Happy Wednesday! Again a barrage of news and a belated result note from one of our companies is keeping me from commenting on general matters.

Eduardo Garcia in Sentidocommun.com today wrote that Mexican Reserves dropped by $203 mn to $195.6 bn. This worries me less than the 2-yr T-bill trading at a premiun with interest at 1.19% when the minimun by law is 1.25%. That means it commanded a premiun of 100¢/bill.

China is creating digital money which can be used without internet connections, initially useable to buy metro tickets in Beijing.

After my blog went out yesterday the Dow recovered and now it is up another 400 points. Nasdaq gained too, despite not recovering Tuesday.

Image Source: Unsplash

Industry

*Tomra Systems yesterday posted a slide show as the only way to view its quarterly results, so they could not be posted in my brokerage account or others'. It has 2 ticker symbols in the USA, TMRAY, and TMRAF. The Norwegian company operates in two businesses, sorting and reverse vending machines. Both were hit by covid-19 but by Q4, Tomra wound up with a new record of revenues which hit NOK 2.7 bn, up 4%, and CEO Stefan Ranstrand claimed that gross operating margins also were strong in sorting. His comments were published by seekingalpha and yahoo in transcripts late yesterday, well after my blog was written. There were technical issues even then and I am using his comments rather than tables which I couldn't access.

Earnings before interest, taxes, depreciation, and amortization hit NOK 505 mn up from prior year's 408 mn. It cashflow of NOK 890 mn compared to NOK 600 mn in 2019.This mostly came in H2 after Covid-19 hit the bottle return business because of contamination risks even in Q1 and a lot in Q2. Its workers worked from home when possible and it imposed a hiring freeze. Collection rose 10% in the quarter. Operating expenses were down, at NOK 881 mn.

CEO Randstrand says recycling packaging is picking up and is necessary for cleaning up the world, but that disruption of its vending machines is a temporary result of the virus particularly in Australia (a new market) and the US, but less so in Europe, particularly Germany, Nordic Europe, and the Baltics, where demand was stable largely because of a new method allowing collection not of individual bottles, plastic containers, and cans but a whole dumpload of them. The EU now charges 800 euros for using a tonne of virgin plastic rather than recycled plastic. Deposit markets in The Netherlands were helped by new laws there, and this month legislation for deposit returns came in Slovakia and Latvia. Scotland will pass a deposit return law this summer and the rest of Britain next year but with a fee of only £200/tonne. This still accounts for about 2/3 of Tomra's business. The sorting side is lagging but recycled PET plastic is now priced higher (nearly double) that of virgin PET because bottlers want to reuse the plastic. The EU and Britain will pass laws this year boosting the higher price of reused PET.

This year Tomra expects that polystyrene for food contact is going to become important. A typical product would be yoghurt containers which are hygienic after washing. Food is now a separate recyling business for the firm with its own head.

Its food sorting business was hurt by the closing of restaurants and bars which use processed food more than retail customers, but it can gain if people feel flush because they are eating at home. The biggest sorting market is potatoes, which account for nearly 40% of sorting.

In addition, Tomra is creating a new division called “circular economy” which combines different models for combinations or measures not related to sorting or collection for a closed-loop for household waste. It created a demonstration facility called Cinnamon in Germany which has an annual capacity of 10,000 metric tonnes. The first step is presorting and washing. In Norway trading today, Tomra rose 4.32% to NOK 389.2 after hitting a high of 391.6. It declared a dividend of NOK 3/sh which has to be voted on by shareholders at the AGM. This is up from last year's NOK 2.75.

CFO Espen Gunderson said Q4 sales were NOK 364 mn compared to 428 mn last year and the backlog also fell to NOK 552 mn vs 561 mn. Q4 op expenses were NOK 254 mn and EBITDA margins were 15% vs merely 9% in the prior Q4. Net currency-adjusted assets (working capital) fell and accounts payable on non-interest-bearing liabilities rose. In Dec. it raised NOK 150 mn in a euro-credit facility extending its debt maturity and liquidity, said Gunderson. (I have no idea what a euro-credit in NOK maybe.) TOMRAY rose 4.26% to $46.16 while TMRAF gained 2.26% to $45.82.

*UK Stockcube analysts say Antofagasta is overextended at UK pence 1830. I am not selling yet. ANFGF rose another 0.56% to $26.1.

*Johnson Matthey gained 1.45% to $90.37. JMPLY.

*Despite Boeing and grounded planes, CAE is expected to re-accelerate this year by Scotiabank analysts in Canada because the planes will need pilots and the pilots will learn on CAE simulators.

*Cemex and its Chihuahua sub are expected by Morgan Stanley to gain from planned US infrastructure spending. CX rose 6.1% to $6.9 today. Bow wow only trades south of the border.

*Another cement firm, CRH of Ireland, is up 2.66% today to $45.49 on hopes for stimulus spending here and in the EU, where it operates. New Ireland Fund, IRL, is up 0.56% over its stake in CRH.

*NIO was cited as a premium winner from Chinese economic growth. Its electric vehicles are cheaper because the batteries are leased and not sold with them. It is improving its recharging systems to use cheaper fuel at night. It has real juice according to Marketbeat. Cathie Wood of ARK Innovation ETF today announced that she had bought $120 mn worth of Tesla after the carmaker stock fell over Elon Musk's buy of bitcoin. Her fund now owns more than 9% of TSL and it also lost a bucket on its tech stocks this week. NIO rose 4.02% today after being hit by the drop in Tesla yesterday. Li Motors, another China carmaker, reports tomorrow.

