News – Electric Cars: Time to plug in?

The Future of Cars: Model 3 or Model T?

(Note: all the sources
listed in the “Balanced” section)

The Machine That
Changed the World.
In July of 1894, the city of Paris hosted what must have been for its time one of the most peculiar events ever to take place: a race of “horseless carriages”. Entrants included vehicles powered by steam, petrol, compressed air, hydraulics, and electricity. The event attracted massive crowds, who lined the 78-mile course from Paris to Rouen. Out of the 102 entrants, only 21 qualified for the race and even fewer finished. Nevertheless, onlookers were rewarded with the opportunity to witness a proud moment for the machine that would change everything. The carriage powered by the internal combustion engine won this race and was chosen to be the machine to replace horses as the propulsion of the future. The petroleum-powered automobile became a foundational pillar for the social and economic infrastructure of the twentieth century. Meanwhile, the electric carriage never even made it to the starting line. However, since that summer over a century ago advances in battery technology have finally made the electric motor a viable alternative. In recent years we’ve seen a big push for electric cars, but the impact of electric cars will have on our lives has yet to be determined. 1

News – Could the US Have More Oil than the Saudis?!

Permian oil production is soaring and gaining importance on a global scale.

(Note: related companies are at base of the
story and all the sources listed in the “Balanced” section)

The United States has already surpassed Saudi
Arabia as the largest producer of oil. 
Much of the increase has come in response to higher production in the
Permian Basin, a region between western Texas and southeastern New Mexico.  The Permian Basin now accounts for more than one-third
of domestic oil production, and that percentage is growing.  So much that some now believe Permian
production will soon surpass Saudi Arabia’s Ghawar Oilfield and become the
largest oil-producing field in the world.

Research – Vectrus (VEC) – On pace for record revenues

Wednesday, February 27, 2019

Vectrus (VEC)

Solid 2018 performance; on track for five year goal of $2.5B revenue and 7% EBITDA margin.

Vectrus Inc is a
U.S.-based company that provides services to the U.S. government. The company
generates nearly all its revenue from the United States Department of Defense.
The company offerings are categorized into three types; infrastructure
asset management services, logistics and supply-chain management
services, and information technology and
network communication services.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Solid 2018 Results. For 2018, Vectrus reported record revenue of $1.279 billion, record operating margin of 3.8%, record adjusted EPS of $2.94, and record operating cash flow of $40.1 million. The results were driven by a combination of organic growth and the SENTEL acquisition.
  • Remains on Track For 5-Year Goals. Vectrus remains on track for its 2023 goal of $2.5 billion of revenue and a 7% EBITDA margin. This is rou… 


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Research – Tegna (TGNA) – Earnings Preview

Wednesday, February 27, 2019

Tegna, Inc. (TGNA)

A strong quarter expected, but with a caveat.

TEGNA Inc., a media
company, operates a portfolio of broadcast stations and digital sites; and
provides marketing service solutions for businesses. The company operates 46
television stations in 38 markets that produce local programming, such as news,
sports, and entertainment. Its marketing services business provides solutions
for clients on multiple channels, including broadcast, online, and OTT. 

Michael Kupinski, DOR, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Q4 preview. The company is expected to report a strong quarter, with revenues up an estimated 29% and cash flow up 43%, a reflection of very strong Political advertising. The results, however, are expected to be shy of the company’s guidance which anticipated 30% to 32% revenue growth. The company will report Q4 results on Friday, March 1st. 
  • Q4 impact from Premion. We believe that the quarter will be adversely impacted by refunds at its Premion subsidiary, which did not deliver ads correctly. The company indicated that the issue affected up to 17% of the division’s total revenue, or  $12.8 million, based on our estimates. Our revised Q4 revenue and cash flow estima… 


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Research – Ducommun (DCO) –

Wednesday, February 27, 2019

Ducommun International (DCO)

9.

