InvScr By Sector Recent July 2021

By pjain      Published June 24, 2021, 6:12 p.m. in blog Invest   

=== Food, Grocers

=== Discretionary, Apparel, Toys, Family, Retail

Toys Industry - nesting

2020, the toy industry enjoyed a 16% increase — or $3.5 billion — in sales from 2019. With families spending more time at home, parents turned to toys to keep everyone entertained indoors. Hasbro, which owns some of the most popular toy brands, such as Monopoly, NERF, and Jenga, has been top of mind for consumers. Its success is also aided by its strength in the digital sector, thanks to its massively popular games, TV shows and movies based on their strongest toy brands.

Hasbro

Mattel

=== SIN, Entertainment

=== Durables

=== EVs, Autos, Auto Parts

r EVs

Auto Parts EV Suppliers to Tesla, Auto and Other EV makers - June 12, 2021

Thesis

The P/S ratio of EV makers like Tesla, NIO, Nikola, Li Auto, and Xpeng are super high on hype. Putting money in EV parts manufacturers could be a smart way to capitalize on the EV industry boom. While some EV makers will be more successful than others, they will all need parts to make their products complete.

Auto Parts - Large Diversified

BorgWarner auto parts have long been used in gas-powered vehicles. However, the company has been winning more business in the EV space.

Aptiv also supplies EV components.

Dana Corporation

Steering Mech

ZF Lenksysteme: power steering mechanism

Suspension, Dampers, Vibration Control

Sika: acoustic dampers Stabilus: liftgate gas spring

Windshields

AGC Automotive

Brakes

Brembo

Seats

Fisher Dynamics - power seats

Chips and Auto Electronics,

Chips going to 50% of Car Costs

Intel Maxim Integrated Products.

Intel’s Mobileye subsidiary inked deals with NIO and Geely to supply chips for their EVs.

Magna International

TE Connectivity GE Nvidia NXPI Samsung

Wiring, Electronics

Hitachi Cable America - part of big Molex - Too Broad Amphenol Corp

Sort Auto

Hope Global Methode Electronics Multimatic Plastomer PSM International Riviera T1 Automotive Zanini Auto Group TXU Corp. Universal Logistics Holdings Affinia Group Intermediate Holdings Inc.

Instrument panel

Inteva Products

Entertainment

Lizhi will provide in-car audio entertainment and its clients include Chinese EV company Xpeng.

Sort

Cooper Industries Clarcor MacLean-Fogg Niocorp Developments DELPHI CORPORATION Flowserve Corp. NextEra Energy Harman International Industries Inc. Lightwave Logic Metaldyne Performance Group Inc. Nortek ROHM AND HAAS COMPANY

ADAC ABC Group Angell-Demmel Argent Gentex Harada

Unlikely?

Burlington Northern Sante Fe Corp.

Batteries, Materials, Systems

EV Batteries Market

The global EV battery market is on track to reach $84 billion in annual sales in 2025 from $23 billion in 2017. The top EV battery manufacturers in the world are Panasonic, which

Samsung

SB LiMotive

Skeleton Technologies, Europe

It makes a super battery that recharges quickly and provides a longer driving range in EVs. Skeleton is gearing up for an IPO.

Panasonic - Majors

While diversifying with its on technology, it still supplies batteries for Tesla’s vehicles

LG Chem

AESC

BYD

Battery Controllers, Chiller

Modine Manufacturing Co.: battery chiller

Batteries Future Solid state

Lithium

Lithium, which is a major component in EV battery manufacturing.

Albemarle No 1

Lithium Exploration Group

U.S. Lithium Exploration Group

Other battery Materials

Rare Element Resources

Searchlight Minerals

EV Charging Networks and Equipment

Charging Network Equipment

General Electric and Siemens supply EV charging equipment for home and public use.

Tesla SuperCharger Network - Biggest in USA

Tesla as the EV giant also operates a global network of EV charging sites for its drivers, and biggest in USA.

ChargePoint - SPAC IPO

Operates a network of EV charging stations across more than a dozen countries. The company teamed up with Switchback Energy Acquisition Corporation, a SPAC, to take it public without going through the traditional IPO process.

Ionity EU

EV charging services across Europe. The business is owned by a group that includes Daimler, Volkswagen, BMW Group, Ford, and Hyundai.

Operates a network of EV charging stations across the U.S.

Electrify America

Provides EV charging services in the U.S. Volkswagen owns Electrify America and is giving 3 year free charging on it for its ID.4 EV.

