It may be time to lighten the load on stocks. Here's what Goldman Sachs just signaled.
The third-quarter outlook from BCA Research is a bit more resolute, however. The U.S. Congress will ultimately extend fiscal support for households and firms. • Coronavirus will continue to take a toll, sometimes tragic, on the world, but “we are unlikely to see the sort of broad-based economic dislocations experienced in March” as mask-wearing and other preventative measures are adopted and because the medical community is better equipped to handle flareups, they say.
Shares of Tesla Inc. charged higher to a fourth-straight record close Monday, after even the most bearish analyst on Wall Street analyst lifted his price target following the electric vehicle maker’s blowout deliveries results.
Let’s talk about keeping safe. It’s a topic we can all relate to, these days, as reports of the coronavirus crisis continue to come in. Cases are rising in the wake of economic reopenings and wide-spread protests, but the fatality rate of the disease appears lower than had initially been feared. Still, social distancing seems to be the order of the day, as a precaution.You can stay safe in your investing, too. ‘Safe’ dividends come from companies that managed to avoid payout cuts during the height of the corona crisis – an important point, as many previously reliable dividends were suspended or slashed in recent weeks. They also feature low payout ratios, indicating that the paying company can easily afford them. Using TipRanks database, we’ve pinpointed three 'safe' dividend stocks with yields starting at 5%, an upside potential starting at 25%, and ‘Moderate or Strong Buy’ consensus rating from Wall Street’s analyst corps. These are stocks that will both grow the portfolio and provide a steady income – and success on multiple fronts is a key strategy to surviving a difficult market environment.Xperi Corporation (XPER)First on the list is a Silicon Valley tech licensing company, Xperi. The company made news late last year when it merged with TiVo, with combined entity using the Xperi name. That merger was completed on June 1 of this year. Xperi has its hands in communications, data storage, memory, and mobile computing, among other fields, and its licensed products are found in the automotive, imaging, and semiconductor industries. Xperi boasts a $1.7 billion market cap, and showed full-year billings of $413.9 million.The company’s strong growth helped it weather the corona storm in Q1. Despite a sequential drop in earnings, first quarter billings beat the forecast by a wide margin, coming in at $112.8 million. The company sees Q2 showing billings in the $85 to $90 million range, in line with estimates.The important metric for our purposes is the dividend, which was paid out at 20 cents per share back in March, and again at 20 cents in May. Xperi has a 6-year history of maintaining its dividend payment, and the payout has been steady at 20 cents quarterly for the past three years. The payout ratio is only 29%, showing that the payment is clearly affordable under current earnings. The yield is excellent, at 5.56%.Craig-Hallum’s 5-star analyst Richard Shannon sees the TiVo acquisition as the key factor in XPER’s current outlook. He writes, “The stock has traded down since the acquisition closing, and with such negative sentiment being priced in we don’t think it would take much for the stock to correct to a more reasonable 10x multiple (~40-50% upside) once the acquisition is better understood…”To this end, Shannon rates XPER a Buy along with a $20 price target, which suggests an upside of 37% for the stock over the coming year, (To watch Shannon’s track record, click here)Overall, Xperi holds a Strong Buy rating from the analyst consensus, and Wall Street is unanimous, with 3 Buy ratings on the stock. Shares are priced at $14.38, and the average price target of $25.33 indicates a very bullish 73% upside potential. (See Xperi stock analysis on TipRanks)Solaris Oilfield Infrastructure (SOI)Moving on, we come to the oil industry. Solaris is an infrastructure company, providing the gear and equipment that the extraction companies need to pull out and gas out of the ground. The company offers solutions for enhanced drilling, well completion and cleaning, and safety features. Solaris is a small-cap player, with just $322 million in market cap, but boasts that its products are key to increasing efficiency in the North American shale oil sector.Solaris’ stock has underperformed the overall markets, and SOI is still down 45% from its February peak levels. A strong Q1 earnings report could only partially offset downward pressure. The company reported over $11 million in net cash provided by operations, and ended the quarter with $11 million in positive free cash flow. The solid cash position bolstered SOI’s quarterly dividend, which was held steady at 10.5 cents per share. The most recent payment was made in June.Solaris has been operating publicly for less than two years; its June dividend payment was only the company’s seventh since the IPO. During that time, the dividend has been increased once, and currently features a low payout ratio of 32% and a high yield of 5.9%.Analyst Tom Curran, of B. Riley FBR, has an upbeat opinion of this stock, writing, “Given its pristine balance sheet, highly FCF generative, specialty-rental business model, and 1 market position that should strengthen and grow, we