For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. BHP Group Limited Sponsored (BHP) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.
BHP Group Limited Sponsored is one of 251 companies in the Basic Materials group. The Basic Materials group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. BHP is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for BHP's full-year earnings has moved 44.44% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Based on the latest available data, BHP has gained about 20.95% so far this year. At the same time, Basic Materials stocks have gained an average of 19.15%. This shows that BHP Group Limited Sponsored is outperforming its peers so far this year.
Looking more specifically, BHP belongs to the Mining – Miscellaneous industry, a group that includes 47 individual stocks and currently sits at #189 in the Zacks Industry Rank. This group has gained an average of 34.92% so far this year, so BHP is slightly underperforming its industry in this area.
Investors in the Basic Materials sector will want to keep a close eye on BHP as it attempts to continue its solid performance.
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Albertsons Companies, Inc. (ACI) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates — one of the most powerful forces impacting stock prices.
A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate — the consensus measure of EPS estimates from the sell-side analysts covering the stock — for the current and following years.
Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.
Therefore, the Zacks rating upgrade for Albertsons Companies, Inc. basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock Prices
The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Albertsons Companies, Inc. imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate Revisions
Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>>.
Earnings Estimate Revisions for Albertsons Companies, Inc.
This company is expected to earn $2.03 per share for the fiscal year ending February 2022, which represents a year-over-year change of -37.4%.
Analysts have been steadily raising their estimates for Albertsons Companies, Inc. Over the past three months, the Zacks Consensus Estimate for the company has increased 2.7%.
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a 'Strong Buy' rating and the next 15% get a 'Buy' rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Albertsons Companies, Inc. to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
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Zacks Investment Research
(Bloomberg) — Rio Tinto Group plans to spend $2.4 billion building a lithium mine in Serbia, in the latest sign that the biggest miners are pushing into metals poised to benefit from the green-energy transition.
The biggest producers are churning out record profits after commodities rallied this year, raising the question of what the industry will do with all the extra cash. Most have been focused on returning money to shareholders through dividends and buybacks — analysts are expecting more big payouts in the coming weeks, including from Rio itself when the world’s second-biggest miner reports financial results on Wednesday.
But there are also signs that the industry is increasingly keen to invest more in growing production of key “future facing” commodities like battery metals or fertilizer. Rio’s announcement marks the first big move by a mining major into lithium, which is used in rechargeable batteries.
Earlier Tuesday, larger rival BHP Group announced plans to buy the owner of a Canadian nickel project — another vital component of the types of batteries that power electric cars or back up renewable energy. Rio in May acquired a stake in a Canadian copper project, while BHP has been building a holding in a company planning to develop a giant copper mine in Ecuador, and is expected to sanction a giant potash project as soon as next month.
It also comes at a time when the biggest miners are looking to shift away from fossil fuels, increasingly shunned by investors. Rio sold its last coal mine in 2019 and is the only major miner to be fossil-fuel free. And its peers are slowly following. Anglo American Plc has agreed to sell its last thermal coal mines, while BHP is in the process of exiting thermal coal and is considering getting out of oil and gas.
Rio has been working on the Jadar project in Serbia for years, and had been expected to make an investment decision this year. The mine will help the company diversify away from iron ore, which dominates its earnings, and will allow it to produce lithium close to the key German carmaking industry.
Rio said on Tuesday that the project is expected to start operating in 2026 and hit full-production in 2029. The investment, which still depends on getting the necessary approvals in Serbia, would make the company a top-10 lithium producer.
Still, there may be obstacles. The Serbian government has promised voters it will hold a referendum on the project, while touting its benefit as a huge growth driver for the Serbian economy. Serbian authorities are opposed to exporting lithium carbonate as raw material for batteries and want to see local production of lithium-based batteries, possibly even electric-vehicles.
“The Jadar project would scale up Rio Tinto’s exposure to battery materials, and demonstrate the company’s commitment to investing capital in a disciplined manner to further strengthen its portfolio for the global energy transition,” Rio said in a statement Tuesday.
(Updates with details throughout)
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HOUSTON, July 27, 2021–(BUSINESS WIRE)–Natural Resource Partners L.P. (NYSE: NRP) plans to report its second quarter 2021 financial results before the market opens on Friday, August 6, 2021. Management will host a conference call beginning at 9:00 a.m. ET to discuss the results.
To register for the conference call please use this link: http://www.directeventreg.com/registration/ event/2296424. After registering, a confirmation will be sent via email and include dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering a day in advance or at minimum 10 minutes before the start of the call. Investors may also listen to the conference call live via the Investor Relations section of the NRP website at www.nrplp.com.
Audio replays of the conference call will be available on the Investor Relations section of NRP’s website.
Company Profile
Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States, including interests in coal, industrial minerals and other natural resources, and owns an equity investment in Ciner Wyoming, a trona/soda ash operation.
For additional information please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210727006129/en/
Contacts
Tiffany Sammis
713-751-7515
tsammis@nrplp.com
Arch Resources Inc. ARCH reported second-quarter 2021 earnings of $1.66 per share, which surpassed the Zacks Consensus Estimate of $1.57 by 5.7%. In the year-ago quarter, the company incurred a loss of $3.26 per share.
Total Revenues
Total revenues amounted to $450.4 million, which beat the Zacks Consensus Estimate of $342 million by 31.7%.
Highlights of the Release
In the Metallurgical segment, Arch Resources sold 2 million tons of coal, down 33.3% from the prior-year figure of 1.5 million tons. It recorded cash margins of $30.34 per ton compared with $14.22 in the year-ago quarter, primarily due to higher sales price.
In the Thermal segment, cash margin was $2.62 per ton versus (99 cents) in the prior-year period.
Arch Resources Inc. Price, Consensus and EPS Surprise
Arch Resources Inc. price-consensus-eps-surprise-chart | Arch Resources Inc. Quote
During the second quarter, Arch Resources invested $50 million in the Leer South mine development, and expects to pump capital between $360 million and $390 million into the project for its completion. As of Jun 30, 2021, the company invested $392 million in the project, a little exceeding the projected forecast. It is on track to commence longwall operations at the mine in third-quarter 2021. When fully operational, the mine is expected to produce up to 3 million tons of High-Vol A coking coal annually for sale in global metallurgical markets.
During the quarter, Arch Resources committed an additional 300,000 tons of metallurgical coal for delivery in 2021, bringing total commitments for the current year to 7.1 million ton.
Financial Highlights
Cash and cash equivalents as of Jun 30, 2021 were $153.5 million compared with $187.5 million on Dec 31, 2020.
Long-term debt as of Jun 30, 2021 was $402.1 million compared with $477.2 million at 2020-end.
Cash provided by operating activities in first-half 2021 was $26.1 million compared with $25.9 million in the year-ago period.
Arch Resources raised its 2021 capex guidance by $10 million to the range of $210- $230 million to accommodate the modest amount of additional capital required to complete Leer South and fund certain opportunistic optimization efforts at its metallurgical mines.
Guidance
Arch Resources committed 7.1 million tons of coking coal volume for 2021. Total thermal coal committed for 2021 is 57.8 million tons. The company expects total sales volume in the range of 62.4-67.2 million tons for 2021.
Zacks Rank
Arch Resources currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Upcoming Releases
Peabody Energy BTU is scheduled to release second-quarter 2021 results on Jul 29. The Zacks Consensus Estimate for the bottom line for the quarter is pegged at a loss of 76 cents per share.
