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Consumer companies are investing in and partnering with companies that can help them pick up delivery speed
(Bloomberg) -- Buyers of newly-minted corporate bonds are already nursing losses as inflation fears send government bond yields climbing.About four fifths of high-grade non-financial corporate bonds priced in Europe this year are quoted below their issue price, based on data compiled by Bloomberg. Last Friday, the share of post-issue losers stood at under 50%.This bleak statistic underscores the damaging effect on credit investors of the so-called reflation trade -- bets on rapid economic recovery and an associated pickup in inflation -- prompting many to seek shelter from further sovereign debt sell-offs.Investment grade bonds are more sensitive than high-yield debt to any threat of higher interest rates in response to inflation, a vulnerability known as ‘duration risk.’ That’s because they have longer life spans than lower-quality peers and carry lower risk premiums. This attribute is hitting investors hard this year.“Duration is already a problem when you see that rate-sensitive sectors underperform and this is going to increase,” said Vincent Benguigui, a portfolio manager at Federated Hermes, which oversees $625 billion. “Clearly everything is stretched.”The year-to-date total return of euro-denominated investment-grade bonds has slumped this week, to minus 0.96% from minus 0.56% on Monday. A month ago the return since the start of 2021 stood at minus 0.3%, according to Bloomberg Barclays indexes. By contrast, the less rate-sensitive junk bond market has gained 2.2%.While the threat of higher yields to compensate for a potential rise in inflation has been a thorn for high-grade investors throughout the year, a European Central Bank pledge to pick up the pace of its emergency pandemic QE program had helped funds recover some losses before this week’s sell-off pushed them further into the red.Rate risk is the main driver of corporate bond losses, as spreads on most of this year’s new issues are trading tighter than at launch, according to data compiled by Bloomberg. The average risk premium of high-grade euro bonds over safer government debt is indicated at 83 basis points, the lowest in more than three years, thanks to continued ECB purchases and bets on the economic reopening.Click here for the spread performance of all bonds issued in Europe this yearBut spreads, with little room to tighten further, seem incapable of stemming duration-driven losses.“While the extended recovery in fundamentals should provide another layer of support, higher yields in the euro government bonds space should limit euro investment grade’s ability to attract inflows and limit tightening potential once rates stabilize,” wrote Cem Keltek, a credit strategist at Commerzbank AG, in a note to clients on Thursday. “Pressure on rates and tapering prospects later in the year render long-end risk-reward unattractive.”Some hedge funds have started betting on price drops in corporate bonds amid the threat of rising interest rates and stretched valuations. Short positions in junk bonds have jumped to their highest level since 2008 and bearish bets on high-grade bonds are at their highest since early 2014.Bonds that lose value shortly after issuance could potentially discourage investors from bidding aggressively for new deals.This leaves high-grade investors with only one realistic source of return: the income made by just holding the interest-bearing bond, unless they are willing to switch to riskier parts of the credit market.“It’s more or less carry at this point,” said Martin Hasse, a portfolio manager at MM Warburg & Co., which oversees 76.2 billion euros ($92 billion). “Maybe a little tightening but not so much. High yield and subordinated notes can see more of that.”EuropeHigh yield issuers are in command of the region’s syndicated bond market on Friday, accounting for three of the day’s four deals as global credit risk sentiment improves.The financing arm of U.S. autoparts maker Dana Inc., Italian technology companies Lutech SpA and Cedacri SpA are pitching new deals that are likely to wrap up by market closeWeekly issuance is likely to reach 33.5 billion euros, according to data compiled by BloombergEuropean credit default risk fell for both investment-grade and high-yield bonds as more-tempered commodity prices helped allay investor concerns about inflation risksAsiaA rush of borrowers early in the week boosted dollar bond sales in Asia ex-Japan, with issuance doubling compared with the previous week.Bond sales rose to $8.4b from $4.2b a week earlier, the highest in three weeks, according to Bloomberg-compiled dataAt least 22 borrowers came to the market, the busiest week in 2021 since January in terms of number of issuersGLP Pte’s $850m perpetual note offering was the biggest bond sale this week, followed by a $707m offering by JSW Hydro Energy and a $650m note from Cathay Pacific AirwaysDeals slowed from mid-week, coinciding with release of data on Wednesday that showed U.S. consumer prices climbed in April by the most since 2009Yield premiums on Asia’s high-grade bonds, excluding Japan, and the cost of protection against such debt both dropped 1-2bps on Friday, credit traders saidU.S.Alibaba Group Holding Ltd.’s revenue beat estimates after China’s e-commerce leader rode a post-pandemic recovery and begins to move past a bruising antitrust investigationAs cash balances have risen toward $70 billion, financial flexibility may enable Alibaba to endure a prolonged period of macroeconomic uncertainty related to the coronavirus, as well as regulatory risk, better than hardware-centric technology peers, write Bloomberg Intelligence credit analysts Robert Schiffman and Suborna PanjaIt seemed almost certain that supply would at least match syndicate desks’ projections of $45 billion this week after Monday’s almost $28 billion bonanza, however, macro uncertainty fueled by inflation fears seems to have curbed issuanceLess than $3 billion priced on Thursday, bringing the week’s volume to $42 billionFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The IRS detailed on how it will handle a mixup involving a tax break for jobless benefits that became law a month after many already filed returns.
