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Get ready for the worst unemployment reading since the Great Depression: Morning Brief

Forest Products IIII - Fri, 05/06/2020 - 12:03

Top news and what to watch in the markets on Friday, June 5, 2020.


For iBio, the Coronavirus Pandemic Was a Lucky Break

Forest Products IIII - Fri, 05/06/2020 - 12:01

The novel coronavirus pandemic caught iBio (NYSE:IBIO) stock at a good time.Source: Maksim Shmeljov / Shutterstock.com The company just finished building a 130,000-square-foot facility near Texas A&M University to produce proteins when the pandemic began in China.Originally a licensor of technology, iBio had made the decision to become a commercial protein producer in 2016.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow iBio is a Covid-19 vaccine company. The transition began in February, through a contract with a Chinese company to produce a vaccine candidate. In March iBio filed four patent applications for Virus-Like Particle (VLP) constructs, which could become vaccine building blocks, and began pre-clinical work at Texas A&M. * 7 Hotel Stocks to Buy Before Vacationing RestartsThe steady drumbeat of news releases has had its effect. The share price exploded in late February from 30 cents to $1.86. They now sit near $1.70. Hope or HypeThere's a big difference between what iBio is doing and what companies like Moderna (NASDAQ:MRNA) are up to. Moderna has created a vaccine candidate, which is now undergoing human testing. The iBio platform is designed to scale up manufacturing of a vaccine.The company says IBIO-200, its first vaccine program, could produce 500 million doses of product each year. It says it has agreements with the Infectious Disease Research Institute ("IDRI") at the University of Washington supporting the work. IDRI and A&M began collaborating in 2016.The company calls its production platform FastPharming. It uses an Australian plant, related to tobacco. The plant is grown in vertical farms, then infected with bacteria that induces production of the target protein. The company says this can move a program from gene sequence to protein production in just three weeks.Thomas Isett, who became the company's CEO in March, uses marketing-friendly terms to describe what the company is doing. An example is the company's latest release, describing a second production platform dubbed IBIO-201. The new platform uses a lichenase booster molecule, which the company has dubbed LicKM. This is said to increase manufacturing capacity and boost immune response. Do They Have It?IBIO is not creating vaccine candidates. It is positioning itself to quickly scale production of candidates produced by others. This doesn't mean iBio will make the winning vaccine, just that it is prepared to do so.The question for investors is the value of this capability. Most of the money in vaccines goes to inventors, not manufacturers. How much goes to whom is subject to business agreements that, in this case, are yet to be negotiated.But iBio's news releases have created speculation that, whoever wins the race, it will help them get over the line. Our Louis Navellier wrote in April that iBio's manufacturing makes it "a unique and worthy bet." Since he wrote that, the price of the stock has doubled. InvestorPlace's Josh Enomoto wrote on June 3 that "superior scalability" makes iBio a winner, and that juiced the stock price further.Other Investorplace writers are more skeptical. David Moedel called it a longshot in March, while Ian Bezek suggested selling "before the hype fades" in May. The Bottom LineI don't know whether iBio will make whatever vaccine works. I also don't know how much iBio will make from its contract manufacturing work.Speculating on vaccine winners has become 2020's version of 2018's pot stocks. There's a lot of smoke, a lot of hope, but no certainty of fire anywhere. Maybe iBio has a winning formula. Maybe its manufacturing system can also be used for other vaccines down the road.But, maybe not. Buying iBio stock is less like buying a lottery ticket than an NBA team tanking to get a top draft choice. You might get a star. You also might get a bust.Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post For iBio, the Coronavirus Pandemic Was a Lucky Break appeared first on InvestorPlace.


North American softwood lumber prices keep rising

International Forest Industries - Fri, 05/06/2020 - 11:46

Sawmills across North America looked toward the end of summer last week, as lumber prices continued to rise but sales volumes were unsteady. Lumber producers in the US and Canada considered this current market strength as temporary, and were already making plans for seasonal slow-downs when summer draws to a close. Softwood lumber producers consequently pushed up their asking prices and extended sawmill order files into mid- to late-June, according to Madison’s Lumber Reporter.( madisonsreport.com/)

Prices were nudged up every day as sawmills sold out of stock with ease, and at higher levels. Customers throughout the market were very underbought, and field inventories remained low even as many buyers abandoned their caution and tried to secure volume. Sawmill order files were into the weeks of June 15th and 22nd. Bread-and-butter sizes continued to garner consistently strong demand, while sales of 2×8 and 2×10 were also really hot. As construction in Texas was roaring, 2×4 R/L #3/Utility sold particularly well.

For the week ending May 22, 2020, the price of Western SPF 2×4 kept rising, this time up +$12, or +3%, to US372 mfbm compared to the previous week when it was US$360. Prices for this benchmark construction framing dimension softwood lumber item were up +$36, or +11% from one month ago. Compared to the same week in 2019 when it was US$310, this price is up +$38, or +13%.

Looking at structural framing softwood lumber, Western-Spruce-Pine-Fir studs continued to be massively undersupplied as pandemic restrictions were lifted and building activity in North America came to life. According to producers in British Columbia, the price of 2×4-8’ studs jumped up $22 to US$392 mfbm. Supply was gone in a flash. Demand for all other trims was feverish also; aside from 2×6-8’s, which remained at $268 and just couldn’t get any sales traction. Even as many stud mills began to ramp up their production levels following periods of curtailment, overall production could only cover a fraction of rapidly-mounting demand.

After taking major tumbles in April, last week’s Western S-P-F 2×4 price dropped by smaller amounts, this time down by -$5, or -1%, relative to the 1-year rolling average price of US$377 mfbm and was down -$33, or -18%, relative to the 2-year rolling average price of US$405 mfbm.

