Barron’s is bullish on Apple and Exxon

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

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS

Apple reaffirms position as tech’s ‘undisputed’ leader – In a follow-up story, Barron’s says that with its earnings report last week, Apple (AAPL) flexed its financial muscle and reaffirmed its position as “tech’s undisputed leader.” Fiscal second-quarter iPhone sales came in roughly as expected, while the company’s total profit was slightly ahead of estimates, the report notes, adding that Apple’s real surprise came from its updated buyback plans. Investors rewarded the company with its best five-day stretch in the stock market since October 2011, Barron’s says.

Apple raking in profits amid technology impasse – Warren Buffet’s Berkshire Hathaway (BRKA) has bought another 75M shares of Apple (AAPL), Tiernan Ray writes in this week’s edition of Barron’s. While the current impasse for technology is going to continue to reduce new opportunities for Apple, for competitors such as Samsung (SSNLF) and suppliers like Qorvo (QRVO), there is enough wealth in the steady supply of what exists to keep investors like Buffett delighted with the cash flow, he contends. Milking it, at the moment, triumphs over innovation, Barron’s says.

Boeing eyeing ‘air supremacy’  – Boeing  (BA) announced last week that it would acquire KLX, whose products include airplane parts, as part of the aircraft manufacturer’s long-term plan to bolster its presence in parts, components, and services, Lawrence Strauss writes in this week’s edition of Barron’s. This is a trend investors should keep an eye on, he contends.

Sarepta winning over investors – Sarepta Therapeutics (SRPT) has been winning over investors with rising sales of its drug to treat Duchenne muscular dystrophy and a promising pipeline of drugs targeted at the fatal muscle-wasting disease, Andrew Bary writes in this week’s edition of Barron’s. Part of the optimism surrounding Sarepta is that it can bring to market two drugs similar to Exondys 51, which treats about 13% of DMD patients, he notes, adding that these drugs – casimersen and golodirsen – target mutations at other points on the dystrophin gene and could treat another 16% of DMD patients.

Exxon Mobil looks appealing – Demand for oil and natural gas is expected to be strong for decades and to capitalize on this growth, Exxon (XOM) has an ambitious plan to increase the company’s energy output by 25% and more than double earnings by 2025, Andrew Bary writes in this week’s edition of Barron’s. At a share price of $77, Exxon looks “appealing,” he adds.

BEARISH  MENTIONS

Wolverine may face mounting cleanup costs – The Scotchgard chemicals that gave stain resistance to Wolverine’s Hush Puppies shoes have leached into wells and aquifers from rusting barrels of sludge and other factory waste scattered around Michigan’s Kent County, where Wolverine (WWW)  used the chemicals for about 50 years, Bill Alpert writes in this week’s edition of Barron’s. The footwear firm has provided water filters to area homes and last year it set aside $35M to cover expected legal and remediation costs, but the question is whether $35M is enough, Barron’s notes.


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Barron’s is bullish on Ensco, bearish on Chipotle

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

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch,

BULLISH   MENTIONS:

Investors should consider Ensco to benefit from oil-price surge.  Crude-oil prices are set to jump because President Donald Trump is likely to reintroduce harsh sanctions on Iran by mid-May and to benefit from the oil-price surge, investors should consider buying shares in Ensco (ESV), Simon Constable writes in this week’s edition of Barron’s. Other key oil stocks include EOG Resource (EOG), Transocean (RIG), Exxon Mobil (XOM), Halliburton (HAL), ConocoPhillips (COP) and Devon Energy (DVN), he adds.

Netflix may soon pass Disney in Market Value – Any week now, Netflix (NFLX) will surpass in market value Walt Disney (DIS) as investors cheer on the streaming service’s continued subscriber growth, Jack Hough writes in this week’s edition of Barron’s. Investors who buy Disney shares now could have a long wait before they learn whether the streaming push will result in a rebounding price/earnings ratio, but that is where a diversified business model helps, Hough says.

