Milacron sold for $2 billion

Hillenbrand to acquire Milacron in cash, stock deal valued around $2B

Milacron sold for $2 billion, Stockwinners

Hillenbrand (HI) and Milacron (MCRN) announced that they have entered into a definitive agreement under which Hillenbrand will acquire Milacron in a cash and stock transaction valued at approximately $2B, including net debt of approximately $686M as of March 31.

Under the terms of the agreement, which has been unanimously approved by the boards of both companies, Milacron stockholders will receive $11.80 in cash and a fixed exchange ratio of 0.1612 shares of Hillenbrand common stock for each share of Milacron common stock they own.

Based on Hillenbrand’s closing stock price on July 11, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Milacron stockholders is $18.07 per share, representing a premium of approximately 34% to Milacron’s closing stock price on July 11, and a premium of approximately 38% to Milacron’s 30-day volume-weighted average price as of the close on July 11.

Hillenbrand pays $2 billion to buy one of its suppliers, Stockwinners

Upon closing, Hillenbrand shareholders will own approximately 84% of the combined company, and Milacron stockholders will own approximately 16%.

Milacron will benefit from the Hillenbrand Operating Model, or HOM, and Hillenbrand expects to leverage Milacron’s global shared services center to drive operational efficiency.

The transaction is expected to generate annualized, run-rate cost synergies of approximately $50M within three years following close, primarily through reducing public company costs, realizing operating efficiencies, and capturing direct and indirect spend opportunities.

The transaction is also expected to generate revenue synergies, driven by opportunities to cross-sell extruder and material handling equipment, and to leverage the combined service footprint to further penetrate the product aftermarket.

These efficiencies will be driven across the combined organization through utilizing the HOM, while maintaining a commitment to serving customers with excellence and innovation.

The transaction, which is expected to close in Q1 of 2020, is subject to customary closing conditions and regulatory approvals, including the approval of stockholders of Milacron.

About the Companies

Hillenbrand, Inc. operates as a diversified industrial company in the United States and internationally. The company operates in two segments, Process Equipment Group and Batesville. The Process Equipment Group segment designs, engineers, manufactures, markets, and services process and material handling equipment and systems for various industries, including plastics, food and pharmaceuticals, chemicals, fertilizers, minerals and mining, energy, wastewater treatment, forest products, and other general industrials.

Milacron Holdings Corp. manufactures, distributes, and services engineered and customized systems within the plastic technology and processing industry in the United States and internationally. 

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Lord Corporation sold for $3.7 billion

Parker-Hannifin to acquire LORD Corporation for $3.7B in cash

Parker Hannifin to buy Lord Corp., Stockwinners

Parker Hannifin (PH) announced that it has entered into a definitive agreement to acquire LORD Corporation for approximately $3.675B in cash.

The transaction has been approved by the Board of Directors of each company and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

LORD, headquartered in Cary, North Carolina, is a privately-held company founded in 1924 offering a broad array of advanced adhesives, coatings and specialty materials as well as vibration and motion control technologies.

Lord Corp. sold for $3.7 billion in cash, Stockwinners

LORD’s products are used in the aerospace, automotive and industrial markets. LORD has annual sales of approximately $1.1B and employs 3,100 team members across 17 manufacturing and 15 research and development facilities globally.

“This strategic transaction will reinforce our stated objective to invest in attractive margin, growth businesses, such as engineered materials, that accelerate us towards top-quartile financial performance,” said Tom Williams, Chairman and CEO of Parker.

“LORD will significantly expand our materials science capabilities with complementary products, better positioning us to serve customers in growth industries and capitalize on emerging trends such as electrification and lightweighting.

Upon closing of the transaction, LORD will be combined with Parker’s Engineered Materials Group.

Parker plans to finance the transaction using new debt.

Following the completion of the transaction, Parker expects to maintain a high investment grade credit profile.

The transaction is not expected to impact Parker’s dividend payout target averaging approximately 30-35% of net income over a five-year period, while maintaining its record of annual dividend increases.

The transaction is expected to be completed within the next four to six months and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

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Anadarko Petroleum sold for $50 billion

Chevron to acquire Anadarko for $65 per share or $33B


Anadarko sold for $50 billion, Stockwinners

Chevron Corporation (CVX) announced that it has entered into a definitive agreement with Anadarko Petroleum (APC) to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33B, or $65 per share.

