Friday, August 28, 2020

Thursday, August 27, 2020

Summit Midstream

While many parts of the market have somewhat recovered towards or even above their pre-COVID highs, the energy industry has not fared as well. Over-capacity has resulted in product pricing that is still low. Unfortunately, predicting cash flows in upstream energy companies is very difficult. Not only is it hard to determine the price the company will receive for its product, but it's also tough to know what it will cost to pull the product out of the ground.

But midstream companies can offer a little bit more cash flow certainty. The fees for gathering and processing are set out in contracts, which often specify minimum usage requirements and last many years. In a lot of cases, the product continues to flow through existing wells and pipes, without much need for capex. And yet, one can find companies in this space whose stock prices are as decimated as any solvent upstream company. Consider Summit Midstream Partners (SMLP).

Saturday, August 22, 2020

Kane & Abel

Historical fiction is probably my favourite genre right now, and within that context Jeffrey Archer's Kane & Abel does not disappoint! The plot is terrific, spans several fascinating historical events including Poland's role in World War I, America's role in World War II, and economic issues in America in between.

Monday, August 10, 2020

The Innovation Stack

The co-founder of $60 billion-valued Square Inc has written an intriguing book called The Innovation Stack. Like most books based on a single idea, I think this book should have been an article, as it's repetitive and drawn out. You can't blame the author: who's going to pay $15 for an article? But at the same time, I think the idea is so important that I'm still glad I read it cover to cover.

Monday, August 3, 2020

Wa Un-Bashed

It feels like just 80 days ago that I wrote about Wabash as a beaten down ($7 share price) manufacturer of trailers that is capitalized to weather a possible multi-year storm. Last week, however, the company traded for $13, which is around what I believe it to be worth and so I sold all my shares.

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