Nat gas has dropped $0.5 in a month and $0.37 in a couple weeks the EIA henry hub prices for this week do not come out until tomorrow. The correlation to EXC is quite strong. Someone want to spend the time to prepare a scatter plot for Squeak? My guess is that someone is front running the EIA release betting on more weakness in tomorrow's numbers.
Decided to take the analysis a little further. The Rig count in N. america in 2014 was 2330. As of this week the number of rigs is now 943. A total of 13 rigs shut down last week alone. Get the Idea where this trend is headed?
EXC is trading in lockstep with the price of Nat Gas. Nat Gas is threatening to break $2 mBTU a price not seen since the late 1990s. What the market does not seem to recognize is that the PMJ bid indicated a game change in the way that polar vortex reliability is now being factored into the bid. In 2014, Both coal and nat gas electricity producers had difficulties when nat gas supplies were drawn down for home heating and coal conveyors and rail were slowed by cold weather. The PMJ auction treatment should be recognized as a Put option for the price of EXC. However, it is not being recognized. As such, the company profitability has improved while the share price has fallen. In the short term this condition probably marks a great buying opportunity, since historically nat gas has not remained at these depressed levels for long periods.
Not coincidently, the last time Nat gas broke $2 mbtu was 1997-1998 was also a strong El Nino year. In other words this is the traders short term bet on unseasonably warm weather conditions this winter. Eventually, long term fundamentals will trump this trade. Typically, Nat gas below $2 will result in a shut in of drilling activity. This will result in high prices in subsequent years.
Let's see if this plays out as in the past.
Went back and read old press releases and headlines. IT appears that DGI is teaming in some areas Forestry for lumber supply (tree health), Fisheries to evaluate temperature and salinity changes to aid fishery management etc. I think this is an area where the potential for vertical growth can expand greatly. The terrorist high resolution satellite imagery market can only expand given the horrible attacks in France.
Thought the rotation into value stocks was going to occur in late August. However,, it has not happened. Eventually, it will and will benefit EXC.
I'm new to DGI but I did listen to the conference call before buying in on Friday. I heard that the private sector traction was not what they had hoped for and is more labor intensive than may be warranted for one time or a limited opportunity, Mapbox is fine but there are a lot of applications beyond map development. Many of these applications have been developed in academia or private sector. I believe multi spectral analysis has the potential to be huge in agriculture, environmental, climate studies etc.
When I worked at an engineering company we used high definition satellite imagery for a variety of civil and environmental projects (landfills, mining, pipelines, etc). One of the environmental engineers had teamed with Purdue University to use multi-spectral imagery to evaluate crop fertilization, hybrid seeds to increase drought tolerance. There is a lot of expertise that DGI cannot even begin to hope to recreate in house. It would simply be too expensive to maintain the scientists etc. DGI needs to work with the developers of this technology to create something of an AP library that will expand the private sector user network. So the developer of an AP that uses the satellite data gets a royalty for developing the AP. Maybe DGI takes a small cut to allow them to co market it through DGI but the bulk of the payoff comes in increasing the subscriber base.
Besides agriculture, I believe Wills Bros was using satellite data from GeoEye in combination with a special pig (instumentation run through pipelines to look for leaks or defects). After the Plains all America Leak in California, something of this would have a lot of value.
Bottom line is that DGI needs to reach out to the developers of innovative uses of the satellite data to allow them to co-market applications that will increased the usage of their imagery and data.
Strangely enough I'm looking at it as an investment and can see holding longer term. I think today is one of those moments you have to cease. I can see writing covered calls once it stabilizes and some of the optimism builds. DGI has a great asset base but needs to figure out how to monetize it. In this world of changing climate, spectral imagery will become very valuable to world agriculture.
Listened to the call and thought this mornings market reaction to the slight cut in forward guidance is way overblown. There are a host of applications for this data that are not even being touched. Unfortunately in this economic environment where oil, construction etc are in recession it may not turn up for a while. Either way DGI has a monopoly and the value will be recognized at some point.
