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Sarfaraz A. Khan

 
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  • Despite Skepticism On ECB's QE, There's Reason For Optimism
    Yesterday, 2:02 PM EU 3 Comments

    Summary

    • Last week, ECB launched its highly-anticipated 1.1 trillion euro QE program.
    • Due to certain fundamental differences, the QE program might not be as effective for the euro zone as Fed’s program has been for the U.S.
    • However, ECB has kept its program open-ended.
    • History suggests the size of ECB’s QE will eventually grow significantly.
  • Baker Hughes, After Best-In-Class Margin Expansion, Is In A Strong Position To Weather The Slump
    Thu, Jan. 29 BHI 6 Comments

    Summary

    • Baker Hughes outperformed its rivals in terms of margin expansion.
    • Baker Hughes is exposed to expected reduction in drilling activity at home and abroad.
    • Relative strength in the Middle East and limited exposure to troubled markets (such as Libya) is encouraging.
    • The company could generate $2.6 billion of free cash flow in 2015.
    • Is it a buy?
  • Foreign Currency Headwinds Take The Spotlight In Drug Maker Earnings
    Wed, Jan. 28 ABT, BMY, JNJ Comment!

    Summary

    • On an average, S&P 500 companies generate 38% of their revenues from outside the U.S., which leaves their bottom-line exposed to rising dollar.
    • Several leading drug makers, on the other hand, generate a majority of their revenues from international markets.
    • Rising dollar has already hit Pfizer & Johnson & Johnson's earnings while Merck and Abbott will also likely report similar numbers in the coming days.
  • Housing Market Disappointed In 2014, But This Year Could Be Better
    Mon, Jan. 26 LEN, KBH, VMC 1 Comment

    Summary

    • The housing market did not provide the much needed boost to the economy due to a number of factors.
    • However, a recent report from the Commerce Department, persistent decline in unemployment rate and other factors could accelerate housing recovery in 2015.
    • There are several stocks to watch in this space.
  • Target: Exit From Canada Was The Low Hanging Fruit
    Sun, Jan. 25 TGT Comment!

    Summary

    • Target has recently revealed that it is going to close its loss-making Canadian business.
    • This is a positive development which will lift the company’s earnings and cash flows in the coming years while allowing it to focus on its U.S. business.
    • This, however, was a quick fix.
  • Update: Halliburton Earnings Show Margin Strength, Expect Layoff Figures In Q1
    Thu, Jan. 22 HAL Comment!

    Summary

    • Halliburton released is first quarter results that were better than market’s expectations.
    • The company’s revenue growth from North America was flat sequentially and operating margins in its key markets continued to improve.
    • This was anticipated in the original article.
  • Bonanza Creek Energy Gives Disappointing Updates But Makes The Right Move
    Wed, Jan. 21 BCEI 1 Comment

    Summary

    • Bonanza Creek Energy has disappointed with 28% growth in reserve base and lower-than-expected fourth quarter production.
    • The company will post 45% increase in production in 2014, but growth will drop significantly next year.
    • The company is going to focus on developing the Wattenberg Field.
  • SM Energy Could Post +15% Production Growth Amid Lower Crude Prices
    Wed, Jan. 21 SM 2 Comments

    Summary

    • SM Energy could sell its Mid-Continent assets by mid-2015 for $150-$200 million.
    • SM Energy will deploy the proceeds at its core assets – Eagle Ford and Bakken/Three Forks formation.
    • Due to low oil prices could, the company could take on more debt, but there is no serious threat to its financial health.
  • Linn Energy Fails To Make The Bold Decision
    Tue, Jan. 20 LINE 33 Comments

    Summary

    • Linn Energy recently slashed its distribution by 56% on weakness in commodity prices.
    • This, and other measures, would allow the company to weather a downturn in 2015.
    • However, they will only provide near-term support, Citi's Faisel Khan has warned.
  • All Eyes On European Central Bank's January 22, 2015 Meeting
    Tue, Jan. 20 3 Comments

    Summary

    • Eurozone reported negative inflation in December, 2014, which heightened concerns regarding deflation.
    • The ECB has scheduled a meeting this week in which the central bank could launch a Federal Reserve style QE program.
    • The ECB will have to make bold decision and allay concerns of its biggest economy.
  • Civeo: When The Going Gets Tough, The Dividend Gets Cut
    Sun, Jan. 18 CVEO 1 Comment

