Author: stlplace

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earning

Syngenta reports 1H 08 results

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Syngenta logo

Highlights
From its IR web site

  • Sales up 20 percent at constant exchange rates to $7.3 billion
  • Crop Protection sales up 21 percent(2) at $5.55 billion
  • Seeds sales up 15 percent(2) to $1.74 billion
  • Earnings per share(1) up 36 percent to $16.53
  • Earnings per share $15.93 after restructuring and impairment
  • Capacity expansion to meet longer term demand growth


    • Video
    CEO interview (cantos, free registrastion required, look for Syngenta).

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    Categories
    Stocks

    Analyze CHK hedging strategy: I

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    Chesepeake Energy logo

    Chesapeake Energy (NYSE: CHK) is a stock I have known for a while. I traded it in year 2006, I did not hold it for long term partly because I usually don’t hold a stock for more than a year (until Mindray), more importantly I did not understand all the natural gas price volatility, CHK’s hedging strategy etc. Fast forward two years, the natural gas and CHK stock have been doing very well until last week, and I have studied the CFA a bit.

    Chesepeake is a natural gas (plus a bit oil) explorer and producer, it’s No. 2 US natural gas according to its investor presentation (click its July 16 presentation here). Natural gas is nothing new, it’s mainly being used in power generation, industrial and residential (heat) use. Exploring and producing natural gas is not a sexy thing either, except CHK claims it has the best geo-scientists and engineering team in the industry. The ultimate differentiator of CHK, compared to its peers, is its large hedging strategy. Using hedging, basically it tries to get a predetermined fair price of its product (natural gas), or in other words, it tries to get a fair profit from exploring and producing the natural gas. It lays out its hedging positions in its quarterly report, and it regularly put updates.

    How about its hedging results? Here are some articles I saw from seekingalpha.

    Article one, article two.

    Why hedging?

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    Categories
    Master Series

    Steve Jobs, Apple, Bill Gates, Microsoft

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    Background
    Couple days ago the Apple stock got a hit not just becaues of the soft earning guidance, the more important reason is the company declined to answer the health question of its co-founder and CEO Steve Jobs in the earning call.

    You tube videos
    Great Artists Steal – Triumph of the Nerds – Revised (very short)

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    Categories
    China earning

    Apple launches store in Beijing, earning

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    Apple launched its first China store in Beijing last Saturday, with 2000 fans waiting outside, including some celebrity names such as Lu Yu (Phoenix TV), Cui Jian (China rock star) etc. You can see the scenes of Apple launch at Sina (Chinese), or preview pictures at David Feng. The Sina picture reminds me of the iPhone launch here in the US, a mob scene 🙂

    The cult culture
    Over the years Apple has this cult like culture among its fans. Looking at site such as MacRumors you will get an idea. While I think Apple products are generally very good, I don’t like their prices. It seems they are going to lower their prices, as they are expanding their market. This is a delicate problem for Apple because people usually got wooed to Apple because of its unique design, cool brand, and thus get the “being cool” status from friends. Now if Apple is everywhere, like iPod did, it loses that status. But Apple is going to pursue this route anyway, under the pressure from Wall Street. This can be shown in its earning forecast for next quarter.

    Earning

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    Categories
    China earning Investing

    Weekend review w/e 071908

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    (What a week, Yahoo Tech-ticker, link)

    China’s role in the Fannie/Freddie mess
    As Fannie/Freddie crisis deepens, people find China in akward postion because China is the largest holder of 2F’s bonds: total $376.3 billion. I don’t know exactly how China got into this mess, but I think one reason is decision maker in China must think 2F bonds are safe because of US goverment implicit gurantee. At least the market thinks so because the rating agency S&P, Moody and Fitch all gave Fannie/Freddie top rating. But wait a minute, didn’t those rating agency give a pass to those toxic MBS and CDOs? One thing I am sure is the China 2F buyers’ job are still safe, because at least they did better than the guys bought Blackstone at IPO, bought Morgan Stanley at $50s couple months ago.

    Financial companies using lots of oil?

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    Categories
    401k and Personal Finance

    401k, oil and gas

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    401k
    Last week my old 401k at Vanguard was merged to my new 401k. I don’t know if you paid attention to your 401k or IRA lately, not a fun thing to do. I did a quick calculation, my old 401k portfolio lost 7.56% of its value from Dec 31 2007 to July 7 2008 when it was transferred into new account. It appears I did ok considering the market dropped quite a bit in 1st half of the year.

