McMoRan Exploration Stockholders - Take the Money and Run

Despite the uncertainty surrounding Davy Jones and other ultra-deep wells, Freeport (FCX-$33.50) hasn’t shut out McMoRan Exploration (MMR-$15.69) investors completely. In addition to the $14.75 cash offer per share, the metals miner will issue 1.15 units of a royalty trust that will make payments – should any of McMoRan's existing ultra-deep exploration properties (in development) actually start-up producing natural gas and other hydrocarbons. Further, the trust could be callable in six-years at an implied valuation of $10 per unit (not bad for “dry” properties).

Continue Reading at YCharts: Ingrates! McMoRan Exploration Holders, Given Drilling Failures, Should Grab Takeover Offer

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Is Google In Need of Groupon coupon?

Chicago-based Groupon (GRPN-$5.01) remains a coupon-driven business, just one of many available to online shoppers. Further, a growing number of analytical and survey-based studies report disillusionment with the alleged effectiveness of coupon promotions. In particular, merchants are questioning the long-term profitability of daily coupon ventures, as a low percentage of customers spend beyond the deal value (with even fewer returning for full-price purchases). Evidence is surfacing, too, that shoppers drive up store congestion by waiting until expiry to use their coupons, which negatively affects perceptions of the participating vendors.

Groupon management says that it is addressing such concerns and is working more closely with its merchants to (a) improve profitability (such as, its new mobile payment app, called “Payments,” which will offer more competitive swipe-fees than the 2% - 4% transaction costs associated with traditional charge cards) and (b) design online promotional offerings that increase percentage of coupon redeemers into loyal customers.

Continue Reading at YCharts: Talk of Rekindled Google-GrouponRomance: Our Bucket of Cold Water

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Drilling for Dividends at Breitburn Energy Partners

Contrary to management’s optimistic guidance, an assessment of Breitburn Energy Partners' (BBEP-$18.18) recent financials strongly suggests the oil & gas MLP cannot continue to simultaneously fund day-to-day operations, cap-ex, interest payments and dividend distributions with cash flow from its operations. Fundamental weaknesses include falling net income and free cash flow, lower return on equity, and increasing debt leverage.

To some extent, the company has mitigated crude oil and natural gas price fluctuations with an active hedging program: In 2013, 78% of anticipated production has already been contracted, with oil and natural gas volumes fixed at $92.80 per barrel and $5.96 per mmbtu. The downside to this “price protected” portfolio is an ugly – and unspoken – truth at Breitburn Energy: cash flow growth is dependent on hitting the production target, which in turn, is tied to spudded wells and acquisitions, funded with more and more debt and by secondary stock offerings, which increases the amount of units outstanding and subsequent cash distributions paid out, too....

Continue Reading at YCharts: What’s Up With Breitburn Energy Partners’ 10% Dividend Yield? Our Man Looks Under the Rocks.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Intel Stockholders Lose - But Otellini Retires a Winner

During Paul Otellini’s tenure as CEO - from the second quarter of 2005 through the third quarter of 2012 – there is no denying Intel (INTC-$19.50) achieved notable financial successes: cash generated from operations of $107 billion; annual revenue growth from $38.8 billion to $54 billion; and, cash dividend payments totaled $23.5 billion.

Digging deeper into the storied legacy of Paul Otellini, however, we find a man who might have been too myopic in transforming manufacturing – both in operations and cost – in his quest for profitable growth. According to Bernstein Research analyst Stacy Rasgon, "Intel’s phenomenal revenue growth over the last couple of years has been out-of-sync with many data points in PCs. Indeed, we find that most of Intel’s growth in PC revenues was not really due to outsized unit growth, but instead from significant upside to pricing.”

Continue Reading at YCharts: Otellini Nicely Milked Intel’s PC-Chip Business, But is Pay Justified With Mobile Strategy a Flop?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.