Ducommun Inc is a
leading global provider of engineering & manufacturing services for
high-performance products & high-cost-of failure applications used
primarily in the aerospace and defense, industrial, medical & other
industries. 

Christian Herbosa, Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM


A… 



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Research – Endeavour Silver (EXK) – 2018 full year earnings results, maintain rating

Tuesday, February 26, 2019

Endeavour Silver (EXK)

Narrower loss than expected; development projects underpin long-term growth potential.

Endeavour Silver Corp
is a precious metal mining company. The company is primarily engaged in silver
mining and owns three high-grade, underground, silver-gold mines in Mexico. Its
other business activities include acquisition, exploration, development,
extraction, processing, refining and reclamation. 

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • EXK
    reports fourth quarter and full year earnings.
      EXK reported a full year net loss of $12.4 million, or ($0.10) per share, compared to our forecast of a loss of $15.9 million, or ($0.12) per share.  The company reported a fourth quarter loss of $3.7 million, or ($0.03) per share, which was better than our estimate of a loss of $7.2 million, or ($0.06) per share.  The variance to our estimate was due to lower than expected cost of sales.  Fourth quarter and full year adjusted EBITDA amounted to $2.2 million and $21.9 million, respectively. 
  • Near-term
    catalysts.
      In our view, improving performance at the Guanacevi mine as a result of developing the higher-grade Milache and Santa Cruz Sur ore bodies, achieving commercial production at the El Compas mine during the first quarter of 2018 and making a production decision with respect to the Terronera Mine project could provide greater visibility with respect to near-term and long-term earnings growth.  Longer-term growth should… 


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Research – Cumulus Media (CMLS) – Earnings preview

Tuesday, February 26, 2019

Cumulus Media (CMLS)

An encouraging preview.

CUMULUS MEDIA, Inc. (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month  wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYS, the American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through on-air, digital, mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees.

Michael Kupinski, DOR, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • A Surprising Preview. The company indicated that it plans to report full year 2018 revenues between $1.139 to $1.141 billion and adjusted EBITDA between $232.7 million to $234.7 million, well above our expectations. We believe that high margin Political advertising likely accounts for a big portion of the upside variance. The company plans to report March 18th. 
  • Beats our expectations. We conservatively estimated 3.3% revenue growth to $303.6 million for Q4 and $1.134 billion for the full year revenues. Our adjusted EBITDA estimate for Q4 was $57.4 mill… 


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News – Cannabiz: Growing Like a Weed

High on Expectations

(Note: related companies are at base of the
story and all the sources listed in the “Balanced” section)

Recently, Canopy Growth Corp (CGC), the Ontario-based cannabis producer, reported a remarkable spike in revenue driven by the company’s first sales of recreational marijuana following recreational legalization in Canada last October. During last quarter, Canopy nearly tripled its quarterly revenue over last year selling 22,271 pounds of weed, 73% of which was recreational. Canopy first made history in 2014 as the first cannabis company to be publicly traded in North America. Since then, Canopy grew to become world’s largest marijuana company by market cap at about $15.2 billion as of market close February 22nd. Canopy, however, is truly only the tip of the iceberg.

The international trend toward legalization combined
with the tremendous amount of investor interest has inspired emerging companies
to bring new products and technologies to market at an exponential rate. The
public small/micro-cap space abounds with unique investment opportunities in
countless emerging cannabis-related markets including pharmaceuticals, cannabidiol
(CBD), hemp, edibles, beverages, vaping equipment, automated joint-rollers, and
everything else you can imagine. Indeed, we stand at the precipice of a
revolution in marijuana consumer and health products.

Research – Great Lakes (GLDD) — Raising Price Target

Tuesday, February 26, 2019

Great Lakes Dredge & Dock (GLDD)

Positive Development at E&I Could Bolster Sales Process.

