Baker Hughes reports U.S. rig count down 9 to 711 rigs.
Baker Hughes (BKR) reports that the U.S. rig count is down 9 from last week to 711 with oil rigs down 5 to 570, gas rigs down 4 to 137 and miscellaneous rigs unchanged at 4.
The U.S. Rig Count is down 16 rigs from last year’s count of 727 with oil rigs down 4, gas rigs down 14 and miscellaneous up 2.
The U.S. Offshore Rig Count is down 1 to 20, up 4 year-over-year.
The Canada Rig Count is up 2 from last week to 87, with oil rigs up 3 to 42, gas rigs down 1 to 45.
The Canada Rig Count is down 16 rigs from last year’s count of 103 with oil down 13, gas rigs down 3.
The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.
The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.
West Texas Intermediate (WTI) is up $1.08 to $72.86 per barrel (52 weeks high of $122.10). Brent crude is up $1.07 to $77.12 per barre (52 weeks high of $123.58). Gasoline last traded at $2.702 per gallon (52 weeks high of $4.31 per gallon).
This 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.
Netflix provides update on sharing guidelines as 100M households share accounts
In an “update on sharing,” Netflix (NFLX) said that,
“Today, over 100 million households are sharing accounts – impacting our ability to invest in great new TV and films.
So over the last year, we’ve been exploring different approaches to address this issue in Latin America, and we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal and Spain.
Our focus has been on giving members greater control over who can access their account.
Set primary location: We’ll help members set this up, ensuring that anyone who lives in their household can use their Netflix account.
Manage account access and devices: Members can now easily manage who has access to their account from our new Manage Access and Devices page.
Transfer profile: People using an account can now easily transfer a profile to a new account, which they pay for – keeping their personalized recommendations, viewing history, My List, saved games and more.
Netflix Spain raises prices
Watch while you travel: Members can still easily watch Netflix on their personal devices or log into a new TV, like at a hotel or holiday rental.
Netflix Canada raises prices
Buy an extra member: Members on our Standard or Premium plan in many countries (including Canada, New Zealand, Portugal and Spain) can add an extra member sub account for up to two people they don’t live with – each with a profile, personalized recommendations, login and password – for an extra CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, Euro 3.99 in Portugal, and Euro 5.99 in Spain.”
This 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.
Aphria (APHA) and Tilray (TLRY) announced that they have entered into a definitive agreement to combine their businesses and create the world’s largest global cannabis company based on pro forma revenue.
Aphria merges with Tilray
The deal is pursuant to a plan of arrangement under the Business Corporations Act and the implied pro forma equity value of the combined company is approximately $3.9B, based on the share price of Aphria and Tilray at the close of market on December 15.
Following the completion of the arrangement, the combined company will have principal offices in the United States, Canada, Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on Nasdaq under ticker symbol (TLRY).
Tilray merges with Aphria
The combined company will have a complete portfolio of branded Cannabis 2.0 products in Canada.
In the United States, the combined company will have a consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater Brewing and Manitoba Harvest.
Under the terms of the Arrangement, the shareholders of Aphria will receive 0.8381 shares of Tilray for each Aphria common share, while holders of Tilray shares will continue to hold their Tilray shares with no adjustment to their holdings.
Upon the completion of the arrangement, Aphria Shareholders will own approximately 62% of the outstanding Tilray Shares on a fully diluted basis, resulting in a reverse acquisition of Tilray, representing a premium of 23% based on the share price at market close on December 15 to Tilray shareholders.
On a pro forma basis for the last twelve months reported by each company, the combined company would have had revenue of $685M.
Upon completion of the arrangement, Aphria’s current chairman and CEO, Irwin Simon, will lead the combined company as chairman and CEO.
The board of directors will consist of nine members, seven of which, including Simon, are current Aphria directors and two of which will be from Tilray, including Brendan Kennedy, and one of which is to be designated.
The combined company will have pro forma revenue of $685M for the last twelve months reported by each company, the highest in the global cannabis industry.
In Canada, the combination of Aphria and Tilray will create the leading adult-use cannabis company with gross revenue of C$296M in the adult-use market for the twelve months reported by each company.
The combination of Aphria and Tilray is expected to deliver approximately C$100M of annual pre-tax cost synergies within 24 months of the completion of the transaction.
