Comment by phil

View Single Comment

phil
December 20th, 2017 at 4:00 pm

WTF?

Tax bill opens up ANWR for drilling

• Attached to just-passed tax reform is a provision opening up the Arctic National Wildlife Refuge to oil and gas drilling, a dream of the energy industry since before many reading this news item were born.
• The area contains an estimated 10.4B barrels of oil, says Alaska Senator Lisa Murkowski.

What does that have to do with taxes?

18 small caps with big upside targets for 2018

• Marketwatch's Philip van Doorn screens for S&P Small-Cap 600 names with majority Buy ratings (with at least three sell-siders covering), and price targets 50% or more above the current price.
• In order of potential move: Progenics Pharma (NASDAQ:PGNX), R.R. Donnelley (NASDAQ:RRD), Xperi (NASDAQ:XPER), Contango Oil & Gas (NYSEMKT:MCF), Medicines Co. (NASDAQ:MDCO), Cytokinetics (NASDAQ:CYTK), MiMedx (NASDAQ:MDXG), TiVo (NASDAQ:TIVO), Consol  Energy (NYSE:CEIX), LivePerson (NASDAQ:LPSN), BioTelemetry (NASDAQ:BEAT), Superior Industries (NYSE:SUP), Green Plains (NASDAQ:GPRE), Spectrum Pharma (NASDAQ:SPPI), Lumentum Holdings (NASDAQ:LITE), Brooks Automation (NASDAQ:BRKS), Blucora (NASDAQ:BCOR), Veeco Instruments (NASDAQ:VECO).

North Korea suspected in latest Bitcoin theft

• Seoul-based crypto exchange Youbit collapsed yesterday after cyberattackers made off with a chunk of its assets.
• North Korea's fingerprints are on the attack, investigators tell the WSJ. That state was also behind a hack of this same exchange (then operating under a different name) in April.
• "Much of the cryptocurrency system is highly vulnerable," says a cybersecurity expert. "Because this world is moving so fast and now it’s so lucrative, it’s really exactly what a cybercriminal like North Korea is looking for.”
• Previously: South Korean crypto exchange collapses; BTC slides under $18K (Dec. 19)

NYSE files to list two Bitcoin ETFs

• ProShares in September filed for approval of its ProShares Bitcoin ETF and ProShares Short Bitcoin ETF, both set to track either CME and CBOE Bitcoin futures.
• Those funds get closer to reality after the NYSE (NYSE:ICE) today filed with the SEC to list them.

Muddy Waters takes aim at China Internet Financial Services

• The company is a "King Zero," says Muddy Waters. "Just another worthless China fraud … We believe zero to almost none of CIFS’s purported business is real."
• All of the supposed borrowers to which CIFS has said it made loans to appear to be a "sham counterparty," says MW.
• Claiming to turn a commoditized business model into an "overnight juggernaut" with gross margins of 97% and net margins topping 70% is "too good to be true."
• Shares – which peaked at about $60 a few weeks back (from $12 earlier in the year) – continue to slide, down 4.25% to $36.70.

WSJ: Saudi Aramco has held talks with Tellurian, other U.S. energy firms

• Tellurian (TELL +3.2%) takes off following a WSJ report that Saudi Aramco has held initial talks about either taking a stake in the company or agreeing to buy some of its gas in the future.
• The talks have not reached an advanced stage, and the Saudis have talked to other, undisclosed U.S. companies about natural gas export deals, and has inquired about acquiring assets in the Permian and Eagle Ford basins, according to the report.
• Aramco owns refineries around the world, including the U.S., but does not produce any oil and gas outside Saudi Arabia’s borders, so any deal to acquire U.S. oil and gas production assets would mark a watershed moment for Saudi Arabia.

General Electric slumps to six-year low below $17.50

• General Electric (GE -0.8%) slides to a fresh six-year low, capping a 45% plunge since the start of this year and a 27% slide since September.
• Although Wolfe Research technical analyst Rob Ginsberg calls GE "dramatically oversold," he also says its chart is "one of the uglier long-term formations in the market today" and sees $15 as the place where the stock will try to make a stand.
• GE bear John Inch at Deutsche Bank sees the potential loss of board member Ed Garden of Trian Partners, which owns just 0.8% and might exit its GE position if the stock continues to struggle: "We also presume that Garden would likely be forced to step down from the GE board… Were there not other equally qualified candidates with more prospective longevity for the position vs. a hedge fund executive whose firm owns just 80 bps of GE’s shares?"
• Goldman's Joe Ritchie recently advised staying away from GE without more evidence of a recovery in cash flows and end markets.