Here's how to tell if dogecoin's rebound is more bark than bite, according to technical analysts following the popular crypto.
Last week, we witnessed a classic “buy the rumor, sell the news” event with the cryptocurrency Dogecoin (CRYPTO:DOGE). Many Dogecoin enthusiasts were hoping that Tesla (NASDAQ: TSLA) CEO Elon Musk’s stint hosting the television show “Saturday Night Live” would lead to higher prices. After all, Musk has been known to pump the price of this cryptocurrency on Twitter and has been one of its biggest supporters. With so many Dogecoin holders anxious to see what the Dogefather had to say Saturday, the price of cryptocurrency rallied hard into the event to hit a record high of $0.74. Unfortunately, Doge investors learned that sometimes these types of events simply cannot live up to the hype. The price of Doge dropped more than 30% following the premiere of the show after Musk failed to deliver the praise for the cryptocurrency investors were hoping for. Traders can learn a lot from this story, particularly since this “buy the rumor, sell the news” scenario repeats itself time and time again in financial markets. It highlights just how difficult it can be to trade based on the news and should be viewed as a cautionary tale. With that said, perhaps the most important lesson here is that instead of gambling on Dogecoin, why not learn a trading strategy that can deliver real results? For example, Mindful Trader has created a data-driven swing-trading strategy that can potentially help you grow your account. Because he has analyzed and dissected historical stock market price data to test his trading strategy, you won’t have to worry about trying to guess right on binary events like the one mentioned above. Instead, you can use a statistical approach with proven results to take your trading to the next level. Signing up for the Mindful Trader service gives you access to tutorials and all the trading rules he uses for successfully generating returns with stocks and options trading. He also provides data-driven stock picks that he trades himself, which allows you to learn while following his suggestions. Whether you are a beginner trader or a seasoned veteran, Mindful Trader has something for everyone. Since Mindful Trader uses a swing-trading strategy that relies on price movement, not hope, you will always be confident in making a trade. That means you won’t have to trade the news and rely on hype to potentially generate returns like those unfortunate Dogecoin investors mentioned above. Check out this link to learn more about Mindful Trader’s trading strategy and why it’s such a smart alternative to gambling with Dogecoin. See more from BenzingaClick here for options trades from BenzingaThese OTC Securities Had the Most Trading Activity in April3 Advantages to Binary Options Trading with Nadex© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Two of the world's most prominent billionaires Tesla Inc.'s CEO Elon Musk and Jack Dorsey are facing off over the merits of bitcoin, with the future of the world's No. 1 crypto likely hanging in the balance.
Dogecoin will likely transition from a proof-of-work protocol to proof-of-stake, speculated Alex Mashinsky, the chief executive and founder of The Celsius Network on Friday during a webcast hosted by his lending platform on YouTube.
Shares of Plug Power Inc. surged Friday, after they hydrogen and fuel cell systems company completed its restatement, removing a "shroud of uncertainty" that has been weighing heavily on the stock the past couple months.