BEARISH  MENTIONS

Chipotle results boosted by potentially short-lived dynamics – Brian Niccol, the new CEO at Chipotle Mexican Grill, got an “enormous” endorsement on Thursday, as shares of the restaurant chain soared 24%, Avi Salzman writes in this week’s edition of Barron’s. But Salzman is still skeptical that investors should buy the rebound. The first-quarter report was boosted by several dynamics that could be short-lived, he argues, adding that even with those results, it is hard to “make a queso” for Chipotle tripling earnings.


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Barron’s is bullish on GM and Delta

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

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Stockwinners offers Barron’s review of stocks to buy

BULLISH   MENTIONS:

Delta, GM look cheap, with growth potential – While a solid start to earnings season helped push share prices higher earlier this week, some remain deeply discounted, Jack Hough writes in this week’s edition of Barron’s. Despite Delta Air Lines’ (DAL) pessimistic valuation, consolidation has left only a handful of key players and the company faces less competition in key markets than some of its peers, the report adds. Additionally, Goodyear Tire (GT), General Motors (GM) and Lincoln National (LNC) also made the valuation cutoff, Hough says.

General Mills shares fall to ‘bargain territory.’  – General Mills (GIS) has fallen 27% so far this year and while the drop seems deserved because earnings growth has stalled, a closer look suggests sales trends are improving, thanks in part to new-product launches, Jack Hough writes in this week’s edition of Barron’s.

Cruise operators can offer ‘nice’ yields, solid dividend growth – Cruise operators, like Carnival (CCL), Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH), can offer nice yields and solid dividend growth, but economic downturns can pressure payouts, Lawrence Strauss writes in this week’s edition of Barron’s. Another option for investors looking for yield among cruise operators is Walt Disney (DIS), the report added. The entertainment company has a wide variety of holdings, and while its cruise business did not account for a large portion of its $55B of sales last year, it is not insignificant either.

Tech giants may make own custom chips to get edge on one another. – There has been a tension between the world’s largest tech companies- Alphabet (GOOG; GOOGL), Amazon (AMZN), Facebook (FB), Apple (AAPL), Microsoft (MSFT), Baidu (BIDU), and Alibaba (BABA)-and the chip companies they rely on, especially Intel (INTC) and Nvidia (NVDA), Tiernan Ray writes in this week’s edition of Barron’s. While the giants buy massive quantities of Intel’s microprocessors, and Nvidia’s graphics chips, or GPUs, to power their data centers, they are also in an arms race to have the best artificial-intelligence-based machine-learning functions, the report noted, adding that there was always the possibility they may decide to buy fewer off-the-shelf parts and make their own custom chips to get an edge on one another.

 MPL valuations look cheap – Master limited partnerships’ valuations appear cheap, and U.S. energy production is thriving, lifting cash flows for pipeline firms, Darren Fonda writes in this week’s edition of Barron’s. MLP, such as Enterprise Products Partners (EPD), Magellan Midstream Partners (MMP), MPLX (MPLX), Plains All American Pipeline (PAA), could reward investors with higher yields as cash flows rise, Fonda adds.

OTHER MENTIONS

Trump’s tweets politicize U.S. markets, Barron’s says – With President Donald Trump, both politics and business appear personal as he continues his tweets aimed at individual companies, Vito Racanelli writes in this week’s edition of Barron’s. Before and after the election, he consistently aimed arrows at Amazon.com (AMZN) and at the proposed acquisition of Time Warner (TWX) by AT&T (T), the report noted. The President is not alone in singling out companies, Racanelli points out, adding that Democratic candidate Hillary Clinton also took issue with Mylan’s (MYL) price increases for its EpiPen. Maybe it is a sign of the times, but the rise of powerful social-media platforms is the key enabling factor, the report said.


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Barron’s is bullish on Tesla, bearish on Deutsche Bank

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

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS:

Comcast a bargain despite risk – Comcast (CMCSA; CMCSK) has fallen from favor with investors following its the proposal to buy SKY (SKYAY) as they fear it will get into a bidding war with Fox (FOXA) and overpay for Sky, Andrew Bary writes in this week’s edition of Barron’s. Now the stock trades at a discount to rival Charter (CHTR) and yields 2.2%, he notes.

