August 2020 - Channelchek

New SEC Disclosure Requirements on Mining Were Overdue.

Posted on August 31, 2020 by Admin

SEC Updates Old Mining Disclosure Requirements – A Win for Investors and US Mining Companies.

In October 2018, the U.S. Securities and Exchange Commission released new disclosure rules for mining company issuers, including royalty companies. The new disclosure requirements replace the SEC’s existing Industry Guide 7 which had not been updated since 1982. The new rules are intended to provide investors with a more comprehensive understanding of a registrant’s mining properties to help make more informed investment decisions and more closely align the Commission’s disclosure requirements and policies with industry and global practices and standards. Major mining jurisdictions outside the United States, including Canada and Australia, have mining disclosure standards based on the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) that differ in many respects from Industry Guide 7. SEC-registered mining companies must comply with the new rules for their first fiscal year beginning on or after January 1, 2021.

Out with the Old

Until the most recent changes go into effect, current SEC disclosure rules are governed by Regulation S-K and Industry Guide 7. The new rules rescind Industry Guide 7 as of January 1, 2021, and create a new Subpart 1300 of Regulation S-K, which contains the requirements for property disclosures by mining companies beginning January 1, 2021. Industry Guide 7 does not recognize mineral resources (i.e., inferred, indicated, and measured), only probable and proven reserves. Reserve requirements require ore to be economical to extract, requires an assessment of the likelihood of permitting, and economic analysis cannot use a commodity price greater than the three-year trailing average. Disclosure of mineral resources is limited to websites and press releases and are not allowed in SEC filings, including annual and quarterly reports, which places U.S. issuers at a disadvantage given that SEC reports do not contain information that is often reported in other jurisdictions such as Canada. There are other drawbacks as well, such as no requirement to publish technical reports or for a qualified person review of technical disclosures.

In with the New

SEC Chairman Jay Clayton stated that the new rules were intended to modernize the Commission’s mining property disclosure requirements by “improving the quality and reliability of information provided to investors and by harmonizing disclosures with international standards including removing the restriction on disclosure of mineral resource estimates that may have placed U.S. registrants and investors at a disadvantage.”

The new rules require companies to disclose mineral resources, mineral reserves, and material exploration results for their material mining operations in aggregate and for each material mining property, and to include supporting technical report summaries in the filings. The technical report summary must be filed as an exhibit when disclosing mineral resources or mineral reserves for the first time, or when there has been a material change in the mineral resources or mineral reserves from the last technical report summary filed for the property. Akin to Canadian NI 43-101 requirements and consistent with CRIRSCO standards, issuers’ disclosures of exploration results, mineral resources, or mineral reserves must be based on information prepared by an expert or qualified person. The SEC’s new mining disclosure rules provide flexibility in establishing the commodity price used in estimating resources, and inferred resources can be included in an initial assessment’s economic analysis. The technical report summary required to support the determination and disclosure of mineral resources is the “initial assessment.” A technical report required to support the determination and disclosure of mineral reserves in Commission filings may be either preliminary feasibility or a final feasibility study and include economic analysis, including a detailed discounted cash flow analysis.

Take-Away

One of the key differences is the ability to disclose mineral resources, instead of just proven and probable reserves, in SEC filings such as Form 10-K and quarterly reports, which aligns the new disclosure requirements more closely with reporting standards in other major mining jurisdictions. The ability to disclose mineral resources, in addition to proven and probable reserves, is important because it provides investors with a fuller picture and understanding of the company’s properties, enabling them to make more informed investment decisions. It is especially important for junior mining companies, whose assets may be comprised mostly of mineral resources, that need to raise capital to expand and upgrade their resources. It could also help investors to better evaluate the potential of each stage of a mining project. The new disclosure requirements could make the United States a more attractive choice for incorporation and make it easier for mining companies to raise capital in the United States.

Sources:

SEC Adopts Rules to Modernize Property Disclosures Required for Mining Registrants, Press Release, Securities and Exchange Commission, October 31, 2018

Final Rule: Modernization of Property Disclosures for Mining Registrants, Securities and Exchange Commission, October 31, 2018.

SEC
Overhauls Disclosure Requirements for Mining Companies, Shearman & Sterling Perspectives, Shearman & Sterling, November 5, 2018.

SEC
Overhauls Mining Property Disclosure Regime, SEC Update, Hogan Lovells, January 16, 2019.

Understanding
SEC’s New Mining Disclosure Rules, Dorsey & Whitney LLP, Christopher Doerksen and Kimberley Anderson, February 26, 2019.

Suggested Reading

Are Mining Companies Facing a Shrinking Opportunity Set?

Do Analyst Price Targets Matter?

