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Facebook Stock Reputation Is Not a Detriment to Its Business

InvestorPlace - Stock Market News, Stock Advice & Trading Tips Owning FB stock for the long term has not ceased being a good idea. It is the leader in social media and is blazing cyber trails. The post Facebook Stock Reputation Is Not a Detriment to Its Business appeared first on InvestorPlace. More From InvestorPlace Stock Prodigy Who Found NIO at $2… Says Buy THIS Now Man Who Called Black Monday: “Prepare Now.” #1 EV Stock Still Flying Under the Radar Interested in Crypto? Read This First........»»

Category: topSource: investorplaceNov 24th, 2021

UBS Group"s (UBS) French Tax Fraud Fine Curtailed to EUR 3.75M

UBS Group (UBS) gets a penalty cut from its earlier fine of EUR 3.7 billion. The bank was originally penalized with EUR 3.75 million by the French appeals court for tax fraud and money laundering. Legal hassles have intensified for UBS Group AG UBS and its French unit UBS France S.A., regarding the bank’s cross-border business activities in France between 2004 and 2012. An appeals court in France ordered the Swiss bank to pay a fine of €3.75 million for unlawful solicitation and laundering of tax-fraud proceeds of wealthy clients. The penalty is reduced from a fine of €3.7 billion, ordered in 2019.Additionally, the court instructed the confiscation of €1 billion. This apart, civil damages worth €800 million slapped on the Swiss firm to be paid to the French state are intact from the 2019 ruling.UBS France S.A. is let off the hook in relation to its aid and assistance in laundering the proceeds of tax fraud but found guilty of abetting in illicit solicitation. Hence, the court levied a fine of €1.875 million on the firm.The fines imposed on UBS Group and UBS France S.A. will be suspended in case the decision is appealed.UBS Group was under investigation by the French authorities on potential charges of illegally soliciting clients in France to open Swiss accounts for stashing undisclosed wealth between 2004 and 2012. Later, the enquiry included money-laundering charges against the bank. In 2019, following a seven-year probe into such allegations and abandoned settlement negotiations, the bank was liable to counter allegations of those illegal activities.Per a Bloomberg article, the fine imposed is based on the maximum statutory penalty for money laundering rather than prosecutors’ recommendation to use an intricate calculation derived from the dues owed by French taxpayers on undeclared wealth in the bank’s Swiss accounts.Per the article, around €450 million set aside by UBS Group as provisions for legal fines might be used.ConclusionUBS Group operates in a business and regulatory environment that is complex, uncertain and subject to change. Also, the company is subject to numerous regulations by the U.S. and non-U.S. regulators that add complexity to the ongoing global compliance operations.We believe that the prevalent investigations on several banks will be a step forward to reducing the huge losses incurred due to offshore tax evasions. Regulatory authorities are investigating scandals and are determined to make a landmark judgment to terminate such shrewd practices in the future, bring justice to the sufferers and punish the wrongdoers.The ongoing probes will undoubtedly dent UBS Group’s reputation in the global arena. With such fines being imposed on UBS Group, its bottom line would take a hit. Nevertheless, resolution of such issues will likely restore investors’ confidence in the stock.Currently, UBS Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of UBS Group have gained 6.1% in the past three months against a 4.8% decline recorded by the industry.Image Source: Zacks Investment ResearchSeveral finance companies continue to encounter legal hassles and are charged with huge sums of money for business malpractices. Some of them are Franklin Resources, Inc. BEN, Washington Federal WAFD and Charles Schwab SCHW.Last month, a lawsuit was filed against Franklin Resources by a group of investors claiming that the company sabotaged a startup named Onsa to get its technology and hence, an entry into the flourishing fintech market. The news was reported by Bloomberg.Washington Federal agreed to pay a civil money penalty of $2.5 million to the Office of the Comptroller of the Currency (OCC) in relation to its February 2018 Consent Order for Anti-Money Laundering and Bank Secrecy Act (“AML/BSA”) deficiencies.In April 2017, Washington Federal entered into an agreement to acquire Anchor Bancorp in an all-stock transaction. That year, in September, the companies amended the merger’s termination date from Dec 31, 2017, to Jun 30, 2018, because of the identification of some faults with respect to procedures, systems and processes of Washington Federal’s BSA program. However, the deal was terminated on Jul 17, 2018.SCHW was slapped with a class-action lawsuit over violations of its fiduciary duty by placing its interest before the protection of its clients through the bank’s robo-adviser Schwab Intelligent Portfolios’ cash sweep program.The case, filed in the U.S. District Court in Northern California, also accused Charles Schwab of breach of contract and the infringement of state laws. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Franklin Resources, Inc. (BEN): Free Stock Analysis Report UBS Group AG (UBS): Free Stock Analysis Report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Washington Federal, Inc. (WAFD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 15th, 2021

Futures Drift Lower In Illiquid Session As Virus Fears Resurface

Futures Drift Lower In Illiquid Session As Virus Fears Resurface After three days of torrid gains, US futures and European markets fell as concerns about economic risks from restrictions to control the new variant outweighed optimism about the efficacy of vaccines after a study from Japan found that the omicron variant is 4.2 times more transmissible (as largely expected) in its early stage than delta. Both S&P 500 and Nasdaq futures dropped around -0.4% as traders awaited earnings from Broadcom, Oracle and Costco after the market close and tomorrow's key CPI print, while European equities drifted lower in quiet trade with little fresh news flow to drive price action. Uncertainty about monetary policy could keep stocks “significantly volatile,” according to Pierre Veyret, a technical analyst at ActivTrades in London. “Investors are likely to remain cautious and keep on monitoring the macro outlook, especially today’s U.S. initial jobless claims, in order to gather more clues on what and when could be the Fed’s next move,” said Veyret. In Asia, China Evergrande Group and Kaisa Group Holdings Ltd. officially defaulted on their dollar debt, while the People’s Bank of China raised its foreign currency reserve requirement ratio for a second time this year after the yuan climbed to the highest since 2018. Among individual moves, CVS Health Corp. jumped in pre-market trading after saying it would buy back shares and raise dividends. Drugmakers including Pfizer rose, while travel companies and airlines declined. European stocks erased gains of as much as 0.3% with the Stoxx 600 trading -0.1% in the red as investors weigh new economic restrictions prompted by the omicron variant against earlier optimism. The real estate subgroup was best performer, up 0.7%; energy company shares lead declines with a drop of 1.2%. The Euro Stoxx 50 is down 0.25%, reversing a modest push into the green at the open. Other cash indexes trade either side of flat. Oil & gas and retail names are the weakest sectors. UniCredit SpA rose after saying it will return at least 16 billion euros ($18.1 billion) to shareholders by 2024. Meanwhile, Electricite de France SA fell with the government considering a cap on regulated power tariffs to help curb soaring electricity prices. Here are some of the biggest European movers today: LPP shares rose as much as 12% after its 3Q earnings beat expectations. The figures confirm a rebound of sales in traditional stores and stronger margins, according to analysts. UniCredit shares gain as much as 8.4%, the most since November 2020, after the Italian lender unveiled its new strategic plan that includes the distribution of at least EU16b to shareholders by 2024. Société Marseillaise du Tunnel Prado Carénage (SMTPC) shares rise as much as 5.5% after Vinci Concessions and Eiffage said they reached a pact to act in concert for a tender offer at EU27/share. Zur Rose drops as much as 7.3% in Zurich after an offering of 650,000 shares priced at CHF290 apiece, representing a 12% discount to the last close. Neste Oyj shares slid as much as 5.7% as investors digested the unexpected resignation of Chief Executive Officer Peter Vanacker from the helm of the world’s biggest maker of renewable diesel. FirstGroup shares fall as much as 5.9% after 1H results, with Chairman David Martin saying the U.K.’s work-from- home edict will “clearly have an impact” on commuter trips. There are potential downside risks to estimates in the short term, if Covid restrictions tighten, according to Liberum (buy). Dr. Martens released solid 1H results, but there’s “nothing material to flag” and unlikely to be upgrades to FY Ebitda estimates, Morgan Stanley says in a note. Shares drop as much as 5.2% after initially gaining 8.9%. Electricite de France shares fall as much as 5.1% after Le Figaro said the French government is considering taking additional steps to keep electricity prices from rising too much amid a spike in energy costs. The global equity rally will be tested as traders expect volatility until there’s more clarity on omicron’s threat to the economy, and ahead of U.S. consumer inflation numbers this week and a Federal Reserve meeting next week that may provide clues on the pace of tapering and interest rate increases. “We are looking to potentially have a rise in volatility even if the market continues higher around those events next week,” said Frances Stacy, Optimal Capital portfolio strategist, on Bloomberg Television. “Many of the catalysts that gave us this boom out of Covid are slowing. And then you have the Fed potentially tapering into a decelerating economy.” Geopolitical tensions are also adding to investor concerns. Germany’s new foreign minister Annalena Baerbock doubled down on warnings from western politicians to Russia over Ukraine, saying that Moscow would pay a high price if it went ahead with an invasion of its neighbor. Separately, the U.S. said it will place SenseTime Group Inc. on an investment blacklist Friday, accusing the artificial intelligence startup of enabling human rights abuses. That’s after the U.S. House of Representatives on Wednesday passed legislation designed to punish China for its treatment of Uyghur Muslims in the country’s Xinjiang province. Asian stocks rose for a third day as investors reassessed concerns over the new virus strain and factored in the possibility that the Federal Reserve will accelerate the end of its quantitative easing.  The MSCI Asia Pacific Index added as much as 0.5%, extending its advance since Tuesday to almost 3%. Information technology and communication services were the sectors providing the biggest support to the climb, with benchmarks in China and Hong Kong among the region’s best performers. The CSI 300 Index gained 1.7% as consumer stocks rallied.   “The market had been initially wary of the Fed’s hawkish tilt in their stance, and a change in how they view inflation, but investors don’t seem too worried about it anymore,” said Tetsuo Seshimo, a fund manager at Saison Asset Management Co. “But this isn’t a theme that’s going away in the short term.”  Asia’s benchmark headed for its highest since Nov. 25, set to erase losses since the omicron variant was detected during the U.S. Thanksgiving holidays, but still in negative territory for 2021. The S&P 500 Index is up 25% this year, after gaining Wednesday on announcements by Pfizer Inc. and BioNTech SE that early lab studies showed a third dose of their Covid-19 vaccine neutralizes the omicron variant. “Funds are flowing into growth stocks with high estimated profit growth and ROE levels, a continuation of moves seen from yesterday,” said Takashi Ito, an equity market strategist at Nomura Securities in Tokyo. “But there could be some profit taking after the market rose for a few consecutive sessions.” Japanese stocks fell, cooling off after a two-day rally as investors weighed the potential impact of the omicron variant on the global economy. Electronics and auto makers were the biggest drags on the Topix, which fell 0.6%. Fanuc and Tokyo Electron were the largest contributors to a 0.5% loss in the Nikkei 225 Indian stocks ended higher, after swinging between gains and losses several times through the session, as traders shifted their focus to key economic data globally and at home in the days ahead.  The S&P BSE Sensex rose 0.3% to close at 58,807.13 in Mumbai, after falling as much as 0.5% earlier in the day. The gauge has gained 3.6% in the last three sessions, its biggest three-day advance in over a seven-month period, on optimism the economic recovery will be resilient despite the spread of the new Covid variant, with the RBI continuing its policy support intact.  The NSE Nifty 50 Index also advanced by similar magnitude on Thursday. Reliance Industries Ltd. contributed the most to the Sensex gain, rising 1.6%. Out of 30 shares in the Sensex index, equal number of stocks rose and fell. Fifteen of 19 sectoral indexes compiled by BSE Ltd. gained, led by a gauge of capital goods companies. The Reserve Bank of India kept borrowing costs at a record-low on Wednesday and voted 5-1 to retain its accommodative policy stance for as long as is necessary, reflecting its bias to support economic growth. The RBI expects the economy to expand 9.5% expansion in the year ending March, one of the fastest paces among the major growing world economies.  Markets’ focus will now shift to U.S. inflation data this week and a Federal Reserve meeting next week, which may provide clues on the pace of tapering and policy tightening. India will release its factory output data on Friday and consumer-price inflation on Monday.  “All eyes will be on crucial macro data (CPI & IIP) outcome which may further provide some direction to the markets,” Ajit Mishra, vice-president research at Religare Broking Ltd., wrote in a note. “The focus will remain on the global cues and updates regarding the new variant. We reiterate our cautious yet positive stance on the markets and suggest traders to focus on managing risk.” Australian stocks edged lower as miners, consumer shares retreated. The S&P/ASX 200 Index fell 0.3% to close at 7,384.50, snapping a four-day winning streak. Miners and consumer discretionary shares contributed the most to the benchmark’s decline. Redbubble was the worst performer, dropping the most since Oct. 14. Sydney Airport was among the top performers after regulators cleared a proposed takeover of the company. The stock also joined a global rally in travel shares after Pfizer and BioNTech said initial lab studies show a third dose of their Covid-19 vaccine may be effective at neutralizing the omicron variant. In New Zealand, the S&P/NZX 50 index fell 0.8% to 12,771.83 In rates, Treasury yields were mostly lower, led by the long end of the curve, while underperforming German bunds. 10Y TSY yields are lower by ~2bp at 1.4973%, trailing declines of 3bp-5bp for most European 10-year yields but remaining above 200-DMA, which it closed above Wednesday for first time since Nov. 29. Treasury futures trade near session highs, with cash yields lower by 3bp-4bp from the 5-year sector to the long end, inside Wednesday’s bear-steepening ranges. European bond markets lead the move, led by Ireland which cut 2022 issuance plans, as virus concerns weighed on most equity markets. U.S. auction cycle concludes with $22b 30-year reopening at 1pm ET, following two Fed purchase operations. Wednesday’s 10Y reopening auction drew 1.518%, tailing by about 0.4bp; Tuesday’s 3Y, which drew 1.000%, also trades at a profit, yielding 0.989% The WI 30Y yield 1.865% is below auction stops since January as sector has benefited from expectations that Fed rate increases beginning next year may strain the economy, as well as from strong equity-market performance driving increased allocation to bonds In FX, the Bloomberg Dollar Spot Index resumed its ascent, climbing 0.2% as the dollar advanced versus all Group-of-10 peers apart from the yen. TRY and ZAR are the weakest in EMFX.  The euro retreated, nearing the $1.13 handle and after touching a one-week high yesterday. One-week volatility for euro and sterling has risen to multi-month highs, with meetings by the Federal Reserve, the European Central Bank and the Bank of England in focus. The British pound fell as Goldman Sachs Group Inc. pushed back its forecast for a U.K. rate hike and business groups called for government support after Prime Minister Boris Johnson announced restrictions to curb the spread of the variant, which Bloomberg Economics estimates could cost the economy as much as 2 billion pounds ($2.6 billion) a month. A study found omicron is 4.2 times more transmissible than the delta variant in its early stages.   The pound hovered near its lowest level in more than a year against the dollar as fresh coronavirus restrictions weighed on the U.K.’s economic outlook. Expectations that the Bank of England will raise interest rates next Thursday continue to wane, with markets pricing less than six basis points of hikes. Goldman pushed back its forecast for a U.K. rate hike and business groups called for government support after Prime Minister Boris Johnson announced restrictions to curb the spread of the variant, which Bloomberg Economics estimates could cost the economy as much as 2 billion pounds ($2.6 billion) a month. A study found omicron is 4.2 times more transmissible than the delta variant in its early stages. Norway’s krone led losses among G-10 currencies as it snapped a three-day rally that had taken it to an almost three-week high against the greenback. In commodities, Crude futures drift lower. WTI slips back near $72 having stalled near $73 during Asian trade. Brent dips 0.5%, finding support just above $75. Spot gold trades flat near $1,782/oz Looking at the day ahead now, and it’s a quiet one on the calendar, with data releases including the US weekly initial jobless claims, as well as the German trade balance for October. Market Snapshot S&P 500 futures down 0.2% to 4,691.00 STOXX Europe 600 up 0.2% to 478.52 MXAP up 0.4% to 195.63 MXAPJ up 0.7% to 638.47 Nikkei down 0.5% to 28,725.47 Topix down 0.6% to 1,990.79 Hang Seng Index up 1.1% to 24,254.86 Shanghai Composite up 1.0% to 3,673.04 Sensex up 0.3% to 58,839.03 Australia S&P/ASX 200 down 0.3% to 7,384.46 Kospi up 0.9% to 3,029.57 Brent Futures down 0.3% to $75.58/bbl Gold spot up 0.0% to $1,783.15 U.S. Dollar Index up 0.20% to 96.09 German 10Y yield little changed at -0.34% Euro down 0.2% to $1.1318 Top Overnight News from Bloomberg European Central Bank governors are to discuss a temporary increase in the Asset Purchase Program with limits on the size and time of the commitment at a Dec. 16 meeting, Reuters reports, citing six people familiar with the matter Hungary raised interest rates for a fifth time in less than a month as policy makers try to rein in the fastest inflation in 14 years. The central bank hiked the one-week deposit rate by 20 basis points on Thursday to 3.3%, broadly matching the median estimate in a Bloomberg survey China’s central bank has signaled a limit to its tolerance for the yuan’s recent advance by setting its reference rate at a weaker-than-expected level China Evergrande Group and Kaisa Group Holdings were downgraded to restricted default by Fitch Ratings, which cited missed dollar bond interest payments in Evergrande’s case and failure to repay a $400 million dollar bond in Kaisa’s. Evergrande Group’s inability to meet its obligations will be dealt with in a market-oriented way, the head of the nation’s central bank said PBOC is exploring interlinking the e-CNY, as the digital yuan is known, system into the Faster Payment System in Hong Kong, says Mu Changchun, head of the Chinese central bank’s Digital Currency Institute Money managers have shown some tentative signs that they may be willing to start buying more Chinese dollar bonds again, after demand for the securities plunged to a 27-month low in November Greece plans to early repay the total amount of IMF’s bailout loan to the country in the first quarter of 2022, Finance Minister Christos Staikouras says in a Parapolitika radio interview The omicron variant of Covid-19 is 4.2 times more transmissible in its early stage than delta, according to a study by a Japanese scientist who advises the country’s health ministry, a finding likely to confirm fears about the new strain’s contagiousness Pfizer will have data telling how well its vaccine prevents infections with the omicron variant before the end of the year A detailed look at global markets courtesy of newsquawk Asian equity markets eventually traded mixed as the early tailwinds from the US gradually waned despite the recent encouragement on the vaccine front. All major US indices were underpinned in which the S&P 500 reclaimed the 4,700 level and approached closer to its ATHs, while Apple extended on record levels and moved closer to USD 3tln valuation. The ASX 200 (-0.3%) was initially kept afloat by resilience in defensives, although upside was restricted amid weakness in tech alongside concerns of a further deterioration in ties with China after Australia’s decision to boycott the Beijing Winter Olympics. The Nikkei 225 (-0.5%) was rangebound with the Japanese benchmark stalled by resistance ahead of the 29k level, although the downside was cushioned by recent currency weakness and a modest improvement in the Business Survey Index. The Hang Seng (+1.1%) and Shanghai Comp. (+1.0%) outperformed after China’s NDRC pledged support measures to boost consumption in rural areas and with some chatter regarding the possibility of another RRR cut in Q1 next year according SGH Macro citing a senior Chinese official. Furthermore, participants digested mixed inflation data from China including firmer than expected factory gate prices. CPI Y/Y was softer than forecast but it still registered the fastest pace of increase since August last year. Finally, 10yr JGBs briefly declined below the 152.00 level following the bear steepening stateside in which T-notes tested 130.00 to the downside and following a somewhat tepid US 10yr offering in which the b/c increased from prior but remained short of the six-auction average, while the results of the 5yr JGB auction were mixed and failed to spur prices with higher accepted prices offset by a weaker b/c. Top Asian News Evergrande Declared in Default as Massive Restructuring Looms China Dollar Junk Bonds Up After Fitch Move on Kaisa, Evergrande Gold Steady as Traders Assess Virus Risk Before Inflation Data China’s Credit Growth Rebounds After Slowing for Almost a Year Stocks in Europe trade have drifted lower in recent trade, giving up the modest gains seen at the open (Euro Stoxx 50 -0.5%, Stoxx 600 -0.2%), and following the mixed lead from APAC and amidst a lack of fresh fundamental catalysts. US equity futures are also subdued, with a relatively broad-based performance seen across the ES (-0.3%), NQ (-0.4%), YM (-0.3%) alongside some mild underperformance in the RTY (-0.6%). Markets are awaiting tomorrow’s US CPI metrics, but more importantly, are gearing up for next week’s blockbuster FOMC confab. Desks have attributed this week’s rebound to several factors working in unison, including a milder Omicron variant (thus far), Chinese policy easing, FOMO, buybacks/upbeat corporate commentary alongside the widely telegraphed hawkish Fed pivot. On the last note, it’s also worth keeping in mind that the rotating voters next year on the FOMC will be more hawkish with the addition of George, Mester and Bullard as voters, albeit some empty spots remain – namely Brainard’s spot as she takes over the Vice-Chair position. Back to Europe, sectors are mostly in the green but portray a defensive bias – with Healthcare, Telecoms, Food & Beverages and Personal & Household Goods at the top of the bunch, whilst Oil & Gas, Retail and Travel & Leisure resides on the other end of the spectrum. In terms of individual moves, UniCredit (+7.8%) shot up to the top of the Stoxx 600 after unveiling its 2024 targets – with the Co. looking to return at least EUR 16bln via dividend and buybacks between 2021-24. Sticking with banks, Deutsche Bank (-2.1%) is pressured after the US DoJ reportedly told Deutsche Bank it may have violated a criminal settlement, due to failures in alerting authorities about internal complaints at its asset management unit, according to sources. Elsewhere, AstraZeneca (+1.0%) is supported as its long-acting antibody combination received emergency use authorisation in the US for COVID-19 prevention in some individuals. Finally, Rolls-Royce (-3.7%) slipped despite an overall positive trading update. Top European News Rolls-Royce Sinks as Omicron Clouds Outlook for 2022 Comeback Harbour Energy Plans Dividend But Pushes Back Tolmount Again Toxic U.K. Tory Press Is Flashing Warning Sign for Boris Johnson Credit Suisse Chairman Horta-Osorio Broke Quarantine Rules In FX, the Greenback remains rangy amidst undulating US Treasury yields and a fluid flow of Omicron related headlines that are filling the void until this week’s main macro release arrives tomorrow in the form of CPI data. However, the index is drifting down in almost ever decreasing circles having retreated a bit further from peaks to a marginally deeper sub-96.000 trough on Wednesday, at 95.848, and forming a fractionally firmer base currently to stay within contact of the psychological level within a narrow 96.154-95.941 band, thus far. Ahead, latest jobless claims updates and the last refunding leg comprising Usd 22 bn long bonds after a reasonable 10 year outing, overall. CHF/EUR/CAD - No obvious reaction to Swiss SECO forecasts even though supply bottlenecks and stricter COVID-19 measures are putting a strain on the economy internationally in winter 2021/22, according to the Government affiliated body. Similarly, ECB sources reporting that views on the GC are converging on a limited, temporary increase of the APP at December’s policy meeting, via an envelope or time specified increase with more frequent reviews, hardly impacted the Euro, as Eur/Usd remained towards the bottom of a 1.1346-16 range and Usd/Chf continued to straddle 0.9200, albeit mostly on the weaker side. Meanwhile, the Loonie has also slipped to the back of the major ranks following yesterday’s largely non BoC event against the backdrop of softer crude prices and an indifferent risk tone, with Usd/Cad hovering mainly above 1.2650 between 1.2645-80 parameters. JPY/GBP/NZD/AUD - All sticking to tight confines against their US peer, as the Yen rotates around 113.50 again and Pound pivots 1.3200 in limbo awaiting top tier UK data on Friday that might shed more light on what is gearing up to be another tight BoE rate call next week. Moreover, Usd/Jpy looks pretty well and heavily flanked by option expiry interest either side and in between its 113.81-35 extremes given large amounts running off at the NY cut - see 6.59GMT post on the Headline Feed for full details. Elsewhere, the pendulum has swung down under in favour of the hitherto underperforming Kiwi, as Nzd/Usd popped over 0.6800 and Aud/Nzd stalled ahead of 1.0550 alongside a pull back in Aud/Usd from 0.7185+ at best to test support into 0.7150 in wake of comments by RBA’s Harker and the RBNZ rebalancing its TWI. In short, the former said Australia’s economy can run hot while dodging the runaway inflation that’s plaguing much of the world, signaling monetary policy will stay ultra-loose for some time yet, while the latter culminated in a bigger Cny contribution at 27% from 23.5%. SCANDI/EM - Another day and more appreciation for the Cnh and Cny, at least in early hours, with validation via the PBoC setting a sub-6.3500 midpoint fix for the onshore Yuan vs Buck. However, the offshore then re-weakened past 6.3500 per Dollar after the Chinese central bank opted to raise the FX RRR by 2ppts - effective 15th Dec. Meanwhile, the Nok gives back after midweek gains as Brent slips with WTI to the detriment of the Rub and Mxn as well. Conversely, the Huf has a further 20 bp 1 week repo hike from the NBH to lean on and the Brl got a boost from 150 bp tightening on top of the BCB signalling the same again when COPOM delivers its next SELIC rate call. In commodities, WTI and Brent front month futures have drifted lower from their best levels printed overnight, which saw WTI Jan briefly mount USD 73.00/bbl and Brent Feb eclipse 76.50/bbl. The complex was unfazed by WSJ source reports suggesting the Biden administration is said to be moving to tighten enforcement of sanctions against Iran, whilst US officials say if there is no progress in the nuclear talks. This comes ahead of the resumption of nuclear talks today, albeit the US delegation will only travel to Vienne over the weekend. With the likelihood of an imminent deal somewhat slim, participants will be eyeing any further deterioration in relations alongside additional demand/sanctions. Aside from that, price action will likely be dictated by the overall market tone in the absence of macro catalysts. Elsewhere, reports suggested the Marathon pipeline has been shut due to a crude oil leak estimated to be around 10 barrels from the 20-inch diameter Illinois pipeline, but again the headlines failed to spur the oil complex. Over to metals, spot gold trades sideways and remains under that cluster of DMAs which today sees the 100 at 1,790/oz, 200 and 1,792.50/oz and 50 and 1,795/oz. LME copper meanwhile has been drifting lower since the end of APAC trade, but the contract remains north of USD 9,500/t. US Event Calendar 8:30am: Dec. Initial Jobless Claims, est. 220,000, prior 222,000; Continuing Claims, est. 1.91m, prior 1.96m 9:45am: Dec. Langer Consumer Comfort, prior 51.0 10am: Oct. Wholesale Inventories MoM, est. 2.2%, prior 2.2%; Wholesale Trade Sales MoM, est. 1.0%, prior 1.1% 12pm: 3Q US Household Change in Net Wor, prior $5.85t DB's Jim Reid concludes the overnight wrap On the theme of advertising, here’s a final reminder about our special monthly survey for 2022, which will be closing today at 1pm London time. We ask about rates, equities, and the path of Covid-19 in 2022, amongst other things, and also return to a festive question we asked in 2019, namely your favourite ever Christmas songs. The link is here and it’s your last chance to complete. All help filling in very much appreciated. Following the strongest 2-day equity performance so far this year, yesterday saw the rally begin to peter out amidst growing concern that another round of restrictions over the coming weeks could set back the economic recovery. Ultimately the issue from a health perspective is that even if Omicron does prove to be less severe, which the initial indications so far have pointed to, a rise in transmissibility could offset that, and ultimately mean that more people are in hospital as a much bigger number of people would actually get Covid-19, even if a lower proportion of them are severely affected. We’ll start with the good news, and one new piece of information yesterday was that Pfizer and BioNTech announced the results from an initial study showing that three doses of their vaccine neutralised the Omicron variant of Covid-19. President Biden tweeted that the new data was “encouraging” and said it reinforced the point that boosters offer the highest protection, whilst Pfizer’s chief executive said that the final verdict would be the real-world efficacy data, which they expect to see toward the end of this year. We also had an update from the EU’s ECDC, who said that of the 337 Omicron cases reported in the EU/EEA so far, all of them were either asymptomatic or mild where severity was available, and that no deaths had yet been reported. Obviously, these sample sizes aren’t big enough to come to concrete conclusions yet, but if things continue this way that’s clearly a promising sign. On the other hand, the spread of infections has continued in South Africa, and the country reported 19,482 cases, which is the highest number since Omicron was first reported. That comes as a study from a Japanese scientist advising the health ministry in Japan said that Omicron was 4.2 times more transmissible than delta in its early stage. That hasn’t been peer-reviewed yet but would certainly back up all the other indications that this is a much more transmissible variant than seen before. These growing warning signs have led governments to keep toughening up restrictions, and here in the UK, the government announced they’d be moving to “Plan B” in England, which will see the reintroduction of guidance to work from home from Monday, and an extension of face masks to most public indoor venues. They will also be making Covid-19 passes mandatory for nightclubs and venues with large crowds, though a negative test will also be sufficient. That comes as cases have continued to rise, with the 7-day average now above 48,000 and at its highest level since January. Separately in Denmark, the government said that schools would close early for the Christmas break, amongst other restrictions. Equities struggled against this backdrop, with Europe’s STOXX 600 down -0.59%, although the S&P 500 managed to pare back its earlier losses to eke out a +0.31% gain. Cyclicals underperformed, but we did see volatility continue to subside, with the VIX down to its lowest closing level since Omicron emerged, at 19.9pts. In addition, there was an outperformance from tech stocks, with the NASDAQ (+0.64%) and the FANG+ index (+0.62%) seeing solid gains. The increasing risk-off tone didn’t bother oil prices either, with Brent crude (+0.50%) and WTI (+0.43%) continuing their run of gains this week, including further gains overnight, whilst European natural gas futures (+5.86%) closed above €100 per megawatt-hour for the first time in nearly 2 months. Over in sovereign bond markets, yields moved higher on both sides of the Atlantic for the most part, with those on 10yr Treasuries up +4.8bps to 1.52%, though this morning they’re down by -1.2bps. That’s the first time they’ve closed back above 1.5% since the session just before Thanksgiving, ahead of the news emerging about the Omicron variant. In Europe, there was an even bigger sell-off, with yields on 10yr bunds (+6.3bps), OATs (+6.9bps) and BTPs (+10.4bps) all moving higher, alongside a further widening in peripheral spreads. This more mixed performance has continued overnight in Asia, with a number of indices trading higher including the CSI (+1.76%), the Shanghai Composite (+1.03%), Hang Seng (+0.89%), and the KOSPI (+0.37%). However, both the Nikkei (-0.27%) and Australia’s ASX 200 (-0.28%) lost ground. On the data front, China’s inflation numbers this morning showed that CPI rose to +2.3% year-on-year in November, slightly lower than forecast +2.5%, albeit still the highest since last August. The PPI readings remained much stronger, but did fall back from a 26-year high last month to +12.9% year-on-year (vs. +12.1% forecast). Looking ahead, futures are indicating a mixed start in the US & Europe with S&P 500 (-0.13%) and DAX (+0.12%) seeing modest moves in either direction. Overnight we also heard from President Biden on Russia, who said that he hoped to announce high-level talks by tomorrow where they would discuss Russian concerns about NATO, and that this would include at least four major NATO allies. President Biden said the meeting was an explicit attempt to “bring down the temperature along the eastern front” that’s ramped up over recent days and weeks. Nevertheless, President Biden reinforced that the US was ready to implement severe economic sanctions should Russia invade Ukraine, telling reporters that he said to Putin there would be “economic consequences like none he’s ever seen”. Back to yesterday, and the Bank of Canada kept policy on hold at their meeting, as was expected. The bank reinforced their expectation for the 2 percent inflation target to be sustainably achieved in the “middle quarters of 2022”. Like other DM central banks, they are focused on persistently elevated inflation, which they tied to supply constraints that will take some time to alleviate. We had some rate hikes elsewhere, however, yesterday with Brazil’s central bank taking rates up by 150bps to 9.25%, whilst Poland’s hiked rates by +50bps to 1.75%. The main data of note yesterday were the US job openings for October, which rose to 11.033m (vs. 10.469m expected) after 2 successive monthly declines. Notably the quits rate, which is a good indicator of labour market tightness, saw its first monthly decline since May as it came down to 2.8%, from an all-time record of 3.0%. To the day ahead now, and it’s a quiet one on the calendar, with data releases including the US weekly initial jobless claims, as well as the German trade balance for October. Tyler Durden Thu, 12/09/2021 - 07:55.....»»