continue to recommend SOI for investors trying to identify attractively valued, secular winners in the U.S. land OFS space.”Curran puts solid numbers with his Buy recommendation, including an $11 price target that implies a one-year upside of 56%. (To watch Curran’s track record, click here)Wall Street is somewhat more divided on SOI shares, a circumstance reflected in the Moderate Buy analyst consensus rating. That rating is based on 7 reviews, including 4 Buys and 3 Holds. Shares are priced at $7.04, and the average price target suggests an upside potential of 29% for the next 12 months. (See Solaris stock analysis on TipRanks)Paramount Group, Inc. (PGRE)Last on our list is a real estate investment trust. Paramount owns and operates commercial office space in some of the country’s most desirable locations, including addresses on Broadway, Avenue of the Americas, and Fifth Avenue in New York City, Market Plaza in San Francisco, and Pennsylvania Avenue in Washington, DC.The sheer quality of the company’s portfolio allowed it to post a modest earnings gain during the first quarter, a time when many REITs found themselves under pressure from reduced incomes as tenants and clients had difficulties paying bills. PGRE saw earnings rise modestly from 26 cents per share to 27 cents during the quarter.In better news for investors, Paramount kept up its dividend. The current payment is 10 cents per common share, paid quarterly. It has been held at this level for the past two years, and the payout ratio of 37% suggests that it can easily remain so. The dividend yield, at 5.26%, compares favorably to most common investments; the average dividend yield among S&P companies is only 2%, and the Treasury bonds are yielding less than 1% in most cases.Reviewing the stock for Wells Fargo, Blaine Heck wrote, “[We] believe that despite tough leasing and operating conditions in the NYC office market for the foreseeable future, shares trade at a meaningful discount to fair value, the company is poised to reap the rewards of previously executed leasing progress in its NYC portfolio, and more recently at 300 Mission (formerly 50 Beale) in San Francisco, and we’re positive on the company recycling capital … into the [strong] San Francisco office market…”Heck backs his assessment, and his Buy rating, with a $15 price target, suggesting a 99% upside potential for the year ahead. (To watch Heck’s track record, click here)PGRE shares have a 2 to 1 split between the Buys and the Holds, giving the stock an analyst consensus rating of Moderate Buy. The average price target is $11, which indicates room for 46% growth from the current share price of $7.60. (See Paramount stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
In many ways the stock charts of rival chip makers Intel and Nvidia resemble their flagship products: as Intel’s central processing unit performance has plateaued, so has its stock price. (NVDA)’s (ticker: NVDA) chips, once known for powering videogame graphics, are getting more powerful—and the company is poised for the first time to overtake Intel as the largest U.S. semiconductor maker by market value. As of Monday, Intel was valued at roughly $14 billion more with a market value of $250 billion.
(Bloomberg) -- The parent company of TheStreet Inc., a financial news website co-founded by media personality Jim Cramer, received a $5.7 million loan as part of a program aimed at helping U.S. small businesses weather the pandemic.The loan was included in documents released by the federal government on Monday chronicling the $669 billion Paycheck Protection Program. A spokesman for TheMaven Inc., which acquired TheStreet in 2019 for $16.5 million, said that for “ease-of-process” reasons the borrowing was taken out under TheStreet’s name, but that it was for the entire consolidated company, which owns media properties such as Sports Illustrated.Cramer, who still supplies content to TheStreet under a deal that followed its acquisition by TheMaven, has been critical of how banks handled the Paycheck Protection Program. In April, he slammed financial institutions for approving loans to larger companies than should have been allowed. A spokesperson for CNBC, where Cramer hosts a TV show, didn’t immediately respond to a request for comment.Bloomberg News, part of Bloomberg LP, competes with both TheStreet and CNBC in providing financial news.In June, TheMaven forecast that sales would be more than $115 million this year. It first disclosed that it was taking out the loan in a filing in May.Another news outlet, Axios, which covers finance, government and politics, returned its loan from the Small Business Administration’s stimulus program after it became public.Other media businesses have tapped the loans, including the Daily Caller News Foundation, the organization that backs the Daily Caller conservative news site. The loan has helped offset “the more difficult funding environment for our foundation,” a representative said.(Updates with other media companies taking loans in final paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Dow Jones Industrial Average soared on Monday after Chinese stocks went parabolic. The Dow gained 459.67 points, or 1.8%, to 26,287.03 on Monday, while the S&P 500 rose 1.6% to 3179.72, and the Nasdaq Composite climbed 2.2% to 10433.65, a new record high. The (ASHR), which tracks the 300 largest stocks on the Shanghai and Shenzhen exchanges, jumped 11% to $34.82.