CONSOL Energy Inc. CEIX is scheduled to release second-quarter 2021 results on Aug 3. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 22 cents per share.
Warrior Met Coal, Inc. HCC is scheduled to release second-quarter 2021 results on Aug 4. The Zacks Consensus Estimate for the quarter is pegged at a loss of 16 cents per share.
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Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.
Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase, investors find themselves invested in shares that have limited to no upside or even a downside. So, betting on a stock just by looking at the traditional momentum parameters could be risky at times.
It could be safer to invest in bargain stocks that have been witnessing price momentum recently. While the Zacks Momentum Style Score (part of the Zacks Style Scores system), which pays close attention to trends in a stock's price or earnings, is pretty useful in identifying great momentum stocks, our 'Fast-Paced Momentum at a Bargain' screen comes handy in spotting fast-moving stocks that are still attractively priced.
Peabody Energy (BTU) is one of the several great candidates that made it through the screen. While there are numerous reasons why this stock is a great choice, here are the most vital ones:
Investors' growing interest in a stock is reflected in its recent price increase. A price change of 72.1% over the past four weeks positions the stock of this coal mining company well in this regard.
While any stock can see a spike in price for a short period, it takes a real momentum player to deliver positive returns for a longer time frame. BTU meets this criterion too, as the stock gained 186.4% over the past 12 weeks.
Moreover, the momentum for BTU is fast paced, as the stock currently has a beta of 1.48. This indicates that the stock moves 48% higher than the market in either direction.
Given this price performance, it is no surprise that BTU has a Momentum Score of B, which indicates that this is the right time to enter the stock to take advantage of the momentum with the highest probability of success.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped BTU earn a Zacks Rank #2 (Buy). Our research shows that the momentum-effect is quite strong among Zacks Rank #1 and #2 stocks. That's because as covering analysts raise their earnings estimates for a stock, more and more investors take an interest in it, helping its price race to keep up. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Most importantly, despite possessing fast-paced momentum features, BTU is trading at a reasonable valuation. In terms of Price-to-Sales ratio, which is considered as one of the best valuation metrics, the stock looks quite cheap now. BTU is currently trading at 0.44 times its sales. In other words, investors need to pay only 44 cents for each dollar of sales.
So, BTU appears to have plenty of room to run, and that too at a fast pace.
In addition to BTU, there are several other stocks that currently pass through our 'Fast-Paced Momentum at a Bargain' screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.
This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.
Click here to sign up for a free trial to the Research Wizard today.
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CNX Resources Corporation CNX is scheduled to release second-quarter 2021 earnings on Jul 29, before the market opens. This exploration and production company delivered an average earnings surprise of 119.6% in the last four reported quarters.
Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.
Factors to Consider
CNX Resources’ earnings in the second quarter are likely to have benefited from lower shares outstanding, as the company has been opportunistically repurchasing shares from the open market. It has been managing costs in an efficient manner, and the same is expected to have lowered operating expenses as well as boosted margins in the second quarter.
It utilized free cash flow to lower the outstanding debt level by more than $70 million in the first quarter, which is likely to have lowered capital servicing cost and aided margins in the second quarter. Stable production volumes from high-quality assets are expected to have boosted second-quarter performance.
Expectations
The Zacks Consensus Estimate for the June quarter earnings per share stands at 24 cents, suggesting an 84.6% rise from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model predicts earnings beat for CNX Resources this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here as you will see below.
CNX Resources Corporation. Price and EPS Surprise
CNX Resources Corporation. price-eps-surprise | CNX Resources Corporation. Quote
Earnings ESP: It has an Earnings ESP of +7.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CNX Resources carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Investors can also consider the following players from the same industry that too have the right combination of elements to beat on earnings in the to-be-reported quarter.
Matador Resources Company MTDR is slated to release second-quarter results on Jul 27. It has an Earnings ESP of +7.62% and sports a Zacks Rank of 1.
Devon Energy Corporation DVN is slated to release second-quarter results on Aug 3. It has an Earnings ESP of +2.93% and sports a Zacks Rank of 1.
APA Corporation (APA) is slated to release second-quarter results on Aug 4. It has an Earnings ESP of +7.01% and sports a Zacks Rank of 1.
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Albertsons Companies, Inc. ACI is likely to register top- and bottom-line decline when it reports first-quarter fiscal 2021 results on Jul 29, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $20.5 billion, which indicates a decline of 9.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for first-quarter earnings currently stands at 68 cents per share, suggesting a slump of 49.6% from the year-ago reported figure. The consensus mark has moved up by 2 cents in the past 30 days. This leading food and drug products retailer delivered an earnings surprise of 20% in the last reported quarter.
Key Aspects to Note
Albertsons top-line is like to reflect the impact of demand moderation, as consumers have begun outdoor dining amid easing of pandemic restrictions and vaccine rollouts. Reduction in pantry loading and at-home consumption trends might have affected year-on-year revenue comparison. In the last earnings call, management indicated that the company is witnessing lower demand across certain categories such as soup, pasta and pasta sauce, when compared to pre-pandemic levels.
Lower fuel sales may have weighed on the to-be-reported quarter’s performance. In the last earnings call, management predicted fuel related headwinds worth $50 million for the first-quarter. Adverse impacts stemming from higher selling, general & administrative expenses cannot be ruled out. The company has been incurring higher selling and administrative expenses due to incremental COVID-19 expenses and other charges.
Nevertheless, gains from rising digital sales, loyalty program and efforts to boost assortments, especially in the fresh and Own Brands categories, are likely to have favored the first quarter performance.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons Companies, Inc. price-consensus-eps-surprise-chart | Albertsons Companies, Inc. Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Albertsons this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Albertsons has a Zacks Rank #3 and an Earnings ESP of +4.44%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Chewy Inc. CHWY currently has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale Corporation COST currently has an Earnings ESP of +0.52% and a Zacks Rank #2.
Sprouts Farmers Market, Inc. SFM has an Earnings ESP of +2.95% and a Zacks Rank #3, at present.
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Earlier this morning, Alliance Resource Partners released its second-quarter 2021 financial and operating results, and we will now discuss these results as well as our perspective on market conditions and outlook. Before we begin, a reminder that some of our remarks today may include forward-looking statements.
TORONTO (Reuters) -BHP Group has reached conditional agreement with a unit of Westshore Terminals Investment Corp for port services for the global miner's proposed Jansen potash mine in Canada, the terminal operator said late on Thursday, moving the project closer to fruition.
The port agreement is subject to approval by BHP's board and conditional on it moving ahead with Jansen's first phase, Westshore said in a release.
The world's biggest listed miner has estimated Jansen would cost up to $5.7 billion in its first phases.
The project in Canada's Saskatchewan province offers diversification into agricultural markets given that potash is a key element in plant nutrition that also makes crops more drought resistant.
"BHP confirms that Westshore Terminals Limited Partnership … has signed an agreement to provide port services for the Jansen potash project in Saskatchewan," BHP said in a statement to Reuters.
Last month BHP said it would present its board with a decision on whether to move ahead with Jansen after choosing between two port options.
"If the Jansen project does proceed, the agreement requires Westshore to handle potash for BHP for a term to 2051, subject to extension," Westshore said.
Under the agreement, Vancouver-based Westshore would construct infrastructure to handle potash at Westshore’s Roberts Bank Terminal by 2026, with BHP funding the construction.
The pact would become binding on BHP if it announces a final decision to proceed with Jansen's first stage, Westshore said.