Category: dealsSource: nytDec 9th, 2021

U.S. Bancorp (USB) Arm Closes PFM Asset Management Buyout

U.S. Bancorp (USB) enhances its presence in the institutional asset management space and bolsters position as a dominant provider of varied investment solutions with the PFM Asset Management buyout. U.S. Bancorp’s USB primary subsidiary U.S. Bank completed the deal to acquire PFM Asset Management LLC. The acquisition was carried out through U.S. Bancorp Asset Management. The deal to acquire PFM Asset Management was announced this July.PFM Asset Management will operate as a separately registered investment advisor. More than 250 employees of PFM Asset Management have joined U.S. Bank.Following the addition of PFM Asset Management, U.S. Bank’s Wealth Management and Investment Services division has combined investment assets under management of more than $407 billion as of the third-quarter 2021 end.PFM Asset Management caters to a broad spectrum of client relationships and product offerings, including outsourced chief investment officer services, local government investment pools, and separately managed accounts in fixed-income and multi-asset class strategies.Per U.S. Bancorp Asset Management head Eric Thole, these services complement U.S. Bank’s existing business. Further, the buyout will amplify U.S Bank’s presence in institutional asset management nationwide and bolster its position as a dominant provider of varied investment solutions in the country.Management at PFM Asset Management remarked that the company and its “clients will benefit from U.S. Bank’s financial strength, franchise value, world-class technology and cybersecurity. We are also excited to join an organization that shares a similar culture – an unwavering commitment to clients, and a reputation for operating with the highest ethics and valuing its clients, employees, communities and diversity, equity and inclusion principles.”U.S. Bancorp’s several acquisitions over the past years have enabled the company to foray into untapped markets and fortify its footprint in the existing geographies.This November, the bank agreed to acquire San Francisco-based fintech firm, TravelBank, which offers technology-driven cost and travel management solutions.U.S. Bank is already an industry leader in delivering innovative corporate payment solutions like virtual corporate credit cards and tools to improve working capital. Hence, the acquisition will help it in accelerating the integration of digital payments within its commercial segment.Such inorganic growth efforts combined with ongoing investments in innovative product enhancements, services and people supported its balance-sheet growth and fee-based businesses beside increasing U.S. Bancorp’s market share.Over the past six months, shares of the company have gained 25.8%, underperforming 38% growth recorded by the industry. Image Source: Zacks Investment Research Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Inorganic Growth Efforts by Finance CompaniesSeveral companies from the finance sector are undertaking consolidation efforts to counter the low-interest-rate environment along with the heightened costs of investments in technology.The Bank of New York Mellon Corporation’s BK subsidiary, Pershing, agreed to acquire direct indexing solutions provider, Optimal Asset Management, Inc. The completion of the deal, subject to customary conditions, is expected by the end of this year.Notably, the acquisition will become part of BNY Mellon Pershing’s newly launched business unit, Pershing X. This October, the Pershing X platform was launched within BNY Mellon’s Pershing to design and build innovative solutions for the advisory industry.Last month, CVB Financial Corp. CVBF, the holding company for Citizens Business Bank, announced that Citizens received regulatory approvals from the Federal Deposit Insurance Corporation, and the California Department of Financial Protection and Innovation to complete its previously announced merger agreement with Suncrest Bank. The stock-and-cash deal worth $204 million, announced this July, is expected to close on or about Jan 7, 2022, subject to the satisfaction of all remaining closing conditions.In an effort to expand its presence, CVBF announced an agreement, and plan of reorganization and merger, according to which Suncrest bank would merge with and into Citizens. The acquisition is the second-largest in CVB Financial’s history.United Bankshares, Inc. UBSI completed the merger deal with Community Bankers Trust Corporation. This June, United Bankshares entered an all-stock deal to acquire Community Bankers, the parent company of Essex Bank. Both companies were expected to collaborate in a transaction valued at $303.3 million.The buyout has brought together two high-performing banking companies. It also bolsters United Bankshares’ position as one of the largest and best-performing regional banking companies in the Mid-Atlantic and Southeast. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report U.S. Bancorp (USB): Free Stock Analysis Report CVB Financial Corporation (CVBF): Free Stock Analysis Report United Bankshares, Inc. (UBSI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 9th, 2021

BNY Mellon (BK) Pershing Agrees to Buy Optimal Asset Management

BNY Mellon's (BK) Pershing signs agreement to acquire direct indexing solutions provider Optimal Asset Management. The Bank of New York Mellon Corporation's BK subsidiary, Pershing, agreed to acquire direct indexing solutions provider, Optimal Asset Management, Inc. The completion of the deal, subject to customary conditions, is expected by the end of this year.Since the announcement of the agreement, shares of BNY Mellon have lost 1.3%.Optimal Asset Management has cutting-edge software that provides customizable direct indexing solutions to investors seeking personalized portfolios aligned to their values.Notably, the acquisition will become part of BNY Mellon Pershing's newly launched business unit, Pershing X. This October, the Pershing X platform was launched within BNY Mellon's Pershing to design and build innovative solutions for the advisory industry.Pershing X is set to transform the advisory marketplace by helping firms attract new clients, better serve existing clients, and, thus, grow assets under management (AUM). Clients using Pershing X's solutions are likely to benefit from access to enterprise offerings provided by BNY Mellon Wealth Management and Investment Management.Jim Crowley, Pershing's CEO, stated, "The acquisition of Optimal Asset Management is the latest step in our Pershing X buildout, which aims to fuel growth by helping clients solve the challenge of managing multiple and disconnected technology tools and data sets. As part of our continued efforts to provide clients with innovative offerings, we're delighted to now be able to offer Optimal Asset Management's direct indexing capabilities to our advisory clients within Pershing, as well as to our institutional and retail clients within BNY Mellon's Investment Management business."Pershing X's president, Ainslie Simmonds, said, "We're thrilled to welcome Optimal Asset Management's founder Dr. Vijay Vaidyanathan and his talented team of software architects to Pershing X. Optimal Asset Management will help advisors at our client firms improve relationships and grow their business."Vijay Vaidyanathan, the founder and CEO of Optimal Asset Management, commented, "We're excited about joining Pershing X and the possibilities that we can jointly deliver to clients seeking customized direct indexing solutions. We are proud of the reputation we have built at Optimal Asset Management and the industry innovation we've delivered."Our TakeFor BNY Mellon, its largest source of revenues is fee income (constituting more than 80% of total revenues). This July, the company agreed to acquire fund management technology provider Milestone Group in an effort to boost its digital offerings and core capabilities.BNY Mellon's global expansion initiatives, robust AUM balance and prudent expense-management efforts are expected to continue aiding financials in the near term.Over the past six months, shares of BNY Mellon have gained 7.8% against a 2.4% decline recorded by the industry. Image Source: Zacks Investment Research Currently, BNY Mellon carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Inorganic Growth Efforts by Finance CompaniesSeveral companies from the finance sector are undertaking consolidation efforts to counter the low-interest-rate environment along with the heightened costs of investments in technology.Last month, CVB Financial Corp. CVBF, the holding company for Citizens Business Bank, announced that Citizens received regulatory approvals from the Federal Deposit Insurance Corporation, and the California Department of Financial Protection and Innovation to complete its previously announced merger agreement with Suncrest Bank. The stock-and-cash deal worth $204 million, announced this July, is expected to close on or about Jan 7, 2022, subject to the satisfaction of all remaining closing conditions.In an effort to expand its presence, CVBF announced an agreement and plan of reorganization and merger, according to which Suncrest bank would merge with and into Citizens. The acquisition is the second-largest in CVB Financial's history.Citizens Financial Group, Inc. CFG has completed its previously announced merger with JMP Group LLC. Citizens Financial announced the all-cash deal in September in a bid to augment its capital market capabilities.The buyout is expected to foster growth, diversify Citizens Financial's capital market platform, and provide greater scale in key verticals like healthcare, technology, financials and real estate.Likewise, in an effort to broaden its capabilities for institutional investors and investment management clients, SEI Investments Company SEIC acquired a global portfolio intelligence platform company, Novus Partners.SEI Investments' chairman and CEO, Alfred P. West, Jr., stated, "The financial services landscape is ever-evolving. Our markets continue to face an unprecedented pace of change, and we continuously seek opportunities to stay ahead of and manage this change. By making strategic investments in our solutions and workforce, we drive growth and help our clients make confident decisions for their futures." 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report CVB Financial Corporation (CVBF): Free Stock Analysis Report SEI Investments Company (SEIC): Free Stock Analysis Report Citizens Financial Group, Inc. (CFG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 7th, 2021

Broadridge (BR) Appoints New Global Chief Marketing Officer

Broadridge (BR) welcomes Dipti Kachru to the position of global chief marketing officer. Broadridge Financial Solutions BR announced the appointment of Dipti Kachru as global chief marketing officer, effective January 18.Prior to joining Broadridge, Kachru served as the chief marketing officer for the Wealth Management division at J.P. Morgan. Earlier, she has held multiple senior consumer and wholesale marketing roles at J.P. Morgan Chase and Oppenheimer Funds (now Invesco). She had started her career in advertising, working with global brands like Pepsi, American Express and Microsoft.In her new role, Kachru will be supervising Broadridge's global marketing organization — brand and digital strategy, product positioning, lead generation and thought leadership. She will monitor factors like driving growth, global brand reputation, expanding client relationships and helping the company achieve its revenue growth targets. Kachru will be a member of Broadridge's executive leadership team, wherein she will be reporting to Chris Perry, president of the company.Considering Kachru’s prior experience, the latest appointment is expected to complement Broadridge’s operations and strengthen its competitive position in the U.S. market.Chris Perry, president of Broadridge, stated, "Dipti is a modern, client-centric marketer with significant experience in financial services. Her proven expertise in strategic marketing and digital transformation will further enable us to scale our business, enhance our offerings and elevate our reputation in the marketplace, leveraging both her wealth and asset management/funds experience. We are also thrilled to welcome a purpose-driven leader who is deeply committed to developing talent and making our industry more inclusive."So far this year, shares of Broadridge have gained 12% compared with 24.9% growth of the industry it belongs to.Image Source: Zacks Investment ResearchZacks Rank and Stocks to ConsiderBroadridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some other better-ranked stocks in the broader Business Servicessector are Avis Budget CAR and Cross Country Healthcare (CCRN), both sporting a Zacks Rank #1, and Charles River Associates (CRAI), carrying a Zacks Rank #2 (Buy).Avis Budget has an expected earnings growth rate of 420.6% for the current year. The company has a trailing four-quarter earnings surprise of 76.9%, on average.Avis Budget’s shares have surged 744.3% in the past year. The company has a long-term earnings growth of 18.8%.Cross Country Healthcare has an expected earnings growth rate of 447.8% for the current year. The company has a trailing four-quarter earnings surprise of 75%, on average.Cross Country Healthcare’s shares have surged 201% in the past year. The company has a long-term earnings growth of 21.5%.Charles River Associates has an expected earnings growth rate of 61.2% for the current year. The company has a trailing four-quarter earnings surprise of 51%, on average.Charles River’s shares have surged 119.3% in the past year. The company has a long-term earnings growth of 15.5%. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadridge Financial Solutions, Inc. (BR): Free Stock Analysis Report Charles River Associates (CRAI): Free Stock Analysis Report Avis Budget Group, Inc. (CAR): Free Stock Analysis Report Cross Country Healthcare, Inc. (CCRN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 7th, 2021

