Teekay Tankers December 2016 Summary And Comments


Click here to read the full summary of Teekay Tankers management December commentary on rates and my comments going forward on the IIEX website.

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Is The Stock Market Getting Too Expensive?


I’ve written several articles over the past few years where I argued the market was not extremely overvalued when many used the historical average Shiller PE to highlight the market as being, well, extremely overvalued.  The problem with using the historical average, as I see it, is including data from say the early 1900’s to forecast the valuation of today’s market is plain wrong; two different worlds.  I’ll discuss the methodology to give a basic understanding on how a conclusion (market valuation) is arrived at.

This method measures market risk over a set time based on Shiller. The Shiller PE (known for Yale University economist and professor Robert Shiller) is the current price of the S&P 500 divided by the past decade’s average inflation adjusted earnings of the index.

The valuation data is derived from a rolling time frame to the present or the year under examination.  Five median values are calculated for each period at the specified intervals. The interval that best fits the historical record is eight years.  We’ll look at a few examples to get a feel for how it works, specifically 1929, 2000 and 2007 followed by a current analysis.

The following color code definitions are:

  • Green – Market cheap to reasonably priced. Good time to find bargains

  • Yellow – Caution, more of a hold pattern. Bargains not as abundant

  • Red – Expensive. The period before a correction.

1929:

…Click here to continue reading the full article…

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Possible Tax Consequences For The Acquisition Of Level 3 Communications By CenturyLink


Possible Tax Consequences For The Acquisition Of Level 3 Communications By CenturyLink

The IIEX website has moved to a new server at http://www.iiex.club/

The blog is at: http://www.iiex.club/blog-1

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New IIEX Website’s New Blog Page


The IIEX website has moved to a new server at http://www.iiex.club/

The blog is at: http://www.iiex.club/blog-1

 

 

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Level 3 Communications – The Bad And The Good


This article lays out revenue growth (The Bad) and its effect on FCF, EBITDA and earnings (The Good). The article can be read without the notes at the end of the article. The notes are provided if the reader wants to delve into detail for a more in depth account.

Level 3 Communications (NYSE:LVLT) is a global communications provider headquartered in Broomfield, Colorado, that provides communications services to enterprise, government and carrier customers in more than 60 countries around the world. Level 3 operates one of the world’s largest Internet backbones.

Top Line Growth (The Bad):

Is Level 3 Communication revenue falling short? The answer is partially in a 2014 article examining the acquisition of tw telecom. Data from a 2014 S-4 provided long-term financials prepared by Level 3 and tw Telecom as part of the due diligence in connection with the merger.

Projecting the future with precision is impossible so various outcomes should be examined. Two projections were given in the S-4:

  • Management Case; non-public historical financial and operating data prepared by management of Level 3 and tw telecom.
  • Sensitivity Case defined as unforeseen events, changes in technology or any number of events that may prove to be financial bumps in the road.

The following is a summary. This table is not in the filing but a compilation of data found in the filing then combined to produce pro-forma numbers along with our projections labeled “Model”: Click Here To Read The Full Article

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Is The Overall Market Cheap Yet?


SPE2016Recent

View based on a rolling time frame from the end date.

Market Gauge

View based on a rolling time frame from the end date. Green = undervaluation; Yellow = Caution Area; Red = overvaluation.

HistView

ANSWER: Not yet but not wildly overpriced either.

Look at end dates for various historical periods with the interactive model at:

https://iiex.sharepoint.com/Pages/ShillerPE.aspx

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Level 3 Communications metrics; actual & projected


Based on models, articles, management comments developed on the IIEX site. Projected summary slides are as follows:

This slideshow requires JavaScript.

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