    Oil and gas
    The relief at gas pump is coming. Not from federal goverment. The crude oil price has been dropping 3 days in a row in the futures market (refer to Bloomberg energy price here). Natural gas also goes lower with the oil pullback. Notice I used the word pullback. I don’t think we are going to see $50 oil or $2 a gallon gas. So, I was buying oil and natural gas stocks 3 days in a row. I bought Marathon Oil (NYSE:MRO) on Tuesday, Devon Energy (NYSE:DVN) yesterday, and Chesapeake Energy (NYSE:CHK) today, all in small amounts. Because I know the oil and gas could drop more, so as the stocks. But long term, 6 months or a year from now, I am quite bullish on them.

    Categories
    Investing Saint Louis

    Why Fazoli is so crowded?

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    (Update July 17) I went to Fazoli this evening to take some food home. Surprisingly there are many people again. Another sign average people are feeling the pinch in this recession.

    (Original) Fazoli has been my favorite lunch places for a while. Recently it got more and more crowded during lunch time. This seems strange because in current economy recession, one would think people would bring their own lunches more and eat less outside. So, what’s the reason?

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    Categories
    Economy Fun

    Who to blame for current financial crisis?

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    Greenspan (regulators): for he kept interest rate too low (1%) for too long, during the recession after dot com bubble.

    Bush (politicians): for his failed Iraq war which cost American tax payers more than 500 billions so far. He asked American “go shopping” after 911, in addition to buying a car or a house. Democrats are no better in this aspect: Fannie Mae and Freddie Mac have deep roots in Democrats leadship.


    (Video by LATimes: anxious customers on day 2 of IndyMac Fed takeover)

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    Categories
    Business Economy

    Fannie and Freddie crisis, InBev snaps AB

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    Fannnie and Freddie crisis
    I read Burham’s beat Fannie Mae’s Golden Goose article last Friday, after seeing the dramatic stock actions of FNM and FRE on that day. Following that, I also reviewed Barrons March 11 article, IS this Fannie Mae Toast?

    Yeah, it looks like it. The bad thing is, those executives at Fannie and Freddie have made their money, we (tax payers) are bailing them out. So is the US still a free market capitalism country? Seems more like cronyism capitalism to me 🙂

    An emotional day in St. Louis
    As you may heard from the news, Anheuser Busch accepted the latest cash offer from InBev, and the AB global headquarter in STL will be the North American HQ of combined company Anheuser Busch InBev. Because it’s a cash offer, the current shareholders (Busch family, and Warren Buffett) will NOT have a stake in the new company. Interestingly, this morning I heard from radio Mayor Slay turned 180 degree about the merger, saying “I will work with AB/InBev starting tomorrow, next day, next week, next month…to ensure the success of AB/InBev in the region”.

    Hm, what did he say a while earlier (before AB shareholders and board accepted the sweetened offer from $65 to $70 a share). Something like “this merger will destroy the shareholder value, lay off workers in AB, reduce the commitment to community”. All kind of bad things. What a difference $5 can make. Now everybody is happy.

    Categories
    Life Tips Travel

    Bought air ticket to PVG China

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    Friday evening I was checking out the air fare for the planned China trip later this year. And I found aa.com price irresistible: $1000 from STL to PVG. So I jumped on it. With sky high gas price (and jet fuel), this price seems cheap to me. I remember last year I paid close to $1100 for similar air ticket.

    So why is the price relatively cheaper? I think one reason is AA needs cash (unearned revenue in this case) badly. Another less likely reason is AA thinks oil price will go down. Separately, I read from news the airline executives wrote an open letter to ask congress to clamp down on the oil speculators, because according to the airlines “oil speculators drove up the oil price”. I see two problems in this argument: 1) Airlines also hedge their jet fuel positions, i.e., they are speculators too; 2) Speculators can cause short term price volatility, but in longer term, it’s the supply and demand determine the price. It seems the airlines executives forgot the Econ 101 here 🙂

    Odds and Ends
    Here in St. Louis, some churchs are organizing prayers for “lower oil price”. Reminds me in ancient China the farmers praying for “good weather/havest season”. In modern days I have seen people praying for “stock prices going up”.

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