Tritium Australia

Provides EV charging solutions in Australia

==== Commodities

Iron Ore Mining

GLNCY Xx GLEN.LN R7 c4.6 (2.5 6.7) y=7.4%

  • Q2'2020 EPS=-0.49 div=0.2 y=3.7% M28b #sh=13.66b $215b NI=$0.82b
  • $3.2b writeoff on asset impairments and net loss for H1'20 y $226m for H1
  • NET LOSS = $2.6b - H1 operating $2b NI at record - but overall due to writeoffs
  • EBITDA -13% to $4.8b yoy for 6 months
  • Cut dividend to cut Debt
  • Net debt jumped 12% in H1 to $20b > Glencore ended 2019 with net debt of $17.56 b exp $17.12 billion.
  • Writeoff $3.2B in charges were mainly related to

  • PROBLEM: Same CEO for many years - owns big chunk of company

  • 5 years+ the company has been doing REAL BAD!
  • Merger with XStra - did NOT help - ballooned debt?

  • PROBLEM: Need to reduce debt - Dividend likely to drop to zero!

  • SEG: Metals and minerals

  • Copper output at its mines declines -11% yoy 293k MT in Q1 y 321k MT
  • Zn up 3% 114 kMT down from 122k MT, Q1 295 kMT +13%
  • cobalt dropped 44% to 6.1 kMT
  • nickel and lead, declined

  • SEG: agricultural products

  • SEG: energy products, OIL TRADING

  • Strong oil trading performance - but needed more working capital to buy and store huge amounts of cheap crude
  • Div Op Profits $2.2b - $3.2b for FY'20
  • Coal product fell 15% fy 114 MT exp 132 m
  • Oil output dropped 17%

  • Energy Production REALLY weak - had to take $3b writeoff due to

  • oilfields in Chad, which shut down during the pandemic,
  • Colombian coal operations
  • Mopani copper mine in Zambia
  • zinc mining in Peru.

  • REVIEW

  • Company is hodgepodge of TOO Many kinds of materials and mining

  • ABOUT Glencore Largest Swiss co by Revenue - 160k emps

  • 2010 global market share of 60% Zinc, 50% CU, 9% grain, 3% Oil
  • a British multinational commodity trading and mining company
  • HQ Baar, Switzerland, and its registered office in Saint Helier, Jersey.
  • 2013 May created through a merger of Glencore with Xstrata
  • Ivan Glasenberg (CEO)

Steel

Copper

  • 7/21/2020 September copper HGU20, 0.17% rose 1.5% to $2.958 a pound.
  • China recovery is well underway - this is seen as MAJOR demand for gold
  • FCX nearly recovered!

Precious Metals

Gold

r USD,Gold,Sivler

Gold Tracking : $1845 - all time high

  • Low interest rates
  • Declining USD drives gold higher as priced in USD
  • Fear of ECB/Fed/BoJ massive printing => Asset inflation spiking
  • Demand eg India marriage market - but down as people selling out of gold in Covid era
  • Ratio of gold to silver could spike to around 130 - ironically as GOLD is much higher demand - this in turn would pull up silver prices
  • 7/21/2020 Gold settles at a nearly 9-year high - Gold for August delivery GC00, -0.05% on Comex rose $26.50, or 1.5%, to settle at $1,843.90 an ounce, after touching a high of $1,844.8
  • China recovery is well underway - this is seen as MAJOR demand for gold

FY20 Trends

  • Covid-19 disrupted production for many miners

Who owns Gold

  • ownership Tonnes 2019 - the percapita includes private and govt holdings - used in multiples of 10gm
Country Private Govt 10gm Percapital
India 24,500 2.5
China 20,398 2.7
Germany 8,918 15
Italy 5,707 13
France 4,605 11
Switzerland 920 1040 22.5
  • Data as of 2019

KGC c9.8 [2.7(3-10)24 in 2011 hi] M=12b $3.8b PS=3x PB=2.2 DE=-.5 y=0% 5$.2%e20%

  • TODO

    • CONF call - https://www.fool.com/earnings/call-transcripts/2020/07/31/kinross-gold-kgc-q2-2020-earnings-call-transcript.aspx
  • VAL/TECH STOCK ROSE MASSIVELY 97% vs 50% for GDX

    • cEPS 80% and rising Zacks 3 hold
    • PS 3.13 vs industry 4.7
    • PCF 7.15 industry 10.5x
  • FY Production

    • FY'20 2.3moz AISC 921-1018 wide range, CAPEX $0.9b
    • Q2'20 0.575 moz -12% yoy AISC $984
    • Higher gold prices boosted op-cf 45% to $417m
  • Kinross Canada STRUCTURE

    • US/Canada focus - little international political risk -but also, West Africa and Russia
    • Tasiast expansion strong and low risk - operating already
    • Gilmore project is a low-cost brownfield expansion with low risk.