    Summary

    • Civeo has recently suspended its dividends and lowered its revenues, earnings and capital expenditure guidance for 2015.
    • The company is facing three major headwinds, including exposure to some of the high-cost oil producing regions.
    • Will the Houston based company survive the downturn?
  • Halliburton Q4 Preview: Job Cuts, Revenues, Margins, And Merger
    Fri, Jan. 16 HAL 2 Comments

    Summary

    • Schlumberger has set the tone for the results of oilfield services companies.
    • Halliburton will release its results on Tuesday, in which the impact of lower oil prices will take center stage.
    • The company has already announced 1,000 layoffs and more could follow.
    • The company will struggle with sequential revenue growth, Goldman Sachs predicted, while earnings could also come under pressure.
  • Following Meltdown, Cameco Is Positioned For Long-Term Growth
    Fri, Jan. 16 CCJ 10 Comments

    Summary

    • Cameco has provided better-than-expected production guidance from its Cigar Lake mine.
    • The company’s output is expected to grow by 40%-50% through 2018-19, as per Credit Suisse and Morningstar estimates.
    • The market fundamentals are improving, thanks to two key Asian countries.
  • Coal Stocks Getting Hammered, But Consol Energy Has A Plan
    Thu, Jan. 15 CNX 1 Comment

    Summary

    • Coal prices have been depressed and could stay low in the near term.
    • Coal producer Consol Energy, however, is transforming into a primarily natural gas producer.
    • The company aims to drill deep into its low cost natural gas properties for +30% production growth.
    • Does it have sufficient resources to make the transformation?
  • SunPower: Japanese Solar Industry's Worst-Case Scenario Is Now A Reality.
    Wed, Jan. 14 SPWR 7 Comments

    Summary

    • Solar stocks have been falling, partly due to concerns from Japan.
    • Solar installations in the world’s second largest solar market could drop significantly, thanks to the new policy update.
    • This could be bad news for the solar industry, particularly those solar stocks that have exposure to Japan.
    • SunPower, however, is in a good position, despite exposure to Japan.
  • Despite Higher Property Sales Volume, China's Number One Problem Isn't Going Anywhere
    Wed, Jan. 14 VALE, RIO, BHP 1 Comment

    Summary

    • China has witnessed better property pricing and increasing sales volume in some first-tier cities.
    • The uptake has come on the back of favorable government policies.
    • However, the company’s property sector could still continue to struggle in 2015 – which is bad news for iron-ore and copper. Here’s why.
  • There's No Escape From Currency Headwinds As Earnings Season Kicks Off
    Mon, Jan. 12 DG, DLTR, HPQ Comment!

    Summary

    • Alcoa will kick-off the year’s first earnings season when it releases its fourth quarter results later today.
    • Some of the major U.S. companies could benefit from the increase in consumer spending, thanks to lower oil prices.
    • This however, could be offset by the strength in the U.S. dollar.
  • Fears On Cheniere Energy's Exposure To Oil Prices Are Overblown
    Fri, Jan. 9 LNG 22 Comments

    Summary

    • The plunge in oil prices also impacting the LNG market.
    • Lower oil prices could threaten the high-yield bond market.
    • Here’s how Cheniere Energy stands up against these challenges that have raised concerns about its future growth prospects.
  • 4 Reasons To Consider Hess Corporation
    Thu, Jan. 8 HES 8 Comments

    Summary

    • Oil stocks have plummeted over the last six months on lower crude prices.
    • This can be an opportunity for investors to buy a high quality name like Hess.
    • The company is in a strong position to outperform other international diversified oil producers, thanks to these four factors.
  • Southwestern Energy Looks Great, If You're Long-Term Bullish On Natural Gas
    Thu, Jan. 8 SWN 4 Comments

    Summary

    • Southwestern Energy is increasing its capital budget for next year, in stark contrast to some other oil and gas producers.
    • Following last year’s massive acquisition, Southwestern has transformed its portfolio.
    • The company remains long-term bullish on natural gas, despite the current weakness, and it has every reason to be optimistic.
  • Update: Monsanto's Earnings Fall By 34%, Which Isn't Bad
    Thu, Jan. 8 MON Comment!

    Summary

    • Monsanto released its first quarter results in which its earnings dropped significantly.
    • Despite the earnings drop, the results confirm that the company is on track to double its earnings for the five years ending FY2019.
    • This was anticipated in the original article.
  • Worthington Industries: This Will Be A Test Of Execution
    Wed, Jan. 7 WOR Comment!