The combined company expects to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales and marketing and corporate expenses.
Under the terms of the agreement, the arrangement will be carried out by way of a court approved plan of arrangement under the Business Corporations Act and will require the approval of at least two-thirds of the votes cast by the Aphria Shareholders at a special meeting.
Approval of a majority of the votes cast by Tilray stockholders will be required to, among other things contemplated by the Agreement, authorize the issuance of Tilray shares to Aphria shareholders pursuant to the Arrangement. Following completion of the Arrangement, Aphria will become a wholly-owned subsidiary of Tilray, with Aphria shareholders owning approximately 62% of Tilray.
The arrangement is expected to close in the second quarter of calendar year 2021 following the receipt of such regulatory approvals, as well as court approval of the Arrangement.
Each of Aphria’s and Tilray’s respective directors and officers and certain principal Tilray Stockholders have entered into voting support agreements agreeing to vote their Aphria Shares or Tilray Shares, as applicable, in favor of the resolutions put before them pursuant to the agreement.
Note that this merger probably was forced on the companies by market forces. Covid-19 pandemic has hurt cannabis industry similar to restaurants and movie theaters. APHA is up 5 cents to $8.18. TLRY is up $1.51 to $9.38. TLRY shares have an all time high of $300.
This 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.
Baker Hughes reports U.S. rig count up 9 from last week to 296
Baker Hughes (BKR) reports the U.S. rig count is up nine from last week to 296 with oil rigs up 10 to 221, gas rigs down one to 72, and miscellaneous rigs unchanged at three.
Baker Hughes has been reporting weekly rig counts for more than 50 years
U.S. Rig Count is down 526 rigs from last year’s count of 822, with oil rigs down 470, gas rigs down 58 and miscellaneous rigs up two.
The U.S. offshore rig count is unchanged at 13, down nine year-over-year.
The Canada rig count is up three from last week to 86, with oil rigs down two to 40, gas rigs up five to 46.
Canada rig count is down 56 rigs from last year’s count of 142, with oil rigs down 53, gas rigs down three.
Rig Counts Rise – See Stockwinners.com Market Radar to read more
Brent crude is down $0.37 to $37.89 per barrel. West Texas Intermediate (WTI) crude is down $0.40 to $35.77 per barrel.
This 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.
Altice USA to acquire Cogeco, to sell Cogeco Canadian assets to Rogers
Altice USA (ATUS) announced that it has presented an offer to Cogeco, or CGO, and Cogeco Communications, or CCA, (CGEAF) to acquire 100% of the issued and outstanding shares of Cogeco.
COGECO sold and broken into pieces
Cogeco Inc. is a Canadian telecommunications and media company. The company operates Cogeco Communications Inc. which is structured into three strategic business units; Cogeco Connexion, Atlantic Broadband, and Cogeco Media.
Altice USA buys Cogeco and sells parts to Roger Comm.
Altice USA has also entered into an arrangement to sell all the Canadian assets of Cogeco to the largest long-term shareholder of Cogeco, Rogers Communications (RCI), if its transaction with Cogeco is completed.
Upon completion of the overall transaction, Altice USA would own all the U.S. assets of Cogeco, namely Atlantic Broadband.
The aggregate all-cash consideration offered for all of the outstanding shares of CGO and CCA, including those owned by Rogers, is approximately $7.8B.
This includes approximately $3.6B to be paid by Altice USA for the U.S. assets: All the multiple voting shares of CGO are held in a company controlled by Mr. Louis Audet, the Executive Chairman of Cogeco, and members of the Audet family.
Given the position of the controlling shareholder, its support is necessary to complete a transaction, and as such the Altice USA offer includes a sizeable premium on those shares.
Altice USA ends up with Atlantic Broadband
Specifically, the offer includes $612M to the Audet family for their ownership interests, which include 100% of the multiple voting shares of CGO, or CGO MVS, and approximately 0.9% of total outstanding CGO subordinate voting shares, or CGO SVS.
The offer also includes C$106.53 per share for the remaining CGO SVS and C$134.22 per share for each CCA subordinate voting share, or CCA SVS.
