Author: therawinformant

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. […]

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(Bloomberg) — To be an energy superpower, U.S. oil and gas requires a suitably gargantuan pipeline network that stretches for millions of miles. The country’s ability to expand that infrastructure is being tested like never before.In what’s possibly the biggest victory yet for an environmental movement targeting the conduits carrying fossil fuels, Dominion Energy Inc. and its partner Duke Energy Corp. said Sunday they’ll no longer pursue their $8 billion Atlantic Coast natural gas pipeline after years of delays and ballooning costs.It’s the third such project this year to be sidelined or canceled altogether amid mounting opposition to development of coal, oil and gas. Armed with experienced lawyers and record funding, environmental groups are finding enormous success blocking key pipeline permits in court. The keep-it-in-the-ground movement has increasingly turned its attention to the pipes, rather than the wells themselves, because they require various federal and state permits, which, for the most part, can be more easily litigated.A lack of new pipelines in areas like the U.S. Northeast, which faces gas supply constraints, may hobble some producers and potentially hasten the pace of transition to renewable energy. The demise of Atlantic Coast also casts a dark cloud on Mountain Valley Pipeline, a $4.7 billion gas project being developed by EQM Midstream Partners alongside utility giants NextEra Corp., Consolidated Edison Inc. and others.The pipeline industry’s challenges come despite support from President Donald Trump. In his first week in office, Trump greenlighted the Keystone XL and Dakota Access oil pipelines. Last year, the White House signed an executive order aimed at short-circuiting regulators who held up gas lines by refusing permits. But the measure has so far failed to save any major projects, and Keystone XL and Dakota Access remain embattled. In February, Williams Cos. scrapped its Constitution natural gas pipeline after failing repeatedly to gain a water permit from New York. Just three months later, the company said it wouldn’t refile a state application for another gas pipeline routed through the state.In contrast to Trump, presumptive Democratic presidential nominee Joe Biden has vowed to kill Keystone XL and is supporting a push to lower-carbon energy sources, even if it comes at the expense of oil and gas jobs.“Investors have lost patience with big infrastructure projects, and the 2020 election poses too much risk for major projects to move forward,” said Katie Bays, co-founder of Washington-based Sandhill Strategy LLC.When Atlantic Coast was proposed in 2014, it was expected to cost $5 billion and connect Appalachian shale gas plays with markets in the southeast. The price tag rose to $8 billion as the pipeline’s date to enter service was pushed back over and over again. The project faced opposition at various points along its route, including the proposed site of an associated plant in Union Hill, a community west of Richmond, Virginia, that was founded by freed slaves after the Civil War. Ex-U.S. Vice President and fossil fuel critic Al Gore said last year the pipeline represented “environmental racism.”The project won a favorable ruling from the Supreme Court in June, but a long list of other obstacles remained. In the end, not only did Dominion cancel it, the company also announced Sunday the sale of almost all its gas pipeline and storage business to Warren Buffett’s Berkshire Hathaway for $4 billion, while highlighting its target of net zero carbon emissions by 2050.“The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline,” U.S. Energy Secretary Dan Brouillette said in a statement. “Duke and Dominion have had to make the difficult decision to end this project because it is no longer economically viable due to the costly legal battles they would continue to face.”The Natural Resources Defense Council was among the environmental groups hailing the decision. The organization said the project threatened waterways and its cancellation marks a victory for landowners along the proposed route.Gas pipelines that traverse state lines have typically required more extensive environmental reviews than oil pipelines, which in turn makes them more vulnerable to legal challenges and permitting problems. But even crude lines are increasingly running into major roadblocks. The Keystone XL oil project is still stalled after more than a decade, while Enbridge Inc.’s Line 3 and Line 5 pipelines remain ensnared in court battles and regulatory pushback. Although Dakota Access is already carrying oil, it could see operations halted if a legal challenge is successful.Even in Texas, long considered a safe haven for the oil and gas industry, Kinder Morgan Inc.’s Permian Highway Pipeline is experiencing a backlash from landowners and conservationists who argue the project would harm aquifer recharge zones.“We have to be honest with ourselves that a world where ACP is too risky to get done is probably also a world where KXL is too risky to get done,” said Bays, using acronyms for Atlantic Coast and Keystone XL. “We’ll see companies pivot toward smaller, strategic investments and away from large interstate oil and gas pipelines.”The Supreme Court victory for Atlantic Coast offered a glimmer of hope for Mountain Valley, which has also seen delays and cost hikes as it too seeks to carry Appalachian gas out of the Marcellus shale field. But its time may be running out after two customers in May amended a 2016 agreement to terminate the deal if service doesn’t begin by the end of 2021.Christi Tezak, managing director at ClearView Energy Partners, said she still expects Mountain Valley to get across the finish line, in part because the project is mostly constructed and faces slightly different circumstances than Atlantic Coast.