Westshore's Toronto-listed shares climbed as much as 38% Friday.
(Reporting by Jeff Lewis; editing by Jason Neely, Kirsten Donovan)
(Adds BHP statement, Westshore shares)
TORONTO, July 23 (Reuters) – BHP Group has reached conditional agreement with a unit of Westshore Terminals Investment Corp for port services for the global miner's proposed Jansen potash mine in Canada, the terminal operator said late on Thursday, moving the project closer to fruition.
The port agreement is subject to approval by BHP's board and conditional on it moving ahead with Jansen's first phase, Westshore said in a release.
The world's biggest listed miner has estimated Jansen would cost up to $5.7 billion in its first phases.
The project in Canada's Saskatchewan province offers diversification into agricultural markets given that potash is a key element in plant nutrition that also makes crops more drought resistant.
"BHP confirms that Westshore Terminals Limited Partnership … has signed an agreement to provide port services for the Jansen potash project in Saskatchewan," BHP said in a statement to Reuters.
Last month BHP said it would present its board with a decision on whether to move ahead with Jansen after choosing between two port options.
"If the Jansen project does proceed, the agreement requires Westshore to handle potash for BHP for a term to 2051, subject to extension," Westshore said.
Under the agreement, Vancouver-based Westshore would construct infrastructure to handle potash at Westshore’s Roberts Bank Terminal by 2026, with BHP funding the construction.
The pact would become binding on BHP if it announces a final decision to proceed with Jansen's first stage, Westshore said.
Westshore's Toronto-listed shares climbed as much as 38% Friday.
(Reporting by Jeff Lewis; editing by Jason Neely, Kirsten Donovan)
Despite a major oil price crash on Monday, oil prices are now on course to close out the week more or less unchanged.
Friday, July 23rd, 2021
The news of OPEC+ bringing back withheld production in August 2021, following through with 400kbpd monthly increments over the remainder of this year, triggered a spectacular tumble in oil prices earlier this week. Despite pandemic-related risks surging in Southeast Asia and U.S. crude inventories rising for the first time since May, the second half of the week saw a surprising rebound as the market has grown to realize that additional OPEC+ supply would be offset by recovering global demand.
Venezuela Buys Diluents Again. The VLCC Rene discharged a cargo of condensate in Venezuela’s main export terminal of José, previously used by PDVSA to dilute extra-heavy Orinoco barrels to create transportable and refinable blends. The origin of the cargo is unknown, the supertanker’s last port of call was in Sri Lanka.
Iberdrola Might Spin-Off Wind Business. The Spanish wind energy giant Iberdrola (BME:IBE) is considering a spin-off of its wind business to raise funds, it said when presenting H1 2021 results this week. Beyond its traditional markets in Europe, Iberdrola has been increasing its presence in the Asia Pacific region, going after new markets like Vietnam, Korea, or Vietnam.
Germany-US Agree on Nord Stream-2 Deal. The White House will scrap sanctions targeting the nearly completed Nord Stream 2 gas pipeline that would bring Russian gas into Germany, in return for Berlin’s pledge to ensure Gazprom (MCX:GAZP) does not fully cut off transit via Ukraine.
Coal Prices Surge to Highest Level in More than Decade. Decreasing Chinese domestic production, unrest in South Africa, and weak hydro generation across the continent have pushed Asian coal prices to their highest level in 13 years, with Newcastle thermal coal FOB prices flirting with the $150 per metric ton threshold, double of what it was in early May.
Tesla Patents New Lithium Extraction Method. Tesla Motors (NASDAQ:TSLA) has filed a patent on a new lithium extraction method from ore using sodium chloride, a more environmentally friendly way of getting lithium, avoiding the usage of acid leaching. According to Tesla officials, the new method might lead to a 33% reduction in lithium cost.
India Seeks to Commercialize Crude Stocks. India has decided to commercialize half of its strategic reserves to encourage private participation in its SPR – companies would have the option to re-export 1.5 million tons of crude stored at SPR sites if Indian companies refuse to buy it. ADNOC remains the only oil major to commit to SPR participation in India.
TAP Fails the Expansion Test. The 10 BCm per year TAP pipeline that brings Azeri gas to Turkey and Europe failed to trigger any shipping interest as no binding bids were submitted for potential capacity bookings, stoking concerns that the European case for further gas conduits was overblown.
Iran Inaugurates Jask Terminal. Iranian officials claimed the new crude export terminal at Jask began operations on Thursday, even though no vessel-tracking data was able to spot a ship alongside the jetties. The 300kbpd capacity Jask will supplement Iran’s main export port at Kharg Island.
Related: U.S. Shale Sees Light At The End Of The Tunnel
US Natgas Futures Highest Level in Almost 3 Years. US natural gas futures rose to their highest level since December 2018 on the heels of warmer-than-expected weather and higher air conditioning power demand, writes Reuters. The front-month NYMEX Henry Hub futures for August surpassed the $4 per mmBtu mark, rising more than 55% this year to date.
Saudi Aramco Data Stolen. Saudi Arabia’s national oil company Saudi Aramco (TADAWUL:2222) confirmed media reports that there has been a data leak of company data (reported to amount to 1 terabyte) yet declined to comment whether the data had been used in a cyber-extortion attempt. Media reports indicate the ransom was set at $50 million.
India Considering Obligatory Green Hydrogen. India’s government is considering the introduction of obligatory green hydrogen use in certain industries, with the oil, steel, and chemical industry listed as prime candidates to fall under the effect of such measures. No details were provided on the assumed deadlines.
BHP Seeking an Oil Exit. Australia’s BHP Group (NYSE:BHP) is mulling a complete exit from the oil business, with its assets estimated at $15 billion or more, seeking to focus on its giant iron ore and copper businesses instead. Media reports suggest that Woodside Petroleum would be the prime candidate to pick up BHP’s oil and gas portfolio.
Barents Sea Prospects Cooling. In another blow to Norway’s strategic quest to tap into the Barents Sea’s assumed hydrocarbon bounty, Aker BP (AKRBP.OL) made only a minor discovery with its wildcat in licensing block PL858, sapping hopes that the Arctic shelf could maintain the European country’s production profile.
France Softens Narrative on China Nuclear Woes. The French EDF (EPA:EDF) suggested it would shut down the Taishan nuclear reactor if similar rod fuel sealing issues were to happen in France. Taishan, the first EPR-type reactor to become operational, has been reporting build-ups on inert gases, compelling nuclear watchdogs to monitor levels of radiation.
Rwanda Seeks Its Place Under the Sun. Rwandan authorities have reportedly allocated funds to start a 2D seismic survey around Lake Kivu, in the hope of finding hydrocarbons reserves similar to the ones TotalEnergies (EPA:TTE) is developing at Lake Albert in Uganda, soon to be a new 200kbpd producing hub in East Africa.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com:
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It is not unusual to falter in life due to lack or absence of proper guidance. The same theory applies to the investing world as well. With a plethora of stocks flooding the market at any point of time, it is very much possible for an investor to make a hasty decision while designing one’s portfolio in want of know-how/expertise. Choice of improper stocks can adversely impact his/her returns, thereby defeating the very objective of shelling out hard-earned money in the highly unpredictable stock market.
Brokers to the Rescue
To avoid such predicament, investors rely on the guidance provided by brokers who are deemed experts in the field. Brokers, irrespective of their types (sell-side, buy-side or independent), undertake a thorough research of the stocks covered by them.
