OREX, anybody?

Crane: http://forumserver.twoplustwo.com/30.../orex-1515413/

This is a piece I don't entirely agree with. You aren't necessarily competing with the majority of money. There are inefficiencies that exist because the smart guys who move onto managing $100m funds aren't interested in strategies that can't bet a significant % of their AUM on. The smart guys working with a team of analyst aren't working on trading TSLA or FB options intraday because there isn't enough pnl to split between all of them and the fund investors. But to us working more or less as individuals, there's plenty.

I would rephrase the last sentence. If you have edge, you need to figure out how to trade as much as possible

If you aren't satisfied with IB's gui and fee schedule, you might also check out OptionsHouse/TradeMonster. And for zero commish stocks only through iPhone, check out Robin Hood.

how long has interactive brokers been around. It's not a big name I've heard of so my trust level is pretty low.

I don't get these posts, how hard is it to take 5 minutes and do research on a company your interested in.

it's a publicly traded company with a market cap of $2b

really?

founded 22 years ago..

http://en.wikipedia.org/wiki/Interactive_Brokers

founded by this dude

MAC from today is a great example of how you aren't competing with the big boys. A sophisticated merger arb firm with $2b couldn't have built a very big position at good prices, but traders with <$10m could have gotten all they wanted even below the open or pre market.

Been buying a lot of Tidewater/TDW, similar thesis to HOS, except an even bigger discount to book. Really bummed there are no long-term options for HOS/TDW.

I'm not sure what to make of bonds going up with stocks and huge dollar volatility. Being long calls on the S&P sounds great right now.

its really not that similar. they operate at worse margins and in a more competitive global market.

They operate at worse margins, true. Not sure about more competitive global market.

Tidewater is trading at more than a 25% discount to assets as compared to Hornbeck, so I think the two bets aren't that dissimilar given the relative vessel margins -- 51% for HOS and 44% for TDW in 2014, and operating margins -- 18% for TDW and 26.5% for HOS. The EV/EBITDA on Tidewater is slightly lower than Hornbeck at Friday's prices.

Tackling the more competitive global market question....50% of Tidewater's global OSVs are contracted for 2015 (in fact they even have a contract for a vessel that is being built), contrast that to HOS which will be reliant upon spot day-rates this year at a time when they project a flat-ish rig market and a growth in OSVs in GoM (39% OSVs contracted, 24% MPSVs contracted in 2015 per the March presentation). Tidewater also has a tugboat business which isn't completely reliant upon oil servicing. So I think HOS is more likely to see margins compress on a relative basis compared to the more predictable streams of Tidwater. And if you look back at their performance during the "trough" years, you can see a reflection of that in their relative earnings.

I think both companies offer tremendous value and a lopsided bet, and I own a lot of shares in both. I simply think Tidewater is the better bargain at their respective prices.

the bet on HOS for me isnt based primarily on book value. Thats just a sanity check.

Those margin differences are huge. If revenue drops across the board (and it will) tidewater will be operating at cash costs whereas hornbeck can still be making profits if HOS realtively lower cost structure (proven by better margins hisotrically) holds up.

50% contracted in 2015 doesnt matter that much. its 1 year of cash flow and besides, 2016 will be the year of the greatest imbalance in supply/demand for this industry, not 2015. Its a small edge to tidewater but counts for very little.

looking at tidewaters performance in the trough year as a downside scenario like I did for hornbeck is silly as tidewater has very little GOM exposure when compared to hornbeck. If you want to downside risk it, see what their profitability is when they get the same day rates per dwt as hornbeck did in 2011, not what tidewater did.

and discounting the differences in competitve dynamic between the GOM and rest of world is a mistake. the GOM is an oligopoly with 3 real competitors. ROW is a dozen companies. There will be no ratonal competition in ROW. There is a real possibility of that in the GOM. Thank you Jones act.

The margin differences are huge, but you're discarding the bigger picture of where the stocks are valued right now. Even with the margin differences, Tidewater is trading at a lower EV/EBITDA.