The table (photo) is a comparison of recent highs, in June 2018, and current May 2020 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of September 2015.

The post North American softwood lumber prices keep rising appeared first on International Forest Industries.

General Electric is Losing Credibility Amid Multiple Crises

Forest Products IIII - Fri, 05/06/2020 - 11:01

Almost every company could use some positive developments following the novel coronavirus. Arguably, General Electric (NYSE:GE) needs it the most. Even before the pandemic, the once-mighty industrial giant needed everything to go smoothly to lend credibility to its low-probability recovery initiative. But like with the pandemic, everything that could go wrong, did go wrong for GE stock.Source: Sergey Kohl / Shutterstock.com As the health crisis spread, General Electric saw much of its market value evaporate over a matter of days. In that, it was much like so many other publicly traded companies. But the extra cruelty for investors who were still holding the shares, GE stock couldn't even get a proper dead cat bounce. While it briefly managed to get itself out of the hole from its March lows, shares again suffered pressure. Last month, they hit a low that was more shocking than what transpired in March.However, the market gods appeared to show some mercy. Recently, Boeing (NYSE:BA) saw its equity value rise dramatically as the beleaguered company was able to keep two of its 737 Max jetliner customers on the books. SMBC Aviation Capital and AerCap (NYSE:AER), both aircraft leasing firms, decided to defer delivery of their Max orders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTrue, a deferral isn't the best outcome. But when you have a sea of cancellations to contend with, deferrals keep the business running. And this has very encouraging implications for GE stock. As you know, General Electric makes the LEAP engine that underlines the Max.So, is this an opportunity to jump back into the GE recovery story? I'm afraid not. We have to remember that General Electric was already hurting from the Max fatalities that grounded the otherwise popular jet. Now, we have a pandemic that almost ensures a drawn-out recovery process. Passenger Volume is a Serious Threat to GE StockIf that doesn't give you pause about General Electric stock, consider that one of the reasons traders gambled on it last year was the anticipation that the Max would fly again soon. Sure, passengers were worried, but they typically tend to forget about travel-related disasters, perhaps because they are such low-probability events. * 7 Hotel Stocks to Buy Before Vacationing Restarts Unfortunately, that's not the case with the coronavirus. Although you're very unlikely to contract Covid-19 on any given day, situational probabilities increase depending on your circumstances. For instance, if you're in a flying tube where social distancing is all but impossible -- even with unoccupied middle seats -- the risk of infection is presumably far greater than quarantining at home.Needless to say, without air travel demand, GE stock is stuck in a battle of inevitability. Currently, airliners see little reason to purchase new aircraft with passenger volumes at ridiculously low levels. Yes, we've seen photos of packed airplanes. However, this stems from air carriers cutting redundant routes to avoid racking up unnecessary costs.Interestingly, it's the same recovery narrative -- that demand will eventually return soon -- that has driven not only GE stock but also direct players like United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL). But does the data support such optimism?I'm skeptical. On May 31, the Transportation Security Administration screened just under 353,000 passengers. This is a huge lift from the lows of April, when the TSA on some days screened fewer than 100,000 flyers. However, this recent figure only represents less than 14% of travel demand from the year-ago period. Click to EnlargeSource: Chart by Josh Enomoto Moreover, travel demand has overall been moving very slowly. In the first half of April, the daily number of passengers screened was only 4.4% of the year-ago level. This metric improved to 7.6% in the first half of May, and to 11.5% in the second half of May.Still, these are terrible figures. Simply put, the airliner industry as it stands cannot survive on a fraction of the demand typically carried. Worse yet, we just don't know when demand will truly normalize, placing GE stock in limbo. Social Unrest is Another Shocking HeadacheAs if that wasn't bad enough, just when most states -- including the powerhouses like California and New York -- were on the cusp of reopening vast portions of their economies, a wave of protests swept the nation.Granted, the calls for social equality and justice are incredibly compelling and relevant during this fractured time. Further, these protests will probably continue for longer than many might imagine. Truly, they reflect not only racial struggles, but class struggles as well. Keep in mind that millions of Americans are still unemployed.But for GE stock, this is again another example of unwanted developments. First, these protests -- some of which have turned shockingly violent -- dissuade air travel. Again, without this demand, the need for airplane engines diminishes.Second, I can't help but notice that social distancing and protesting don't go hand-in-hand. Therefore, I think it's only fair to assume that coronavirus cases will accelerate. Worryingly, new daily cases in the U.S. stubbornly remain at the 20,000 level. I'm sure the protests aren't helping matters.So, if we do have second wave of the coronavirus, the travel industry will surely succumb to revamped fears. And that might be it for GE stock. While I'm sympathetic to the company's recovery efforts, there are too many variables at work here.A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post General Electric is Losing Credibility Amid Multiple Crises appeared first on InvestorPlace.