“Is the landscape more challenging? Absolutely. But for the projects that are in play right now there are situational characteristics that make them all different,” she said. “I would say that what we’re seeing is the end of a cyclical boom in energy infrastructure, combined with a trend toward lower greenhouse-gas-intensive power generation.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Is it time to run with the bulls? Writing from investment bank JPMorgan, quantitative strategist Marko Kolanovic says it is. You may remember Kolanovic, if you follow market news regularly; he was one of the few who correctly called the bottom back in March. Now he says that the near- to mid-term prospects remain bullish. He notes two points of particular importance for investors, economic support policies, and the ongoing COVID-19 epidemic.Regarding policy support, Kolanovic is quick to connect recovery in liquidity with the massive fiscal and monetary support put in place by Congress and the Federal Reserve. He reminds investors that “liquidity has recovered meaningfully from the March lows.”The second point is more subtle. Kolanovic writes, “Higher COVID-19 incidence in mainly impacting younger populations, [with] drastically lower mortality rates and likely reflects high testing rates, recent protests, backlogs of hospital visits, and increased economic activity.” In other words, as we return to normal life, more people are getting exposed to the virus – but the people getting exposed are more resistant to the disease, and the death rates are dropping. The coronavirus crisis is turning out less dangerous than was originally feared, and that is good news – especially for stock bulls.Kolanovic’s colleagues at JPM have run with his bullish view, and are pinpointing stocks that have great upside potential. We’ve used the TipRanks database to pull the details on three of those stocks – the upsides start at 22%, but let’s see what else makes them compelling to JPM’s experts.Warner Music Group (WMG)After a nine-year run as a private company, Warner Music, the global music industry’s third largest recording company, completed a new IPO just last month. The stock sale raised almost $2 billion, and was considered a smashing success. Music is a competitive industry, and Warner has some aces in the hole. The company owns recording rights to a slew of big-name artists, including Madonna, Prince, the Rolling Stones, and Metallica. This playbook is an enormous asset, and one that puts Warner on solid footing.With just one month of market trading behind it, WMG hasn’t got a long history for analysts to review – but it does have that playbook, and JPM analyst Alexia Quadrani is suitably impressed. Quadrani writes, “As the only pure play music content company, WMG is well-positioned to benefit from the ongoing growth in paid music streaming globally. We believe WMG shares will maintain a premium valuation over the average of our large-cap media universe due to its higher growth profile, and our outlook reflects our confidence in the growth of streaming and WMG’s execution.”To this end, Quadrani rates WMG a Buy and suggests a $40 price target, which implies a robust upside of 36%. (To watch Quadrani’s track record, click here)In its first month since the IPO, WMG shares have earned a Moderate Buy rating from the analyst consensus. Wall Street’s stock watchers are divided 7 to 8 on Buys and Holds, mainly reflecting caution during the coronavirus crisis. The stock’s $33.64 average price target indicates a one-year upside potential of 15% from the current share price of $33.64. (See WMG stock analysis on TipRanks)Varonis Systems, Inc. (VRNS)With so many people moving to remote work, data security is at a greater premium than ever. Varonis Systems, a security software company, offers a platform that is perfect for the times. Using digital behavior analysis techniques, Varonis’ platform allows businesses to identify cyberattacks based on abnormal user behavior. It’s an idea whose time has clearly come, and Varonis is running with it. The company’s newest platform features remote work security capability.That doesn’t mean the company was able to fully dodge the corona bullet. The broad declines in Q1 – due to the social and economic lockdown policies – put a hurt on VRNS. The company reported steep losses in earnings, seeing the net loss drop sequentially from 47 cents to $1.05. Revenue performed better, beating the forecast at $54.18 million.The stock, however, has performed better than the earnings, rising nearly 27% year-to-date.Sterling Auty, 5-star analyst with JPM, lays out a clear case to explain Varonis’ strong share appreciation: “[We] believe Varonis represents one of those attractive situations as its subscription transition offers the opportunity for significant outperformance relative to revenue and margin estimates that we believe can deliver stock outperformance. This is aided by the growing need for data security solutions as cloud adoption increases and work-from-home setups drive usage of tools that create security challenges.”Auty’s Buy rating on the stock is supported by his $130 price target, which indicates room for a potential 31% upside in the coming year. (To watch Auty’s track record, click here)Overall, Varonis has a Strong Buy rating from the analyst consensus, based on 11 