(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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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 automaker are also seeking to diversify supply chains to lessen their dependence on China, in line with a policy by U.S. President Joe Biden's administration to rely on allies to supply of the bulk of metals for electric vehicles.
BHP said the metal will be supplied from its Nickel West project in Western Australia which is set to start producing 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's nickel division accounts for less than 1 percent its earnings, which are dominated by iron ore.
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 the statement. (Reporting by Melanie Burton and Nikhil Kurian Nainan in Bengaluru; Editing by Subhranshu Sahu and Richard Pullin)
By Ernest Scheyder
July 21 (Reuters) – A U.S. federal judge said on Wednesday she will rule by July 29 on whether to temporarily block Lithium Americas Corp from excavating its Thacker Pass site in Nevada, which could become one of the country's biggest lithium mines.
Environmentalists sued earlier this year to block the proposed lithium mine, arguing that it could threaten sage grouse habitats and that the former President Donald Trump's administration erred when it approved it in January.
Chief Judge Miranda Du of the federal court in Reno held a Wednesday hearing to determine whether excavation work at the mine site should first be blocked while she considers the broader question of whether approval should have been issued in the first place.
After a nearly three-hour hearing, Du said she will rule by next Thursday. The company had previously agreed to pause digging through that date, pending the court review.
Environmentalists hope to stop Lithium Americas from minor excavation work needed to determine whether the land holds historical import for Native Americans and others. The project cannot move forward until that work is complete.
Du, an appointee of former President Barack Obama, gave little hint as to which way she may rule and asked probing questions of attorneys for the Vancouver-based company, environmental groups, and the Bureau of Land Management, which is supporting Lithium Americas.
Thacker Pass would be one of the largest lithium mines in the United States if completed, producing 30,000 tonnes of lithium.
Laura Granier, an attorney for Lithium Americas, argued that temporarily blocking the project would harm President Joe Biden's efforts to address climate change, including promoting a switch to cleaner electric vehicles which use lithium-based batteries.
Talasi Brooks, who represented the environmental groups, told Du that any excavation – even if small – could cause irreparable harm to the area's wildlife.
Rival projects from ioneer Ltd and Piedmont Lithium also face opposition.
(Reporting by Ernest Scheyder Editing by Marguerita Choy)
* 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%.
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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.
Vale S.A.’s VALE iron ore production for the second quarter of 2021 was 75.7 million tons (Mt), which came in 12% higher than the year-ago quarter and 11.3% higher than the first quarter of 2021. The company’s 2021 iron ore production guidance of 315-335 million tons remains unchanged, but the nickel and copper outlook are under review, as labor stoppages at the Sudbury mine in Ontario and a flood at Voisey's Bay in Labrador hurt output.
The sequential improvement in iron ore production in the quarter was aided by higher volumes from Brucutu, improvement of weather-related conditions in Serra Norte and a strong performance in Serra Leste. Increased productivity in Itabira Complex, higher third-party purchase and wet processing production in Fábrica during the tests to resume beneficiation plant operations contributed to the improvement as well. These gains were partially offset by the interferences caused by the installation and commissioning of the first of four jaspilite crushers in S11D.
Vale’s pellet production was up 13.3% year over year and 27.4% sequentially to 8 Mt in the second quarter. Second-quarter sales volume of iron ore fines and pellets was 74.9 Mt, up 22% year on year and 14% from the first quarter of 2021.
Production of nickel declined 15.3% year over year to 41.5 kt in the June-ended quarter. Compared to the first quarter of 2021, nickel production was down 14.3% due to labor disruption at Sudbury and unscheduled maintenance in Clydach Nickel Refinery. Copper production was 73.5 kt in the quarter, down 13% year over year and 4% down from the first quarter of 2021. The drop in production was due to labor disruption in Sudbury and delays in mining at Voisey’s Bay, partially mitigated by a more robust performance in Salobo owing to the ramp-up of mine maintenance activities and better performance at Sossego operations.
Cobalt production reached 754 metric tons in the quarter, up 34.2% from the prior-year quarter and up 6% from the first quarter of 2021. Manganese ore production totaled 113 kt in the April-June period, 24.2% lower than the prior-year quarter due to adjustments in the mining plan to ensure the safety and sustainability of underground operations at the Urucum mine. On a year-over-year basis, production was up 24.2% primarily due to the end of the rainy season and improved performance at the beneficiation plant in Morro da Mina.
Coal production was 2.1 Mt in the second quarter, up 63% from the prior-year quarter and 92% higher than the year-ago quarter. This was mainly due to improved productivity after the major plant revamp concluded last quarter. The revamp removed important bottlenecks in the processing plants by increasing equipment availability and productivity. Gold production was down 15.8% year over year to 96,000 troy ounces in second-quarter 2021. Compared to the first quarter, gold production was up 11.6%.
Among other developments, Vale has resumed loading activities at ship loader 6 at the Ponta da Madeira Maritime Terminal, in São Luís, Maranhão, after five months of maintenance due to a fire in the equipment. The maintenance of ship loader 6, which involved the substitution of over 60% of its components, did not impact Ponta da Madeira Maritime Terminal’s monthly iron ore shipment schedule for the year.
Vale’s iron ore production guidance for 2021 remains at 315 to 335 Mt. The company stated that it has achieved a production capacity of 330 Mtpy. If sustained, this would allow for an average of 1 Mt per day production in the second half of 2021, due to better weather conditions in the period. Citing uncertainties concerning the labor situation in Ontario, and the ramp-up of the safety and maintenance process implementation in Sossego and Salobo, the company has placed the guidance for nickel and copper for the year under review.
The company’s efforts to improve productivity, introducing more high-quality ore in the market and cutting costs will drive margins. Investment in growth projects and efforts to lower debt will aid growth. Vale will also gain on the rally in iron ore prices this year. Iron ore prices have gained around 40% so far this year and are currently trending at around $220 per ton, fueled by high demand from China amid concerns over supply from the major iron producers. While Vale’s production in the second quarter has improved year on year, it lagged expectations of 78 Mt.
Last week, Rio Tinto plc RIO reported a 9% drop in second-quarter iron ore production to 75.9 Mt due to above average rainfall in the West Pilbara, shutdowns to enable replacement mines to be tied in, processing plant availability and cultural heritage management. Iron ore shipments in the second quarter of 2021 declined 12% year over year to 76.3 Mt. Due to this underperformance, Rio Tinto now expects to ship near the lower end of its range of its previous guidance of 325 Mt to 340 Mt in 2021.
BHP Group’s BHP iron ore production was down 2% year over year to 65.2 Mt in the April-June quarter. On a sequential basis, production improved 9% primarily due to improved performance at Western Australia Iron Ore (WAIO). The company anticipates producing between 249-259 Mt of iron ore in fiscal 2022.
Price Performance
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Shares of Vale have surged 86.3% in a year compared with the industry’s rally of 92.7%.
Zacks Rank & Another Stock to Consider
Vale currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another top-ranked stock in the basic materials space is FreeportMcMoRan Inc. FCX. FreeportMcMoRan has a projected earnings growth rate of 475% for the current fiscal year. The company’s shares have soared 142% in the past year.
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BHP Group BHP released production details for the year ended Jun 30, 2021 and provided guidance for fiscal 2022. Total iron ore production rose 2% to 254 Mt (million tons) in fiscal 2021 courtesy of record production at Western Australia Iron Ore (WAIO). The company met production guidance for iron ore, copper, metallurgical coal, nickel and energy coal. Petroleum production for the 2021 financial year was slightly above guidance.
Production Highlights
In the April-June quarter, BHP’s iron ore production was down 2% year over year to 65.2 Mt. On a sequential basis, production, however, improved 9% primarily due to enhanced performance at WAIO. Brazilian miner, Vale S.A. VALE, reported its iron ore production for the second quarter of 2021 at 75.7 Mt, which came in 12% higher than the year-ago quarter and 11.3% higher than the first quarter of 2021. Last week, Rio Tinto plc RIO reported a 9% drop in second-quarter iron ore production to 75.9 Mt due to above average rainfall in the West Pilbara.
For the year ended Jun 30, 2021, BHP’s total iron ore production improved 2% year over year to a record 253.5 Mt, within the company’s provided guidance of 245 Mt to 255 Mt. WAIO production was up 1% to a record 252 Mt reflecting record production at Jimblebar and Mining Area C, which included first ore from South Flank in May 2021. This performance was impressive considering weather impact, temporary rail labor shortages due to COVID-19 related border restrictions and the planned Mining Area C and South Flank major tie-in activity. Strong operational performance across the supply chain reflected continued improvements in car dumper performance and reliability, and train cycle times.
Total petroleum production was 102.8 MMboe (million barrels of oil equivalent) for the period under review, down 6% year over year. Total copper production was down 5% year over year to 1,635.7 kt in fiscal 2020. Metallurgical coal production dipped 1% to 40.6 Mt, while energy coal production was 19.3 Mt, down 17% year over year. Nickel production was up 11% year over year to 89 kt.
Average realized prices for iron ore, copper and nickel in fiscal 2021 surged 69%, 52% and 17% respectively. Average realized prices for metallurgical coal declined 19%, while of thermal coal rose 2%. Average realized prices for oil (crude and condensate) and Natural gas were up 6% and 8%, respectively, while LNG prices slumped 22%.
Fiscal 2022 Production Guidance
In fiscal 2022, BHP expects to produce between 249 and 259 Mt of iron ore compared with 253.5 Mt produced in fiscal 2021 as WAIO continues to focus on incremental volume growth through productivity improvements. The company’s petroleum production guidance for fiscal 2022 is expected to be 99-106 MMboe. BHP anticipates copper production between 1,590 kt and 1,760 kt in fiscal 2022. Production guidance of Metallurgical coal for fiscal 2022 is at 39-44 Mt, while the same for energy coal is at 13-15 Mt. Nickel production for fiscal 2022 is now expected between 85 kt and 95 kt.
Development Projects on Track
During fiscal 2021, BHP successfully achieved first production at four major development projects, all of which were delivered either on or ahead of schedule and also within budget. The Atlantis Phase 3 petroleum project and the Spence Growth Option copper project achieved first production in the first half of the financial year. During the fiscal fourth quarter, the South Flank iron ore sustaining project in Western Australia, and the Ruby oil and gas project in Trinidad and Tobago achieved first production.
As of Jun 31, 2021, the company had two major projects under development in petroleum (Mad Dog Phase 2) and potash (Jansen mine shafts), with both of these on track. The Jansen Stage 1 project in Canada remains on track for a go or no-go decision in the next two months.
On 28 Jun, 2021, BHP announced that it had signed a Sale and Purchase Agreement with Glencore PLC GLNCY to divest its 33.3 per cent interest in Cerrejón, a non-operated energy coal joint venture in Colombia, for $294 million cash consideration. The transaction is expected to be completed in the second half of fiscal 2022.
BHP’s efforts to make operations more efficient through smart technology adoption across the entire value chain will continue to aid in reducing costs, thereby boosting margins. Focus on lowering debt will fuel growth.
Price Performance
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Over the last year, BHP’s shares have gained 35.7%, compared with the industry’s rally of 22.6%.
Zacks Rank
BHP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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(Bloomberg) — Brazilian mining giant Vale SA produced slightly less iron ore than expected last quarter because of teething problems at a new plant in a fresh blow to an already tight global market for the steelmaking ingredient.