Lufthansa to Exit Germany’s DAX Benchmark After 32-Year Stay

Forest Products IIII - Fri, 05/06/2020 - 10:18

(Bloomberg) -- Germany’s flag carrier is being removed from the country’s benchmark stock index for the first time since the gauge’s inception more than three decades ago, after travel restrictions aimed at stemming the coronavirus pandemic sent the stock plunging.Deutsche Lufthansa AG will be replaced by real estate company Deutsche Wohnen AG in the DAX Index, Deutsche Boerse said in a statement Thursday night. The change will come into effect June 22.Shares in Lufthansa, which this week agreed to a 9 billion-euro ($10 billion) state bailout package, rose as much as 7.8% on Friday, paring their loss this year to 32% and giving the airline a market capitalization of about 5.2 billion euros. That makes it the 60th largest German company by market value, while the DAX is reserved for the country’s 30 biggest companies. Deutsche Wohnen rose as much as 3.4%.The first half has been a tumultuous one for the German carrier, with the pandemic all but halting its business. Its massive size -- with operations spanning from catering to maintenance -- meant it has bled cash faster than other airlines. The bailout will inflate Lufthansa’s debt and interest payments, and existing shareholdings will be diluted as the government takes a stake. The company said on Wednesday it will slash employee expenses and look at spinoffs to bolster cash flow.More Pessimism“Implications for Lufthansa’s equity value from the support package, on top of the existing net debt and pension liabilities, are weighing on sentiment,” Goodbody Stockbrokers analyst Nuala McMahon said by email before the announcement. There are also concerns about the corporate-travel market, which accounted for 50% of passenger revenue, and its strategy for leisure travel because of discount competition, she said.More than two-thirds of analysts covering the carrier recommend clients should sell the stock, while the average price target among those tracked by Bloomberg suggests a 35% drop, in contrast to a 4% gain expected for British Airways parent IAG SA. Lufthansa’s consensus recommendation -- a measure translating buy, hold and sell ratings into a number -- is also the third-worst for all companies in the Stoxx Europe 600 Index.The pessimism is mirrored by investor bets of a stock drop that are among the harshest in Europe. Short interest in the freely traded stock currently stands at 19%, according to IHS Markit data.Still, not everyone is as negative on the airline’s prospects. “The company appears to be able to exceed our expectations in terms of liquidity preservation,” Bankhaus Metzler analyst Guido Hoymann wrote in a note Thursday, raising his recommendation to hold from sell. While visibility on the recovery of travel is still low, the management measures announced “seem totally plausible,” and capital expenditure will be reduced significantly, he wrote.(Updates with share prices in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Coronavirus: AstraZeneca to begin making potential vaccine

Forest Products IIII - Fri, 05/06/2020 - 10:12

AstraZeneca says it could provide two billion doses of a potential vaccine, helped by backing from Bill Gates.


Broadcom Reports Solid Results, Dividend As Analysts Boost PTs

Forest Products IIII - Fri, 05/06/2020 - 08:55

Broadcom (AVGO) has reported an in-line April quarter, and guided to an in-line July quarter at $5.75B (consensus $5.8B). Shares in AVGO gained 1% in Thursday’s after-hours trading following the earnings release.Specifically, Q2 Non-GAAP EPS of $5.14 was in-line with consensus expectations, while GAAP EPS of $1.17 beat by $0.21. Revenue of $5.74B climbed 4% from the previous year, and topped Street estimates by $50M. Meanwhile Q2 adjusted EBITDA was $3.2B, again, coming in slightly higher than the $3.11B consensus.Semiconductor Solutions reported revenue of $4,027M (-1% y/y) but Infrastructure software revenue came in strong at $1,715M (+21% y/y).“Second quarter results were in-line with our expectations, and saw limited impact from the effects of COVID-19,” commented Hock Tan, CEO of Broadcom Inc. “Looking ahead, our third quarter guidance for semiconductors reflects a surge in demand from cloud, telecom and enterprise customers, offset by supply chain constraints and an expected substantial reset in wireless.”At the same time the company declared a $3.25/share quarterly dividend, in line with previous payouts, for a forward yield of 4.2%.“We generated record quarterly free cash flow of over $3 billion and reinforced our balance sheet, ending the quarter with over $9 billion of cash,” explained Tom Krause, CFO of Broadcom Inc. As a result, AVGO “remain[s] committed to maintaining our dividend while we navigate these unprecedented times.”Following the report Mizuho Securities analyst Vijay Rakesh reiterated his AVGO buy rating while ramping up his price target from $315 to $325 (5% upside potential).“We continue to see AVGO as well positioned, driven by 5G networking and wireless, software M&A, strong FCF, and dividends, with near-term COVID-19 headwinds subsiding” Rakesh told investors, adding that the company is currently trading at an attractive ~13.1x F21E (Oct) P/E.Likewise RBC Capital’s Mitch Steves boosted his price target from $300 to $340 noting that AVGO is seeing much more demand than it can currently supply for Q3. “AVGO is seeing strong uplift in demand from the ramp of next-generation deep learning inference chips” the analyst wrote, while demand from enterprise customers for data protection controllers has recovered and is showing strength.Overall, AVGO scores a bullish Strong Buy Street consensus, with 19 buy ratings offset by 2 hold ratings. However, the average analyst price target stands at $303, indicating downside potential of 2%. Shares in AVGO are trading down 2% year-to-date. (See AVGO stock analysis on TipRanks).Related News: Slack Plunges 15% Post-Print Despite Multi-Year Amazon Deal Ebay Lifts Quarterly Sales and Profit Forecast; Shares Jump To All-Time High Microsoft Buys Metaswitch For Cloud-Based Telecoms Move, 5G Expansion More recent articles from Smarter Analyst: * Novavax Surging On $60M Funding For Covid-19 Vaccine Candidate * Facebook To Start Labeling State-Controlled Media Ahead of US Elections * Slack Plunges 15% Post-Print Despite Multi-Year Amazon Deal * Seanergy’s Shipping Rates Set to Rebound While Equity Raises Will Reduce Debt, Says Analyst


Earnings Update: Vodafone Group Plc (LON:VOD) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Forest Products IIII - Fri, 05/06/2020 - 08:34

It's been a good week for Vodafone Group Plc (LON:VOD) shareholders, because the company has just released its latest...