Investors may want to look at Microsoft to play tech-stock downdraft  – For the past two weeks, large-cap technology stocks have sold off on investor concerns following the data crisis at Facebook (FB), Bill Luby writes in this week’s edition of Barron’s. One collateral-damage victim has been Microsoft (MSFT), and it is “easy to argue” that the downturn in its shares is overdone, Luby contends, adding that the tech giant’s strong fundamentals, combined with good technical support for its shares just below their recent price, make the company’s stock a strong candidate for a rebound.

Oil refiners primed for profits – The outlook for companies that turn crude oil into gasoline has looked better and demand for refining is poised to grow faster than supply in the years ahead, leading to a surge in profits and share prices across the industry, Jack Hough writes in this week’s edition of Barron’s. Refiners include Andeavor (ANDV), Marathon Petroleum (MPC), Philips 66 (PSX) and Valero (VLO), the report notes.

New AI era for chip makers– Artificial intelligence is about to become a lot more pervasive as the computer circuitry to perform AI grows more prevalent, Tiernan Ray writes in this week’s edition of Barron’s. The desire to embed AI in just about anything has meant that more chip makers are racing to diffuse their designs for circuitry that processes the algorithms that drive the software, he note, adding that relevant companies spanning the semiconductor industry include Nvidia (NVDA), CEVA (CEVA), Synopsys (SNPS) and Cadence Design Systems (CDNS).

Tesla stock may rally later this year – In a follow-up article, Barron’s notes that investors have had fun following Tesla’s journey, reaping stock gains of 600% in the last five years, but some wonder if “the music is going to stop.” The key question is whether Tesla (TSLA) can raise enough cash to keep going, the report notes, arguing that Tesla should “live to fight another day” to produce cars, and may even start to turn a cash profit next year. Barron’s believes later this year, its shares will most likely rally as clouds lift.

BEARISH  MENTIONS:

New CEO may not save Deutsche Bank stock – News that Deutsche Bank (DB) Chairman Paul Achleitner has been looking for another CEO grabbed the financial industry’s attention, but just as it may be premature to organize farewell drink for current CEO John Cryan, it may also be too soon to turn bullish on the shares, Victor Reklaitis writes in this week’s edition of Barron’s. There are plenty of reasons to stay bearish on the stock and the latest escalation of tensions between Achleitner and Cryan is just “a piece of Deutsche Bank puzzle,” he adds.


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Willbros Group sold for $100M

Primoris to acquire Willbros Group in all-cash transaction

 

Primoris to acquire Willbros Group, Stockwinners.com
Primoris to acquire Willbros Group,

Primoris Services Corporation (PRIM) announced that it has entered into a definitive merger agreement to acquire Willbros Group (WG) in an all-cash transaction.

Primoris will pay 60c per share for all of the outstanding stock of Willbros and will settle all of the existing Willbros debt obligations, for an enterprise value of approximately $100M.

Willbros is a specialty energy infrastructure contractor serving the Oil & Gas and Power industries across its three operating segments: Utility Transmission and Distribution, Oil & Gas, and Canada. Willbros’ infrastructure services platform provides a diverse base of utility, natural gas, and renewable customers with comprehensive engineering, construction, maintenance, repair, and restoration solutions.

Upon completion of the transaction, Primoris expects the Willbros UTD business to become a new operating segment, Primoris UTD, which continues Primoris’ strategic plan for growing its Master Service Agreement revenue base.

Primoris anticipates that Willbros’ Lineal Oil & Gas operations will be incorporated into Primoris’ Utilities & Distribution segment, the Houston-based Oil & Gas facilities operations will become part of Primoris’ Pipeline & Underground segment, and the Canadian business will become part of Primoris’ Power, Industrial, and Engineering segment.

Primoris expects the financial benefits of the transaction to include: For the first 12 months after closing, revenues of approximately $660M, including estimated UTD revenues of $470M, For the first 12 months after closing, EBITDA of $25M, including approximately $7M in annual cost savings, The addition of approximately $400M to Total Backlog, including approximately $300M from the UTD business and within 24-30 months after the closing of the transaction, additional annual cost savings of $7.5 million to $10M.

