RE:RE:Cohode's short is based on bsEnergy cos. are a terrible comparison since this 'growth' strategy depends on a rising stock price and is only sustainable/profitable with oil over $65ish. Energy cos. have been diluted to hell and eventually had to cut the unaffordable dividends since crude collapsed and operating losses accelerated. Companies that prioritize leveraged high yield returns before running a sustainable business always end up cannibalizing themselves and guess what, capital preservation is more important than dividends for smart money!
puma1 wrote: JDavis17 wrote: His main "argument" is that EIF pays out more cash flow in dividends and capex than they make, but he includes growth capex in that number, which is nothing but pure bs.
Think of it this way. Consider a pipeline company that wants to build a huge new pipeline, which would be growth capex. Would anyone expect them to use their cash flow for that? No, of course not, the company would issue a bunch of shares to pay for it.
So why should EIF be expected to fund growth out of cash flow? Cohodes "argument" is a joke.
I was just about to post that anyone questioning the logic behind MC should perhaps first review a few petro sector stocks. Great post. The short case is BS other than that the stock got way ahead of itself and so was a sitting duck. At a 7% plus yield AND growth from these levels it seems to be undervalued both as a standalone analysis and as a comp to market. But they will take it down again on a slow day so wait imo. $26 is here again so wait.