Oil Set for Sixth Weekly Gain as OPEC+ Nears Cut Extension Deal

Forest Products IIII - Fri, 05/06/2020 - 08:25

(Bloomberg) -- Oil was headed for a sixth weekly gain after OPEC+ reached a tentative agreement to extend record production cuts until the end of July.Futures in New York edged higher toward $38 a barrel on Friday and are up around 6% this week. After almost a week of wrangling, Saudi Arabia and Russia clinched a deal with Iraq, according to a delegate. The pair were pushing Baghdad to stop shirking its share of cuts and to compensate for past non-compliance. OPEC+ will meet Saturday at 4 p.m. Vienna time, delegates said.In another potentially bullish driver for oil prices, analysts have been poring over U.S. inventory numbers that don’t add up. While it’s unclear where the discrepancy lies, data sets including stockpiles, output, imports and exports are signaling that official figures on at least some supplies are excessive.While oil has recovered rapidly from its plunge below zero in mid-April, the pace of the rebound has slowed in the past couple of weeks and further gains may be more difficult without a sustained recovery in demand and more evidence the worst of the virus is over. A continuation of the rally could also encourage more American shale producers to bring wells back online and lead to a fraying of the consensus within OPEC+, which might also cap the advance.See also: Too Early for Shale Obituary as U.S. Oil Wells Return, IEA Says“The world’s oil exporters, including members of the OPEC+ alliance, do not want prices below $30 a barrel, but there’s no consensus on how much higher prices should be,” said Victor Shum, vice president of energy consulting at IHS Markit. If Dated Brent prices move into the $40 to $50 a barrel range there would likely be policy divergence between the Saudis and Russia, he said.West Texas Intermediate for July delivery rose 0.4% to $37.57 a barrel on the New York Mercantile Exchange as of 7:22 a.m. in London after climbing 0.3% on Thursday. It’s up 5.9% since May 29, on track for the longest run of weekly gains since April 2019.Brent for August settlement added 0.8% to $40.29 a barrel on the ICE Futures Europe exchange and has risen 6.5% so far this week. Dated Brent, used to price more than two-thirds of the world’s oil, was at $37.71 on Thursday, according to traders monitoring prices from S&P Global Platts.Riyadh and Moscow, who were on opposite sides of a vicious price war until a deal in April, are now united against countries who have consistently failed to shoulder their share of the burden. Russia, a habitual laggard, has complied punctiliously with the most recent cuts and wants to make sure others are too. Meanwhile, Saudi Aramco has delayed the release of its July crude pricing until Sunday at the earliest, according to people with knowledge of the situation, as waits for clarity on the extension of production cuts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Slack Plunges 15% Post-Print Despite Multi-Year Amazon Deal

Forest Products IIII - Fri, 05/06/2020 - 08:24

Shares in Slack Technologies (WORK) plunged 15% in Thursday’s after-hours trading after the company reported a solid F1Q21 but withdrew full year billings guidance. Slack also revealed an exciting new strategic collaboration with Amazon (AMZN)- but that wasn’t enough to send shares higher.Revenue, billings, margin, and FCF were ahead of consensus with Q1 Non-GAAP EPS of -$0.02 beating Street expectations by $0.04. Similarly GAAP EPS of -$0.13 beat by $0.04 and revenue of $201.7M delivered strong year-over-year growth of 50%, while topping expectations by $13.58M.Meanwhile calculated billings came in at $206M vs consensus of $189.2M, and representing 38% year-over-year growth.F2Q guidance came in higher than consensus as well, and FY21 was raised on revenue, FCF and margin. Calculated billings guidance was withdrawn due to the ongoing uncertainties surrounding the COVID-19 pandemic, but the consensus had been for guidance of $1.000.9B (+30.8% Y/Y).“Q1 was a phenomenal quarter for Slack, with the addition of 12,000 net new Paid Customers and 50% revenue growth year-over-year,” said Stewart Butterfield, CEO and Co-Founder at Slack.“We believe the long-term impact the three months and counting of working from home will have on the way we work is of generational magnitude. This will continue to catalyze adoption for the new category of channel-based messaging platforms we created and for which we are still the only enterprise-grade offering” he added.At the same time Slack and Amazon announced a new multi-year agreement to deliver solutions for enterprise workforce collaboration.Development teams will now be able to communicate and manage their AWS resources from inside Slack. Slack will migrate its Slack Calls capability for voice and video calls to Amazon Chime, AWS’s communications service, and use AWS’s global infrastructure.“Together, AWS and Slack are giving developer teams the ability to collaborate and innovate faster on the front end with applications, while giving them the ability to efficiently manage their backend cloud infrastructure,” said Andy Jassy, CEO of AWS.Notably shares in Slack have already rallied a whopping 68% year-to-date, and as a result the stock scores a cautiously optimistic Moderate Buy consensus from the Street. Meanwhile the average analyst price target stands at $29 (23% downside potential). (See WORK stock analysis on TipRanks).“On the whole, we see a balanced view given multiple LT growth levers (new customers/users, international expansion, etc.) offset by potential second-derivative macro pressure points. Maintain perform, viewing Slack as fairly valued at ~18x EV/sales on our FY22 estimates” explained Oppenheimer’s Ittai Kidron following the earnings report.Related News: Nio Rising On Record-High Monthly Deliveries, Goldman Sachs Upgrade Ebay Lifts Quarterly Sales and Profit Forecast; Shares Jump To All-Time High Microsoft Buys Metaswitch For Cloud-Based Telecoms Move, 5G Expansion More recent articles from Smarter Analyst: * Novavax Surging On $60M Funding For Covid-19 Vaccine Candidate * Facebook To Start Labeling State-Controlled Media Ahead of US Elections * Broadcom Reports Solid Results, Dividend As Analysts Boost PTs * Seanergy’s Shipping Rates Set to Rebound While Equity Raises Will Reduce Debt, Says Analyst


Should You Buy Delta Stock Before Travel Demand Returns?