Based on Chevron’s closing price on April 11, and under the terms of the agreement, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.

Chevron sees synergies of $2 billion, Stockwinners

The total enterprise value of the transaction is $50B.

“The acquisition of Anadarko will significantly enhance Chevron’s already advantaged Upstream portfolio and further strengthen its leading positions in large, attractive shale, deepwater and natural gas resource basins.

Furthermore, Western Midstream Partners, LP (WES) is a successful midstream company whose assets are well aligned with the combined companies’ upstream positions, which should further enhance their economics and execution capabilities.”

Chevron’s Chairman and CEO Michael Wirth said, “This transaction builds strength on strength for Chevron. The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business.

It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short-cycle, higher-return investments.

This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion, and will be accretive to free cash flow and earnings one year after close,” Wirth concluded.

“The strategic combination of Chevron and Anadarko will form a stronger and better company with world-class assets, people and opportunities,” said Anadarko Chairman and CEO Al Walker.

“I have tremendous respect for Mike and his leadership team and believe Chevron’s strategy, scale and operational capabilities will further accelerate the value of Anadarko’s assets.”

The acquisition consideration is structured as 75% stock and 25% cash, providing an overall value of $65 per share based on the closing price of Chevron (CVX) stock on April 11.

In aggregate, upon closing of the transaction, Chevron will issue approximately 200M shares of stock and pay approximately $8B in cash. Chevron will also assume estimated net debt of $15B.

Total enterprise value of $50B includes the assumption of net debt and book value of non-controlling interest.

The transaction has been approved by the boards of both companies and is expected to close in the second half of the year. The acquisition is subject to Anadarko (APC) shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.

Upon closing, the company will continue be led by Michael Wirth as chairman and CEO. Chevron will remain headquartered in San Ramon, California.

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Rig counts rise!

Baker Hughes reports U.S. rig count up 2 to 1,051 rigs

The international offshore rig count for April 2018 was 194. Stockwinners
The U.S. rig count rises to 1,051

Baker Hughes (BHGE) reports that the U.S. rig count is up 2 rigs from last week to 1,051 rigs, with oil rigs up 3 to 857 and gas rigs down 1 to 194.

The U.S. Rig Count is up 76 rigs from last year’s count of 975, with oil rigs up 59 and gas rigs up 17.

The U.S. Offshore Rig Count is up 2 rigs to 21 and up 3 rigs year-over-year.

The Canada Rig Count is down 16 rigs from last week to 224, with oil rigs down 6 to 152 and gas rigs down 10 to 72.

The Canada Rig Count is down 94 rigs from last year’s count of 318, with oil rigs down 66 and gas rigs down 28.

USO is up 12 cents to $11.60.

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Barrick Gold acquires Randgold

Barrick acquires Randgold in all-stock deal, sees ‘industry-leading’ company

Barrick Gold acquires Randgold, Stockwinners
Barrick Gold acquires Randgold, Stockwinners

Barrick Gold (ABX) announced that it has reached agreement on the terms of a recommended share-for-share merger of Barrick and Randgold Resources Limited (GOLD).

The merger is subject to approval by both sets of shareholders, regulatory approvals and other customary closing conditions.

It is intended that the merger will be implemented by means of a court-sanctioned scheme of arrangement of Randgold Resources and the Randgold shareholders under Article 125 of the companies Law 1991, with the entire issued and to be issued share capital of Randgold being acquired by Barrick.

Under the terms of the merger, each Randgold shareholder will receive 6.1280 new Barrick shares for each Randgold share.

Following completion of the merger, Barrick shareholders will own approximately 66.6% and Randgold shareholders will own approximately 33.4% of the new Barrick Group on a fully-diluted basis.

The company said, “The Merger will create an industry-leading gold company with the greatest concentration of Tier One Gold Assets in the industry, led by a proven management team of owners. Superior operating metrics, including the highest Adjusted EBITDA margin and the lowest total cash cost position among Senior Gold Peers, will support sustainable investment in growth and shareholder returns.”

The merger is expected to close by Q1 2019.