The Tesla CEO sent the price of Bitcoin and other cryptocurrencies plummeting. But he may be aiming to turn crypto-mining green in ways that benefit Tesla.
Lawmakers are looking for quick action to improve an existing forgiveness program.
(Bloomberg) -- Stock sales are reaping a windfall for the world’s richest shareholders.Corporate insiders including Amazon.com’s Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month long bull market that’s helped boost fortunes to the tune of trillions.U.S. public company insiders offloaded shares worth $24.4 billion this year through the first week of May, with about half sold through trading plans, according to data compiled by Bloomberg. That’s almost as much as the $30 billion total they disposed of in the second half of 2020.Large shareholders frequently sell stock in planned intervals, often through pre-arranged trading programs. Yet the prolonged rally in equities markets has made the value of these disposals, whether planned or opportunistic, strikingly high.There are multiple reasons an investor of any size might be motivated to sell. After the pandemic-defying rally, valuations are increasingly under pressure from rising inflation. Investors are wary the post-Covid recovery could prompt tightening measures from the Federal Reserve. And President Joe Biden’s proposed tax hikes -- including a near doubling of the capital gains rate -- have created uncertainty.Bezos, EllisonWhatever the reason, the sales are flooding the market with yet more liquidity, the consequences of which will ripple through philanthropy, the art market, real estate and other niches.Bezos has sold $6.7 billion worth of Amazon shares this year. While a relative pittance for the world’s richest person, it’s more than two-thirds the value of shares he sold in 2020. Larry Ellison unloaded 7 million Oracle shares in the past week for total proceeds of $552.3 million. Charles Schwab has sold $192 million worth of shares of his eponymous brokerage this year.Brin, who has signaled that he intends to sell as many as 250,000 Alphabet Inc. shares, has disposed of $163 million worth of stock in recent days, his first sales in more than four years, filings show.Mark Zuckerberg and his charitable foundation, the Chan Zuckerberg Initiative, meanwhile, accelerated their sales of Facebook stock in the fall. Zuckerberg or his charity has divested shares at a near-daily clip since November, for a cumulative total exceeding $1.87 billion.The surging markets have exacerbated the concentration risk of the single-stock-dominated fortunes typical of many tech billionaires, said Thorne Perkin, president of Papamarkou Wellner Asset Management.“From a portfolio-management perspective, it makes sense to spread it around,” he said.Covid EconomyAlso among the biggest sellers are some noteworthy beneficiaries of the Covid economy. Zoom Video Communications founder Eric Yuan and used-car retailer Carvana Co.’s Ernest Garcia II have together received more than $1.75 billion from stock sales since March 2020, according to the Bloomberg Billionaires Index. George Kurtz, chief executive officer of cybersecurity firm CrowdStrike, has sold shares worth at least $250 million over that period.Zoom founder Yuan -- the poster child, in many ways, for the coronavirus economy -- has stepped up his sales this year as the firm’s share price slumped. In 2020, he typically offloaded about 140,000 shares a month through a trading plan, which generated more than $350 million over the course of the year.Since March, he’s sold almost 200,000 shares a month on average, yielding him about $185 million. He also donated more than a third of his stake in the San Jose-based company as part of “typical estate planning practices,” according to a spokesman. Some of the cash from his share sales fund donations to unspecified “humanitarian causes.”(Updates with Charles Schwab’s sales in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Despite differing outcomes, shares of GameStop and AMC Entertainment were moving in almost perfect sync on Friday as the two most popular meme stocks experienced very similar choppy trading one day after both experienced major surges.
The beneficial owners of the companies cited have no say at all in how their institutionally held shares are voted.
The IRS sent out COVID-19 relief checks to nearly 1 million more Americans in the ninth batch of payments made under Biden's American Rescue Plan.
Now that the IRS knows what you earned last year, you may be eligible for more support.
Anyone with a stock account can now make a savvy, albeit risky, bet on GBTC pricing disparities that were previously exclusive to big players.
