Investing General Discussion

Sanrith Descartes said:

Follow-up on that previous post, There is a treasury auction closing on 8/8 for 3-year notes. Face value is 4.5% coupon with the expected yield about 4.391%
Think I am going to grab some.
Now that my house sale closed in NY and I no longer need any cash out of my accounts for my new purchase I am free to start investing it again. Off the sidelines at last.

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There is a 10-year auction on 8/9 at 4% a coupon. Some things I like to side with Buffett on and I might piggyback this trade with him.

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The three year was expected to go at 4.391% and stopped through at 4.398%. The when issued yield was 4.416%. Face value was 4.5%

Blazin said:

guns in minecraft,

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Blazin said:

So where do we stand today? Well still in a bullish configuration. We have some room for weakness, if things are going to materially sour there will be signs and we'll just keep an open mind to them each and every day.

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So we are working on red day number 5 out of 6 days for SPY. This following two really long green session streaks. You think we get down to the 50-DMA? And if we breakthrough a possible move down to the 100?

Lightning Lord Rule said:

Really like the discussion on fake news and market fundamentals, great stuff guys.


Question for the analysts out there, I recently saw in an email that I get from Seeking Alpha recommending Enbridge (ENB) as a good buy right now. It's a Canadian energy company, and the stock price is at a 2Y low or so right now. SA also recommended it for its healthy 7.X% dividend. The thing is, when I look at the info on Fidelity's page about it, it kind of looks like crap to me other than the dividend. The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison, and well... it's Canadian.

There's also my thoughts that if we are in for a recession soon, doesn't that mean energy is going to be affected negatively due to people and businesses being less economically active? Not as many things being built, etc etc. I mean, the overall market might not be affected by the economy, but that certainly won't apply to all sectors, such as real estate, industrials, etc.

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The energy sector is a complex raid zone in my opinion. So many moving parts to understand. That being said, I am currently long OXY but only because I am riding it with Buffett. I think your quote here answers your question...

"The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison"

Blazin said:

I honestly can't understand how its so low, its actually an oddity given the inflation we have seen it should be pushing 2-3T just to be on the level of previous periods of credit extension. Consumers became more disciplined through the pandemic (hate that words because it's bs there was no pandemic but whatever whenever I say pandemic I mean the govts response not reinforcing it actually being a thing) . That is wearing off and the US consumer should at some point return to it's glory days of overextension. Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

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I kinda wonder if this is a scenario where the upper income to middle class and generally skilled blue-collar worker are sitting right fine and dandy, because this is an extremely job friendly economy. I don't know anyone who owns a house who's really having any financial trouble at all. My mortgage gets laughably cheaper every year, I paid cash for my car, cause why not, and my wages have gone up way faster than inflation. (almost +50% in the past 2-3 years).

Meanwhile, a lot of people in more questionable financial situations seems to be not doing as well. Car repossessions and things like that have trended upward pretty aggressive, but part of that is the market being weird, and lenders seem to be somewhat in front of the game. And people I know that rent or are paycheck to paycheck definitely have been working more OT than usual and seem to be complaining about finances.

The economy is sick atm, but I just don't see the credit market being a huge influence into it like last time. The power balance that's been falling into place since the 70s being turned upside down seems a much, much bigger factor to me, plus god knows what boomers cashing out will do to things.

Lightning Lord Rule said:

Well sure, but WTF do I know? That's the barest surface level of analysis compared to what you guys do. I haven't had the time to sit down and figure out how to do a thorough analysis on company/stock X like you guys have.

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First questions I would ask yourself is why you want to buy it? Do you want exposure to the sector? Are you just looking because of the dividend? Did that email give you a reason to buy it other than "check this stock out". I generally don't deep dive into a stock until I have identified why I want to own it. Exposure to the space is a viable reason. Its why I started a position in ALB recently.

Blazin said:

I'm just watching one level at a time right now the 50d, my feel is we get a test but days like today where the bears just have zero follow through even with perfect set ups and volume is meh. Price action telling me this is becoming less likely. Maybe the 50d comes to us instead via further consolidation.

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So the math tells me that if I were to go long with a 25% tranche at the 50-DMA, and it goes to shit so another 25% tranche at the 100-DMA, it keeps falling, a third 25% at the long dated support and finally the last 25% at the 200-DMA, I would end up with a full position with a cost basis of $421 which is sitting just below the 100-DMA and at the early June price point.
The above assumes a bearish movement. If it bounces off the 50 and runs then I look for a new set of entries on the way up.

Thoughts?

Lightning Lord Rule said:

I don't know if I really want to buy it, other than the usual: a good opportunity to scalp some $$$. I mostly want to check to see if these guys are full of crap or not.

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Fair enough. Financials:

Bottom half of the income statement:





Balance sheet:



Cash flows:



So off the top of my head is their Debt to EBITDA is scary. $80b in debt alone is scary but its running at 7x normalized EBITDA. Their net debt position is growing each year. Also a red flag for me. They have the free cash to cover the dividend but just barely and they are borrowing money to cover it. They borrowed $2b in 2022 and after paying the dividend ended up with a new cash flow of only positive $500m.

Based just on the financials, I wouldn't put money into it. I also know very little about the industry and their could be compelling reasons in their sector to make it an investment. I cant answer that part.