Ever since 2001, when China was allowed unfettered entry into the World Trade Organization, the country has played a huge behind-the-scenes role in pushing up the value of the US currency and suppressing US bond yields. In barely two decades, China’s share of the $140tn pool of global liquidity — defined as total savings plus credit — leapt from about 6 per cent to well over 25 per cent. China invoices goods in US dollars, invests in US dollars and provides timely countercyclical boosts of fiscal and monetary policy for its dollar-hungry economy.
Nikola stock dropped more than 13% to close last week. Founder Trevor Milton wondered whether bearish investors have been ganging up on the fledgling company.
Is it time to run with the bulls? Writing from investment bank JPMorgan, quantitative strategist Marko Kolanovic says it is. You may remember Kolanovic, if you follow market news regularly; he was one of the few who correctly called the bottom back in March. Now he says that the near- to mid-term prospects remain bullish. He notes two points of particular importance for investors, economic support policies, and the ongoing COVID-19 epidemic.Regarding policy support, Kolanovic is quick to connect recovery in liquidity with the massive fiscal and monetary support put in place by Congress and the Federal Reserve. He reminds investors that “liquidity has recovered meaningfully from the March lows.”The second point is more subtle. Kolanovic writes, “Higher COVID-19 incidence in mainly impacting younger populations, [with] drastically lower mortality rates and likely reflects high testing rates, recent protests, backlogs of hospital visits, and increased economic activity.” In other words, as we return to normal life, more people are getting exposed to the virus – but the people getting exposed are more resistant to the disease, and the death rates are dropping. The coronavirus crisis is turning out less dangerous than was originally feared, and that is good news – especially for stock bulls.Kolanovic’s colleagues at JPM have run with his bullish view, and are pinpointing stocks that have great upside potential. We’ve used the TipRanks database to pull the details on three of those stocks – the upsides start at 22%, but let’s see what else makes them compelling to JPM’s experts.Warner Music Group (WMG)After a nine-year run as a private company, Warner Music, the global music industry’s third largest recording company, completed a new IPO just last month. The stock sale raised almost $2 billion, and was considered a smashing success. Music is a competitive industry, and Warner has some aces in the hole. The company owns recording rights to a slew of big-name artists, including Madonna, Prince, the Rolling Stones, and Metallica. This playbook is an enormous asset, and one that puts Warner on solid footing.With just one month of market trading behind it, WMG hasn’t got a long history for analysts to review – but it does have that playbook, and JPM analyst Alexia Quadrani is suitably impressed. Quadrani writes, “As the only pure play music content company, WMG is well-positioned to benefit from the ongoing growth in paid music streaming globally. We believe WMG shares will maintain a premium valuation over the average of our large-cap media universe due to its higher growth profile, and our outlook reflects our confidence in the growth of streaming and WMG’s execution.”To this end, Quadrani rates WMG a Buy and suggests a $40 price target, which implies a robust upside of 36%. (To watch Quadrani’s track record, click here)In its first month since the IPO, WMG shares have earned a Moderate Buy rating from the analyst consensus. Wall Street’s stock watchers are divided 7 to 8 on Buys and Holds, mainly reflecting caution during the coronavirus crisis. The stock’s $33.64 average price target indicates a one-year upside potential of 15% from the current share price of $33.64. (See WMG stock analysis on TipRanks)Varonis Systems, Inc. (VRNS)With so many people moving to remote work, data security is at a greater premium than ever. Varonis Systems, a security software company, offers a platform that is perfect for the times. Using digital behavior analysis techniques, Varonis’ platform allows businesses to identify cyberattacks based on abnormal user behavior. It’s an idea whose time has clearly come, and Varonis is running with it. The company’s newest platform features remote work security capability.That doesn’t mean the company was able to fully dodge the corona bullet. The broad declines in Q1 – due to the social and economic lockdown policies – put a hurt on VRNS. The company reported steep losses in earnings, seeing the net loss drop sequentially from 47 cents to $1.05. Revenue performed better, beating the forecast at $54.18 million.The stock, however, has performed better than the earnings, rising nearly 27% year-to-date.Sterling Auty, 5-star analyst with JPM, lays out a clear case to explain Varonis’ strong share appreciation: “[We] believe Varonis represents one of those attractive situations as its subscription transition offers the opportunity for significant outperformance relative to revenue and margin estimates that we believe can deliver stock outperformance. This is aided by the growing need for data security solutions as cloud adoption increases and work-from-home setups drive usage of tools that create security challenges.”Auty’s Buy rating on the stock is supported by his $130 price target, which indicates room for a potential 31% upside in the coming year. (To watch Auty’s track record, click here)Overall, Varonis has a Strong Buy rating from the analyst consensus, based on 11 Buys versus just 2 Holds. The stock’s recent share gains, however, have pushed the price almost up to the average price target. VRNS currently trades at $98.58; the average target is $100.36. (See Varonis stock analysis on TipRanks)Masonite International (DOOR)Last on our list is a major name in the construction industry. Tampa-based Masonite, through its subsidiary companies, manufactures doors and their associated systems (frames, screens, windows, and locks) for both interiors and