Forest Products IIII - Fri, 05/06/2020 - 06:20

[Editor's Note: "Stay on the Sidelines While Delta (DAL) Stock Is Up in the Air" was originally published April 13, 2020. It is regularly updated to include the most relevant information.]Source: Markus Mainka / Shutterstock.com With investors jumping back into airlines, what's next for Delta Air Lines (NYSE:DAL)? The legacy carrier's shares have rallied 70% off their lows set in mid-May. While the novel coronavirus continues to impact air travel, Wall Street is betting on a swift recovery in DAL stock.However, many things remain uncertain. On one hand, air travel is slowly rebounding from its extreme lows in weeks prior. On the other hand, even if the novel coronavirus quickly fades away, it could be years until a rebound happens, as some industry leaders have predicted.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet, while airline stocks remain risky, Delta may be a cautious way to bet on a V-shaped recovery for the industry.Why? Delta is relatively stronger than legacy rivals like American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL). That doesn't guarantee they will survive today's headwinds. Yet, being the "best of the worst" may be enough to justify a buy.Let's dive in, and see why it could be a shrewd move in hindsight to jump in at today's prices. What's Next for DAL Stock After Covid-19?The three major legacy airlines, American, Delta, and United, all face big trouble from the coronavirus. With the lion's share of their routes inactive, cash is quickly flying out of the window.Compared to the other two, is Delta stock a stronger rebound opportunity? At first glance, it's hard to say yes. As InvestorPlace's Mark Hake wrote Jun 1, the company continues to experience massive cash burn. The daily losses are coming down, from $50 million per day to $40 million per day. But, cash burn could continue through the end of 2020.Yet, they may have enough capital to wait things out. According to Raymond James' Savanthi Syth, the company has about 11 months of liquidity. And, with air travel slowly picking up, they can probably stretch that out a bit. * 10 M&A Deals I'd Love to See Happen in the Second Half of 2020 Previously, Stifel's Joseph DeNardi cited Delta as being financially stronger relative to rivals like American. That may not mean much as underlying demand remains depressed. But it could indicate this stock is the best legacy carrier to bet on for an industry rebound.However, a swift recovery remains a long shot. It may be up to five years before airlines recover from the coronavirus. Also, airline stocks could pull back again on the heels of additional bad news. Air travel may be slowly returning. But, with flights no more than 60% full, profitability will remain a challenge. Did Buffett Call the Bottom?Back in April, Warren Buffett sold Berkshire Hathaway's (NYSE:BRK.A, NYSE:BRK.B) stake in DAL, along with other airline stocks like American, United, and Southwest Airlines (NYSE:LUV).Given the big change in the operating environment for airlines, it makes perfect sense Buffett and Berkshire did a 180 on airline stocks.Best case scenario, airlines ride out the weak air travel market, and return to prior price levels a few years out. Worst case scenario? Government intervention fails to keep airlines afloat, they require additional bailouts/capital infusions, and their share prices fall to lower levels.In short, the thesis has changed on airline stocks. It's no surprise Buffett cut his losses.Yet, did the "Oracle of Omaha" call the bottom, as a Barron's article predicted in May? It looks like it. Granted, the near-term picture for airlines remains bleak. But, with the specter of air travel bouncing back sooner than predicted, it may be too late to go short airline stocks. Legacy carriers remain a high-risk proposition. But, by going long the "least broken" of the three, investors could see additional gains in the near-term. Buy DAL Stock, Even If Things Remain Up in the AirDelta has a stronger balance sheet than its legacy rivals. But it's all relative. With billions flying out the door each month due to the coronavirus, the company faces a tough road ahead. Travel demand may be slowly bouncing back. But that doesn't mean a swift return to profitability.Yet, bleak prospects have already been priced into this stock. Buffett may have called the bottom. Sure, investors could be getting ahead of themselves. But, Delta stock may move even higher as positive developments continue.Thomas Niel, contributor to InvestorPlace, has written single-stock analysis for web-based publications since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Should You Buy Delta Stock Before Travel Demand Returns? appeared first on InvestorPlace.


Gold heads for third week of losses amid signs of recovery

Forest Products IIII - Fri, 05/06/2020 - 06:17

Spot gold was down 0.2% at $1,708.07 per ounce as of 0700 GMT, while U.S. gold futures slid 0.9% to $1,711.80. "Gold prices have been under pressure after a miraculous stock market run," said Edward Moya, senior market analyst at broker OANDA. Investors are now awaiting U.S. nonfarm payrolls data for May due at 1230 GMT.


