Wednesday, April 16, 2014

For Investors Only; Whirlpool Raises Dividend; April 14 - 18, 2014; KOG Over At SeekingAlpha

Whirlpool raises dividend from 62.5 cents to 75 cents.

Abbott Labs beats by 5 cents.

St Jude Medical beats by 1 cent.

Bank of America misses by 10 cents. 

A reminder:
GOOG: after market close; expectations, $6.39

Kansas City Southern: after market close; expectations, 99 cents

Kinder Morgan (KMI): after market close; expectations, 33 cents

Yahoo!Financial shows TPLM reporting today, but it won't be (if I recall correctly).
Tomorrow, Thursday, April 17:
  • BHI, forecast, 78 cents; before market opens,
  • GE, forecast, 32 cents; before market opens,
  • Schlumberger, forecast, $1.20; before market opens,
  • Union Pacific, forecast, $2.37, before market opens, 
Halcon Following GDP Well in TMS Over At Seeking Alpha

Halcon has a substantial position in the TMS, but is a much larger company than Goodrich. HK stock moved up ~10% in response to the result, versus GDP moving up ~40%. It also probably didn't help that the result was a Goodrich well and not a Halcon well. Incidentally, I had the opportunity to briefly meet with Floyd Wilson, Halcon's CEO, at the recent IPAA conference in NYC in early April. He is confident the TMS will work and believes Halcon has sufficient liquidity, operating expertise and scale to successfully exploit the play. (Would the CEO say otherwise?)

Throwaway KOG Article Over At SeekingAlpha

For archival purposes only, a link to an article over at SeekingAlpha -- the writer is a bit late, and probably a dollar short. Where was he two years ago? Six years ago? I think most regular readers could have written this column:
Share price of Kodiak Oil & Gas has risen by 72% over the past 12 months, significantly outpacing a 19% return for the S&P 500 index. In my view, the shares still offer great value at the this level, as it appears the company's improving cash flow outlook is underappreciated by the market, and the current stock price is trading below my intrinsic value estimate.
KOG has been a solid cash flow generator. Over the past 3 years, the company has managed to grow its operating cash flow margin from 45% in 2011 to 61% in 2013, primarily due to production growth and continued improvement in capital efficiency (i.e. cost per production). Given that most of KOG's acreage is currently held by production, it is expected that costs per well/production are expected to decline over time, while production will gain momentum. In my view, these dynamics should drive up operating cash flow margin, which should even exceed its record level of 67% seen in 2012, as current well costs at $10M is notably below $12M in 2012, and it is forecasted to drop to $9M in 2014, according to management. Moreover, management has provided capex budget of $940M for 2014, which is in line with the actual level at $1B in 2013 (additional $0.8B was mainly due to the acquisition of Liberty). I expect capex to remain somewhat flattish over the next few years given that most of KOG's assets are in production stage and management will likely focus on deleveraging, rather than pursuing major acquisitions.