exteriors. It’s a niche product, but an important one; even a small house can have two exterior doors and 8 or 10 interior ones.Masonite posted a strong Q1, despite the corona crisis. Net sales increased 4%, reaching $551 million. EPS rose sharply, too, to $1.24. These gains came even as the company withdrew its full-year 2020 guidance due to COVID-19 concerns.JPM’s Michael Rehaut likes what he sees in Masonite, noting, "[Not] only did the company provide a positive sales update – pointing to June sales down only mid single-digits (with N. America Residential up modestly), following May down low teens – but importantly, DOOR also pointed to some positive margin trends as well,""[We] point to the company’s pricing strategy, strong execution and longer term margin optimization efforts as positive differentiators, along with its attractive relative valuation trading at only roughly 8.5x and 7.3x our 2020E and 2021E EBITDA, respectively," the analyst concluded. In line with his comments, Rehaut puts a $95 price target and a Buy rating on DOOR shares. His target implies an upside of 22% for the next 12 months. (To watch Rehaut’s track record, click here)DOOR is another stock with a Strong Buy consensus rating, in this case based on 6 Buys and 2 Holds. Shares are currently trading at $77.54, and the average price target of $85.38 suggests a one-year upside of 10%. (See Masonite’s stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
(Bloomberg) -- It was once the center of America’s shale boom -- a vast reservoir of crude unleashed by hydraulic fracturing and horizontal drilling, turning North Dakota into the second-largest oil producer in the U.S. and helping transform the nation into the world’s largest supplier.These days, the Bakken is looking like anything but a boom. Drilling in the once-prolific shale formation straddling North Dakota, Montana and parts of Canada has all but halted -- another victim of the pandemic that sapped fuel demand worldwide. Output is believed to have fallen by as much as half a million barrels a day this year. Even before the virus, drillers there were struggling to compete with fast-improving margins in Texas’s Permian Basin. Now, the looming shutdown of the Dakota Access pipeline that carries more than a third of the region’s oil to market threatens to keep the play from booming ever again.“This court ruling will create major obstacles for producers in North Dakota, who’ve been struggling to rebound,” said Sandy Fielden, director of research for Morningstar Inc. The buyers of Bakken crude, he said, will simply turn elsewhere for supplies once the pipeline dries up.On Monday, a U.S. district court ruled that Energy Transfer LP’s Dakota Access pipeline will have to shut by Aug. 5. If the ruling survives appeals, it would be the first time a major pipeline in service was ordered shut because of environmental concerns. Exactly how long it will be down is unclear -- the court has decided it should remain closed until a proper environmental review is complete. That process could extend into 2021.One thing’s clear: The closure will be devastating for the Bakken, which once jostled to become the nation’s most prolific crude-producing field and defined the careers of some of the most well-known titans of shale including Continental Resources Inc.’s Harold Hamm and Whiting Petroleum Corp.’s former chairman, Jim Volker.Dakota Access, which started up in 2017, was fundamental to advancing North Dakota’s oil production. Output grew to a record volume of 1.52 million barrels a day in November but has fallen since the spread of the coronavirus devastated demand. The state expects crude output in May probably fell below 1 million barrels a day for the first time since 2017. Even before the pandemic, it was struggling to attract investment as more money flowed to the Permian Basin of Texas and left reeling from Whiting’s bankruptcy in April. Bakken producers have shut in nearly 7,000 wells as oil markets languish due to the pandemic, according to the Bakken Restart Task Force.Shutting the pipeline will mean oil can’t leave the state economically at a time when a pandemic-related glut gives buyers plenty of oil to choose from. Dakota Access connects with Energy Transfer’s ETCO crude pipeline and provides users a pathway to send barrels from North Dakota to the Gulf Coast. This system charges from $5.50 to more than $8.00 a barrel. The alternative of using rail would double the cost of transportation.Losing LusterThe Bakken was already losing its luster in favor of oil fields in Texas, which are cheaper to produce. The number of rigs drilling for oil there tumbled more than 80% this year, according to Baker Hughes Co. “Capital allocation, on a relative basis, was more skewed to the lower breakevens that exist in the core areas of the Permian,” Vincent Piazza, senior U.S. oil and gas analyst for Bloomberg Intelligence, said by phone. “Even operators in the Bakken were looking elsewhere.”The price of Bakken crude at Clearbrook, Minnesota, weakened Monday with the discount to West Texas Intermediate oil widening $1.15 to $2.75 a barrel, the biggest decline since late May, data compiled by Bloomberg show.Phillips 66, which owns a stake in the pipeline, said Monday it was disappointed in the court ruling. “The negative impacts resulting from this court’s decision to markets, customers, and jobs up and down the energy value chain will inflict more damage on an already struggling economy and jeopardize our national security,” Dennis Nuss, a spokesman, said in an emailed statement.Continental, a shale producer founded by Hamm, said the bulk of its oil is shipped on other pipelines. “That being said, we believe that today’s DAPL court decision is harmful to royalty owners, the state of North Dakota and the American consumer,” Kristin Thomas, a spokeswoman, said in an email. “This decision will serve to drive the price of crude higher.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Futures: Fireworks continued on Wall Street, as Leaderboard stocks Apple, Amazon, Microsoft and Tesla led the Nasdaq to a new high. Three other Leaderboard stocks broke out.