The Party Is Over for Moderna Stock Holders

Forest Products IIII - Fri, 05/06/2020 - 06:15

[Editor's Note: "Sell Moderna (MRNA) Stock as Covid-19 Catalyst Inflates Valuation" was originally published April 2, 2020. It is regularly updated to include the most relevant information.]Source: Shutterstock Is the party over for Moderna (NASDAQ:MRNA)? MRNA stock soared in May as the company's novel coronavirus prospects looked bright. But now, with investors selling off vaccine plays, the days of this being a "hot stock" may be coming to an end.Granted, this doesn't mean "game over" for their prospective mRNA-1273 vaccine. Already entering phase 2 clinical trials, they could have a vaccine available for use by the end of the year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPerceived "first mover advantage" is one thing Moderna has going for it. Another is social proof, courtesy of the U.S. government. With a former exec leading the White House's vaccine efforts, it seems Moderna has yet another edge.Yet, as investors have either cashed out, or lost love, for Moderna, shares have taken a hit. Just a few weeks ago, the stock was parabolic, hitting prices as high as $87 per share. * 10 M&A Deals I'd Love to See Happen in the Second Half of 2020 Now? Things aren't so hot anymore. Shares now trade around $60 per share. But, could today's pullback be a buying opportunity?Not so fast! Moderna shares still trade at a rich valuation. Investors continue to price in much of the potential gains from not one, but two vaccines (more below). In short, shares could tumble further if both efforts wind up being fruitless. I know, it's fun to speculate on biotech stocks. Especially when it ties into a newsworthy event. But, as Moderna stock trends lower, it may be too late to ride the coronavirus vaccine wave. Coronavirus Vaccine and MRNA StockWhat a difference a few weeks makes. On May 18, news of positive preliminary findings put Moderna shares into hyper-drive. But, vaccine experts went through the details. According to them, the recent news revealed little about the vaccine candidate's effectiveness.It all went downhill from there. As the company raised equity, insiders sold shares, and other concerns mounted, Moderna's stock price fell back to earth.But, don't take this pullback as being an invitation to buy. Considering so much has been priced into shares, investors still face big potential losses if things don't pan out.So, with this catalyst a bit of a gamble, are there other factors at play with Moderna's stock? Yes. As InvestorPlace's Luke Lango discussed March 5, there's huge potential for the company's prospective vaccine for CMV, or congenital cytomegalovirus.Creating a vaccine for this major cause of birth defects may be an even greater catalyst for Moderna. Based on Lango's analysis, if all goes right, the company could generate billions in pre-tax profits if it receives Food and Drug Administration (FDA) approval.But this catalyst was already reflected in the stock price of MRNA. Before coronavirus sent shares higher. The company's market capitalization now stands at around $23.3 billion. In short, the company needs its prospective CMV vaccine to go without a hitch. Any bump in the road could send shares cratering.So would dashed hopes of mRNA-1273 becoming the first Covid-19 vaccine. Considering investors have priced in both catalysts, it's tough to justify a buy. Other Vaccine Stocks Could Offer Better ValueThe recent run-up in Moderna stock means shares trade at a rich valuation. The company's enterprise value/sales (EV/Sales) ratio currently stands at 422.7. That's a lot more reasonable than another coronavirus vaccine play, Inovio (NASDAQ:INO). That company's shares trade at a EV/Sales ratio of 688.8.But, if you're looking for a pure coronavirus vaccine play, there are other opportunities selling at lower (yet still frothy) valuations. Take, for example, iBio (NYSEMKT:IBIO), which currently trades at a EV/Sales ratio of 158.5. Granted, this name may be more of a gamble. But, a binary play like iBio may be a better than a more diversified one like Moderna.Moderna shares would bounce back if their vaccine shows success. But the potential rise in its stock price, percentage-wise, likely isn't as great as you'd see with an iBio or an Inovio.You could take that as a positive. A less binary play, downside for Moderna could be lower given their other catalysts. But that's hardly a great reason to buy, as the share price remains inflated due to past coronavirus speculation. Sell Moderna Stock as Shares Go ParabolicDon't buy Moderna because you think it'll strike gold with a coronavirus vaccine. Other vaccine contenders could offer a more promising risk/return proposition.Moderna stock does bring a lot more to the table. Their CMV vaccine catalyst could really move the needle if it pays off. But, this doesn't make shares a low-risk opportunity. If that vaccine fails to deliver, much of the stock's rich valuation would evaporate overnight.Whether you bought stock in MRNA for the CMV or the coronavirus catalyst, it's clearly time to sell. With shares treading water around $60 per share, cashing out today could be the best call.Thomas Niel, contributor to InvestorPlace, has been writing single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * This Stock Picker's Latest Video Just Went Viral * The 1 Stock All Retirees Must Own The post The Party Is Over for Moderna Stock Holders appeared first on InvestorPlace.


Apple $425 Per Share Case 'On The Horizon,' Analyst Says

Forest Products IIII - Fri, 05/06/2020 - 06:07

Apple Inc. (NASDAQ: AAPL) has weathered the economic impact of the novel coronavirus pandemic in a "Jacques Cousteau-like fashion," and the consumer electronics company could become the first to cross $2 trillion in market valuation by the end of 2021, according to Wedbush.AAPL Rating, Price Target Wedbush analyst Daniel Ives maintained an outperform rating and increased its price target from $350 to $375. Ives upgraded its bull case for AAPL shares from $400 to $425.'Major 5G cycle on the horizon' For Apple Wedbush said in an analyst note on Thursday that Apple is best set to benefit from the growth of 5G standard for cellular networks, alongside a growth in its services business.The analysts reiterated their stance that about 350 million iPhones are in the "window of an upgrade opportunity," meaning iPhone users who are looking to upgrade to a later version of the device."[We] believe Cupertino has a unique opportunity to capture this delayed super cycle opportunity with a major 5G cycle on the horizon which will include a host of new smartphone versions/models for iPhone 12," Wedbush noted.China will remain a key market for Apple, accounting for about 20% of these iPhone upgrades over the next year, as per Wedbush.Wedbush maintained that the iPhone 12 with a "mix of 4G/5G" is likely to be launched ahead of the holiday season in October.Apple's services business is set to exceed $60 billion revenue for the current financial year, as demand is projected to spike in the coming months, Wedbush said. It gave a valuation between $500 billion to $650 billion to the segment.The sales of the Cupertino-based company's wireless Bluetooth earbuds Airpods should also come near an "eye popping" 85 million units, compared to the 65 million last year, according to Wedbush.AAPL Price Action Apple shares closed about 0.9% lower at $322.32 on Thursday and inched further lower at $322.10 in the after-hours session.Latest Ratings for AAPL DateFirmActionFromTo Jun 2020Morgan StanleyMaintainsOverweight May 2020B of A SecuritiesMaintainsBuy May 2020Deutsche BankMaintainsBuy View More Analyst Ratings for AAPL View the Latest Analyst RatingsSee more from Benzinga * Why Genius Brands Is On A Massive Rally, Adding Nearly 2500% Value In A Month * Warner Music Set To Go Public Today, In Anticipated Largest US IPO Of The Year * Peloton Makes Its Fitness App Available On Apple TV After Pandemic Demand Surge(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


