shoeless Posted November 16, 2012 Share Posted November 16, 2012 Very good interview witch Chad : http://watch.bnn.ca/#clip805458 Landquart, now a high cost producer..nothing to expect before one year (spin-off, sell, etc). They try to improve it for now. Still believe in the long term thesis with DP, current price unsustainable for a long period for at least one third of the producer. Finally some humility and acceptance that they did not delivered on the ramp up so far. Now producing at 95-96%. Thanks for posting. Unless I misunderstood it sounds like delivered cost per ton is now "mid to high 700's"? I think that is incorrect. Here is Chad's quote from the 04:21 min mark in the interview: "At our full run rate, we expect to have our cost structure in the mid-to-high $700s delivered to China." The key, IMO, is the phrase "at our full run rate." I think that Thurso will need to achieve its run rate for a sustained period in order to bring costs down to these levels. Further, I believe that co-gen will also be needed in order to achieve these levels..and co-gen has not yet started. For both reasons, I conclude that Chad is not talking about now. Here's a link to the interview: http://www.bnn.ca/News/2012/11/13/Fortress-CEO-expects-competition-to-wither.aspx BRK7, I agree with you. I meant to write the *expected* costs now seem to be mid to high 700's, the point being this is higher than the last number I remember them using- $725. Link to comment Share on other sites More sharing options...
triedtestedand Posted November 17, 2012 Share Posted November 17, 2012 Shoeless/BRK7: Latest presentation deck shows "production" cost variability over time. It does show those costs dipping below $800/ton for the first time in early August, when it looks like production correspondingly approached 95% for the first time. That said, I'm assuming such production costs no doubt exclude the offseting a) benefits of co-gen (i.e. drop ~$100/ton to account for that) and b) costs of shipping (i.e. add ~$100/ton to account for that). To see the needle move down more, then no doubt need average production rate to increase from 95% to 100% ... or more, at least for non-planned downtimes, as the 200K tons per year assumes an annual 90% to 92% real uptime. Further, that implease need rate to be sustained, as there's no doubt incremental costsa ssociated with the variability. So really ... if they can get that much more reliable uptime, it might be worth as much or more than debottlenecking Link to comment Share on other sites More sharing options...
alertmeipp Posted November 17, 2012 Share Posted November 17, 2012 his talk about privatization and holding company discount somehow make me them he is still in denial.. The major reason the stock was tanking is he over promised and way under delivered and now he is talking things like prioritization. If he is serious, just put a tender offer out to load the shares, he should really focus on fixing the co.. Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 18, 2012 Share Posted November 18, 2012 Irwin Michael of ABC Funds on BNN discusses Fortress Paper at the start of this clip http://watch.bnn.ca/market-call/november-2012/market-call-november-16-2012/#clip808571 Link to comment Share on other sites More sharing options...
shoeless Posted November 19, 2012 Share Posted November 19, 2012 Fortress foresees becoming Canadian dissolving pulp powerhouse by Tembec merger http://www.calgaryherald.com/business/all/Fortress+foresees+becoming+Canadian+dissolving+pulp/7566684/story.html Link to comment Share on other sites More sharing options...
FrankArabia Posted November 19, 2012 Share Posted November 19, 2012 what is your view on Irwin Michael? From what I can see, he consistently gets into value traps. Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 19, 2012 Share Posted November 19, 2012 what is your view on Irwin Michael? From what I can see, he consistently gets into value traps. Sometimes he does and sometimes he doesn't. I don't have an opinion on any mutual fund managers. Sometimes their picks will work out and sometimes they won't, just like the rest of us. I just listen to their point of view since it is probably shared by some and may be different from my own. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2012 Share Posted November 20, 2012 Fortress foresees becoming Canadian dissolving pulp powerhouse by Tembec merger http://www.calgaryherald.com/business/all/Fortress+foresees+becoming+Canadian+dissolving+pulp/7566684/story.html Interesting thought. but again, why would he even discuss this publicly is beyond me. It's not like they are not heavily leverage to DP already. Link to comment Share on other sites More sharing options...