I think looking at the Jones Act as strictly a plus is also mistake, because as Hornbeck makes clear, it could be a limiting factor because they're less able to move ships between different regions. If there's a supply/demand imbalance in GoM this year (as Hornbeck implies could happen towards mid-late 2015), that's not good. Whereas if Tidewater is seeing weakness in a region (such as they did in 3Q in Australia), they'll just move the ships elsewhere. The immense advantages of the Jones Act has a trade-off in terms of a disadvantage in flexibility.

Hi Guys,

Never posted in this forum, so I didn't want to start a new thread and came in here to post my question.

I'm considering investing in oil, assuming the prices will recover. This is not part of a long term investment strategy. I'm considering a couple ETFs, the first being USO and the second being VDE. USO seems most directly tied to per barrel oil pricing, but I don't know much about futures or what the heck contango is. I like Vanguard and VDE seems like a low cost index of companies whose recent graphs basically mimic the fall in oil prices (like Exxon).

Does this sound reasonable?

USO invests in other fuels besides crude oil, not sure if that matters. I use "OIL" to track oil, which is strictly crude.

I'm not familiar with VDE...the only thing to really pay attention to on ETFs is the breakdown of what companies they're holding and the expense ratio (as close as possible to 0).

why do you want to make the investment? or I guess, why do you assume that prices will recover?

contango: http://www.investopedia.com/terms/c/contango.asp

I don't have a good answer. It's an uneducated hunch.

If I look at oil prices graphs over long periods of time, it seems like the drop is so steep and severe there will be a bottoming out and recovery. Also, oil prices tend to increase in the summer so the combination of it (HOPEFULLY) bottoming out and the upcoming summer bump makes me want to put a few thousand of short term savings into something oil related with the intention of likely selling near the end of the year.

It wouldn't be part of any retirement planning on long term investment strategy. I'm hunching that even with short term capital gains taxes I can get a better return on some spare cash than by letting it sit in a 12 month CD (or my 1% amex savings).

depends on your forecast for ebitda and how nasty you think things can get. my guess is between 2014 to 2016 tdw has a bigger falloff than hos.

also im sure you know this but if GOM supply is really out of balance and looking like it will stay that way hos can always take ships out of the region. sure they lose their jones act eligibility but its still flexibility that other regions dont have.

There is an unprecedented supply/demand imbalance right now. Look at the pent-up supply in Cushing Oklahoma which is setting a new record every week. IIRC we have a month's worth of oil just waiting to be sold. There is no guarantee oil prices will rebound anytime soon.

It isn't unprecedented. It is just a repetition on a theme.

Yeah I meant unprecedented in terms of the amount of oil being put into storage.

Completely different topic, looks like Samsung trades at a stupidly low multiple. It's showing up as a 3.96 EV/EBITDA, 1.36 p/b (and there's a negligble amount of intangibles), and 9.5 trailing earnings. Also looks like it's hard as hell to buy their shares as an American. Seems like a big leak. Or maybe they don't want US activists banging on the door.

It's the Korean stock market generally that's hard to buy, nothing to do with Samsung really. But it's possible, you just need to find a Korean broker and open an account.

I think buying Samsung is a horrible trade. You're a couple of years too late. A lot of their profit came from the fact that they had a virtual monopoly on desirable large sized phones, but now that the larger iPhone is permanently out, they're going to lose a lot their easy profit. Android is a gigantic turd for high end buyers and the Galaxy itself is less polished by far. Now that the iPhone is competing in their market segment, their profit will go down with zero no doubt. This is good article to give you an idea why they're a horrible buy:

http://www.businessinsider.com.au/sa...-xiaomi-2014-7

Look at the profit graphic. It's old, but their business profitability hasn't changed that much. Most of it is still in phones. They're the only profitable phone manufacturer apart from Apple. The rise of increasing sophisticated Chinese phone and chip manufacturers is going to hurt them too.

Look at it this way. You're basically paying 30 P/E for their electronics business and 7.5 P/E for their phone business (numbers pulled out of my ass, but close enough), which is a terrible proposition.

To put Samsung into perspective, Apple is at an ~11 EV/EBITDA.

There's also, similar to Apple, a boatload of cash on their balance sheet, so if one were to assume all of that cash was given back to shareholders, Samsung's P/E ratios would be reduced dramatically.