Hedge Funds Souring On Incyte Corporation (INCY)

Forest Products IIII - Fri, 05/06/2020 - 04:24

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F […]


FSC gives indigenous people a voice in forestry solutions

Australian timber industry news - Fri, 05/06/2020 - 04:22
To give a voice to Indigenous Peoples on the continued management and preservation of the world’s forests, the Forest Stewardship Council (FSC) has established the FSC Indigenous Foundation. Source: Timberbiz The Foundation is an extension of FSC’s commitment to working with Indigenous Peoples to find solutions for the sustainable management of forests. It is a strategic and operative unit established to develop creative and innovative solutions to support Indigenous communities and enable them to build and guide the sustainable management of their land. For supporting Indigenous Peoples, the Foundation will adapt an Indigenous cultural landscapes approach. This approach was developed by FSC in 2016, to acknowledge the social, cultural and economic value of Indigenous land. The approach appreciates the enduring relationship of Indigenous Peoples with the land, water, fauna and flora, and their spiritual significance to cultural identify, knowledge and livelihoods. FSC’s commitment to working with Indigenous Communities is part of its DNA and has always been central to its work. This commitment became explicit in 2011, with the establishment of the FSC Permanent Indigenous Peoples Committee, an advisory unit to the FSC board of directors, to ensure the voice of Indigenous Peoples is heard at FSC’s decision-making level. FSC Director General, Kim Carstensen explained that FSC’s decades of experience were proof that Indigenous communities were one of the most important factors for the sustainable management of forests. “I’m delighted that FSC’s Indigenous members have wanted to come together with us to facilitate the establishment of this unique Foundation. It is Indigenous led and Indigenous governed and has a very strong link with FSC. For me, this is a major opportunity for forest-dependent Indigenous Peoples worldwide and is a breakthrough for FSC’s mission and our global strategic plan, which is deliberately designed with Indigenous input at its core,” Mr Carstensen said. The Indigenous Foundation is headed by Francisco Souza, who is an Indigenous person himself with decades of experience working with environmental and Indigenous organizations particularly in Latin America. Souza aims to use his experience working with Indigenous communities across over 70 million hectares of Amazon rainforest to ensure increased Indigenous engagement in creating and leading sustainable forest-based solutions across the globe. “We expect to increase the degree of engagement of Indigenous Peoples in the FSC certification system in a more strategic way by creating Indigenous community models with long-term safeguards for their rights and improved access to markets. At the same time, we will develop tools and promote business partnerships to improve forest management and income in indigenous cultural landscapes” Mr Souza said. The results of the initiatives and projects carried out by the Foundation will strengthen the mission and long-term objectives of FSC to promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. The FSC Indigenous Foundation is headquartered in Panama. The Permanent Indigenous Peoples Committee will continue its role as advisor to FSC’s Board of Directors, and its activities will be serviced by the Indigenous Foundation.

A glimpse into the state of the US lumber market

Australian timber industry news - Fri, 05/06/2020 - 04:16
If we’ve learned one thing about economic uncertainty during the COVID-19 pandemic, it’s that markets will always react to demand regardless of the conditions. As tissue and paper towel manufacturers have demonstrated over the last several months amid record demand, many businesses simply don’t have time to wait for what amounts to a subjective sense of certainty. Sources: Timberbiz, Forest2Market, Madison’s Lumber Reporter The solid wood sector was hit especially hard early in the pandemic due to slowed construction, primarily in states that deemed it to be non-essential. In April, primes sold better via the big box stores, but demand for construction-grade products was near anaemic. Mill curtailments are still in place across the continent as the lumber industry, like many other industries, has made adjustments to the “new normal.” But as state economies open back up and new-home construction resumes, the sudden surge in demand has caught many lumber purveyors off-guard and prices have skyrocketed as a result. As a follow-up to last month’s snapshot of what’s happening across the North American lumber market, we are providing a glimpse of the latest developments’ courtesy of fresh data from Madison’s Lumber Reporter and Forest2Market. Western Spruce Pine Fir (WSPF – US) WSPF lumber and stud purveyors in the United States described a “robust” market last week. Buyers came in volleys to shore up their depleted inventories, making peace with the fact that their shipments may not arrive for over a month in some cases when three- to four-week order files and occasional one- to two-week rail car delays were taken into account. Bread and butter items again sold with aplomb, but “everything was moving briskly.” Eastern Spruce Pine Fir (ESPF – Canada) Eastern Canadian producers kicked off last week with higher asking prices, sending buyers into a brief digestion-phase until midweek. On Wednesday, the dam seemingly broke and a surge of demand issued forth as customers frantically tried to cover their short-term needs after having their on-ground stocks quickly consumed by ramping-up construction activity on both sides of the border. Stud prices continued to climb – aside from 2×6-8’s, the perpetual “dog of the industry” due to persistent oversupply while dimension prices into both the US Great Lakes and Canadian Toronto markets also advanced. Resultant order files were into early June. Southern Yellow Pine (SYP) Building on two weeks of significant increases, southern yellow pine (SYP) lumber prices skyrocketed in mid-May to their highest level in nearly two years. Forest2Market’s composite SYP lumber price for the week ending May 15 (week 20) was US$460/MBF, a 12.2% increase from the previous week’s price of US$410, and a 20% increase from the same week in 2019. The last time the composite SYP price was this high was in July 2018, when prices began to recede from record highs achieved in June. Based on the price performance of these benchmark products, there is clearly demand for North American lumber in the current market. But is this an indication of things to come? It’s really difficult to predict what the housing market – the principal driver of lumber demand – will do in the near term. The NAHB/Wells Fargo Housing Market Index (HMI) reflects builders’ reactions to the virus-related shutdowns, and the HMI plunged 42 points in April (to 30), the largest single monthly change in the history of the index. It marks the lowest builder confidence reading since June 2012, and it is also the first time the index has been below 50 since June 2014. Housing demand is tied to employment and unemployment has surged over the last six weeks. The current unemployment rate is nearing 15% (the highest since the Great Depression era) and, while a bulk of those layoffs will be temporary, there will likely be some structural changes going forward that will result in higher unemployment numbers than we have seen over the last two years. Lingering effects of this pandemic-driven financial crisis are also looking increasingly probable. We’re simply not going to be able to lift the restrictions, snap our fingers and go back to the way things were in January; a well-defined “V”-shaped recovery is looking less and less likely at this point. Neel Kashkari, President of the Minneapolis FED, recently said that: “The V-shaped recovery is off the table” during a virtual roundtable conversation. As MarketWatch noted, “Kashkari said the recovery would likely be long and drawn out. While there will be a bounce after the worst GDP contraction in the April-June quarter, the economy will be ‘nowhere near back’ to where it was in December 2019, he said.” The good news for lumber manufacturers in the interim is that demand is still there. And judging by recent performance, it is poised to outpace supply in the very near term, especially as more and more state economies are coming back to life. The challenge for manufacturers in the coming months will be adequately matching their production to demand while maintaining margins in a highly fluid market.