Great Lakes Dredge & Dock Corp is a
provider of dredging services in the United States. The Company operates in two
operating segments namely Dredging and Environmental, and Infrastructure.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Recent $35 million award could
    help sale of under performing Environmental & Infrastructure (E&I)
    business. E&I was recently reclasssified as discontinued operation at yearend 2018 and a
    sale is likely in mid-2019. 
    Late last week, E&I was awarded a $35 million project for levee work in Sacramento, CA, which should have a positive impact on E&I backlog and the sales process. 
  • Bidding activity remains
    high and 2018 awards moved yearend 2018 dredging backlog to $707 million
    , up $196 million from yearend 2017 backlog of $511 million and almost double yearend 2016 backlog of $369 mill…


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News – Legalizing Sports Gambling: Place Your Bets

The Legalization of Sports Gambling: A Winning Bet?

 (Note: related companies
are at base of the story and all the sources listed in the “Balanced”
section)

On Monday, May 14, 2018, the U.S. Supreme Court made a monumental ruling to legalize sports gambling outside the state of Nevada, lifting the 25-year-old federal law. The rationale for this decision was to bring a multibillion-dollar industry into the forefront, allowing states to record tax revenues and encourage tourism. The decision is intended to protect consumers by increasing transparency between all parties involved. As of February 13, 2019, full-scale legalized sports betting is allowed in eight states, with bills pending in two additional states.

The American Gaming Association (AGA) estimates $150 billion is illegally wagered in the United States annually. This Supreme Court ruling presents an economic opportunity for corporations and entrepreneurs to compete for a share of this market. Assuming at least 40 states legalize sports betting, the AGA estimates the industry can generate $8 billion in local tax revenue, create thousands of new jobs, and add between $14-$20 billion to the national GDP.

The
success of the gambling enterprise is founded on the simple principle that
there will be more losers than winners. So, who will be the winners? And, who
will be the losers?

Research – Coeur Mining (CDE) – Exceeds expectations

Friday, February 22, 2019

Coeur Mining, Inc. (CDE)

CDE exceeds expectations; outlook remains favorable.

Coeur Mining Inc is a metals producer focused on mining precious minerals in the Americas. The company is involved on the discovery and mining of gold and silver, and generates the vast majority of revenue from the sale of these precious metals. The operating mines of company are palmarejo, rochester, wharf, and kensington.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • CDE reports fourth quarter and full year 2018 earnings.  Coeur reported adjusted fourth quarter earnings of $16.1 million, or $0.08 per share, compared with our estimate of a loss of $7.4 million, or ($0.04) per share.  The consensus estimate was a loss of ($0.10) per share.  The variance to our estimate is attributed, in part, to a $36.2 million tax benefit.  On a full year basis, the company reported an adjusted net loss of $2.2 million, or ($0.01) per share.  By our calculation, fourth quarter and full year adjusted EBITDA were $36.2 million and $158.4 million, respectively.  On a reported basis, Coeur reported earnings per share of $0.00 in the fourth quarter and a full year loss of ($0.26) per share.
  • Production guidance for 2019.  Coeur expects to produce 12.2 million to 14.7 million ounces of silver, 334,000 to 372,000 ounces of gold, 25.0 million to 40.0 million pounds of zinc and 20.0 million to 35.0 million pounds of lead in 2019.  In 2018, the company produced 12.8 milli… 


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Research – Torchlight Energy (TRCH) – Orogrande transaction may be near

Friday, February 22, 2019

Torchlight Energy (TRCH)

Torchlight Provides Update on Orogrande – What’s Important.