To that end, they attend company conference calls, interview management personnel and minutely study the company’s publicly available documents among other things. Against this backdrop, it is no surprise that they have extensive knowledge on the stocks in their portfolio(s). Similarly, it is in the best interest of investors to be guided by such well-researched information of the “experts” in the field while arriving at crucial investment decisions (buy, sell or hold).
Since brokers indulge in in-depth analysis, the question of their actions being arbitrary does not arise. The direction of the estimate revisions serves as an important pointer in determining the price of a stock. In fact, a rating upgrade normally leads to stock price appreciation and vice versa.
To take care of the earnings performance, we designed a screen based on improving analyst recommendations and upward estimate revisions over the last four weeks.
Don’t Ignore the Top Line
A strategy designed solely on the basis of the bottom line is unlikely to result in a winning strategy. According to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance. To address the top-line concerns, we included in our screen the price/sales ratio, which serves as a strong complementary valuation metric.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75: This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.
% change in Q (1) est. (4 weeks) = Top #10: This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.
To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio.
Price greater than 5: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by market capitalization.
Com/ADR/Canadian= Com: This takes out the ADR and Canadian stocks.
Here are five of the 10 stocks that made it through the screen:
Bassett Furniture Industries, Incorporated BSET carries out manufacturing, marketing and retailing of home furnishings in the United States and internationally. The stock presently sports a Zacks Rank #1 (Strong Buy). Factors like an improved housing market scenario in the United States, product innovation and efficient cost management are aiding the company’s earnings, which outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peabody Energy BTU: St Louis, MO-based Peabody Energy engages in the coal mining business and has both thermal and metallurgical operations. The revival in the domestic and international coal markets bodes well for this currently Zacks Rank #2 (Buy) stock.
AutoNation AN is the largest automotive retailer in the United States. The stock, currently sporting a Zacks Rank of 1, has seen the Zacks Consensus Estimate for earnings improve 38.4% over the past 60 days. Factors like a diversified product mix and multiple streams of income are supporting the company’s growth.
Arch Resources ARCH based in St. Louis, MO, is one of the largest coal producers in the United States. The stock, currently sporting a Zacks Rank #1, has seen the Zacks Consensus Estimate for earnings move 37.7% north over the past 60 days. Factors like its strong liquidity position are serving the stock well.
Abercrombie & Fitch Company ANF operates as a specialty retailer of premium, high-quality casual apparel for men, women and kids. The Zacks Consensus Estimate for this presently Zacks #1 Ranked stock’s current-year earnings has been revised 117.1% upward over the past 60 days. The company is being well-served by robust digital sales and efficient cost-control measures.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Peabody Energy Corporation (BTU) : Free Stock Analysis Report
AutoNation, Inc. (AN) : Free Stock Analysis Report
Bassett Furniture Industries, Incorporated (BSET) : Free Stock Analysis Report
Arch Resources Inc. (ARCH) : Free Stock Analysis Report
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By Dhirendra Tripathi
Investing.com – BHP (NYSE:BHP) and Tesla (NASDAQ:TSLA) stocks were among the gainers in Thursday’s premarket trading following an agreement under which the miner will supply nickel to the electric vehicle maker.
BHP was up 1% and Tesla 0.4%.
Nickel is one of the key metals used to make batteries that run electric vehicles.
BHP will supply Tesla with nickel from its Nickel West asset in Western Australia that it claims is one of the most sustainable and lowest carbon emission nickel producers in the world.
The agreement is much broader than a mere supply agreement. The two companies will collaborate to make the entire battery supply chain more sustainable including working on storage solutions along with looking for more ways to deploy renewable energy, according to a joint statement.
According to BHP Chief Commercial Officer, Vandita Pant, demand for nickel in batteries is estimated to grow by over 500% over the next 10 years, in large part to support the world’s rising demand for electric vehicles.
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Tesla TSLA recently inked a deal with BHP Group BHP to secure the supply of nickel from the latter’s Nickel West mine based in Western Australia.
Per the latest alliance, Tesla and BHP will also collaborate to make the battery supply chain more efficient and sustainable, with key focus on raw material procurement using blockchain and exchange of know-how for battery raw-material production. The companies will also identify supply-chain partners who are most aligned with their vision and battery value chains.
BHP will also join hands with Tesla on energy storage solutions to reduce carbon emissions through the enhanced use of sustainable energy, coupled with battery storage.
Headquartered in Melbourne, Australia, BHP is a leading resources company globally. The mining giant extracts and processes minerals, oil and gas and its products are sold worldwide. The company is a notable producer of major commodities, including iron ore, metallurgical coal, nickel and copper.
Shining Prospects of Nickel Market
Amid the heightening climate-change concerns, development of batteries used to power electric vehicles (EVs) has become crucial in order to decarbonize the global economy. This, in turn, has buoyed the demand of metals, particularly copper and nickel, used in the production of batteries.
Nickel, a core ingredient used in lithium-ion batteries, helps reduce the usage of cobalt, which is much more expensive and has an ambiguous supply chain. Amid the soaring popularity of EVs worldwide, demand for nickel in batteries is projected to jump more than 500% over the next decade. Within the shining future prospects of nickel, BHP claims to be one of the most sustainable and lowest carbon emission nickel producers in the world.
California-based Tesla is the undisputed leader of EVs and battery storage systems, with a vision to accelerate the global transition to green transportation solutions.
With the demand for nickel set to boom in the near future and due to challenges faced in procuring nickel, Tesla CEO Elon Musk has repeatedly expressed his concerns about the future supplies of nickel and has urged miners to increase the production of nickel.
In fact, in order to facilitate in-house production of batteries, Tesla has entered into a series of deals with mining companies for the commodities it needs to make batteries. This includes securing cobalt, another metal used in batteries, from the Swiss miner Glencore and supporting a nickel venture in New Caledonia.
The deal with BHP to procure nickel is in sync with Tesla’s vision of in-house production of batteries, and will boost the EV behemoth’s ability to self-manufacture batteries. The agreement is Tesla’s latest effort to shield itself from future supply crunch of metals needed in battery production. The agreement confirms Tesla will become one of the biggest customers of BHP for sustainable and reliable supply of quality nickel crucial to the EV maker’s growth plans.
BHP has been hinting a deal with Tesla since last year. For BHP, the deal marks a revival for the company’s Nickel West division. The company failed to sell the unit in 2014 and has since then diverted the division to cater to battery makers, rather than conventional customers like the stainless steel industry.
Though details on the deal amount have not been revealed by the companies, Tesla had earlier noted that it anticipates spending more than $1 billion annually on raw material for batteries from Australia.
Tesla — which shares space with auto biggies like General Motors GM and Ford F — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Ford Motor Company (F) : Free Stock Analysis Report
BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
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The market expects Peabody Energy (BTU) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2021. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 29, 2021, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This coal mining company is expected to post quarterly loss of $0.76 per share in its upcoming report, which represents a year-over-year change of +40.2%.
Revenues are expected to be $691 million, up 10.3% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 112.9% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Peabody Energy?
For Peabody Energy, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.
On the other hand, the stock currently carries a Zacks Rank of #2.
So, this combination makes it difficult to conclusively predict that Peabody Energy will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Peabody Energy would post a loss of $1.48 per share when it actually produced a loss of $0.82, delivering a surprise of +44.59%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Peabody Energy doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
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Peabody Energy Corporation (BTU) : Free Stock Analysis Report
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The market expects CNX Resources Corporation. (CNX) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2021. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 29, 2021, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +69.2%.
