How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of […]

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We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]

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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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Does the July share price for BlackBerry Limited (TSE:BB) reflect what it's really worth? Today, we will estimate the…

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(Bloomberg) — One of the largest utilities in America is starting to turn its back on natural gas.Dominion Energy Inc., the second-biggest U.S. power company by market value, on Sunday said it’s selling substantially all of its gas pipeline and storage assets to Berkshire Hathaway Inc. for $4 billion. It’s the largest deal announced this year to buy U.S. energy assets, according to Bloomberg data.In a separate statement, Dominion and its partner Duke Energy Corp. said they’re killing the controversial Atlantic Coast gas pipeline along the U.S. East Coast, citing ongoing delays and “cost uncertainty.”The moves come as utilities face increasing pressure from local governments, investors and environmentalists to quit fossil fuels. While long heralded as a cleaner alternative to coal and heating oil, gas is drawing stiff oppositions from left-leaning state lawmakers, making it increasingly difficult to build pipelines and other infrastructure.“Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged,” Dominion Chief Executive Officer Thomas Farrell said on a call with analysts. “This trend, so deeply concerning for our country’s economic growth and energy security, is a new reality.”Read More: Demise of Gas Project Shows U.S. Pipelines Becoming UnbuildableShares of Dominion, which also announced it’s cutting its dividend, fell as much as 7.6% Monday, the most in more than three months.The push away from gas positions Dominion as more of a pure-play state-regulated utility at a time when oil and pipeline operators have lagged the broader market. In the last year, an index of pipeline companies has fallen 36%, while the S&P 500 Index has gained 4.7%.“Given the bend towards decarbonization efforts in the country, the move away from natural gas, and investor demand for more simplified utility structures, we believe this is absolutely the correct move for Dominion to make,” Guggenheim analysts led by Shahriar Pourreza said in a research note.Read More: Wall Street Falls Out of Love With Once-Coveted Fossil FuelTo be clear, Richmond, Virginia-based Dominion, which provides power and gas to seven million customers in 20 states, isn’t walking away from the fossil fuel altogether. It will still sell gas to customers for heating and cooking. It’s retaining an interest in its Cove Point liquefied natural gas export terminal in Maryland. And 40% of the electricity the company generates comes from plants fueled by gas, coal and oil, according to its website.“They’ll still be burning lots of gas for decades ahead in the core utility business,” Bloomberg Intelligence analyst Kit Konolige said in an email.But pressure is mounting. Virginia enacted a law in April requiring Dominion’s utility in the state to be to be carbon-free by 2045.What Bloomberg Intelligence Says“Dominion’s unsurprising shutdown of the troubled Atlantic Coast Pipeline project and $4 billion sale of midstream properties take pressure off the strained balance sheet. In combination with a dividend cut, the steps shift Dominion to an almost all-utility growth story.”\– Kit Konolige, senior utility analystRead the full report here.Atlantic Coast is the third U.S. gas pipeline project to scrapped or shelved this year. Williams Cos. opted not to reapply for a permit in May for a $1 billion pipeline extension after regulators in New York blocked it. And in February the Oklahoma-based company canceled plans for a pipeline that would have run from Appalachia to New York.While the Atlantic Coast pipeline project won a key victory last month when the U.S. Supreme Court sided against environmentalists and upheld a crucial permit, the project still faced formidable opposition and costs. “That would indicate that that wasn’t a strategic decision as much it was as a practical decision,” said Paul Patterson, an analyst at Glenrock Associates LLC.Read More: Duke to Book Charge of Up to $2.5 Billion From Canceled PipelineDeal with BerkshireDominion’s deal with Berkshire calls for the giant conglomerate to assume $5.7 billion in debt. The utility will use $3 billion of the proceeds to buy back shares. Dominion cut its projected 2021 dividend payment to around $2.50 a share, reflecting the assets being divested and a new payout ratio that aligns it better with industry peers.The transaction is expected to close during the fourth quarter. It will require the approval of federal agencies including the U.S. Department of Energy.Read More: Buffett Sticks to Comfort Zones With His Dominion Energy DealBerkshire is amassing more than 7,700 miles (12,400 kilometers) of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage in the deal with Dominion. Warren Buffett’s conglomerate will also acquire 25% of Cove Point.With this transaction, Buffett has ended his period of relative silence on the acquisition front since the pandemic.The Dominion deal is set to be Berkshire’s largest acquisition ranked by enterprise value since its purchase of Precision Castparts Corp. in 2016. It will expand the company’s already sprawling empire of energy operations, which currently has operations in states including Nevada and Iowa.(Adds CEO quote in fifth 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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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F […]

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How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of […]

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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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