The world’s second-largest iron producer churned out 75.7 million metric tons in the second quarter compared with the 78 million-ton average estimate among analysts tracked by Bloomberg. The result was still up from both the previous three months and the Covid-impacted year-ago period.
Vale’s ongoing recovery from an early-2019 dam disaster makes it a major swing factor in a market in which demand remains strong despite China’s efforts to curb emissions and contain commodity inflation. Vale’s ability and willingness to expand and take back the No. 1 producer title it lost to Rio Tinto Group will help determine whether the market moves back into surplus. Rio Tinto has said suppliers are struggling to meet demand.
While Vale is resolving a rail interruption at one of its complexes in southern Brazil, production was held back by disruptions cause by the installation of a crusher plant at its S11D complex in the country’s north. The Rio de Janeiro-based also said it had pushed back resumption dates at other operations due to slower-than-expected permitting and extra work to increase dam safety.
Vale’s ramp-up took a hit in early June when it was ordered to restrict operations at its Timbopeba complex amid concerns surrounding the stability of another dam. In the first quarter, the partial resumption of Timbopeba had helped push up Vale’s output.
Still, Timbopeba delivered a better performance thanks to the commissioning of the three additional wet-processing lines in March. The company said a driver-less train solution at the complex is performing well.
In Monday’s production report, Vale maintained its full-year guidance of 315 million to 335 million tons and said it achieved annual output capacity of 330 million tons. The company expects to reach 350 million tons capacity by year-end and 400 million tons by the end of 2022.
Still, quarterly iron ore sales lagged output, coming in at 67.2 million tons. Rio Tinto said last week that its shipments fell 2% on the previous quarter and flagged annual exports could come in at the low end of its forecast, partly because of rainier-than-normal weather. BHP Group reported a 12% increase in quarterly shipments.
Vale is also one of the world’s largest nickel producers and a major copper supplier. Production of both metals fell in the second quarter and Vale said it’s reviewing annual guidance amid a strike at one of its complexes in Canada.
The Brazilian miner is set to release earnings on July 28.
(Updates with iron sales and nickel production)
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For Immediate Release
Chicago, IL – July 19, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BHP Group BHP, Materion Corp. MTRN, Tronox Holdings plc TROX, MP Materials Corp. MP and Freeport-McMoRan Inc. FCX.
Here are highlights from Friday’s Analyst Blog:
U.S. Bulks Up Rare Earth Production: 5 Stocks to Track
According to the U.S. Geological Survey, China was responsible for 80% of rare earth imports in 2019. While the pandemic caused disruptions in the supply chain and exports fell short last year, China’s dominance over the rare earth market cannot be denied. After all, the country currently holds about 70% of the world’s known rare earth reserves.
The group of 17 elements is used in electric vehicles (EV), batteries, renewable energy systems and a wide range of electric appliances, ranging from smartphones, display panels, speakers, televisions and more. Cerium and neodymium are commonly used in smartphones, flat-screen TVs and LED lights as well as in F-35 fighter jets and missiles, radar and lasers by the U.S. Department of Defense. Elements like lanthanum are used in oil refining.
America is making an effort in upping its game in rare earth element production as several big trends are at play. President Joe Biden’s administration has massive investments planned in climate change technology, and rare earth elements are essential to this change. However, as the name suggests, these elements are not widely available, and extracting, processing and refining these elements entail several political and environmental issues.
Recently, Lynas Rare Earths Limited (LYSCF) received a $30-million grant from the U.S. government to open a new processing facility with Blue Line. The plant is one of the many rare earth production plants that Biden hopes to open in order to boost production and reduce reliance on China for the elements.
On Jul 13, the Senate Democrats reached an agreement on a $3.5-trillion budget plan that encompasses an expansion in Medicare, fund climate change initiatives and fulfill other parts of Biden’s economic agenda. The Democrats hope to pass this budget plan on top of a bipartisan infrastructure bill, which will surely aid the rare earth mining space.
As Biden plans to boost the EV market, supply-chain vulnerabilities might pose hindrances. In February, Biden ordered a federal review analysis of supply-chain vulnerabilities to make better investments in mines abroad and boost refining.
To address issues on groundwater and air pollution, as rare earth mining creates radioactive waste byproducts, the White House holds up an Initiative for Responsible Mining Assurance as a model for the mining industry. This model includes mining companies, unions and groups of advocates, and plans to create environmental and human rights principles for this industry.
In fact, it emphasizes getting prior and informed consent from Indigenous communities and local residents before mineral processing operations. Additionally, mining and processing companies have to arrange for the permanent disposal of toxic waste and build waste treatment facilities.
5 Stocks to Keep an Eye On
It may take America time to lower its reliance on China for rare earth elements but the new government funding will boost production which open up investment opportunities that investors should watch out for. Per a Valuates.com report, the global rare earth elements market size is projected to reach $3757.7 million by 2026, up from $2664.5 million in 2020, at a CAGR of 5.9%.
BHP Group engages in the exploration, development, and production of oil and gas properties, and also engages in mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 21.7% upward over the past 60 days. BHP Group currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Materion Corp produces PVD rare earth elements for modern technologies and supports most major OEM thin film deposition platforms. The company's expected earnings growth rate for the ongoing year is 57.1% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 1% upward over the past 60 days. Materion holds a Zacks Rank #2 (Buy), at present.
Tronox operates titanium-bearing mineral sand mines, and beneficiation and smelting operations. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Chemical – Diversified industry’s projected earnings growth of 27.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.7% upward over the past 60 days. Tronox presently carries a Zacks Rank #3 (Hold).
MP Materials engages in the ownership and operation of integrated rare-earth mining and processing facilities. This Zacks Rank #3 company's expected earnings growth rate for 2021 is 81.5% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 29% upward over the past 90 days.
Freeport-McMoRan engages in the mining of mineral properties. This Zacks Rank #3 company's estimated earnings growth rate for the ongoing year is more than 100% against the Zacks Mining – Non Ferrous industry’s projected earnings decline of 1.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 10.2% upward over the past 60 days.
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Newmont Corporation’s NEM board recently approved the advancement of the Ahafo North Project to the execution stage. The project, exceeding the required internal rate of return (“IRR”), will be bringing profitable production from the best un-mined gold deposit in West Africa.
The Ahafo North Project includes four open-pit mines and the setting up of a stand-alone mill. The construction is expected to complete in the second half of 2023. At the current gold prices, production from the mine is expected to deliver more than 30% IRR.
It will also lead to the creation of approximately 1,800 jobs, with more than 550 permanent roles. The company aims to focus on the key aspect of achieving gender parity in the workforce after the commencement of operations.
There have been considerable engagements with traditional leaders, local and regional government agencies and also public stakeholder engagement meetings by the company. Stakeholders have backed the project’s infrastructure plans and permits necessary to begin construction.
The company remains dedicated to maintaining its stakeholder interaction by providing regular updates as the project proceeds. This will strengthen its social acceptance.
The full scope of funding will be deployed to high-impact activities, including but not limited to tasks like finalizing engineering and EPCM services, relocating of the national highway and support of additional resettlement activities, constructing and commissioning a 3.7-million-ton per annum plant, constructing a Tailings and Wastewater Management Storage Facility, and long-lead sourcing including the acquisition of 14 CAT 770 haul trucks.
Newmont noted that the project will expand its existing footprint in Ghana and add more than three million ounces of gold production over the initial 13-year mine life. It is committed to sustainably develop and operate the project to add value to its stakeholders.
Shares of Newmont have declined 3.8% over a year against the industry’s rise of 26%. Its earnings growth rate for the current year is pegged at 25.6%.
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In its first-quarter earnings call, the company said that it expects attributable gold production of 6.5 million ounces, gold cost applicable to sales (CAS) to be $750 per ounce and all-in sustaining costs (AISC) to be $970 per ounce. It also foresees an increase in gold production and is undertaking investments in its operating assets and other growth prospects.
Newmont Corporation Price and Consensus
Newmont Corporation price-consensus-chart | Newmont Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Newmont carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Glencore PLC GLNCY and Rio Tinto Group RIO, both 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 82.9% over a year.
Rio Tinto has a projected earnings growth rate of 124.3% for the current year. The company’s shares have grown 32.6% over a year.
BHP has a projected earnings growth rate of 192.5% for the current year. The company’s shares have gained 38.8% over a year.
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These are the materials stocks with the best value, fastest growth, and most momentum for August 2021.
There's no doubt that money can be made by owning shares of unprofitable businesses. By way of example, Minbos Resources (ASX:MNB) has seen its share price rise 320% over the last year, delighting many shareholders. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.
In light of its strong share price run, we think now is a good time to investigate how risky Minbos Resources' cash burn is. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves.
View our latest analysis for Minbos Resources
When Might Minbos Resources Run Out Of Money?
A company's cash runway is calculated by dividing its cash hoard by its cash burn. In December 2020, Minbos Resources had AU$1.7m in cash, and was debt-free. Looking at the last year, the company burnt through AU$2.0m. So it had a cash runway of approximately 10 months from December 2020. To be frank, this kind of short runway puts us on edge, as it indicates the company must reduce its cash burn significantly, or else raise cash imminently. You can see how its cash balance has changed over time in the image below.
How Is Minbos Resources' Cash Burn Changing Over Time?
Because Minbos Resources isn't currently generating revenue, we consider it an early-stage business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Over the last year its cash burn actually increased by a very significant 72%. Oftentimes, increased cash burn simply means a company is accelerating its business development, but one should always be mindful that this causes the cash runway to shrink. Admittedly, we're a bit cautious of Minbos Resources due to its lack of significant operating revenues. So we'd generally prefer stocks from this list of stocks that have analysts forecasting growth.
How Hard Would It Be For Minbos Resources To Raise More Cash For Growth?
Given its cash burn trajectory, Minbos Resources shareholders should already be thinking about how easy it might be for it to raise further cash in the future. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.
Since it has a market capitalisation of AU$39m, Minbos Resources' AU$2.0m in cash burn equates to about 5.2% of its market value. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.
How Risky Is Minbos Resources' Cash Burn Situation?
On this analysis of Minbos Resources' cash burn, we think its cash burn relative to its market cap was reassuring, while its increasing cash burn has us a bit worried. We don't think its cash burn is particularly problematic, but after considering the range of factors in this article, we do think shareholders should be monitoring how it changes over time. Taking a deeper dive, we've spotted 5 warning signs for Minbos Resources you should be aware of, and 3 of them are concerning.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
According to the U.S. Geological Survey, China was responsible for 80% of rare earth imports in 2019. While the pandemic caused disruptions in the supply chain and exports fell short last year, China’s dominance over the rare earth market cannot be denied. After all, the country currently holds about 70% of the world’s known rare earth reserves.
The group of 17 elements is used in electric vehicles (EV), batteries, renewable energy systems and a wide range of electric appliances, ranging from smartphones, display panels, speakers, televisions and more. Cerium and neodymium are commonly used in smartphones, flat-screen TVs and LED lights as well as in F-35 fighter jets and missiles, radar and lasers by the U.S. Department of Defense. Elements like lanthanum are used in oil refining.
America is making an effort in upping its game in rare earth element production as several big trends are at play. President Joe Biden’s administration has massive investments planned in climate change technology, and rare earth elements are essential to this change. However, as the name suggests, these elements are not widely available, and extracting, processing and refining these elements entail several political and environmental issues.
