Today - Friday, August 28, 2015
- FuelCell Energy (NASDAQ:FCEL) is up 8.6% on its effort to create methanol and other liquid fuels from natural gas, using an electrochemical cell.
- The company will work with scientists at the University of North Dakota on building a high-performance, low-cost cell that would help tap the methane richness of natural gas. Methanol is easier to store and transport, and liquid hydrocarbons have up to 10 times the value of natural gas on an energy basis.
- The electrochemical cells could be located near heavy methane sources (oil/gas wells, farms, landfills) that could make a useful fuel rather than letting methane, a potent greenhouse gas, escape into the atmosphere.
- It's a $3.5M project awarded by the Dept. of Energy's Advanced Research Projects Agency.
- Dow -0.21%.
- 10-yr flat.
- Euro -0.55% vs. dollar.
- Crude +6.66% to $45.40.
- Gold +1.02% to $1,134.10.
- Schlumberger (SLB +2.7%) is offering more than $66 in cash and stock per share while takeover target Cameron International’s (CAM +2.5%) private market value may be only $63, according to Gabelli analysts who lower their recommendation on CAM to Hold from Buy.
- The firm says arbitrageurs can earn a respectable ~10% annualized return on the deal, assuming a successful close by the end of Q1 2016 and given the current $3.62 deal spread.
- However, the firm believes the deal makes strategic sense for both companies, combining SLB’s subsurface and wellbore expertise with the largest surface technology and second-largest subsea equipment manufacturer, and expects the deal will close with minimal regulatory scrutiny.
- After a 2011 resignation amid a journalistic phone-hacking scandal -- and a year after being cleared of charges -- Rebekah Brooks is set to return to News Corp. (NWS +1.5%, NWSA +1.3%) as its UK chief executive, the Financial Times reports.
- The company will shuffle execs, with current News UK chief Mike Darcey departing and promoting The Sun's editor, David Dinsmore, to a senior role alongside Brooks.
- Meanwhile, the government is deciding whether to bring corporate charges against News Corp. in the scandal, and two Sun journalists who worked for Brooks could be retried on bribery charges. The U.S. Justice Dept. has said it won't prosecute News Corp. and Twenty-First Century Fox over the scandal.
- Brooks would return to tabloids that have lost their top-profit status. The Sun has lost ground to MailOnline (the world's top English-language newspaper site), and The Times and Sunday Times have lost about £506M before tax since 2002.
- Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
- The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
- Related tickers: SU, ENB, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- The U.S. oil drilling rig count continue a six-week streak of small increases, rising by one to 675, according to the latest weekly data from Baker Hughes.
- Over the past six weeks, the number of active oil rigs has risen by 37, though only five have been added in the past four weeks; the oil rig count is down significantly from last October’s high of 1,609.
- Natural gas fell by nine to 202, with the combined rig count slipping by eight rigs to 877.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
- Dow -0.45%.
- 10-yr +0.05%.
- Euro -0.37% vs. dollar.
- Crude +6.18% to $45.19.
- Gold +0.93% to $1,133.00.
- Primark will open its first store in the U.S. on September 10 with an opening in Boston.
- The chain is targeting teenagers and younger millennials with its low-cost lines.
- The company has shown strong growth in the U.K. and other areas of Europe.
- Primark is owned by Associated British Foods (OTCPK:ASBFF, OTCPK:ASBFY).
- HC2 (NYSEMKT:HCHC) offers more value today than just after Phil Falcone took control of what was then a liquidating entity named PTGI Holding, writes Brad Kern.
- The stock then (March 2014) traded for $3.70 and subsequently ran up to as high as $13 a year later. Since, the stock lost about 50% of its value, in part thanks to a failed bid for MCG Capital, and worries Harbinger Group (NYSE:HRG) would seek to unload the rest of its 4.7M share stake (HRG sold more than 1M shares as the stock price cratered over the past weeks).
- By Kern's SOTP analysis, HC2 has a mid-range NAV of $10.33 vs. last night's close of $6.33. The shares are higher today by 11.1% to $7.03.