Metals & Mining Second Quarter 2020 Review and Outlook

Grindrod Shipping (GRIN) – Better Than Expected 1H2020 Results. Firmer 2H2020 Outlook.

Posted on August 31, 2020 by Admin

Monday, August 31, 2020

Grindrod Shipping (GRIN)

Better Than Expected 1H2020 Results. Firmer 2H2020 Outlook.

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.
Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

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

Refer to the full report for the price target, fundamental analysis, and rating.

Reported adjusted 1H2020 EBITDA of $28.8 million was a sharp improvement over 1H2019 number of $14.7 million and strong dry bulk TCE rate outperformance continued. Adjusting for IFRS 16 adoption, we calculate that adjusted EBITDA was $21.2 million in 1H2020, which was above expectations due to forward cover and the cargo centric focus.

TCE rate outperformance continued in 1H2020, with Handysize TCE rates $2,067 (56%) above the BHSI index, and Supramax/Ultramax TCE rates $3,444 (60%) above the BSI-58 index. The outperformance versus the indices generated almost $20.0 million of additional TCE revenue, or $7.0 million in Handysize and $12.2 million in Supramax/Ultramax.

Adjusting 2020 EBITDA to reflect better than expected 1H2020 operating results and firmer dry bulk market. Given the positive variance in 1H2020 and the firmer state of the dry bulk market, we are increasing our 2020 EBITDA to $46.0 million from $39.8 million. There is some visibility into the 2H2020 due to forward cover, but the majority of …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

Release – Palladium One Reports the First Diamond Drill Hole Results to Test the Murtolampi Zone

Posted on August 31, 2020 by Admin

Palladium One Intersects 87.2m @ 1.43 g/t Palladium Equivalent (“Pd_Eq”) at the Murtolampi Zone of the Open Pit Läntinen Koillismaa PGE-Cu-Ni Project, Finland

August 25, 2020 – Vancouver, British Columbia – Palladium One Mining Inc. (TSX-V: PDM, FRA: 7N11, OTC: NKORF) (the “Company” or “Palladium One“) is pleased to report the first diamond drill hole results to test the Murtolampi zone, located 2.5 kilometers (“km”) north of the Kaukua Deposit, at the open pit Läntinen Koillismaa (“LK”) PGE-Cu-Ni Project (Figure 1). Starting at 5.8 meters downhole, Hole LK20-012 intersected 87.2m @ 1.43 g/t Pd_Eq* including 20.2 @ 2.26g/t Pd_Eq (Figure 2). Surface sampling by the Company, previously returned 4.9 g/t Pd_Eq (1.86 g/t Pd, 1.12 g/t Pt, 0.14 g/t Au, 0.78% Cu, & 0.13% Ni), see news release August 12th, 2019.

President and CEO, Derrick Weyrauch commented, “Murtolampi is a short distance north of the Kaukua Open Pit Deposit. We have now shown that both Murtolampi and Kaukua South have the potential to significantly add to the existing NI 43-101 open pit resource at Kaukua. Similar to Kaukua South, Murtolampi is associated with a strong Induced Polarization (“IP”) chargeability anomaly that is not fully tested. IP has proven to be an invaluable tool for outlining palladium-rich sulphide mineralization on the LK project, as evidenced by the success of Hole LK20-006 at Kaukua South. The current drill program will continue to test both the Murtolampi and the Kaukua South IP chargeability anomalies discovered earlier this year. We look forward to sharing further drill results with our shareholders in the near term.“

Highlights:

87.2m @ 1.43 g/t Pd_Eq, from 5.8m down hole in hole LK20-012, collared on the same drill pad as LK20-011.
- Total platinum-group elements (“PGE”), (Pd + Pt + Au), 0.53 g/t
  - Including 20.2m @ 2.26 g/t Pd_Eq
    - Total PGE 1.05 g/t,
35.8m @ 1.66 g/t Pd_Eq, from 7.2m down hole in LK20-011, which was abandoned at 43m due to hole deviation.
- Total PGE 0.63 g/t
  - Including 10.0m @ 2.94 g/t Pd_Eq, from 33.0 m to end of hole.
    - Total PGE 1.41 g/t
Hole LK20-012 intersected a zone more than twice as thick as historical drilling at Murtolampi, by the Geologic Survey of Finland (“GTK”) in the 1990’s, demonstrating the potential for significantly more tonnage than previously thought.

The Murtolampi zone hosts a 750 long IP chargeability anomaly (see news release March 10, 2020). Six shallow GTK drill holes, conducted in the 1990s, all intersected mineralization and frequently ended in mineralization, but only tested the very outer edge of the newly discovered chargeability anomaly.