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both Willbros and Primoris, each stockholder of Willbros will receive 60c per share in cash, without interest, which represents a significant premium to the closing price of Willbros common stock on March 27, 2018.

In addition, Primoris will settle all of the existing Willbros debt obligations. The transaction has an enterprise value of approximately $100M.

Primoris intends to finance the transaction through cash on hand and its existing credit facilities.

As part of the transaction, Primoris has agreed to provide Willbros up to $20M in secured bridge financing to support Willbros’ working capital liquidity needs prior to the transaction close.

The transaction is subject to approval by Willbros stockholders and certain other closing conditions. In connection with the execution of the merger agreement, certain Willbros directors and stockholders, together representing approximately 17% of Willbros’ outstanding shares, have entered into voting agreements with Primoris, whereby such stockholders agreed, among other things, to vote in favor of the adoption of the merger agreement. The transaction is expected to be completed in the second quarter of 2018.


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TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B. Stockwinners.com
TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy (TPGE) announced it has entered into definitive agreements with certain funds managed by EnerVest to acquire the oil and gas assets within EnerVest’s South Texas Division for approximately $2.66B in cash and stock.

As part of the transaction, TPGE and EnerVest are partnering to create Magnolia Oil & Gas Corporation, a new company led by Steve Chazen who will serve as Magnolia’s full-time chairman, president and CEO.

EnerVest will retain a significant ownership stake in Magnolia.

The transaction is subject to approval by the TPGE shareholders and other customary closing conditions, and the new company will trade on the NYSE under a new ticker upon closing, which is expected to occur late in the second quarter of 2018.

The formation of Magnolia creates a large-scale, pure-play South Texas operator with top-tier Eagle Ford and Austin Chalk asset positions with more than 40,000 boe per day of production.

Magnolia will acquire EnerVest’s approximately 360,000 total net acres in South Texas, which consists of approximately 14,000 net acres in one of the most prolific sections of Karnes County and 345,000 net acres in the emerging, high-growth potential Giddings Field.

The acreage position is almost entirely held by production, and the production from the combined asset base is heavily weighted toward oil.

TPGE closed at $9.73.


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Barron’s is bearish on Fitbit, L Brand and Nokia

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

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Stockwinners offers Barron’s review of stocks to buy

BULLISH   MENTIONS:

Invesco stock weakness a buying opportunity – U.S. stocks are down 5% from their January 26 peak, while shares of Invesco (IVZ) have fallen much more, which gives investors a buying opportunity, Jack Hough writes in this week’s edition of Barron’s. Driven by strong exchange-traded fund lows, BlackRock’s (BLK) shares have skyrocketed in recent years while Invesco’s have lagged behind, he notes, adding that the latter’s forward price-earnings multiple now represents a bargain-basement 44% discount to BlackRock’s.

Nordstrom, TJX appear to have most staying power– Department store stocks have rebounded in recent months, but they are not all likely to emerge as winners, Avi Salzman writes in this week’s edition of Barron’s. Nordstrom (JWN) and TJX (TJX) appear to have the most staying power, with the former the more attractive choice in terms of valuation, he notes. Kohl’s (KSS) and Macy’s (M) are showing new life but need to prove they can repeat their fourth quarter performances, Salzman says, adding that JCPenney (JCP) and Dillard’s (DDS) remain “tricky.”

BEARISH  MENTIONS:

L Brands shares may still go lower given multiple problems – Shares of L Brands  (LB) tumble after quarterly results, with the stock trading at just 13.5 times 12-month earnings forecasts, Ben Levisohn writes in this week’s edition. While it may look tempting, Levisohn cannot help think that the multiple problems facing the company could send them lower still.

Not much time left for Fitbit – In a follow-up story, Barron’s notes that plenty of people still use fitness trackers and Fitbit (FIT) still sells millions of them, but the company has acknowledged that the market is “rapidly changing.” Fitbit CEO James Park has pledged to expand the company’s line of watches, putting it in direct competition with Apple (AAPL), but there is no indication that Fitbit knows how to nurture an “ecosystem” of software developers.