Torchlight Energy
Resources Inc acquires, explores, exploits, and/or develops oil and natural gas
properties in the United States. The company has an interest in four oil and
gas projects namely the Orogrande Project in Hudspeth County, Texas, and the
Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, the Winkler
Project in Winkler County, Texas, and the Hunton wells in partnership with
Husky Ventures in Central Oklahoma. It operates through three business
processes Investment Evaluation and Review; Operations and Field Activities;
and Administrative and Finance Management.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • TRCH completed the drilling phase
    of three wells
    .  The wells in Orogrande confirmed several new pay zones in addition to Wolfcamp (1,300 ft) including the Atoka (6,200 ft).  Management indicated the Atoka has 500′ of structural gain and excellent porosity.  The wells meet drilling requirements to hold land position (two more need to be done by year-end).  
  • New hire and new seismic data will
    help define the play.   
    Through a newly-employed industry professional, TRCH came across significant 2-d seismic, gravity and magnetics data on the Orogrande field.  The data was gathered by Texa…


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News – Alzheimer’s, Cannibals, and the Scientist Who Saw the Connection

How does a Nobel Prize winner, the mystery of Alzheimer’s Disease, and a rare brain ailment caused by cannibalism become part of the same story?

(Note: related companies are at base
of the story and all the sources listed in the “Balanced” section)

In
1997, Dr. Stanley Prusiner won the Nobel Prize in Medicine and Physiology for
the discovery of the cause of Creutzfeld Jakob encephalopathy, a rare brain
disease caused by an infectious particle known as prion. The Prion particle is
also the cause of the Kuru disease, an ailment first observed among a tribe in
New Guinea, who practice cannibalistic rituals. Members of this tribe ate the
brains of the deceased as a result of their spiritual beliefs. Kuru disease is
characterized by the presence of tremors and other neurological symptoms.

In
recent years, medical scientists have discovered that the same type of
mechanism, a prion-like phenomenon, might also be related to the cause of
Alzheimer’s disease. Scientists have demonstrated that molecules derived from
amyloid-beta behave in a prion-like fashion. Last year, Cold Spring Harbor
Laboratories published a seminal review article by Dr. Stanley Prusiner
entitled “Amyloid-beta Prions and the Pathobiology of Alzheimer’s Disease” (see
sources below). In the article, Dr. Prusiner clearly explains how these
prion-like molecules are related to the cause of Alzheimer’s. Today, prions are
defined as alternative protein conformation capable of self-propagation.
Indeed, prion particles are infectious. They encipher their own replication
blueprint without the use of a genetic code. It is defined as protein-only
inheritance.

This
month, French scientists from Sorbonne
Université in Paris have published an article on the journal “Current Opinion
in Neurology” (article in press, see reference below) discussing the body of
evidence in the medical literature supporting the prion hypothesis as the cause
of Alzheimer’s. As Dr. Stanley Prusiner’s medical hypothesis gains acceptance
among medical scientists today, it almost becomes imperative to review the
history behind Dr. Prusiner’s eureka moment.
 

The Discovery of the Prion and The
Scientific Controversy that Ensued Afterward

In
1997, the Medicine and Physiology Nobel Prize Ceremony became vindication for a
maverick scientist who was marginalized by the scientific community for almost
15 years. The winner of the highly rewarded prize that year, Dr. Stanley
Prusiner, had been previously criticized for postulating a medical hypothesis
that challenged at the time one of the most important dogmas in biology. Back
then, it was widely accepted by the scientific establishment that the flow of
genetic information is based on the genetic code. Information flows from
nucleic acids, DNA and RNA, to proteins. The problem was that the Prion
particle did not contain any nucleic acid. With zero content of DNA or RNA, how
was it possible that Prions were infectious? Scientists were in disbelief.

On
his paper published on the journal “Science
in 1982, Dr. Prusiner claimed that the Prion particle, the infectious agent
that caused Creutzfeld Jakob disease, consisted of only protein, with zero
nucleic acid content. The scientific community did not believe Dr. Prusiner’s
findings. His medical hypothesis was rejected by most of his peers. Without any
nucleic acid content, a particle cannot be infectious, they sternly claimed. It
is not feasible as there is no genetic information within the Prion particle,
the medical community thought at the time. As a result of the discrepancy, the
work of Dr. Prusiner’s laboratory lost credibility, as scientists and experts
claimed that Dr. Prusiner’s team have failed to identify the presence of nucleic
acid in a Prion. The culprit of the infection had to be a nucleic acid,
scientists thought then. They were confident that the nucleic acid had gone
undetected by Prusiner’s team, maybe because it was in minor quantities.

