What I learned surprised and scared me, as I described in the resulting article, "Confessions of a Car Salesman." Selling cars turned out to be the perfect training for my current job as a consumer advocate and autos editor for NerdWallet. While I posed as a "green pea" — the nickname for a beginner car salesperson — the sales managers freely revealed their secrets to me so that I would move the metal and, in turn, make money for them.
Does the stock market predict the winner of U.S. presidential elections? Many argue that it does, pointing to the historical correlation between the incumbent party retaining the White House and the stock market’s strength in the months leading up to Election Day in November. Given President Donald Trump’s preoccupation with the stock market, he apparently agrees.
The EV (electric vehicle) industry has become a hot topic for investors and traders as Tesla Inc. soars well past the magic $1,000 level. Traders have also piled into ADRs of Nio Inc. . In the daily Japanese candlestick chart of NIO, below, we can see that the shares have soared sharply the past two months.
Berkshire Hathaway’s long-awaited pandemic-era purchase in a seemingly difficult business might seem like odd timing, but there is good logic behind it.
(Bloomberg) -- Sunrun Inc., America’s biggest rooftop-solar company, is set to become a behemoth through a $1.46 billion takeover of its rival Vivint Solar Inc. Shares of both companies surged.The agreement announced late Monday is one of the industry’s biggest. It comes after Tesla Inc.’s 2016 purchase of debt-plagued SolarCity Corp. and the failed 2015 acquisition of Vivint by SunEdison Inc., the clean-energy giant that went bankrupt soon after.The second major U.S. energy deal in as many days -- following Berkshire Hathaway Inc.’s $4 billion purchase of Dominion Energy Inc. assets -- also threatens to further weaken Tesla’s grip on the rooftop-solar market and could inspire more sector consolidation. Sunrun and Vivint combined provide about 75% of new residential solar leases each quarter, according to BloombergNEF.“Sunrun will be freaking big,” Joe Osha, an analyst at JMP Securities, said in an interview. “They are clearly looking for ways to get scale and efficiency.”Sunrun shares rose 16% at 9:44 a.m. in New York. Vivint climbed 29%.The deal, subject to approvals, values Blackstone Group Inc.-backed Vivint at $3.2 billion including debt. It comes as America’s rooftop-solar industry works its way back from the worst of the coronavirus pandemic. Door-to-door sales -- a key marketing strategy for installers -- practically ceased as states imposed lockdowns, while installations were slowed or canceled.“Now was a perfect time because we have been through the Covid test,” Sunrun Chief Executive Officer Lynn Jurich said on a conference call Tuesday.There’s evidence that the sector may be rebounding. Investor enthusiasm for rooftop-solar equities has surged after March lows, companies have lined up financings in recent weeks, and there have been efforts to ramp up the digitization of operations.Amid the pandemic, rooftop solar “could be an industry that picks up faster than others,” Hugh Bromley, an analyst at BNEF, said in an interview. “People are staying home thinking about renovations and they’re seeing their power bills increase while they’re running the air conditioner around the clock.”Rooftop KingSunrun has been America’s largest rooftop-solar company for more than two years, edging aside Tesla, which had inherited the throne from longtime king SolarCity. Tesla’s market-share has shrunk since the acquisition amid strategic shifts and competition from rooftop rivals including Sunnova Energy International Inc. and SunPower Corp.New leases and power-purchase agreements represented about 27% of American residential-solar systems prior to the pandemic. Marketing is usually the biggest expense for American installers, and the companies said in a statement Monday that the deal will create $90 million in annual “cost synergies.”The acquisition, which is expected to close in the fourth quarter, is an all-stock transaction, under which each share of Vivint will be exchanged for 0.55 shares of Sunrun. The combined company would have an enterprise value of $9.2 billion, they said Monday.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.
(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.
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.
RBC automotive analyst Joseph Spak initiated coverage of the company on Tuesday with the equivalent of a Hold rating and a $46 price target.
The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project. Canadian company TC Energy needs the permit to continue building the long-disputed pipeline across U.S. rivers and streams. Without it, the project that has been heavily promoted by President Donald Trump faces more delay just as work on it had finally begun this year following years of courtroom battles.
De Niro, who's worth an estimated $500 million, co-founded the swanky Japanese-Peruvian fusion restaurant in 1994.
(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 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.
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.
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.
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.
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.