These offer prices represent a significant premium of 30% to each stock’s 1-month volume weighted average price, or VWAP, on the Toronto Stock Exchange (the offer prices also represent a 36% premium for CGO SVS and 37% premium for CCA SVS to the August 31 closing prices).
This offer is in line with Altice USA’s previously stated objective to opportunistically grow through value-accretive acquisitions.
The acquisition of Atlantic Broadband, if consummated, would allow Altice USA to build on its success with prior cable acquisitions in the United States and expand its operations across 11 states on the east coast of the United States, adjacent to its existing Optimum and Suddenlink footprints.
Altice USA’s share repurchase and net leverage targets for 2020 remain unchanged from this transaction.”
This 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.
Loral Space & Communications declares $5.50 per share special dividend
Loral Space & Communications (LORL) announced that its board of directors has declared a special dividend of $5.50 per share for an aggregate dividend of approximately $170.5M.
The dividend is payable on May 28 to holders of record of Loral voting and non-voting common stock as of the close of business on May 14.
Loral declares a one time $5.50 special dividend, Stockwinners
Michael Targoff, Vice Chairman of Loral’s Board of Directors, explained that, “in an effort to maximize shareholder value, we have for some time been exploring, and are now in advanced discussions with our Canadian co-owner in Telesat, Public Sector Pension Investment Board, regarding the combination of Loral and Telesat into one public company.
Telesat to combine with Loral Space, Stockwinners
“Given the advanced state of the discussions regarding the combination transaction, it is now appropriate to pay to our shareholders a significant portion of the $243M cash distribution that we previously received from Telesat.”
“It is our intention,” Mr. Targoff continued, “to request that the Board declare an additional distribution to our shareholders in coordination with signing definitive agreements for the combination transaction.”
The company added: “Notwithstanding the advanced state of the discussions regarding the potential combination transaction, there can be no assurance as to whether or when Loral will be able to conclude the ongoing negotiations, that Loral will enter into any agreement that provides for a strategic transaction involving Telesat or Loral’s interest therein, that any strategic transaction will occur, or that any particular economic, tax, structural or other objectives or benefits with respect to any strategic transaction will be achieved.”
Loral Space & Communications Inc. offers satellite-based communications services to the broadcast, telecom, corporate, and government customers worldwide.
Telesat, formerly Telesat Canada, is a Canadian satellite communications company. The company is now the fourth-largest fixed satellite services provider in the world. It owns a fleet of satellites, with others under construction, and operates additional satellites for other entities.
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This 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.
Fed lowers federal funds target rate to 0%-0.25% on coronavirus outbreak
Fed, other central banks announce action to enhance U.S. dollar liquidity
Fed to up Treasury securities holdings by at least $500B, MBS by at least $200B
Expect added volatility in financial markets
Corona slowdown leads to drastic decisions, Stockwinners
The Federal Reserve said in a Sunday night statement, “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected.
Available economic data show that the U.S. economy came into this challenging period on a strong footing. Information received since the Federal Open Market Committee met in January indicates that the labor market remained strong through February and economic activity rose at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending rose at a moderate pace, business fixed investment and exports remained weak. More recently, the energy sector has come under stress.
Global inflation from 2007-2017, Stockwinners
On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent.
Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook.
In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.
The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective.”
The Federal Reserve said “To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.
QE 4 initiated by the Feds on a Sunday night, Stockwinners
In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate,” the central bank announced.
In an extraordinary move, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.
The Federal Reserve stated: “These central banks have agreed to lower the pricing on the standing U.S. dollar liquidity swap arrangements by 25 basis points, so that the new rate will be the U.S. dollar overnight index swap rate plus 25 basis points.
To increase the swap lines’ effectiveness in providing term liquidity, the foreign central banks with regular U.S. dollar liquidity operations have also agreed to begin offering U.S. dollars weekly in each jurisdiction with an 84-day maturity, in addition to the 1-week maturity operations currently offered. These changes will take effect with the next scheduled operations during the week of March 16.
The new pricing and maturity offerings will remain in place as long as appropriate to support the smooth functioning of U.S. dollar funding markets. The swap lines are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.”
This 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.
Osisko Gold to acquire Barkerville Gold Mines for approximately C$338M
Stockwinners.com
Osisko Gold Royalties (OR) announced that it has entered into a definitive agreement with Barkerville Gold Mines, pursuant to which Osisko has agreed to acquire all of the issued and outstanding common shares of Barkerville that it does not currently own, by way of a plan of arrangement under the Business Corporations Act.