Indonesian government sees value in timber verification

Australian timber industry news - Fri, 05/06/2020 - 04:14
The Chairman of the Association of Indonesian Forest Concessionaires (APHI), Indroyono Soesilo, said that output from the timber sector fell around 10% in April and that he expects a steeper decline in May. Source: Timberbiz He commented that action by the government in relaxing a range of regulations to ease the burden on companies is helping with maintaining the work force. He proposed some further steps including expanding the implementation of the Timber Legality Verification System (SVLK) at the global level, strengthening market intelligence for Indonesian manufacturers, arranging business meetings and trade missions, and boosting the function of the Indonesia Timber Exchange (ITX). The Indonesian Ambassador to South Korea, Umar Hadi said the potential for expansion of Indonesian processed wood products sales based on SVLK to South Korea offers opportunities as South Korea has a law on ‘Sustainable Use of Timber’. In addition, he said South Korea’s economic growth depends heavily on international trade. Wang Sutrisna, Finance Director of PT Integra Indocabinet Tbk (WOOD), has said furniture sector companies in Indonesia feel that government policies are not encouraging growth in the sector and should be reviewed. Wang said that despite having a huge potential there is a lack of upstream/downstream integration in the sector which in other countries delivers many benefits. The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, stressed the importance of the Timber Legality Verification System (SVLK) related to sustainable forest management to meet export market demand for verification of legality. In related news the Minister of Industry, Agus Gumiwang Kartasasmita, proposed that SVLK be mandatory in the upstream wood processing industry but voluntary in the downstream wood processing industry as this would ease the burden on SMEs. The Secretary General of the Ministry of Environment and Forestry, Bambang Hendroyono, said the Ministry plans to make it easier for SMEs to comply with the SVLK regulations and would be providing incentives for the SME sector. Siti Nurbaya, Minister of Environment and Forestry said, at a panel discussion during the ‘World’s Forests 2020’ (SOFO 2020) hosted by FAO, that while Indonesia’s annual deforestation was over 3.5 million hectares in the period 1996 to 2000 it has fallen sharply to 0.44 million and will continue to fall. Deforestation rates have declined sharply during the period of the present government which is committed to meeting global targets for forest security. The minister said Indonesia has 51 million hectares of protected areas or more than 28% of the land and her ministry is working hard to develop a protected area policy to connect fragmented animal habitats separated due to concession allocations.

Do Hedge Funds Love HTG Molecular Diagnostics, Inc. (HTGM)?

Forest Products IIII - Fri, 05/06/2020 - 04:13

In this article you are going to find out whether hedge funds think HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus […]


Timberlinks CLT plant talks underway in Vic & SA governments

Australian timber industry news - Fri, 05/06/2020 - 04:13
Timberlink’s plans to build a CLT plant in South Australia or Victoria are on track despite the CoVid-19 pandemic. The company announced in February its plans to enter the growing mass timber market enabled through a state-of-the-art Cross Laminated Timber (CLT) and Glue Laminated Timber (Glulam) manufacturing facility. Source: Timberbiz David Oliver EGM Sales, Marketing and Corporate Affairs at Timberlink said the company was working through equipment selection and was in discussions with both the SA and Victorian Governments, which were very interested in the project. “Clearly their priority at this time is the health of people in both States so they have been fairly distracted,” Mr Oliver said. “We haven’t got a site location at this point. “But we are on track in terms of our timelines. It’s a very detailed, significant project with lots to work through in terms of equipment process flow.’’ Mr Oliver said plans were to have the facility up and running by the middle of 2024. “There are challenges regarding equipment selection because we can’t travel overseas at present which add a slightly curly dynamic,” he said. “But we are working through that quite effectively with potential vendors.” No date had been set for a decision on the location. However, Mr Oliver did say that if South Australia was selected the facility would be built near the existing Timberlink mill in Tarpeena in the South East of the State. “There will be 150 jobs in the construction phase and plans are for 27 full time roles at start-up wherever it is built,’’ he said. The South East of SA has the appeal because that is where the timber is; close to Melbourne is appealing because that is where the market is. “It’s quite a complex product to deliver to sites so there are pros and cons with both locations,” Mr Oliver said. “Proximity to market is a key criteria. “We are in discussions about a number of options, but we haven’t landed on a decision with either government at this stage.” Engineered timber products are increasingly being used in Australia and globally, particularly in midrise buildings due to a combination of factors, including cost-effectiveness, liveability, ease and efficiency of construction.

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by Dr. Radut