Investing -- Stories That Fascinate Me -- May 3, 2023

Locator: 44524I. 

Investing:

• opportunities: over at SeekingAlpha: PXD, APA, and COP

•  ban on natural gas hook-ups in the northeast, NYC, New England? 

• this has nothing to do with the environment per se; it's a lack of natural gas pipelines. 
• it's now become urgent, literally a risk of running out of enough natural gas for those already dependent upon natural gas.
• google natural gas pipelines Long Island Brooklyn AOC
• one has to remember: politicians, by nature, are not that bright
• politicians don't act until they absolutely have to
• I'm convinced the NY governor was briefed on the seriousness of this matter when she announced her decision; she was told in stark terms, "natural gas is not going to meet demand"
  
• the story no longer interests me; it's simply fascinating to watch this play out;
  

• contagion: now its PacWest -- once the dominoes start to fall ....

• Ford:

Rivian:

Molson Coors: link here.

Molson Coors posted earnings of $0.54 per share, which was a long, long way ahead of the $0.26 per share analysts expected.

Revenue was also up, coming in at $2.35 billion against projections calling for $2.23 billion. Better yet, revenue increased 6.3% year-over-year, with net sales up 5.9% as well.

Molson Coors even noted that it looks for a slight increase in net sales even with some significant macroeconomic headwinds already in progress

... the eighth quarter running that Molson Coors has delivered top-line growth, a point which suggests that a return to Earth is due. Nothing grows forever, after all, and what goes up must certainly come down. Coors stock has already landed an advantage from the Bud Light / Dylan Mulvaney debacle.

Meanwhile, given that Bud Light is now in a “panic” over the state of its own advertising—or so noted a report in AdAge—that’s a good opportunity for Molson Coors to potentially wring a ninth quarter of gains out of the market.

BUD: Kid Rock, Dylan Mulvaney -- an unlikely mash-up.

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All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source. 

RIDE: link here.

To make matters worse, over the past year, the Federal Reserve has raised interest rates at a pace not seen since the 80s

High-growth companies like those in the electric vehicle market have seen their valuations crater, making it harder to access cheap funding through equity raises.

Although Lordstown claimed the initial batch of 500 Endurance trucks was out for delivery last November, 2022, the company voluntarily recalled them, halting production over quality issues.

Lordstown has faced bankruptcy several times last year, yet the Taiwanese electronics manufacturer Foxconn has been there to back the EV start-up financially, with several investment rounds to revamp the program. According to Lordstown’s SEC filing Monday, that may no longer be the case.

With the Foxconn deal falling through, the start-up says bankruptcy is a possibility.

More on Ford: link here; link here; link here.

Fleet sales: years ago, the same story -- fleet sales. I thought that was a big deal and a big deal for automakers. Then I learned that when auto makers rely on fleet sales that's a red flag That was years ago but the lesson stayed with me. I forget "why" but if nothing else, it has to do with a) low-end vehicles (no bells and whistles; and, b) very low margins. And fleet sales are sporadic or something to that effect; I've long forgotten the specifics.

The question: does the average Ford shareholder have a 30-year horizon?

Ford is still taking a loss on its EV business, which it often describes as a “startup.” The unit brought in $700 million in revenue, a 27% decline from last year, partly attributable to production interruptions of two of Ford’s most popular EVs: the F-150 Lightning pickup and the Mustang Mach-E SUV. Ford said production for the Mach-E was interrupted by “industrial changes that will nearly double manufacturing capacity,” which perhaps explains Ford’s most recent price drop on the vehicle.

That marks the second time Ford has cut the price on the Mach-E this quarter. The first time was in January and followed similar price cuts from Tesla.

Ford aims to sell EVs at a global run rate of 600,000 units by the end of 2023 and more than 2 million by the end of 2026. The automaker will have to build and ship quickly if it wants to meet that goal. Ford only reported 10,866 EV units sold in Q1 this year.

Despite the losses within Model e, Ford’s other two units were more than enough to push the automaker into growth territory. Ford said that Ford Blue and Ford Pro business segments were both profitable in every region where they operate. The automaker shipped 1.1 million vehicles in the quarter, an increase of 9% year-over-year, with the majority of sales coming from Ford’s gas-powered, hybrid and electric trucks, commercial vans and SUVs, according to the company.