Concurrent to the Arrangement, Osisko also announces the formation of the North Spirit Discovery Group, the next step in the evolution of Osisko’s accelerator business that Osisko pioneered over the last five years, with the goal of privatizing and surfacing value in resource development projects.
BGM sold to Osisko, Stockwinners.com
Under the terms of the Arrangement, each shareholder of Barkerville will receive 0.0357 of a common share of Osisko for each share of Barkerville held.
The Exchange Ratio implies consideration of C$0.58 per Barkerville share, based on the closing price of Osisko shares on the Toronto Stock Exchange on September 20, representing a 44% premium based on both companies’ trailing 20-day volume weighted average price as at September 20.
The Exchange Ratio implies a total equity value of approximately C$338M on a fully-diluted in the money basis, inclusive of Barkerville shares held by Osisko.
It is anticipated that the Arrangement will be completed in November. Upon completion of the transaction, current Osisko and Barkerville shareholders will hold approximately 91% and 9% of Osisko shares outstanding, respectively.
About the Companies
Barkerville Gold Mines Ltd. is focused on developing its extensive mineral rights package located in the historical Cariboo Mining District of central British Columbia. Barkerville’s Cariboo Gold Project mineral tenures cover 2,039 square kilometres; along a strike length of 67 kilometres which includes several past producing placer and hard rock mines, making it one of the most well-endowed land packages in British Columbia.
Osisko Gold Royalties Ltd is an intermediate precious metal royalty company that holds a North American focused portfolio of over 130 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its 5% NSR royalty on the Canadian Malartic Mine, which is the largest gold mine in Canada.
This 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.
Ecology & Environment to be acquired by WSP Global for $65.1M
Ecology and Environment announced that it has entered into a definitive merger agreement with WSP Global, pursuant to which WSP will acquire E & E for cash.
EEI sold for $65.1M, Stockwinners
E & E has approximately 775 employees, predominantly in offices across the United States, with an additional presence in Latin America. With its US operations representing approximately 80% of its 2018 $US 73.5 million in net revenues, E & E’s portfolio includes work on the New York State Offshore Wind Master Plan, Climate Change Adaptation Planning in San Mateo County, California, and work on large federal programs with agencies including the US Environmental Protection Agency, the US Army Corps of Engineers, and the US Navy.
Under the terms of the agreement, E & E’s shareholders will receive $15.00 in cash, and a special dividend of up to 50c, for each share of Class A and Class B common stock they own. The special dividend is conditioned on and will be paid following the completion of the transaction and is subject to downward adjustment in certain circumstances.
WSP buys EEI for $65.1 M.
Under the terms of the Agreement, the merger consideration is approximately $US65.1 million in the aggregate, including a special dividend of approximately $US 2.2 million.
The merger agreement and the transaction have been unanimously approved by E & E’s Board of Directors.
In addition, E & E’s founders Frank Silvestro, Ronald Frank and Gerald Strobel, a trust affiliated with E & E’s late founder Gerhard Neumaier, each member of E & E’s Board of Directors and affiliates of Mill Road Capital have all signed voting agreements in support of the transaction.
The merger consideration, together with the special dividend of up to 50c, represents a premium of approximately 52.9% over E & E’s closing share price of $10.14 on August 27, 2019.
The merger agreement provides for a “go-shop” period of 30 days, during which E & E – with the assistance of Robert W. Baird & Co. Incorporated – will contact and potentially enter into negotiations with, and provide due diligence access to, third parties that offer potentially superior proposals to the proposed transaction with WSP.
E & E will have the right to terminate the merger agreement to enter into a superior proposal subject to the conditions and procedures specified in the merger agreement.
There can be no assurance this process will result in a superior proposal. E & E does not intend to disclose developments about this process unless and until the Board has made a decision with respect to any potential superior proposal.
The closing of the transaction is subject to customary closing conditions, including the approval of E & E’s shareholders and applicable regulatory approvals.
The parties are targeting a closing in the fourth quarter of calendar year 2019, subject to receipt of applicable regulatory approvals.