Nabors Industries (NBR) Sets Strategies for Energy Transition

Nabors' (NBR) Nabors Energy Transition Solutions (NETS) aims at expanding energy efficiency and trimming toxic emissions for both itself and the third-party clients. Nabors Industries Ltd. NBR and firms across the oil and gas value chain set ambitious decarbonization targets. The sector now needs the means to meet the same. As a result, NBR is happy to launch Nabors Energy Transition Solutions (NETS), a rapidly expanding portfolio of solutions aimed at increasing the energy efficiency and lowering emissions of both itself and the third-party clients.The line-up currently comprises unique emissions monitoring and analytics software, engine management controls, energy storage devices, hydrogen injection catalysts, carbon capture technologies and fuel optimizing additives along with typical high-line power and dual-fuel solutions. All of this is aimed at making Nabors' fleet the cleanest and the most efficient in the business.NBR aims to expand these technologies beyond drilling into the wider upstream market in the future. Nabors is also looking to extend some of its solutions outside oil and gas, such as the large numbers of engines used in marine applications and power production today.Nabors has so far made strategic investments in three geothermal companies, namely, Geo-X Energy, SAGE Geosystems and Quaise through its Nabors Energy Transition Ventures business. Management stated that other initial targets will include alternative energy sources, such as hydrogen, energy storage and carbon capture.Nabors Energy Transition Corporation (NETC), a newly-created special purpose acquisition company and an affiliate of Nabors, raised $276 million in an initial public offering. NETC was established to achieve a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more enterprises. In the energy transition area, it plans to seek an initial business combination target.While this Hamilton-based energy firm expands its business portfolio by pursuing new decarbonization possibilities, it remains dedicated to its prudent capital-management and debt-control policies. Its current focus on drilling automation and digitization is well linked with improving the current energy scenario while also reacting to global sustainability issues.In its existing business, the currently Zacks Rank #3 (Hold) player expects the continuous expansion and innovation. Nabors sees the present extension of its overall strategy as an excellent opportunity to deliver some handsome incremental returns. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Net-Zero ScenarioCarbon neutrality, also termed net zero, refers to a situation wherein all carbon (and other greenhouse gas or GHG) emissions are offset by absorbing the same from the atmosphere. This is an important yardstick by climate scientists to ensure that global warming is limited to 1.5°C above the pre-industrial levels by 2050, in sync with the Paris Climate Agreement.Of late, the concept gained traction operationally with companies across a diverse spectrum laying out concrete strategies about their future sustainability endeavors. For the energy operators in particular, the pressure to decarbonize is intensified by institutional investors and major clients committed to an ESG agenda, thereby snubbing the carbon emitters.  As the focus on energy transition deepens, let’s look at some of the oil and gas companies aiming to achieve net-zero emissions by 2050.It all started with Repsol REPYY, which in December 2019, announced its non-binding plan of reducing net carbon emissions to zero by 2050. The move by the Spanish firm, which complies with the Paris Agreement climate goals, marked the first such initiative in the oil and gas industry.REPYY is expected to use its 2016 carbon intensity level as the baseline. It plans to reduce 10% intensity by 2025 and 20% in the next five years. Repsol expects carbon intensity to fall 40% by 2040 and reach 100% by 2050.In February 2020, BP plc BP announced a plan of curbing net carbon emissions to zero by 2050 or sooner. This London-based energy behemoth plans to sell assets worth some $25 billion to finance its green energy push. As part of its net-zero ambition, BP vowed to cut fossil fuel production by 40% from the 2019 levels.Moreover, to achieve its environment targets, it plans to boost investments in non-hydrocarbon businesses over time. Additionally, BP intends to stop corporate reputation advertising and divert spending toward the promotion of carbon-reduction policies.Last year, Norway’s Equinor EQNR also set its strategy to enhance its transformation into a net-zero carbon emitter. EQNR plans to reduce net carbon intensity by 20% within 2030 and 40% by 2035 while investing more in renewables and low-carbon solutions.Equinor announced a long-term renewable energy target of reaching 12-16 gigawatt of installed capacity by 2030. It aims to store 15-30 million metric tons of carbon dioxide per year and offer clean hydrogen in 3-5 industrial clusters by 2035. EQNR intends to invest about $23 billion in renewables between 2021 and 2026.Wrapping UpA significant number of oil companies publicly set net-zero environmental pledges by 2050, many within the last few months. A big reason for such urgency is the market’s growing recognition of corporate ESG credentials.There is no doubt that the Oil/Energy space stepped up efforts toward a decarbonization goal.Nonetheless, this evolution involves a monumental shift in the energy sector’s business model by effectively departing from the primary operations of oil and gas development.      While some of the transition strategies are indeed ambitious, what’s clear is that companies with a strong ESG bent are held in high regard by the public that might ultimately boost the stock prices. Investor Alert: Legal Marijuana Looking for big gains? Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0%. You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Nabors Industries Ltd. (NBR): Free Stock Analysis Report Repsol SA (REPYY): Free Stock Analysis Report Equinor ASA (EQNR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 6th, 2021

A Close Analysis Of The LegalZoom Stock, Performance And Competitive Landscape

LegalZoom. com Inc (NASDAQ:LZ) is a company to watch, according to current Nasdaq stock exchange figures, with an enterprise value of 35.87 billion dollars. With an increasing number of people beginning their own businesses and many owners lacking interest in or knowledge of legal and compliance processes and frameworks, the future of the industry appears […] LegalZoom. com Inc (NASDAQ:LZ) is a company to watch, according to current Nasdaq stock exchange figures, with an enterprise value of 35.87 billion dollars. With an increasing number of people beginning their own businesses and many owners lacking interest in or knowledge of legal and compliance processes and frameworks, the future of the industry appears to be bright. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Get To Know The Company LegalZoom is a leading online platform for legal and compliance solutions in the United States, with the goal of democratizing the law. LegalZoom has more than 20 years of experience navigating complex regulations and simplifying the legal and compliance process for its customers throughout all 50 states and over 3,000 counties in the United States. The company specializes in business formation, corporate modifications, filings, business compliance, trademarks, patents, copyright, taxes, licenses, permits, agreements, and other services. LegalZoom assists its customers in forming and protecting their businesses, ideas, and families, and is driven by the basic concept that every business deserves the complete protection of the legal system and a simple means to keep compliant with it. What experts say about Legalzoom is that by 2022 they will have formed 10% of all new LLCs and 5% of all new corporations in the United States. This is astronomical - and yes, it allows small business owners to focus on their core competencies rather than the legal and regulatory complexities that come with running a business. In addition to business formations, LegalZoom provides continuing compliance and tax assistance, trademark and copyright filings, and estate planning documents to protect small businesses and their founders. “Our mission of Democratizing Law has been a constant from day one. Our goal is to level the playing field for small businesses by making the law accessible with simple and affordable services. At business formation, small businesses are looking for a lot more than just legal help. We’re excited to help remove roadblocks that get in their way, legal or otherwise,” Wernikoff said in a statement on the release day of LegalZoom on the stock market. Thoughts On Valuation & IPO The company's management and underwriters sought to sell 19.1 million shares at a price range of $24 to $27 per share, with the ultimate price set at $28, well above the higher end of the range. With the offering, the company expects to raise $535 million in gross proceeds. Net cash after the offering is estimated to be roughly $230 million based on the offer proceeds. The 194.1 million shares are worth $5.4 billion in equity, which translates to a $5.2 billion operational asset valuation. When we look at the underlying firm, we notice a sizable revenue base, as well as profitability. The company generated $408 million in revenue in 2019, with a $46 million operating profit after a $14 million impairment change. Revenues increased by 15% to $470 million and change in 2020, while operating profits increased slightly to $49 million, however they were really down if we compensate for the impairment charge incurred in 2019. Revenues during the first quarter of 2021 increased by 27% to $134.8 million, resulting in a $540 million sales run rate. This works out to approximately 10 times sales with a $5.2 billion operational asset valuation. With shares trading as high as nearly $40 in the first few days of trading, the company's value has increased by $2.3 billion, resulting in a $7.5 billion operational asset valuation. This means that, of course, expectations have risen to 14 times annualized sales and even lower earnings multiples. Final Thoughts Although LegalZoom is well positioned to be a long-term secular growth story, current valuations appear to already reflect this. Other concerns, aside from the valuation risks in terms of the sales multiple, are much more generic. This includes, among other things, a competitive operating environment, the perceived value of client counsel, and reputation (in the event that some incorrect advice is given). Fortunately, there are a number of traditional incumbents in the competitive area, and it appears that the company is well positioned to capture market share from them, making it an interesting enough tale to keep an eye on. Updated on Nov 29, 2021, 9:28 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 29th, 2021

Why You Should Pay Close Attention to Company Hiring Practices When Investing

Most savvy investors know the importance of doing your due diligence before you invest in any company. Long before you part with your hard-earned money, you should understand a company’s profitability, target audience, biggest competitors, and trajectory for future growth. To accomplish this, proactive investors look up a number of important metrics and facts about […] Most savvy investors know the importance of doing your due diligence before you invest in any company. Long before you part with your hard-earned money, you should understand a company’s profitability, target audience, biggest competitors, and trajectory for future growth. To accomplish this, proactive investors look up a number of important metrics and facts about the company they’re considering, including its past revenue, its past stock prices, its price to earnings (PE) ratio, and the profiles of its competitors. But have you considered looking at companies’ hiring practices as well? Elements of Hiring Practices to Consider There are several elements of company hiring practices worth considering while investigating potential investment options. For example: Background checks. Does this company conduct background checks on its employees before hiring them? While many past felons go on to have very meaningful and productive careers, there are certain industries that are more sensitive to criminal backgrounds. And these days, it’s incredibly easy to do a mugshots search and lookup conviction history – so there’s no excuse for a company to skip this step. Nepotism and cronyism. There’s nothing wrong with running a family business where multiple family members are involved. But there’s definitely something wrong with hiring a person just because they’re related to you or because you owe them a favor. Companies that practice nepotism and cronyism usually end up corrupt, inefficient, or both. Diversity and inclusion. Companies that practice diversity and inclusion in their hiring practices tend to be 70 percent more likely to capture new markets – and that’s just one of the benefits of diverse hiring. Does this company have employees from a diversity of different backgrounds? Or are they all pretty much interchangeable? Talent recruiting and reputation. Are there lots of people clamoring to work for this organization? Or does the company struggle to attract new people to the business? If a business mistreats its employees or if it doesn’t have a good reputation, it’s going to show. Compensation and benefits packages. How much does this company pay its employees? What kind of benefits packages does it offer? Companies that pay competitively tend to value their employees more – and tend to have more productive, thriving work environments, despite the higher cost of operations. Employee retention. As a combination of these factors and others, companies may benefit from higher employee retention. In turn, higher employee retention leads to reduced costs and greater continuity for the organization. Why Is Hiring So Important? Why is hiring so important for an investor to consider? Workforce and execution. Good hiring and management practices lead to a happier, more productive workforce. When a business is filled with employees who are actively engaged, and who actually care about the success of the organization, it’s much more likely to be successful. Longevity and continuity. It’s also important for an organization to have employees who have been with the business since the beginning – or at least for a long time. This leads to greater continuity and consistency, especially over the long term. Diligence and attention to detail. How much time and attention is a business willing to take when hiring employees? This attention to detail may spill over into other aspects of the business. For example, a business that cuts corners when hiring likely cuts corners in other areas as well. Brand reputation and future. Companies with great hiring practices, and those that treat their employees well, tend to benefit from a stronger brand reputation, setting them up for more appeal with customers and more long-term success. Investigating Hiring Practices How are you supposed to research hiring practices of companies? Company recruiting materials. You can start by reviewing the recruiting materials in circulation for this company. How does this company try to reach new talent? What is the hiring process like? You may even consider going through the application process yourself, to see firsthand how it works. Annual reports and statements. Most companies mention hiring and recruiting in their annual reports and in public company statements. Try to get a feel for employee turnover, productivity, employee satisfaction, and other factors. Employee reviews. It’s often better to learn about a company’s hiring practices from employees themselves. Look up employee reviews for this organization and see what they have to say about it. Are they happy with their overall experience? Are there common grievances among employees who work here? A company having a sketchy or questionable hiring practice probably isn’t enough to justify not investing in them. But in combination with other factors, it could represent a breaking point. Make sure you include hiring in your list of factors to research when investigating a company you want to invest in. You might be surprised at what you find.   Updated on Nov 27, 2021, 10:53 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 28th, 2021

Deere Reports Net Income of $1.283 Billion for Fourth Quarter, $5.963 Billion for Fiscal Year