And just like that, the tides have turned for Inovio Pharmaceuticals (INO). Shares of the high-flying biotech dropped last week by 31%, the vast majority of which came after the release of interim data from the early stage trial of its COVID-19 vaccine candidate, INO-4800.You could chalk the dip up to a classic case of “buy the rumor, sell the news,” but this sell-off was slightly more nuanced, with the lack of a clear good/bad story leaving a lot to interpretation.The company said that after giving participants two doses of the vaccine, 94% "demonstrated overall immune responses." What probably concerned investors was the fact that finer immune response details were missing. Specifically, how many patients produced neutralizing antibodies that could prevent a COVID-19 infection. This looks bad when compared to Pfizer/BioNTech, as they published a richly detailed report of their candidate’s progress on the same day.The full data is expected to be published in a medical journal in the near future. Meanwhile, at investment firm Maxim, analyst Naureen Quibria believes the data was “positive.”The analyst said, “In truth, while we don’t know what 'good' immunogenicity data should be, studies suggest that both T cell and antibody immune responses will be important for protection in both mild and serious infections, particularly given that most convalescent plasmas obtained from individuals that have recovered from COVID-19 do not appear to contain high levels of neutralizing activity (e.g., one study, published in Nature). However, reports have also highlighted that the virus-specific T cells found in convalescent patients can control the severity of their COVID-19 disease. As such, the early data for INO-4800 appear to be promising, in our view.”However, the analyst can’t ignore Inovio’s lofty valuation, which, along with the murky data, played a part in the sell-off. Even after last week’s drop, shares are still up by 540% since the turn of the year. Therefore, for Quibria, “the success of INO-4800 is priced into the shares.”Accordingly, Quibria downgraded Inovio from Buy to Hold, and took the price target off the table. (To watch Quibria’s track record, click here)Other analysts appear to be reading from the same page. Based on 2 Buys, 5 Holds and 1 Sell, Inovio has a Hold consensus rating. There’s small upside of 3% in the cards, should the average price target of $22 be met over the next 12 months. (See Inovio stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Workhorse, NIO, Tesla, Nikola, and Tortoise have gained almost 180% over the past month. Now their shares are trading, on average, 146% above Wall Street price targets. When stocks go up like this they become hard to value.
Tesla is now the most valuable car maker “of all time”. And with combined market caps of some $70 billion, Uber and Lyft are also severely disrupting the giant auto industry
(Bloomberg) -- One of the largest utilities in America is starting to turn its back on natural gas.Dominion Energy Inc., the second-biggest U.S. power company by market value, on Sunday said it’s selling substantially all of its gas pipeline and storage assets to Berkshire Hathaway Inc. for $4 billion. It’s the largest deal announced this year to buy U.S. energy assets, according to Bloomberg data.In a separate statement, Dominion and its partner Duke Energy Corp. said they’re killing the controversial Atlantic Coast gas pipeline along the U.S. East Coast, citing ongoing delays and “cost uncertainty.”The moves come as utilities face increasing pressure from local governments, investors and environmentalists to quit fossil fuels. While long heralded as a cleaner alternative to coal and heating oil, gas is drawing stiff oppositions from left-leaning state lawmakers, making it increasingly difficult to build pipelines and other infrastructure.“Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged,” Dominion Chief Executive Officer Thomas Farrell said on a call with analysts. “This trend, so deeply concerning for our country’s economic growth and energy security, is a new reality.”Read More: Grim Day for Pipelines Shows They’re Almost Impossible to BuildShares of Dominion, which also announced it’s cutting its dividend, fell 11% Monday, the most in more than three months. The company is taking $2.7 billion to $3.2 billion in pre-tax charges related to the canceled pipeline, it said in a filing.The push away from gas positions Dominion as more of a pure-play state-regulated utility at a time when oil and pipeline operators have lagged the broader market. In the last year, an index of pipeline companies has fallen 36%, while the S&P 500 Index has gained 4.7%.