Alexandre L’Heureux, President and Chief Executive Officer of WSP, said, “We are pleased by the opportunity to have E & E join WSP, as we share a similar culture and strategy, centered around employees and clients. This Acquisition, which is in line with our 2019-2021 Global Strategic Plan, will enable us to increase both our Strategic Advisory Services offering and our presence in the United States, most particularly the US governmental sector. E & E, which is recognized for its expertise in environment, has built experience in sectors and services that WSP had targeted for growth, including environmental impact assessment, emergency planning and management, as well as site restoration.”
This 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.
Fiat Chrysler proposes to 50/50 merger agreement with Renault
Fiat Chrysler propose to merge with Renault, Stockwinners
Fiat Chrysler Automobiles N.V. (FCAU) announced that it has delivered a non-binding letter to the board of Renault (RNLSY) proposing a combination of their respective businesses as a 50/50 merger.
The FCA proposal follows initial operational discussions between the two companies to identify products and geographies where they could collaborate.
Fiat Chrysler propose to merge with Renault, Stockwinners
Fiat said, “These discussions made clear that broader collaboration through a combination would substantially improve capital efficiency and the speed of product development. The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry in areas like connectivity, electrification and autonomous driving…The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis.”
Under the terms of the proposal, shareholders in each company would receive an equivalent equity stake in the combined company.
The combination would be carried out as a merger transaction under a Dutch parent company.
The board of the combined entity would initially be composed of 11 members, with the majority being independent and with equal representation of four members each for both FCA and Groupe Renault, as well as one nominee from Nissan.
Further, there would be no carryover of existing double voting rights.
However, all shareholders would have the opportunity to earn loyalty voting rights from the completion of the transaction under a loyalty voting program.
The parent company would be listed on the Borsa Italiana, Euronext and the New York Stock Exchange. Before the transaction is closed, to mitigate the disparity in equity market values, Fiat said its shareholders would also receive a dividend of EUR $2.5B.
In addition, prior to closing, there would be a distribution of Comau’s shares to Fiat’s shareholders or an incremental EUR $250M dividend if the Comau spin-off does not occur.
The combination is expected to deliver in excess of EUR $5B of annual run rate synergies, incremental to existing Alliance synergies.
Renault’s Response
Renault announced that its board met today to examine the proposal received from Fiat Chrysler Automobiles (FCAU) regarding a potential 50/50 merger between Renault S.A. and Fiat.
Renault said, “After careful review of the terms of FCA’s friendly proposal, the Board of Directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance.
A further communication will be issued in due course to inform the market of the results of these discussions, in accordance with applicable laws and regulations.”
This 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.
Waste Management to acquire Advanced Disposal Services for $33.15 per share
Advanced Disposal sold for $4.9B, Stockwinners
Waste Management (WM) and Advanced Disposal Services (ADSW) announced that they have entered into a definitive agreement under which a subsidiary of Waste Management will acquire all outstanding shares of Advanced Disposal for $33.15 per share in cash, representing a total enterprise value of $4.9B when including approximately $1.9B of Advanced Disposal’s net debt.
The per share price represents a premium of 22.1% to Advanced Disposal’s closing share price as of April 12, the last trading day prior to today’s announcement, and a premium of 20.9% to Advanced Disposal’s 30-day volume weighted average price as of the same date.
Transaction to close by the first quarter of 2020, Stockwinners
The transaction is not subject to a financing condition. Waste Management intends to finance the transaction using a combination of bank debt and senior notes.
Advanced Disposal Services provides non-hazardous solid waste collection, transfer, recycling, and disposal services. The company is involved in the curbside collection of residential refuse from small carts or containers into collection vehicles for transport to a disposal/recycling site. The company serves approximately 2.8 million residential customers; 200,000 commercial and industrial customers; and 800 municipalities in the Southeast, Midwest, and Eastern regions of the United States, as well as the Commonwealth of the Bahamas.
Following completion of the transaction, Waste Management expects to maintain a strong balance sheet and solid investment grade credit profile with a pro forma leverage ratio within the company’s long-term targeted net debt-to-EBITDA range of 2.75x to 3.0x.
The transaction, which was unanimously approved by the boards of directors of both companies, is expected to close by the first quarter of 2020, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by a majority of the holders of Advanced Disposal’s outstanding common shares.