MOLINE, Ill., Nov. 24, 2021 /PRNewswire/ -- Fourth-quarter net income rises on net sales gain of 19%, demonstrating solid execution and benefits of operating model. UAW contract agreement shows commitment to Deere's workforce. Full-year 2022 earnings forecast to be $6.5 to $7.0 billion, reflecting healthy demand. Deere & Company (NYSE:DE) reported net income of $1.283 billion for the fourth quarter ended October 31, 2021, or $4.12 per share, compared with net income of $757 million, or $2.39 per share, for the quarter ended November 1, 2020. For fiscal year 2021, net income attributable to Deere & Company was $5.963 billion, or $18.99 per share, compared with $2.751 billion, or $8.69 per share, in fiscal 2020. Worldwide net sales and revenues increased 16 percent, to $11.327 billion, for the fourth quarter of fiscal 2021 and rose 24 percent, to $44.024 billion, for the full year. Equipment operations net sales were $10.276 billion for the quarter and $39.737 billion for the year, compared with corresponding totals of $8.659 billion and $31.272 billion in 2020. "Deere's strong fourth-quarter and full-year performance was delivered by our dedicated employees, dealers, and suppliers throughout the world, who have helped safely maintain our operations and serve customers," said John C. May, chairman and chief executive officer. "Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union. Last week's ratification of a 6-year agreement with the UAW brings our highly skilled employees back to work building the finest products in our industries. The agreement shows our ongoing commitment to delivering best-in-class wages and benefits." Company Outlook & Summary Net income attributable to Deere & Company for fiscal 2022 is forecasted to be in a range of $6.5 billion to $7.0 billion. "Looking ahead, we expect demand for farm and construction equipment to continue benefiting from positive fundamentals, including favorable crop prices, economic growth, and increased investment in infrastructure," May said. "At the same time, we anticipate supply-chain pressures will continue to pose challenges in our industries. We are working closely with our suppliers to address these issues and ensure that our customers can deliver essential food and infrastructure more profitably and sustainably." Deere & Company Fourth Quarter Full Year $ in millions 2021 2020 % Change 2021 2020 % Change Net sales and revenues $ 11,327 $ 9,731 16% $ 44,024 $ 35,540 24% Net income $ 1,283 $ 757 69% $ 5,963 $ 2,751 117% Fully diluted EPS $ 4.12 $ 2.39 $ 18.99 $ 8.69 Net income in the fourth quarter and full-year 2020 was negatively affected by impairment charges and employee-separation costs of $211 million and $458 million after-tax, respectively. In addition, net income was unfavorably affected by discrete adjustments to the provision for income taxes in both periods of 2020. Equipment Operations Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 10,276 $ 8,659 19% Operating profit $ 1,393 $ 1,056 32% Net income $ 1,056 $ 571 85% For a discussion of net sales and operating profit results, see the production and precision agriculture, small agriculture and turf, and construction and forestry sections below. Production & Precision Agriculture Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 4,661 $ 3,801 23% Operating profit $ 777 $ 578 34% Operating margin 16.7% 15.2% Production and precision agriculture sales increased for the quarter due to higher shipment volumes and price realization. Operating profit rose primarily due to price realization and improved shipment volumes / mix. These items were partially offset by higher production costs. Results for fourth-quarter 2020 were negatively impacted by employee-separation expenses.   Small Agriculture & Turf Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 2,809 $ 2,397 17% Operating profit $ 346 $ 282 23% Operating margin 12.3% 11.8% Small agriculture and turf sales increased for the quarter due to higher shipment volumes and price realization. Operating profit rose primarily due to improved shipment volumes / mix and price realization. These items were partially offset by higher production costs and higher research and development and selling, administrative, and general expenses. Employee-separation expenses and impairments negatively impacted the fourth quarter of 2020.   Construction & Forestry Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 2,806 $ 2,461 14% Operating profit $ 270 $ 196 38% Operating margin 9.6% 8.0% Construction & Forestry sales moved higher for the quarter primarily due to higher shipment volumes and price realization. Operating profit improved mainly due to price realization and higher sales volume / mix. Partially offsetting these factors were increases in production costs and higher selling, administrative, and general and research and development expenses. Fourth-quarter 2020 results were adversely affected by employee-separation expenses and impairments.   Financial Services Fourth Quarter $ in millions 2021 2020 % Change Net income $ 227 $ 186 22% Net income for financial services in the quarter rose mainly due to income earned on a higher average portfolio and favorable financing spreads, as well as improvements on operating-lease residual values. These factors were partially offset by a higher provision for credit losses. Results in 2020 also were affected by employee-separation costs. Industry Outlook for Fiscal 2022 Agriculture & Turf U.S. & Canada: Large Ag Up ~ 15% Small Ag & Turf  ~ Flat Europe Up ~ 5% South America (Tractors & Combines) Up ~ 5% Asia  ~ Flat Construction & Forestry U.S. & Canada: Construction Equipment Up 5 to 10% Compact Construction Equipment Up 5 to 10% Global Forestry Up 10 to 15%   Deere Segment Outlook for Fiscal 2022 Currency Price $ in millions Net Sales Translation Realization Production & Precision Ag Up 20 to 25% 0% +9% Small Ag & Turf Up 15 to 20% -1% +7% Construction & Forestry Up 10 to 15% 0% +8% Financial Services Net Income $870 Financial Services. Fiscal-year 2022 net income attributable to Deere & Company for the financial services operations is forecast to be approximately $870 million. Results are expected to be slightly lower than fiscal 2021 due to a higher provision for credit losses, lower gains on operating-lease residual values, and higher selling, general, and administrative expenses. These factors are expected to be partially offset by income earned on a higher average portfolio. John Deere Capital Corporation The following is disclosed on behalf of the company's financial services subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market. Fourth Quarter Full Year $ in millions 2021 2020 % Change 2021 2020 % Change Revenue $ 673 $ 693 -3% $ 2,688 $ 2,808 -4% Net income $ 181 $ 154 18% $ 711 $ 425 67% Ending portfolio balance $ 41,488 $ 38,726 7% Net income for the fourth quarter of fiscal 2021 was higher than in the fourth quarter of 2020 primarily due to income earned on higher average portfolio balances and improvements on operating-lease residual values. These factors were partially offset by a higher provision for credit losses. Fourth-quarter 2020 results were also negatively impacted by employee-separation expenses. Full-year 2021 net income was higher than in 2020 due to improvements on operating-lease residual values, a lower provision for credit losses, favorable financing spreads, and income earned on a higher average portfolio. Full-year 2020 results also included impairments on lease residual values. Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:  Statements under "Company Outlook & Summary," "Industry Outlook for Fiscal 2022," "Deere Segment Outlook (Fiscal 2022)," and other forward-looking statements herein that relate to future events, expectations, and trends involve factors that are subject to change and risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of the company's businesses. The company's agricultural equipment businesses are subject to a number of uncertainties, including certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; weather conditions and the effects of climate change; soil conditions; harvest yields; prices for commodities and livestock; crop and livestock production expenses; availability of transport for crops (including as a result of reduced state and local transportation budgets); trade restrictions and tariffs (e.g., China); global trade agreements; the level of farm product exports (including concerns about genetically modified organisms); the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; available acreage for farming; land ownership policies of governments; changes in government farm programs and policies; international reaction to such programs; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases (e.g., African swine fever) and their effects on poultry, beef, and pork consumption and prices and on livestock feed demand; crop pests and diseases; and the impact of the COVID pandemic on the agricultural industry including demand for, and production and exports of, agricultural products, and commodity prices.  The production and precision agriculture business is dependent on agricultural conditions, and relies in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes; the rate of adoption and use by customers; availability of technological innovations; speed of research and development; effectiveness of partnerships with third parties; and the dealer channel's ability to support and service precision technology solutions. Factors affecting the company's small agriculture and turf equipment operations include agricultural conditions; consumer confidence; weather conditions and the effects of climate change; customer profitability; labor supply; consumer borrowing patterns; consumer purchasing preferences; housing starts and supply; infrastructure investment; spending by municipalities and golf courses; and consumable input costs. Factors affecting the company's construction and forestry equipment operations include consumer spending patterns; real estate and housing prices; the number of housing starts; interest rates; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure. Prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. Many of the factors affecting the production and precision agriculture, small agriculture and turf, and construction and forestry segments have been and may continue to be impacted by global economic conditions, including those resulting from the COVID pandemic and responses to the pandemic taken by governments and other authorities. All of the company's businesses and its results are affected by general economic conditions in the global markets and industries in which the company operates; customer confidence in general economic conditions; government spending and taxing; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates (including the availability of IBOR reference rates); inflation and deflation rates; changes in weather and climate patterns; the political and social stability of the global markets in which the company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts; natural disasters; and the spread of major epidemics or pandemics (including the COVID pandemic) and government and industry responses to such epidemics or pandemics, such as travel restrictions and extended shut downs of businesses. Continued uncertainties related to the magnitude, duration, and persistent effects of the COVID pandemic may significantly adversely affect the company's business and outlook. These uncertainties include, among other things: the duration and impact of the resurgence in COVID cases in any country, state, or region; the emergence, contagiousness, and threat of new and different strains of virus; the availability, acceptance, and effectiveness of vaccines; additional closures as mandated or otherwise made necessary by governmental authorities; disruptions in the supply chain, including those caused by industry capacity constraints, material availability, and global logistics delays and constraints arising from, among other things, the transportation capacity of ocean shipping containers, and a prolonged delay in resumption of operations by one or more key suppliers, or the failure of any key suppliers; an increasingly competitive labor market due to a sustained labor shortage or increased turnover caused by COVID pandemic; the company's ability to meet commitments to customers on a timely basis as a result of increased costs and supply and transportation challenges; increased logistics costs; additional operating costs due to continued remote working arrangements, adherence to social distancing guidelines, and other COVID-related challenges; increased risk of cyber-attacks on network connections used in remote working arrangements; increased privacy-related risks due to processing health-related personal information; legal claims related to personal protective equipment designed, made, or provided by the company or alleged exposure to COVID on company premises; absence of employees due to illness; and the impact of the pandemic on the company's customers and dealers. The sustainability of the economic recovery observed in 2021 remains unclear and significant volatility could continue for a prolonged period. These factors, and others that are currently unknown or considered immaterial, could materially and adversely affect our business, liquidity, results of operations, and financial position. Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the company's earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the company's products and customer confidence and purchase decisions, financing and repayment practices, and the number and size of customer delinquencies and defaults. A debt crisis in Europe, Latin America, or elsewhere could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, suppliers, demand for equipment, and company operations and results. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings. Continued effects of the withdrawal of the United Kingdom from the European Union could adversely affect business activity, political stability, and economic conditions in the United Kingdom, the European Union, and elsewhere. The economic conditions and outlook could be further adversely affected by (i) uncertainty regarding any new or modified trade arrangements between the United Kingdom and the European Union and/or other countries; (ii) the risk that one or more other European Union countries could come under increasing pressure to leave the European Union; or (iii) the risk that the euro as the single currency of the eurozone could cease to exist. Any of these developments could affect our businesses, liquidity, results of operations, and financial position. Additional factors that could materially affect the company's operations, access to capital, expenses, and results include changes in, uncertainty surrounding, and the impact of governmental trade, banking, monetary, and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs, and other areas; the potential default of the U.S. federal government if Congress fails to pass a fiscal 2022 budget resolution; governmental programs, policies, and tariffs for the benefit of certain industries or sectors; sanctions in particular jurisdictions; retaliatory actions to such changes in trade, banking, monetary, and fiscal policies; actions by central banks; actions by financial and securities regulators; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, noise, and the effects of climate change; changes to GPS radio frequency bands or their permitted uses; changes in labor and immigration regulations; changes to accounting standards; changes in tax rates, estimates, laws, and regulations and company actions related thereto; changes to and compliance with privacy, banking, and other regulations; changes to and compliance with economic sanctions and export controls laws and regulations; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies. Other factors that could materially affect the company's results include production, design, and technological innovations and difficulties, including capacity and supply constraints and prices; the loss of or challenges to intellectual property rights, whether through theft, infringement, counterfeiting, or otherwise; the availability and prices of strategically sourced materials, components, and whole goods; delays or disruptions in the company's supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations, or distribution; the failure of customers, dealers, suppliers, or the company to comply with laws, regulations, and company policy pertaining to employment, human rights, health, safety, the environment, sanctions, export controls, anti-corruption, privacy and data protection, and other ethical business practices; introduction of legislation that could affect the company's business model and intellectual property, such as right to repair or right to modify; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; start-up of new plants and products; the success of new product initiatives or business strategies; changes in customer product preferences and sales mix; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; acquisitions and divestitures of businesses; greater-than-anticipated transaction costs; the integration of new businesses; the failure or delay in closing or realizing anticipated benefits of acquisitions, joint ventures, or divestitures; the inability to deliver precision technology and agricultural solutions to customers; the implementation of the smart industrial operating model and other organizational changes; the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts; difficulties related to the conversion and implementation of enterprise resource planning systems; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; changes in company-declared dividends and common stock issuances and repurchases; changes in the level and funding of employee retirement benefits; changes in market values of investment assets, compensation, retirement, discount, and mortality rates which impact retirement benefit costs; and significant changes in health care costs. The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend largely on timely access to capital in order to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses. The company's forward-looking statements are based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The company, except as required by law, undertakes no obligation to update or revise its forward-looking statements, whether as a result of new developments or otherwise. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q).   DEERE & COMPANY FOURTH QUARTER 2021 PRESS RELEASE (In millions of dollars) Unaudited Three Months Ended Years Ended October 31 November 1 % October 31 November 1 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,661 $ 3,801 +23 $ 16,509 $ 12,962 +27 Small ag & turf net sales 2,809 2,397 +17 11,860 9,363 +27 Construction & forestry net sales 2,806 2,461 +14 11,368 8,947 +27 Financial services 869 891 -2 3,548 3,589 -1 Other revenues 182 181 +1 739 679 +9 Total net sales and revenues $ 11,327 $ 9,731 +16 $ 44,024 $ 35,540 +24 Operating profit: * Production & precision ag $ 777 $ 578 +34 $ 3,334 $ 1,969 +69 Small ag & turf 346 282 +23 2,045 1,000 +105 Construction & forestry 270 196 +38 1,489 590 +152 Financial services 299 249 +20 1,144 746 +53 Total operating profit 1,692 1,305 +30 8,012 4,305 +86 Reconciling items ** (78) (219) -64 (390) (472) -17 Income taxes (331) (329) +1 (1,659) (1,082) +53 Net income attributable to Deere & Company $ 1,283 $ 757 +69 $ 5,963 $ 2,751 +117 * Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains or losses. ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.   DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Three Months Ended October 31, 2021 and November 1, 2020 (In millions of dollars and shares except per share amounts) Unaudited  2021 2020 Net Sales and Revenues Net sales $ 10,276 $ 8,659 Finance and interest income 828 867 Other income 223 205 Total 11,327 9,731 Costs and Expenses Cost of sales 7,809 6,470 Research and development expenses 450 443 Selling, administrative and general expenses 936 1,011 Interest expense 210 278 Other operating expenses 309 414 Total 9,714 8,616 Income of Consolidated Group before Income Taxes 1,613 1,115 Provision for income taxes 330 329 Income of Consolidated Group 1,283 786 Equity in income (loss) of unconsolidated affiliates 1 (28) Net Income 1,284 758 Less: Net income attributable to noncontrolling interests 1 1 Net Income Attributable to Deere & Company $ 1,283 $ 757 Per Share Data Basic $ 4.15 $ 2.41 Diluted $ 4.12 $ 2.39 Average Shares Outstanding Basic 309.1 314.1 Diluted 311.5 317.1 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Years Ended October 31, 2021 and November 1, 2020 (In millions of dollars and shares except per share amounts) Unaudited 2021 2020 Net Sales and Revenues Net sales $ 39,737 $ 31,272 Finance and interest income 3,296 3,450 Other income 991 818 Total 44,024 35,540 Costs and Expenses Cost of sales 29,116 23,677 Research and development expenses 1,587 1,644 Selling, administrative and general expenses 3,383 3,477 Interest expense 993 1,247 Other operating expenses 1,343 1,612 Total 36,422 31,657 Income of Consolidated Group before Income Taxes 7,602 3,883 Provision for income taxes 1,658 1,082 Income of Consolidated Group 5,944 2,801 Equity in income (loss) of unconsolidated affiliates 21 (48) Net Income 5,965 2,753 Less: Net income attributable to noncontrolling interests 2 2 Net Income Attributable to Deere & Company $ 5,963 $ 2,751 Per Share Data Basic $ 19.14 $ 8.77 Diluted $ 18.99 $ 8.69 Average Shares Outstanding Basic 311.6 313.5 Diluted 314.0 316.6 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEET As of October 31, 2021 and November 1, 2020 (In millions of dollars) Unaudited  2021 2020 Assets Cash and cash equivalents $ 8,017 $ 7,066 Marketable securities 728 641 Receivables from unconsolidated affiliates 27 31 Trade accounts and notes receivable - net 4,208 4,171 Financing receivables - net 33,799 29,750 Financing receivables securitized - net 4,659 4,703 Other receivables 1,738 1,220 Equipment on operating leases - net 6,988 7,298 Inventories 6,781 4,999 Property and equipment - net 5,820 5,817 Investments in unconsolidated affiliates 175 193 Goodwill 3,291 3,081 Other intangible assets - net 1,275 1,327 Retirement benefits 3,601 863 Deferred income taxes 1,037 1,499 Other assets 1,970 2,432 Total Assets $ 84,114 $ 75,091 Liabilities and Stockholders' Equity Liabilities Short-term borrowings $ 10,919 $ 8,582 Short-term securitization borrowings 4,605 4,682 Payables to unconsolidated affiliates 143 105 Accounts payable and accrued expenses 12,205 10,112 Deferred income taxes 576 519 Long-term borrowings 32,888 32,734 Retirement benefits and other liabilities 4,344 5,413 Total liabilities 65,680 62,147 Stockholders' Equity Total Deere & Company stockholders' equity 18,431 12,937 Noncontrolling interests 3 7 Total stockholders' equity 18,434 12,944 Total Liabilities and Stockholders' Equity $ 84,114 $ 75,091 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY STATEMENT OF CONSOLIDATED CASH FLOWS For the Years Ended October 31, 2021 and November 1, 2020 (In millions of dollars) Unaudited 2021 2020 Cash Flows from Operating Activities Net income $ 5,965 $ 2,753 Adjustments to reconcile net income to net cash provided by operating activities: Provision (credit) for credit losses (6) 110 Provision for depreciation and amortization 2,050 2,118 Impairment charges 50 194 Share-based compensation expense 82 81 Loss on sales of businesses and unconsolidated affiliates 24 Undistributed earnings of unconsolidated affiliates 2 (7) Credit for deferred income taxes (441) (11) Changes in assets and liabilities: Trade, notes, and financing receivables related to sales 969 2,009 Inventories (2,497) 397 Accounts payable and accrued expenses 1,884 (7) Accrued income taxes payable/receivable 11 8 Retirement benefits 29 (537) Other (372) 351 Net cash provided by operating activities 7,726 7,483 Cash Flows from Investing Activities Collections of receivables (excluding receivables related to sales) 18,959 17,381 Proceeds from maturities and sales of marketable securities 109 93 Proceeds from sales of equipment on operating leases 2,094 1,783 Cost of receivables acquired (excluding receivables related to sales) (23,653) (19,965) Acquisitions of businesses, net of cash acquired (244) (66).....»»

Category: earningsSource: benzingaNov 24th, 2021

A Top CEO Was Ousted After Making His Company More Environmentally Conscious. Now He’s Speaking Out

(To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) The battle within Danone—producer of Activia and Oikos yogurts, Silk soy milk, and Evian water, among others—might have been dubbed a “food fight,” had it not erupted in such serious times. But it was no laughing matter. Months of… (To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) The battle within Danone—producer of Activia and Oikos yogurts, Silk soy milk, and Evian water, among others—might have been dubbed a “food fight,” had it not erupted in such serious times. But it was no laughing matter. Months of tension within the executive board of the $36-billion global food giant exploded in March 2021, just as the world began easing its lockdowns and launching mass vaccination campaigns. In a gloves-off power struggle, two small stakeholders maneuvered a coup, ousting the company’s CEO and chairman Emmanuel Faber, whose four-year leadership had made him a star among environmentalists and climate activists. [time-brightcove not-tgx=”true”] Faber had turned Danone into an “enterprise à mission,” France’s new category similar to an American B-Corp, whose purpose was far broader than profits and growth. He named his strategy “One Planet, One Health,” and created a carbon adjusted earnings per share indicator, pegging Danone’s success directly to its environmental performance. While that brought applause from climate activists, the company’s shares lagged behind peers like Nestlé and Unilever during the pandemic, as sales of some key Danone products like Evian water plummeted. Amid the shock of Faber’s ouster, there were roiling questions over what it all meant. Do CEOs now face an impossible dilemma: Either to please their shareholders, or to join the fight for climate justice and social equity? Faber had placed those issues at the core of the company. And outside it, he threw himself into activist CEO coalitions like the B Team and Business for Inclusive Growth, or B4IG. Little wonder, then, that his firing left palpable distress in some circles, from Paris to the U.N. “Are these two objectives, environmental and economic, irreconcilable?” asked France’s liberal Le Monde of Faber’s ouster. “It plunges us into a confusion of emotions over the ethics of capitalism,” the paper said. Faber, for his part, was more sanguine. At 57, he escaped to his beloved Alps, where he was born and raised, and climbed the peaks, reflecting on what to do, after a 24-year career at Danone. In October, he took a partnership at agritech impact fund Astanor Ventures. Far from irreconcilable, environment and economic objectives are, he believes, becoming inexorably aligned. Over green tea and Perrier in Paris on Nov. 16, Faber spoke with TIME about the role business leaders must play in solving the world’s urgent crises. Fresh off the COP26 climate talks in Glasgow, he believes companies will be key—perhaps the key—to fighting climate change and inequity. (This interview has been condensed and edited for clarity.) It’s been a very strange year for you. Did you feel sideswiped by what happened at Danone? Danone had grown to become my family, so it’s like leaving your family. I didn’t choose that. But I suddenly discovered that I was totally free to reinvent myself, in terms of where I do want to spend time and with whom and how. Which is a privilege, really. What happened was a few people that saw a window of opportunity and for personal reasons pursued that opportunity at the moment where it was easy to destabilize the governance of the company. The outside world believed you wanted to create a climate-driven company, and were punished for it. You know, they had voted the equivalent of public Benefit Corporation [B-Corp] status, 99%, not even a year before, they had agreed with the €3 billion climate and digital acceleration plan that we had announced a year before. … None of them were opposed to what we were doing. You need to read the end of the story, which is unfortunately on the 29th of July. The whole board had to resign. They said they would not seek any reappointment, and all of them would step down with one year in advance. The board had lost total credibility to shareholders. How should corporate boards be changed? What needs to happen in this new generation of corporate leaders? Climate change is there. I don’t think you would find one CEO in the business ecosystem that would say it is not there. That is behind us, different from five years ago… Five years ago, that recently? Oh yeah. I think the pandemic has also taught us lessons, about the fact that there were elements in our supposedly well-controlled and old system that we did just not control. This virus is only half a living organism, and yet it played havoc with the health system. Suddenly we discovered that our food systems were entangled in such a complex web that food sovereignty became huge in the agenda. We suddenly learned that what we felt was a predictable model and a safe model wasn’t, that we hadn’t been super good at being efficient, but we were tested in our resilience in the system. The other thing is, I think last summer’s extreme weather events, fires all over the place, floods all over the place, brought to the public attention that climate change was not in five or 10 years, it was not for remote countries. It is here now. Agriculture is the first victim of climate change warming. The yields are declining, water stress all over the place, soils are eroded. We see a number of situations where civil society and citizens are going after governments for action or inaction against climate change. Governments will have no other way than turning to companies and corporations to do the job, because governments are not doing the job themselves. The private sector will be front and center of the climate transition. So that’s one. Employees collectives are asking questions about ESG [Environmental, Social, and Corporate Governance], big time. More and more, the war for talent is there for the larger companies. So many of the highly educated talents don’t want to work for these large companies. More and more employers are asking the new generation what they want: Meaning, they want impact. And then you have the shareholders. Already now it’s harder for the most carbon-emitting companies to find the right appeal from shareholders. I’ll just give you one example. Anglo American [Corporation] wanted to spin off their coal-mining operations, Thungela. Typically, the market would be ready to pay you 20 years of your current earnings because they believe these earnings have great potential to grow in the future. In the case of Thungela, when they spun it off, they got four months of EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] multiple. They couldn’t find enough investors that would be willing to pay the cost on their reputation to consciously, in 2021, choose to invest in the business which is purely coal mining. So how do you even keep a business like that going? Well, that’s exactly my point. The global financial markets are increasingly reluctant to finance these assets. So far, ESG has been sort of an easy path for CEOs and boards that wanted to look good, but weren’t ready to really walk the talk. That’s the whole question of greenwashing. I think there will always be greenwashing. All this greenwashing noise is paralyzing everybody. It’s penalizing the people that are doing the real stuff, because they can’t prove that, and it’s favoring the people that are not doing the real stuff, because they can claim without being challenged on the reality of this stuff, because there are no metrics. The big announcement at COP26 for me was when the IFRS [International Financial Reporting Standards, which sets rules for public companies] said that they have prepared a prototype for a climate standard that is going to be transparent, comparable, and reliable and audited. It’s huge news. What they are essentially saying is by 2023, all companies will be able to—and in some cases compelled to—report under these new standards. Essentially, 140 countries already agreed to be part of the IFRS metrics in the past, so they would take the additional metric on climate, and adopt it as part of their IFRS. Each company will have to report on its targets on CO2 emissions and its pathway to reduce that. If a company is ahead of its plan, the market will look at this positively. If you’re late, it means that there are some capital expenditures that you need to do in the future. That will mean additional debt. So immediately, the valuation of companies in the stock market will be impacted. Which means as for profits, when you are ahead of your forecast, you get a bump on your share price, and a bump down if you’re super late on your emissions trajectory. Suddenly you can be compared, within peers, within an industry. And you start having a situation where the capital allocation can be based not only on profit but also on carbon. So it’s a huge change. How many companies followed your model of using a carbon-adjusted earnings per share metric, to show the financial cost of the company’s carbon emissions? Zero. Because it takes time. There was a whole journey for those shareholders to understand where I was coming from. We took them into the fields. We had food scientists coming to speak to them. We had been constantly and consistently over years speaking about this to our shareholders. When we decided to become a B-Corp, we were puzzled about how to explain that to our shareholders. I received a short note from my friend Doug McMillon, CEO of Walmart, and he said, “Emmanuel, that’s so great.” So I call him and say, “Would you shoot a short video saying why you think it’s great? You’re my biggest customer.” So he he did that. It was 2017. The Investor Day started with a video of my biggest customer, saying why it was great. It cut 80% of the questions. So when like two years later, we come up with this CO2 adjusted metric, they knew that this carbon charge was not just here to save the planet, it was to save the business, because we needed that carbon in the soil, not in the air. Beyond the food and agriculture system, you don’t have the same magic of telling a story that it’s actually good for the business to put carbon back into the soil. The absence of metrics on carbon made it very difficult to do this. I think the day you have those climate metrics it will become obvious. Maybe we were just ahead by a few years. … The metrics may not be the ones that we had, but there will be one, which will make it a market conversation instead of just one company that had this crazy idea. What got a lot of people’s attention from COP26 in Glasgow was Greta Thunberg’s protests. I think maybe most people will remember her saying, “It’s all blah, blah, blah.” Is that just cynical? And what’s the impact of that on the real work being done? Is it just a sideshow? Unfortunately, it’s a combination of all of that. I don’t think this is only cynicism. I think there has been blah blah. I have myself said that we had not moved either fast or far enough. But I can see many things moving fast. We’re still behind the curve, but we have never been as close as coming to a tipping point. CEOs are held back in talking, by their legal teams, by their comms teams, by their PR teams. They have this polished, you know, sometimes bullshit kind of communication. Shareholders were not so interested in all these discussions three years ago, but now they got very interested, and so everyone is super nervous. But in themselves, [CEOs] know that there is a problem, and they know that there is an opportunity. The food industry, your industry, is a big carbon business. We started the journey on carbon emissions in 2008. By 2009, all the team managers at Danone had a significant incentive [to reduce our] carbon footprint. An incentive bonus. A third [of the bonus] was on social and environmental issues, among which was carbon. The EBITDA level of the company and the carbon footprint had an equal weight in my bonus. So that’s how far we and I went into walking the talk and putting our money where our mouth was. Were you losing some money because that was part of the equation? No, I was making money. We established in 2009 a trajectory that said our peak carbon emissions would be in 2025. And the result of the hard work of 15,000 team leaders, incentivized in their bonuses, led us to reach peak carbon six years in advance, in 2019. So we have constantly been ahead of our plan and the reduction of the intensity of carbon. When you speak about agriculture, carbon is 60% of the organic matter of the soils. And the intensive agriculture, the monoculture kind of agriculture that is the dominant food system, is actually extracting carbon from the soil. Danone was the first—Patagonia and ourselves—to start a regenerative organic certification in the U.S. in 2015. When we started, no one understood what that was. It started by saying we need to regenerate the soil health by going from intensive agricultural practices to practices that actually put carbon back into the soil. We know how to do that. How big has the idea of putting carbon back in the soil become? In 2019, I gathered 30 of the largest companies in the world that that are using resources from the soil: Textile companies, fashion companies, cosmetics, food retailers, some data companies, Microsoft, Google, joined…. So we are now two years after, we have a set of indicators, a framework for what regenerative agriculture stands for. And you find these huge companies. After Danone, you have Nestlé, that this year said by 2030, we will supply from regenerative agriculture. These people needed a safe place where they could incubate and think and work and get their teams to meet together and discuss as an ecosystem. You talk about monoculture agriculture—growing only one type of crop at a time, as is popular at large American farms—ruining soils and the need to put carbon back into the soil, so they’re actually seeing the effects in terms of the quality of their crops? The International Union for Nature Conservation, which is a UN agency on biodiversity, ran a big study. They looked at the wild relatives of the varieties that are being used in the fields. Wild vanilla. Wild coffee, etc. They found out that a third of all the wild relatives in beans are under threat of extinction. They found out that 100% of the sample they used on vanilla’s wild relatives are under the threat of extinction. The seeds of those wild varieties, they constantly adapt to the climate conditions, to the water availability, to the shades or no shades, to the temperature, to the sun, to everything. They mutate naturally. So with climate change, these wild varietals are going to be just way more able to deal with things, and it is so important that we bring them on board. If you are a Cargill or others, or the big coffee companies or the big cocoa companies, that are directly dealing with this reality, with the farmers who see their yields declining and the water scarcity more and more, they have either the choice of going up in altitudes—meaning lower lands at lower volumes, more expensive to adapt—or to find alternatives. This is one of these topics on which I see CEOs’ minds just opening when they realize that there is this opportunity. Because climate change is knocking on the door saying, “Here is the huge problem we have.” But also nature is saying, “Here are the huge abilities that I have to solve your problems.” In your new role in Astanor Ventures, are you going to be putting investments in the future of agriculture? I think at the juncture of technology and nature-based solutions. I’ll say something which is terribly unpopular, but which I’ve been saying for 10 years: We are not paying the true cost of food. We are just not. Do you think that should be reflected when we go to the supermarket? Yes, it should be more expensive. Because it’s not sustainable in terms of farmer income, in terms of animal welfare, in terms of your health sometimes. When we walk into a supermarket in 10 years’ time, is it going to look different? Will there be different products on the shelves? What do you think, and what would you like to see? I hope it is going to be different. There is one aspect that I think I am absolutely convinced about: The food system will relocalize. The second biggest topic for governments through the pandemic has been to make sure that there would be enough food. And they suddenly realized that with the complexity of the food system, there were these bottlenecks. The reduction of the food system carbon emissions will also come from the fact that the ingredients will travel less. In 20 years from now, you will have much more local food. I would like to see more diverse local food, and more expensive than you have today. Some subsidies should be redirected in order to make sure that the people that cannot afford to pay are being given the possibility to do that. At the end of the day, we know where the food systems have led us: About two billion people that are overweight in the world, about 700 million people that have diabetes. Instead of dealing with these obesity and diabetes issues, by providing better food aid and supporting people that need to be supported, you’d actually save money for the future. This is the whole theory of where I think we can gradually move. And climate change will force us to move there. I want to get back to the original thing we were talking about: What we call “conscious capitalism.” You sound almost kind of optimistic, that there are really big changes to come out of this pandemic. And yet inequality is worse, and the profit motivation seems as strong as ever. What makes you so hopeful that people are going to act in the common good rather than in their own self interest? I’m not sure they will. I’ve seen the worst and the best in this pandemic. We see all over the place that growing inequalities are a danger for democracies. So I’m not optimistic. But we’ve seen solidarity, social bonding, people changing their behaviors in many ways, again for the worse and for the best. I see climate change as such a huge frontier for us as a species, that I’m sure it will bring the worst. And I see signs that it can also bring the best. It would be illogical to blame capitalism and the global financial markets for ruining the resilience of our species. I’ve defined myself as a business activist. I’m an activist of business being part of the solution, being the fundamental solution, the solution. I saw you said that when you were 33, you thought of leaving business. Now you think it is the place to be. Yes, I really think so. Do you think the next generation of CEOs is going to be quite different? The next, I don’t know. But the next-next? I think yes. Maybe they will not join the companies. That’s the point. And this is why CEOs are paying a lot of attention to these collectives of employees that have started all around the world. They are highly educated, talented managers. And they will be candidates for CEOs. They are part of a generation that was born with these questions already. So it’s not a cultural shift [for them]. We were talking about this climate skilling and upskilling. How to make people aware of [climate change]. This is not a problem for that generation. They’re entirely into it already, sometimes too much, with climate anxiety and everything. So they will leave these large companies, in which case I think these large companies will simply not survive, because they will not have the skills. Put it this way, if you’re not able to lead climate strategy 10 years from now, you should not be a CEO. It’s as simple as that. Your company will not find capital. I’m pretty clear on that......»»