*While US crude inventories rose (in part because Texas couldn't tap them) oil prices rose again boosting the stock prices of Schlumberger Ltd, up 5.8% to $29.34; BP plc up 4.6% to $25.34; and Royal Dutch Shell B up 3.8% to $40.51. SLB, BP, RDS-B.

*Earthstone Energy ESTE rose 6.3% to $7.28. Computer Modelling CMDXF is up 3 to $5.09.

*Canadian Solar, CSIQ gained 4.1% hitting $48.25. It makes modules in China.

*Hoegh Partners LNG Partners preferred freighter firm HMLP rose 1.1% today to hit $26.2, a new high. It was tipped by Gen. Joe Shaefer USAF-Ret for yield, now 8.44%.

Drug Dealers

*Astra-Zeneca expects to meet EU vaccine targets in Q2, despite rumors to the contrary. AZN is up 1.83% and back over $50 again.

*Bausch Healthcare, BHC of Canada, is adding 2 directors picked by Carl Icahn who owns 7.83% of the shares out. One is son Brett Icahn. It also reported Q4 sales of $(US)2.213 bn, off from last year's $2.224 bn, but not by much. Removing one-offs made the drop 6% for the full year at $8.027 bn. Q4 loss/sh at 43¢ was 1/10 that of Q4 2019. The stock rose 0.8%. I am tempted to buy back at $31.715 but my brokerage account is not responding.

*Takeda Pharma goes ex-div Friday for a payout of the equivalent of 72¢. TAK is Japanese. Our other Japanese drug stock Eisai, ESALY, rose 0.6% today to $72.96.

*Israeli Compugen (CGEN) reports tomorrow morning and is expected to report a loss of 10¢/sh. But it often beats. It fell 1.52% today.

*TEVA gained 7.68% to hit $11.43. Mazel tov. No news except that there are bearish buys of its March calls at a $10 strike price which cost $80 per contract (of which there were 473.) This is a likely loser.

*Abcellera, ABCL, gained 4.1% today but did not recuperate all its recent losses.

*Israeli Enlivex Therapeutics jumped 4.7% today hitting $16.14 after it got Chinese premits for Alloctra cancer immunotherapy yesterday (as reported then). ENLV.

*BiolineRX gained 3.61% today hitting $3.45. BLRX.

Finance

*I added to my holdings of AY, Atlantica Sustainable Infrastructure plc, yesterday. Harry Geisel who tipped the stock rightly points out that I misstated the way we are taxed if we sell the stock after dividends are distributed tax-free. We have to pay the tax but of course we are free to sell and do so. It is up 3% today to $36.93 so while I misspoke I did buy smart.

*Finnish Sampo Oij held its marketing day about planning to become a pure insurance firm, boosting its P&C underwriting capacity by single digits without giving up all its own holdings, however. It plans to have a combined ratio of under 85%. It wants to further cut its stake in Nordea, a bank, over the next 18 months, after an earlier spinoff and also cut other financial investments. It plans to pay out at least 70% of group-level net annually excluding extraordinary items. Last year its divie of eurocents 1.7/sh got 1.6/sh from insurance earnings, starting with rises at recently acquired Hastings.

At the corporate level it wants to hit a solvency ratio of 170-190%, and cut financial leverage to under 30%. SAXPY aims to boost its insurance earnings steadily and return “excess capital” to shareholders. All these metrics will be under international financial reporting standards. SAXPY fell fractionally.

*Investor A/B of Sweden is selling 5 mn Ericsson B shares and buy 5 mn A shares. This will boost its votes to 23.6% from 22.8%. The Wallenberg family fund, now public, took advantage of a boost in the price of the non-voting shares which we own, and which I noticed. I presume it was a setup. IVSBF gained 2.22% to $76.45. But Eric fell 0.7% to $12,53.

*AIA Hong Kong, AAIGF, lost 2.3% today hitting $13.21. China is scary but I think it will move away, unlike Honkers and Shankers bank, HSBC which is planning to sell its US, British, and French businesses to focus more on Asia. I will have to move my account unless the buyer is better at banking than it has proven lately.

*Panama multilateral trade finance Banco Latinoamericano de Comercio Exterieur gained 1.16% today. BLX.

*Mitsubishi is up 1.2% to $28.84, MSBHF. Sumitomo is up 0.7% to $7.24, SMFG.

*Scotiabank is up 4% today after reporting yesterday. BNS.

*CBOE Global Markets is ex-div today for its quarterly payment of 42¢, at $100.88. But the share rose 3.64%. This is weird.

*Gold (GLD) is down .3% but Kirkland Lake, KL, a miner of gold is up.

Internets and Tel

*UK Vodafone will list its Vantage Towers AG in Frankfurt in March with an IPO for the cellphone firm whose towers are in 10 different countries, releasing money for VOD, while opening the way to more Vantage services like IoT, fiber backhaul, edge computing, and strategic deals. While VOD controls Vantage, it expects to also get minority shareholders.

*While Nasdaq is up, foreign internet shares are lagging. Mercando Libre, MELI is down another 3.63% to $1711.37.

*Africa cell and advertising site Multichoice MCHOY is off 5.5%.

*BCE is up 0.53% up north.