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) -- Leaving behind the waters of the Caribbean Sea, the 1,100-feet long oil tanker Maran Apollo is emblematic of the wider petroleum market.Steaming at 11.5 knots, she’s heading toward China, where oil demand is fast recovering, hauling a cargo of two million barrels of U.S. crude. But her voyage didn’t start a few days ago. She loaded in early May, and with no buyers during the worst of the coronavirus outbreak, the supertanker stood floating in the U.S. Gulf of Mexico for almost two months, waiting for better times.Only a few days ago, she weighed anchor and left for the Chinese port of Rizhao -- a sign that refiners are starting to pull in crude that went unwanted for months.It’s not any kind oil on board, though. Refiners are competing for barrels in one corner of the market known as medium-heavy sour crude -- barrels with a higher content in sulfur and relatively dense. It’s the kind of oil that Saudi Arabia and its allies pump. And also the type of crude that’s pumped offshore in the U.S. Gulf of Mexico -- and that’s what’s in the Maran Apollo’s tanks.Like the wine industry, the oil market has its own vintages: global refiners seek their barrels much like connoisseurs covet bottles of Bordeaux and Burgundy. Urals of Russia and Arab Light from Saudi Arabia are normally two of the most widely consumed -- think Cabernet Sauvignon, maybe a Merlot. But in today’s oil market, such crude is in increasingly short supply due to record output cuts by the two nations and their allies.“Deep OPEC+ cuts and demand recovery have tightened balances and this has been reflected in improvements in physical differentials,” said Bassam Fattouh, director of the Oxford Institute for Energy Studies. “But the recovery has not been even, with medium-sour crudes faring better than light-sweet crudes.”In normal times, medium-sour crude is usually cheaper than other streams, particularly those known as light sweet crude that have a lower sulfur content and are less dense.But OPEC, which pumps mostly medium-sour crude, has cut output to the lowest since 1991, and Russia has also implemented brutal reductions. On top of that, medium and heavy sour crude accounts for the bulk of the supplies from Iran and Venezuela, where production has collapsed under the weight of U.S. sanctions and lack of investment.The market is reflecting the under supply. The price of Urals, Russia’s flagship grade, has surged to a record premium to the Brent crude benchmark. Last week, it briefly changed hands at $2.40 a barrel above Dated Brent, a regional benchmark, compared with a discount of more than $4.50 a barrel in April, according to traders. S&P Global Platts, a price-reporting agency, assessed the grade at a premium of $1.90 for delivery to Rotterdam on June 29, matching a prior record high.The surge means that Urals is selling in Rotterdam, the main oil refinery hub in northwest Europe, at roughly $45 a barrel, compared with a low point of about $15 a barrel in early April.The price pattern is similar for other sour crude streams, from Oman in the Middle East to Oriente in Latin America. All are commanding hefty prices at a time when oil demand globally remains down roughly 10% below normal levels. Because sour crude makes a significant chunk of a typical refinery’s diet, the price increase is strangling the plants’ profitability.“OPEC+ continues to tighten the screws,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. said, referring to the group’s output cuts.With the physical oil market tightening, OPEC is now able to increase the prices it charges to refiners. On Monday, Saudi Aramco, the state-owned oil company, lifted its official selling prices to Asia for the third consecutive month, largely reversing all the discounts it offered during a brief price war with Russia in March and April.Aramco and other national oil companies sell their crude at differentials to oil benchmarks, announcing every month the discount or premium they’re charging to global refiners. These so-called official selling prices help set the tone in the physical oil market, where actual barrels change hands.The Saudi oil giant is now selling its most dense crude, called Arab Heavy, for the first time ever, at roughly the same price at its flagship Arab Light, an indication of the strength of the market for the medium-heavy sour grades. Typically, Arab Heavy has sold at a discount of about $2-to-$6 a barrel to Arab Light.Not only is medium-heavy sour crude trading at a premium to benchmarks, but barrels for immediate delivery are commanding premiums to forward contracts, a price pattern known as backwardation that also reflects a tight physical-market. Dubai crude, a Middle Eastern medium sour barrel, is one example: backwardation between barrels for delivery now and in three months has surged to 60 cents per barrel. In mid-April it stood at minus $9.24 per barrel because the physical market was so glutted back then.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.
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
Vanguard Group Inc reallocated operating expenses on a $1.9 billion municipal money market fund, a spokesman said, a move called akin to waiving fees as rival fund firms have done amid low interest rates. Because yields have fallen below expenses on the Vanguard Pennsylvania Municipal Money Market Fund, "expenses of the fund are being temporarily reallocated to other funds within Vanguard," company spokesman Freddy Martino said via e-mail. Vanguard, the world's largest mutual fund manager, said in a securities filing late on Monday made the change "to maintain a zero or positive yield on the fund."
It may be time to lighten the load on stocks. Here's what Goldman Sachs just signaled.