sarganaga

Gazprom (OGZPY)

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We have significantly more than $1.3 million and no debt. No mortgage or loans, credit cards paid off entirely each month. It's been like that for over 30 years. It's been much easier/less stressful to take business and investment risks on a cash basis. I can see how far down is. I realize this is not the best path for everyone, but it's worked well for me.

Thanks for sharing your work. Good luck.

Yup, lots here too. A bit less than 4% for me.

Imperial Brands (IMBBY)

CK Hutchison (CKHUY)

Altria (MO)

Can you share any compelling writeups that you've come across? Hey, here's a podcast episode going into the details of the company and the investment case. Basically its just a really cheap telecom company with 100-200% upside and a heavily incentivized CEO to unlock that value. Thanks for the podcast link. This is a very informative discussion about Lumen (LUMN) that starts with the merger of Century Link and Level 3 in 2017. Good listen!

Can you share any compelling writeups that you've come across? Michael Burry likes the stock. This article from Seeking Alpha and the discussion which follows lays out most of the bullish and bearish arguments https://seekingalpha.com/article/4405414-lumen-reports-solid-fourth-quarter Bears see declining revenue, lots of stock compensation for management, some still butt hurt over dividend cut awhile back after management indicated it was safe. On the positive side for me Lumen generates quite a bit of cash flow that it's using to pay down debt substantially. That's what they said they were going to do when they cut the dividend. A well covered dividend north of 8%. Michael Burry's involvement helps me convince myself that I'm not just being a misguided yield whore. Value investor, Mason Hawkins, has it as his largest position across his Longleaf funds. He's underwater having owned it since 2017. He met with Lumen management in December and added to his position. FWIW his performance has been grim as it has for many real value managers. There's a wide discrepancy between what believers and unbelievers see as true value for this one. I'm choosing to see the glass half full. A bit less than 4% position for me.

Lumen (LUMN)

CK Hutchison (CKHUY) slightly less than 4% position now

More tower sales details here https://www.ckh.com.hk/upload/assets/downloads/en/20201112_CKH_Networks_Tower_Assets_Investor_Presentation.pdf From the transaction highlights: 1 • Unlocks the underlying value of the Group’s European telecommunications tower assets • The value of which is not fully reflected in the Group’s current share price Unlock Value 2 • Improves the Group’s operational efficiency and results in an overall efficient capital allocation • Transfers the operation and development of the passive tower assets to a dedicated tower operator with proven industrial expertise Better Operational Efficiency 3 • Increased strategic focus on developing best-in-class networks and innovative product offerings, while accelerating the rollout of 5G across our networks • Forms a compelling long-term strategic partnership for passive telecoms infrastructure with Cellnex • Invested in a high performing European growth stock with expected foreseeable upside Maintain Strategic Focus 4 • Realises a very significant capital gain and net proceeds in the form of both cash and marketable securities, which could be used to materially reduce the Group’s net financial indebtedness • Subject to the Board’s decision at the time, a portion of the proceeds may be allocated to fund on-market share buyback programs. Any such decision will be made taking into account all relevant circumstances and the best interests of CKHH and its shareholders at the time, including negating earnings per share dilution resulting from the transactions. Further announcements in this regard (if applicable) will be made as and when closing of a transaction occurs in 2020 and 2021 • Proceeds would reduce CKHH’s reported net debt from HK$206bn to HK$119bn 5 Capital Gain & Net Proceeds • Strengthens the Group’s financial position to support its future growth and potential M&A opportunities • Near term positive cash flow impact to CKHGT and CKHH from significant reduction in capex from deconsolidation of CKH Networks and interest savings (assuming debt repayment) • Pro-forma, CKHH’s reported net debt to net total capital ratio would reduce from 25.1% to 14.9% Overall this looks pretty good to me. They are selling an asset for cash proceeds that are large compared to their market value while also receiving a 5% stake in Cellnex, the acquiring company. While they mention M&A, my take on use of the proceeds is for debt reduction and maybe buybacks. There's also the improvement to cashflow.

I own it, about a 2% position. Between the Husky transaction with Cenovus and the European cell tower sale, it looks to me like they may be trying to do something to help the stock price reflect the company's value. Lots will depend on how the cash proceeds of the tower sale are used. If they pay down debt, buy back shares, or pay a special dividend, GREAT. If they find some new and wonderful asset to buy, not so great. Even then, I guess we could get lucky and have them find a good deal that works out. We'll see. It is cheap.

Enterprise Products Partners (EPD) Lumen (LUMN)