Following completion of the merger: John Thornton, Executive Chairman of Barrick, will become Executive Chairman of the New Barrick Group; Mark Bristow, Chief Executive Officer of Randgold, will become President and Chief Executive Officer of the new Barrick Group; Graham Shuttleworth, Finance Director and Chief Financial Officer of Randgold, will become Senior Executive Vice President and Chief Financial Officer of the new Barrick Group; Kevin Thomson, Senior Executive Vice President, Strategic Matters of Barrick, will become Senior Executive Vice President, Strategic Matters of the new Barrick Group; Two-thirds of the directors of the board of the new Barrick Group will be nominated by Barrick, and one-third will be nominated by Randgold.


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Engility Holdings sold for $2.5 billion

SAIC to acquire Engility in all-stock deal valued at $2.5B

Engility Holdings sold for $2.5 billion, Stockwinners
Engility Holdings sold for $2.5 billion, Stockwinners

SAIC (SAIC) and Engility Holdings (EGL) announced that they have entered into a definitive agreement under which SAIC will acquire Engility in an all-stock transaction valued at $2.5B, $2.25B net of the present value of tax assets, creating the second largest independent technology integrator in government services with $6.5B of pro-forma last 12 months’ revenue.

The combination of these two complementary businesses will accelerate SAIC’s growth strategy into key markets, enhance its competitive position and provide significant financial benefits.

The transaction will create market sub-segment scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence, and space.

In addition, it expands the capabilities of both companies, bringing additional systems engineering, mission, and IT capabilities to a broader base of customers.

Under the terms of the merger agreement, Engility stockholders will receive a fixed exchange ratio of 0.450 shares of SAIC common stock for each share of Engility stock in an all-stock transaction.

Based on an SAIC per share closing price of $89.86 on September 7, 2018, the transaction is valued at $40.44 per share of Engility common stock or $2.5B in the aggregate, including the repayment of $900M in Engility’s debt.

SAIC has obtained a financing commitment letter from Citigroup Global Markets Inc. for a new seven-year senior secured $1.05B term loan facility under our existing credit agreement.

The proceeds will be used to repay Engility’s existing debt and associated fees. SAIC expects no immediate change to its quarterly cash dividend as a result of this transaction.

The transaction is expected to close by the end of the fiscal fourth quarter ending February 1, 2019, following customary closing conditions, including regulatory and SAIC and Engility shareholder approvals.

The transaction has been unanimously approved by both boards.

The businesses will continue to operate separately until the transaction closes. The combined company will retain the SAIC name and continue to be headquartered in Reston, Virginia.

Following closing, Tony Moraco will continue as CEO and as an SAIC board member. SAIC will expand its board to include two additional members from Engility’s board.


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Ocean Rig sold for $2.7B

Transocean to acquire Ocean Rig for $2.7B including debt

 

Ocean Rig sold for $2.7B, Stockwinners
Ocean Rig sold for $2.7B, Stockwinners

Transocean (RIG) and Ocean Rig UDW Inc. (ORIG) announced that they have entered into a definitive merger agreement under which Transocean will acquire Ocean Rig in a cash and stock transaction valued at approximately $2.7B, inclusive of Ocean Rig’s net debt..

The transaction consideration is comprised of 1.6128 newly issued shares of Transocean plus $12.75 in cash for each share of Ocean Rig’s common stock, for a total implied value of $32.28 per Ocean Rig share, based on the closing price on August 31, 2018.

This represents a 20.4% premium to Ocean Rig’s ten-day volume weighted average share price.

The transaction has been unanimously approved by the board of directors of each company.

Transocean intends to fund the cash portion of the transaction consideration through a combination of cash on hand and fully committed financing provided by Citi.

The merger is not subject to any financing condition. Upon completion of the merger, Transocean’s and Ocean Rig’s shareholders will own approximately 79% and approximately 21%, respectively, of the combined company.

No changes to Transocean’s board of directors, executive management team, or corporate structure are anticipated as a result of the acquisition.

The Company will remain headquartered in Steinhausen, Switzerland, with significant operating presence in Houston, Texas, Aberdeen, Scotland and Stavanger, Norway.

The transaction, which is expected to be completed during the first quarter of 2019, is subject to the approval of both Transocean and Ocean Rig shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

The merger is not subject to any financing condition.