Category: topSource: timeNov 21st, 2021

The Metaverse - Much, Much Bigger Than Facebook

The Metaverse - Much, Much Bigger Than Facebook Authored by Bill Blain via MorningPorridge.com, “I’m serious. She could actually be a 300-pound dude who lives in his momma’s basement in suburban Detroit. And her name is Chuck.” Facebook is now Meta, and Meta wants to own the Metaverse. Just what is the Metaverse, what are the opportunities, and can Mark Zuckerberg repeat the success of Facebook by monetising a whole new way of doing business, or is it shaping up to be something much, much more? This morning’s Porridge is dedicated to my new colleague Diaa, who was foolish enough to ask what I thought about Facebook.. he will learn.. As a distraction from worrying about What Biden and Xi actually said to each other, the state of wage inflation across economies, UK vs Yoorp unpleasantness, and wondering what 100,000 armed-to-the-teeth Russians are doing on the Ukraine border (aside from being a classic maskirovka to distract us from what Putin is really doing..), I thought today I might continue my grand tradition of writing about stuff I know I know very little about… So, just what is the Metaverse? What kind of opportunity does it represent? Is it, as so many fantabulous things in this wonderful world are, yet another digital solution in search of a problem? Is it hype or a genuine new trend? Of course, my interest in the Metaverse was pricked 2 weeks ago when Facebook Inc changed its name to Meta. Since then the stock is up 7%, only down 8% from its September high before the recent whistleblower news. A few cynics have suggested the renaming was all about trying to distance and shut-off the recent sordid whistleblower accusations about Facebook. Zuckerberg has previous form as something of a congenital acquisitive hoarder of the future – and he clearly wants to own “the metaverse” with the intention of monetising it. The question, and future value of the firm, ultimately lies in how well he achieves that. The Metaverse concept was first described and named by Science Fiction writer Neal Stephenson – whom I’ve actually read! – right in the very early days of the internet revolution. Way back in 1992 he presented a vision of human avatars inter-reacting in a 3D digital space in the novel “Snow Crash”. He pretty much nailed it – establishing digital life alongside concepts like “proof of work” leading inevitably to the concept of digital currencies, the genesis of Bitcoin, the Blockchain and now Non-Fungible Tokens. Today, the Metaverse is being “imagined” as some kind of Internet version 2.1 – but it’s really describes how we will all integrate digitally. It will offer a more immersive world of deeper engagement into virtual and augmented reality – once the technology catches up with the promises. “Digital Visionaries” are talking about how natural it will become to do everything from shopping, business and living a social life online in the form of single or multiple digital avatars… It informs the world of “Ready Player One” and raises fears about a “Matrix” like future. The thing is – whatever Facebook would have us believe – it’s already happening and has been for some time. The global gaming sector is now infinitely larger than the film industry at over $100 bln per annum.  Fortnite, the game, has become a global sensation, and now includes virtual concerts given by smart artists who see the future potential. The amount of cash spent in-game purchases is over $50 bln, just in the US! My family hails from the Scottish City of Dundee, once famous for “Jam, Jute and Journalism”. In the 30-years post-war, it looked to be in terminal decline, but is now the heart of the UK’s exploding gaming sector and home to best-selling game ever: Grand Theft Auto. (Incidentally, the City’s recovery began in 1982 when the UK’s first commercial UK computer; the ZX Spectrum, was built in Dundee!) It’s a city reborn. Zuckerberg has a problem. His existing brands; Facebook, Instagram and WhatsApp will remain essentially unchanged (for now) and are, essentially, advertising companies under competitive and evolutionary threat. They remain the dominant brands in social media advertising, but their user bases are not as sticky as once assumed, and they no longer have a monopoly as social media breaks and fragments into multiple players and themes. Let’s give Zuckerberg some credit for trying to derisk Facebook Meta by diversifying its earnings. The regulatory risks from privacy concerns and the charge its maximised advertising revenues to the detriment of users by targeting them with dangerous social media tosh are huge. How long before an American class action suite emerges for trillions alleging American youth have been mentally damaged by social media? Without Zuckerberg’s unique approach –  I suspect Facebook would be as unlamented as “Friends Reunited” in the social-media graveyard. He is painting the Metaverse he intends to own as a virtual environment where “you can be present with people in digital spaces”, an “embodied internet”, and how it’s going to “succeed the mobile internet”. It’s an opportunity for him to monetise Facebook’s investment in things like the Oculus VR set, and to diversify his earnings from pure (yet risky) advertising to actually selling hard and soft stuff in the Metaverse. Will he succeed in making Meta the dominant venue in the Metaverse? Don’t underestimate the potential for monetisation in the Metaverse. Earlier this year a 17 year old artist, Fewocious, sold 600 digital sneakers in NFT format through an on-line auction for…. $3.08 million. There is now a whole digital fashion universe selling unique NFT apparel gamers can wear on-line. As yet there isn’t a way of being able to dress across the net (enabling digital avatars to wear the same gear across multiple games and in multiple venues), but I’m assured it’s going to happen. There are now a host of earnest fashion designers exclusively focused on digital fashion. There clearly are also real and valuable applications for the metaverse in terms of virtual reality business and education. Effectively, Education when virtual last year when millions of school-kids zoomed an academic year because of Covid. Imagine a future where kids can attend any school they want as digital avatars – interesting, and horrific in terms of real social interaction, not to mention the health consequences of living on line. I’m intrigued by the business potential. Like every other firm we’re wondering just how much office space we really need. How often do clients actually visit the office? Do we all need to be there? Would we not be cheaper and more efficient to continue developing better on-line tools. Instead of one hour zoom calls, what about an on-line digital office open all day? The potential to design and innovate new ways of working in the metaverse are only limited by our imagination! Zuckerberg is a smart fellow who sees all that potential. He knows Facebook is a risk business – the declining numbers of young people using it isn’t compensated for by the ones using Instagram. The dominant younger generation platform is TikTok, which is now part China Government owned after it took an ownership stake in Bytedance. As the Facebook brand inevitably fades its advertising revenues will plummet. Therefore, he is staking the next stage of his brand’s development on his company’s 3D universe. He will find new ways to monetise whatever data Meta can find in its virtual and augmented reality universe – which is not without associated risks to consumers and therefore the company. And that’s where the jury is out – can he make Meta as much a monopoly as Facebook once was? If not, and I suspect its going to be a very crowded space, then Meta’s future is debatable long-term. One final thought – if the Metaverse takes off, then I suspect so does a currency to go with it. I am reassessing Ethereum. Tyler Durden Wed, 11/17/2021 - 19:40.....»»

Category: smallbizSource: nytNov 17th, 2021

Is Boeing The Worst Company On The Planet?

Is Boeing The Worst Company On The Planet? Authored by Bill Blain via MorningPorridge.com, “Had the government done its job of regulating Boeing, it is highly unlikely that the 737 Max would have been globally grounded.” A new book on the fall of Boeing is getting the headlines this morning. I’ve been arguing it illustrates all the worst excess of capitalism – yet how many investors have called it out? Very few. Why does ESG apparently not apply to Boeing? Very short Porridge this morning as I’m about to fly… Thankfully, I shall not be flying on a Boeing 737 Max. At the end of this month a new book will be launched – Flying Blind: the 737 Max Tragedy and the Fall of Boeing, by Peter Robinson. Bloomberg carries a piece on it this morning: Boeing Built an Unsafe Plane, and Blamed the Pilots When it Crashed. Since the first tragic B-737 Max crash in 2018, and then the second on March 10th 2019, I’ve written about the unravelling tumble of Boeing many times. It’s been something of a journey – discovering the emperor not only had no clothes on, but was an abusive, thieving, wife-battering bully into the bargain. I have a childish fascination with aircraft, a geeky ability to identify and prattle about any plane that’s ever flown, and a business interest in aircraft finance. But nothing quite prepared me for just how badly Boeing’s myth collapsed. Frankly – I’m surprised it still exists, and hasn’t been split into a wholly newCo airliner maker, and a legacy Boeing to service its Military contracts. The world needs climate-clean new airliners, but Boeing is a busted flush and will need a massive injection to contribute anything. Airbus isn’t much better – its suffering a talent drain as engineers age and retire, and is struggling to maintain quality on its current products, let along deliver promised hydrogen clean tech by 2035. If ever there was a time to completely relaunch the airliner business… aside from having to reinvent them from the wheels up, and rebuild the workforce.. this would be it. Once Boeing was the byword for aviation brilliance – successfully launching the jet-age, making mass travel possible and displaying endless innovation and inventiveness as the premier aviation firm. And then the cost accountants took over – the old Boeing vanished the day McDonnell-Douglas famously bought Boeing with Boeing’s money in what’s turned out to be among the worst takeovers in corporate history. The last decent plane Boeing made was the innovative, fuel-efficient, composite Dreamliner. It cost $25 bln plus to develop – and it will take decades to recoup the money through clever accounting. (It may never make a real profit.) The plan had then been to develop a successor for the venerable B-737 which airlines and the environmental lobby would have loved: a fuel-efficient, climate friendly, lightweight city-to-city hopper. It never happened. Instead, the C-Suite cut costs and saved money. Their market was secure, a duopoly with Airbus and a packed 3-4 year order books, happy that airlines had little choice but keep buying whatever crud they offered. As interest rates fell Boeing borrowed more and more from market, using debt and earnings to buyback stock. The stock soared. Executives received enormous bonuses and stock option packages. Workers saw salary and conditions cut. Quality fell. The C-Suite decided not to invest in new aircraft development – they simply further extended the B-737, making the once slim thoroughbred of the skies into a fat, bloated, unstable, unsafe cow of flying metal that barely defied gravity. They told airlines crews would not need retraining. They lied. 346 people paid the ultimate price for Boeing compromising safety. Today Boeing has no aircraft on its books any airline really wants. Its new B-777x that finally showed up for the Dubai airshow earlier this week is years late. No one wants it. It’s utterly pointless in this new environment. There have been very few new Dreamliner orders – the whole programme may have lost money. Boeing is textbook corporate failure. Equally it’s a market failure. Have investors pilloryiedBoeing the same way they punish oil majors, miners and energy firms for the temerity of being involved in businesses that cause a perception problem because of the E in ESG? No they have not. Yet Beoing absa***glootly fails both the Social and Governance aspects of ESG. How many big investors have said they are dumping the stock? No, they keep buying because they know just how important Boeing is to the US economy, that it’s too big to fail, so it won’t be allowed to die.. When I give lectures on financial markets I cite Boeing as a prime example of a company guilty of every kind of corporate failure and blatant greed. Its leadership failed in every respect imaginable. It killed 346 people through the deliberate negligence of cost-cutting accountants and marketing teams. It sold an unsafe compromise of plane to avoid spending the money it would have cost to develop a new, more efficient and climate friendly single aisle short-haul airliner. It gambled the money it should have invested in new products by squandering the company’s earnings on stock buybacks to boost the incomes of senior executives. It is now effectively finished. Its reputation as a leading corporate is in taters. It can’t afford to develop new products. It has no current product airlines want – they will buy the relaunched 737 Max because there is nothing else and its’ cheap. Its employee relations are in tatters. What was once the pride of American engineering has a record for shoddy workmanship. It also exposes a number of critical failure across the US industrial complex, including the regulator, The FAA, whch was effectively “state-captured” by Boeing, enabling it to deliver compromises to trusting customers. If you use the search function on the top right of the Morning Porridge website you will find a whole series of Morning Porridges where Boeing was the main topic, including the following: July 10th 2019: Could Boeing trigger a market crash? October 22nd 2019: Boeing, Boeing, Boing, Bong.. May 1st 2020: Boeing, Marx was right? Enough said.. Tyler Durden Wed, 11/17/2021 - 12:10.....»»

Category: blogSource: zerohedgeNov 17th, 2021

The 4 best camper van rentals in 2021, plus insider tips for your first trip out

Camper vans provide a compact, affordable alternative to large RVs, with more comfort than traditional camping. Here are the best places to rent them. When you buy through our links, Insider may earn an affiliate commission. Learn more.Campervan North America LLC Due to COVID-19, many people are considering alternatives to flights and hotels for travel. A camper van is an increasingly alluring proposition for an affordable, socially-distanced vacation. We break down types of camper vans and the best camper van rentals to consider. Table of Contents: Masthead StickyThere's no denying the fact the travel landscape continues to evolve as we adapt to the ongoing pandemic. With plenty of perceived risks associated with both boarding a plane or booking a hotel, people are turning to alternatives to vacation closer to home.   An RV rental is one such way forward as your wheels, lodging, and dining are all relegated to one controlled space. However, they tend to be difficult to drive, sometimes too large for campgrounds, and pricey when it comes to fuel.For an equally convenient way to travel with more flexibility, consider the camper van. Like larger RVs and motorhomes, a camper van offers travelers increased levels of control over their environments. The best camper van is a self-contained living pod with sleeping, washing, and cooking facilities all onboard. They allow easy access to socially distant spots in nature, are easier to drive, better on fuel, and can slip into most campgrounds without problems.Finding the right camper van can be a challenge, though, as there exists a wide range of potential renting (and buying) options. Below are four of the best camper van rental services we've found based on reputation, customer satisfaction levels, specialties, all-around value, and fleet offerings.At the bottom of this guide, we've also included answers to a few FAQs, as well as tips and recommendations for first-timers.Here are the best camper van rentals of 2021Escape CampervansEscape CampervansPros: A well-established company with a good number of locations and excellent customer service. Cons: Some relatively older rental stock, but vans are regularly maintained. Company info and locations: Founded in New Zealand in 2003, the company opened in the US in 2008 and now has 12 locations and 600 vehicles. Locations include Denver, Los Angeles, Las Vegas, Miami, New York, Phoenix, Portland, Salt Lake City, San Francisco, Seattle, Calgary and Vancouver. Their vans have funky, painted exteriors and range from Jeeps up to large Newport campers.   COVID-19 policies: Enhanced, 80-point cleaning and detailing policies, facilities meeting CDC guidelines, minimizing customer contact (a contactless option will be offered from June 2020), flexible cancellation policies.  Typical rental costs: The Escape Mavericks package includes a camper van sleeping up to five people, priced at $35 per day for unlimited mileage in a Ford E-150 or Transit, with kitchen (stove, refrigerator). The price quote is for traveling out of Miami. Rent a camper van through Escape Campervans hereLost CampersLost CampersPros: One of the cheaper rental options on the market. Cons: Just two year-round locations. Entry-level vehicles are relatively basic. Company info and locations: A family-owned business that has operated since 2007. Locations in San Francisco and Los Angeles, and also Salt Lake City (seasonally). The company bills itself as the budget option, and rents out mainly Dodge Grands and Ford E350 vans. COVID-19 policies: Enhanced cleaning policies under CDC guidelines, minimizing contact with customers. Typical rental costs: Wanderer camper van sleeps two people, from $83 per night, rentals include unlimited mileage and roadside assistance. The vehicle includes a full outdoor kitchen including stove and ice chest. The price is for traveling out of Los Angeles.Rent a camper van from Lost Campers hereVintage Surfari WagonsVintage Surfari WagonsPros: The place to rent from if retro-chic appeals to you, with some truly special vehicles in their fleet. The company is exceptionally knowledgeable and will happily help out with suggested itineraries. Cons: The age of some of the vehicles means there are some restrictions on parts of the fleet in terms of range (some 100 miles per day limits) and restricted roads (some cannot drive up very steep inclines). There is just one location to rent from.  Company info and locations: This company has been specifically renting out vintage camper vans for over 14 years, and is based in Costa Mesa, California. Their fleet is exclusively restored VW camper vans from the 1970s and 1980s, with some less iconic but more modern vehicles as well, all with revamped interiors. COVID-19 policies: Enhanced, stringent disinfecting procedures, particularly for 'high touch' points. Typical rental costs: 1984 VW 'Lime Cello' Vanagaon sleeps four passengers with two sleeping berths (one a pop-top on the roof), from $169 per night, mileage conditions to be outlined at the time of booking. The vehicle includes a propane stove and refrigerator/icebox. The price quote is for traveling out of Costa Mesa. Rent a camper van from Vintage Surfari Wagons hereCampervan North AmericaCampervan North AmericaPros: The company rents out practical, no-frills vehicles and has a sizable fleet and good customer satisfaction ratings. Cons: The vehicles have relatively few amenities and fans of luxury additions may find them on the sparse side. Company info and locations: The company has been in business since 2009. Since starting out in Bozeman, Montana, they have expanded to four locations in Denver, Las Vegas, and Seattle. The company has been accredited with the Better Business Bureau since 2015 and holds an A+ rating.   COVID-19 policies: The company has instituted a comprehensive disinfecting program for each rental in accordance with CDC guidelines. Typical rental costs: The Bunkhouse camper van sleeps up to four people (one large bed, two single bunks), from $128 per night, 500 prepaid miles for $180, and a $90 set up/preparation fee. Based on a Dodge Promaster van, it does not come with a stove or refrigeration. The price quote is for traveling out of Denver.Rent a camper van from Campervan North America hereImportant info for first-timersIt's vital to check that you can park your camper van at the campground you intend to visit and check what facilities they have there.Booking ahead is key due to increased demand. Overnight campsite and park fees with 'hookups' (electricity, water, bathrooms, and/or sewage disposal) typically range from $30 to $50 per night or more for the best quality grounds. Some older camper vans may not be suitable for roads with steep inclines, so check your proposed routes with the rental company at the time of booking. Outside of campgrounds, it is also possible to find places to park (usually for limited amounts of time) without any facilities, either in remote areas or at designated spots. This is called 'dry camping' or 'boondocking' and is usually free of charge. You can find these locations on the website for the United States Forest Service or Campendium. This option is much easier for camper vans than it is for huge motorhomes.  There are other obvious preparation tips, such as having a full complement of water (some camper vans do not include running or potable water onboard), groceries, and other essentials. Many of the rental companies listed below have regularly-updated blogs and online resources that are well worth looking at if this is a first-time trip, and are all experts in their regions, and can help with suggested routes and campgrounds. We also suggest starting here with our favorite camper van accessories to make your trip exta comfy.FAQsWhat's the difference between a motor home and a camper van?Motor homes and camper vans both generally fall under the general definition of an RV.A motor home is usually larger, built on a bus or truck chassis, and has a divider between the driver's cab and the living quarters, which include comfortable sleeping, cooking, and bathroom facilities. A camper van is generally smaller, typically with no divide, and usually more basic. Many were not originally built to be self-contained living quarters and have been specially adapted and fitted to serve this purpose. Are all camper vans the same? Customers can choose from a range of outfitted vehicles, some with very basic facilities and some with rockstar levels of comfort but all offer flexibility, economic benefits, and control over the traveler's own environment. It's tricky to specify exact fuel economies for each type but for average-sized camper vans, around 20 miles per gallon is a good working average. "Camper vans offer great gas mileage and can access the more restricted roads (that might be unavailable to larger motorhomes)," Kirby Sandberg said. "They also offer great maneuverability and visibility when driving, and you'll save big by having the option to camp instead of booking into hotels." What kinds of camper vans are there?Basic outfitted/converted camper vans: These are general-use vans like the Ford Transit that were not built for camping but which have been converted. Additions usually include basic sleeping quarters and storage for camping or biking gear, with more upscale models including a small kitchen or galley area with a refrigerator, sink, and running water. Composting toilets and propane-heated shower attachments for outdoor showering are also possible.Purpose-made outfitted camper vans: These are usually newer-generation products built intentionally to be sold to travelers. They tend to be more luxurious with upgraded fixtures and fittings, made from comfortable materials, and feature nicely integrated electronics and plumbing facilities. Upper echelon versions have dining rooms and full bathrooms with showers, too. Brands of these include Winnebago, Volkswagen, and Airstream.High-top outfitted camper vans: These vehicles typically come with a higher roof that's either been factory-fitted on the original vehicle or extended as part of a conversion. Think of this as added "attic'' space that can be used for sleeping quarters, storage space for camping, or adventure gear. Some variations include pop-up or semi-rigid tops, as well as those compatible with rooftop tents. More great road trip guidesstellalevi/Getty ImagesThe best camper van accessoriesThe best RV rentalsThe best car rental companiesThe best road trips in the US, and where to stay along the wayRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 16th, 2021

