It’s likely they will see some of that, but the CAPEX cuts really set in more than a year ago, with 2H15 CAPEX in the industry looking like it was below long term sustainability levels. So on the net, I think the worst is behind the company with growth outweighing revenue reductions going foreward.
Looking at cash flows, CAPEX was only 20% of 2015 operating cash flows which were in turn about a third of the total debt load, so to me the financial positioning is pretty conservative with the stability of cash flows providing a reasonable degree of comfort.
In other words, even if you lowered operating cash flows by half, you’re still cash flow positive and paying down debt. Over the long run, you’d expect demand to stabilize. You only have to go back to early August pricing to double your money in JOY and you will likely never see $100 (2011) again but even early 2015 prices give you roughly 300% upside. Plus the small but cash generative profile of this company with only one major competitor (CAT owned Bucyrus) makes it a prime target for acquisitions or buyouts.
Maybe I’m batshit crazy, but everytime I see this ticker I want to roll a second mortgage into it.
Disclaimer: This is an annoymous internet forum, so take it with a grain of salt. Also, do understand a $10 buy in means lots of volatility but in my mind skewed to the upside.
No bonus for me this spring. I walked away from it when I changed jobs, but even had I stayed, I heard they axed bonuses due to poor financial performance. So either way I’d get nothing, not to mention my investment bearings have been a bit off lately.
I like U.S. bank preferreds. I like PFF and PGF but they have too much exposure to european financials. I like the simple banks with relatively clean balance sheets; NTRS, USB, BK, PNC all have preferred stock that trades.
Regarding the MLP’s, be selective. Some of them are great, well-run companies but these midstream companies can do very different things with varying degrees of exposure to the oil and gas markets. Some of them have very real problems. Got to go with quality in this market. Stay way from G&P businesses.