“Given the bend towards decarbonization efforts in the country, the move away from natural gas, and investor demand for more simplified utility structures, we believe this is absolutely the correct move for Dominion to make,” Guggenheim analysts led by Shahriar Pourreza said in a research note.Read More: Wall Street Falls Out of Love With Once-Coveted Fossil FuelTo be clear, Richmond, Virginia-based Dominion, which provides power and gas to seven million customers in 20 states, isn’t walking away from the fossil fuel altogether. It will still sell gas to customers for heating and cooking. It’s retaining an interest in its Cove Point liquefied natural gas export terminal in Maryland. And 40% of the electricity the company generates comes from plants fueled by gas, coal and oil, according to its website.“They’ll still be burning lots of gas for decades ahead in the core utility business,” Bloomberg Intelligence analyst Kit Konolige said in an email.But pressure is mounting. Virginia enacted a law in April requiring Dominion’s utility in the state to be carbon-free by 2045.What Bloomberg Intelligence Says“Dominion’s unsurprising shutdown of the troubled Atlantic Coast Pipeline project and $4 billion sale of midstream properties take pressure off the strained balance sheet. In combination with a dividend cut, the steps shift Dominion to an almost all-utility growth story.”\-- Kit Konolige, senior utility analystRead the full report here.Atlantic Coast is the third U.S. gas pipeline project to scrapped or shelved this year. Williams Cos. opted not to reapply for a permit in May for a $1 billion pipeline extension after regulators in New York blocked it. And in February the Oklahoma-based company canceled plans for a pipeline that would have run from Appalachia to New York.While the Atlantic Coast pipeline project won a key victory last month when the U.S. Supreme Court sided against environmentalists and upheld a crucial permit, the project still faced formidable opposition and costs. “That would indicate that that wasn’t a strategic decision as much it was as a practical decision,” said Paul Patterson, an analyst at Glenrock Associates LLC.Read More: Duke to Book Charge of Up to $2.5 Billion From Canceled PipelineDeal with BerkshireDominion’s deal with Berkshire calls for the giant conglomerate to assume $5.7 billion in debt. The utility will use $3 billion of the proceeds to buy back shares. Dominion cut its projected 2021 dividend payment to around $2.50 a share, reflecting the assets being divested and a new payout ratio that aligns it better with industry peers.The transaction is expected to close during the fourth quarter. It will require the approval of federal agencies including the U.S. Department of Energy.Read More: Buffett Sticks to Comfort Zones With His Dominion Energy DealBerkshire is amassing more than 7,700 miles (12,400 kilometers) of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage in the deal with Dominion. Warren Buffett’s conglomerate will also acquire 25% of Cove Point. With this transaction, Buffett has ended his period of relative silence on the acquisition front since the pandemic.The Dominion deal is set to be Berkshire’s largest acquisition ranked by enterprise value since its purchase of Precision Castparts Corp. in 2016. It will expand the company’s already sprawling empire of energy operations, which currently has operations in states including Nevada and Iowa.(Updates shares and adds impairment charge in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Some penny stocks are worth the risk. The prospect of stumbling upon a dirt-cheap penny stock that will ultimately make shareholders rich is an exciting idea. In reality, these types of rags-to-riches ...
The day's jump increased Tesla's stock market value by $30 billion (24 billion pounds), eclipsing the entire value of Ford Motor Co , currently at $25 billion. JMP Securities increased its price target to $1,500 from $1,050 after Tesla on Thursday reported higher-than-expected second-quarter vehicle deliveries, defying plummeting sales in the wider auto industry as the coronavirus pandemic slammed the global economy. "We believe that the question to be considered is not whether the stock is expensive on current valuation measures, but what the company's growth and competitive position signal about the stock's potential for the next several years," JMP Securities analyst Joseph Osha wrote in a client note.
A U.S. court ordered the shutdown of the Dakota Access oil pipeline on Monday over concerns about its potential environmental impact, a big win for the Native American tribes and green groups who fought the major pipeline's route across a crucial water supply for years. The decision by U.S. District Court for the District of Columbia followed the cancellation of another high-profile U.S. pipeline project on Sunday and came as a blow to the Trump administration's efforts to lift the domestic fossil fuels industry by rolling back environmental red tape. According to the ruling, the U.S. Army Corps of Engineers violated the National Environmental Policy Act (NEPA) when it granted an easement to Energy Transfer LP to construct and operate a segment of the oil pipeline beneath Lake Oahe in South Dakota, because they failed to produce an adequate Environmental Impact Statement (EIS).