Also, consistent with the Company’s strategy of recycling less competitive rigs, Transocean will retire two of its floaters, the ultra-deepwater drillship C.R. Luigs and the midwater floater Songa Delta.

The rigs will be classified as held for sale and will be recycled in an environmentally responsible manner. Both floaters are currently stacked.

Transocean anticipates re-ranking the combined fleet, which may result in additional rigs being recycled.


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KMG Chemicals sold for $1.6B

Cabot Microelectronics to acquire KMG Chemicals for $1.6B

KMG Chemicals sold for $1.6B, Stockwinners
KMG Chemicals sold for $1.6B, Stockwinners

Cabot Microelectronics (CCMP) and KMG Chemicals (KMG), a global provider of specialty chemicals and performance materials, have entered into a definitive agreement under which Cabot Microelectronics will acquire KMG in a cash and stock transaction with a total enterprise value of approximately $1.6B.

Under the terms of the agreement, KMG shareholders will be entitled to receive, per KMG share, $55.65 in cash and 0.2000 of a share of Cabot Microelectronics common stock, which represents an implied per share value of $79.50 based on the volume weighted average closing price of Cabot Microelectronics common stock over the 20-day trading period ended on August 13.

The transaction has been unanimously approved by the board of both companies and is expected to close near the end of calendar year 2018.

The combined company is expected to have annual revenues of approximately $1B and approximately $320M in EBITDA, including synergies, extending and strengthening Cabot Microelectronics’ position.

The transaction is subject to the satisfaction of customary closing conditions, including HSR clearance and approval by KMG shareholders.

Cabot Microelectronics expects to finance the cash portion of the transaction consideration through a combination of existing cash and additional debt supported by commitments from its key lenders.


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Scotts Miracle-Gro dragged down by Bayer woes

Bayer drags Scotts Miracle-Gro down after Monsanto weed killer ruling

Scotts Miracle-Gro dragged down by Bayer woes, Stockwinners
Scotts Miracle-Gro dragged down by Bayer woes, Stockwinners

Shares of Bayer (BAYRY) trading in New York are sliding after the recently acquired Monsanto was ordered to pay $289M by a California court, who found it liable in a lawsuit alleging that the company’s Roundup caused cancer.

Commenting on the news, JPMorgan analyst Richard Vosser told investors that the selloff in the shares is “significantly overdone” as he sees the potential for the verdict to be overturned on appeal and for the damage amount to be greatly reduced.

Meanwhile, his peer at Bank of America Merrill Lynch argued that the ruling adds cloud over an important product for Scotts Miracle-Gro (SMG).

ROUNDUP RULING

Last week, a jury found Monsanto, which was recently acquired by Bayer for $63B, liable in a lawsuit alleging that the company’s glyphosate-based weedkillers, including its Roundup brand, caused cancer.

The case against Monsanto is the first of more than 5,000 similar lawsuits across the U.S.

The jury at San Francisco’s Superior Court of California found that Monsanto had failed to warn school groundskeeper Dewayne Johnson and other consumers of the cancer risks posed by its weed killers, and awarded Johnson $250M in punitive damages and about $39M in compensatory damages.

Monsanto, which plans to appeal the verdict, has denied that glyphosate causes cancer and has contended that decades of scientific studies have shown the chemical to be safe for human use.

SELLOFF ‘SIGNIFICANTLY OVERDONE’

In a research note to investors, JPMorgan’s Vosser said he views the selloff in shares of Bayer after a California jury ordered the company’s Monsanto unit to pay $289M for not warning of cancer risks posed by its weed killer, Roundup, as “significantly overdone.”

The analyst added that he sees the potential for the verdict to be overturned on appeal and for the damage amount to be greatly reduced. Overall, Vosser believes current share levels of Bayer provide a good long-term buying opportunity and reiterated an Overweight rating on the name.

RULING ‘ADDS CLOUD’ OVER IMPORTANT PRODUCT

Also commenting on the California court’s ruling, BofA/Merrill analyst Christopher Carey pointed out in a research note of his own that while the product is owned by Monsanto, Scotts Miracle-Gro is the exclusive distributor/marketer of consumer Roundup in the U.S. and Canada, with the brand on track to be about 15% to FY18 profit, but less in FY19 as a 3-year term for $20M annual payments from Monsanto ends in FY18.