Breast DX was approved for the previous CMS negotiated rate. I don't think we know the rate that prostate will be reimbursed at. Colon is pretty insignificant. There is rotation out of health care right now so GHDX is getting dragged down with the health care sector. I don't expect too much this quarter, but the impact of the prostate approval should set the tone for a good 4th quarter. Wall street may want a couple of quarters of accelerating rev growth, so it could be mid next year before share price traction starts to pick up.
The whole company is being valued at $700 million, meaning little value is ascribed to any of the components, Presently GHDX trades at about 2.5 times sales. Other faster growing genomic firms are trading 7.5 to 10 times. If GHDX starts demonstrating that they are on a trajectory to hit $1B in sales by 2020 (i.e., their guidance) it should double in the next year. The float is surprisingly small so any clammer to get in could result in strong/quick upward movements. The narrative that they help cut unnecessary health care costs can be pretty powerful in this environment.
It's becoming apparent that EXC is trading in lockstep with nat gas. Nat gas (look at UNG chart compared to EXC). UNG) collapsed at the same time that EXC dropped. The market is betting that nuclear power generation will lose competitiveness to nat gas fired power plants. However, the recent PMJ auction should bring this reasoning into question since nat gas fired power plants were not as reliable during the 2014 winter vortices due to fuel being diverted for home heating.
A Novartis AG drug used for treating leukemia may also work for patients with Parkinson’s disease,
An early stage trial conducted by the Georgetown University Medical Center found a small dose of the medicine, Tasigna, produced “meaningful clinical improvements” in 10 out of 11 patients, the university said in a statement on Saturday. Unlike standard clinical tests, this one didn’t include a control group for comparison.
The findings appear significant nonetheless, because there is no cure for Parkinson’s disease and participants in the study saw production of the brain chemical dopamine increase so much researchers had to advise them to reduce or stop taking other drugs. Parkinson’s, a degenerative condition causing tremor and motor impairment, is associated with dysfunctions in the dopamine system and affects an estimated 10 million people worldwide.
Alan Hoffmann, a retired social science professor diagnosed with Parkinson’s disease in 1997 who took part in the trial, said he was able to “empty the garbage, unload the dishwasher, load the washer and the dryer, set the table, even take responsibility for grilling” after taking the Novartis drug. Previously, he did almost nothing around the house.
Some patients in the study had Lewy body dementia, the second most common type of progressive dementia after Alzheimer’s disease.
The study marks the first time a therapy appears to reverse the “cognitive and motor decline in patients with these neuro-degenerative disorders,” Fernando Pagan, a neurology professor who helped oversee the trial at Georgetown University Hospital, said in the statement. “But it is critical to conduct larger and more comprehensive studies before determining the drug’s true impact.”
However, the press release does not specify the agreed upon price for test.
I've been PO'd at Yahoo for limitations on posting referenced material (links, or even cut and paste text). So I've curtailed posting. Either way looks like an attractive entry point for GHDX. Next quarter should tell whether we get the long promised inflection point in the revenue growth curve (i.e. 20% yoy sales growth). We will need to see how that translates to the bottom line.
Unfortunately this type of horse trading is occurring every day. One bright spot, there are worse places to maintain a secondary presence. This may help put EXC in closer proximity to lawmakers in order to further push the clean power legislation. Not like it couldn't be done from Chicago through lobbyists, but sometimes bypassing the hired gun is beneficial.
Zion IL is about 4 yrs into being decommissioned. However, I recall (read in the Chi Tribune yrs Ago) that the company doing the decommissioning was locked into a lump sum contract. Their thinking was that they would position the company for future decommissioning work. Either way, my point is that I do not think their is a huge unfunded liability the way the article implied. That said, EXC is under a lot of pressure today. 2 x normal volume.
Scott Levine (from Motley Fool) article included a section that said that the cost of decommissioning EXC' s aging nuclear fleet was weighing on the share price. I thought that the costs for the eventual decommissioning has been accrued over the life of the facility (i.e., part of the ratepayer agreements included funds for eventual dismantling) and that financial assurance instruments were in place for the facility to be decommissioned by a 3rd party contractor. I recall reading a couple years ago that Energy Solutions (I think) took over the Zion plant license during decommissioning and that their business model was to try to bring it in under the costs that had been accrued for the dismantling.
Am I wrong in my recollections? Is there an unfunded liability in the aging plant dismantling??