The Wall Street Journal reported the FAA is testing the (BA) 737 MAX again. The Journal news article says the additional tests will assess the safety of Boeing (ticker: BA) software fixes. The 737 MAX—Boeing’s latest model single-aisle jet—has been grounded world-wide since mid-March 2019 following two deadly crashes inside of five months.
Don't turn big profits into big losses, Jim Cramer told viewers of Mad Money Thursday night. Cramer said it's time to ring the register on two early-stage biotechs, Novavax and Inovio Pharmaceuticals , two companies working on a Covid-19 vaccine. In this daily Japanese candlestick chart of NVAX, below, we can see just two upper shadows at the end of June.
Millions of Americans have lost their job during the COVID-19 outbreak and are relying on unemployment benefits as they pay their bills and re-start their career. “There will definitely be some people who are going to be surprised at tax time next year and I’d like to minimize that,” said Michele Evermore, senior policy analyst at the National Employment Law Project, an advocacy organization for workers. Here’s why Evermore and other observers are concerned: though the Internal Revenue Service counts unemployment benefits as taxable income, people getting that money may not be withholding a portion for federal income taxes.
Over the past five years, shares of semiconductor stocks have been on an absolute tear. As a result, the PHLX Semiconductor Sector Index (SOX) has added 191% over the period, with several names notching gains of close to 2,000% (AMD, Nvidia). Lagging behind most is industry giant Qualcomm (QCOM). Over the same five-year period, QCOM shares have appreciated by only 46%.There have been various headwinds hampering the semiconductor player’s progress. A run in with Apple regarding patent and licensing issues, a Federal Trade Commission led antitrust case, the US – China trade war – are just a few of the hurdles Qualcomm has encountered.However, what this all means, according to Canaccord analyst Michael Walkley, is that QCOM’s current share price “is compelling.” So, what’s driving Walkley’s bullish outlook?The 5-star analyst explained, ”We believe Qualcomm has a strong leadership position for 5G that should not only result in strong share gains with leading smartphone OEMs but also provide an opportunity of up to 1.5x the dollar content of a similar 4G customer smartphone due to a combination of increased RF content and higher pricing for 5G basebands versus premium-tier 4G solutions.”After a difficult 1H20, smartphone volumes are staging a turnaround, and are expected to further improve as the year progresses. As Walkley said, a major catalyst for QCOM is the upcoming 5G cycle, which the analyst believes will have a meaningful impact and ultimately lead to “recovering earnings in F2021.”Apple’s iPhone 12 launch in 2H20 is included in this cycle. That said, Apple isn’t the only one using Qualcomm technology, as the chipmaker is playing for both sides across the smartphone divide, with Android 5G handsets expected to bring Qualcomm market share, too. Additionally, the 5G story is gathering momentum in China where “the percentage of 5G activations is continuing to rise, and 5G price points now cover roughly 50% of the market.”Adding to the good news, it already has 85 5G licenses, and the company’s high-margin QTL (Qualcomm Technology Licensing) business should “benefit from 5G smartphone growth trends.”Walkley, therefore, reiterated a Buy recommendation on QCOM shares and raised the price target from $102 to $115. What’s in it for investors? Upside potential of 24% from current levels. (To watch Walkley’s track record, click here)Among Walkley’s colleagues, the chipmaker has a Moderate Buy consensus rating, based on 10 Buys, 5 Holds and 3 Sells. The average price target hits $93.93 and implies modest upside potential of 1%. (See Qualcomm stock analysis on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
(Bloomberg Opinion) -- As a diplomatic tit-for-tat escalates between Washington and Beijing, millions of Chinese investors — defiant and patriotic — are once again engineering a fast and furious bull market on their home turf. The theme? Self-reliance.Two years ago, when the trade war first hit, China’s $8.5 trillion stock market sank into one of its deepest bear episodes, as worries about the economic damage of decoupling took root. This time, tension with the U.S. hasn't even made a dent. Rather, mainland shares are on fire. The benchmark CSI 300 Index has rallied 14% this year, to trade at a five-year high. The S&P 500 Index, by comparison, is still in the red. Daily trading volume has exceeded 1 trillion yuan ($142 billion) for three consecutive trading days. The latest frenzy began right after Beijing imposed its national security law on Hong Kong, despite U.S. opposition. Now, investors have renewed their faith that China is finally recognizing the importance of self-sufficiency. Bullish sell-side analysts are tossing around buzz words like national champions, import substitutes and capital market reforms; ultimately, these boil down the idea that turning inward is good for stocks. There are many examples. Consider Shanghai-based Semiconductor Manufacturing International Corp., a chip foundry that counts Huawei Technologies Co. as its largest client. Rather than languishing as Huawei gets boxed out of U.S. technology, SMIC’s Hong Kong-listed shares are up over 200% this year.On the financing front, SMIC is behaving