In connection with the definitive agreement, Canada Pension Plan Investment Board, which owns approximately 19% of Advanced Disposal’s outstanding shares, has, under the terms of a voting agreement, agreed to vote its shares in favor of the transaction.
This 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.
Baker Hughes reports U.S. rig count down 3 to 1,022 rigs last week
The U.S. Rig Count is up 14 rigs from last year’s count of 1,008
Rig counts declined by three, See Stockwinners.com
Baker Hughes (BHGE) reports that the U.S. rig count is down 3 rigs from last week to 1,022, with oil rigs up 2 to 833, gas rigs down 5 to 189, and miscellaneous rigs unchanged at 0.
The U.S. Rig Count is up 14 rigs from last year’s count of 1,008, with oil rigs up 18 to 833, gas rigs down 3 to 189, and miscellaneous rigs down 1.
The U.S. Offshore Rig Count is up 1 rig to 23 and up 7 rigs year-over-year.
The Canada Rig Count is down 2 rigs from last week to 66, with oil rigs down 4 to 18 and gas rigs up 2 to 48.
The Canada Rig Count is down 36 rigs from last year’s count of 102, with oil rigs down 23 and gas rigs down 13.
Crude oil (WTI) is up 66 cents to $64.25 per barrel. Brent crude is up 95 cents to $64.27 per barrel.
This 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.
FDA to hold hearing on potential regulatory pathways for cannabis products
FDA to evaluate cannabis use, Stockwinners
The FDA issued a statement from outgoing Commissioner Scott Gottlieb on new steps to advance the agency’s continued evaluation of potential regulatory pathways for cannabis-containing and cannabis-derived products, in which he stated in part:
“In recent years, we’ve seen a growing interest in the development of therapies and other FDA-regulated consumer products derived from cannabis and its components, including cannabidiol, or CBD…We also recognize that stakeholders are looking to the FDA for clarity on how our authorities apply to such products, what pathways are available to market such products lawfully under these authorities, and how the FDA is carrying out its responsibility to protect public health and safety with respect to such products.”
The FDA is announcing a number of new steps and actions to advance its consideration of a framework for the lawful marketing of appropriate cannabis and cannabis-derived products under its existing authorities, Gottlieb said.
These new steps include:
A public hearing on May 31, as well as a broader opportunity for written public comment, for stakeholders to share their experiences and challenges with these products, including information and views related to product safety;
The formation of a high-level internal agency working group to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or regulatory changes might be needed and what the impact of such marketing would be on the public health;
Updates to its webpage with answers to frequently asked questions on this topic to help members of the public understand how the FDA’s requirements apply to these products;
and the issuance of multiple warning letters to companies marketing CBD products with “egregious and unfounded claims that are aimed at vulnerable populations.”
Publicly traded companies in the cannabis space include Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Canopy Growth (CGC), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), MediPharm Labs (MLCPF) and Tilray (TLRY).
This 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.
Cannabis stocks rise amid interest by Coca-Cola, opportunities for Shopify
Cannabis stocks rise amid interest by Coca-Cola, Stockwinners
Shares of cannabis stocks are in focus following a report that Coca-Cola (KO) is in talks with Aurora Cannabis (ACBFF) as it eyes the cannabis industry and an analyst note from Keybanc which said Shopify (SHOP) has cannabis potential.
COCA-COLA EYES CANNABIS
Coca-Cola is monitoring the nascent cannabis drinks industry and is in talks with Canadian marijuana producer Aurora Cannabis to develop the drinks, Bloomberg reported Monday.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said. “The space is evolving quickly. No decisions have been made at this time” Landers added.
The move comes as beverage makers are looking towards cannabis as soda consumption and traditional business slows.
Constellation Brands (STZ, STZ.B) previously announced it will spend $3.8B to increase its stake in Canadian marijuana producer Canopy Growth (CGC) and Molson Coors Brewing (TAP) is starting a joint venture with Quebec’s Hydropothecary to develop cannabis drinks.
In addition, Diageo (DEO) has been holding talks with at least three Canadian cannabis producers regarding a potential deal and Heineken’s (HEINY) Lagunitas label has launched a brand focused on non-alcoholic drinks infused with THC.