Dr.
Prusiner denied those claims, as he sternly continued to support his medical
hypothesis:

The Prion particle consists
of only protein with two main properties:

  1. prions
    exist in two main conformations (“sick conformation with propensity to generate
    oligomerization or formation of aggregates, and normal conformation, which
    remains monomeric (single protein, without aggregation));
  2. The
    prion conformation (“sick” form of the protein) can propagate itself by
    converting the normal conformation of the protein into prion by physical
    contact.

The
controversy made Dr. Stanley Prusiner a pariah of the scientific community.
Organizers of medical conferences and meetings did not want to invite him, and
rumors of many kinds on the origin and quality of his work grew.

Cannibalism and the Infectious
Prion

Kuru is a rare, fatal brain disease caused by “funerary cannibalism”. The disease spread among the people of Papua New Guinea, an Oceanian country, where relatives consumed the bodies of the deceased. Their belief was that a “life force” of the dead will return to them. The spread of Kuru started in the region in the 1920s, becoming an epidemic lasting until 2009. Kuru disease is characterized by body tremors. The word “Kuru” derives from the Fore (a language spoken in Papua New Guinea), and the word “kuria” (shaking), used to describe the tremors caused by this illness. Kuru is also manifested with uncontrollable laughter, which gives the ailment another name, “laughing sickness”.

Prion, Kuru and
Cannibalism

Among the people of Papua New Guinea, the incidence of Kuru was the highest among those that ate the brains of the deceased. It was demonstrated that Kuru is caused by prion particles, which have their highest concentration in the brains of the sick. The same prion particle, discovered by Dr. Stanley Prusiner, which causes Creutzfeldt-Jakob disease, it is also the causative agent responsible for the Kuru epidemic. Like all neurodegenerative diseases caused by prions, including Alzheimer’s, Kuru is incurable at present.

Prion-Like Transmission and
Alzheimer Disease

Alzheimer’s
disease is the main cause of dementia, memory loss, and cognitive decline in
elderly patients. The illness’ symptoms start gradually, but worsen quickly
later on, severely affecting a patient’s thinking capacity and behavior. The
brain of Alzheimer’s patients shows significant damage, with remarkable loss of
neurons, as the overall brain size shrinks.

After
two decades of intense basic and clinical research, a new hypothesis to explain
the mechanism responsible for Alzheimer’s disease has emerged. Based on results
obtained from multiple experimental models, it has been demonstrated that
amyloid-beta, the same protein molecule forming aggregate deposits in the brain
known as “amyloid-beta plaques”, gives rise to smaller peptides known as “toxic
oligomers”, which behave in the same fashion as a Prion particle. These
prion-like molecules have been shown to be responsible for the toxic effects
responsible for killing neurons in the brain of Alzheimer’s patients. An
amyloid-beta toxic oligomer or “amyloid-beta prion” acquires an aberrant
conformation (shape) and it is capable of converting normal oligomers into
disease causing “amyloid-beta prions”. These prions are capable of propagating
the disease from neuron to neuron, which gradually results in neuronal loss and
memory impairment. This type of transmission is similar to what occurs in the
brain of patients suffering from Creutzfeldt-Jakob and Kuru diseases.

Despite the significant
progress made to identify the cause of Alzheimer’s disease, finding a cure for
this illness remains today as one of the most difficult challenges for the
biotechnology and pharmaceutical industries. It is common belief among experts
that a “disease-modifying drug therapy” for Alzheimer’s patients has the
potential to become the largest blockbuster medicine in the history of the
industry. Thus far, all attempts to develop such a candidate medicine have
resulted in clinical trial failures. Experts believe that the main obstacle to
finding a cure has been not knowing what causes this terrible illness.