bathtime Posted November 20, 2012 Share Posted November 20, 2012 Fortress foresees becoming Canadian dissolving pulp powerhouse by Tembec merger http://www.calgaryherald.com/business/all/Fortress+foresees+becoming+Canadian+dissolving+pulp/7566684/story.html Interesting thought. but again, why would he even discuss this publicly is beyond me. It's not like they are not heavily leverage to DP already. Right! It's as if now and again Chad inappropriately puts his securities analyst hat back on. One whose speculations don't pan out. Looking back on that March 2011 article... : ---- "I'm pretty confident that by the end of this year, we're going to be the largest dissolving-pulp company in the world," says Wasilenkoff. "From nothing to the biggest, in a year and a half.".... He's convinced the deals he has on the go could make Fortress a $300 stock and a $4-billion company-from an $8-million company in 2006. His outlook is wildly bullish but aired without the promotional fervour of Vancouver's Howe Street. "It won't be this year, but by the end of next year. It's a very clear runway." Link to comment Share on other sites More sharing options...
bathtime Posted November 20, 2012 Share Posted November 20, 2012 bonechip2 did a nice update on FTP over at The Fool: http://boards.fool.com/calling-bonechip2-fortress-30366762.aspx?sort=whole Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2012 Share Posted November 20, 2012 would be nice if FTP.to starts posting weekly spot DP pricing. Anyone requested the same? Link to comment Share on other sites More sharing options...
Myth465 Posted November 20, 2012 Share Posted November 20, 2012 I was planning on selling some for tax losses, but doubled down. I will see take some losses, but for a small fee I can have twice as many shares. Wish I did this on ATSG when it hit 11 cents... Chad is an interesting guy, he should temper his optimism, but the assets are there, hopefully they work out the kinks. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2012 Share Posted November 20, 2012 I was planning on selling some for tax losses, but doubled down. I will see take some losses, but for a small fee I can have twice as many shares. Wish I did this on ATSG when it hit 11 cents... Chad is an interesting guy, he should temper his optimism, but the assets are there, hopefully they work out the kinks. ATPG is 11 cents now. LOL Link to comment Share on other sites More sharing options...
Myth465 Posted November 20, 2012 Share Posted November 20, 2012 LOL I have lost enough there, I said ATSG not ATPG. bonechip seems to have handicapped things well. Seems like an interesting bet, but a bet none the less... Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2012 Share Posted November 20, 2012 LOL I have lost enough there, I said ATSG not ATPG. bonechip seems to have handicapped things well. Seems like an interesting bet, but a bet none the less... I know.lol Yes, but as u said it's a bet on dp pricing mostly, probably a good idea Link to comment Share on other sites More sharing options...
Myth465 Posted November 20, 2012 Share Posted November 20, 2012 Agreed. I think Chad will pull through and he is risking way more money than me lol. DP prices as you said though could take everything down if he isnt careful. I threw a few more chips on the table, and will get my tax loss in Dec. Hopefully it pans out. What about you? Pushing more in or what and see. Same question with SD as well? Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 20, 2012 Share Posted November 20, 2012 Many, many years ago I read the book by Philip Fisher called "Common Stocks and Uncommon Profits". Phil Fisher started his career during the depression and was a sort of mentor for guys like Warren Buffet (Warren even wrote a write up for this book). In his book he talked about companies that endeavor to bring on a new, very large project or factory, like Fortress is doing with Thurso. He said to always watch out for two events. The first is that with large sophisticated projects, they will inevitably go over budget and over-schedule and that things will just not go exactly to plan. This is the way life is and its normal, but the stock market will punish the stock severely for these events. They never seem to be expected, as they should. I have owned this stock for quite a long time and when the stock was assending to $50 and $60, I kept reminding myself of his sound advice, but it seemed to me that for some reason Fortress Paper might become the exception to this rule. For some reason, I felt that any problems they were going to have would come from the initial conversion and since they had very few problems there (a little over-schedule and some minor capital cost increases) I thought that they might avoid this situation, perhaps since Peter Vinall had done this 3 times before. When the conversion was finally done, I felt that they were perhaps in the clear. Obviously, Mr. Fisher's sound prediction came to roost with FTP, as it always does, during the start up of production. I suppose I should have known this, but that is a moot point at this time. In any event, his next point was that these set-backs, that are normal with these kinds of projects, get instilled to the stock market as a permanent problem, however his experience has shown, that they inevitably are overcome, again to the surprise of the stock market. That book was originally published in 1958 and it is interesting how very little has changed, since that time. Link to comment Share on other sites More sharing options...
ECCO Posted November 20, 2012 Share Posted November 20, 2012 This is not Coca Cola or JNJ starting a new plan. The problem right now is that they dont have any control on the selling price, even if they have "contract". What is Phil Fisher thinking about commodity? Link to comment Share on other sites More sharing options...