Recently, Lynas Rare Earths Limited (LYSCF) received a $30-million grant from the U.S. government to open a new processing facility with Blue Line. The plant is one of the many rare earth production plants that Biden hopes to open in order to boost production and reduce reliance on China for the elements. On Jul 13, the Senate Democrats reached an agreement on a $3.5-trillion budget plan that encompasses an expansion in Medicare, fund climate change initiatives and fulfill other parts of Biden’s economic agenda. The Democrats hope to pass this budget plan on top of a bipartisan infrastructure bill, which will surely aid the rare earth mining space.
As Biden plans to boost the EV market, supply-chain vulnerabilities might pose hindrances. In February, Biden ordered a federal review analysis of supply-chain vulnerabilities to make better investments in mines abroad and boost refining. To address issues on groundwater and air pollution, as rare earth mining creates radioactive waste byproducts, the White House holds up an Initiative for Responsible Mining Assurance as a model for the mining industry. This model includes mining companies, unions and groups of advocates, and plans to create environmental and human rights principles for this industry. In fact, it emphasizes getting prior and informed consent from Indigenous communities and local residents before mineral processing operations. Additionally, mining and processing companies have to arrange for the permanent disposal of toxic waste and build waste treatment facilities.
5 Stocks to Keep an Eye on
It may take America time to lower its reliance on China for rare earth elements but the new government funding will boost production which open up investment opportunities that investors should watch out for. Per a Valuates.com report, the global rare earth elements market size is projected to reach $3757.7 million by 2026, up from $2664.5 million in 2020, at a CAGR of 5.9%.
BHP Group BHP engages in the exploration, development, and production of oil and gas properties, and also engages in mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 21.7% upward over the past 60 days. BHP Group currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Materion Corporation MTRN produces PVD rare earth elements for modern technologies and supports most major OEM thin film deposition platforms. The company's expected earnings growth rate for the ongoing year is 57.1% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 1% upward over the past 60 days. Materion holds a Zacks Rank #2 (Buy), at present.
Tronox Holdings plc TROX operates titanium-bearing mineral sand mines, and beneficiation and smelting operations. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Chemical – Diversified industry’s projected earnings growth of 27.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.7% upward over the past 60 days. Tronox presently carries a Zacks Rank #3 (Hold).
MP Materials Corp. MP engages in the ownership and operation of integrated rare-earth mining and processing facilities. This Zacks Rank #3 company's expected earnings growth rate for 2021 is 81.5% compared with the Zacks Mining – Miscellaneous industry’s projected earnings growth of 18.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 29% upward over the past 90 days.
Freeport-McMoRan Inc. FCX engages in the mining of mineral properties. This Zacks Rank #3 company's estimated earnings growth rate for the ongoing year is more than 100% against the Zacks Mining – Non Ferrous industry’s projected earnings decline of 1.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 10.2% upward over the past 60 days.
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It’s never easy to pick stocks to buy for the second half of a calendar year. That’s especially true when the markets are hotter than a pistol — which they are in 2021.
As of July 14, the S&P 500 was up 18.31% year-to-date (YTD). That’s an annualized return of almost 34%. Since 1928, the index has done better on just six occasions, the last being in 1995.
Ultimately, I want to give suggestions that can make money for readers over the long haul and not just the remaining five months of this year.
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With that in mind, a strategy based on 10 momentum stocks could backfire if the markets cool off in the second half. But on the other hand, if I go with 10 tried-and-true stocks and the markets stay hot, you’re likely to underperform relative to the index.
Therefore, I’ll try to have my cake and eat it too. These 10 stocks have high free cash flow (FCF) yields and are trading at or near the index’s YTD return:
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BHP Group (NYSE:BHP)
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ViacomCBS (NASDAQ:VIAC)
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Columbia Sportswear (NASDAQ:COLM)
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Nomad Foods (NYSE:NOMD)
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TechnipFMC (NYSE:FTI)
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Orix Corporation (NYSE:IX)
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Jazz Pharmaceuticals (NASDAQ:JAZZ)
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Masonite International (NYSE:DOOR)
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Paramount Group (NYSE:PGRE)
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Genpact (NYSE:G)
Stocks to Buy: BHP Group (BHP)
Source: Shutterstock
As with all my stock galleries, I try to provide sector diversification. I would like to load up on stocks in industries I enjoy, such as the consumer cyclical or consumer defensive sectors. But as my dad used to say — and he was generally an optimist — “Life is to be endured.” So, I endure by selecting a materials stock.
BHP Group is the world’s largest mining conglomerate. Based in Australia, it has a YTD return of 15% and an FCF yield of 5.6%. As for BHP stock’s rating, of the 15 analysts that cover it, nine rate it as either a buy or overweight. Only two rate it as underweight or an outright sell.
For the trailing 12 months (TTM) ended March 31, BHP had $46.3 billion in revenue. That’s higher than it’s been at any point in the past three years. Over the same period, the company has seen $16.6 billion in operating income.
I consider companies with FCF yields between 4% and 8% to be very attractive long-term investments.
ViacomCBS (VIAC)
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The media conglomerate’s stock has gathered speed in the past three months. In that time, VIAC shares have risen 4% in response to rumors that the company may be the subject of a bid by Comcast (NASDAQ:CMCSA).
The main attraction for Comcast would be ViacomCBS’ Paramount+ streaming service. The telecommunications company has its own streaming unit, Peacock, as part of its NBCUniversal media conglomerate. Combining both services would put Comcast in a good position to capture the coveted number-three spot in the lucrative streaming industry.
Paramount+ is adding several items to its streaming repertoire this summer. Most notably, the service will stream hundreds of live soccer-related events like the Men’s Concacaf World Cup Qualifiers.
Tom Ryan, president and chief executive officer of ViacomCBS Streaming, said, “The breadth and depth of premium feature films and exclusive series coming to the service further strengthens our position in the market as a premium entertainment destination and, by offering this compelling content portfolio at an all-new low cost, makes us even more accessible to a wide consumer audience.”
When you consider the boost Disney (NYSE:DIS) has gotten from Disney+, ViacomCBS executives have good reason to be excited.
Stocks to Buy: Columbia Sportswear (COLM)
Source: Ekaterina_Minaeva / Shutterstock.com
On average, the 12 analysts covering COLM stock rate it overweight with a 12-month target price of $127. That’s 28% upside at current prices.
In April, COLM stock hit its all-time high of $114.98. Up nearly 25% over the past year, CEO Timothy Boyle must be very happy with its run of late. Boyle’s shares are now worth $2.3 billion.
The board of directors could use a few more women — of the nine members, just two are female. It could also benefit from a few younger members, as the average director’s age is 68. But there’s no doubt that they are a group of very talented individuals.
Normally I’m not a fan of boards that are particularly ancient, especially when it comes to consumer-facing products such as apparel and footwear. But in Columbia’s case, the proof is in the pudding.
The company has managed to produce returns for shareholders in recent years. I see good things happening in the long term for investors in COLM stock.
Nomad Foods (NOMD)
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If you haven’t heard of Nomad, it’s the largest frozen food company in Europe. In the U.S., the company is the third-largest of its kind, with Nestle (OTCMKTS:NSRGY) and Conagra Brands (NYSE:CAG) in the top two spots.
In March, Nomad announced that it will acquire Fortenova’s frozen food business. The company’s Ledo and Frikom brands are well-known to consumers in Central and Eastern Europe. Nomad paid 615 million Euros ($726 million) for the frozen food group. That’s less than 10 times the group’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
Nomad’s Green Cuisine brand is Europe’s fastest-growing frozen meat-free brand. In 2020, its retail sales grew by 299%. That’s almost five times faster than Beyond Meat (NASDAQ:BYND), which saw 65% growth in the same timeframe.
Another reason to like Nomad is that Sir Martin Franklin owns 7.4% of its stock. Franklin is a company builder with a success rate matched by few others.
As for the analysts’ perspective, 10 cover NOMD stock, with nine rating it a buy and one rating it overweight. They list a median target price of $28.66. I think we’ll see a bunch of revisions for this stock in the next few months.
Nomad’s TTM FCF is $410.6 million. Based on a market cap of $4.9 billion, it has an FCF yield of 8.4%. I consider that to be value territory.
Stocks to Buy: TechnipFMC (FTI)
Source: abu emran / Shutterstock.com
If we were talking about weaknesses in stock coverage, the energy sector would be at the top of the list. I don’t see the point in covering businesses that probably won’t exist in a decade or two.
TechnipFMC was created during the January 2017 merger of FMC Technologies and Technip. The combination created a global leader in subsea and surface technologies. TechnipFMC also provides services to oil and gas exploration and production companies.
In the first quarter of 2021, the company’s subsea operations generated revenue of $1.39 billion, an 11% increase from last year. TechnipFMC’s subsea operations account for 85% of its overall revenue and has a backlog of $6.86 billion.
In 2021, the company expects to see revenue of at least $6.05 billion with an EBITDA margin in the low double digits.
In Q1, it had an FCF of $137 million. For the TTM ended March 31, its FCF was $620 million, implying an FCF yield of 18%.
I’m not a fan of energy stocks, but it’s hard not to notice FTI stock’s value at current prices.
Orix Corporation (IX)
Source: shutterstock.com/CC7
It’s always nice to be able to include a stock that I’ve previously recommended. In the case of Orix, I suggested investors take a look at the Japanese diversified financial services company in May 2020.
I recommended Orix partially because of its U.S. division, which has its hands in all kinds of financial pies. It manages more than $70 billion in assets.
Fast forward to today, and IX stock is up 48% over the past 14 months. Its momentum doesn’t look like it will slow in the second half of 2021.
I believe this despite the fact that fiscal 2021 wasn’t one of the company’s best years on record. On the top line, revenue grew by less than 1% to 2.293 trillion Japanese Yen ($20.7 billion). Its pre-tax income fell 30% to 287.5 billion Japanese Yen ($2.6 billion).
There are a lot of moving parts in Orix’s business. For example, Orix USA’s revenue was up 2% in 2021, but its segment profits fell 23%. The latter decline was primarily due to the sale of equity ownership in Houlihan Lokey (NYSE:HLI) in fiscal 2020.
I suggest you visit Orix’s various sites, including its investor relations page. It’s a diamond in the rough.
Stocks to Buy: Jazz Pharmaceuticals (JAZZ)
Source: Michael Vi / Shutterstock.com
If there’s one thing I like to see from most non-financial stocks, it’s strong free cash flow.
Jazz Pharmaceuticals, a developer of medicines for neuroscience and oncology-related treatments, has excellent FCF. In the trailing 12 months, it had $750 million in FCF and an FCF yield of 6.8%.
Many cannabis investors jumped on JAZZ stock after the company acquired GW Pharmaceuticals in May for $7.6 billion in cash and stock.
GW’s cannabis-based medication Epidiolex treats children with rare types of early-onset epilepsy. In 2020, revenue from Epidiolex grew by 73% to $511 million. This growth, in addition to the company’s sleep disorder medicine Xyrem, shows that Jazz has the makings of a major player in the drug development industry.
Of the 17 analysts covering JAZZ, 15 rate it a buy, one rates it overweight, and one rates it a hold. In their eyes, it’s a clear buy with a target price of $208.82.
Masonite International (DOOR)
Source: David Papazian / Shutterstock
It wouldn’t be a proper gallery from a Canadian writer if it didn’t have a Canadian company in its midst. Masonite, a Toronto-based manufacturer of doors, fits the bill nicely.