SHOPIFY MAY BENEFIT FROM CANNABIS SALES
KeyBanc analyst Monika Garb told investors in a research note on Monday that she is a buyer of Shopify, as the company has “ample” growth opportunities ahead.
She sees potential upside to her above-consensus estimates and expects that recreational sales of cannabis in Canada could be a general merchandise volume and revenue driver further benefiting Shopify’s business momentum.
The analyst said the company has been selected by several Canadian provinces to run their e-commerce sites and in-store point of sale solutions and has also signed deals with private cannabis producers and distributors, including Canopy Growth and Aurora.
Additionally, Garb says Shopify is the best positioned to benefit from growth in emerging brands, citing brands like Rebecca Minkoff and Kyle Cosmetics that already use Shopify. Garb maintained an Overweight rating and $182 price target on shares.
CANNABIS STOCKS
Publicly-traded companies in the space include Cronos Group (CRON), Canopy Growth, Tilray (TLRY), Cannabis Science (CBIS), Innovative Industrial Properties (IIPR) and Aurora Cannabis.
PRICE ACTION:
Aurora Cannabis gained over 16% in Monday’s trading, while Tilray gained 7.3%.
This 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.
Analysts diverge on Shopify after quarterly results
Shopify little changed after Q2 results, Stockwinners
Following the company’s second quarter results, Piper Jaffray analyst Michael Olson downgraded Shopify (SHOP) to Neutral saying the quarter was “not good enough” and the stock’s valuation fairly reflects current business trends.
Meanwhile, his peers at Baird and Canaccord both reiterated buy-equivalent ratings and raised their price targets on the shares following what they view as a “solid” quarter.
RESULTS
Shopify reported second quarter adjusted earnings per share of 2c and revenue of $245M, above consensus of (3c) and $234.64M, respectively.
GMV for the second quarter was $9.1B, an increase of 56% over the second quarter of 2017, and Gross Payments Volume, or “GPV,” grew to $3.6B.
The company said it sees third quarter revenues between $253M-$257M, third quarter GAAP operating loss in the range of $40M-$42M and adjusted operating loss in the range of $9M-$11M.
Additionally, Shopify said it expects FY18 revenues between $1.015B-$1.025B, FY18 GAAP operating loss in the range of $105M-$110M and adjusted operating profit in the range of $0-$5M.
PIPER MOVING TO THE SIDELINES
In a research note to investors, Piper Jaffray’s Olson downgraded Shopify to Neutral from Overweight and lowered his price target to $145 from $155 as he believes the stock’s current valuation adequately reflects the long-term growth story.
The analyst argued that the company’s second quarter was “good, but not good enough,” with monthly recurring revenue below investor expectations with a deceleration from 57% to 49% year-over-year growth between Q1 and Q2.
While Olson acknowledged that Shopify is performing well, the analyst told investors he believes this performance is mostly reflected in the shares’ valuation.
‘SOLID QUARTER’
Still bullish on the name, Canaccord Genuity analyst David Hynes told investors to not let yesterday’s post-earnings selloff in shares of Shopify confuse them on the fundamentals.
The analyst believes this was another “solid” quarter for Shopify as the company grew its nearly $1B revenue run-rate at 62% in the quarter.
Further, Hynes pointed out that he does not believe Shopify’s growth is decelerating faster than expected or that merchant churn is “going to sneak up and bite” the company.
He continues to believe that Shopify is one of the best-positioned growth stories in application software, and is confident that this business will ultimately scale to material profits. Hynes reiterated a Buy rating on the shares, while raising his price target on the stock to $165 from $160.
Meanwhile, Baird analyst Colin Sebastian also raised his price target for Shopify to $165 from $150 and reiterated an Outperform rating on the shares. While acknowledging that slowing monthly recurring revenue growth, a new shelf filing and its third quarter loss guidance weighed on the shares, the analyst said that this was another “solid” quarter for the company.
Ramping Plus adoption, international expansion, and new Merchant Solutions features should continue to drive significant growth, he contended. Sebastian told investors that he continues to like Shopify based on the significant e-commerce growth opportunity and defensible market leadership position he sees being demonstrated in the second quarter results.
PRICE ACTION
In Wednesday morning trading, shares of Shopify were fractionally down to $137.60.
This 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.