The Home Depot Announces Third Quarter Results

ATLANTA, Nov. 16, 2021 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $36.8 billion for the third quarter of fiscal 2021, an increase of $3.3 billion, or 9.8 percent from the third quarter of fiscal 2020. Comparable sales for the third quarter of fiscal 2021 increased 6.1 percent, and comparable sales in the U.S. increased 5.5 percent. Net earnings for the third quarter of fiscal 2021 were $4.1 billion, or $3.92 per diluted share, compared with net earnings of $3.4 billion, or $3.18 per diluted share, in the same period of fiscal 2020. For the third quarter of fiscal 2021, diluted earnings per share increased 23.3 percent from the same period in the prior year. "As evidenced by our strong performance in the quarter, our team continues to do an outstanding job of operating with flexibility and agility," said Craig Menear, chairman and CEO. "Ultimately, this is what has allowed us to respond to the elevated home improvement demand that has persisted. I would like to extend my sincere appreciation to our team, as well as our supplier, supply chain, and transportation partners, as we continue to navigate this dynamic environment together." The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at ir.homedepot.com/events-and-presentations. At the end of the third quarter, the Company operated a total of 2,317 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico, including 14 stores from a small acquisition completed during the second quarter of fiscal 2021. The Company employs approximately 500,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE:HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index. Certain statements contained herein constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the impact of the COVID-19 pandemic and the related recovery on our business, operations and financial results (which, among other things, may affect many of the items listed below); the demand for our products and services; net sales growth; comparable sales; effects of competition; our brand and reputation; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; international trade disputes, natural disasters, public health issues (including pandemics and quarantines, related shut-downs and other governmental orders, and similar restrictions, as well as subsequent re-openings), and other business interruptions that could disrupt supply or delivery of, or demand for, the Company's products or services; continuation or suspension of share repurchases; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity or other price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation, including compliance with related settlements; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes, including changes to tax laws and regulations; store openings and closures; guidance for fiscal 2021 and beyond; financial outlook; and the impact of acquired companies, including HD Supply Holdings, Inc., on our organization and the ability to recognize the anticipated benefits of those acquisitions. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 31, 2021 and in our subsequent Quarterly Reports on Form 10-Q. There also may be other factors we cannot anticipate that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission and in our other public statements. THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended Nine Months Ended in millions, except per share data October 31,2021 November 1,2020 % Change October 31,2021 November 1,2020 % Change Net sales $ 36,820 $ 33,536 9.8 % $ 115,438 $ 99,849 15.6 % Cost of sales 24,257 22,080 9.9 76,468 65,827 16.2 Gross profit 12,563 11,456 9.7 38,970 34,022 14.5 Operating expenses: Selling, general and administrative 6,168 6,076 1.5 18,975 18,260 3.9 Depreciation and amortization 600 528 13.6 1,780 1,567 13.6 Total operating expenses 6,768 6,604 2.5 20,755 19,827 4.7 Operating income 5,795 4,852 19.4 18,215 14,195 28.3 Interest and other (income) expense:.....»»

Category: earningsSource: benzingaNov 16th, 2021

The Home Depot Announces Third Quarter Results

ATLANTA, Nov. 16, 2021 /CNW/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $36.8 billion for the third quarter of fiscal 2021, an increase of $3.3 billion, or 9.8 percent from the third quarter of fiscal 2020. Comparable sales for the third quarter of fiscal 2021 increased 6.1 percent, and comparable sales in the U.S. increased 5.5 percent. Net earnings for the third quarter of fiscal 2021 were $4.1 billion, or $3.92 per diluted share, compared with net earnings of $3.4 billion, or $3.18 per diluted share, in the same period of fiscal 2020. For the third quarter of fiscal 2021, diluted earnings per share increased 23.3 percent from the same period in the prior year. "As evidenced by our strong performance in the quarter, our team continues to do an outstanding job of operating with flexibility and agility," said Craig Menear, chairman and CEO. "Ultimately, this is what has allowed us to respond to the elevated home improvement demand that has persisted. I would like to extend my sincere appreciation to our team, as well as our supplier, supply chain, and transportation partners, as we continue to navigate this dynamic environment together." The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at ir.homedepot.com/events-and-presentations. At the end of the third quarter, the Company operated a total of 2,317 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico, including 14 stores from a small acquisition completed during the second quarter of fiscal 2021. The Company employs approximately 500,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE:HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index. Certain statements contained herein constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the impact of the COVID-19 pandemic and the related recovery on our business, operations and financial results (which, among other things, may affect many of the items listed below); the demand for our products and services; net sales growth; comparable sales; effects of competition; our brand and reputation; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; international trade disputes, natural disasters, public health issues (including pandemics and quarantines, related shut-downs and other governmental orders, and similar restrictions, as well as subsequent re-openings), and other business interruptions that could disrupt supply or delivery of, or demand for, the Company's products or services; continuation or suspension of share repurchases; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity or other price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims and litigation, including compliance with related settlements; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes, including changes to tax laws and regulations; store openings and closures; guidance for fiscal 2021 and beyond; financial outlook; and the impact of acquired companies, including HD Supply Holdings, Inc., on our organization and the ability to recognize the anticipated benefits of those acquisitions. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended January 31, 2021 and in our subsequent Quarterly Reports on Form 10-Q. There also may be other factors we cannot anticipate that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission and in our other public statements. THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended Nine Months Ended in millions, except per share data October 31,2021 November 1,2020 % Change October 31,2021 November 1,2020 % Change Net sales $ 36,820 $ 33,536 9.8 % $ 115,438 $ 99,849 15.6 % Cost of sales 24,257 22,080 9.9 76,468 65,827 16.2 Gross profit 12,563 11,456 9.7 38,970 34,022 14.5 Operating expenses: Selling, general and administrative 6,168 6,076 1.5 18,975 18,260 3.9 Depreciation and amortization 600 528 13.6 1,780 1,567 13.6 Total operating expenses 6,768 6,604 2.5 20,755 19,827 4.7 Operating income 5,795 4,852 19.4 18,215 14,195 28.3 Interest and other (income) expense:.....»»

Category: earningsSource: benzingaNov 16th, 2021

Cooper Companies" (COO) Buyout to Boost Women"s Healthcare

Cooper Companies' (COO) agrees to acquire Generate Life Sciences. It will be an important addition to the former's present offerings, while improving women's healthcare. The Cooper Companies, Inc. COO recently inked a definitive purchase agreement to acquire Generate Life Sciences for around $1.6 billion. The buyout is anticipated to be completed in the acquirer’s first fiscal quarter of 2022 upon the fulfillment of customary closing conditions, which include regulatory approval.It’s worth mentioning that Generate Life Sciences is a privately held company and a leading provider of donor egg and sperm for fertility treatments, fertility cryopreservation services and newborn stem cell storage (cord blood & cord tissue).This transaction is likely to bolster Cooper Companies’ CooperSurgical (CSI) business segment.Rationale of the BuyoutPer management, the buyout is a strategic fit for CooperSurgical as it will enable the company to cater to the needs of fertility clinics and Ob/Gyns on the back of a more extensive product portfolio and services.Image Source: Zacks Investment ResearchGiven Cooper Companies’ leading position in women’s healthcare, the buyout, once completed, is going to be a crucial addition to its existing offerings. This, in turn, will enable the company to support its infrastructure and expertise, which include its sales forces’ solid clinical reputation and educational capabilities.From the financial perspective, the acquisition (excluding one-time charges and deal-related amortization) is anticipated to be accretive to Cooper Companies’ adjusted earnings per share by around 30 cents in the first year post completion.Market ProspectsPer a report by Grand View Research, the global women’s health market is anticipated to reach $47.8 billion by 2027, witnessing a CAGR of 4.9% during the forecast period (2016-2027). Hence, this buyout is a well-timed one for Cooper Companies.Another Notable DevelopmentIn August, Cooper Companies announced that its CooperVision MiSight 1 day contact lenses have received approval from China’s National Medical Products Administration — regulating medical devices and pharmaceuticals — for usage within the country post a priority review. CooperVision has been leading the way (for more than a decade) when it comes to building the global myopia management category to provide aid to millions of children and their caregivers through partnership with the optometry and ophthalmology communities.Price PerformanceShares of this Zacks Rank #4 (Sell) company have gained 14.9% on a year-to-date basis compared with the industry’s growth of 14.2%.Stocks to ConsiderSome better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. TMO, DexCom, Inc. DXCM, and AngioDynamics, Inc. ANGO.Thermo Fisher’s long-term earnings growth rate is estimated at 14%. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Thermo Fisher surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.02%. The company’s earnings yield of 3.7% compares favorably with the industry’s (3.6%).DexCom’s earnings growth rate for next quarter is estimated at 60.6%. The company currently carries a Zacks Rank #2.DexCom surpassed earnings estimates in each of the trailing four quarters, the average surprise being 31.7%. The company’s earnings yield of 0.4% compares favorably with the industry’s (3.6%).AngioDynamics’ consensus mark for revenues for fiscal 2022 stands at $313.3 million, suggesting an improvement of 7.7% from the prior-year reported figure. The company currently carries a Zacks Rank #2.AngioDynamics surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 125.6%. The company’s earnings yield of 0.1% compares favorably with the industry’s (3.6%). 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AngioDynamics, Inc. (ANGO): Free Stock Analysis Report Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report DexCom, Inc. (DXCM): Free Stock Analysis Report The Cooper Companies, Inc. (COO): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksNov 15th, 2021

SWK Holdings Corporation Announces Financial Results for Third Quarter 2021

DALLAS, Nov. 12, 2021 /PRNewswire/ -- Corporate Updates Conclusion of strategic review process with SWK to focus on specialty finance receivables business SWK evaluating ongoing dividend and additional leverage Third Quarter 2021 Finance Receivables Segment Updates: As of September 30, 2021, tangible book value per share was $17.50, a 12.7% increase from September 30, 2020 For the third quarter 2021, finance portfolio effective yield was 13.8%, a 40-bps increase compared with 13.4% for the third quarter 2020 For the third quarter 2021, finance portfolio realized yield was 18.8%, compared to 17.4% for the third quarter 2020 Core finance receivables business generated adjusted non-GAAP net income of $7.7 million for the quarter ended September 30, 2021, a 17.6% increase compared to $6.6 million for the quarter ended September 30, 2020 As of September 30, 2021, total investment assets were $206.3 million, a 10.3% increase from September 30, 2020 SWK Holdings Corporation (NASDAQ:SWKH) ("SWK" or the "Company"), a life science focused specialty finance company catering to small- and mid-sized commercial-stage companies, today provided a business update and announced its financial and operating results for the third quarter ended September 30, 2021. "I am pleased to report that both segments of our business performed well during the third quarter. The specialty finance portfolio continued its year-to-date strong performance as highlighted by its 18.8% realized yield during the quarter with strong underlying credit trends. Additionally, Enteris secured several new feasibility studies during the quarter and recently reported encouraging pharmacokinetics data for an internal development candidate," stated Winston Black, Chairman and CEO of SWK. "The recent completion of the strategic review process initiated earlier this year provides management the framework to focus efforts on our specialty finance business going forward. We have built a strong reputation with our platform and are encouraged by the Board's determination that growing the specialty finance business is in the best interests of our stockholders. We intend to return new deal originations to historical levels during 2022, although anticipate this may take a few quarters to ramp up as we fully intend to maintain the high integrity of our underwriting standards. Given SWK's strong current liquidity, including a Board commitment to increase leverage prudently as we scale, we foresee multiple opportunities to deploy capital given the need for small and mid-sized life sciences companies to obtain funding to enable innovation to reach the marketplace." Mr. Black continued, "Value creation continued at Enteris BioPharma, highlighted by six new Peptelligence® feasibility studies signed year-to-date. The increased industry interest in our Peptelligence technology is driven by the business development efforts of Dr. Rajiv Khosla and his team, as well as the technology's role in advancing Cara Therapeutics' Oral KORSUVA™ program. Last month, Enteris also announced successful completion of a Phase 1 clinical trial of optimized Peptelligence Oral Leuprolide, demonstrating delivery of drug levels comparable or greater to subcutaneous or depot injection. Enteris is advancing the program into the next round of clinical development, and we will provide additional details as warranted." Third Quarter 2021 Financial Results For the third quarter 2021, SWK reported total revenue of $9.6 million compared to $10.6 million for the third quarter 2020, which change was primarily the result of a $1.5 million increase in interest and fees earned on our finance receivables and a $2.6 million decrease in revenues from our Pharmaceutical Development segment. The $1.5 million increase in revenue attributable to our Finance Receivables segment primarily consists of a $1.4 million net increase in royalty income and a $1.1 million increase in fees and interest earned on our finance receivables due to funding new and existing loans, partially offset by a $1.0 million decrease in interest and fees earned on finance receivables that were paid off or paid down since the third quarter of 2020. The decrease in Pharmaceutical Development segment revenue includes $2.5 million of milestone revenue received in 2020 related to Enteris' license agreement with Cara. Income before taxes for the third quarter 2021 totaled $2.8 million compared to $3.9 million for the same period the previous year. The year-over-year $1.1 million decrease is primarily driven by a $2.6 million decrease in income from our Pharmaceutical Development segment due to the third quarter 2020 milestone achievement, offset by a $1.5 million increase in revenue from our Finance Receivables segment, and a $0.3 million net increase in operating expenses. The increase in operating expenses included a $1.0 million increase in expenses incurred in connection with the board's efforts to identify, review and explore strategic alternatives for the Company; such expenses primarily consist of legal and consulting fees, as well as board compensation. The increase in operating expenses was offset by a $2.0 million decrease in the amortization of intangible assets. GAAP net income for the quarter ended September 30, 2021, totaled $2.2 million, or $0.17 per diluted share, compared to $4.3 million, or $0.34 per diluted share for the third quarter 2020. For the third quarter 2021, non-GAAP adjusted net income was $4.3 million and non-GAAP adjusted net income for the Finance Receivables segment was $7.7 million, compared to $6.9 million and $6.6 million, respectively, for the third quarter 2020. Income producing assets (defined as finance receivables and corporate debt securities) totaled $196.3 million as of September 30, 2021. This is a 9.0% increase compared with income producing assets of $180.1 million as of September 30, 2020. Total investment assets, which include income producing assets plus equity-linked securities, totaled $206.3 million as of September 30, 2021, compared to the September 30, 2020 total investment assets of $187.1 million. Tangible financing book value per share totaled $17.50 as of September 30, 2021, a 12.7% increase from $15.52 as of September 30, 2020. Management views tangible financing book value per share as a relevant metric to value the Company's core finance receivable business. Book value per share was $20.36 as of September 30, 2021, compared to $18.44 as of September 30, 2020. Tables detailing SWK's financial performance for the third quarter 2021 are below. Portfolio Status During the quarter, SWK did not deploy any capital with existing portfolio companies. During the quarter ended September 30, 2021, the Company collected $7.1 million in principal payments. As of November 8, 2021, SWK had $6.4 million of unfunded commitments. At the end of the third quarter 2021, the weighted average projected effective yield of the finance receivables portfolio was 13.8%, including non-accrual positions, versus 13.4% at the end of the third quarter of last year. The projected effective yield is the rate at which income is expected to be recognized pursuant to the Company's revenue recognition policies, if all payments are received pursuant to the terms of the finance receivables and excludes non-interest earning assets such as warrants and equity investments. For the third quarter 2021, the realized yield of the finance receivables portfolio was 18.8%, versus 17.4% for the third quarter the previous year. The realized yield is inclusive of all fees, including all realized unamortized fees, amendment fees, and prepayment fees, and is calculated based on the simple average of finance receivables at the beginning and end of the period. The realized yield is greater than the effective yield due to actual cash collections being greater than modeled. Total portfolio investment activity for the three months ended September 30, 2021, and 2020 was as follows (in thousands): Three Months Ended September 30, 2021 2020 Beginning Portfolio $ 212,958 $ 182,311 Interest paid-in-kind 672 623 Investment in finance receivables — 6,350 Loan discount and fee accretion 885 555 Net unrealized gain (loss) on marketable investments and warrant assets 128 (193) Principal payments received on investments (7,112) (1,860) Royalty paydowns (1,284) (826) Warrant investments, net of cancellations — 79 Ending Portfolio $ 206,247 $ 187,039 Borrower Liquidity Events During the quarter ended September 30, 2021, no borrowers experienced liquidity events or repaid SWK. However, after quarter close, two borrowers repaid: In October 2021, borrower Thermedx repaid the $0.5 million subordinate note. Thermedx had repaid the majority of its facility in May 2019. In October 2021, borrower Misonix was acquired by Bioventus for $518.0 million. Upon closing of the transaction, Misonix made a $31.6 million payment to SWK to pay principal, accrued interest, and exit fees. Gain on the transaction will be recognized in SWK's fourth quarter. In conjunction with the acquisition, SWK tendered its Misonix stock at $28 per share and received $1.9 million of cash and 71,361 shares of Bioventus common stock, which are freely tradeable. Adjusted Non-GAAP Net Income The following table provides a reconciliation of SWK's reported (GAAP) consolidated net income to SWK's adjusted consolidated net income (Non-GAAP) for the three-month period ended September 30, 2021, and September 30, 2020. The table eliminates provisions for income taxes, non-cash mark-to-market changes on warrant assets and equity securities, amortization of Enteris intangible assets and any non-cash impact on the remeasurement of contingent consideration. Three Months EndedSeptember 30, 2021 2020 Consolidated net income $ 2,243 $ 4,342 Add (subtract): income tax expense (benefit) 513 (451) Add (subtract): (gain) loss on fair market value of equity securities (342) 178 Add (subtract): (gain) loss on fair market value of derivatives 214 (87) Add (subtract): strategic review legal, consulting and board expenses 1,004 126 Add: Enteris amortization expense 619 2,588 Add (subtract): (gain) loss on remeasurement of contingent consideration — 174 Adjusted income before income tax expense (benefit) 4,251 6,870 Adjusted income tax expense (benefit) — — Non-GAAP consolidated net income $ 4,251 $ 6,870 In the table above, management has deducted the following non-cash items: (i) change in the fair-market value of equities and warrants, as mark-to-market changes are non-cash, (ii) income taxes, as the Company has substantial net operating losses to offset against future income, (iii) amortization expense associated with Enteris intangible assets, and (iv) (gain) loss on remeasurement of contingent consideration. Management has also deducted legal and board expenses associated with the Company's strategic review; management believes these expenses are not reflective of operational execution. Finance Receivables Adjusted Non-GAAP Net Income The following table provides a reconciliation of SWK's consolidated adjusted income before provision for income taxes, listed in the table above, to the non-GAAP adjusted net income for the Finance Receivable segment for the three-month period ended September 30, 2021, and September 30, 2020. The table eliminates Enteris operating (income) and loss. The adjusted income before income taxes is derived in the table above and eliminates income tax expense, non-cash mark-to-market changes on warrant assets and equity securities. Three Months EndedSeptember 30, 2021 2020 Adjusted income before income tax expense (benefit).....»»

