Spyglass Resources Corp (SGL-T)

The liquidity situation in this company is profoundly challenged and he would take out any equity value you could.

(Top Pick Oct 23/13, Down 21.25%) Yield was very strong and he felt the stock should go up to bring the yield down. Management decided to sell assets. Then they had some operating issues. Then we didn’t get a warm summer so he liquidated. Soon afterwards the dividend was cut. We will see what they can do to get the debt lower.

Hasn’t owned this for a year or so. Still waiting for the debt to come down.

This is a combination of 3 companies that merged fairly recently. Pays a monthly dividend of about $0.02. The market is saying that the dividend is likely to be slashed. He doesn’t know why they are paying that much. It makes no sense to him. Have a debt load of over $300 million. Thinks they would be far better off if they started to trim back the dividend or eliminate it altogether. Usually when you have a merger of companies, there is also a write-down, so it would not surprise him if there were some write-downs coming up. Would be in no rush to purchase this. This might prove to be a good tax loss play.

This was a recapitalization of 3 different companies coming together. Owns a lot of it because he believes management is going to solve the balance sheet issue of too much debt leverage. They will do that through asset sales of non-core stuff that doesn’t really contribute to their ongoing cash flow. Once they do that, he believes there is a yield compression story that is going to unfold. Dividend would probably support an 8%-10% yield versus its current 13.5%. Not out of the question that they could attract some joint venture partners.

Was a merger of 3 companies transitioning into a dividend model so it didn’t start off on a good footing. Yield of 13% means market does not see dividend as sustainable. Management is trying hard to sustain it. Thinks it should go to 9-10% and pay down the balance sheet.

His company has this as a Sector Perform with a one-year target of $2.50. Feels the Street is cautious about this on sustainability given target capital efficiencies and higher debt levels. Company is likely to implement a DRIP and likely look to sell some non-core assets. 13% dividend yield. Would be a little bit cautious on this.

(Market Call Minute.) Has a Short position on this. A serial underperformer and has a lot of debt. Good bounce because of tax loss selling.

Have assembled some good assets. The concern is that anyone that is paying out a 15% dividend, the market has made a judgment that it is not sustainable. Feels the price has been driven way down because it was assembled and built as a dividend payer and the market is concerned they can’t keep paying this. Would be a little careful with this at this time. If you own, there may be a relief rally after tax loss selling, which may be a good time to get out.

Tax loss selling or average down? Thinks management has a shot at turning this company around from the three-way merger that they did. Likes tax loss selling as you can always buy back in. You could Sell today and then just mark it on your calendar for January 6, 7 or 8 and then buy it back.

This was a result of a merger between 3 companies. Have a reasonable asset base with a low decline. As far as capital efficiencies, how efficiently they can reinvestment capital, operating costs and growth; it is too early to tell. Reasonably challenging. Yield of 15%, which indicates the market does not believe it. This is a wait and see situation.

14.2% dividend. There was some concern about the high dividend. High debt levels, plus lower cash flows mean that they should lower the dividend so they can meet their debt obligations. Short term it could take a hit but longer term it should do well.

Market has loved to hate this stock. The assets that management brought together were assets that they all knew when they were at the Provident Energy arena. What has been missing is confidence by the market in their ability to pay the dividend, which they have indicated they will continue to pay. Also reducing debt is a big knock against the company. They will be selling some non-core assets to bring the debt down. Yield of 13.99%.

Great management. Good operators. Struggling with amalgamation of three businesses and what do you keep. Wants to wait before going in.

Likes this name. Producing 18,000 barrels per day. Believes the dividend is stable given that it has a basic payout ratio of 25% and an all-in payout ratio of 100% with healthy lines of credit. Have low decline assets, which are ideal for dividend paying models. 12.6% yield.