Buys versus just 2 Holds. The stock’s recent share gains, however, have pushed the price almost up to the average price target. VRNS currently trades at $98.58; the average target is $100.36. (See Varonis stock analysis on TipRanks)Masonite International (DOOR)Last on our list is a major name in the construction industry. Tampa-based Masonite, through its subsidiary companies, manufactures doors and their associated systems (frames, screens, windows, and locks) for both interiors and exteriors. It’s a niche product, but an important one; even a small house can have two exterior doors and 8 or 10 interior ones.Masonite posted a strong Q1, despite the corona crisis. Net sales increased 4%, reaching $551 million. EPS rose sharply, too, to $1.24. These gains came even as the company withdrew its full-year 2020 guidance due to COVID-19 concerns.JPM’s Michael Rehaut likes what he sees in Masonite, noting, "[Not] only did the company provide a positive sales update – pointing to June sales down only mid single-digits (with N. America Residential up modestly), following May down low teens – but importantly, DOOR also pointed to some positive margin trends as well,""[We] point to the company’s pricing strategy, strong execution and longer term margin optimization efforts as positive differentiators, along with its attractive relative valuation trading at only roughly 8.5x and 7.3x our 2020E and 2021E EBITDA, respectively," the analyst concluded. In line with his comments, Rehaut puts a $95 price target and a Buy rating on DOOR shares. His target implies an upside of 22% for the next 12 months. (To watch Rehaut’s track record, click here)DOOR is another stock with a Strong Buy consensus rating, in this case based on 6 Buys and 2 Holds. Shares are currently trading at $77.54, and the average price target of $85.38 suggests a one-year upside of 10%. (See Masonite’s stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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Musk has often taken umbrage at short-sellers and in 2018 sent a box of shorts to hedge fund owner and Tesla short-seller David Einhorn. The “Short Shorts” on the Tesla shop website feature gold trim and “S3XY” in gold across the back, which also happens to be formed from Tesla model names.

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Stanphyl Capital letter to investors for the month ended June 30, 2020, discussing their short thesis for Tesla Inc (NASDAQ:TSLA) and other positions in several small-cap stocks. For June 2020 the fund was down 3.9% net of all fees and expenses. By way of comparison, the S&P 500 was up 2.0% while the Russell 2000 was up […]

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Billionaire investor Warren Buffet's Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) is buying Dominion Energy Inc.'s (NYSE: D) natural gas assets, the two companies announced Sunday.Berkshire Acquisition Berkshire's energy division will pay $4 billion in cash to Dominion for the purchase.The transaction between the two companies also assumes an existing debt of about $5.7 billion for Dominion's Gas Transmission and Storage Business, giving the deal an enterprise value of $9.7 billion.The assets that Berkshire is purchasing include over 7,700 miles of natural gas transmission lines, with about 20.8 billion cubic feet per day of transportation capacity. It also includes about 900 billion cubic feet worth of gas storage.The Nebraska-based conglomerate holding company increased its cash holdings to a record $137.3 billion during the first quarter this year, as the company held back from new acquisitions during the novel coronavirus (COVID-19) pandemic.The acquisition is expected to close in the first quarter this year, subject to regulatory approval, the statement read.Dominion Kills Atlantic Coast Pipeline Project In a separate statement on Sunday, Dominion, along with partner Duke Energy Corp. (NYSE: DUK), said they were canceling the Atlantic Coast Pipeline project due to "ongoing delays and increasing cost uncertainty which threaten the economic viability of the project."The pipeline has been abandoned even after the favorable United States Supreme Court decision last month. The project has faced major protests from landowners in the pipeline's path and environmental activists."This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States," Dominion Chief Executive Officer Thomas Farrell said in a statement."Until these issues are resolved, the ability to satisfy the country's energy needs will be significantly challenged."The pipeline that was to run from West Virginia to eastern North Carolina through Virginia was last estimated to cost $8 billion.Price Action Dominion shares closed nearly 0.5% higher at $82.69 on Thursday. Berkshire Class A shares closed 0.2% higher at $267,551, and Class B shares closed nearly 0.5% higher at $178.83 the same day.Duke Energy closed 0.1% lower at $81.84 per share.Image: WikimediaSee more from Benzinga * Saudi Arabia Threatens Another Oil Price War, As Nigeria, Angola Refuse OPEC+ Oil Cuts * Amazon CEO Jeff Bezos's Net Worth Tops Pre-Divorce Height: Bloomberg Index * Apple Blocks Developers From Updating Gaming Apps In China Without Government Approval: Report(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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(Bloomberg) — The dramatic moves in Chinese stocks over the past week are inviting comparisons with a bubble that burst spectacularly five years ago.In many ways, the pace of gains matches the market’s melt-up that started in the final weeks of 2014. The CSI 300 Index has now added 14% in five