Boeing announces additional $300M in investments due to new tax law

• Boeing (BA +0.5%) praises the tax bill passed by Congress and commits to an additional $300M in investments that will move forward as a result of the law.
• The bill will help "unleash economic energy" in the U.S. and will "enable us to better compete on the world stage," CEO Dennis Muilenburg says. "It's the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country."
• The company says it will earmark $100M for "workplace of the future" facilities and infrastructure enhancements for employees, $100M for workforce development in the form of training and education, and $100M for corporate giving such as employee gift-match programs.

NRF calls tax reform a 'major victory' for retailers

• The National Retail Federation supports the passage of the tax reform bill by Congress.
• "Passage of tax reform is a major victory for retailers who currently pay the highest tax rate of any business sector, and for the millions of consumers they serve every single day," reads a NRF statement.
• The NRF expects consumer spending to pick up due to the tax reform.

Chipotle on watch after report of L.A. illness probe

• Chipotle (CMG -2.9%) swings lower with a food illness report circulating around.
• Business Insider's Hayley Peterson breaks news of a public health investigation in the Los Angeles area over sickness reports from a single Chipotle restaurant.
• Chipotle response: "We are aware of three reports (two of which appear to be the same) on a user generated reporting site but there is no clinical validation associated with those reports, and we have not been contacted by customers directly to substantiate these claims."
• Shares of Chipotle have been volatile in the past to food illness reports, even in cases when only a few customers were impacted.

Theater blockbuster: MoviePass tops 1M subscribers

• There's something pretty dramatic going on with movie theater attendance that's becoming harder to ignore. Today, MoviePass announced that it passed 1M paying subscribers. The business that is majority-owned by Helios and Matheson Analytics (HMNY +4%) hit the 1M subs mark faster than Hulu (NYSE:DIS), Netflix (NFLX -0.1%) or Spotify.
• While plenty of investors are debating the HMNY numbers and model on Seeking Alpha, there's also the question of what kind of tailwind AMC Entertainment (AMC -1.3%), Regal Entertainment (RGC +0.1%), Marcus Corporation (MCS +0.9%), Reading International (RDI +0.2%) and Cinemark Holdings (CNK +1.3%) will catch from the 1M-member MoviePass army. One negative is that MoviePass limits subscribers to standard screenings, a potential drag on 3D and premium dine-in traffic.
• Source: Press Release

Samsung enters mass production on second-gen 10nm chips

• Samsung (OTC:SSNNF, OTC:SSNLF) enters mass production on its second-gen 10nm DRAM chips.
• The company says the new chips offer a 30% improvement in production efficiency and raises data transmission speeds by at least 10%. Energy efficiency increases by at least 15% for the chips. 
• Samsung will market the chips primarily to data center servers with additional pushes towards smartphones and other mobile devices.
• Samsung holds about 50% of the DRAM market with SK Hynix and Micron standing as the only other major players. In its earnings report yesterday, Micron forecasted DRAM industry supply bit growth to hit around 20% in CY18 with Micron expecting to come in slightly below that number. 

AT&T sets $1B additional capital spend, $1K employee bonus thanks to tax bill

• Following Congressional approval of the GOP tax reform plan, AT&T (T +1.4%) announces its intention to boost capital spending in the U.S. by $1B in 2018, and pay a $1K special bonus to more than 200K domestic employees.
• If the bill gets signed prior to Christmas, employees will get their checks during the holiday season.
• Source: Press Release

 

Apple unifying OS apps, responds to phone slowing accusations

• Bloomberg sources say Apple (NASDAQ:AAPL) will soon allow developers to design an app that works for both iOS and macOS.
• Mac users have complained that macOS apps get neglected while developers complain about having to create two different versions of the app for the operating systems. 
• The change comes as part of Apple’s next iOS and macOS updates, which are codenamed “Marzipan.” Rollouts could start in early 2018 with an official announcement coming at the summer developers conference.
• In other news, Apple responds to claims that it purposefully slows down older iPhone models to promote sales.
• The company says that the slowdown is actually due to worn batteries, which are more likely to exist in older phones.
• Full statement (via Apple Insider): “Our goal is to deliver the best experience for customers, which includes overall performance and prolonging the life of their devices. Lithium-ion batteries become less capable of supplying peak current demands when in cold conditions, have a low battery charge or as they age over time, which can result in the device unexpectedly shutting down to protect its electronic components.”
• ”Last year we released a feature for iPhone 6, iPhone 6s and iPhone SE to smooth out the instantaneous peaks only when needed to prevent the device from unexpectedly shutting down during these conditions. We've now extended that feature to iPhone 7 with iOS 11.2, and plan to add support for other products in the future.” 
• Previously: Nomura downgrades Apple, lowers price target (Dec. 19)