Oil rigs…

May 23, 2009 20095 4:40 am | In Thoughts, Trading | Comments Off

Current situation in the market is that every single operator out there are looking to cut their costs by renegotiating their contracts, especially on the day rates of oil rigs which has reached crazy figures of 250k/day for a jack-up! And it looks like some rig owners are starting to bend to the operator wishes.

I do not have all the details but there were rumours that somewhere in the Arabian/Persian Gulf, one of Noble Corp's (NYSE:NE) drilling jack-up rigs was loaned out to serve as a accomodation unit for a platform while there were ohers saying Transocean Ltd (NYSE:RIG) refused to lower their prices and rather let their rigs sit in the yard. But considering Transocean currently owns most of the deepwater & ultra-deepwater drilling rigs around the world and they are still in demand despite the current oil prices, they can comfortably absorb the losses.

Anyway, on the subject of oil rigs, it's obvious some companies have spreaded themselves too thin but considering oil prices might recover in a year or two & it typically takes 3-5 years to build a new one, a chance to buy up one of these weakened companies doesn't look like a remote possibility anymore to bigger more established companies like Transocean (NYSE:RIG), Noble (NYSE:NE), Ensco (NYSE:ESV), Nabors (NYSE:NBR), Diamond Offshore (NYSE:DO) or those who are traditionally strong in the land rig business like Helmerich & Payne, Inc (NYSE:HP). I've been looking at the following recently:

Hercules Offshore, Inc (NASDAQ: HERO) – 29 jack-ups, 27 barge rigs, 3 submersibles (but cold-stacked)! Quite a fleet, but what's up with the cold-stacked submersibles! But with most of the rigs operating in the Gulf of Mexico/US Gulf Coast, it might not be faring too well with the current reduced demand of rigs, especially shallow ones.

Atwood Oceanics, Inc (NYSE: ATW) – 4 semisubs, another 2 on order to be delivered in 2011 & 2012 respectively and 5 jack-ups/tender rigs looks like a sizeable addition to any company's deepwater expansion!

Any thoughts anyone?

2008 Top Hedge Fund Moneymakers

March 26, 2009 20093 11:41 am | In Trading | Comments Off

George Soros again! This guy's a master in downtimes!!!

1 – James Simons, Renaissance Technologies Corp, $2.5 billion
2 – John Paulson, Paulson & Co, $2 billion
3 – John Arnold, Centaurus Energy, $1.5 billion
4 – George Soros, Soros Fund Management, $1.1 billion
5 – Raymond Dalio, Bridgewater Associates, $780 million
6 – Bruce Kovner, Caxton Associates, $640 million
7 – David Shaw, D.E. Shaw & Co, $275 million
8 – Stanley Druckenmiller, Duquesne Capital Management, $260 million
9 – (tie) David Harding, Winton Capital Management, $250 million
9 – (tie) Alan Howard, Brevan Howard Asset Management, $250 million
9 – (tie) John Taylor Jr, FX Concepts, $250 million
12 – James Chanos, Kynikos Associates
13 – Michael Platt, BlueCrest Capital Management
14 – Roy Niederhoffer, R.G. Niederhoffer Capital Management
15 – John Horseman, Horseman Capital Management
16 – Paul Touradji, Touradji Capital Management
17 – Henry Laufer, Renaissance Technologies Corp.
18 – Kenneth Tropin, Graham Capital Management
19 – (tie) Pierre Andurand, Dennis Crema, BlueGold Capital Management
19 – (tie) Christopher Rokos, Brevan Howard Asset Management
22 – (tie) Christian Baha, Superfund
22 – (tie) Christian Levett, Clive Capital
24 – William Dunn, Dunn Capital Management
25 – Andrew Hoine, Paulson & Co.

Agriculture Stocks…

October 11, 2008 200810 2:30 pm | In Trading | Comments Off

Monsanto Company (MON)

Monsanto Company (NYSE: MON) is the largest producer of genetically modified seeds for crops such as corn, soybeans, and cotton. Monsanto beat competitor DuPont (DD) to market with the latest seed technology – a combination of draught resistance, insect resistance, and higher yield in a single seed – and has plans to release a seed with eight such traits by 2010.[1] Monsanto uses an aggressive and effective strategy of first capturing market share (through price breaks, if necessary), and then raising prices, which has made it the market share leader in the industry. It has an especially strong hold in Latin America and India, markets with large opportunities for agricultural and biotechnological expansion.

Biotech Traits

In addition to its standard products, Monsanto also sells source DNA material to other companies, including a few of its close competitors. For many seed companies, it is cost-efficient to buy tweaked genes from Monsanto that they can then insert into their seeds. Monsanto is currently estimated by Goldman Sachs to hold more than 90% of this "biotech traits" market.

