Crude Oil Higher on Inventories Draw

The American Petroleum Institute #API reported a draw of 5.789 million barrels in UOil barrels on the price chart backgroundnited States #crude oil inventories, compared to analyst expectations that markets would see a crude oil draw of 1.8 million barrels for the week ending May 5.

#Gasoline inventories rose by 3.169 million barrels, according to the API. A draw of 700,000 barrels was expected. Gasoline inventories continue to build up ahead of summer driving season, as refiners continue to turn crude oil into gasoline above demand for the fuel.

So while crude oil has experienced an overall drawdown over the last couple of weeks, it’s being converted to gasoline, and extra inventories are moving from one side of the refinery to the other. Gasoline inventories have continued to build for four weeks in a row, if the EIA confirms this week’s build on Wednesday.

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Pilots Strike Leads to Passenger Brawl!

saveShares of #Spirit Airlines $SAVE are lower by 3% in Tuesday trading after its pilots’ strike forced the carrier to cancel several of its flights.  To make matters worse for the discount airline, a brawl erupted among Spirit Airlines passengers in Florida late Monday after another round of flight cancellations from the carrier, reports Reuters, citing a video of the event.

The cancellations are “just the latest of hundreds” from Spirit, which is engaged in a labor dispute with its pilots, Reuters says. “We are shocked and saddened to see the videos of what took place,” a spokesperson told the news service, adding that its pilots are engaged in “unlawful” strikes.

Footage of the fights spread widely on social media, creating the latest in a string of public relations headaches for U.S. airlines.

At least 11 Spirit flights were canceled at Fort Lauderdale airport on Monday and 31 delayed, according to data.

Hundreds of Spirit flights have been canceled in recent days. On Tuesday, the airline filed for a temporary restraining order against its pilot union.

Broward County Sheriff’s deputies responded to the incident at the airport as about 500 passengers became irate, police said. Video showed people falling down fighting as security officials tried to restrain them.

Three people were arrested for threatening to harm airline employees and challenging them to fight, police said, adding the trio had made the crowd become “increasingly aggressive.”

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Q1 GDP Growth Rate Forecast Raised!

Tgdpoday’s U.S. #wholesale report revealed divergent surprises, with a disappointing flat figure for March wholesale sales after a 0.7% February increase, but a 0.2% inventory rise that beat the 0.1% drop in the advance indicators report, after a 0.3% February rise.

Sales undershot inventories after beating inventories for three consecutive months, hence slowing the downtrend in the inventory-to-sales (I/S) ratio to leave a 1.28 ratio for a third consecutive month. Analysts now expect a Q1 GDP growth boost to 0.9% from 0.7%, with a $7 B boost in wholesale inventories that accompanies an $8 B downward factory inventory revision, but an $8 B hike in #construction. However, keep in mind that is the view from the rear-view mirror.

Analysts expect Q2 GDP growth of 3.2% with a $5 B inventory subtraction that leaves just a $4 B accumulation rate, after a likely trimming in the Q1 accumulation rate to the $9 B area. For monthly forecasts, analysts expect a 0.2%

#March business inventory rise after a 0.3% February increase.

Today’s 0.2% March wholesale inventory rise accompanies a flat factory figure and an assumed 0.4% retail inventory increase that matches the advance indicators data.

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Pentair to split into two companies!

#Penairpnr-logo $PNR announced that its Board of Directors has unanimously approved a plan to separate into two independent, publicly-traded companies.
The proposed transaction will create a global water company that designs, manufactures and delivers solutions to residential, commercial and industrial customers. Strategic business groups include Filtration & Process, Flow Technologies and Aquatic & Environmental Systems. The company will retain the Pentair name and ticker symbol. Water generated approximately $2.8B in sales in 2016; and an electrical company focused on improving utilization, lowering costs and maximizing customer uptime.
Strategic business groups include Enclosures, Thermal Management and Electrical & Fastening Solutions. The company will be named at a later date. Electrical generated approximately $2.1B in sales in 2016.
The separation is expected to occur through a tax-free spin-off of Electrical by Pentair to its shareholders.
Both Water and Electrical are expected to be well-capitalized and have investment-grade credit ratings.
Until the planned separation is completed, Pentair expects to continue to pay its quarterly dividend and will set appropriate dividend policies for each business following completion.
Upon separation, John L. Stauch, Senior Vice President and Chief Financial Officer of Pentair, will become Water’s CEO and Karl R. Frykman, the current President of Pentair’s Water segment, will become Water’s COO. Pentair expects to complete the separation in the second quarter of 2018, subject to satisfaction of customary conditions, including obtaining final approval from the Pentair Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the U.S. SEC.
$PNE is up 3% to $68.02 in morning trading following the announcement.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Pandora shares get a boost from KKR

pandora_logo_blue-796x174Noting that #Pandora $P announced it had raised $150M by selling a 5-year, 8% convertible preferred security to KKR $KKR , #Needham analyst Laura Martin calculates that adding KKR to the Pandora story adds $5 per share to the latter’s value, implying that it should trade up to $15 per share on the news over time.

The analyst believes #KKR provides a financial safety net, and expects KKR’s exit time frame to be 5 years, giving public shareholders a clearer exit path.

She reiterates a Buy rating and $16 price target on Pandora’s shares.

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