Revenues are expected to be $384.3 million, up 158.2% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 2.89% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for CNX Resources Corporation.
For CNX Resources Corporation.The Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +10.53%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that CNX Resources Corporation. Will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that CNX Resources Corporation. Would post earnings of $0.28 per share when it actually produced earnings of $0.36, delivering a surprise of +28.57%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
CNX Resources Corporation. Appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
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CNX Resources Corporation. (CNX) : Free Stock Analysis Report
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Report Further Outlines Non-Replicable ESG Accomplishments and Strategy
PITTSBURGH, July 22, 2021 /PRNewswire/ — CNX Resources Corp. (NYSE: CNX) today announced the release of its annual Corporate Responsibility Report. The report details company execution in line with the traditional Global Reporting Initiative (GRI) core option, along with additional disclosure standards established by the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB). Included in the report is more information about CNX objectives and initiatives undertaken to meet the company's broader environmental, social, and governance (ESG) philosophy: tangible, impactful, and local.
CNX President and Chief Executive Officer Nick DeIuliis commented, "Many in the energy industry and capital markets continue to speak in the abstract and distant future about ESG, sustainability, resiliency, carbon intensity, and the industrial logic of consolidation. CNX pursues a different path: one that prioritizes the development of our extensive existing asset base over further scale, and that focuses on transparency, measurable outcomes, current and nearer term deliverables, and long-termism defined by growing per-share intrinsic value. Our tangible, impactful, and local ESG approach coupled with our non-replicable asset base results in a net carbon negative footprint today, a truly sustainable business model of a low-cost producer that regularly returns capital to shareholders, and the opportunity to pursue exciting new opportunities for further methane capture and abatement. We believe we are the rare combination of tangible, impactful, and local ESG results coupled with low-risk free cash flow per-share generation that presents the best-in-class option for ESG-focused investors."
The following are key highlights of the report:
Environmental and Safety:
-
CNX is net carbon negative for Scope 1 and 2 emissions – unique in the natural gas upstream and midstream sectors;
-
Annual abatement of venting of over 300,000 metric tons of third-party methane (which equates to approximately 7.5 million metric tons of CO2e emissions);
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Adoption of the TCFD framework and SASB standards;
-
Employee safety Total Recordable Incident Rate (TRIR) of 0.0 in 2020;
-
Contractor safety TRIR of 0.92 in 2020;
-
Recycled 99.6% of produced water in the company's core operating area in 2020; and
-
Management compensation now tied to company's methane intensity footprint.
Social Responsibility:
-
Median compensation package over $150,000 – top among regional public companies;
-
$30 million invested in local communities over last 10 years;
-
New $30 million philanthropic commitment and establishment of CNX Foundation to drive regional progress;
-
Establishment of mentor academy for young adults in local, underserved communities;
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No layoffs, paid front line worker bonuses, and no acceptance of government assistance during COVID;
-
Half of CEO direct reports are diverse;
-
In 2021, introduction of a cross-training rotation program for diverse employees, comprehensive review of compensation programs with emphasis on pay equity, and diversity and inclusion training of all employees; and
-
CNX targets 33% diverse employee workforce by 2024 and 40% by 2026.
Governance:
-
First to provide multi-year, transparent financial guidance via our 7-year free cash flow generation plan;
-
CEO pay for performance philosophy with 90% of compensation at-risk;
-
Insider ownership at 2.5% of outstanding shares;
-
Stock retention requirements for executive management;
-
Small, focused board of directors with diversity of skills, professions, and gender; and
-
Full board participation in Environment, Safety, and Corporate Responsibility Committee.
To read the full 2020 Corporate Responsibility Report, please visit: https://responsibility.cnx.com/
About CNX Resources Corporation:
CNX Resources Corporation (NYSE: CNX) is the premier independent natural gas development, production, and midstream company, with operations centered in the major shale formations of the Appalachian basin. Our vertically integrated model includes transmission, storage, gathering systems, and water infrastructure that support energy development from wellhead to end user. With the benefit of a more than 155-year legacy and a substantial asset base amassed over many generations, the company deploys a strategy focused on responsibly developing its resources to create long term per-share value for its shareholders, employees, and the communities where it operates. As of December 31, 2020, CNX had 9.55 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
View original content to download multimedia:https://www.prnewswire.com/news-releases/cnx-releases-2020-corporate-responsibility-report-and-announces-industry-leading-net-carbon-negative-position-301338950.html
SOURCE CNX Resources Corporation
As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Albertsons Companies, Inc. (NYSE:ACI).
Hedge fund interest in Albertsons Companies, Inc. (NYSE:ACI) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that ACI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare ACI to other stocks including Vereit Inc (NYSE:VER), Robert Half International Inc. (NYSE:RHI), and Natera Inc (NASDAQ:NTRA) to get a better sense of its popularity.
In today’s marketplace there are plenty of methods investors employ to value stocks. A couple of the most innovative methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top investment managers can beat the market by a healthy amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Stephen Feinberg of Cerberus Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we're going to check out the recent hedge fund action regarding Albertsons Companies, Inc. (NYSE:ACI).
Do Hedge Funds Think ACI Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in ACI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Cerberus Capital Management held the most valuable stake in Albertsons Companies, Inc. (NYSE:ACI), which was worth $2750.4 million at the end of the fourth quarter. On the second spot was Brigade Capital which amassed $13.1 million worth of shares. Citadel Investment Group, Verdad Advisers, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cerberus Capital Management allocated the biggest weight to Albertsons Companies, Inc. (NYSE:ACI), around 76.09% of its 13F portfolio. Verdad Advisers is also relatively very bullish on the stock, designating 3.38 percent of its 13F equity portfolio to ACI.
Because Albertsons Companies, Inc. (NYSE:ACI) has witnessed declining sentiment from the smart money, we can see that there was a specific group of funds that elected to cut their full holdings heading into Q2. It's worth mentioning that Anand Parekh's Alyeska Investment Group cut the largest investment of the 750 funds monitored by Insider Monkey, totaling about $13.5 million in stock. Daniel S. Och's fund, OZ Management, also dumped its stock, about $3.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Albertsons Companies, Inc. (NYSE:ACI). We will take a look at Vereit Inc (NYSE:VER), Robert Half International Inc. (NYSE:RHI), Natera Inc (NASDAQ:NTRA), Churchill Downs Incorporated (NASDAQ:CHDN), Kingsoft Cloud Holdings Limited (NASDAQ:KC), Alleghany Corporation (NYSE:Y), and SEI Investments Company (NASDAQ:SEIC). All of these stocks' market caps are closest to ACI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VER,27,664502,4 RHI,27,284866,0 NTRA,41,1222395,-5 CHDN,19,413255,-6 KC,16,92226,-4 Y,34,359891,0 SEIC,27,304623,-6 Average,27.3,477394,-2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $477 million. That figure was $2808 million in ACI's case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Kingsoft Cloud Holdings Limited (NASDAQ:KC) is the least popular one with only 16 bullish hedge fund positions. Albertsons Companies, Inc. (NYSE:ACI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACI is 30. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately ACI wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ACI investors were disappointed as the stock returned 4.8% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
Thursday, July 22, 2021
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including BHP Group (BHP), Booking Holdings (BKNG), and CVS Health (CVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Q2 Earnings Season Scorecard
Including all of this morning's releases, we now have Q2 results from 103 S&P 500 members or 20.% of the index's total membership. Total earnings for these 103 index members are up +117.6% on +18.9% higher revenues, with 90.3% beating EPS estimates and a record 85.4% beating revenue estimates.