Carey noted that he does not expect a ban of glyphosate, but argued that the court decision nevertheless “adds a cloud” over a product which is important for Scotts Miracle-Gro.

While any additional impact from Roundup is unclear, this adds another layer to risks, he contended, highlighting that the company already must overcome a number of headwinds in 2019.

The analyst reiterated an Underperform rating and $74 price target on Scotts Miracle-Gro’s shares. Meanwhile, his peer at SunTrust told investors that there is likely no legal risk to Scotts Miracle-Gro from Friday’s jury verdict in California.

As part of the master agreement between Scotts and Monsanto signed three years ago, Scotts is indemnified from any litigation relating to the Roundup/glyphosate issue, analyst William Chappell pointed out.

Further, the analyst noted that the company is not listed as a defendant in any of the cases filed against Monsanto.

Nevertheless, Chappell estimates that Roundup represents roughly 10% of Scotts’ EBITDA, and believes sales could be impacted over the long-term from these trials.

The analyst reiterated a Buy rating and $100 price target on Scotts Miracle-Gro’s shares.

PRICE ACTION

In Monday morning trading, shares of Bayer in New York have dropped over 10% to $23.75, while Scotts Miracle-Gro’s stock has slipped 2.25% to $73.65.


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Aegean Marine to acquire H.E.C. Europe for $367M

Aegean Marine to acquire H.E.C. Europe for approximately $367M

Aegean Marine to acquire H.E.C. Europe for $367M. Stockwinners.com
Aegean Marine to acquire H.E.C. Europe for $367M.

Aegean Marine (ANW) is pleased to announce that today it has entered into a definitive agreement to acquire all of the outstanding share capital of H.E.C. Europe Limited, the parent company of Hellenic Environmental Center S.A. and a group of companies that together provide global port reception facilities services, from the shareholders of H.E.C., for aggregate consideration of approximately $367M, including the assumption of certain indebtedness, which consideration is payable in the form of a combination of debt, the assignment of certain accounts receivables, cash and shares of Aegean common stock, which will represent approximately 33% of the issued and outstanding common stock of Aegean after giving effect to the issuance.

The Sellers are companies owned and controlled by Dimitris Melisanidis and certain members of his family, and members of the Agiostratitis family.

Aegean expects the acquisition, which results from several months of negotiations, to be immediately accretive to adjusted earnings per share in year one.

The acquisition was unanimously approved by the Aegean Board upon the recommendation of a special committee of independent directors. In making its recommendation, the Special Independent Committee consulted with its independent financial advisor, Clarksons Platou Securities and outside legal counsel.

The acquisition does not require the approval of Aegean’s shareholders. Aegean expects the acquisition to be immediately accretive to adjusted EPS in year one. Post-closing of the transaction, expected additional 2018E Revenues will amount to approximately $60M-$65M and 2018E EBITDA will amount to approximately $35M-$40M, which assumes timely closing of the transaction and completion of targeted acquisitions in 2018.

In addition, Aegean expects to appoint one additional independent director to the Aegean Board, effective as of the closing of the acquisition, creating an eight member Board of Directors.

ANW closed at $4.45.


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A. Schulman sold for $2.25B

LyondellBasell to acquire A. Schulman for $2.25B

LyondellBasell to acquire A. Schulman for $2.25B. Stockwinners.com
LyondellBasell to acquire A. Schulman for $2.25B.

LyondellBasell (LYB) and A. Schulman (SHLM) announced that they have entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.

The acquisition builds upon LyondellBasell’s existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.

Under the terms of the agreement, LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.

LyondellBasell will purchase 100% of A. Schulman common stock for $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations.

In addition, the contingent value rights generally will provide a holder with an opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman’s Citadel and Lucent acquisitions. LyondellBasell is using cash-on-hand to finance the acquisition.

LyondellBasell expects to achieve $150M in run-rate cost synergies within two years, primarily by leveraging its well-established approach to cost discipline and productivity, as well as its culture of operational, business and commercial excellence.

Further, the acquisition is expected to be accretive to earnings within the first full year following close.