Category: earningsSource: benzingaNov 12th, 2021

Daniel Schlaepfer: “There Is No Such Thing As Free Day Trading”

High on the list of all the trends, habits, and businesses that the pandemic changed or helped boost, is day trading. Cerulli Associates asserts that during the peak of the pandemic in April 2020, the activity increased dramatically when compared to the same period the previous year. Q3 2021 hedge fund letters, conferences and more […] High on the list of all the trends, habits, and businesses that the pandemic changed or helped boost, is day trading. Cerulli Associates asserts that during the peak of the pandemic in April 2020, the activity increased dramatically when compared to the same period the previous year. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Bored at home and dealing with severe lockdowns, thousands of people turned to day trading apps to compensate for the loss of income, or simply to try their luck at big gains. During this time, applications like eToro and Robinhood Markets Inc (NASDAQ:HOOD) increased their online ads spending. The success of day trading was such that this year will have seen the public listing of both companies, with Robinhood’s already taking place in July, and eToro’s due in the fourth quarter. As more people engage in trading activity, we talked to Daniel Schlaepfer, President and CEO of global market-making firm Select Vantage Inc. (SVI) to discuss the exponential growth of day trading and the regulatory measures that need to be taken to ensure fair trading. In your view, what has caused day trading to become a more prominent feature of financial news headlines this year? It’s really been a mixture of things. The pandemic put the spotlight on day trading –both amateur and professional– for several reasons. The market volatility it brought about made trading riskier and therefore more exciting and more profitable for professional day traders, at least for some. It’s also true that public interest in amateur day trading increased because many people had lost a stable source of income and were spending more time at home. But I also think it goes deeper than this. We’re reaching a point in human history in which technology is providing almost anyone with the opportunity to control their financial welfare –or at least try to. Naturally, that is very alluring. I think greater access to public markets is a good thing, but that doesn’t mean that everyone will be successful. What is the best way to learn how to day trade? I won’t try to hide my bias. I think the best way to learn is to undergo professional training in a simulator before you trade with real capital, which is what my firm’s traders have to do before they can trade the firm’s capital. Of course, not everyone wants to be a professional day trader. You can learn through practice by trading on apps, but you might learn the hard way by losing your money. I also won’t hide my bias in recommending TraderTV.live –a show sponsored by my firm which I am an executive director of– which talks about trends and strategies in real time. It’s the biggest day trading show on YouTube, and bias aside, I’ve heard from many amateur traders that it’s helped them better understand and analyse the markets. Do you agree with the view that amateur day trading has undergone a process of ‘gamification,’ making it both more attractive and risker to retail investors? I think it’s fair to say or at least to speculate that the illusion of “free trading” created by commission-free trading apps has caused a significant proportion of retail investors to treat trading like a game, rather than an investment practice that requires skill and experience, and which involves real losses as well as potential gains. The reality is that there is no such thing as free trading. The practice of Payment-For-Order-Flow (PFOF) enables brokerages like Robinhood to sell customers' buy and sell orders to wholesalers. So, brokers generate revenue by offering zero-commission trading to retail investors when commissions are in fact being subsidized by wholesalers. When something is free, human nature tends to undervalue it. What is your assessment of the SEC’s recent report on the so-called meme stock trading controversy (formally titled ‘Staff Report on Equity and Options Market Structure Conditions in Early 2021’)? It was comprehensive, but not particularly conclusive. Though it warned of the danger of PFOF, it stopped short of banning the practice outright, which I think was a missed opportunity. Doing so would give investors access to the better pricing of a perfect market. Access fees would become transparent and so properly factored into trading decisions. All investors would reap the full efficiencies of the market and correspondingly pay the true cost of facilitating trades. In turn, the fact of incurring this cost would likely deter small retail investors from indulging in risky gamification. From the market’s perspective, what should financial regulators do to ensure the fairest and most competitive trading environment? That’s a complicated question, and the reason for that is that financial regulation is generally too complicated in my view. Simply put, I think good regulation is regulation that is simple, easy to understand and easy to implement. You have previously argued that the cost of complying with financial regulation is too high. Why is this and what could be done to reduce its costs? After the financial crash there naturally emerged a consensus that more regulation was needed to prevent a repeat of the ‘too big to fail’ culture. Since then we’ve seen broad, ambitious, and all-encompassing regulation like Dodd-Frank and more recently MiFID II come into play. While this might all have been well intended, it also became extremely expensive for firms to implement, especially small firms. As such, many small to medium sized firms have been priced out of the market because of regulation. In other words they became “too small to comply.” I’ve been arguing for some time now that the priority for regulators around the world needs to be about bringing down the hidden costs of compliance. You have been involved in litigation proceedings with financial regulators –what was the incentive behind your actions? Yes, that's true. In 2016 I decided to sue the Australian Securities and Investments Commission (ASIC) for defamation. I learnt that they had communicated unfounded suspicions to other market participants that traders at my firm had engaged in market manipulation, which damaged our business. What was the outcome of this litigation? The judge found that I had been defamed, but defensively so. In other words, it was found that no market manipulation had taken place, and that in retrospect the regulator acted wrongly, but that they had the right to act as they did at the time in light of their ultimately ill-founded suspicions. For me that constitutes a moral victory, so it was worthwhile. The judgement stated that, although the appeal outcome didn’t go my way, I was successful on most issues, including the vindication of my reputation. I issued a statement in July manifesting concerns about the fact that ASIC's defence of qualified privilege could set a dangerous precedent for financial regulation. This shows how regulators can act with impunity and cause great reputational damage that could account for financial losses to market participants. How can understanding between market participants and financial regulators be improved and made more efficient? I think communication between regulators and market participants needs to be improved at all levels. I currently sit on the Market Structure Advisory Committee (MSAC) of The Ontario Securities Commission (OSC), which is a great forum for this. What does the future hold for the day trading industry and who stands to benefit the most from increased interest in day trading, whether amateur or professional? I think public interest in trading stocks will only continue to increase, and with time the public will only become better informed. Ultimately I’d like to think the health of the market will be the ultimate beneficiary, as public access means greater liquidity. Updated on Nov 9, 2021, 4:45 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 9th, 2021

Atotech Reports Third Quarter 2021 Results and Narrows 2021 Full-Year Guidance Range

Generates third quarter revenue of $383 million, an increase of 18% over the prior-year period, including chemistry organic revenue growth of 6% Reports net income of $19 million, an increase of 75% compared to Q3 2020 Delivers Adjusted EBITDA of $112 million, a 10% increase over the prior-year period Net leverage decreased to 3.1x Confirms guidance for full year 2021 organic revenue growth, which is expected to be in the range of 13% to 14%, including full year chemistry organic revenue growth of approximately 10% Narrows guidance for full year 2021 Adjusted EBITDA1, which is anticipated to be in the range of $440 million to $450 million. BERLIN, Germany, Nov. 09, 2021 (GLOBE NEWSWIRE) --  Atotech (NYSE:ATC), a leading specialty chemicals technology company and a market leader in advanced electroplating solutions, today reported financial results for the third quarter of 2021. The company maintained its revenue guidance and narrowed the Adjusted EBITDA guidance range for the full year 2021. Chemistry organic revenue growth, a key performance indicator for the Company, increased 6% over the third quarter of 2020. Chemistry organic revenue growth reflects chemistry revenue growth excluding the impact of foreign exchange translation ("FX") and palladium pass-through ("palladium"). Management Commentary Geoff Wild, Atotech's Chief Executive Officer said, "We are pleased by our strong third quarter performance. Atotech delivered results fully in-line with our expectations and our nine-months results are at record levels, despite the continuing disruption of global supply chains. The strength of demand and the resilience of our business model enables us to feel comfortable reiterating our full-year guidance. "This quarter, we saw strong demand in our Electronics segment for our semiconductor-related businesses as well as IC-substrates. In our GMF segment, we experienced good demand for construction-related products, partially offset by a slowdown in demand from the automotive OEMs, which was primarily felt towards the end of the quarter. We also observed increasing demand for our sustainability-related products. "As expected, in Q3 we saw freight costs decline from the first half; however, this improvement was counter-balanced by broad-based inflationary pressure, including raw material price increases. As a result, we have implemented price increases to our customers to mitigate those effects and will be rolling those price increases out over the coming months." Third-quarter 2021 Results Total revenue was $383 million for the third quarter of 2021, an increase of 18% over the prior-year period. Total organic revenue, which reflects total revenue excluding the impact of FX and palladium, increased 10%. Over the quarter, FX provided a 4% tailwind and palladium increased total revenue by a further 4%. These results were supported by organic growth in chemistry revenue of 6%. Adjusted EBITDA was $112 million for the third quarter of 2021, a 10% increase over the prior-year period, reflecting the chemistry organic volume growth and FX tailwinds, partially offset by increased costs associated with higher raw-material, freight and energy costs. Diluted earnings per share was $0.10 for the period ended September 30, 2021, and Adjusted EPS was $0.27. Adjusted EBITDA margin was 29% for the third quarter of 2021. The decline reflects the margin dilution from higher palladium prices as well as broad-based inflation in raw material costs. Third-quarter 2021 Segment Highlights Electronics: Revenue for the third quarter of 2021 in our Electronics segment was $254 million, an increase of 23% over the prior-year period. Total organic revenue grew 13%, consisting of 7% chemistry organic growth and a 60% increase in equipment organic revenue. Palladium pass-through increased revenue by 6% and FX was a 4% tailwind for the quarter. The Electronics organic revenue increase was driven by continued demand for the Company's advanced semiconductor packaging and IC-substrate solutions. End-market demand for computing applications and automobile electrification continued to gain momentum, but the overall slowdown in the Automobile sector for Electronics was also noticeable. As in prior quarters this year, the global build-out of production capacity for PCBs and semiconductors translated into strong demand for our equipment. Adjusted EBITDA for our Electronics segment was $84 million for the third quarter of 2021, an 18% increase over the prior-year period, primarily driven by chemistry volume growth. Adjusted EBITDA margin was 33%, a decline of 135 basis points, driven by dilution from higher palladium prices and the product-mix effect from lower gross- margin equipment revenue. General Metal Finishing: Revenue for the third quarter of 2021 in our GMF segment was $129 million, an increase of 9% over the prior-year period. Total organic GMF revenue increased 5%, consisting of 6% chemistry organic revenue growth and a 29% decline in organic revenue for equipment. Palladium and FX added 1% and 3% to revenue for the quarter, respectively. Chemistry organic revenue growth was primarily a function of continued recovery from the pandemic-depressed markets of 2020, supported by continued strength in sanitary and construction end-markets as well as sustainability projects. Automotive end-market demand slowed towards the end of the quarter. Adjusted EBITDA for our GMF segment was $28 million, an 8% decline compared to the prior-year quarter, primarily reflecting broad-based inflation in raw materials. Full Year 2021 Guidance Regarding the Company's 2021 outlook, Peter Frauenknecht, Atotech's Chief Financial Officer said, "As a result of our solid third quarter, we reiterate our revenue guidance. We continue to expect full year 2021 total organic revenue growth to be in the range of 13% to 14%, including full year organic growth in chemistry revenue of approximately 10%, which excludes the impact of FX and palladium pass-through. Additionally, we now expect full year 2021 adjusted EBITDA to be in the range of $440 million to $450 million, which represents a $2.5 million improvement over our prior guidance, at the mid-point." MKS Transaction On July 1, 2021, MKS Instruments, Inc. ("MKS"), a global provider of technologies that enable advanced processes and improve productivity, and Atotech Limited announced that they had entered into a definitive agreement pursuant to which MKS will acquire Atotech for $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech common share (the "MKS Transaction"). The MKS Transaction is to be effected by means of a scheme of arrangement under Article 125 of the Companies (Jersey) Law 1991 (as amended). The MKS Transaction has been unanimously approved by the MKS and Atotech boards of directors and each of the resolutions put to the Company's shareholders at the court meeting and the general meeting convened in connection with the MKS Transaction, which were each held on November 3, 2021, were passed by the requisite majority of votes. The closing of the MKS Transaction remains subject to the approval of the Royal Court of Jersey, regulatory approvals, and other customary closing conditions, and is expected to close by the fourth quarter of 2021. Conference Call In light of the pending transaction with MKS, the Company will not host a conference call today. Cautionary Statement Regarding Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," and similar expressions and variations or negatives of these words. These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, and such differences could be material. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances. More information on potential factors that could affect Atotech's financial results is available in "Forward-Looking Statements", the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" within Atotech's most recent Annual Report on Form 20-F, and in other documents that we have filed with, or furnished to, the U.S. Securities and Exchange Commission (the "SEC"), and such factors include, but are not limited to: the uncertainty of the magnitude, duration, geographic reach, impact on the global economy of the COVID-19 pandemic, as well as the current and potential travel restrictions, stay-at-home orders, and other economic restrictions implemented to address it; uncertainty, downturns, and changes in our target markets; foreign currency exchange rate fluctuations; reduced market acceptance and inability to keep pace with evolving technology and trends; loss of customers; increases in costs or reductions in the supplies of raw materials that may materially adversely affect our business, financial condition, and results of operations; our ability to provide products and services in light of changing environmental, health and safety, product liability, financial, and other legislation and regulation; our failure to compete successfully in product development; our ability to successfully execute our growth initiatives, business strategies, and operating plans; whether the secular trends we expect to drive growth in our business materialize to the degree we expect them to, or at all; material costs relating to environmental and health-and-safety requirements or liabilities; underfunded defined benefit pension plans; risk that the insurance we maintain may not fully cover all potential exposures; failure to comply with the anti-corruption laws of the United States and various international jurisdictions; tariffs, border adjustment taxes, or other adverse trade restrictions and impacts on our customers' value chains; political, economic, and legal uncertainties in China, the Chinese government's control of currency conversion and expatriation of funds, and the Chinese government's policy on foreign investment in China; regulations around the production and use of chemical substances that affect our products; the United Kingdom's withdrawal from the European Union; weak intellectual property rights in jurisdictions outside the United States; intellectual property infringement and product liability claims; our substantial indebtedness; our ability to obtain additional capital on commercially reasonable terms may be limited; risks related to our derivative instruments; our ability to attract, motivate, and retain senior management and qualified employees; increased risks to our global operations including, but not limited to, political instability, acts of terrorism, taxation, and unexpected regulatory and economic sanctions changes, among other things; natural disasters that may materially adversely affect our business, financial condition, and results of operations; the inherently hazardous nature of chemical manufacturing that could result in accidents that disrupt our operations and expose us to losses or liabilities; damage to our brand reputation; Carlyle's ability to control our common shares; risks relating to the proposed MKS Transaction, including that such transaction may not be consummated, any statements of belief and any statements of assumptions underlying any of the foregoing; and other factors beyond our control. Additional Information and Where to Find It Shareholders may obtain a free copy of the scheme document published by Atotech on September 28, 2021 in relation to the MKS Transaction (the "Scheme Document") and other documents Atotech files with the SEC (when available) through the website maintained by the SEC at www.sec.gov. The Scheme Document is also available free of charge on Atotech's investor relations website at investors.atotech.com together with copies of materials it files with, or furnishes to, the SEC. No Offer or Solicitation This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed MKS Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. The proposed MKS Transaction will be implemented solely pursuant to the scheme of arrangement, subject to the terms and conditions of the definitive agreement between MKS and Atotech, dated July 1, 2021, which contains the full terms and conditions of the proposed MKS Transaction. Non-IFRS Financial Measures This communication contains certain non-IFRS financial measures designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. However, our use of these non-IFRS financial measures may vary from that of others in our industry. Our non-IFRS metrics have limitations as analytical tools, and you should not consider them in isolation or as alternatives to consolidated net income (loss) or other performance measures derived in accordance with IFRS as measures of operating performance, operating cash flows or liquidity. The Company believes that these measures are important and supplement discussions and analysis of its results of operations and enhances an understanding of its operating performance. See the Appendix for a reconciliation of the non-IFRS financial measures. About Atotech Atotech is a leading specialty chemicals technology company and a market leader in advanced electroplating solutions. Atotech delivers chemistry, equipment, software, and services for innovative technology applications through an integrated systems-and-solutions approach. Atotech solutions are used in a wide variety of end-markets, including smartphones and other consumer electronics, communications infrastructure, and computing, as well as in numerous industrial and consumer applications such as automotive, heavy machinery, and household appliances. Atotech, headquartered in Berlin, Germany, is a team of 4,000 experts in over 40 countries generating annual revenues of $1.2 billion (2020). Atotech has manufacturing operations across Europe, the Americas, and Asia. With its well-established innovative strength and industry-leading global TechCenter network, Atotech delivers pioneering solutions combined with unparalleled on-site support for over 9,000 customers worldwide. For more information about Atotech, please visit us at atotech.com. Financial Statement Tables ATOTECH LIMITED Income Statement   Three months ended(unaudited) ($ in millions), except earnings per share Sept 30, 2021 Sept 30, 2020 Revenue $ 383.0   $ 325.4   Cost of sales, excluding depreciation and amortization   (193.2 )   (142.9 ) Depreciation and amortization   (44.0 )   (44.3 ) Selling, general and administrative expenses   (72.2 )   (71.3 ) Research and development expenses   (14.2 )   (13.2 ) Restructuring benefit (expenses)   (0.1 )   (0.1 ) Operating profit (loss)   59.3     53.7   Interest expense   (14.5 )   (36.2 ) Other income (expense), net   (2.1 )   10.8   Income (loss) before income taxes   42.7     28.3   Income tax expense   (23.3 )   (17.3 ) Consolidated net income (loss) $ 19.4   $ 11.1   Earnings per share     Basic earnings (loss) per share   0.10     (0.25 ) Diluted earnings (loss) per share   0.10     (0.25 )   Three months ended(unaudited) ($ in millions) Sept 30, 2021 Sept 30, 2020 Consolidated net income (loss) $ 19.4   $ 11.1   Other comprehensive income (loss)     Actuarial gains and losses   1.5     (4.7 ) Tax effect   (0.5 )   1.4   Items not potentially reclassifiable to statement of income   1.1     (3.3 ) Currency translation adjustment   (35.2 )   65.5   Hedge reserve   (0.1 )   (3.6 ) Thereof: Income (cost) of Hedging (OCI II)   0.3     3.7   Items potentially reclassifiable to statement of income (loss), net of tax   (35.3 )   61.9   Total other comprehensive income (loss), net amount.....»»