every bit like a national champion already. On May 15, the day Huawei got slapped with further sanctions, the state-owned China Integrated Circuit Industry Investment Fund, which held close to 20% of SMIC as of December 2019, said it would co-invest about $2.5 billion into one of its wafer plants. Meanwhile, securities regulators have fast-tracked the company’s plans to raise as much as $7.5 billion in Shanghai, the largest mainland initial public offering in a decade. Beijing is well aware that chip manufacturing is a capital-intensive business, and it must provide financial support as SMIC races to catch up on technology. In the industrial space, global supply-chain disruption is already benefiting Chinese players. For instance, Sany Heavy Industry Co., China’s largest excavator maker, has seen its domestic market share jump to 27% from 8% in 2010, at the expense of foreign brands, data provided by HSBC Holdings Plc show. No surprise, Sany’s stock is up 24% this year, while Caterpillar Inc., whose mainland market share shrank to 11% from 14% in 2016, is down 13.5%. Jiangsu Hengli Hydraulic Co., a large manufacturer, tells a similar story. It’s up 55% this year. Washington’s attempt to block mainland businesses’ access to U.S. money — from the delisting of Chinese American depositary receipts in New York, to forbidding federal pension funds from investing in mainland companies — is only forcing Beijing to speed up its capital markets reform. Regulators are already rewriting equity financing rules, including the launch of new registration-based IPOs, and opening new funding venues for young startups. As a result, we can expect China’s stock market to grow to 100% of its gross domestic product in the next five to 10 years, from 60% now, estimates CICC Research.When it comes to stock investing, China and the U.S. face the same set of problems. A slowing economy inevitably eats into corporate earnings growth, narrowing any justification for a further bull run.But President Donald Trump is giving China’s stock market a second wind. Huawei may prefer chips made by Taiwan Semiconductor Manufacturing Co. — after the U.S. sanctions, though, it may have no choice but hold its nose and buy domestic. Meanwhile, industry consolidation, which benefits domestic firms, is only accelerating now that Beijing is openly supporting its national champions. Trump is always looking at the stock market for validation. This time, he’s looking at the wrong one.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- China’s equity market is firmly in the spotlight after an almost unprecedented rally that helped lift global stocks to a one-month high.The speed of the past week’s gains in China is in many ways unseen since the stock bubble that burst five years ago. Monday’s surge alone added more than $460 billion to Chinese stock values, behind just one day in July 2015 as the biggest increase in shareholder wealth since the global financial crisis.The advance continued on Tuesday, though at a slower pace. The CSI 300 Index rose 1.9% as of 1:31 p.m. in Shanghai to extend its five-year high, with trading volume more than three times the three-month full-day average. The offshore yuan strengthened past 7 per dollar for the first time since March.China’s state media struck a more measured tone on Tuesday, after earlier publishing commentaries that highlighted the case for buying shares. Two newspapers urged investors to be rational: the Securities Times -- one of China’s most widely circulated financial publications -- said investors should be mindful of potential risks and not use the market as way to make a fortune overnight.“The market will likely consolidate after strong rallies, especially as big caps have outperformed smaller peers by a big margin in the past week,” said Shen Zhengyang, an analyst with Northeast Securities Co. “Regulators wouldn’t want to see rapid gains in the market either. But there remain plenty of opportunities, and investors will continue to rotate into some laggards so the uptrend is still intact.”Wang Hongyuan, the co-chairman of First Seafront Fund Management Co., warned investors should be cautious. China’s equities have “the strongest fundamentals in the world” but the bubbles in some parts of the market “are unseen in five years and the risks are huge,” he said in written comments shared with Bloomberg.As China’s tight capital controls limit the investment options for the country’s savers, this year’s low interest rates and the first losses ever for some popular wealth-management products are driving retail investors to stocks. But some analysts, as well as mainland media, say the country’s economic recovery and the government’s handling of the coronavirus outbreak have helped underpin the rally.Mainland traders are counting on the momentum to continue, increasing the amount of leverage in the equity market to almost 1.2 trillion yuan ($171 billion), the highest since late 2015.The risk-on sentiment sent Chinese government debt plunging, with the yield on notes due in a decade rising over 3% for the first time since January on Monday. The yield on China’s 10-year government bonds was last at 3.02%.A measure of tech shares rose 4.9%, the most since June 1, as the best performer among the CSI 300 Index’s 10 industry groups Tuesday. Consumer shares also rose, with Kweichow Moutai Co. surging 6.3% to take its market capitalization over $300 billion for the first time.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.