Recent market volatility is enough to make your head spin, and can cause plenty of confusion for retail investors seeking a solid market strategy. It’s tempting to look to the experts, but that raises another question: which experts are the best to follow? There are plenty to choose from. Wall Street’s corps of professional stock analysts provide frequent and relevant commentary on hundreds of publicly traded stocks, but some investors want to consult opinions that originate a bit closer to the stock in question. For them, following the insiders – corporate officers whose jobs put them in a position to know the inner workings of their companies – can provide valuable stock hints. To make that search easier, the TipRanks Insiders’ Hot Stocks tool gets the footwork started – identifying stocks that have seen informative moves by insiders, highlighting several common strategies used by the insiders, and collecting the data all in one place. Fresh from that database, here are the details on three Strong Buy stocks showing ‘informative buys’ in recent days. Energy Transfer (ET) We'll start with a midstream company in the energy sector. Midstreamers are the companies that move energy sources – crude oil and natural gas, their derivatives, and other fuels – from the wellheads to the refiners and transfer points. It’s a necessary network in the hydrocarbon industry, and Energy Transfer exists right in the middle of it. The company’s transport network spreads across 38 states, connecting the Appalachia, North Dakota, and Texas-Oklahoma-Louisiana regions. Energy Transfer controls pipelines, terminals, and tank farms for oil and gas products. In Q1, ET reported net income of $3.29 billion, up by more than $4 billion from the net loss in the year-ago quarter. Per share, earnings came to $1.21. The company’s cash flow also grew substantially. ET reported $3.91 billion in distributable cash flow, compared to the $1.42 billion in 1Q20, for a gain of 175%. Energy Transfer used that cash flow to fund its dividend, at 15.25 cents per common share and payable on May 19. At that rate, the payment annualizes to 61 cents per share, and gives a strong yield of 6.11%. On the insider front, Ray Washburne, of Energy Transfer’s Board of Directors, made several purchases of ET stock recently. Two of those purchases, totaling 200,000 shares and purchased for approximately $1.9 million. His total holding in the stock now exceeds $4.2 million. Covering this stock for Evercore ISI, analyst Todd Firestone takes note of the sound quarterly report, and believes the company is moving in the right direction. “ET ticks every major investment theme, massive, diversified portfolio, clear path to deleveraging, focus on returns vs. growth, protection from commodity and volume swings, and an unchallenging valuation, trading well behind peers. There are two key takeaways on which we think investors ultimately focus on from [the earnings] results, i) guidance improved independently from the storm with systems operating at or above pre-COVID levels, and ii) the extra earnings are already in the bank and were used to pay down $3.7 Bn in debt,” Firestone wrote. To this end, Firestone gives ET shares an Outperform (i.e. Buy) rating, along with a $14 price target that implies a 38% upside potential for the year ahead. (To watch Firestone’s track record, click here) It’s clear from the unanimous Strong Buy consensus rating that Wall Street agrees with Firestone’s take on this stock. ET has 9 positive reviews on file. The stock is selling for $10.17, and its $12.67 average price target suggests ~25% one-year upside. (See ET stock analysis on TipRanks) New Fortress Energy (NFE) Let’s stick with the energy industry, but shift gears a bit and take a look at the natural gas segment. New Fortress Energy provides funding, construction, and operational maintenance for fully integrated natural gas energy projects in underdeveloped areas around the world. The company defines its mission as bringing clean and affordable energy onto the global marketplace. New Fortress has operations in Jamaica and Puerto Rico, Mexico and Brazil, and Western Ireland. In its report on the first quarter of this year, Fortress showed $145.7 million in total revenues, up 95% year-over-year, although flat from the previous quarter. In other news, the company’s gas projects in Mexico, Nicaragua, and Brazil are all proceeding on schedule. Two previously announced acquisition deals, of Hygo Energy Transition and Golar LNG Partners, were closed during the quarter, at a combined value of $5.1 billion. The company also shored up its liquidity position during the quarter. It completed a private offering of senior secured notes, $1.5 billion in total, due in 2026, and closed a $200 million secured revolving credit facility. Turning to the inside trades, John Mack, COB and Board member of New Fortress, made a series