Category: earningsSource: benzingaNov 9th, 2021

Transcript: Thomas S. Gayner

     The transcript from this week’s, MiB: Thomas S. Gayner, Markel Corp, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the… Read More The post Transcript: Thomas S. Gayner appeared first on The Big Picture.      The transcript from this week’s, MiB: Thomas S. Gayner, Markel Corp, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast I have an extra special guest. His name is Tom Gayner, and he has a fascinating position in the world of investing and finance. He is the Chief Investment Officer and Co-CEO of Markel Corporation, which he describes as a publicly-traded family office. They have an insurance arm, that’s the genesis and history of the company, but he also has been running the investment portfolio for quite a while. It’s their second arm. And they have — for lack of a better word — a venture, a private equity group that purchases companies. Really a fascinating history, a tremendous track record, and really very interesting gentleman, I found this conversation to be fascinating, and I think you will also. So, with no further ado, my discussion with Markel Corporation’s Tom Gayner. VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is Tom Gayner. He is the CIO and Co-CEO of Markel, a diversified financial holding company. He has been dubbed the next Warren Buffet by no less an expert than Jason Zweig of the Wall Street Journal. From 2000 to 2015, Gayner’s stocks have averaged a return of 11.3 percent annually, while the S&P 500 returned a mere 4.2 percent, counting dividends. Tom Gayner. welcome to Bloomberg. GAYNER: Thanks so much for having me. RITHOLTZ: So, I’ve been looking forward to having this conversation. You’re kind of an interesting guy working in kind of an interesting company. I don’t think a lot of folks know what Markel is and does. Why don’t we start by just give us the short version, what is Markel? GAYNER: Sure. And, in fact, not only do a lot of people not know what Markel does, a lot of people don’t know how to pronounce it. So, it’s a easy screening technique when somebody asked for Markel. They probably don’t know who they’re talking to. So, yes, Markel, to some degree, I think the shorthand way of describing it in — in the usage of today’s words is we’re a family office that happens to be publicly-traded. RITHOLTZ: Right. GAYNER: Now, the — the way that business started was in the 1930’s as a specialty insurance company. It’s kind of an interesting history, in that Sam Markel was in Norfolk, Virginia, and he was on the city council there. And Norfolk, Virginia was a place where a lot of veterans would be getting off the boat from World War I. Some of them decided to stay. And it was the early days of the automobile and trucking industry. So, Sam Markel had been an insurance agent. There were veterans getting off the boat. They were — they were providing cab rides, which were unregulated, unlicensed nickel a ride. Jitneys was the — the name of the term. Of course, accidents ensued, as will be the case, anything like that. And Sam Markel got a law passed that said, “If you’re going to operate one of these jitneys, you had to have insurance.” And so, … RITHOLTZ: So just the people to provide it. GAYNER: And — well, no insurance company was willing to take that sort of risk. So, Sam Markel said, “Well, I’ll start an insurance company to take that risk.” I don’t know what the chicken and egg was, whether Sam had the chess moves all laid out before he proposed the — proposed the ordinance. I’m — I would not be surprised if he did, but that was really the start and the genesis of the company. And — and they caught a mega wave in the sense that the automobile, trucks, the highway system, the interstate highway system for 30 or 40 years, you really had this tailwind of epic growth in the underlying business that — that they would insure. We could go on and on with this conversation, but I think the hallmark that still matters today is you look at the problems, you look at something that somebody needs, you try to be creative, you try to figure out a way to — to solve it, and — and that’s what Markel does. Historically, largely through insurance products and insuring things that a lot of other companies choose not to do for a variety of legitimate reasons. But then also we’ve expanded into a lot of different products and services, industrial products and services over the last 15 years with the growth of Markel Ventures. So, we — we can we can do anything and everything, and if we can figure out a way to make the customers, the employees better off by doing so, we’ll do it. RITHOLTZ: So, the interesting thing about the insurance side is insurers taking cash against the future potential liability, but between — when the policy is sold and when the payout has to be made, hey, we have to do something with all this capital, which brings us to your job. You’re essentially CIO of — of Markel Assets. How do we describe your title? And we’ll get to the Co-CEO thing in a bit. But technically, what is your job description? GAYNER: Well, the CIO, in terms of Chief Investment Officer as opposed to Chief Information Officer, that is exactly the job I had prior to becoming the Co-CEO and effectively, it is still a job that’s embedded in my role. Now, again if your business is story and you have the sophisticated listing base, if you think about insurance — first off, set it up. Your — your initial point is correct, in that an insurance company collects premiums today, and they’re going to make a payment to — for a claim sometime in the future. So, embedded in every single insurance company is an investment operation. RITHOLTZ: Right. GAYNER: And historically, it’s not been unusual for insurance companies to make the vast majority if not the totality of their earnings from what they make on the investments while they’re holding that pool of money. That — that’s the case. RITHOLTZ: If you can — if you can run the — the insurance side as a breakeven and then just be free to do what you want with that capital over until those potential liabilities come home to roost, that’s not a bad source of capital. It’s very cheap. GAYNER: Exactly. And a lot of minds have — have figured that out and — and — and known about that. For some interesting sort of financial history episodes. We go back to the 1960’s or 70’s when conglomerates were sort of the hot money things of the day. Many of those had an insurance company as the financial core of the business – Gulf & Western, Teledyne, things like that. Now, I think there’s an interesting cultural circumstance that’s at play there. In that if you look at insurance companies that are run by investment people, oftentimes that — that movie didn’t end that well because, you know, investment people have a certain mindset, a certain culture, a certain way of doing things, a certain … RITHOLTZ: Embracing things. GAYNER: … lifestyle — sort of lifestyle they’d like to — to lead, insurance people probably not wired that way. RITHOLTZ: Yes. GAYNER: And most insurance companies are run by people who came up through the discipline of insurance. So, they were claims people, they were actuaries, they were sales people, whatever, but the realm of insurance is — is what they are wired to do and how they understand life. They may or may not understand capital allocation and investments quite so much. Similarly — and — and as such, since they don’t understand it, I don’t think they appreciate it and the discipline and what’s required to be really top league in — in that requirement. Similarly, investment people, when — when they run an insurance-based organization and they came up through the realm of — of investments, I think sometimes there’s a tendency not to appreciate the detail work and the daily discipline of what it takes to — to run a — a very good insurance operation. So, if you look at organizations that have successfully been able to balance that tension and have both sides of the house not have one overwhelm the other side, that the list is very, very short. RITHOLTZ: Yeah. And — and we’re going to talk — let’s talk a little bit about that list. And part of the reason you’re implying is, hey, some groups are a little too safety first and to risk averse if they’re overly weighted on the insurance side, other groups are too aggressive and risk embracing. You need that balance, which leads us to the comparison that I have to ask. When did you start first hearing yourself described as the next Warren Buffett, a mini Warren Buffett. He used GEICO as a giant source of — of inexpensive capital and, obviously, did okay with it, right, did pretty well with it — better than pretty well. When did you first start hearing this noise because you’ve been with Markel now for 20 something years? GAYNER: A little over 30 years … RITHOLTZ: Thirty … GAYNER: … going to 1990. RITHOLTZ: … wow. Jeez … GAYNER: Yes. RITHOLTZ: … 31 years. So how long was it before these silly comparisons began? GAYNER: Well, I guess the first time I really heard it was when I said it to myself looking in the mirror. And — and frankly, that would have happened even before I joined Markel … RITHOLTZ: Really? GAYNER: … because the — the way that started was … RITHOLTZ: That’s hilarious. GAYNER: … the first time I became aware of — of Buffett and Berkshire was in 1984 with the seminal Carol Loomis article in Fortune. And I … RITHOLTZ: Right. GAYNER: … and I could remember I’ve worked for a firm called Davenport & Company of Virginia, wonderful firm, still there today. Been in Richmond since 1863, so … RITHOLTZ: Not going anywhere. GAYNER: … not going anywhere. The head of the department was a gentleman named Joe Antrim. And I read this article and here’s how naive and stupid I was. So, it was 1984, I was 22 years old, and I — I went into Joe’s office and I said, “Hey, Joe, have you ever heard of this guy named Warren Buffett.” And Joe was sort of a crusty fella, and he says, “It’s a Buffett, you idiot, and threw me out.” Well, I went to the cutting-edge technology of the day, which was the Standard & Poor’s tear sheet. RITHOLTZ: Right. GAYNER: And I — and I looked at the Berkshire Hathaway page. And my training is as an accountant. I started out as a CPA with PricewaterhouseCoopers. And I looked at those numbers, and I could tell without resorting to four decimal point calculations, they were good. RITHOLTZ: Right. GAYNER: So, I became a — I became aware of Berkshire at that point. RITHOLTZ: When did you first become a Berkshire investor? GAYNER: Not until 1990, which also points out how stupid one can be, because when I first saw it … RITHOLTZ: So, he was right when he — when he said, “Get out of my office.” GAYNER: He exactly was right. So as a kid and the stupid things you — you do as a kid, and I’ll — I’ll — I’ll defer to the notion that at age 22 you’re still a kid … RITHOLTZ: Sure. GAYNER: … so I asked for grace in that sense. So, I — I looked at it, I could tell the numbers were good, and I made the searing mistake. I think — I think the stock was $375 or something like that. RITHOLTZ: Ooh, so expensive. GAYNER: Exactly. RITHOLTZ: Yeah. GAYNER: And I said no stock could possibly be worth that much. RITHOLTZ: Right. GAYNER: So, I made the greatest mistake of omission and sat there and watched it go from that to — remember the first share we bought was $5,750. RITHOLTZ: Oh, my God. GAYNER: And — and by the way, that’s still a pretty good buy. RITHOLTZ: Right. GAYNER: But there’s immense lessons to be learned from that. So, the per share value as — as opposed to the per share price … RITHOLTZ: Right. GAYNER: … let’s do your math and do your homework about that. And by the way, getting back to Teledyne, which is one of those companies that was on the list of balancing out the insurance in the industrial sides of the business under the leadership of Henry Singleton, Fayez Sarofim is a famous money manager, who made a lot of his reputation and returns by being right about Teledyne in the early days. RITHOLTZ: Right. GAYNER: And people used to ask Sarofim what’s the next Teledyne. And his famous response was the next Teledyne is Teledyne. So, when you got something right and you’re going to have a … RITHOLTZ: Stay with it. GAYNER: Exactly. RITHOLTZ: Yeah. GAYNER: Dance with the girl you’re bragging with and keep dancing. But — so answering your question about how the Berkshire comparison started to take place, so in 1986, Markel went public. And luck of the draw, I was the analyst at Davenport who was assigned to cover it. RITHOLTZ: Ah, there we go. GAYNER: So, I started covering Markel from the day of the IPO. And what I observed was here was an insurance company that made an underwriting profit. And at that time, in an era of meaningfully higher rates, you didn’t really need to be disciplined about your insurance so much if you make so much from interest income that you — you could engage in cash flow underwrite. You just wanted to get cash in the door and worry about the claims … RITHOLTZ: Well, a nominal basis not necessarily … GAYNER: Correct. RITHOLTZ: … a real basis, but still … GAYNER: … but this was an unusual discipline to stick to the idea of making an underwriting profit even amidst the — the ability to earn epic investment returns. So, what I saw — and by this time I’m 25 or so — from the IPO is that here’s — here’s an insurance-based organization, which is going to make an — make it dedicated to making it underwriting profit, and Steve Markel, who is the Vice Chairman at the time, was open-minded and had already started making some equity investments with those pennies of underwriting profit out of each dollar. So, they have a long-term mentality from day one. So, I saw that instantly. It was a — it was a — it was a light bulb kind of realization, and I — and I — and I wanted to own some of that stock and be connected to the company. So, from ’86 through ’90, four years, Steve Markel became a friend, a client, a business associate. And he might tell the story differently. I might tell it differently depending on the point of view. But I sort of begged him for a job for four years because I just wanted to be part of that. In 1990, Markel did one of their famous “double the size of the company” deals, but they bought — they bought another company that was as large as what they were. Steve had been managing investments by himself, thought he might like a wingman and … RITHOLTZ: You got the call. GAYNER: … offered me the job at that time. I’ve got the call at that (inaudible). RITHOLTZ: And I assume you jumped right at it. GAYNER: Exactly. RITHOLTZ: And — and let — let me just stay with Markel for a moment. They famously — they don’t hold analyst days. They don’t give earnings guidance or things like that. At least that was the reputation back then. Tell us a little bit about that. What was the thinking behind if you’re going to cover us, you figure it out? GAYNER: Well, there’s a lot of layers to — to that, but I — but I think it makes sense. Think about it this way. If — if you — if you really are, as I said, the first definition of Markel, the — the family office, which is a very popular term these days, that was not a term so much in — in 1990 when I joined. If you really want shareholders who are going to be there for a long period of time and have a sense of ownership, and have a sense of partnership, and really wish to be multi-generational investors, well, I — I run a business and setting aside the investment side with the Markel Ventures’ sides of things, in the businesses that we run, which are long-term established businesses, I don’t think — and the people who run those businesses do not think about their customers in — in a quarterly time frame. We think about our customers as once you’re a customer of ours in whatever business we have, we want to be doing a good enough job for you and delivering enough value and delighting you in such a way that you want to keep doing business with us. So, cutting that into quarterly time frames and setting expectations that are tied to that, that just seems like a bad idea and — and contradictory to — to how we would really run a business. So, we didn’t have to think up all these things our self. We got to observe the — the way Buffett did things. And — and we’ve been going to the Berkshire Annual Meeting since — since 1991, which have been the — the first year — first year I joined, because what I said to Steve at that point was in terms of investors that we wanted to get at Markel, the people who are most likely to understand what we’re doing are people who are already in Berkshire. So rather than try to get them to come to Richmond and engage, so well … RITHOLTZ: Let’s go there. GAYNER: … if you own Berkshire, you’re already — you’re already qualified. RITHOLTZ: Right. GAYNER: So, let’s go there and start meeting people. So that very first year that we were there, just because I’ve been in the investment business for a couple of years, there were — there were six people that were willing to sit down and drink coffee and eat bagels with Steve Markel and I. And we didn’t have a formal presentation. I think we just talked and answered their questions. And that went on for maybe 2.5, three hours or something like that. RITHOLTZ: Wow. GAYNER: In that room, six people, Chuck Akre was one. He’s a legendary investor. I don’t know whether he’s been on your — your — your podcast or not. Wonderful guy and … RITHOLTZ: Make an introduction. GAYNER: He would be a … RITHOLTZ: OK. GAYNER: … well-worthy person to talk to, and he’s a meaningful teacher to me ever (inaudible). RITHOLTZ: We love people like that. GAYNER: I do indeed. Michael Lowenstein, whose father was Louis Lowenstein, the professor at Columbia Business … RITHOLTZ: Columbia, OK, sure. GAYNER: … School, exactly. And one of his cousins I can’t remember who, but wonderful family and sort of the right — the right kind of people. Having Peter Cayman (ph) for Boston — Jonathan Brandt at Ruane Cunniff is one of the panelists that asks Buffett questions at the meetings, whose father was a — a roommate and buddy of — of Buffett and Bill Ruane. So, we — we started off with just an absolutely wonderful set of people. And — and all Steve and I said at the end of that meeting was, “You know, we’ll be back again next year. And if you know anyone who would be interested, please let them know and we’ll stick together.” RITHOLTZ: Let’s have another one, I’m sure. GAYNER: So, we started doing that, and that became an annual tradition. And we did that year after year after year. What started with six people, by the time you got to the year before last, which was the last in-person meeting that Berkshire had, we had something on the order of 1,200 or 1,300 people at — at that meeting. And again, same format, we open it up. We say, “Thank you for being here. Great to see you. What questions can we answer for you?” And — and there are more Markel shareholders in that room than typically come to our annual meeting, so it — it really is cultivating of the community that that’s out there. And this year, unfortunately, because the Berkshire meeting was virtual and — and — and that the crowd wasn’t there, I said, “Well, we have the opportunity to try to create some center of gravity in Richmond, Virginia because that convening — that worldwide convening of people who are searching for certain values and certain ways of running the business, the world is hungry for that. So, let’s give them a forum and a venue to do so. So, we found the concert arena in Richmond, Virginia that had a roof, but open air to — to try to, you know, meet people halfway that the pandemic (inaudible) … RITHOLTZ: Makes sense. GAYNER: … we’re getting better. We — we had a meeting. We had — my goal was to get 100 and — 100 out of town professional investors to attend. We ended up with about 150 professional investors. And then between employees, associates, local people, we had 500 people at that meeting and we try to make it fun. We had — we had food trucks. We had beer trucks. We had a band. And that may seem minor, but it speaks to the culture of trying to connect with people in ways that you just cannot do in any other way than — than be with them, and — and to cultivate this long-term sense of ownership where your time horizons are — are infinite — eternal rather than — than cut into — to quarterly things. So, it’s just an entirely different way of approaching things and thinking about things, so it — it doesn’t really comport to match up with the — the — the typical way that — that major finance is done. Not right or wrong, just different. RITHOLTZ: I — I like it, I love the idea of burning man for finance … GAYNER: Exactly. RITHOLTZ: … instead of, oh, great another boring hotel conference room. I mean, the one good takeaway from the pandemic is those sorts of financial, you know, just deadly meetings, they seem to be attenuating quite — quite a bit. And … GAYNER: I think people are maximizing their multitasking skills when they’re with listening to something like that on a — on a Zoom call. I — I don’t — I don’t have the patience or the endurance to do that with a — without fidgeting and looking at something else, too. RITHOLTZ: I’m — I’m with you on it. Let’s talk a little bit about your background, which has some really interesting things about it. You’ve described yourself as knowing that you’re just good and not great. Explain that. Who — who goes out and says, “I am not great. I’m — I’m good and I am aware of that.” GAYNER: Well, I was in a discussion last night with an absolutely fascinating person, absolutely high-end quality on every measure you could — you could think about and — and that excellence shown through. And — and the discussion took this twist and turn where the — the distinction between an optimizer and a satisfier came up. RITHOLTZ: Sure. GAYNER: And — and I think there is a tendency among Taipei people, extraordinarily high accomplishment people, high achievers to really latch onto the idea of optimization. RITHOLTZ: Yeah. GAYNER: And there’s nothing wrong with that. But sometimes there can be a hidden intangible, unquantifiable cost to focusing entirely on optimizations all the time. Einstein says that, you know, not everything that counts can be counted and not everything that counts — Einstein is smarter than me, he’s a perfect example of how — I couldn’t remember it, not everything … RITHOLTZ: Not everything that counts can be counted and not everything that can be counted counts. GAYNER: There you go. My special guest Barry Ritholtz, thanks for the pickup in the (inaudible) there. RITHOLTZ: Was that Einstein? I thought that was — I thought that was some management consultant who said that. GAYNER: I’m going to go with Einstein. RITHOLTZ: OK. GAYNER: But I’ll defer to … RITHOLTZ: Makes it sound better. GAYNER: … I’ll defer to the fact-checking experts on that. But — but the point is there — there’s an element of — of intuition, of — of the — the intangible sense of — of — of spirit and culture that I find extraordinarily different — difficult to matter, that sometimes you got — you have to let people have some room to make some mistakes and look at outcomes that are not optimized. And what you get in — in design thinking and — and in systems approach if you’re dealing with the right kind of systems that there’s — there’s a bit of an evolutionary process where mistakes that you make start drifting away and things that you did right start compounding, and — and — and — and magnifying themselves. And — and as such, if you just — if you just leave a little slack in the system and you don’t try to press a to the last red line of — of what’s there, you allow time and space, and muscle, and rest, and energy to create things that you — you couldn’t have thought of beforehand that happened somewhat through serendipity. So, I think — I think humility — and it’s an epic challenge. I’m — I’m 59 years old now. And fortunately, things have worked out well. And I have credibility because my record is pretty good. I have a lot of empathy and — and — and understanding of the challenge that would face a 26-year-old or a 25-year-old one, or — or me at 22, trying to get on the ladder and — and get the career, get the leeway and latitude that I enjoy right now. Because if you think about it, say you’re 22 or 25 and you’re trying to pitch somebody to — to manage money for them or being given discretion, typically, if — if you just say the kinds of things that I do, we’re long-term, we’re going to be patient, we’re going to look at this and step in. So, you don’t really stand out enough to get people to — to write you a check. (COMMERCIAL BREAK) RITHOLTZ: Especially at 26. GAYNER: Exactly. So, you’re — you’re forced, almost — almost bullied by the system to make hyperbolic statements, and — and claim precision, and claim efforts that are — that are super human just to get people to — to give you the job and give you the money to manage. And — and I think markets are — are — are — are quantum systems. They — they — they defy understanding. And — and you can do a lot of work and you can keep trying to get to the next decimal point of understanding, but there’s a certain irreducible quantity to human psyche, and greed, and fear, and all those sort of things that really do matter in markets. And — and I just think it’s helpful to be humble to — to acknowledge that. Don’t pretend you can know it. And by virtue of not pretending that you — you can know it, I think you’re more open to ideas, people, different ways of thinking that you can start out with a premise that this person I’m talking to is probably smarter than I am. They’re demonstrably smarter than I am, so I think I should listen and learn something. And if you just go about your `daily life that way, you do learn things and you do get exposed to things and the people that were right. And you — they start to occupy a greater and greater share of your mindshare, and the people who are wrong kind of — kind of — kind of drift away into smaller and smaller thing. So, the math of compounding really accentuates the positive and it makes the — it makes the mistakes drift away into irrelevance over time. RITHOLTZ: I do like the idea of — of not being a — a maximalist optimizer to give you a little breathing space to allow creativity and collaboration, other things to bubble up. I don’t remember whose quote I am about to steal, but the line is, “Jazz is the space between the notes.” And it’s that same — you need a little breathing room in order to allow some creativity to take place. GAYNER: Exactly. RITHOLTZ: So — so let’s talk about a horrible, terrible, ridiculous mistake you’ve made or at least everyone else who does this. It’s a horrible mistake. Co-CEO is usually a disaster. Somehow you guys seem to have made that work. GAYNER: Yeah, I think you’re correct to point out that that’s — that’s not the odds with a bet, and I think it gets back to some of the history and culture of Markel that makes it work in the sense that you had Sam Markel who was the original founder of the company. He ran it from its inception up until, I think, the mid-50’s like 50 something like that. Sam had four sons who were two sets of twins. And when he unfortunately died, the business then was taken over by the — by the four sons. And — and they ran it essentially by unanimous consent. RITHOLTZ: Ooh. GAYNER: I believe they had lunch every day, if not almost every day. And for any kind of strategic or — or more than just little decision, there had to be unanimity among the four. RITHOLTZ: Wow. GAYNER: And I think you can sort of picture how this unspools. RITHOLTZ: Everyone has veto power. GAYNER: Exactly, and the company did not grow that much during their era that they ran it. But then what happened, but — so you went from one CEO to effectively four despite what the titles might have been. So, then the second generation started to go the way of all flesh … RITHOLTZ: (Inaudible), right. GAYNER: … and the third generation comes along. At this point there are 12 cousins that — that are in existence, some of whom work for Markel, some of whom did not. And the generational transfer succession issue started to be — become paramount and become important. A lot of sifting and sorting about that. The public offering — offering in 1986 was one of the tools used to bring about some — some finality there. RITHOLTZ: Sure. GAYNER: But at the end of all that sifting and sorting, three of the 12 cousins said “We’re in.” And in effect, they did a leverage buyout of the second generation where they gave them a note with a coupon to provide income and sale process to the — to the second generation, but gave them the stub equity underneath of it so that as they, you know, built the value of the business they’d attribute it to the equity as opposed to the debt that was there for the second generation. The — the IPO did two things. It — it paid off that debt. It gave the company a little bit of a capital base. And culturally, it said, “You know, you don’t need to be a member of the Markel family to own equity interest.” And — and I’m a perfect example of that. I’m not a Markel family member. I’m not married to Markel. I have no Markel blood. And we — but I’ve been there 37 years. I’ve been there since I was a kid, so I — I feel like a member of the Markel family. And I — I own some equity in the company from the IPO from … RITHOLTZ: Really? GAYNER: … from day one … RITHOLTZ: Wow. GAYNER: … and — and had always sort of been accumulating more stock as — as — as time goes by. So there — there’s that element of how the — the transition is taking place, so the — the four went down to three and — and really a triumvirate of Steve Markel, Tony Markel and Alan Kirschner who was a cousin-in-law, ran the business for decades. And as — as they started to — to — to move on, Alan retired from the board that year and a half to a year just so ago. Steve and Tony are still on the board, but not active in day-to-day management. You know, that — that went to three to two, so Richie and — and myself. And it — it’s also connected to the evolution of the business itself, in that historically, the insurance business was the largest single piece of the company. Investments are there, but, you know, it’s just the investment operation that’s embedded in the insurance company. So, while we emphasize investments more than most, every insurance company has an investment operation. So that — that wasn’t weird. As Markel Ventures has grown to become a substantial part of the company, they have two very distinct pieces of the company. So, in — in reality, the way it works between Richie and myself is that — and this is really the way it worked with Alan, Tony and Steve as well. In — in the era of the triumvirate, everything on the income statement reported to Tony Markel. So what branches did we have? How many sales people? What were the locations? All the — all the sort of things that would — that managing the (inaudible) all that would Tony would be the ultimate authority and really the ultimate CEO of that. And I was in the room sometimes when — when Alan and Steve would disagree with him, but they would always say at the end of that meeting, “If that is your decision, that is your area, so we support you.” And they walk out of the room, the door is closed, and the — there’s the — the team speaks with one voice. RITHOLTZ: That’s right. GAYNER: Similarly, Steve is in-charge of the balance sheet of the organization. And anything — the loss reserve setting, the — the M&A activity, strategic stuff like that, Steve was the ultimate authority on that sort of stuff. And Alan joked he was the world’s highest paid referee because he would adjudicate disputes between the two of them to — to make sure that’s how it worked. So, with Richie and I, it’s a slightly different gearing. He’s in charge of the insurance operations of the business. I’m in charge of the investments and the ventures’ operations. And our — our normal working relationship is if something meaningful or substantive comes up in one of our areas, the first person that I will talk to about an upcoming deal or a capital — a big capital allocation decision, I’ll talk to Richie and make sure he and I get on the same page. We — we don’t see the world eye-to-eye on everything, but we — we function and — and work it out. And similarly, on the insurance thing, he would come to me first and we work that out. So, on major capital allocation decisions, it’s very important that he and I manage to find agreement, and we have. On day — on day-to-day matters, the tactical execution of the business itself, we — we both operate as sole CEOs in the realm of the businesses we run. RITHOLTZ: So, you mentioned — so we have insurance, we have asset management. You mentioned the third arm, Markel Ventures. That’s kind of unusual for insurance company. Let’s talk a little bit about what — what brought this division about and what sort of things you look at. What do you focus on? RITHOLTZ: Sure. Well, again the way it came about was being aware of the Berkshire example whe.....»»

Category: blogSource: TheBigPictureNov 8th, 2021