This is a notably improved performance from these 103 index members relative to what we have seen from the same group of companies in other recent periods, with the revenue outperformance notably standing out. Looking at Q2 as a whole, combining the actual results that have come out with estimates for the still to come companies, total S&P 500 earnings are currently expected to be up +72.7% on +19.8% higher revenues. For a detailed look at the Q2 earnings season and expectations for the coming periods, please check out our weekly Earnings Trends report >>>> All Around Earnings Strength
Today's Featured Research Reports
Shares of BHP have outperformed the Zacks Mining – Miscellaneous industry over the past year (+49.4% vs. +33.6%). The Zacks analyst believes that the company will continue to benefit from the rally in iron ore prices aided by strong demand in China. Improved industrial activity has led to a rally in copper prices, which is a positive for the company.
BHP’s efforts to make operations more efficient through the employment of smart technology will lead to a reduction in costs, thereby boosting margins. During fiscal 2021, the company achieved first production at four major development projects. It is currently involved in two major petroleum and potash projects, both of which are under development.
(You can read the full research report on BHP here >>>)
Booking Holdings shares have gained +7.9% over the last six months against the Zacks Internet Commerce industry’s loss of -21.4%. The Zacks analyst believes that steadily improving bookings, on the back of the re-opening of economy, have been benefiting the company.
The company remains optimistic about its highly variable cost structure and strong liquidity position, which it expects will help in navigating through the current crisis. Disruptions in the travel industry due to the pandemic and sluggishness in the agency business are major headwinds for the company.
(You can read the full research report on Booking Holdings here >>>)
Shares of CVS Health have gained +21.9% in the year to date period against the Zacks Retail Pharmacies and Drug Stores industry’s gain of +21.2%. The Zacks analyst is encouraged by the increasing demand for PBM and specialty pharmacy along with significant growth observed in the retail business.
The company’s consumer-centric digital strategy has become more relevant in the current environment as people are using technology more while staying indoors. A weak cough, cold and flu season, however, impacted growth within both Pharmacy Services and Retail/LTC in the first quarter. The repealing of the HIF for 2021 also hampered growth for Health Care Benefits unit.
(You can read the full research report on CVS Health here >>>)
Other noteworthy reports we are featuring today include Infosys (INFY), Chipotle Mexican Grill (CMG) and Exelon (EXC).
Sheraz Mian
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
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Zacks Investment Research
Investors interested in Consumer Products – Staples stocks are likely familiar with Albertsons Companies, Inc. (ACI) and Chewy (CHWY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Albertsons Companies, Inc. and Chewy are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ACI currently has a forward P/E ratio of 10.30, while CHWY has a forward P/E of 806.83. We also note that ACI has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CHWY currently has a PEG ratio of 40.34.
Another notable valuation metric for ACI is its P/B ratio of 7.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CHWY has a P/B of 497.71.
Based on these metrics and many more, ACI holds a Value grade of A, while CHWY has a Value grade of F.
Both ACI and CHWY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ACI is the superior value option right now.
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(Bloomberg) — BHP Group is considering getting out of oil and gas in a multibillion-dollar exit that would accelerate its retreat from fossil fuels, according to people familiar with the matter.
The world’s biggest miner is reviewing its petroleum business and considering options including a trade sale, said the people, who asked not to be identified as the talks are private. The business, which is forecast to earn more than $2 billion this year, could be worth an estimated $15 billion or more, one of the people said.
BHP’s energy assets make it an outlier among the world’s biggest miners — rival Anglo American Plc has already exited thermal coal under investor pressure and BHP is trying to follow suit. The company has long said the oil business was one of its strategic pillars and argued that it will make money for at least another decade. But as the world tries to shift away from fossil fuels, BHP wants to avoid getting stuck with assets that more become more difficult to sell, the people said.
The deliberations are still at an early stage and no final decision has been made, the people said. A spokesman for BHP declined to comment.
The move comes as oil supermajors grapple with how to respond to investor pressure over climate, in some cases by shrinking their core production and adding renewable energy assets.
Read more: The Retreat of Exxon and the Oil Majors Won’t Stop Fossil Fuel
BHP wants to exit while it can still get a good price for the assets, aiming to repeat a 2018 sale of its shale business to BP Plc for $10.4 billion, the people said. And unlike big-oil rivals, BHP doesn’t depend on profits from the energy business, which are dwarfed by the company’s giant iron ore and copper units.
The timing could be good for an oil exit. The economic recovery from Covid-19 has transformed the fortunes of oil producers, with Brent oil futures having rallied about 60% in the past year.
By contrast, the company’s efforts to get out of thermal coal so far have been disappointing, after early bids for mines in Australia came in lower than the company’s own valuations last year.
Getting out of both thermal coal and petroleum would help BHP make its case to investors as a company geared toward commodities of the future. The miner is also expected to sanction a giant potash mine in Canada next month, which could make it a key supplier of the crop nutrient once production begins. BHP is scheduled to report annual results on Aug. 17.
BHP has been in oil and gas since the 1960s, and has assets in the Gulf of Mexico and off the coast of Australia. It produced 102.8 million barrels of oil equivalent in the year ending June 30.
“BHP is an outlier in the mining sector for its petroleum business and this is often cited in our investors discussions as a point of detraction,” said RBC Capital Markets analyst Tyler Broda. “With rising ESG pressures facing the industry, but also as this business potentially enters into a re-investment phase, we can see why management might be contemplating an exit.” Broda estimates the business is worth about $14.3 billion.
Read: Falling Oil Prices, Treasury Yields May Power New Energy Stocks
While divesting fossil fuel assets would help to strengthen BHP’s ESG metrics, it may have to sell them at a discount, Saul Kavonic, an analyst at Credit Suisse Group AG, said in a note. Exiting the oil and gas business could also leave the company short of medium-term growth catalysts, with the Jansen potash project in Canada “a late-decade story,” he added.
BHP shares rose as much as 2.3% in Sydney trading on Wednesday.
(Adds analyst comment in paragraph 12, share reaction)
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Here are four stocks with buy rank and strong momentum characteristics for investors to consider today, July 21st:
NIKE, Inc. NKE: This leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories has a Zacks Rank #1 (Strong Buy) and witnessed the Zacks Consensus Estimate for its current year earnings increasing 10.1% over the last 60 days.
NIKE, Inc. Price and Consensus
NIKE, Inc. price-consensus-chart | NIKE, Inc. Quote
Nike’s shares gained 22.8% over the last one month compared to S&P 500’s rise of 1.5%. The company possesses a Momentum Score of B.
NIKE, Inc. Price
NIKE, Inc. price | NIKE, Inc. Quote
Lululemon Athletica Inc. LULU: This company that designs and retails athletic clothing for women, men, and female youth has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.3% over the last 60 days.
Lululemon Athletica Inc. Price and Consensus
Lululemon Athletica Inc. price-consensus-chart | Lululemon Athletica Inc. Quote
Lululemon Athletica’s shares gained 8.8% over the last one month. The company possesses a Momentum Score of B.
Lululemon Athletica Inc. Price
Lululemon Athletica Inc. price | Lululemon Athletica Inc. Quote
BHP Group BHP: This resources company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 20% over the last 60 days.