    Summary

    • Worthington Industries delivered a mixed performance in its recent quarter.
    • The engineered cabs division continues to weigh on its performance.
    • The company faces major pricing headwinds.
  • Top Stocks To Watch As The U.S. Opens Up To Condensate Exports
    Wed, Jan. 7 COP, DVN, EPD 3 Comments

    Summary

    • Crude exports from the U.S. are still mostly banned.
    • The country, however, has been opening up to the idea of exporting the ultra-light oil after it goes through a minor refining process.
    • Higher exports can impact WTI prices.
    • There are several stocks that could benefit from an increase of condensate exports.
  • A Window Into A Driverless Future: From Science Fiction To Reality
    Editors' Pick • Mon, Jan. 5 GOOG, MBLY, TSLA 9 Comments

    Summary

    • Google is gearing up to launch its self-driving car by as early as 2017.
    • Other automakers also have similar plans.
    • Slowly but surely, the industry is moving toward a driverless future, Kelley Blue Book Senior Analyst Karl Brauer said in an exclusive interview.
    • There are several stocks to watch in this space; not all of them are Google -- or automakers.
  • CarMax Is Positioned For Long-Term Growth Due To These 2 Factors
    Sun, Jan. 4 KMX 5 Comments

    Summary

    • CarMax has recently delivered impressive quarterly results.
    • The company could report higher trucks and SUV sales in the coming quarters, thanks to lower gasoline prices.
    • However, there is an even bigger factor at work, the company’s spokesman said in an interview, which will power its long-term growth.
  • Monsanto's Earnings Will Nosedive, Is It Time To Panic?
    Thu, Jan. 1 MON 11 Comments

    Summary

    • Monsanto will release its first quarter results within a week in which its earnings could drop by 50%.
    • At least two analysts have recently downgraded the stock while analysts expect flat EPS growth in Q2.
    • Will this jeopardise the company's long-term plan to "at least" double EPS during FY2014 - FY2019?
  • Russia Experiences A Double Whammy As It Heads For A Recession
    Thu, Jan. 1 BP, RSX, RNFTF 9 Comments

    Summary

    • Russia is facing the twin challenges of Western sanctions and lower crude prices.
    • The country’s currency, which closely tracks Brent crude prices, is still significantly weak, despite the recent rally.
    • Financial and energy sectors will face the brunt of the weak market.
  • Diamondback Energy, Energen: 2 Permian Basin Oil Stocks For A Down Market
    Dec. 30, 2014 FANG, EGN 2 Comments

    Summary

    • Crude prices have fallen to multi-year lows.
    • Permian Basin producers, however, are better positioned than their competitors to face a down market.
    • Diamondback Energy and Energen, in particular, have two key strengths that put them in a strong position to face a soft pricing environment.
  • Cabot Oil & Gas Falls On Lower Gas Prices - Is It A Buy?
    Dec. 29, 2014 COG 1 Comment

    Summary

    • The Houston-based gas producer has fallen by 7.4% as natural gas prices touched their lowest levels since 2012.
    • BNP Paribas has warned about the future of natural gas prices.
    • Will this bring an end to Cabot Oil & Gas' double-digit Marcellus-powered production growth story?
  • U.S., China And Lower Crude Prices Will Fuel General Motors' Growth
    Dec. 22, 2014 GM 2 Comments

    Summary

    • General Motors’ shares have under-performed, partly due to the impact of defective ignition switches.
    • General Motors continues to struggle in Europe, even as others witness higher registrations.
    • However, General Motors could rise in the coming years. Here's why.
  • BHP Billiton: When Iron Ore Miners Act Like They're OPEC
    Dec. 17, 2014 BHP 12 Comments

    Summary

    • Besides crude, iron ore prices have also plummeted to their multi-year lows.
    • Weak economic numbers from China paint a grim picture for the future.
    • However, BHP Billiton, one of the leading iron ore producers, is not slowing down.
    • Is it worth investing in?
  • Goodrich Petroleum: Top Stock To Not Buy In 2015
    Dec. 16, 2014 GDP 11 Comments

    Summary

    • Oil prices have plummeted by more than 30% over the last three months, and could stay lower in the future.
    • This creates question marks over the future of Tuscaloosa Marine Shale, a costly area to drill.
    • And this could be bad news for Goodrich Petroleum that gets a substantial portion of its production from this region.
    • The company was already struggling, weak prices could exacerbate its troubles.