Forest Products Industry
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 email@example.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.
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.
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.
(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.
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
(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.
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
[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.
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.
[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 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.
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 […]
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 […]