Masonite’s history dates back to 1925, but the Canadian connection didn’t happen until 1999. That’s when Premdor Inc. entered into a strategic alliance with Masonite Corp., then owned by International Paper (NYSE:IP). A year later, Premdor acquired Masonite from IP for $523 million. Once the acquisition closed, the Premdor name was replaced with Masonite.
Masonite had sales of $301 million in 1999. In 2020, they were $2.26 billion with a TTM FCF of $230 million and an FCF yield of 8.5%.
As for Masonite’s business, it generates 73% of its sales from the North American residential market. Europe accounts for another 11% of sales, and its architectural business is responsible for the rest.
It is one of only two vertically integrated residential interior door manufacturers in North America. New residential construction accounts for 45% of its North American sales, while the renovation market accounts for the remaining 55%.
The company is continuing to grow its margins. In 2015, its adjusted EBITDA margin was 10.9%. Today, it’s over 16%. That’s how you grow free cash flow.
Stocks to Buy: Paramount Group (PGRE)
Source: ImageFlow/shutterstock.com
Paramount Group is a real estate investment trust (REIT) focused on owning the best assets in the best markets and providing top-notch service for tenants.
Founded in 1978, it owns properties in New York, San Francisco and Washington, D.C. Its 19 assets are valued at approximately $13.5 billion. These properties cover 13.9 million square feet of leasable space and generate $358 million in annualized cash net operating income.
New York City accounts for 70% of the REIT’s gross asset value and 62% of its leasable square feet.
While the REIT’s office real estate accounts for a concerning 96% of its revenue, the quality of its properties enables it to charge top dollar rents compared to its peers. Further, none of its largest tenants accounts for more than 4.5% of its annual rent. Most importantly, 32% of its leases will not expire until 2031 or thereafter.
Despite Covid-19 affecting its business, Q1 2021 saw the REIT deliver $50.6 million in core funds from operations. That was down from $61.5 million a year ago, but still very positive. As re-openings accelerate, its earnings will too.
Genpact (G)
Source: Shutterstock
Genpact helps Global Fortune 500 companies transform their digital operations to deliver a world that works better for people.
In the first quarter, all Genpact’s financial metrics exceeded expectations. Revenues grew 1%, excluding currency, to $946 million while adjusted earnings per share rose 11% to 59 cents.
For all of 2021, Genpact expects revenue of at least $3.93 billion, 5% higher than last year, with an adjusted EPS of $2.27.
A real-world example of Genpact’s work is its partnership with Envision Virgin Racing, a Formula E racing team. The partnership aims to make the team’s electric vehicles as efficient as possible during Formula E races.
“Genpact’s technology helps Envision Virgin Racing do this with data analytics and augmented intelligence — the combination of machine-generated insights and human know-how, context, and experience — that engineers, drivers, and pit crew rely on during races to make quick decisions and shift strategies,” Fast Company reported on July 12.
Now, multiply this by hundreds of companies across many different industries, and you have the makings of a successful business services provider.
Genpact currently has an FCF yield of 6.7%, which can provide investors with an excellent entry point.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
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Rio Tinto plc’s (RIO) iron ore shipments in the second quarter of 2021 declined 12% year over year to 76.3 million tons (Mt) as storms affected its West Australian operations. This takes total iron ore shipped by the company to 154.1 Mt for the first half of 2021, which reflects a 3% drop year over year. Iron production in the first half of 2021 came in 5% lower than the prior year, due to weather and labor constraints. Both shipments and production reported by the company in the first half of 2021 marks its weakest performance since 2015.
Iron ore production in the second quarter was down 9% year over year to 75.9 Mt. The company stated that the shortfall was due to above average rainfall in the West Pilbara, shutdowns to enable replacement mines to be tied in, processing plant availability and cultural heritage management. In the first quarter, the company’s iron production dipped 2% to 76.4 Mt on account of above average wet weather in the mines through February, and fixed plant reliability and labor resource availability. Ongoing travel restrictions due to COVID-19 and a tight labor market in Western Australia have been impacting the company’s ability to access experienced contractors and particular skill sets. Overall, in the first half of 2021, the company has produced 152.3 Mt of iron ore, which is 5% lower than the prior year comparable period.
Rio Tinto raised its iron ore production cost guidance for 2021 citing higher input costs (diesel and labor), costs related to mine heritage management as well as COVID-19 related expenses. The company has so far incurred around $100 million of COVID-19 related costs.
Due to this underperformance, Rio Tinto now expects to ship near the lower end of its range of its previous guidance of 325 Mt to 340 Mt in 2021. The company stated that the guidance remains subject to weather conditions, tie-in and ramp up of brownfield replacement mines, and ongoing cultural heritage management. The labor constraints also persist and will continue to impact operations. Brazilian miner Vale S.A VALE had reported a 14.2% year-over-year increase in its first quarter 2021 iron ore production to 68 Mt courtesy of the company’s ongoing operational stabilization and resumption plan. It is set to release its second-quarter production report on Jul 19, 2021. The company’s iron ore production guidance for 2021 is in the range of 315 Mt to 335 Mt. Meanwhile, BHP Group BHP anticipates producing between 245 Mt and 255 Mt of iron ore in fiscal 2021.
These companies will benefit from higher iron ore prices this year. Iron ore prices have gained around 40% so far this year and are currently trending above $220 per ton. Prices had hit a record high of $232 on May 12 on declining stockpiles and concerns over supply. Meanwhile, iron ore demand from China is benefiting from rise in infrastructure spending and renewed vigor in manufacturing activity. Despite the China government’s efforts to curb steel output to reduce carbon emissions, demand for iron ore showed resilience as mills that were not subject to output curbs continued to ramp up production. Healthy profit margins buoyed by higher demand and a rally in steel prices have led to a rise in production.
The World Steel Association projects steel demand to grow 5.8% in 2021 and reach 1,874 Mt. China's steel demand is expected to improve 3% this year. Further, the ongoing recovery in automotive and constructions sectors across the world will drive demand for steel and thereby for iron ore. In the United States, massive government spending to rebuild infrastructure including railroads, highways and bridges will significantly boost steel demand, thus fueling the requirement of more iron ore.
Image Source: Zacks Investment Research
In the past year, shares of Rio Tinto have gained 38.8%, compared with the industry’s rally of 31.2%.
Rio Tinto currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Another top-ranked stock in the basic materials space is Nucor Corporation NUE which flaunts a Zacks Rank #1.
Nucor has a projected earnings growth rate of 259.9% for the current year. The company’s shares have soared around 131% over the past year.
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Rio Tinto PLC (RIO) : Free Stock Analysis Report
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(Adds BHP, Vale comments, photo)
By Carolina Mandl
SAO PAULO, July 16 (Reuters) – Creditors of bankrupt miner Samarco Mineracao SA, a joint venture between Vale SA and BHP Group Plc, objected to the company's restructuring plan on Thursday, according to a court document.
Creditors said the plan's main goal is to protect Samarco's giant shareholders, Vale and BHP, and reduce future payments to creditors.
They also rejected Samarco's offer to apply an 85% haircut to all creditors, including shareholders Vale and BHP, which extended 24 billion reais in loans to the company. Debt payments to creditors would occur in 2041.
Creditors said both Vale and BHP, as shareholders, should be paid only after all other creditors fully recover their money. They also questioned if both giant companies should recover any value as creditors consider that both miners are co-debtors.
They also refused Samarco's offer to swap their debt for shares in the company.
"It is unacceptable that a restructuring plan of a company controlled by the world's biggest miners outlines an outright (and illegal) debt forgiveness to create value for its multimillionaire shareholders, which are also responsible for Brazil's biggest environmental disaster," creditors said in the court document.
They referred to the collapse of a dam at the Samarco mine complex in 2015 that killed 19 people, severely polluted the Doce River with mining waste and led the company into financial trouble.
Creditors have proposed Samarco, Vale and BHP pay in three equal parts for all damage caused by the rupture of the dam, creditors lawyers Paulo Padis and Marcos Pitanga said in an interview. That contrasts with Samarco's restructuring plan, which proposes the company pay for the damage entirely.
Creditors and Samarco have recently signed confidentiality agreements to start negotiations.
Samarco and Vale said in separate statements that the proposed restructuring plan takes into consideration the company's financials and aims at keeping payments to repair damage caused by the disaster.
BHP said loans extended to Samarco to allow its continuity in the last five years were at terms similar to credit lines taken by the miner before the disaster.
Samarco added creditors have not presented any alternative plan so far.
(Reporting by Carolina Mandl; Editing by Nick Macfie and Steve Orlofsky)
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of BHP Group (ASX:BHP) stock is up an impressive 169% over the last five years. We note the stock price is up 4.8% in the last seven days.
See our latest analysis for BHP Group
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last half decade, BHP Group became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the BHP Group share price is up 58% in the last three years. During the same period, EPS grew by 14% each year. This EPS growth is reasonably close to the 16% average annual increase in the share price (over three years, again). So one might argue that investor sentiment towards the stock hss not changed much over time. Rather, the share price has approximately tracked EPS growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on BHP Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of BHP Group, it has a TSR of 253% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
We're pleased to report that BHP Group shareholders have received a total shareholder return of 43% over one year. That's including the dividend. That's better than the annualised return of 29% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for BHP Group you should be aware of, and 1 of them is a bit unpleasant.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
MELBOURNE (Reuters) -Rio Tinto reported a 12% fall in quarterly iron ore shipments on Friday after storms affected its West Australian operations, but is expected to report bumper results this month on soaring prices for the steel raw material.
Rio said it now expects to ship near the lower end of its range of 325 million tonnes (mt) and 340 mt in calendar 2021, meaning it may hand back its crown as the world's biggest producer to Brazilian rival Vale S.A..
Vale, which reports output later this month, is on track to meet the upper end of its 2021 guidance of 315-335 mt, according to UBS.
Rio shipped 76.3 million tonnes (mt) of the steel-making commodity for the three months ended June 30, down from 86.7 mt a year ago, just ahead of a UBS estimate of 76 mt.
"We would have liked to have seen higher production to capitalise on these iron ore prices. Still, they are going to be swimming in cash at results time," said analyst David Lennox at Fat Prophets in Sydney.
"Hopefully we will get a good dividend and we are looking for a share buyback as well."
Iron ore prices surged to records above $230 a tonne in May thanks to a post-COVID infrastructure drive by China.
Rio is expected to post half-year underlying earnings of $10.9 billion on July 28 according to a Vuma consensus of 14 analysts, more than double the $4.75 billion it reported for the same period last year.
Rio on Friday also raised its full-year iron ore production cost guidance due to increased labour and input costs.
The miner expects unit costs of $18.00-$18.50 per tonne for the year, up from its previous estimate of $16.70-$17.70 per tonne, even as prices it received for iron ore doubled to $168.40 a dry metric tonne free on board for the first half.
Miners have been facing labour shortages as Australia has shut international borders and snap closed state borders.
Rio also said it delayed commissioning at its new Gudai-Darri iron ore hub to later this year and first production from its Winu copper find in Australia to 2025 from original estimates of 2023, partly due to COVID restrictions.
It lowered 2021 production by 2 Mt due to new strategies to protect Aboriginal areas of high cultural significance as it seeks to repair relations with Aboriginal groups following its destruction of rock shelters at Juukan Gorge last year.