VMware investors not happy with possible Dell deal – VMWare (VMW) fell on Thursday and Friday in the wake of a CNBC report that Dell and VMware are considering a reverse merger in which the latter would issue shares to Dell Technologies and allow it to go public without doing an IPO, Andrew Bary writes in this week’s edition of Barron’s. A Dell/VMware combination could benefit Dell’s tracking stock for VMware, he notes, while adding that VMware investors are not happy about a possible transaction as it would link a thriving, cash-rich company with a highly leveraged Dell.

5G cannot deploy fast enough for Ericsson/Nokia – While the battle to dominate the future of wireless networks would be a boon for any wireless arms merchant such as Nokia (NOK) or Ericsson (ERIC), the race to build the new technology dubbed 5G is not going to produce a boom in revenue overnight, and both companies are struggling to get back on their feet, Tiernan Ray writes in this week’s edition of Barron’s. If they stabilize this year, and sentiment starts to warm about 5G, it could boost their stock prices even if 5G takes a while to pay off, he adds.


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International rig counts rise

Baker Hughes reports January international rig count up by 6 to 960 rigs

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Rig Counts Rise

Baker Hughes (BHGE) reported international rig count for January 2018 was 960, up 6 from the 954 counted in December 2017, and up 27 from the 933 counted in January 2017.

The international offshore rig count for January 2018 was 196, up 5 from the 191 counted in December 2017, and down 10 from the 206 counted in January 2017.

The average US rig count for January 2018 was 937, up 7 from the 930 counted in December 2017, and up 254 from the 683 counted in January 2017.

The average Canadian rig count for January 2018 was 278, up 73 from the 205 counted in December 2017, and down 24 from the 302 counted in January 2017.

The worldwide rig count for January 2018 was 2,175, up 86 from the 2,089 counted in December 2017, and up 257 from the 1,918 counted in January 2017.

WTI crude is down 33 cents to $63.06 pr barrel.


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Midstates Petroleum proposes merger with SandRidge Energy

Midstates Petroleum proposes all-stock combination with SandRidge Energy

Midstates Petroleum calls for merger with SandRidge Energy. Stockwinners.com
Midstates Petroleum calls for merger with SandRidge Energy

Midstates Petroleum Company (MPO) announced that it has proposed to combine with SandRidge Energy (SD) in an all-stock merger that would create the leading exploration and production company in the Mississippian Lime play.

Earlier today, Midstates sent a letter to the Board of Directors of SandRidge detailing the merger proposal and its strong desire to negotiate a friendly transaction.

Given the highly complementary nature of the businesses, significant shareholder overlap, and the substantial operational synergies, Midstates believes that the proposed combination is attractive strategically and financially for the shareholders of both companies.

Under the terms of the proposal, SandRidge shareholders would own approximately 60% of the combined company and Midstates shareholders would own 40%.

David J. Sambrooks, Midstates President and Chief Executive Officer, stated, “We are ready to move forward immediately to negotiate a merger agreement to form a stronger, more formidable company.

The combined company will have zero net debt, strong liquidity, and forecasted free cash flow generation of up to $480 million over the next five years.”

Sambrooks continued, “Combining these two businesses in an at-market merger would bring undeniable benefits to shareholders of both companies.

The strategic fit and geographic overlap of both companies’ assets in the Miss Lime and NW STACK builds critical mass, creates significant synergies, and generates superior, risk-adjusted returns.”

Midstates is making this proposal public to inform both Midstates and SandRidge shareholders of the compelling value creation potential of the combination and to encourage SandRidge’s board to move towards a negotiated transaction.

MPO closed at $15.45. SD closed at $16.50.


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December international rig counts rise

Baker Hughes reports December international rig count 954

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes (BHGE), a GE company, announced that the Baker Hughes international rig count for December 2017 was 954, up 12 from the 942 counted in November 2017, and up 25 from the 929 counted in December 2016.

The international offshore rig count for December 2017 was 191, up 8 from the 183 counted in November 2017, and down 19 from the 210 counted in December 2016.

The average US rig count for December 2017 was 930, up 19 from the 911 counted in November 2017, and up 296 from the 634 counted in December 2016.

