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  • Update: Cost Savings Will Help Suncor Grow Its Margins
    Wed, Jan. 14 SU 3 Comments

    Summary

    • The company has announced a reduction in the capital budget and plans to save $600-800 million in operating costs.
    • The reduction in capital budget was expected but the cost savings will result in better margins for the company.
    • Increased margins from the refining segment and decreasing costs from the E&P and oil sands segments should have positive impact on the stock price.
  • Update: Solid Earnings Growth Makes CSX Corp. An Attractive Pick
    Wed, Jan. 14 CSX 4 Comments

    Summary

    • The company has reported record fourth quarter and full year results.
    • We have previously recommended the stock to income investors, but we feel the growth profile of the company also makes it attractive for growth investors.
    • The growth in revenues is in line with our expectations as we explained in our article that the company is on track to grow its revenues.
  • Update: Southwestern Energy Issues Shares To Pay Off Debt
    Wed, Jan. 14 SWN 3 Comments

    Summary

    • The company has announced to issue a combination of common and preferred shares to pay off its loan.
    • Southwestern Energy has been aggressively growing its asset base, which has resulted in growing debt for the company.
    • I did not expect the company to take this step; however, it is a good decision for its long-term future.
  • Update: Lululemon's Upward Revision Of Earnings Guidance Justifies Our Optimism
    Mon, Jan. 12 LULU 1 Comment

    Summary

    • The company has revised its earnings guidance upwards and it has resulted in a sharp rise in the stock price.
    • We did not expect the company to revise its earnings guidance.
    • The overall trend in revenues and earnings is according to our expectations.
  • Rising Sales Justify Our Optimism About Ford
    Mon, Jan. 12 F 13 Comments

    Summary

    • The company has reported impressive sales from the North American markets, which is line with what we have been saying in the past.
    • Increase in dividend sends a strong signal to the market that the financial condition of the company is improving.
    • Ford will continue to book strong sales from Asia-Pacific and Middle East while the North American and European markets will also continue to recover.
    • Margins of the company might take a hit in the short-term due to increased costs for expansion.
  • Suncor's Refining And Marketing Segment Will Grow
    Sun, Jan. 11 SU 4 Comments

    Summary

    • The falling crude prices can help the refining segment of the company as the cost of feedstock falls.
    • The prices for manufactured products have not fallen, which should increase the crack spread for refiners.
    • Increased crack spread should result in increased operating margins, cash flows and operating income.
    • Suncor's Montreal refinery is back online after the completion of maintenance work, and it should further help the company grow its revenues.
  • Devon Energy Is A Good Pick In The Current Market Conditions
    Fri, Jan. 9 DVN 2 Comments

    Summary

    • The business mix of the company gives it an edge in the current market conditions.
    • The diversification of the revenue mix decreases the dependence on the commodity prices.
    • The midstream and marketing segment has been growing exceptionally, which should give it some protection against falling crude prices.
    • Strong hedge position is needed for any company to weather this short-term storm in the commodities market.
  • Advanced Micro Devices Remains A Good Long-Term Pick
    Fri, Jan. 9 AMD 86 Comments

    Summary

    • The company has made progress over the last year, but the stock price has been under pressure due to the poor condition of the PC market.
    • New product launches can give AMD an edge over its competitors.
    • Growing console sales is good news for AMD and it will certainly allow the company to grow revenues.
  • Repsol And Talisman Are A Good Match
    Fri, Jan. 9 REPYY 6 Comments

    Summary

    • Repsol will be able to make up for the lost production from the Latin America operations due to the nationalization of YPF SA.
    • The deal will allow Repsol to have a considerable exposure in the North American market and it will reduce the company's dependence on Latin America.
    • Talisman shareholders are getting a good deal as the company did not have too many opportunities to grow due to the poor cash position.
  • Update: Contract Wins By Ocean Rig Is Good News For DryShips
    Fri, Jan. 9 DRYS 5 Comments

    Summary

    • The company announced the extension of the contract with ENI Angola S.p.A, along with two new contracts.
    • New contracts in the current market conditions is a massive plus for the company.
    • DryShips needs to find a solution for its core business segment for sustainable growth.
  • Linn Energy Will Face Issues In The Short Term
    Thu, Jan. 8 LINE 85 Comments

