Archive for the 'Investment Ideas' Category

In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Braxton Gann to discuss two shipping companies, Scorpio Tankers (STNG) and Diamond S Shipping Company (DSSI). 

Overview

A lot of managers are concerned about the "trade war" because less trade = less shipping. Braxton thinks that a trade war is a positive because the trade will be less efficient, increasing ton-miles.
 
Some investors also worry that a global recession will send these shipping companies into bankruptcy, forgetting that new supply would be cut off by a recession, and that obsolete vessels would be scrapped mercilessly.
 
There has been a lot of talk about OPEC cutting production being a negative for STNG, but STNG carries products, not crude. Saudi Arabia is adding refinery capacity, and the OPEC cuts will have to be renewed in March.
 

IMO 2020

Another puzzle is that shipping companies are downplaying the obvious effects of IMO 2020, which can easily be enforced by spot checks. Braxton thinks this is because most companies can't afford scrubbers, even though they offer payback times of 10 months or less.
 
Another factor that we didn't end up getting to on the show is that many shipyards are going bankrupt, and shippers will have to rebuild their balance sheets for a couple of quarters before ordering more product tankers, which can take a year and a half to build.
 

The Tanker Thesis

 
The main reason Braxton likes product tankers is due to the disruption that will occur from IMO 2020. Many ports don't have the low-sulfur fuels required for IMO 2020, and each low-sulfur blend must be carried in a different tank. Braxton started looking at product tankers when he realized they would be the ones carrying LSFO blends. Inventories of refined products and bunker fuels are surprisingly low, so you could get a double boost from normalizing inventories and arbitrages between ports. This could boost demand by 10% or more, excluding the effect of normal GDP growth.
 

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Episode Summary

In this episode of The Intelligent Investing Podcast, Eric Schleien interviews DTEJD1997 to discuss an under-the-radar company called Caledonia Mining. 

 

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In this episode, Eric Schleien & Anthony Waldichuk discuss National Stockyards (NSYC). 
 
According to Oddball Stocks:
 
Here's the backstory. A long time ago in a faraway place, there was a company that owned stockyards.  A stockyard is a place where cattle are auctioned off to buyers.  Ranchers drive their cattle by horse, or train, or truck to the stockyard at pre-determined dates when auctions are held.  Cattle buyers come and purchase the ingredients for your burgers and steaks and the ranchers return home without cattle, but with pockets full of cash.

The company was established in the 1870s in Oklahoma.  The date and place invoke images of cowboys and Indians, saloons and western movies.  Those days are long gone and the company now consists of three things, their Oklahoma stockyard that's still transacting cattle, a plot of empty land near St. Louis, and an ownership interest in a golf course.

 

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Following Anthony on Twitter  

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In this episode, Eric Schleien & Anthony Waldichuk discuss Scope Industries (SCPJ). Company is super under the radar. The CEO has been at the helm for 6 decades and has built a pretty good long-term track record as a value investor. Was amazed that I had never heard of him before this episode. Totally interesting stuff! Anthorny refers to the CEO as the Poor Man's Warren Buffett.

 

Hope you enjoy!

 

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In this episode, Eric Schleien & Anthony Waldichuk discuss Southern Reality (SRLY) which is an oil & gas royalty business with a stock and bond portfolio attached.

 

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SA Article: https://seekingalpha.com/article/4235934-southern-realty-podcast

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#45: Avoca, LLC (AVOA)

Avoca, LLC (AVOA) is a publicly traded, non-reporting limited partnership that owns a 16,000-acre island off the coast of New Orleans. They have a few side businesses, some potential use for the land, and have a stock and bond portfolio worth the market cap. These dark companies are fun!

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A writeup of this podcast was also published on Seeking Alpha which you can find here: https://seekingalpha.com/article/4236410-want-buy-island-avoca-llc-podcast

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In this episode, Eric Schleien & Anthony Waldichuk discuss Ojai Oil Company (OJOC). 

Anthony started out as a trader for what is now TD Ameritrade Institutional’s trading desk, moved onto LPL Financial where he traded equities, then moved over to trade fixed income instruments.

Then moved to the buy-side as a portfolio manager for Neosho Capital LLC, where he focused on international and emerging market equities. 

Retired in 2016 to oversee his real estate portfolio, but still dabbles in the stock market occasionally, mostly in the inefficient micro-cap space.

He can be followed on Twitter at @darkfirecapital 

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 A writeup of this podcast was also published on Seeking Alpha which you can find here: https://seekingalpha.com/article/4235632-ojai-oil-company-podcast

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In this episode, I interview a guy know by the handle, "Spekulatius". This is our second guest who would prefer to stay anonymous - and as always, I honor that commitment to privacy.

We talk about an obscure OTC company he owns called Queen City Investments (QUCT). For those of you who follow Nate Tobik who runs Oddball Stocks, he did a writeup on the company back in 2012 which you can see here. 

  • Nate has also been interviewed on this podcast. The link to the episode is here
  • A link to his blog post about it is here.

 

 A transcript for this episode is also available for this episode.

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#40: GCI Liberty

If you could take 30 seconds and give us some honest feedback on iTunes, it would be much appreciated! 

In this episode, I discuss GCI Liberty (GLIBA) with Anthony Morley, founder of Delphi Value Investments. 

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#38: Facebook

In this episode, I bring Marcelo Lima back on to talk about his investment in Facebook (FB). Pretty interesting discussion. 

Disclosure: I own Facebook shares for both myself and my investors at Granite State Capital Management, LLC. This could change at any time without notice.

Additional disclosure: All information for this podcast was derived from publicly available information. Investors are encouraged to conduct their own due diligence into these factors.

Additional disclosure: This podcast represents the opinion of Eric Schleien as of the date of this podcast. The information set forth in this podcast does not constitute a recommendation to buy or sell any security. This article contains certain "forward-looking statements," which may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "potential," "outlook," "forecast," "plan" and other similar terms. All are subject to various factors, any or all of which could cause actual events to differ materially from projected events. This podcast is based upon information reasonably available to Eric Schleien and obtained from sources that Eric Schleien believes to be reliable; however, such information and sources cannot be guaranteed as to their accuracy or completeness. Eric Schleien makes no representation as to the accuracy or completeness of the information set forth in this podcast and undertakes no duty to update its contents. Eric Schleien may also sell any investments mentioned in this podcast at any point in time without providing notice. Eric Schleien encourages all listeners of The Intelligent Investing Podcast to do their own due diligence.

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