- Online retailer Bonobos has lost its CEO after just a three-month stint.
- Co-founder Andy Dunn will replace Fran Della Badia.
- NYC-based Bonobos has 19 physical stores open where shoppers can try on different lines of clothing, although orders are still processed online.
- Nordstrom (NYSE:JWN) was an early investor in Bonobos.
- Outflows from emerging market bond funds like EMB hit $4.2B in the week ending Aug. 26, the second-largest amount ever. Overall emerging market net outflows of $10.5B were the largest since early 2008.
- Turning back to bond funds alone, outflows over the last three weeks of $7.5B represent 2.9% of AUM, says Morgan Stanley.
- EMB is lower by more than 5% since a late-April high, and in stocks, EEM is off nearly 20% over the same time frame.
- Previously: Record amount pulled from stock funds (Aug. 28)
- ETFs: EEM, VWO, EDC, EMB, PCY, EDZ, TEI, SCHE, EDF, IEMG, ELD, EDD, EMLC, EMF, MSF, EEV, GHI, VWOB, ADRE, EMD, EDI, EET, EUM, MSD, GMM, SBW, DBEM, LEMB, EMAG, EEME, EBND, EMCR, FEM, XSOE, EWEM, HEEM, EMLB, EMSH, EMSA, EMFT, KEMP, FEMB, KLEM
- Baxalta (BXLT -4.8%), which is attempting to fend off a $30B takeover offer from Shire (SHPG +0.2%), is in talks to make an acquisition of its own to bolster its status as an independent company, according to a Bloomberg report.
- BXLT is said to be working with bankers on the acquisition of a U.S.-based hematology-oncology specialist valued at ~$2B; the report does not identify the target, but Ariad Pharmaceuticals (ARIA +16.9%) is shooting higher on speculation that it is the unnamed company.
- Since SHPG went public with its takeover proposal, BXLT management has sought to paint the suitor as trying to buy it cheaply.
- Dow -0.22%.
- 10-yr +0.05%.
- Euro -0.58% vs. dollar.
- Crude +6.72% to $45.42.
- Gold +1.01% to $1,133.90.
- Lululemon (LULU +0.4%) is still well-positioned despite some growing concerns the strong growth trends in athletic apparel are set to wane, according to Oppenheimer.
- The investment firm makes the case in a new note to investors that Lululemon will be able to hold its 15% market share in the U.S. and has significant international upside not fully priced into shares.
- SA contributor Equity Watch broke down the long-term bull case on LULU last month in an article that still resonates.
- LULU trades at $62.91 vs. a 52-week range of $37.81 to $72.00.
- CtW is an advocate for union-affiliated pension funds holding roughly 21M shares (0.2% of the total) of Bank of America (BAC -0.5%), and plans sending a letter to shareholders today arguing for an independent chairman.
- The board, says CtW, showed "a shocking lack of awareness" towards shareholders for making CEO Brian Moynihan chairman in the first place.
- The vote is set for Sept. 22.
- Previously: Mayo unloads on BofA over chairman/CEO vote (Aug. 20)
- Previously: Two big tests on tap for BofA's Moynihan (Aug. 19)
- Barclays' Kannan Venkateshwar has raised the firm's price targets on merger partners Charter Communications (CHTR -0.8%) and Time Warner Cable (TWC -0.7%), noting growing operating leverage and what looks like a conservative take on synergies.
- The price target on Charter was raised to $204, from $157. Based on that, Venkateshwar raised the target on Time Warner Cable to $206, from $166.
- Time Warner Cable is currently trading at $186.63, implying more than 10% upside, while Charter's trading at $180.28, implying more than 13% upside.
- Charter's seeing operating leverage for the first time after years of investment, Venkateshwar says, boosting confidence that it could generate earnings growth after engulfing TWC and Bright House Networks.
- Venkateshwar estimates synergies close to a $1B, higher than Charter's guidance to $800M, and believes the company may be able to boost better margin expansion -- closer to that of Comcast.
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