    Summary

    • Linn Energy's strategy was focused on the long term, but falling commodity prices have forced the company to take drastic measures.
    • The decision to cut cash distributions should allow the company to manage its cash and liquidity in the short term.
    • If the prices of commodities do not recover in the medium-to-long term, then the partnership can be in deep trouble.
  • Seadrill Shareholders Should Be Patient
    Thu, Jan. 8 SDRL 75 Comments

    Summary

    • The impact of crude prices has been almost completely priced in.
    • Contract cancellations are not likely to happen unless the crude prices remain low for a sustained period of time.
    • Seadrill's strong relationship with oil and gas majors as well as state-owned companies will play in favor of the off-shore driller.
  • General Electric Should Buy National Oilwell Varco
    Thu, Jan. 8 GE 33 Comments

    Summary

    • The consistent fall in the crude prices have created an opportunity for major players in the sector to takeover smaller players.
    • General Electric can benefit from the products portfolio as well as the customers of National Oilwell Varco.
    • National Oilwell Varco has lost more than 27% over the last four months, and GE can pick it up at a discount.
    • The acquisition will be in line with the company's strategy to grow its industrial segment, and this acquisition can enhance one of its growth areas.
  • Laredo Petroleum: A Speculative Bet On Commodity Prices
    Wed, Jan. 7 LPI 10 Comments

    Summary

    • The company has a good hedging position for its crude and NGLs production.
    • High levels of debt and volatile cash flows might create problems for the company if low commodity prices persist.
    • The stock has lost more than 64% over the last six months and further weakness will make it a good speculative play.
    • However, due to the heavy dependence on crude oil, Laredo's recovery will be rather dependent on the recovery of crude prices.
  • Update: Gilead Acquires Another Drug Candidate
    Wed, Jan. 7 GILD 12 Comments

    Summary

    • The company announced the acquisition of Phenex Pharmaceuticals' development program for liver diseases and Non-Alcoholic Steatohepatitis.
    • The drug candidate further strengthens the portfolio of the company.
    • As I expected, the company continues to find ways to grow its liver disease treatment portfolio.
  • BP Is Taking The Necessary Steps To Deal With Current Market Conditions
    Tue, Jan. 6 BP 4 Comments

    Summary

    • The company has been trying to streamline its upstream operations and has sold a substantial number of assets over the last few years.
    • New discoveries will allow BP to produce more at a lower per unit cost, which should ensure profitability despite falling crude prices.
    • BP's agreement with SOCAR will allow the company to grow production with minimal risk as it is a production sharing contract.
  • Update: Another Contract Win By McDermott Can Work As A Positive Catalyst
    Tue, Jan. 6 MDR 4 Comments

    Summary

    • The company has won a contract for PEMEX, a Mexican state-owned oil and gas company.
    • Our long-term thesis remains unchanged, despite weakness in the commodities market.
    • This is the third contract win by the company in the last three months, which justifies our long-term thesis.
  • Update: BreitBurn Cuts Cash Distributions
    Sun, Jan. 4 BBEP 9 Comments

    Summary

    • The partnership has announced a reduction in annual cash distributions from $2.08 to $1.
    • The decision to slash cash distributions should allow the partnership to enhance its balance sheet.
    • The reduction in cash distributions is not in line with our long-term thesis, but it is the right decision under the current circumstances.
  • Update: Slashing Cash Distributions Should Help Linn Energy
    Sun, Jan. 4 LINE 4 Comments

    Summary

    • The partnership has announced a reduction in its capital budget and cash distributions.
    • The reduction in cash distributions should help the partnership maintain better liquidity.
    • The decision is not in agreement with our thesis, but it is not unexpected under the current market conditions.
  • Southwestern Energy Should Benefit From Expansion Into Marcellus
    Sat, Jan. 3 SWN 6 Comments

    Summary

    • The company has more than doubled its Marcellus acreage during the last year.
    • The addition of these assets should result in an immediate rise in production volumes.
    • Superior well economics of Marcellus should allow the company to bring down its per unit cost and improve margins.
  • Cabot Is A Safe Bet In Current Market Conditions
    Sat, Jan. 3 COG 6 Comments

    Summary

    • The company has less exposure to crude oil prices due to its natural gas heavy portfolio.
    • Cabot's cost advantage should allow it to be profitable even at lower crude oil and natural gas prices.
    • Lower leverage and a strong balance sheet should allow Cabot to weather the storm.
  • Update: Seadrill Exercises The Option To Buy West Polaris
    Dec. 31, 2014 SDRL 10 Comments

    Summary

    • The company has exercised the option to buy the drillship, West Polaris, from Ship Finance International Limited.
    • The timing of the transaction is interesting and we did not expect this transaction.
    • Total consideration to Ship Finance International Limited stands at $108 million, which will be made by buying shares of its subsidiary.
  • Range Resources Is Well Positioned To Grow
    Dec. 31, 2014 RRC Comment!