(Reporting by Melanie Burton in Melbourne and Sameer Manekar and Anushka Trivedi in Bengaluru; Editing by Krishna Chandra Eluri and Richard Pullin)
MELBOURNE, Australia, July 15, 2021–(BUSINESS WIRE)–Rio Tinto Chief Executive Jakob Stausholm, said: "The global economy, in particular China, recovered strongly and we are intensely focused on servicing our customers with as much product as we can. However, we faced some challenges in the first half notably at our Pilbara operations, which were impacted by replacement mine tie-ins and materially higher rainfall. Heightened COVID-19 constraints, which resulted in numerous travel restrictions, added further pressure on the business and limited our ability to access additional people, particularly in Western Australia and Mongolia, in order to deliver operational improvements or maintenance initiatives and accelerate projects.
"Safety is our first priority and our performance in this area remains robust in challenging conditions. However, as identified shortly after my appointment, operationally we are not where we want to be. Our first half performance has reaffirmed my belief that we have identified the right priorities to strengthen the business: to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence. We have made initial progress against our priorities, but a large volume of work remains to make Rio Tinto even stronger, so we can continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society."
|
Production* |
Quarter 2 |
vs Q2 |
vs Q1 |
H1 |
vs HY |
||||
|
Pilbara iron ore shipments (100% basis) (Mt) |
76.3 |
-12% |
-2% |
154.1 |
-3% |
||||
|
Pilbara iron ore production (100% basis) (Mt) |
75.9 |
-9% |
-1% |
152.3 |
-5% |
||||
|
Bauxite (Mt) |
13.7 |
-6% |
+1% |
27.3 |
-4% |
||||
|
Aluminium (kt) |
816 |
+4% |
+2% |
1,619 |
+3% |
||||
|
Mined copper (kt) |
115.5 |
-13% |
-4% |
236.1 |
-11% |
||||
|
Titanium dioxide slag (kt) |
298 |
+14% |
+7% |
577 |
+4% |
||||
|
IOC iron ore pellets & concentrate (Mt) |
2.7 |
-2% |
+16% |
5.1 |
-5% |
||||
|
*Rio Tinto share unless otherwise stated |
|||||||||
Q2 Operational update
-
Our colleague Nico Swart was tragically killed in a shooting incident whilst driving to work at Richards Bay Minerals (RBM) in South Africa on 24 May. Our sympathies are with Nico's family and we are offering ongoing support to his family, friends and colleagues.
-
We continue to prioritise the safety of our people and communities as some regions experience a resurgence of COVID-19. We have exceeded 30 months without a fatality on site but our all injury frequency rate (AIFR) of 0.39 has seen a slight increase versus the second quarter of 2020 (0.37), and prior quarter (0.35), which underlines that there is no room for complacency.
-
We expect iron ore shipments to be at the low end of the guidance range which remains subject to COVID-19 disruptions, tie-in and ramp up of brownfield replacement mines and management of cultural heritage. Mined copper and bauxite production is expected to be at the low end of the guidance range. Full year titanium dioxide slag production guidance has been removed as a result of risks around the timing of resumption of operations at RBM in South Africa, due to an escalation in the security situation. We are working with the local and federal governments and police to ensure we can safely resume operations.
-
Pilbara iron ore production of 75.9 million tonnes (100% basis) was 9% lower than the second quarter of 2020 due to above average rainfall in the West Pilbara, shutdowns to enable replacement mines to be tied in, processing plant availability, and cultural heritage management. Shipments of 76.3 million tonnes (100% basis) were 12% lower than the second quarter of 2020 with some additional drawdown of inventories. Ongoing COVID-19 restrictions and a tight labour market have further impacted our ability to access experienced contractors and particular skill sets.
-
Bauxite production of 13.7 million tonnes was 6% lower than the second quarter of 2020 due to ongoing system instability following severe wet weather in Eastern Australia in the first quarter.
-
Aluminium production of 0.8 million tonnes was 4% higher than the second quarter of 2020, underpinned by the ISAL smelter in Iceland and the Becancour smelter in Quebec operating at full capacity, and the Kitimat smelter in British Columbia nearing completion of its pot relining cycle.
-
Mined copper production of 115.5 thousand tonnes was 13% lower than the second quarter of 2020, with lower recoveries and throughput at Escondida as a result of the prolonged impact of COVID-19, and a planned relocation of the in-pit crusher at Kennecott in April. On 31 May, an anticipated slope failure occurred in the south east wall of the Bingham Canyon pit at Kennecott. There were no injuries or damage to equipment as the slide was accurately predicted by our geotechnical experts. Mining in the affected area restarted progressively in June. No ore has been sterilised and we expect to recover the material from the slide which is largely copper bearing ore. Mining rates will however be slower due to the size distribution of the material, and therefore some high-grade production scheduled for late 2021 will be deferred to 2022.
-
Titanium dioxide slag production of 298 thousand tonnes was 14% higher than the second quarter of 2020 due to consistent production at the Fer et Titane (RTFT) metallurgical complex in Quebec. Following weeks of violent disruptions, our RBM operations have been significantly hampered. As a result, we have declared force majeure, with all operations curtailed.
-
Production of pellets and concentrate at Iron Ore Company of Canada (IOC) was 2% lower than the second quarter of 2020 due to labour and equipment availability issues impacting product feed. Force majeure declared in April following the fire at the port has been lifted.
-
On 17 June, Peter Cunningham was appointed as Chief Financial Officer with immediate effect. Peter also joined the Rio Tinto Board as an executive director at the same time. On 7 July, we announced the appointment of Isabelle Deschamps who will join on 25 October as Chief Legal Officer & External Affairs, succeeding Barbara Levi.
-
On 4 June, we announced the appointment of Ben Wyatt as a non-executive director of the Rio Tinto Board. Mr Wyatt, an Australian citizen, and former Treasurer and Aboriginal Affairs Minister in the Western Australian Government, will join the Board on 1 September 2021.
-
In the second quarter, we entered into four partnerships to progress our work to decarbonise our value chain. These include one with the Australian Renewable Energy Agency (ARENA) to study whether hydrogen can replace natural gas in alumina refineries to reduce emissions, and one with POSCO to jointly explore, develop and demonstrate technologies to transition to a low-carbon emission steel value chain.
The full second quarter production results are available here.
This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.
LEI: 213800YOEO5OQ72G2R82
Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State
View source version on businesswire.com: https://www.businesswire.com/news/home/20210715006088/en/
Contacts
Contacts
Please direct all enquiries to media.enquiries@riotinto.com
Media Relations, UK
Illtud Harri
M +44 7920 503 600
David Outhwaite
M +44 7787 597 493
Media Relations, Americas
Matthew Klar
T +1 514 608 4429
Media Relations, Australia
Jonathan Rose
M +61 447 028 913
Matt Chambers
M +61 433 525 739
Jesse Riseborough
M +61 436 653 412
Investor Relations, UK
Menno Sanderse
M: +44 7825 195 178
David Ovington
M +44 7920 010 978
Clare Peever
M +44 7788 967 877
Investor Relations, Australia
Natalie Worley
M +61 409 210 462
Amar Jambaa
M +61 472 865 948
Rio Tinto plc
6 St James’s Square
London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England
No. 719885
Rio Tinto Limited
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Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404
riotinto.com
Category: General
For Immediate Release
Chicago, IL – July 15, 2021 – Today, Zacks Equity Research discusses Fertilizer including Nutrien Ltd. NTR, Yara International ASA YARIY, The Mosaic Company MOS and CF Industries Holdings, Inc. CF.
Link: https://www.zacks.com/commentary/1761229/4-top-stocks-to-watch-from-the-prospering-fertilizer-industry
The Zacks Fertilizers industry is riding on strong demand and pricing fundamentals for major crop nutrients including phosphate and potash. The underlying strength of the agricultural market, a rally in crop commodity prices and healthy farm economics are spurring demand for fertilizers globally.
Industry players like Nutrien, Yara International, The Mosaic Co. and CF Industries are poised to gain from higher demand for fertilizers in the major markets. Factors like healthy farm income and expectations of increased planted acres are expected to drive demand globally in the near term.
About the Industry
The Zacks Fertilizers industry comprises producers, distributors and marketers of crop nutrients for the global agriculture industry. Companies in this space offer nutrients such as phosphates (including diammonium phosphate, monoammonium phosphate and phosphoric acid), potash and nitrogen (including urea, ammonia and urea ammonium nitrate) fertilizers. They also provide other nitrogen products to help farmers maximize crop yield.
Crop nutrients are essential to drive agricultural productivity and boost soil's natural fertility. Demand for these nutrients is being supported by the need to grow the production of grains to address rising food consumption globally. Moreover, the constant need of growers to nourish their crops, replenish nutrients in the soil following a harvest and boost yields to feed a growing global population drives the consumption of fertilizers.
What's Shaping the Future of the Fertilizers Industry
Strong Demand and Pricing for Nutrients: The companies in the fertilizers space are well placed to benefit from strong global demand and prices for major crop nutrients. Demand for fertilizers in the United States is likely to be fueled by solid farm profits and higher planted acreage. Strong farmer economics are also expected to support demand in major markets such as Brazil and India. Phosphate markets are likely to remain robust in the near term on solid demand and pricing dynamics.
Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices and low global inventory levels. Demand for nitrogen fertilizer also remains healthy in major markets.
Global nitrogen requirement is being driven by demand in North America, India and Brazil. Healthy corn acres in the United States are expected to spur up nitrogen demand in North America. Moreover, demand for urea imports into Brazil and India remains favorable. Lower global supply availability and a spike in energy prices are also likely to boost nitrogen prices.
Agricultural Fundamentals Remain Strong: While the coronavirus pandemic stung a vast spectrum of industries, agriculture was left unscathed given the sustained rise in food demand globally. Moreover, strong global demand and tightened supply provided a boost to crop commodity prices.
Prices of corn and soybean have rallied to multi-year highs. Higher agricultural commodity prices augur well for crop nutrient demand over the near term. Expectations of higher planted corn and soybean acres globally this year on the back of higher crop prices also suggest a pickup in fertilizer demand.
Healthy Farm Economics: Farm economics have strengthened in the United States on the back of government support and a spike in crop commodity prices. Per the U.S. Department of Agriculture ("USDA"), net farm income is projected to be $111.4 billion in 2021.
While net farm income is forecast to decline 8.1% from the 2020 level due to lower federal payments to farmers, it would still be 21% higher than its 2000-19 average, based on USDA projections. It is worth noting that farm profits surged to their highest level in seven years in 2020 on the back of record levels of federal payments in the wake of the pandemic.
Notwithstanding the expected year-over-year decline, solid farm income backed by higher agricultural commodity prices is likely to drive farmers' spending on crop nutrients this year.
Zacks Industry Rank Reflects Upbeat Prospects
The Zacks Fertilizers industry is part of the broader Zacks Basic Materials sector. It carries a Zacks Industry Rank #61, which places it at the top 24% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates a bright near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.
Industry Tops Sector & S&P 500
The Zacks Fertilizers industry has outperformed both the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.
The industry has gained 76.4% over this period compared with the S&P 500's rise of 37.5% and the broader sector's increase of 36.4%.
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing fertilizer stocks, the industry is currently trading at 14.01X compared with the S&P 500's 18X and the sector's 8.3X.
In the past five years, the industry has traded as high as 21.98X and as low as 6.04X, with a median of 12.67X.
4 Fertilizer Stocks to Keep a Close Eye On
Nutrien: This Canada-based company is a leading provider of crop inputs and services. The company should benefit from solid demand and higher prices for fertilizers, especially potash. It is expected to gain from strong potash sales volumes this year on the back of solid domestic and overseas demand.
