tag:blogger.com,1999:blog-6321089372587128676.post2623855333607915381..comments2023-10-17T10:01:00.917-04:00Comments on Distressed Debt Investing: David Einhorn and Levered EquitiesUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6321089372587128676.post-12979744237967698832012-02-24T23:20:55.059-05:002012-02-24T23:20:55.059-05:00HOV would not generate cash if housing roars back,...HOV would not generate cash if housing roars back, it would need to spend cash to buy land and invest in WIP. Builders tend to generate cash on the way down, not on the way up. The only scenario under which HOV is capable of generating cash is it if it can issue a ton of equity and retire debt. It's cash interest payment is too big of a nut, HOV is done. The only people buying HOV equity are morons who do not understand the company. BZH could survive, but not HOV.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-45974317380787793832012-02-21T21:28:00.015-05:002012-02-21T21:28:00.015-05:00Please correct me I'm wrong here - given the d...Please correct me I'm wrong here - given the dramatic decline in charter rates (both for new/old ships) across all vessel segments, wouldn't you expect the operating income of these shippers to decline too? Then at the income level, the writedowns would be offset (at least to some extent) by less D&A - although I'd expect the writedowns to be greater.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-78241916783926748072012-02-20T18:06:39.069-05:002012-02-20T18:06:39.069-05:00One thing to consider on the shippers. The debt wa...One thing to consider on the shippers. The debt was used to finance the acquisition of ships. But the value of the ships have dropped drastically and the carrying values haven't been written down (yet). When they do (PRGN and RIG just did it), then book value drops a lot, so does D&A, but net income rises drastically as a result. So the shippers have been more profitable than the market was giving them credit for, thus the run up in stock prices recently. Graham said the security analyst should make these adjustments on his own to get a better understanding of earnings.Anonymousnoreply@blogger.com