days, the most since December that year. A gauge of momentum on the CSI 300 is also the strongest since late 2014. Shares of brokerages surged as daily turnover exceeded 1.5 trillion yuan ($213 billion) for the first time since 2015, indicating increasing participation from retail investors. Monday’s more-than-5% gain in stocks had only happened once before since the bubble burst.Low interest rates and the first losses ever for some popular wealth-management products are driving China’s savers to stocks. The advance is also being aided by an enthusiastic chorus from the nation’s influential state media. A front-page editorial in the China Securities Journal on Monday said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever. Chinese social media exploded with searches for the term “open a stock account,” with bullish sentiment also boosting the yuan.But there are also key differences between now and 2014 — including a lower starting point for equity valuations. And while more traders are taking on debt to buy shares, leverage in the stock market is about half what it was at its peak five years ago. The central bank has this time taken a cautious approach to liquidity, withdrawing funds from the financial system for a seventh day on Monday.“It’s very unlikely for us to go through the boom-and-bust like we experienced in 2014 and 2015,” said Dai Ming, Shanghai-based fund manager at Hengsheng Asset Management Co., who is buying property shares. “The market isn’t flooded with money everywhere like last time. Beijing is still very prudent with its monetary policy.”Talking up stocks is a dangerous game in China, where investment choice is limited due to capital controls. In 2014, encouraging words by state media helped revive interest in what had been a dull equity market. The result was a debt-fueled speculative bubble that burst, wiping out $5 trillion of value. Just like then, regulators have recently unveiled measures to liven up trading, including a new, streamlined approach to initial public offerings.“The state is very cautious about creating another boom-bust as seen in 2015, realizing the harm to confidence that comes from the bust is greater than the good from the ride up,” said Wang Zhuo, fund manager at Shanghai Zhuozhu Investment Management Co.The CSI 300 is up 14% this year, one of the biggest gains among major global benchmarks, to trade at a five-year high. Its 14-day relative strength index has climbed to 88, the highest since December 2014. The Shanghai Composite Index rose 5.7% Monday, its biggest single-day gain in five years. Futures on the city’s SSE 50 Index of large caps jumped 9.1%.Brokerages, typically seen as a barometer for market sentiment, led gains Monday with a Bloomberg gauge for Hong Kong-listed securities firms surging the most in nearly four years. A dozen mainland-listed brokers surged by the 10% daily limit. China International Capital Corp. hiked target prices for the industry, predicting the country’s stock market will double in value in the next 5-10 years.Surging risk appetite is one factor behind the relentless rout in China’s sovereign bonds, with the yield on the 10-year note rising the most since 2016 Monday. The selloff is also spilling over to the credit market, where companies are shelving plans to sell debt as borrowing costs surge. They canceled about $11 billion worth of deals in June alone.In another illustration of bullish sentiment, Semiconductor Manufacturing International Corp. is set to hold the mainland’s largest stock sale in a decade. The chipmaker is seeking to raise as much as $7.5 billion, or more than double the cash predicted by analysts. SMIC’s Hong Kong stock jumped 21% to a record Monday, its biggest gain since 2009.While the rally looks hot, investors such as He Qi, a fund manager with Huatai Pinebridge Fund Management Co, say they have made the most of lower valuations and a catch-up rally in cheaper stocks.“I’ve been fully invested in stocks since early June to bet on the shift in market focus,” he said, adding that he had focused on brokerages, property developers and automakers. “After a tough two months or so, it’s finally my moment to shine.”(An earlier version corrected name of publication in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Tesla Inc. (NASDAQ: TSLA) has started taking pre-orders for its Cybertruck in China, its website suggests, as earlier spotted by Reddit user u/aaronhry.What Happened The Palo Alto-based automaker is asking customers to pay $141.8 (CNY 1,000) to make the reservation for the all-electric pickup truck.The full self-driving feature is available as an add-on for the truck at $9,075.8 (CNY 64,00), according to Tesla's website.Tesla unveiled the Cybertruck in November last year, but production isn't expected to begin until late 2022.The Elon Musk-led company saw nearly 250,000 reservations in the United States, where it has been taking $100 deposits, within the first week of launch. Tesla stopped keeping track, but according to third-party data reported by Electrek, the number of reservations has crossed 500,000.Tesla has shortlisted sites for the Cybertruck manufacturing plant, including in Texas and Oklahoma.Price Action The company's shares closed nearly 8% higher at $1,208.66 on Friday. The shares added another 0.4% in the after-hours at $1,213.20.Image: TeslaSee more from Benzinga * Tesla Under Federal Probe Over Fatal Battery Design Flaw * Lyft Resumes Self-Driving Test Rides * Here's How Much Investing ,000 In Bitcoin 5 Years Ago Would Be Worth Today(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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