Nutrien is also well placed to gain from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to expand its footprint in Brazil through acquisitions, including Tec Agro.
Nutrien currently sports a Zacks Rank #1 (Strong Buy). It has expected earnings growth of 105.6% for the current year. The Zacks Consensus Estimate for current-year earnings has moved up 16.7% in the past 60 days. The stock has also rallied around 83% over the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
Yara International: The Norway-based company is a leading supplier of mineral fertilizers with particular strength in nitrogen-based fertilizers. It should benefit from the strength in the nitrogen fertilizer market. Rising nitrogen prices are expected to lend support to its margins. Yara should also gain from a recovery in its industrial business on the back of a rebound in demand.
The company, carrying a Zacks Rank #3 (Hold), has expected earnings growth of 44.8% for the current year. The consensus estimate for earnings for the current year has been revised 13.8% upward over the last 60 days. The stock has also gained roughly 47% over the past year.
Mosaic: The Florida-based company is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. The company is well positioned to leverage increasing global demand for fertilizers and higher realized prices in its businesses.
It is also taking measures to cut costs in a still-challenging operating environment. Its actions to improve the operating cost structure through transformation plans are expected to boost profitability. Transformational savings are also expected to drive margins in its Mosaic Fertilizantes segment.
Mosaic, carrying a Zacks Rank #3, has expected earnings growth of 280% for the current year. The Zacks Consensus Estimate for current-year earnings for the company has moved up 1.9% in the past 60 days. The stock has also rallied around 133% over the past year.
CF Industries: The Illinois-based company is a leading global manufacturer of nitrogen and hydrogen products for fertilizer, clean energy, emissions abatement and other industrial applications. The company should benefit from higher nitrogen fertilizer demand in major markets. Higher nitrogen prices are also expected to support the company's bottom line. CF Industries also remains committed to boost shareholders' value by leveraging strong cash flows.
The company, carrying a Zacks Rank #3, has expected earnings growth of 168% for the current year. The consensus estimate for the current year has been revised 30% upward over the last 60 days. The stock has also gained around 62% over a year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
The Mosaic Company (MOS) : Free Stock Analysis Report
Yara International ASA (YARIY) : Free Stock Analysis Report
Nutrien Ltd. (NTR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
-
Shares of Wells Fargo & Co. WFC advanced nearly 4% after the company delivered second-quarter 2021 adjusted earnings per share of $1.38, beating the Zacks Consensus Estimate of $0.95.
-
Apple Inc.’s AAPL shares rose 2.4% following news report that the company is asking its suppliers to increase production of its next-generation iPhones this year by about 20% and build around 90 million units.
-
Microsoft Corp.’s MSFT shares gained 0.5% after the company said that it is going to offer its Windows operating system as a cloud-based service via Windows 365.
-
Compass Minerals International, Inc.’s CMP shares popped 13.2% after the company said that it has identified a lithium brine resource of around 2.4 million metric tons lithium carbonate equivalent.
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Wells Fargo & Company (WFC) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Compass Minerals International, Inc. (CMP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today:
Intrepid Potash, Inc. IPI: This producer and seller of potash and langbeinite products has seen the Zacks Consensus Estimate for its current year earnings increasing 96.5% over the last 60 days.
Intrepid Potash, Inc Price and Consensus
Intrepid Potash, Inc price-consensus-chart | Intrepid Potash, Inc Quote
Dow Inc. DOW: This material science company has seen the Zacks Consensus Estimate for its current year earnings increasing 23.7% over the last 60 days.
Dow Inc. Price and Consensus
Dow Inc. price-consensus-chart | Dow Inc. Quote
Vista Outdoor Inc. VSTO: This designer and manufacturer of consumer products in the outdoor sports and recreation markets has seen the Zacks Consensus Estimate for its current year earnings increasing 4.4% over the last 60 days.
Vista Outdoor Inc. Price and Consensus
Vista Outdoor Inc. price-consensus-chart | Vista Outdoor Inc. Quote
Bassett Furniture Industries, Incorporated BSET: This manufacturer and marketer of high quality, mid-priced home furnishings has seen the Zacks Consensus Estimate for its current year earnings increasing 19.2% over the last 60 days.
Bassett Furniture Industries, Incorporated Price and Consensus
Bassett Furniture Industries, Incorporated price-consensus-chart | Bassett Furniture Industries, Incorporated Quote
360 DigiTech, Inc. QFIN: This digital consumer finance platform under the 360 Jietiao brand in China has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days.
360 DigiTech, Inc. Sponsored ADR Price and Consensus
360 DigiTech, Inc. Sponsored ADR price-consensus-chart | 360 DigiTech, Inc. Sponsored ADR Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Here are four stocks with buy rank and strong momentum characteristics for investors to consider today, July 15th:
Intrepid Potash, Inc. IPI: This producer and seller of potash and langbeinite products has a Zacks Rank #1 (Strong Buy) and witnessed the Zacks Consensus Estimate for its current year earnings increasing 96.5% over the last 60 days.
Intrepid Potash, Inc Price and Consensus
Intrepid Potash, Inc price-consensus-chart | Intrepid Potash, Inc Quote
Intrepid Potash’s shares gained 11.2% over the last one month compared with the S&P 500’s growth of 3.6%. The company possesses a Momentum Score of A.
Intrepid Potash, Inc Price
Intrepid Potash, Inc price | Intrepid Potash, Inc Quote
L Brands, Inc. LB: This retailer of home fragrance products, body care products, soaps and sanitizers, women's intimate and other apparel, and personal and beauty care products has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 11.2% over the last 60 days.
L Brands, Inc. Price and Consensus
L Brands, Inc. price-consensus-chart | L Brands, Inc. Quote
L Brands’ shares gained 13.5% over the last one month. The company possesses a Momentum Score of B.
L Brands, Inc. Price
L Brands, Inc. price | L Brands, Inc. Quote
Atento S.A. ATTO: This company that provides customer relationship management, and business process outsourcing services and solutions has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 50% over the last 60 days.
Atento S.A. Price and Consensus
Atento S.A. price-consensus-chart | Atento S.A. Quote
Atento’s shares gained 24.2% over the last one month. The company possesses a Momentum Score of B.
Atento S.A. Price
Atento S.A. price | Atento S.A. Quote
Hibbett, Inc. HIBB: This retailer of athletic-inspired fashion products has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 79% over the last 60 days.
Hibbett, Inc. Price and Consensus
Hibbett, Inc. price-consensus-chart | Hibbett, Inc. Quote
Hibbett’s shares gained 23.7% over the last one month. The company possesses a Momentum Score of A.
Hibbett, Inc. Price
Hibbett, Inc. price | Hibbett, Inc. Quote
See the full list of top ranked stocks here
Learn more about the Momentum score and how it is calculated here.
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SAO PAULO, July 15 (Reuters) – Creditors in bankrupt miner Samarco Mineracao SA, a joint venture between Vale SA and BHP Group PLC, made on Thursday an objection to the company's restructuring plan, according to a court document.
Creditors said the plan's main goal is to protect Samarco's giant shareholders, Vale and BHP, and reduce future payments to creditors.
They also rejected Samarco's offer to apply an 85% haircut to all creditors, including shareholders Vale and BHP, which extended 24 billion reais in loans to the company. Payments would occur in 2041.
Creditors said both Vale and BHP, as shareholders, should be paid only after all other creditors fully recover their money. They also questioned if both giant companies should recover any value as creditors consider that both miners are co-debtors.
They also refused Samarco's offer to swap their debt into shares in the company.
"It is unacceptable that a restructuring plan of a company controlled by the world's biggest miners outline a outright (and illegal) debt forgiveness to create value for its multimillionaire shareholders, which are also responsible for Brazil's biggest environmental disaster," creditors said in the court document.
The collapse of a dam at the Samarco mine complex in 2015 killed 19 people, severely polluted the Doce River with mining waste and led the company to financial trouble.
Creditors have proposed Samarco, Vale and BHP pay in three equal parts for all damages caused by the rupture of the dam, creditors lawyers Paulo Padis and Marcos Pitanga said in an interview. That contrasts with Samarco's restructuring plan, which proposes the company pay for damages entirely.
(Reporting by Carolina Mandl; Editing by Sam Holmes)
VANCOUVER, British Columbia, July 15, 2021 (GLOBE NEWSWIRE) — Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) (“Search” or the “Company”) is pleased to provide an update on its 7000m drilling program at DEEP FOX, located in our Port Hope Simpson – St. Lewis Critical Rare Earth Elements (CREE) District in SE Labrador, which begun in June 2021.
DEEP FOX DRILL PROGRAM UPDATE
The drill program commenced June 2, 2021, with our expectation of 7000m of drilling and completion of between 40-45 drill holes.
-
Drilling program objectives:
-
extend the current resource (see Search Minerals News Release, Oct. 1, 2019) to the 200m level with a 50m x 50m grid;
-
drill on a 25 x 25m grid to the 50m level;
-
drill two cross-sections (25m spacing) to the 200m level; and
-
explore to the 250m level.
-
-
Drilling program progress:
-
completed 3900 m of drilling and 28 drill holes;
-
shipped 1260 samples for assay.
-
-
Remaining timeline:
-
complete the 7000m program near September 1, 2021
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HQ geotechnical drill program will consist of 8-10 holes, 1800-2000m, and commence after the completion of DEEP FOX drill program (early September)
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complete assay results should be received within 6 weeks of completion of the program.
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Dr. Randy Miller, Vice-President, Exploration comments, “All drill holes completed to date have intersected mineralization that is visually similar to that analyzed from previous drill programs. The addition of geologist Andrea MacFarlane and another support staff to our team has greatly improved our ability to log, test and sample core for assay. We will report our assay and drilling results once all the assays have been received and interpretations have been completed.”
The drill program is designed to provide data to estimate a resource for an open pit to the 200m level. The 25m grid and cross-section drill holes will help to evaluate what density of drilling is required to estimate a measured and indicated resource for a Bankable Feasibility study. The Company will prepare an updated resource estimate following the completion of this drilling program.
The Geotechnical drill program will be used to determine the geotechnical parameters of the proposed open pit to mine the deposit.
Greg Andrews, President/CEO states, “Our immediate goal is to advance our Critical Rare Earth Element District to production. This will require (a) advancing our DEEP FOX project to a measured and indicated resource, (b) provide engineering and economic studies such as Preliminary Economic Assessments and Feasibility Studies and (c) develop and submit an Environmental Assessment report to initiate the environmental and permitting process for DEEP FOX.”
The DEEP FOX DEPOSIT occurs about 2 km northeast of St. Lewis and 12 km east of the FOXTROT DEPOSIT.
Search is following the COVID protocols which are currently in place within the Province of Newfoundland & Labrador to ensure the safety of our employees and the communities where we work.
Qualified Person:
Dr. Randy Miller, Ph.D., P.Geo, is the Company's Vice President, Exploration, and Qualified Person (as defined by National Instrument 43-101) who has supervised the preparation of and approved the technical information reported herein. The Company will endeavour to meet high standards of integrity, transparency, and consistency in reporting technical content, including geological and assay (e.g., REE) data.
About Search Minerals Inc.
