The Game Over Dominant China Platforms a Now a BUY!
Hey Subscriber,
(NOTE: Wanted all subs to get a taste of why the TR All-Access trading room is so valuable--as such, all subs are on this update)
Yet another reason to join and check into the All-Access Trading room every day--scroll down and click here and join... stuff happens quickly!
Today at 9:51 AM
"Just got off a call with MSCI analysts on China Tech Giants.. $JD $PDD and Tencent Music-they are of course game over digital platform dominators in China and Southeast Asia...they make a strong case that the50% demolition of market capsfor these dominant companies is crazy--that "this same shit happens every 4-5 years heading into the giant every 5 years October CCP meeting--and that having a CCP board member is a GOOD thing for these companies!"
Today at 10:15 AM
Buying TME Tencent Music Group down 60%
Jan 2022 calls $12 Calls
< .70 13,339 options traded
Today at 10:25 AM
JD.com turn around and 10 forward PE for the Amazon of China?
BUY to Open JD Oct 15 2021 80.0 Call
Limit $3
10:30 AM
KWEB index holds all the major China internet plays
BUY KWEB $50 CALLS < $2.75 5,295 traded so far...
In addition, a promise by China’s central bank to keep monetary policy stable was also seemingly behind the rally. “The People’s Bank of China will keep monetary policy stable with a good cross-cyclical design and will support high-quality economic expansion with ‘appropriate money growth,'” the PBOC said in a statement late Monday.
“We think the reversal in Hong Kong of 7% off lows, the general rise of Asian equities, the bounce-back of 11% from Alibaba, and the soaring commodities prices, where iron ore was up 10% at one point overnight in Singapore… All can be linked back to that statement,” Andrew Brenner, head of international fixed income at NatAlliance Securities, said in a note.
USAC Update
We got a gift this week to buy $USAC under $15.25 with yet another "the sky is falling-dividend cut inevitable" article from a Seeking Alpha author who has been dead wrong on USAC since forever. Got a note from the CFO on the allegations that "because of low new compressor acquisitions/CAPEX, the rock-solid $2.05 14% annual distribution will have to be cut!"
He shared the latest USAC investor deck (which you ALL should read) that he presented at a Citibank MLP conference and replied " Toby--what this person does not understand is that #1 ALL of our compressors are leased for 3-5 years in advance and we get paid 30 days AHEAD of the lease due date by automatic bank drafts. He also does not understand that when we establish a new compressor lease, they first come out of our existing inventory and if we need to, we buy a new compressor. Right now our "capex" demand is cyclically low because of pandemic issues that are slowly resolving themselves as the pandemic variant peaks.
And of course, our distributable cash and liquidity continue to strongly support our dividend."
Here are our CEO's most recent comments on 2021 from early August :
Second Quarter 2021 Highlights
Total revenues were $156.6 million for the second quarter 2021, compared to $168.7 million for the second quarter 2020.
Net income was $2.7 million for the second quarter 2021, consistent with the second quarter 2020.
Net cash provided by operating activities was $99.5 million for the second quarter 2021, compared to $97.4 million for the second quarter 2020.
Adjusted EBITDA was $100.0 million for the second quarter 2021, compared to $105.5 million for the second quarter 2020.
Distributable Cash Flow was $52.5 million for the second quarter 2021, compared to $58.7 million for the second quarter 2020.
Announced cash distribution of $0.525 per common unit for the second quarter 2021, consistent with the second quarter 2020.
Distributable Cash Flow Coverage was 1.03x for the second quarter 2021, compared to 1.15x for the second quarter 2020.
“The second quarter of 2021 continued the pattern of stability in USA Compression’s business that we began to experience as we came into the year,” commented Eric D. Long, USA Compression’s President and Chief Executive Officer. “As the continued strength in commodity prices throughout the quarter helped further improve prospects for many across the broader energy industry, we have seen our customers maintain capital discipline and continue with their scaled-down budgets for 2021.
While the storage of crude oil and natural gas worldwide continues to be reduced (bullish for energy prices and E&P) , there is some potential short-term pressure on demand due to the COVID-19 Delta variant. As global economies open back up and continue to strengthen, we believe the stage is being set for improved E&P activity. We are seeing improving fundamentals for compression services – increased levels of quotes, contract execution and pricing – which should translate into an improved outlook for compression services in the latter half of 2021 and on into 2022.
The post-election uncertainty of prospective regulatory and legislative actions regarding energy transition, has also tempered activity this year and may have further impact into the future.”
“More broadly, we believe the prospects for natural gas continue to be positive. While we’ve seen modestly increasing rig counts since the lows last summer, when combined with a meaningful acceleration in the rate of completing previously drilled but uncompleted wells, domestic natural gas production has increased more than 5% above this time last year. Exports of LNG have continued at or near historic highs. And with the continued strength in natural gas prices, we expect these trends to continue.”
“As we have throughout the recent cycle, we continue to focus on managing our capital spending and controlling expenses throughout the company. Our operating margins remain attractive and consistent with historical performance. These efforts helped in part to achieve coverage and leverage metrics better than our expectations for the quarter.”
Expansion capital expenditures were $8.2 million, maintenance capital expenditures were $5.0 million and cash interest expense, net was $30.1 million for the second quarter 2021."
In short, TAKE ADVANTAGE of our $Buy Under $15.25 and get the 14% dividend and THEN sell the $15 PUT OPTIONSas the Vaccine Approval action will create millions of employer mandates just like the mandates for infectious diseases are mandated for school and travel. Moderna mandate will follow very shortly!
Toby and TR Team