The combined businesses had revenues of $4.6B and adjusted EBITDA of $446M over the last 12 months.

The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders.

The acquisition is expected to close in the second half of 2018.


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KapStone sold for $4.9 billion

WestRock to acquire KapStone for $35.00 per share

WestRock to acquire KapStone for $35.00 per share. Stockwinners.com
WestRock to acquire KapStone for $35.00 per share

WestRock (WRK) and KapStone Paper and Packaging (KS) announced the signing of a definitive agreement, pursuant to which WestRock will acquire all of the outstanding shares of KapStone for $35.00 per share and will assume approximately $1.36B in net debt, for a total enterprise value of approximately $4.9B.

Based on KapStone’s annualized EBITDA performance in the second half of its fiscal 2017, WestRock estimates the EV/EBITDA multiples to be under 10 times before and 7 times after the full run rate of expected cost synergies and performance improvements.

Upon closing, the acquisition is expected to be immediately accretive to WestRock’s adjusted earnings and cash flow, inclusive of purchase accounting adjustments.

KapStone stockholders will have the option to receive $35.00 per share in cash, or to elect to receive 0.4981 WestRock shares per KapStone share, with elections of stock consideration capped at 25% of the outstanding KapStone shares but no limit on the number of KapStone shares that can receive cash consideration.

KapStone’s chairman, Roger Stone, and president and chief executive officer, Matt Kaplan, have entered into voting agreements, pursuant to which they have agreed to vote their shares in support of the transaction, subject to certain limitations.

WestRock will finance the cash consideration through the issuance of new debt under a fully committed financing package. WestRock expects to refinance existing KapStone debt assumed as part of the transaction upon closing.

WestRock’s expected leverage ratio at the closing of the transaction will be greater than 3.00x, and WestRock expects to return to its stated leverage ratio target of 2.25x to 2.50x by the end of fiscal 2019.

The transaction is not conditional on financing. The transaction is subject to a number of customary closing conditions, including a vote by KapStone’s stockholders, and is expected to close during the quarter ending September 30, 2018.

Upon completion of the transaction, KapStone will be integrated into WestRock’s Corrugated Packaging segment.


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Shell paints a rosy picture

Shell annual organic free cash flow outlook increased to $25B-$30B by 2020

Shell annual organic free cash flow outlook increased to $25B-$30B by 2020

Royal Dutch Shell (RDS.a) CEO Ben van Beurden updated investors on the company’s strategy, setting out plans to grow returns and free cash flow, and outlining its ambition to reduce the net carbon footprint of its energy products.

Van Beurden highlighted three updates from his presentation:

“We have increased our outlook for organic free cash flow, which has been consistently strong over the past five quarters. We have also made significant progress with our divestment programme, allowing us to reduce net debt in that time.

Meanwhile, we intend to cancel our scrip dividend programme with effect from the fourth quarter 2017.”

The outlook for annual organic free cash flow has increased to $25 to $30 billion by 2020 at a Brent crude oil price of $60 per barrel (real terms 2016).

This is $5 billion more than the outlook Shell provided during its capital markets day in June 2016.

The delivery of new projects continues, and the company remains on track to deliver 1 million barrels of oil equivalent per day, and $10 billion of cash flow from operations from new projects by 2018, at $60 per barrel, real terms 2016.

It expects to deliver an incremental $5 billion cash flow from operations by 2020. Annual capital investment will continue to be between $25 and $30 billion, and at current oil prices capital investment will be managed towards the bottom end of that range, or lower if needed.

Annual underlying operational expenditure will remain below $38 billion until 2020, with efficiency gains expected to deliver further reductions, building on the more than 20% reduction in operational expenditure since 2014. The company expects to continue to grow organic free cash flow throughout the 2020s at a more moderate rate.

Increased distributions to shareholders in the form of share buybacks in line with the plans confirmed below is expected to support a stronger growth in its metrics per share.

RDS-a closed at $61.85.


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Barron’s is bullish on Verizon

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
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BULLISH  MENTIONS

 

Rising sales may lift Mondelez (MDLZ)- There is reason to hope that growth is returning to Mondelez, with sales perking up in its latest quarter, especially in the developing markets, Bill Alpert writes in this week’s edition of Barron’s. If the company and its new CEO can deliver sales growth, many analysts think Mondelez’s stock could rise to $50 or more, the report notes.

