peet_ksa

Private Kitty Acct. Former hedge fund manager, focus on equities and commodities

[peet_ksa @KsaPeet]

@thewatsonview Why would a trip to the White House be beneficial??

[peet_ksa @KsaPeet]

$OCI.AS Update

Company has announced $8.5B of divestitures which is equal to current EV…company has committed to $3B of cash return in 2024 or $14.50 per share vs a ~$29 stock price.

From here. Looking at $300m of midcycle EBITDA as a pure call option…

I see upside to $36

[peet_ksa @KsaPeet]

Special Sits play with OCI-NV
- global fertilizer / methanol company
- 2 big asset sales for ~$6.1B of net proceeds
- remainco EBITDA at $600-700m midcycle vs ~$500m today
- 7x Ebitda and $1.3m net debt = $13.60 base biz then add $28/sh for proceeds gets me $41.60 vs $28.50

[peet_ksa @KsaPeet]

Bottom line is valuation will be driven by

1) dayrates in short term based on supply and demand

2) dayrates need to rise to bring cold stacked rigs into market

3) day rates will peak at new build replacement economics

This should get us to $600-700k dayrates in time

[peet_ksa @KsaPeet]

Offshore Drillers look interesting to me…
$VAL $NE $SDRL $DO $BORR $RIG

Simple thesis is we at 90% utilization and low likelihood of new build cycle which should drive dayrates higher.

Stocks emerged from BK debt free and will be disciplined on capital returns. More…

[peet_ksa @KsaPeet]

$NE and $DO implications

Key risks to asset heavy cyclicals are 1) capex plans 2) lack of industry discipline and 3) demand fallout and 4) tech changes and 5) high leverage.

Point 3 is the key risk for industry and point 4 is why $RIG is my least favored play.

[peet_ksa @KsaPeet]

From my industry contacts - not much a key difference between 6th and 7th gen drillships (difference would be dual Blow Out Preventers, hookload, MPD capacity). What we have seen is the moored semis and old semis being scrapped (40% of floaters scrapped)

[peet_ksa @KsaPeet]

$NE and $DO implications.

So what is next? Floater dayrates matchup to repl cost economics of $600-750k vs $500k leading edge

Term extends from 1-18m to multi-years

Smaller operators sell assets to Big Four.

Older assets continue to be scrapped

[peet_ksa @KsaPeet]

$NE and $DO implications cont’d

$NE dividend hike gets you 4.4%…$BORR at 6%…SDRL and VAL both buying back chunk of stock.

Mkt not discounting capital discipline and new thinking post BK reorgs.

These stocks have a multi year cycle ahead with key risk being a recession

[peet_ksa @KsaPeet]

@Mufasa_CoL I’m no expert. I analyze historic actions across various situations and use that to predict future…majority of time, this works out…

[peet_ksa @KsaPeet]

@katkittykit2 I posted this earlier..

[peet_ksa @KsaPeet]

@Mufasa_CoL If a country doesn’t respond to the targeted assassination of its most senior military leaders over a 5yr period - why should they respond now? What has changed???

[peet_ksa @KsaPeet]

Tagging above $GLD

[peet_ksa @KsaPeet]

Gold looks cheap vs BTC

Just another view as many threads circulating on Gold specifically

[peet_ksa @KsaPeet]

@Mufasa_CoL Why would they attack now? Is the element of surprise no longer material in war??

[peet_ksa @KsaPeet]

@Mufasa_CoL I don’t remember when Iran has ever responded to a provocation.

[peet_ksa @KsaPeet]

@katkittykit2 Unfortunately the data tells you majority of their social / economic transformation will have serious difficulty if global liquidity is being reduced

[peet_ksa @KsaPeet]

@Lizzy_Capital Even if you have an edge…one would assume it’s informational…AI should basically wipe out quant models first and then eliminate 2nd and 3rd derivative alpha plays

[peet_ksa @KsaPeet]

@Lizzy_Capital I think it’s comical people pretend that performance matters on the buyside. What matters is the ability to raise assets, nothing else

[peet_ksa @KsaPeet]

@MacroIDK_pvt @Lizzy_Capital Again with all due respect. If you have sat in numerous board rooms discussing Treasury and capital allocation, you will understand how far fetched investing a portion of reserves in BTC are…same as asking a company to invest in 3x levered market indices with excess cash