The average Canadian rig count for December 2017 was 205, up 1 from the 204 counted in November 2017, and down 4 from the 209 counted in December 2016.

The worldwide rig count for December 2017 was 2,089, up 32 from the 2,057 counted in November 2017, and up 317 from the 1,772 counted in December 2016.

WTI crude last traded at $61.65 per barrel, up 21 cents.  Brent crude is up 16 cents to $67.78 per barrel.


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International rig counts decline

Baker Hughes reports November international rig count 942, down 9 rigs

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count
Oil Rig counts decline

Baker Hughes (BHGE), a GE company, announced that the Baker Hughes international rig count for November 2017 was 942, down 9 from the 951 counted in October 2017, and up 17 from the 925 counted in November 2016.

The international offshore rig count for November 2017 was 183, down 21 from the 204 counted in October 2017, and down 28 from the 211 counted in November 2016.

The average US rig count for November 2017 was 911, down 11 from the 922 counted in October 2017, and up 331 from the 580 counted in November 2016.

The average Canadian rig count for November 2017 was 204, unchanged from the 204 counted in October 2017, and up 31 from the 173 counted in November 2016.

The worldwide rig count for November 2017 was 2,057, down 20 from the 2,077 counted in October 2017, and up 379 from the 1,678 counted in November 2016.

WTI Crude is up 6 cents to $56.02 per barrel. Brent crude is up 27 cents to $61.49 per barrel. USO closed at $11.20.


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Barron’s is bullish on Salesforce.com

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

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS

Johnson & Johnson (JNJ) could rise further – In a follow-up story, Barron’s notes that Johnson & Johnson’s shares had a blockbuster year, as concerns about its big rheumatoid-arthritis drug Remicade proved too pessimistic, but shares could rise almost 20% as investors view the company’s drug pipeline in a new light.

Companies trading mostly in U.S. to benefit from tax reform – Investors in companies that trade mostly in the U.S. such as Southwest Airlines (LUV) should benefit greatly from what is arguably the signature provision of the tax reform bill, namely a drop in the federal corporate tax rate, John Kimelman writes in this week’s edition of Barron’s. Tech giants such as Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOG; GOOGL) should experience a huge windfall from the legislation’s provision that could set the rate on the taxes of foreign earnings held in cash as low as 10%, thus encouraging repatriation, he says.

Transfer Partners situation to be resolved by 2019/2020 – Master limited partnerships have been dogged for the past several years by investor concerns, with Energy Transfer Partners (ETP) being one of the worst-performing large MLPs, Andrew Bary writes in this week’s edition of Barron’s. Its unit price has tumbled since the merger with Sunoco Logistics, even as the units of its sister company, Energy Transfer Equity (ETE) have held steady, he adds. The endgame probably will be a merger of the two companies, or an equity buyout of the IDRs by Energy Transfer Partners, Barron’s contends.

Start-ups dwelling in tech giants shadow – Tech giants such as Amazon (AMZN), Alphabet (GOOG; GOOGL) and Apple (AAPL) show no signs of slowing down, increasingly calling the shots in tech in a way that limits the scope within which small companies operate, Tiernan Ray writes in this week’s edition of Barron’s. While many start-ups show promise but “dwell in the shadow of the giants,” he adds. Commenting on recent IPOs, Barron’s notes that while Appian (APPN) and Roku (ROKU) have surged 39% and $85% respectively, cloud-computing darlings Mulesoft (MULE) and Tintri (TNTR) are down since their debuts.

Wall Street about to join in Bitcoin fun – Bitcoin shot past $11,000 last week but slid sharply right after before surging yet again, Avi Salzman writes in this week’s edition of Barron’s. Now Wall Street is about to join in the fun, he notes, adding that getting listed on some of the largest exchanges in the country is a “tectonic shift for Bitcoin.” Banks like Goldman Sachs (GS) are considering helping clients execute Bitcoin trades, and once “they dip their toes in,” there may be no turning back, Salzman contends.