GOLD or ABX.TO

  • VAL/TECH STOCK

    • Cutting debt
  • Growth- Production FY

  • Barrick

    • progress of its key projects - U.S., Canada, South America, Australia, and Africa
    • merger with Randgold for reserves upside
    • joint venture with Newmont
  • Zacks 2 Buy

NEM M56 c69 T74

  • Technically BIG NAME FAMOUS - stock rose 60% YTD >> GDX
  • Production FY'20 6moz from RESERVES of 24 moz at AISC $1015/oz
    • Capex'2020 $1.4b
    • open-pit/surface 75% - so covid-19 will not hurt production
    • 21% FALL IN Q2'20 production yoy down to 1.3 mOZ
    • Sustain cost rising 8% to $1100/oz

RGLD - ROYALTY STREAMS

  • VAL/TECH STOCK

    • 6mo stock up 20%
    • EPS 57% cy
  • Royal Gold Inc.

    • acquires and manages precious metals stream and royalty interests

GFI

  • VAL/TECH STOCK

    • cy eps +36%
    • Stock up 100% 6mos
  • Gold Fields Ltd.

    • one of the world's largest unhedged gold producers
    • operating mines in South Africa, Ghana and Australia.

EGO

  • VAL/TECH STOCK

    • up 63% for year
  • Eldorado Gold. produces gold, as well as silver, lead, zinc, and iron ore.

    • Turkey, Canada, Greece, Brazil and Romania

EQX

  • VAL/TECH STOCK

    • FY Eps = 255%
  • Equinox - principal properties is the Castle Mountain property in California.

    • Zacks 3 hold

Silver

FY'20 c$21.6/oz - to benefit at 100:1 ratio vs normal 20:1 - Playing catchup

  • 7/21/2020 Silver scores highest finish since 2014 September contract SIU20, 0.69% up $1.37, or 6.8%, to end at $21.557 an ounce after a high at $21.63. Most-active silver futures marked their highest settlement since March 2014.
  • 7/21/2020 Silver spot prices have outperformed gold so far this month

Ironically the ratio of gold to silver could spike to around 130 — meaning that it would take 130 ounces of silver to buy one ounce of gold. That ratio is now back under 100, but that figure should be closer to 50 instead, he said. “Even at a 50 ratio, silver is far removed from the ratio found naturally,” said Spina, as silver is found at a ratio of nearly 20 ounces per ounce of gold.

ETFs store silver value > As of June 30, global holdings of silver in silver exchange-traded products, or ETPs, which include ETFs, reached a “fresh all-time high of 925 million ounces, which is roughly 14 months of mine supply,” according to a recent report from The Silver Institute, an international industry association. ETP growth in the first half of 2020 of 196 million ounces “comfortably surpassed” the highest annual inflow of 149 million ounces set in 2009, the report said.

“Trading in the gray metal is worth barely 10% of what gold sees each day, so hedge funds and other money managers wanting to catch up with the yellow metal’s jump towards new all-time highs might expect to get more bang for their buck in silver,” said Adrian Ash, director of research at BullionVault.

  • SILVER IS VERY VOLATILE - silver has jumped from its COVID-19 price crash to an 11-year low in mid-March by 58% in just 80 trading days. That puts the March to July 2020 performance in the “top 4% of all four-month gains over the last half-century,” he told MarketWatch. Even so, silver has outpaced this current surge many times — in 1974, 1979, 1982, 1987, 2010 and 2011, which all marked times of extreme economic or financial stress, so “when silver gets moving, it can really move.

Platinum

  • 7/21/2020 October platinum PLV20, -0.02% rose 7.1% to $918.90 an ounce

Palladium

  • 7/21/2020 September palladium PAU20, 0.53% added 3.7% to $2,188.20 an ounce, for the highest settlement since late March.

