Wonder Products

Today's blog is late because I had to work on my taxes for 2020 some more. Tesla TSLA stock crashed because of problems with tire pressure requiring a recall of thousands of vehicles. Moreover, the SEC decided that Elon Musk is in violation for promoting cryptocurrencies. But not to worry. Meme is alive and well. I just got a flyer from Amazon offering no-meat Mondays and artificial mushrooms and dairyless ice cream. I think I will pass on these wonder products.

Photo by Annie Spratt on Unsplash

Now for our portfolio news which is very positive.

Oilpatch

*Dutch Antillean Schlumberger Ltd rose another 6.4% today after its CEO Olivier Le Peuch told a Sanford Bernstein conference that he expects 2021 revenues will be greater than the $22.5 bn Wall Street consensus. He also spoke of cashflow margins higher than 10% and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of 20.8% to 21.3%, also higher than what analysts are predicting. SLB has been upwardly mobile for the past week and presumably, some of the insiders either from the founding family or executives have already learned the good news. The rise in oil prices today made the stock of the wellhead services company for oil and gas searches even more appealing. West Texas Intermediate rose to $68.60 per barrel and Brent Crude to $71.09/bbl.

"With oil demand projected to reach pre-2019 levels by the end of 2022 and supply tightening, our oil and gas business is on the verge of an exceptional growth cycle,” the Frenchman told the conference. "Given our unique position and strategy, we are positioned to deliver outstanding returns in the short and longer term.” SLB hit a 52-wk high at $34.32 today.

The higher price move also boosted our BP plc by 2.39% and our Royal Dutch Shell RDS-B by 2.56% in European trading.

*Atlantica Sustainable infrastructure Fund, AY, rose 1.9% to $36.85 today in the wake of the oil price rise. It is 20% owned by Algonquin Power which rose a mere 0.52%. AQN.

*Hikma prefs, HKMPF, which held a conference call this morning for common shareholders after announcing that its parent in Norway will also offer charters of LNG carriers to avoid bunker fuel ships. I am in favor of green stocks but I don't like to see the parent of a small sub competing with it, however good for the environment. I did not attend the conference call.

*Canadian Energy Fuels, UUUU, lost 3.5% today but it is still over $7. It mines uranium and will refine uranium and rare earths found with it, a high risk but exciting move.

*Cosan, the peddler of green fuel in Latin America, is up 1.8% today to $18.9. It partners with Shell in gas stations in Argentina and Brazil which may be spun off. CSAN.

Tech & Tel

*Dutch Prosus, PROSY, today revealed that it is paying $1.8 bn to buy New York's Stack Overflow, an online gathering place for software developers, to gain from demand for tech education with questions and answers for workers boosting their coding skills. Stack says it gets 100 million visitors every month. PROSY was set up to manage some $200 bn of Tencent by the former owners, Naspers of South Africa, which was so valuable it distorted the Jo'burg Stock Exchange. NPSNY bought into TCEHY back in 2001 paying $34 mn, the smartest move of any media company ever. PROSY recently sold part of its Tencent holdings to invest in tech education on-line. It recently announced it would invest in Skillsoft, which publishes training software and a plan to merge with a SPAC called Churchill Capital. The Dutch firm aims to have a full NY listing. PROSY believes that remote working and online education will continue after covid-19 ends. Larry Illg who handles edu-tech investment at Prosus said that consolidation is coming in this area. The seller are venture capitalists named as Union Square Ventures, Andreessen Horowitz, Bezos Expeditions (Jeff from Amazon), Spark Capital, Silver Lake, and the Singapore sovereign wealth fund, according to the Wall Street Journal.

Stack Overflow’s website is free to access. It generates ad revenue from those promoting technology products or seeking tech employees. It offers a private version of its platform called Stack Overflow for Teams, a subscription as a service, which links with GitHub (owned by Microsoft). Microsoft also uses Stack Overflow itself, as do other businesses like Liberty Mutual, Siemens AG, Chevron, and others. Now Stack Overflow will gain access to other Prosus clients in education. MSFT fell 4.1%.

*Nokia of Finland rose 6.36% today. Part of it is the meme effect reflecting the rush into AMC Entertainment yesterday which boosted the share price by 90% and led to a trading halt. NOK did a deal with Daimler, the German maker of Mercedes-Benz, which will end its lawsuit over patent violations for use of its mobile telecom systems without a license which Daimler said should be set up by Continental or Bosch, rather than NOK. However, in the EU, NOK has licensed the mobile app in Audi, Bentley, BMW, Mini-Minor, Rolls Royce, Seat, and VW cars. Daimler lost its initial suit last year but had been heading for a higher court, but now has capitulated. Neither party revealed the amount of the payment. Earlier this year NOK also collected license fees from Lenovo of China and Samsung refused earlier. Ericsson rose in sympathey by 0.5% but ERIC is not in auto apps.

Drug dealers

This week will see the new Alzheimer's treatment Aducanumab either winning FDA approval or not. The drug is being developed by US Biogen but it is also a key hope also for Eisai, ESALY, of Japan, which we own. Initially, the trials seemed to show no help to people with the old-age loss of mental accutity but then more careful reading of the outcomes induced hope. Eisai applied for a Japanese green light separately from Biogen but the trials were joint. Today BIIB is up 1.3% while ESALY is only up 0.23%. Japan with an aged population is more in need of an Alzheimer's drug than the USA. Both shares will react to the FDA ruling expected this week. Bernie Gal of Sanford Bernstein told a reporter that if approved the price will be high.

The other Japanese drug giant Takeda, TAK, fell 0.43%.

Mining

Antofagasta lost 4.15% today at the opening. We sold in time. ANFGF is Chilean but has its main listing in London. Having lived through one dictatorship of the right in Santiago I think the country will not veer away from the reformers of the left.

Canadian Kirkland Lake is up 1.76% along with the price of the yellow metal which is gaining as cyber currencies lose traction. KL.

Banks

Bank of Nova Scotia BNS which reported yesterday is up another 1.4% today at US$87.93 despite results that were decidedly mixed because it is more global and less North American than other banks from Canada. This works most of the time but not in the 1st quarter this year. It was upgraded to neutral from underweight today by Crédit Suisse.

Investor A/B of Sweden rose 1.35% today hitting $23.31. IVSBF.

TD Ameritrade called to tell me that Orbia Advance stock (traded as MXCHF, its former name in the US) is producing these huge gaps between bid and ask prices because the market makers have no recent trades to compare and as a result the prices are set by robots. Robots are great for turning drip-feed taps on but they don't actually eat food. 

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William K. 1 year ago Member's comment

Not only interesting and informative across a broad range of subjects, but also a really enjoyable style.