Wheat prices may rise amid cold December – A “brutal cold snap” in December is likely and could lift winter wheat prices higher than $5 a bushel, a rally that would aid the farm economy that has been hurt by steadily falling wheat prices since mid-2012, Simon Constable writes in this week’s edition of Barron’s. Among companies that benefit from higher crop prices are fertilizer makers Mosaic (MOS) and Agrium (AGU), the report notes.

Infrastructure stocks should rise if Congress passes legislation – It may be easy to be skeptical about President Donald Trump’s ambitious effort to rebuild aging bridges, roads and other elements of the country’s infrastructures, but there is reason for hope, John Kimelman writes in this week’s edition of Barron’s. For investors in a group of about a dozen infrastructure companies such as Vulcan Materials (VMC) and Fluor (FLR), legislation cannot be considered soon enough, he contends. Other companies that may get meaningful boosts include Martin Marietta Materials (MLM), Aecom (ACM), Jacobs Engineering Group (JEC), Granite Construction (GVA), Eagle Materials (EXP), and U.S. Concrete (USCR), Barron’s notes, adding that even equipment companies like Caterpillar (CAT) could benefit.

Tencent still has upside – While Tencent (TCEHY) is up 125% this year, the stock still has lots of upside, Assif Shameen writes in this week’s edition of Barron’s.

Verizon could return 20% over the next year – A long price war in wireless is easing, which has left Verizon’s (VZ) shares looking cheap, Jack Hough writes in this week’s edition of Barron’s. They could return 20%, including a dividend yield of 5%, over the next year, he adds.

BEARISH  MENTIONS

Challenges at HP Enterprise loom large– In a follow-up story, Barron’s says that as HP Enterprise (HPE) CEO Meg Whitman prepares to retire in February, the company no longer “has to shut the lights at night to save money.” However, plenty of challenges remain, notwithstanding Whitman’s moves to reconfigure the business, the report notes. The challenges at HP Enterprise loom large, as cloud-computing leaders Amazon (AMZN), Microsoft (MSFT) and Alphabet’s (GOOGL; GOOG) increasingly buy less HPE gear because they are building their own, the report notes.


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Barron’s turns bullish on Baker Hughes

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin

BULLISH MENTIONS

Buy Baker Hughes – While it is “not easy” to be a General Electric company (GE) and seems like GE may be giving up on Baker Hughes (BHGE), it does not mean investors should, Ben Levisohn writes in this week’s edition of Barron’s. The recent selloff may be a chance to pick up shares of Baker Hughes at a bargain, he adds.

Activist investors Nelson Peltz still in P&G picture. – In a follow-up story, Barron’s notes that while a month ago Procter & Gamble (PG) claimed to have survived a challenge from activist Nelson Peltz, a new vote tally last week showed that Peltz’s Trian Fund Management had won a board seat. A Peltz win would be good for the stock, as the consumer-products giant has faced a lack of significant revenue growth, the publication contends

IBM could be next to fetch higher valuation – Investors are warming to moderately priced blue chips, and IBM could be the next “slumbering giant” that could fetch a higher valuation, Jack Hough writes in this week’s edition of Barron’s. IBM’s gross profit could grow in the current quarter for the first time in years, suggesting its big investment in analytic and cloud products are winning over customers, he notes, adding that a stock rebound could follow.

BEARISH MENTIONS

More needed for Cisco to have ‘groove back.’  – While the Nasdaq composite returned to its heights a couple of years ago, it took Cisco Systems (CSCO) until last week to regain its footing, with an upbeat outlook by the company, Tiernan Ray writes in this week’s edition of Barron’s. Cisco has “certainly achieved something,” but not everything it needs, he notes, adding that while it seems to have stability, it has a kind of fixation on its own balance sheet that does not bode well for its competitiveness in the years to come.

Risk remains after GE dividend cut – While buying General Electric (GE) shares after a big payment cut may seem like a safe move, it might not be as GE would have to move still lower to give it the “sort of plump yield befitting a struggling giant” in need of a turnaround, Jack Hough writes in this week’s edition of Barron’s. 


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