--- ENERGY, GREEN, OIL, GAS - 2030 only 25% EVs

Oil, Gas USA

OIL, GAS Key Factors - Supply Demand

Majors, Diversified

Oil Services

Pipelines, MLPs - purification trend

Refiners Pure

Oil International - Russia, Opec

Infra - xfr -

Renewables

Carbon Trades

H2

Solar, PV

USA MAJORS Oil to be hot commodity - Reopening but Supply Crunch - NON SHALE separate

x COP - acq Concho nepotism, combined 1.5m bpd heavily dependent on shale Permian Basin biggest - short cycle fall off x OXY - overextended

XOM - guyana production - fell below $62 cup-handle now sell range

Getting OUT of deepwater drilling off the Australian coast to conventional drilling in the Middle East. Tons of writeoffs 2020 in Permian Shale after 2017 $6b acq? - maintained its 2021 capital spending program at $16 billion-$19 billion in Q1. In addition to $3 billion in cost cuts in 2020, the company is on pace to achieve $3 billion in more cuts through 2023. 5.6% yield fully covered by Q1'21 FCF as well as current capex levels

CVX M$210b - below 50 day ma

  • Smart buy of Noble $5b at cheap price and sourcing access to E.Medi sea.

B Pipeline Existing as Block Growth like Keystone

? same as TCP

KMI M83b

OKE M$40

EPB

EEQ

EEP

C MLP - manipulated as subsidiaries?

MPLX M$40b MLP

PAA M27b MLP

About: Plains All American Pipeline

ET Energy Transfer M 96b MLP

EPD M $93b

C Diversified Petro,MLP,Pipelines

D Diversified Canadian

ENB Enbridge EV=130b CAN

TRP TC Energy M 88b CAN

PBA Pembina Pipeline M$27 CAN

D E&P Oil select producers

EOG

EOG Resources (EOG) is known as the "Apple of Oil" for its use of technology and big data to aid in drilling operations. The company has a $51 billion market cap.

The company has premium acreage in the Eagle Ford shale formation in south Texas and the Permian's Delaware Basin.

EOG beat analyst expectations when it reported Q1 results May 6, as EPS nearly tripled to $1.62 with revenue down 22% to $3.69 billion. The shale producer also declared a special dividend of $1 after earlier hiking its regular payout, bringing total expected return of cash to shareholders in 2021 to $1.5 billion.

On May 7, shares broke out from a flat base with a 77.24 buy point, and beyond the 5% chase zone, which tops out at 81.10.EOG stock is extended and not currently a buy.

In February, EOG projected 2021 crude oil production at 440,000 barrels per day, up from 2020's full-year average of 409,200 bpd. EOG is allocating more capital in 2021 to test high‐impact oil plays and lease acreage and sees capital spending at $3.7 million -$4.1 million for the year, up from $3.5 million in 2020.

CLR

  • FY'21
  • M$14'2012,
  • CLR stock failed to break out of a cup base last month. The stock then formed a gap-up base with 34.40 as an alternate buy point but is now extended out of buy range.

  • About Continental Resources, Enid, Okla-

  • One of the first and largest exploration companies in the shale oil and gas-rich Williston Basin region of North Dakota and Montana.
  • kept its focus on North Dakota's Bakken play and did not rush to Permian shale MGT Harold Hamm, Continental's founder and CEO, stepped down last year and assumed the role of executive chairman. Former ConocoPhillips executive William Berry replaced Hamm.

PXD

  • FY'21 M 41b c170 = buy point from cup base, flipped early june down
  • become the largest oil producer in Permian with enough land to replace wells as expire
  • Q1 earnings and revenue estimates on May 4. In addition to raising its regular quarterly dividend early this year, Pioneer will start paying a long-term variable quarterly dividend in 2022
  • After 2 merger, 2021 capex $3.1-$3.4 b prior 2.7b
  • Expected oil and gas production of 605,000-631,000 bpd, up from a prior view of 528,000-554,000 bpd.

  • ABOUT: Pioneer Natural Resources pure-play Permian Basin 1m acres

  • May'21 acq
  • sold its Eagle Ford assets in 2019
  • acq DoublePoint Energy for $6.4b for nearly 100,000 Permian
  • acq Parsley Energy in an all-stock transaction valued at about $4.5 billion that closed early 2021

HES

WLL drills in the Permian Basin, Rocky Mountains, Gulf Coast and Mid-Continent.

FY'2012 $6b - Gunderson T $65 as sees a delay of Keystone plans, and therefore Canadian oil imports, as in a sense a setback of competition for this shale company.

ALT: PV

ALT: Wind

Supply Chain Constraints 6/21

=== Finance

USBanks Aug'2020

  • Buffet accumulating $2b BAC >12% in July $30>$25 - has not recovered
    • Why so little news for BAC?
    • Huge loan losses reserves -would add to EPS if stimulus reduces need for
  • JPM pricey
  • WFC hard to own - restructuring

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