BHP Group Price and Consensus
BHP Group price-consensus-chart | BHP Group Quote
BHP’s shares gained 4.8% over the last one month. The company possesses a Momentum Score of B.
BHP Group Price
BHP Group price | BHP Group Quote
ABB Ltd ABB: This company that manufactures and sells electrification, industrial automation, and robotics and motion products has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.7% over the last 60 days.
ABB Ltd Price and Consensus
ABB Ltd price-consensus-chart | ABB Ltd Quote
ABB’s shares gained 4.1% over the last one month. The company possesses a Momentum Score of B.
ABB Ltd Price
ABB Ltd price | ABB Ltd Quote
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By Melanie Burton
MELBOURNE (Reuters) – Rio Tinto is asking train drivers working in mineral-rich Western Australia to work more hours, following a move by rival BHP Group, as miners rush to ship millions of tonnes of iron ore amid soaring prices for the steel making material.
The push comes among a worsening skills shortage in Australia's west that has been exacerbated by strict coronavirus restrictions, which unions say have raised mental health risks for workers and their families.
Train driver Paul Bloxsom, who will leave Rio next month, said Western Australian border constraints to keep out COVID-19 that include a 14-day quarantine meant he had only seen his family in Queensland four times in 15 months.
"That's a challenge in itself, the isolation and the loneliness and so on. There was a combination of things, and I just had enough. And there's a lot more jobs going back at home on the east coast," he told Reuters.
Mine workers in Australia often live in cities and fly in and fly out (FIFO) to remote mine sites, a commute that can take anywhere from several hours to a day, including connections.
While miners in Western Australia are enjoying a commodity boom that has powered new construction projects, they are having to compete for workers with government-backed infrastructure projects on the other side of the country.
"Unlike previous construction-led growth periods for our sector, where up to 1,000 people a week were moving to Western Australia for work, there are now strong employment prospects in the eastern states," the state's Chamber of Minerals and Energy said last month.
International skilled migration has also dried up due to Australia's caps on immigration arrivals.
Miners have been looking for ways to ensure they can keep production at full tilt until Australia boosts its vaccination rates, said analyst Peter O'Connor of Shaw and Partners in Sydney.
"Short of keeping people in Western Australia on extended rosters, which wears people out, their options are limited – that is a real and present risk to production," he said.
For train drivers, Rio has asked for expressions of interest in a two-week on, one-week off roster, compared to the typical two-week on, two-week off roster, but said the request was voluntary and would include appropriate remuneration.
BHP has already mandated that roster for its FIFO train drivers as a temporary measure through to August 2022, blaming the skills shortage, but drawing criticism from the CFMEU union which says it has come at a cost for drivers and their families.
BHP, which has announced plans to train 200 new drivers, said it was offering interstate FIFO employees support including financial assistance for temporary and permanent relocation, flexible work options, as well as mental health support.
Rio said it is looking to recruit drivers, and is also providing temporary and permanent relocation packages for interstate workers.
The state government is also taking steps to boost skilled worker numbers, but noted in a statement its strong border measures have kept out COVID-19 and helped drive the national economy.
The CFMEU, however, wants miners and government to find ways for FIFO workers to spend less time in quarantine and more time with their families, said Greg Busson, secretary of the CFMEU mining and energy division.
"We have been dealing with this for 18 months now, surely we have some lessons learned," he said.
(Reporting by Melanie Burton; editing by Richard Pullin)
(Bloomberg) — Tesla Inc. has struck a nickel-supply deal with BHP Group, as the electric-car maker seeks to protect itself from a future supply crunch.
BHP will provide the automaker with the metal from its Nickel West operation in Western Australia, the world’s biggest miner said in a statement. BHP gave few further details, but said the companies would work together to make the battery supply chain more sustainable.
Telsa’s billionaire boss, Elon Musk, has repeatedly expressed concern about future supplies of nickel due to challenges in sustainable sourcing. Musk has pleaded with miners to produce more nickel, with demand set to skyrocket as the world increasingly moves toward electric vehicles.
Read more on Tesla’s plans to lock in supply as battery demand booms
Nickel is a key component in lithium-ion batteries, used in electric vehicles. It packs more energy into batteries and allows producers to reduce use of cobalt, which is more expensive and has a less transparent supply chain.
Telsa has struck a string of deals with mining companies for the commodities it needs to make batteries, including cobalt pacts with Glencore Plc and supporting a nickel venture in New Caledonia.
For BHP, it marks a turnaround for the company’s Nickel West business. The company unsuccessfully tried to sell the unit in 2014 and has since pivoted it to serve battery makers, rather than traditional customers such as the stainless steel industry.
Bloomberg originally reported that the two companies were in talks in October.
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Here are four stocks with buy rank and strong income characteristics for investors to consider today, July 21st:
BHP Group BHP: This resources company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 20% over the last 60 days.
BHP Group Price and Consensus
BHP Group price-consensus-chart | BHP Group Quote
This Zacks Rank #1 (Strong Buy) company has a dividend yield of 5.47%, compared with the industry average of 0.00%. Its five-year average dividend yield is 4.36%.
BHP Group Dividend Yield (TTM)
BHP Group dividend-yield-ttm | BHP Group Quote
Fanhua Inc. FANH: This provider of financial services has witnessed the Zacks Consensus Estimate for its current year earnings increasing 1% over the last 60 days.
Fanhua Inc. Price and Consensus
Fanhua Inc. price-consensus-chart | Fanhua Inc. Quote
This Zacks Rank #1 company has a dividend yield of 3.83%, compared with the industry average of 0.78%. Its five-year average dividend yield is 3.40%.
Fanhua Inc. Dividend Yield (TTM)
Fanhua Inc. dividend-yield-ttm | Fanhua Inc. Quote
Citizens Financial Group, Inc. CFG: This bank holding company for Citizens Bank, National Association has witnessed the Zacks Consensus Estimate for its current year earnings increasing 1.9% over the last 60 days.
Citizens Financial Group, Inc. Price and Consensus
Citizens Financial Group, Inc. price-consensus-chart | Citizens Financial Group, Inc. Quote
This Zacks Rank #1 company has a dividend yield of 3.66%, compared with the industry average of 2.41%. Its five-year average dividend yield is 3.32%.
Citizens Financial Group, Inc. Dividend Yield (TTM)
Citizens Financial Group, Inc. dividend-yield-ttm | Citizens Financial Group, Inc. Quote
Tenaris S.A. TS: This manufacturer and supplier of seamless steel pipe products and associated services to the oil and gas, energy and other industries has witnessed the Zacks Consensus Estimate for its current year earnings increasing 1.1% over the last 60 days.
Tenaris S.A. Price and Consensus
Tenaris S.A. price-consensus-chart | Tenaris S.A. Quote
This Zacks Rank #1 company has a dividend yield of 2.86%, compared with the industry average of 0.79%. Its five-year average dividend yield is 3.48%.
Tenaris S.A. Dividend Yield (TTM)
Tenaris S.A. dividend-yield-ttm | Tenaris S.A. Quote
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* BHP to supply Tesla from Nickel West operation
* Nickel West to start sulphate output in Sept quarter
* BHP, Tesla to work on energy storage solutions (Adds share price move, detail)
MELBOURNE July 22 (Reuters) – Global miner BHP Group said on Thursday it signed a nickel supply agreement with Tesla Inc and will work with the electric carmaker on lowering carbon emissions in the battery supply chain.
