April 25, 2019

MMM: The stock also weighs heavily in the Dow, a price-weighted index. 3M’s opening share decline of 10.6%, or $23.21, generated a 157-point drag on the index.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

Market: the Dow is down 200 points. Buying opportunity. First thing I did was check to see if I have any cash to buy anything.

If you like the market today, you will love the market when Joe Biden becomes president. He wants to change course, doesn't like Trump's focus on making America great.

Had I not blogged, I very likely would have not come across "platform company" -- but readers keep me interested.

Dots connecting dots and sooner or later we get to Valeant. Something to think about. That linked article was posted May 10, 2015. The Canadian company apparently changed its name in early 2018.

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Algeria

I normally do not care about Algeria. Don't understand it.

But yesterday, Irina Slav had an easy-to-understand tutorial on Algeria. Data points:

• on a good day, Algeria produces about 1.1 million bopd
• comparable to Libya's
• oil reserves: 12 billion bbls
• shale gas: third-largest reserves in the world, at 20 trillion cubic feet
• 2017: 
• produced 100 billion cubic meters (rounded)
• exported: 50 billion cubic meters (again, rounded)

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Archives

The road to Indiana.

This will be good for the archives.

Indiana Utility Regulatory Commission: won't consider new power plants unless renewable energy is in the mix. Nixes a $781-million natural gas plant which was to replace an aging coal-burning plant.

I assume the coal-burning plant will be kept going.

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Chevron

A huge "thank you" to Don for sending me this link. I said the same thing some days ago when Chevron made an offer for Anadarka and investors quickly showed their displeasure by selling off CVX. I'll come back to this later when I get caught up. Summary here:

• Big M&A can be tough to pull off, and usually results in negative shareholder value
• Chevron's $50 billion acquisition of Anadarko is likely to turn out well, thanks to the company paying a fair price and one of the best management teams in the industry
• Even after taking on a lot of debt and diluting investors 10%, Chevron's dividend remains very safe and is likely to grow at 5% to 7% annually over time
• With shares about 5% undervalued, Chevron is offering about 11% CAGR total return potential over the next five years, making it a potentially attractive buy
• But investors need to keep in mind that this mega deal still brings execution risk on top of Chevron's existing risk profile

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Earnings

Reporting today:

• Hess: huge; reports earnings of 9 cents/share vs a loss of 26 cent/share forecast.
• 3M missed. Forecast, $2.57.
• Amazon after market close. Forecast, $4.72.
• Baxter. Beat forecast, 68 cents. Came in at 76 cents. Revenue of $2.63 billion exceeded expected $2.62 billion.
• Xcel Energy: Forecast, 61 cents. In-line; bottom line improved 7% year over year.
• F: crushes estimates.
• SBUX: after market close.
• 3M, as noted above:

3M weighs heavily in the Dow, a price-weighted index. 3M’s opening share decline of 10.6%, or $23.21, generated a 157-point drag on the index.

3M reported that it would lay off 2,000 members of its global workforce and lowered its forecast for full-year earnings, sending shares tumbling as much as 10% in early trading. The company now sees adjusted earnings in the range of between $9.25 to $9.75 per share, down from the $10.45 to $10.90 it guided previously.

This marks the second reduction to 3M’s bottom-line forecast in three months.

The company delivered first-quarter adjusted EPS of $2.23 on net sales of $7.86 billion, missing expectations for earnings of $2.48 on revenue of $8.02 billion, according to Bloomberg data.