Impressive!!!

Archer Daniels Midland Company (NYSE: ADM)

Archer Daniels Midland Company (NYSE: ADM), based out of Decatur, Illinois, is one of the largest commercial "agribusinesses" in the world. It processes cereal grains and oil seeds and deals with the storage and transportation of commodities. ADM's products are used agriculturally for human consumers and livestock, as well as in the fuel industry. ADM has become an increasingly international business, with firm footholds in both Brazil and China.

Expansion

During the last five years, ADM has invested $4 billion in building new plants, expanded current plants, and acquiring new plants and transportation equipment. In 2006 it announced plans to expand ethanol production by 550 million gallons and announced plans for the construction of two dry plants for corn milling. It also plans to construct a polyhydroxy alkanoate (PHA) natural plastics factory (with bioplastics firm Metabolix), a U.S. cocoa processing factory, and plans to increase U.S. Biodiesel production. These changes will come at an estimated cost of $3.1 billion over the next 4 years.

ADM is presently producing biodiesel in Brazil and is looking into Renewable Energy in the form of Ethanol. ADM currently holds partial ownership of the Brazilian company Cosan SA and there is speculation of larger buyouts. This would allow ADM to more fervently enter the sugar-cane ethanol market. Sugar-cane ethanol can be produced for $.90 per gallon, 30% less than the $1.20 that it costs to manufacture ethanol from corn.

Lotsa room to grow, eh?

Bunge (NYSE:BG)

Bunge (NYSE:BG) is an agribusiness and food company that is the largest producer of soybean oil and which has an immense stake in the South American fertilizer market. It also deals with commodities and works a great deal with Biofuels, especially Brazilian sugar-cane ethanol.

Fertilizer

Bunge is currently the largest supplier of fertilizer to South America. In Brazil it is involved in every stage of the process, from mining to marketing. It also controls 26% of the Brazilian NPK (nitrogen, phosphate, potassium) fertilizer retail market. A foothold in Brazil allows the company to greatly cut-down on transportation expenses to South America.

Wonder if there's room to grow along with Cargill & ADM down in LAM.

Seagate (STX)

October 11, 2008 200810 10:10 am | In Trading | Comments Off

Seagate

Seagate was the first to make perpendicular recording a commercial success. This technology allows for greater data capacities and faster access speeds. Seagate currently offers 3.5" drives in capacities up to 750 GB using perpendicular recording, the largest of its kind in the industry. The company is moving to transition all of its products to incorporate the technology.

Perpendicular recording

Perpendicular recording is a data recording technology that allows for greater data densities, which leads to greater drive capacities and faster access speeds. Traditionally, bits of digital data are stored as magnetic information on the hard disk platter with the magnetic poles aligned along the plane of the platter. There is a physical limit to how closely data can be packed while maintaining data stability. However, perpendicular recording technology overcomes this limit by aligning the poles of magnetic information perpendicular to the platter using a different writing mechanism and recording material with higher magnetic fidelity. Whereas traditional longitudinal recording has an estimated limit of 100 to 200 gigabits per square inch, perpendicular recording allows for densities of up to 1000 gigabits per square inch.

Hard drive manufacturers are expected to adopt the technology rapidly because current data densities are near the physical limit. Seagate was the first to successfully implement the technology, and is currently shipping 3.5" drives with capacities up to 750 GB. In comparison, Western Digital's largest 3.5" drive, which uses traditional longitudinal recording, has a maximum capacity of 500 GB. Seagate has announced that it will intend to eventually make perpendicular recording a standard feature in all of its drives.

Solar Stocks…

October 11, 2008 200810 10:03 am | In Trading | Comments Off

JA Solar

Though the company is based in China, and therefore keeps production costs down via cheap labor, it is barely above average in both measures of solar success. JASO will either have to develop stronger efficiency technologies or lower-cost production technologies, as 17.7% efficiency[1] cells that cost $2.37/watt[2] to manufacture don't compare well against competitors like SunPower or First Solar, with 22% efficiency[3] and $1.40/watt[4] manufacturing cost respectively. The solar sector is becoming more and more competitive; among JA Solar's competition are such powerhouses as SunPower, SunTech, BP Solar, Sharp, Kyocera, and Q-Cells.

ReneSola

In 2005 77% of the company’s revenue was from solar modules, with significant contributions from the sale of ingots and solar cells as well. In 2007, the three accounted for only 0.5% of the company’s revenue, with solar wafers accounting for a whopping 91% and processing services contributing 7.1%. WOW!!!