Led by a proven management team and board of directors, Search is focused on finding and developing Critical Rare Earths Elements (CREE), Zirconium (Zr) and Hafnium (Hf) resources within the emerging Port Hope Simpson – St. Lewis CREE District of South East Labrador. The Company controls a belt 63 km long and 2 km wide and is road accessible, on tidewater, and located within 3 local communities. Search has completed a preliminary economic assessment report for FOXTROT, and a resource estimate for DEEP FOX. Search is also working on three exploration prospects along the belt which include: FOX MEADOW, SILVER FOX and AWESOME FOX.
Search has continued to optimize our patented Direct Extraction Process technology with the generous support from the Department of Tourism, Culture, Industry and Innovation, Government of Newfoundland and Labrador, and from the Atlantic Canada Opportunity Agency. We have completed two pilot plant operations and produced highly purified mixed rare earth carbonate concentrate and mixed REO concentrate for separation and refining.
For further information, please contact:
Greg Andrews
President and CEO
Tel: 604-998-3432
E-mail: info@searchminerals.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding “Forward-Looking” Statements:
Except for the statements of historical fact, this news release contains "forward-looking information" within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and projections as at the date of this news release. "Forward-looking information" in this news release includes information about the Company’s proposed exploration programs described herein, and other forward-looking information. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the inability to obtain the necessary resources to complete the exploration programs and poor exploration results.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company's financial condition and development plans do not change as a result of unforeseen events, and that the Company will receive all required regulatory approvals.
Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. The Company does not assume any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements, unless and until required by applicable securities laws. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, which filings are available at www.sedar.com.
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, British Columbia, July 14, 2021 (GLOBE NEWSWIRE) — Lupaka Gold Corp. ("Lupaka Gold" or the “Company") (TSX-V: LPK, FRA: LQP) announces that the Company has closed the non-brokered private placement previously announced on June 23, 2021 (the “Placement”).
The Company issued 4,000,000 units at a price of $0.05 per unit for gross proceeds of $200,000. Each unit consists of one common share of the Company (“Share”) and one transferable common share purchase warrant (“Warrant Share”) entitling the holder to purchase an additional common share of the Company at a price of $0.10 for a period of three years from the closing (the “Placement”). All Shares issued and Warrants Shares (if exercised prior to November 15, 2021) are subject to a hold period expiring four months and one day from the closing date of the Placement in accordance with applicable securities laws. Closing of the Placement is subject to final acceptance by the TSX Venture Exchange.
In connection with the subscriptions received the Company expects to pay finders’ fees in the amount of $10,000 in cash. No insiders participated in this Placement.
The proceeds of the Placement will be used to pay ongoing operating costs as the Company continues to pursue its litigation against the Republic of Peru and to support review of potential new properties.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless an exemption from such registration is available.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this news release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Gordon Ellis, C.E.O.
gellis@lupakagold.com
Tel: (604) 985-3147
or visit the Company’s profile at www.sedar.com or its website at www.lupakagold.com
(Bloomberg) — South African stocks rose, led by companies that derive much of their income abroad and benefit from weakness in the local currency, as authorities grappled with a wave of unrest in two key provinces that has left more than 70 people dead.
The FTSE/JSE Africa All Share Index was 1.1% higher as of 10:09 a.m. in Johannesburg, with rand-hedge giants BHP Group Plc, Richemont, Anglo American Plc and Naspers Ltd. prominent in the advance after the currency slipped to its lowest level against the dollar since April.
South Africans are expected to face major food shortages, as rioters upend supply chains by looting supermarkets and torching goods trucks.
Food Shortage Set to Grip South Africa After Rioters Rampage
South Africa’s Biggest Refinery Shuts Down Due to Unrest
Negative foreign sentiment toward South African stocks was evident in the large outflows recorded Tuesday, with non-residents selling 4 billion rand ($271 million) of local equities, the most since November last year.
Globally, investors are evaluating a surprise U.S. inflation jump that stirred the debate on how long Federal Reserve policy can stay ultra-loose. The June U.S. inflation print topped all forecasts and pointed to higher costs associated with the reopening from the pandemic.
In Johannesburg Wednesday, an index of industrial miners surged 1.7% to provide the biggest boost to the overall market.
BHP +1.1% after RBC Capital Markets said the company has the potential to pay out 100% of 2021 earnings in dividends and still come in below its net debt target amid surging iron ore prices.NOTE: BHP Could Pay Out 100% of Earnings on Iron Ore Surge, RBC SaysAnglo American +1.2%, Glencore Plc +1.6%, Kumba Iron Ore Ltd. +0.7%, African Rainbow Minerals Ltd. +0.5%
Luxury goods retailer and popular rand-hedge Richemont advanced 1.2% to a record.
Global tech investor Naspers advanced 1.7% to contribute the most to the rising benchmark.
An index of banks steadied after plunging the most since December on Tuesday. The gauge was 0.7% higher, with Standard Bank Group Ltd. up 1.1%.
NOTE: Rand Hovers Near Weakest Level Since April: Inside South Africa
Real Estate Investment Trusts dropped to the lowest in two weeks, as investors avoided some sectors exposed to the unrest.
GrowthPoint Properties Ltd. -1.1%, Redefine Properties Ltd. -1.2%, Vukile Property Fund Ltd. -2.5%, Attacq Ltd. -3.7%, EPP NV -1.7%, Irongate Group -1.2%, Hyprop Investments Ltd. -0.8%, Hammerson Plc -1.3%, Resilient Reit Ltd 1.1%
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While the EV boom has been growing for years, 2021 could be the year electric starts to take over everything.
And it could happen much sooner than most people realize, as some of the biggest names are already hopping on board.
Amazon has already started making deliveries with electric vans in Los Angeles, as they’ve agreed to purchase 100,000 vans from EV startup, Rivian.
The United States Postal Service just signed a 10-year, multi-billion dollar contract with Oshkosh Defense to produce thousands of electric mail trucks.
And United Airlines just placed an incredible $1 billion order with EV manufacturer, Archer, for a fleet of electric air taxis.
Legacy automakers are all making the shift too, rolling out their line of electric vehicles one by one.
Ford is set to double their investment in EVs to $22 billion, and they’re planning to release their electric version of the Mustang and the F-150, the most popular vehicle in the U.S.
Volkswagen is calling their 2021 electric crossover, the ID.4, “the most important new Volkswagen debut since the Beetle.”
And General Motors has even announced they’ll stop making gas-powered vehicles altogether by 2035.
Now, Biden has even announced plans to transition all government fleet vehicles to EVs.
This electric revolution has already led to monster gains for EV companies throughout 2020.
The EV van startup, Workhorse, saw gains of over 551%…
Tesla’s shares shot up a massive 740%…
And Blink Charging soared for incredible 1,740% gains last year.
Now, many investors are looking ahead for the next big thing in the EV markets.
And one Canadian company in EV related business has seen its momentum building steadily over the last year.
Facedrive (TSXV:FD,OTC:FDVRF) has been acquiring key pieces left and right, adding them to their electric ecosystem alongside their signature ridesharing service.
With these acquisitions, they’ve brought the EV boom into food delivery, car subscriptions, and more.
And now that Facedrive has announced a major government investment in their technology, their business could be set to take off in 2021.
Here are 3 reasons why you should be paying attention to Facedrive:
1 – Bringing EVs to the Gig Economy
Many of the biggest EV stories of late have come from either the automakers rolling out new models or companies working on building out the infrastructure…
But Facedrive is taking a different approach.
Instead, they’re using the cars those automakers have already made and turning them into an entire EV-related ecosystem.
So just like Uber has built their $96 billion business off leveraging cars they never manufactured, bought, or sold…
Facedrive connects customers looking to hail a ride, providing an eco-friendly solution.
Their model is simple.
When customers request a ride, they get their pick between riding to their destination in a standard gas-powered car, a hybrid or an electric vehicle (for no extra charge to them).
Then Facedrive’s algorithm crunches the numbers, setting aside a portion of the fare to plant trees, offsetting the carbon footprint from the ride.
Through next-gen technology and partnerships, they’re bringing EVs into the gig economy and making a splash.
That’s because Facedrive has also added a food delivery service, which has taken off since so many have been stuck at home during global lockdowns.
Today, they’re delivering over 4,100 orders per day on average. And after growing to 19 major cities, they plan to expand to more cities throughout the U.S. and Canada soon.
But they’ve also gone beyond applying EVs to the gig economy and are offering a way for people to get behind the wheel themselves without the usual sticker shock.
2 – Reinventing The Standard Model
At this point there’s no question there’s a growing demand for EVs from consumers, as this trend has spread from Europe and Asia and through North America.
And almost 3 out of 4 younger buyers even say they’re willing to pay higher prices to own an electric vehicle.
But with Facedrive’s acquisition of Steer, you can get the benefits without the large upfront cost.
Facedrive (TSXV:FD,OTC:FDVRF) recently acquired the EV subscription company from the largest clean energy producer in the United States, and they’re aiming to change the way people think about using EVs.
Steer has combined the Netflix subscription model with the EV boom to flip the traditional car ownership model on its head.
With Facedrive’s acquisition of Steer, customers pay a simple monthly fee like with Netflix, and they get access to their choice of EVs from a fleet at their disposal.
So they can borrow one whenever they need it instead of buying an EV outright – and at a fraction of the cost.
They’re up and running in the Washington D.C. market already…
And they’ve seen so much success there that they’ve decided to expand further north, to roll out the service in Toronto as well.
With two of the largest metro areas in North America in the mix, Facedrive has started paving the path for a completely unique way to save drivers money in the EV boom.
But their biggest announcement recently came thanks to their willingness to think outside the box and serve the most pressing need we’re seeing today.
3 – Taking On The Biggest Challenges
While Facedrive (TSXV:FD,OTC:FDVRF) has been busy helping bring EVs to mainstream use in creative ways, they’ve also found a way to help address the issue we’ve all been facing for the last year.
By partnering with the University of Waterloo, they’ve created a wearable contact tracing technology called TraceSCAN.
It’s designed to help alert those without cell phones after they’ve been in contact with someone who’s tested positive for COVID-19.
That’s great news for those working in schools, airports, mining, long-term care facilities, and more.
And the demand for TraceSCAN has surged in recent months, as businesses work to open safely and responsibly.
Facedrive has now signed an agreement with Canada’s largest airline, Air Canada, to use this breakthrough technology.
They’re also in discussions to continue TraceSCAN’s growth with major multinational corporations.
But perhaps the most exciting news came from a government announcement in Canada just weeks ago.
In February, the Ontario government announced they’re investing $2.5 million to help speed up the deployment of TraceSCAN to more users.
This means TraceSCAN’s technology has gotten another vote of confidence in their innovative technology… to the tune of millions from the government.
As governments and businesses around the world are doing whatever they can to stop the spread of the virus, this major announcement could help bring attention to Facedrive’s TraceSCAN technology…
Applying more pressure to other organizations and governments to act responsibly and start investing more seriously in contact tracing technology.
Setting Up For Electric Everything in 2021
As 2021 heats up, we’re seeing that the EV boom isn’t just limited to manufacturing sedans anymore.
It involves building an entire electric ecosystem and re-imagining what transportation looks like on all fronts.
That’s why Facedrive aims see their growth wave continue as they bring EVs to ridesharing, food delivery, and beyond.
Here are a few other companies who could profit in the electric future:
Tesla (NASDAQ:TSLA) is a company that has redefined the automotive industry with their electric cars. The Tesla Model S was one of the first fully electric vehicles on the market and it's still one of the best. If you're wondering if an all-electric car is right for you, read this blog post to learn more about what makes Tesla different from other EV manufacturers.