Guest Quebec Posted November 20, 2012 Share Posted November 20, 2012 I threw a few more chips on the table, and will get my tax loss in Dec. Hopefully it pans out. What about you? Pushing more in or what and see. How do you get a tax loss with the 30 days window that prevent you from owning it ? Do you hope nothing happens during this period where you are naked ? If you buy back right away, its considered a "wash sale". Maybe I'm missing something. I bought more to average down. I remain underwater but will ride the tax loss season while holding all my shares. With deep discount like this, a sudden catalyst may arise. Link to comment Share on other sites More sharing options...
Guest Quebec Posted November 20, 2012 Share Posted November 20, 2012 Does anyone have access to the document by Paul Quinn (RBC) where here float the idea of a Tembec/Fortress combination ? All I could find is an excerpt on RISI: http://www.risiinfo.com/content-gateway/pulpandpaper/news/FINANCIAL-ANALYSTS-What-if-Fortress-bought-Tembec-Scenario-Analysis-Part-II.html Sounds like a good idea and looks like Chad is testing the water. Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 20, 2012 Share Posted November 20, 2012 This is not Coca Cola or JNJ starting a new plan. The problem right now is that they dont have any control on the selling price, even if they have "contract". What is Phil Fisher thinking about commodity? I doubt he was referring to Coca Cola or JNJ, since his point was directed at companies, where this new project is very material to their future. With those companies, this would unlikely be the case. Yes. The commodity price is definitely why FTP is trading at about 50% of break up value, as we speak. I doubt it would be trading at these prices if the DP prices were much higher, even with the setbacks. Here an investor has two choices. Either wait to see if DP prices actually bottom and start going back up or make some form of prediction to that event in advance. The problem with waiting is, what part of the price decline will get recouped when/if the Thurso engineers fix the lion's share of the production issues? The second is, how much of the price decline gets recouped "as" the DP prices start to recover? As for the prediction on DP prices. Temporarily, it could go anywhere. Longer term it almost has to stabilize and trend upwards. The rule on commodities, that is also never broken is that the best thing to fix low prices, are low prices. As the price declines, higher cost capacity gets idled or taken out, demand increases, competitive products (cotton) also get removed from the market place. I am not sure whose book that rule was stated in, but it does inevitably prevail. Dissolving pulp is one of the better commodities for this rule, since more then 2/3rds of the cost of production are variable expenses, like wood fibre, energy and chemicals. In this type of commodity, producers can reduce losses quicker by shuting down, as opposed to other commodities where the participants attempt to increase production, to stem losses. Link to comment Share on other sites More sharing options...
FrankArabia Posted November 20, 2012 Share Posted November 20, 2012 where do you get your stat that its trading at half of break up value? are you using the book value as your starting measure? if so you might be overstating your point a it here...... Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 20, 2012 Share Posted November 20, 2012 where do you get your stat that its trading at half of break up value? are you using the book value as your starting measure? if so you might be overstating your point a it here...... It is my own estimate. Feel free to make your own. It is also a moot point however, since I doubt this company will be broken up. A few divisions may be bought and sold, over time, but I doubt they are going to sell off everything and distribute the money, so it doesn't really matter. Link to comment Share on other sites More sharing options...
Myth465 Posted November 20, 2012 Share Posted November 20, 2012 I threw a few more chips on the table, and will get my tax loss in Dec. Hopefully it pans out. What about you? Pushing more in or what and see. How do you get a tax loss with the 30 days window that prevent you from owning it ? Do you hope nothing happens during this period where you are naked ? If you buy back right away, its considered a "wash sale". Maybe I'm missing something. I bought more to average down. I remain underwater but will ride the tax loss season while holding all my shares. With deep discount like this, a sudden catalyst may arise. I have bought double the shares I hold at an 80% discount. I will hold till Dec and may sell the original shares for a tax loss. If we get upside before then I get it all. As I said you are betting on them holding together till the kinks are worked out and prices firm. If prices hit where they were and the plant is running 100% then the potential is mind boggling. Its a bet but one with alot of upside. Link to comment Share on other sites More sharing options...
Guest Quebec Posted December 5, 2012 Share Posted December 5, 2012 I think we're about ready for FTP renaissance. Here's a recent write-up: http://www.stockhouse.com/bullboards/messagedetail.aspx?s=FTP&t=LIST&m=31865005 Let the market cap rise to Tembec level and then propose merger ;-) Link to comment Share on other sites More sharing options...
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