Comments for Value Investing Ideas

Comment on ATP Update by WorthTheEffort

WorthTheEffort — Tue, 01 Jun 2010 02:29:50 +0000

Hey Joshuat,

It’s been a while since you’ve made a post. I just wanted to thank you for bringing ATP to my attention in October 2008. I spent a lot of time analyzing their liquidity and history in order to understand what I would calculate as probabilistic fair values for ATP in the past few years. I bought a lot, and I am beginning to buy more right now.

Sure the memoratium might delay some drilling of wells and therefore cash flow but ATP has the titan online and at least 600 MM of liquidity (300 from debt, 300 from titan monetization) and the wherewithal to live within their cash flows. I did end up buying the Fundamentals of Oil & Gas Accounting Textbook and it has helped immensely.

Thanks again,

Chris

PS. If you come across another stock selling at 0.05 to 0.35 of asset value with good management incentives, a business moat, short term difficulties, and a large amount of uncertainty I would be more than happy to research and understand the risks and benefits to determine appropriate ranges of estimated intrinsic value. Even if you come across a typical undervalued security and you would like some fundamental research help let me know; I owe you one!

Comment on ATP Update by Daniel Smith

Daniel Smith — Wed, 06 Jan 2010 02:25:05 +0000

It seems Al Reese sold about 20% of his shares of company stock. My figures are of his shares remaining listed on MSN so that may be off a little. I figure it’s a substantial amount though. I also saw today that they canceled a conference due to his upcoming back surgery. Doesn’t appear to be a lot of additional insider selling though but a few developments to watch.

Comment on ATP Update by rlabbe

rlabbe — Wed, 23 Dec 2009 19:23:22 +0000

Absolutely - their annual report specifically points out in the risk section that there are events that can occur that they are not insured for. As for the very specific scenerio you spelled out, I have no idea - I am not a lawyer, nor am I privy to the details of the limitations of their insurance coverage. But, yes, in general the company could be destroyed by a suitably large event.

Comment on ATP Update by WorthTheEffort

WorthTheEffort — Mon, 21 Dec 2009 01:40:58 +0000

I have a question about what would happen to ATP if there was a catastrophic event (large pipe leak followed by a vapor cloud explosion that kills all the people on the rig and damages infrastructure) on one of their large projects? Would ATP be responsible for incurring all of the lawsuits and environmental costs, as well as the costs of shutting in production and major repairs?

They contract out a lot of their engineering and operations, so would the fact that they own the assets make them liable, or would that risk be undertaken by their contractors?

I know these are small probability events, especially considering the improvements in safety technology in the past few decades, but it would be useful to know if a major incident could cause bankruptcy in a probability based evaluation of ATP.

Comment on Action Semiconductor (ACTS) Update by quartz tank

quartz tank — Tue, 17 Nov 2009 23:54:05 +0000

Well it looks like the company has a stable history… But what are their plans for the future (ie new applications of their abilities)

Comment on ATP Update by rlabbe

rlabbe — Tue, 10 Nov 2009 15:55:03 +0000

Sorry, been busy with work and now a new puppy. I’m sure the preferred stock question is answered by now. Yes, it’s normally offered to institutional money. The investment bank shops the issue around to see who’s interested, along with sharing all of the corporate’s information. Yes, it’s no fun to see dilution, but on the other hand the new buyers are buying into that dilution. This is still way undervalued as a ‘failed’ company (fold up tomorrow, sell off all the assets), let alone as a value company, not to mention as the growth company it actually is.

As for reading, I’m not doing too much. Too much information has been shown to reduce your decision making abilities. I just read the quarterly reports, and have google alerts sent to my inbox daily on the companies I own and the investors I track (Berkowitz, Buffett, etc). To date I have been content with my portfolio, but it feels like it is about time to start sniffing around and looking for another bargain. Unfortunately, that is just a ton of work, not much fun, but when you find it, oh boy! The main reading I need to do at the moment is get back to my Fundamentals of Oil & Gas Accounting textbook (highly recommended as a reference, if you are buying other oil&gas companies)

Comment on ATP Update by Stockowner

Stockowner — Sun, 25 Oct 2009 15:45:35 +0000

Not to digress, but are you reading any investing literature at the moment?

Comment on ATP Update by Dan

Dan — Wed, 23 Sep 2009 12:50:21 +0000

Do you know how the preferred stock is doled out? The wire says the preferred stock is offered to “eligible buyers” or a private offering. I wonder who is eligible for this and what the conversion price will be. I imagine these are normally done by large buyers or financial institutions compared to individual investors? Just curious how the process would work. Once again not real thrilled about the dilution and don’t know how to calculate the overall potential dilution aside from the common offering. I guess it doesn’t change the fact the stock is still undervalued but makes it harder to calculate by how much.

Thoughts?

Comment on ATP Update by texthe2nd

texthe2nd — Tue, 22 Sep 2009 21:09:50 +0000

A slew of announcements today - more dilution, debt reduction, and asset sales (Gomez pipe) - I guess they wanted to strike while the (equity) iron was hot so to speak to accelerate the deleverage process.

Comment on ATP Update by rlabbe

rlabbe — Fri, 18 Sep 2009 20:16:59 +0000

No, sorry, haven’t looked at them. Haven’t really been terribly interested in MLPs due to the tax burden they impose. Which is not to say it’s a bad thing - just that I focus my attention elsewhere.