of stock purchases recently, totaling 24,000 shares. At the average price paid of $39.88, these were worth more than $957,000. In a detailed note on New Fortress, Evercore analyst Sean Morgan sees the company developing a solid foundation and improved profitability. “NFE has expanded its regasification capacity at a very rapid rate and has had to acquire third-party LNG cargoes to meet demand at its facilities…. NFE is also working to develop two offshore FLNG projects... The net result of this supply chain integration is to self-provide gas at a fixed price of $3-4/mmbtu, with first gas expected in 2022," Morgan wrote. The analyst continued, "For the upcoming quarter, NFE will see the partial-quarter direct contribution of its newly acquired assets of GMLP and Hygo, as the transaction closed on April 15th. We expect the contribution of GMLP’s assets amid an improving LNG carrier spot rate market to improve the profitability of the company in 2Q21, as NFE also continues to ramp its growing regasification business (including Hygo) and FLNG export projects.” Based on the above, Morgan gives NFE shares an Outperform (i.e. Buy) rating. His price target of $64 implies a 12-month upside potential of 60%. (To watch Morgan’s track record, click here) Overall, of the 5 recent analyst reviews on file for New Fortress, 4 are to Buy and 1 is to Hold, giving the stock its Strong Buy consensus rating. The shares are trading for $40.02 and have an average price target of $53.20, giving them an upside potential of 33% for the coming year. (See NFE stock analysis on TipRanks) Green Brick Partners (GRBK) Last but not least is Green Brick, a Texas-based company in the land-development and home acquisition sector. This is a growth segment of the economy; real estate and home prices have been rising lately. Green Brick invests in land, which it then provides as plots for development projects. The company also provides financing for construction costs. Green Brick’s recent Q1 revenues came in at $234.5 million, up 9.9% year-over-year. On the negative side of the ledger, revenues have been slipping since 3Q20 – but the company typically shows short cycles of rising and falling quarterly revenues, and the overall trend in the past two years has been upwards. EPS has shown a similar patter, and the Q1 print, at 51 cents per share, was up 64% from the year-ago quarter. The strength of the residential real estate sector can be seen by the share performance. GRBK shares have appreciated an impressive 155% in the past 12 months. Turning to the insiders, we find that Harry Brandler, of the company Board, this week purchased 25,000 shares of stock, in a series of transactions totaling over $552,000. It was his second large stock buy this year; the earlier purchase, in March, was 20,000 shares for $428,000. Brandler’s stake in Green Brick now reaches $1.9 million. Analyst Aaron Hecht, in his coverage of Green Brick for JMP Securities, sees the company on firm footing, despite the sequential declines. “The delivery shortfall was not all that unexpected given the company’s massive increase in backlog. Management continues to leverage its exposure to the Dallas-Fort Worth and Atlanta markets and is capitalizing on Millennial home purchases and pandemic-related relocations from urban environments. We believe the current housing cycle has legs through 2022," Hecht noted. The analyst added, “Net new orders totaled 1,082 homes for 1Q21, up 71% yr/yr and a record number of homes for the company…. Sales in the entry-level and first move-up categories, often an indicator of Millennial, homebuyers totaled 36%, which is double the percentage just two years ago.” All in all, Hecht rates GRBK shares as Outperform (i.e. Buy), with a $30 price target to suggest room for a 30% one-year upside. (To watch Hecht’s track record, click here) The recent reviews on Green Brick break down 3 to 1 in favor of Buys versus Holds, and support the Strong Buy analyst consensus rating. The shares are currently priced at $23 and their $32 average price target implies ~40% upside from that level. (See GRBK 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. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Meme-stock favorite AMC has skyrocketed this year, but one veteran media analyst says the movie studios' pressure on the exclusivity window means AMC is very overpriced.
USA TODAY answers the most asked questions regarding the Colonial Pipeline cyber attack and what states are struggling to keep gas stations stocked.
The gap between reported price inflation and the experiences of businesses and consumers is a signal to investors that inflation is hotter than it looks. Here’s a look at the Federal Reserve’s big gamble that inflationary pressure will be transitory.
In a further sign of "institutional DeFi" momentum, the regulated custodian is adding 1INCH, BNT, CRV, REN and SUSHI.