 Salesforce.com has 25% upside – As Salesforce (CRM) launches new products, its “addressable market” expands, which means more opportunities for sales and potentially wider margins, Jack Hough writes in this week’s edition of Barron’s. The company’s shares should continue to outperform as revenue rises and margins improve, and a 25% increase in 2018 to $130 seems achievable, he adds.


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Rig counts continue to rise

Baker Hughes reports U.S. rig count up 6 to 929 rigs 

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes reports that the U.S. rig count is up 6 rigs from last week to 929, with oil rigs up 2 to 749, gas rigs up 4 to 180, and miscellaneous rigs unchanged.

The U.S. Rig Count is up 332 rigs from last year’s count of 597, with oil rigs up 272, gas rigs up 61, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is down 2 rigs from last week to 20 and down 2 rigs year-over-year.

The Canada Rig Count is up 7 rigs from last week to 222, with oil rigs up 4 to 111 and gas rigs up 3 to 111, and miscellaneous rigs unchanged.

The Canada Rig Count is up 22 rigs from last year’s count of 200, with oil rigs up 11, gas rigs up 13, and miscellaneous rigs down 2 to 0.

Crude oil is up 85 cents to $58.25 per barrel.  Brent crude is up $1.01 to $63.64 per barrel.


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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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Bonanza Creek sold for $746 million

SandRidge Energy to acquire Bonanza Creek for $36.00 per share in cash, stock

Bonanza Creek sold for $764M. See Stockwinners.com for details

SandRidge Energy (SD) and Bonanza Creek Energy (BCEI) jointly announced today that the two companies have entered into a definitive merger agreement under which SandRidge will acquire all of the outstanding shares of common stock of Bonanza Creek in a cash-and-stock transaction valued at $36.00 per share.

The consideration consists of $19.20 in cash and $16.80 of SandRidge shares for each Bonanza Creek share, subject to the collar mechanism described below.

Bonanza Creek Energy, Inc. engages in the exploration, development, and production of onshore oil and related liquids-rich natural gas in the United States.

Bonanza Creek shareholders will receive $36.00 per share under the terms of the agreement, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock, subject to the collar mechanism.

This represents a 17.4% premium to Bonanza Creek’s closing price as of November 14.

This purchase price implies a total transaction value of approximately $746M, comprised of $398M in cash and 18.89M shares of SandRidge stock, based on SandRidge’s stock price as of November 14.

Following the transaction, shareholders of Bonanza Creek are expected to own between approximately 31.4% and 35.8% of the outstanding shares of SandRidge based upon the Average Parent Stock Price.

One of the independent directors of Bonanza Creek will be joining the Board of Directors of SandRidge.

The stock portion will be subject to a collar based on the volume weighted average price of SandRidge common shares over the 20 business days ending on the third business day prior to closing. If the Average Parent Stock Price is greater than or equal to $17.50 but less than or equal to $21.38, Bonanza Creek shareholders will receive a number of SandRidge shares between 0.7858 and 0.9600 equal to $16.80 in value per Bonanza Creek share. Bonanza Creek shareholders will receive 0.9600 SandRidge common shares if the Average Parent Stock Price is below $17.50 and 0.7858 SandRidge common shares if the Average Parent Stock Price is above $21.38.

The Boards of Directors of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction.

The completion of the transaction is subject to the approval of each company’s shareholders, certain regulatory approvals and customary closing conditions.

The transaction is expected to close in the first quarter of 2018.

Accretive Purchase

James Bennett, SandRidge’s CEO, said “This acquisition greatly enhances our existing portfolio by adding a deep inventory of drill-ready locations in the DJ Basin of Colorado and is highly complementary to our existing North Park, Northwest STACK and Mississippian assets.

The geological and operational characteristics of Bonanza’s Niobrara and Codell locations are analogous to our existing Colorado North Park assets, and we expect to benefit from the expertise of their teams. Overall, we believe this will drive strong risk-adjusted returns in both areas. Likewise, SandRidge will benefit from the greatly increased scale and substantial cost and operational synergies as a result of the transaction. Lastly, the acquisition will be accretive to cash flow per share and will enhance our ability over time to increase cash flow generation of the business.”


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