    Summary

    • The company is growing its production despite a fall in the commodity prices.
    • Less than expected natural gas prices during the fourth quarter might force some companies to cut forecasts.
    • Range Resources has an efficient cost structure and high-yielding assets, which should allow it to tackle short-term weakness in the commodities market.
    • The demand for NGLs will continue to rise in the global markets, which should enhance the company's revenues from the NGLs segment.
  • First Energy: The Hidden Gem Of Marcellus Shale?
    Dec. 31, 2014 FE 1 Comment

    Summary

    • Electricity companies are the major beneficiaries of growing investment in the Marcellus and Utica Shale.
    • First Energy is making investments in order to take advantage of the growth opportunity in the region.
    • Cracker plants will substantially increase the demand for electricity in the region.
  • Update: LiveDeal Remains A Speculative Play Despite A Reduction In Net Losses
    Dec. 31, 2014 LIVE 3 Comments

    Summary

    • The company reported its fourth quarter and full year results.
    • As we expected, acquisition have played a major role in growing total revenues.
    • We maintain that LiveDeal remains a speculative play.
  • Update: Share Repurchase Plan Should Provide Some Support To Chesapeake
    Dec. 24, 2014 CHK 5 Comments

    Summary

    • The company announced the $1 billion worth of share repurchase plan along with the closing of asset sales in Marcellus and Utica shale.
    • The asset sales are in line with my previous analysis.
    • Share repurchase plan should offer some support to the share prices.
  • Update: Datalogix Is A Nice Addition To Oracle's Portfolio
    Dec. 24, 2014 ORCL Comment!

    Summary

    • Oracle announced an agreement to buy Datalogix.
    • The deal will enhance its cloud offerings as well as its IaaS, PaaS and SaaS products.
    • The transaction is in line with our expectations, as the company has been growing this segment rapidly.
  • Update: Rite Aid Earnings Continue To Grow - Our Bull Case Stands
    Dec. 20, 2014 RAD 4 Comments

    Summary

    • The company announced its third quarter earnings.
    • As we expected, pharmacy sales registered strong growth for the company.
    • Increased full year outlook shows that the management is confident about the fourth quarter earnings growth.
  • Update: Slashing The Dividend Is A Wise Move By Penn West
    Dec. 19, 2014 PWE 19 Comments

    Summary

    • The company announced a dividend cut and a reduction in the capital budget for the next year.
    • Keeping in mind the current market condition, the dividend cut does not come as a surprise.
    • Total saving from the dividend cut and capital budget will reach about $376 million.
  • Alcatel-Lucent And Nokia Merger Would Be Good For Both Companies
    Dec. 19, 2014 ALU, NOK 14 Comments

    Summary

    • Rumors have resurfaced that Alcatel-Lucent and Nokia are in merger talks.
    • The companies have reportedly been in merger talks in the past.
    • Future growth in the key focus areas of these companies is expected to remain strong, and combined resources would position them well to exploit this growth opportunity.
  • Update: PaaS And IaaS Continue To Fuel Future Growth For Oracle
    Dec. 19, 2014 ORCL Comment!

    Summary

    • The company has announced its second quarter earnings.
    • As we expected, IaaS and PaaS revenues continue to grow at an exceptional rate.
    • Cloud bookings are also strong for the company and are expected to reach $250 million by the fourth quarter of the current fiscal year.
  • Cost Advantage Will Allow Marathon To Do Well In The Poor Market Conditions
    Dec. 19, 2014 MRO 1 Comment

    Summary

    • The company has assets in some of the highest yielding areas in the U.S.
    • Focus on low-cost methods will allow the company to remain profitable even at low crude prices.
    • Marathon's drilling technology gives it an advantage compared to its peers and the company is able to grow production at a lower cost.