Tesla has been one of the hottest stocks on the market for the past two years. And that’s largely thanks to its CEO and hypeman, Elon Musk. As a visionary in the tech world, Musk built his empire on PayPal and then pivoted to a cause closer to his heart, Tesla. Musk has had his eye on prize long before the green energy hype started building. Tesla isn’t just about cars, however, it’s diving head first into the battery market, as well. And by extension, could completely transform renewable energy as we know it. Tesla’s battery technology is a game-changer because batteries will be the first big step towards decentralized electric grids, another innovation fueled by the dramatic rise of blockchain technology, another cause that Musk is passionate about.
NIO Limited (NYSE:NIO) is another company that manufactures all-electric vehicles. The company's headquarters are located in Shanghai, China and they have manufacturing facilities in Nanjing, Jiangsu Province; Pune, Maharashtra; Lancaster, California; Tilburg, Netherlands and San José dos Campos, São Paulo State. Nio was founded on September 12th 2015 by William Li. NIO has raised $1 billion since the start of their first round of funding back in 2014 with investors including Tencent Holdings Ltd., Temasek Holdings Pte. Ltd., Baidu Inc., Sequoia Capital as well as other prominent firms such as GIC Private Limited (formerly known as Government of Singapore Investment Corporation) and TPG Growth among others.
Nio had an incredible 2020, taking the market by storm. And it’s surprising because no one could have imagined how successful the company was going to be. Investors were ready to leave it for dead. But Nio powered on, blew away estimates, and most importantly, kept its balance sheet in line. And it’s paid off. In a big way.
In addition to its automotive push, however, Nio, Tesla’s largest competitor in China, has also started to offer a batteries-as-a-service concept, in which car buyers can ‘lease’ the battery of their vehicle and save as much as $10,000 on the price of a new vehicle, while also offering buyers the option to swap batteries after a few years of use. And that’s huge news in the lithium world, because it will mean give miners even greater incentive to sign deals with the battery innovator.
General Motors (NYSE:GM) is one of the world's largest and most recognizable automakers. They have a wide variety of vehicles to suit every kind of budget, with their Chevrolet brand being one of the best-selling in America. GM has been around for over 100 years and has always had a focus on technology, innovation, safety, sustainability and value. What started as just the Buick car company back in 1904 is now an internationally recognized name that produces cars in 34 countries across six continents.
just started a joint venture with Korea’s LG Chem to mass produce next-gen battery cells for electric vehicles, together investing $2.3 billion over the next few years. That’s not all its working on, either. In October, auto industry legend, GM announced that its majority-owned subsidiary, Cruise, has just received approval from the California DMV to test its autonomous vehicles without a driver. And while they’re not the first to receive such an approval, it’s still huge news for GM.
Cruise CEO Dan Ammann wrote in a Medium post, “Before the end of the year, we’ll be sending cars out onto the streets of SF — without gasoline and without anyone at the wheel. Because safely removing the driver is the true benchmark of a self-driving car, and because burning fossil fuels is no way to build the future of transportation.”
Ford (NYSE:F) is one of the most recognized automakers in the world. In the late 1800s, Henry Ford transformed the automobile industry by creating a car that was affordable to most Americans. He also made it possible for people to buy their own cars with installment plans. This allowed for more people in America to have access to transportation and do things they couldn't before such as travel farther distances or move away from home. Car ownership would eventually come with privileges like being able to vote, drive without restrictions, and make purchases without relying on others.
Ford is another Detroit automaker making the jump to EVs – and seeing shares jump in the process. They recently announced they’ll be boosting their spending on EVs to $27 billion through mid-decade. That big investment includes plans of their own to develop an electric cargo van and a plug-in version of their bestseller F-150 pickup truck.
Ford isn’t going to be left out of the autonomous vehicle boom, either. The company, for its part, has recently revealed plans to launch its self-driving business in 2022. The new vehicles, in partnership with Argo AI, a Philadelphia-based autonomous vehicle startup, will include major upgrades from advanced Lidar technology and high resolution cameras.
Blink Charging (NASDAQ:BLNK) is an innovative company that has created a solution for electric vehicle owners to charge their car in the blink of an eye. Blink's technology allows drivers to pull up and plug in, then walk away as the car charges. This means more time spent on other tasks or with family instead of waiting around for your battery to fill up!
Blink chargers are currently available at over 300 locations across North America and Europe. They're also expanding into airports, hotels, restaurants, and gas stations–perfect for those who don't have access to home charging facilities. Blink Charging is revolutionizing the way we think about electric vehicles by making them accessible anywhere you go!
Blink was one of the darlings of the EV boom last year because of its expansion in EV charging technology. With their chargers deployed at airports, car dealers, hospitals, restaurants, retailers, and schools across the nation, Blink recently saw shares jump 76% in just one month. A wave of new deals, including a collaboration with EnerSys and another with Envoy Technologies to deploy electric vehicles and charging stations adds further support to its success.
Michael D. Farkas, Founder, CEO and Executive Chairman of Blink noted, “This is an exciting collaboration with EnerSys because it combines the industry-leading technologies of our two companies to provide user-friendly, high powered, next-generation charging alternatives. We are continuously innovating our product offerings to provide more efficient and convenient charging options to the growing community of EV drivers.”
Canada is ramping up its own electric vehicle push, as well. GreenPower Motor (NASDAQ:GP, TSX:GPV) is a company that was founded in 2007 and has been providing motors for the green energy industry. They've used their know-how to produce high quality, efficient and cost effective motors. The company's products are used by some of the world's top manufacturers such as Caterpillar, Komatsu, GE Energy and Siemens. GreenPower Motor offers a range of new services including Power Plant Designing Services and Consulting Services which help clients understand how they can improve power plant efficiency using electric motors.
Right now, it is primarily focused on the North American market, but the sky is the limit as the pressure to go green grows. GreenPower has been on the frontlines of the electric movement, manufacturing affordable battery-electric busses and trucks for over ten years. From school busses to long-distance public transit, GreenPower’s impact on the sector can’t be ignored.
Lithium Americas Corp. (NYSE:LAC, TSX:LAC) is a leading producer of lithium and has been developing the Salar de Atacama in Chile for over 20 years. The company's focus on responsible production practices, employee safety, and environmental stewardship have earned them top rankings among mining companies
In a way, Lithium Americas is literally fueling the green energy boom. With two world-class lithium projects in Argentina and Nevada, Lithium Americas is well-positioned to ride the wave of growing lithium demand in the years to come. It’s already raised nearly a billion dollars in equity and debt, showing that investors have a ton of interest in the company’s ambitious plans, and it will likely continue its promising growth and expansion for years to come.
It’s not ignoring the growing demand from investors for responsible and sustainable mining, either. In fact, one of its primary goals is to create a positive impact on society and the environment through its projects. This includes cleaner mining tech, strong workplace safety practices, a range of opportunities for employees, and strong relationships with local governments to ensure that not only are its employees being taken care of, but locals as well.
NFI Group (TSX:NFI) is a manufacturer of electric vehicles. The company has been in the business for over 50 years, and they are best known for their innovative design that offers high-quality and low-cost options. They have built more than 10 million cars worldwide, which means they know what they’re doing! NFI Group manufactures electric vehicle components as well as complete vehicles. Their factory produces battery packs, motors, controllers, chargers, inverters and other electrical equipment to meet all types of customer requirements.
NFI produces transit busses and motorcycles, as well. NFI had a difficult start to the year, but it since cut its debt and begun to address its cash flow struggles in a meaningful way. Though it remains down from January highs, NFI still offers investors a promising opportunity to capitalize on the electric vehicle boom.
Celestica (TSX:CLS) is closely tied to the green energy boom. Celestica’s wide range of products includes but is not limited to communications solutions, enterprise and cloud services, aerospace and defense products, renewable energy and enough health technology.
Thanks to its exposure to the renewable energy market, Celestica’s future is tied hand-in-hand with the green energy boom that’s sweeping the world at the moment. It helps build smart and efficient products that integrate the latest in power generation, conversion and management technology to deliver smarter, more efficient grid and off-grid applications for the world’s leading energy equipment manufacturers and developers.
Maxar Technologies (TSX:MAXR) is a high flying tech stock to watch in the energy transition. Why? Its wholelly-owned subsidiary, SSL, a designer and manufacturer of satellites used by government and commercial enterprises, has pioneered research in electric propulsion systems, lithium-ion power systems and the use of advanced composites on commercial satellites. These innovations are key because they allow satellites to spend more time in orbit, reducing costs and increasing efficiency. And it’s greener than traditional power sources.
Thanks to Maxar’s incredible tech and innovative approach to the already-extremely complicated space industry, the company has seen its share price climb where many of its peers have struggled. In fact, in just the past two years, Maxar has seen its share price increase by well over 1000%. And as the company secures more deals in the great beyond, the innovative firm will likely maintain its upward trajectory for some time.
Another way to gain exposure to the electric vehicle industry is through AutoCanada (TSX:ACQ), a company that operates auto-dealerships through Canada. The company carries a wide variety of new and used vehicles and has all types of financial options available to fit the needs of any consumer. While sales have slumped this year due to the COVID-19 pandemic, AutoCanada will likely see a rebound as both buying power and the demand for electric vehicles increases. As more new exciting EVs hit the market, AutoCanada will surely be able to ride the wave.
Shaw Communications Inc. (TSX:SJR) is major player in the Canadian telecoms sector. It owns a ton of infrastructure throughout Canada and its cloud services and open-source projects look to address some of the biggest issues that its customers might face before the customers even face them. As online gaming depends on solid internet connections, Shaw will likely become a backdoor benefactor in increased online activity. Not only that, it’s growing higher on ESG investors’ lists, as well, thanks to its forward-thinking approach to the environment and its governance.
By. Max Gibson
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
Forward-Looking Statements
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the demand for ride sharing services will grow; that Steer can help change car ownership in favor of subscription services; that new tech deals will be signed by Facedrive and deals signed already will increase company revenues; that Facedrive will achieve its plans for manufacturing and selling Tracescan devices; that Facedrive will be able to expand to the US and globally; that Facedrive will be able to fund its capital requirements in the near term and long term; and that Facedrive will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that riders are not as attracted to EV rides as expected; that competitors may offer better or cheaper alternatives to the Facedrive businesses; changing governmental laws and policies; the company’s ability to obtain and retain necessary licensing in each geographical area in which it operates; the success of the company’s expansion activities and whether markets justify additional expansion; the ability of the company to attract drivers who have electric vehicles and hybrid cars; and that the products co-branded by Facedrive may not be as merchantable as expected. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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Investors with an interest in Mining – Miscellaneous stocks have likely encountered both Billiton (BBL) and Wheaton Precious Metals Corp. (WPM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Billiton has a Zacks Rank of #1 (Strong Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BBL has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BBL currently has a forward P/E ratio of 5.96, while WPM has a forward P/E of 29.82. We also note that BBL has a PEG ratio of 1.44. 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. WPM currently has a PEG ratio of 5.96.
Another notable valuation metric for BBL is its P/B ratio of 1.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WPM has a P/B of 3.46.
Based on these metrics and many more, BBL holds a Value grade of A, while WPM has a Value grade of D.
BBL has seen stronger estimate revision activity and sports more attractive valuation metrics than WPM, so it seems like value investors will conclude that BBL is the superior option right now.
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BHP Billiton PLC (BBL) : Free Stock Analysis Report
Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report
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