Tesla said in June it expects to spend more than $1 billion a year on battery raw materials from Australia given the country's reliable mining industry and responsible production practices.
Western automakers are also seeking to diversify supply chains to lessen their dependence on China, in line with a U.S. policy to rely on allies to supply metals for electric vehicles.
BHP's nickel division accounts for less than 1% of its earnings, which are dominated by iron ore. Shares in the miner were up 3% at A$51.37 by 0454 GMT.
BHP said the metal will be supplied from its Nickel West operation in Western Australia, which is set to add nickel sulphate – a key battery chemical, and one that has much higher margins than nickel metal – in the September quarter.
Nickel makes batteries energy-dense, allowing cars to run further on a single charge.
BHP and Tesla will also look at end-to-end raw material tracing using blockchain, and work on energy storage solutions, the miner said in a statement.
"Tesla is going to take up available nickel from well-established producers with strong operational credentials as much as it can," said Steven Brown, an independent consultant based in Australia.
"These are logical moves for Tesla at this point of time when there's not a lot of other opportunities."
Nickel West's carbon footprint is around half the size of even the newest producers in top supplier Indonesia, which use an energy-intensive technology to extract nickel from laterite ores, he said. Its waste disposal practices are also seen to be lower risk.
BHP in February signed a deal to secure up to half of its power needs for its Kwinana nickel refinery from a local solar farm, although the rest is powered by the state grid, which uses coal power.
Indonesian producers have said they will initially dispose of their waste on land but there are questions about where their waste will go in the long term, and whether that might mean discharging them into the sea, Brown added.
Indonesia currently accounts for about 30% of nickel supply, according to the International Nickel Study Group (INSG), but Brown expects that to reach 50% by 2025.
Australia was the world's fifth biggest producer of mined nickel last year, according to INSG figures, accounting for about 7% of global supply.
BHP has committed to cutting carbon emissions by 30% by 2030 from 2020 levels with a long-term target of net zero operational emissions by 2050. It is working with customers to lower emissions from the steel-making industry that is among the worlds' heaviest polluters. (Reporting by Melanie Burton and Nikhil Kurian Nainan in Bengaluru; Editing by Subhranshu Sahu and Richard Pullin)
U.S. Silica Holdings, Inc. SLCA has announced that its Industrial and Specialty Products unit will increase prices for most of its non-contracted silica sand, diatomaceous earth and clay products that are used mainly in applications like glass, foundry, paints, coatings, elastomers, roofing, chemicals, recreation, building products, agricultural, pet litter and other applications.
The increase will be up to 15%, on the basis of the product and grade, with effect from shipments beginning Sep 1, 2021.
The increased prices are requisite to help balance significant cost increases in energy, transportation, materials and manufacturing costs.
Shares of U.S. Silica have skyrocketed 170.9% over a year, outperforming the industry’s rise of 26%. Its earnings growth rate for the current year is pegged at 54.2%.
Image Source: Zacks Investment Research
In its last-quarter earnings call, the company has predicted sustainable long-term growth for 2021 and beyond. It is focused on prioritizing free cash flow, repositioning its Oil & Gas segment and expanding the Industrial and Specialty Products segment.
The company expects The Industrial & Specialty Products segment growth to outpace U.S. GDP. It expects the contribution margin of the segment to increase 5-10% sequentially in the second quarter.
In the Oil & Gas segment, the company expects a strong energy recovery as economic activity rebounds and gains momentum. For the second quarter, the contribution margin is projected to increase 30-35%. The company plans to deliver positive cash flow in 2021 and deleverage its balance sheet.
U.S. Silica Holdings, Inc. Price and Consensus
U.S. Silica Holdings, Inc. price-consensus-chart | U.S. Silica Holdings, Inc. Quote
Zacks Rank & Stocks to Consider
Currently, U.S. Silica carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Glencore PLC GLNCY and Rio Tinto PLC RIO, each sporting a Zacks Rank #1 (Strong Buy), and BHP Group BHP, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glencore has a projected earnings growth rate of 296.7% for the current year. The company’s shares have appreciated 74.3% over a year.
Rio Tinto has a projected earnings growth rate of 124.3% for the current year. The company’s shares have rallied 28.5% over a year.
BHP has a projected earnings growth rate of 192.5% for the current year. The company’s shares have grown 35% over a year.
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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about BHP Group (NYSE:BBL) in this article.
BHP Group (NYSE:BBL) was in 23 hedge funds' portfolios at the end of March. The all time high for this statistic is 24. BBL has experienced an increase in hedge fund interest lately. There were 18 hedge funds in our database with BBL holdings at the end of December. Our calculations also showed that BBL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
James Dinan of York Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we're going to take a gander at the fresh hedge fund action regarding BHP Group (NYSE:BBL).
Do Hedge Funds Think BBL Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in BBL a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in BHP Group (NYSE:BBL). Fisher Asset Management has a $413.5 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund is Farallon Capital, with a $231.5 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, D. E. Shaw's D E Shaw and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to BHP Group (NYSE:BBL), around 3.04% of its 13F portfolio. York Capital Management is also relatively very bullish on the stock, setting aside 2.19 percent of its 13F equity portfolio to BBL.
As industrywide interest jumped, some big names were leading the bulls' herd. Farallon Capital, assembled the largest position in BHP Group (NYSE:BBL). Farallon Capital had $231.5 million invested in the company at the end of the quarter. Orkun Kilic's Berry Street Capital also made a $18.8 million investment in the stock during the quarter. The other funds with brand new BBL positions are James Dinan's York Capital Management, Louis Bacon's Moore Global Investments, and Frank Fu's CaaS Capital.
Let's also examine hedge fund activity in other stocks – not necessarily in the same industry as BHP Group (NYSE:BBL) but similarly valued. We will take a look at Morgan Stanley (NYSE:MS), SAP SE (NYSE:SAP), Amgen, Inc. (NASDAQ:AMGN), HDFC Bank Limited (NYSE:HDB), Bristol Myers Squibb Company (NYSE:BMY), Philip Morris International Inc. (NYSE:PM), and Shopify Inc (NYSE:SHOP). All of these stocks' market caps are closest to BBL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MS,79,5285168,13 SAP,19,1473996,5 AMGN,47,1001957,-2 HDB,27,1964796,-4 BMY,81,5037397,-50 PM,48,5494085,-4 SHOP,91,9984457,1 Average,56,4320265,-5.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 56 hedge funds with bullish positions and the average amount invested in these stocks was $4320 million. That figure was $1354 million in BBL's case. Shopify Inc (NYSE:SHOP) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 19 bullish hedge fund positions. BHP Group (NYSE:BBL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BBL is 41.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately BBL wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BBL investors were disappointed as the stock returned 5.7% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores?
Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on — that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value Score
For value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth Score
Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum Score
Momentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM Score
If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank
The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: CNX Resources Corporation. (CNX)
Founded in 1860, CNX Resources Corporation, an independent oil and gas exploration and production company formed after the separation of CONSOL’s, Exploration and Production (E&P) and Pennsylvania Mining Operations into two independent companies. The natural gas focused company retained the old ticker symbol while the coal focused company retained the name of the old company. As of Dec 31, 2020, the company had 9.55 trillion cubic feet equivalent of proved natural gas reserves up 13% year over year.
CNX is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 11.24; value investors should take notice.
Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2021, while the Zacks Consensus Estimate has increased $0.02 to $1.11 per share. CNX also boasts an average earnings surprise of 119.6%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CNX should be on investors' short list.
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