Figure 1. Greater Kaukua Area showing IP chargeability anomalies. Phase 1 drill hole locations showing in (black) and planned drill holes in (red).

Figure 2. Cross section showing hole LK20-012. Holes R368-371 are GTK holes drilled in the 1990’s

QA/QC
The Phase I drilling program was carried out under the supervision of Neil Pettigrew, M.Sc., P. Geo., Vice President of Exploration and a director of the Company.

Drill core samples were split using a rock saw by Company staff, with half retained in the core box and stored indoors in a secure facility, in Taivalkoski, Finland. The drill core samples were transported by courier from the Company’s core handling facility in Taivalkoski, Finland, to ALS Global (“ALS”) laboratory in Outokumpu, Finland. ALS, is an accredited lab and are ISO compliant (ISO 9001:2008, ISO/IEC 17025:2005). PGE analysis was performed using a 30 grams fire assay with an ICP-MS or ICP-AES finish. Multi-element analyses, including copper and nickel were analysed by four acid digestion using 0.25 grams with an ICP-AES finish.

Certified standards, blanks and crushed duplicates are placed in the sample stream at a rate of one QA/QC sample per 10 core samples. Results are analyzed for acceptance at the time of import. All standards associated with the results in this press release were determined to be acceptable within the defined limits of the standard used

Qualified Person
The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo., Vice President of Exploration and a director of the Company and the Qualified Person as defined by National Instrument 43-101.

About Palladium One
Palladium One Mining Inc. is a palladium dominant, platinum-group-elements (“PGE”), copper, nickel exploration and development company. Its assets consist of the Läntinen Koillismaa (“LK”) and Kostonjarvi (“KS”) PGE-Cu-Ni projects, located in north-central Finland and the Tyko Ni-Cu-PGE and Disraeli PGE-Ni-Cu properties in Ontario, Canada. All projects are 100% owned and are of a district scale. LK is an advanced project targeting disseminated sulphide along 38 kilometers of favorable basal contact. The KS project is targeting massive sulphide within a 20,000-hectare land package covering a regional scale gravity and magnetic geophysical anomaly. Tyko is a 13,000-hectare project targeting disseminated and massive sulphide in a highly metamorphosed Archean terrain. Disraeli is a 3,100-hectare project targeting PGE-rich disseminated and massive sulphide in a highly productive Proterozoic mid-continent rift.

The Kaukua deposit of the LK project hosts a pit-constrained resource of 635,600 Pd_Eq ounces of Indicated Resources grading 1.80 g/t Pd_Eq* (“palladium equivalent”) contained in 11 million tonnes (@ 0.81g/t Pd, 0.27g/t Pt, 0.09g/t Au, (1.17g/t PGE), 0.15% Cu & 0.09% Ni), and 525,800 Pd_Eq ounces of Inferred Resources grading 1.50 g/t Pd_Eq contained in 11 million tonnes (@ 0.64g/t Pd, 0.20g/t Pt, 0.08g/t Au (0.92g/t PGE), 0.13% Cu, & 0.08% Ni), (see press release September 9, 2019).

*Pd_Eq is calculated using the following metal prices (in USD) of $1,100/oz for Pd, $950/oz for Pt, $1,300/oz for Au, $6,614/t for Cu and $15,432/t for Ni.

ON BEHALF OF THE BOARD
“Derrick Weyrauch”
President & CEO, Director

For further information contact:
Derrick Weyrauch, President & CEO
Email: info@palladiumoneinc.com

Neither the TSX Venture Exchange nor its Market Regulator (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States of America. The common shares of Palladium One Mining Inc. have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Information set forth in this press release may contain forward-looking statements. Forward-looking statements are statements that relate to future, not past events. In this context, forward-looking statements often address a company’s expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in palladium and other commodity prices; title matters; environmental liability claims and insurance; reliance on key personnel; the absence of dividends; competition; dilution; the volatility of our common share price and volume; and tax consequences to Canadian and U.S. Shareholders. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

Release – Cocrystal Pharma Announces Closing of $17.2 Million Bought Deal

Posted on August 31, 2020 by Admin

Cocrystal Pharma Announces Closing of $17.2 Million Bought Deal Including Partial Exercise of Underwriter’s Option to Purchase Additional Shares

BOTHELL, WA, August 31, 2020 – Cocrystal Pharma, Inc. (NASDAQ: COCP), (“Cocrystal” or the “Company”), a clinical stage biotechnology company discovering and developing novel antiviral therapeutics, announced today the closing of its previously announced underwritten public offering of 16,422,813 shares of common stock of the Company, including the partial exercise by the underwriter of the option to purchase an additional 2,137,098 shares of common stock, at a price to the public of $1.05 per share.

H.C. Wainwright & Co. acted as the sole book-running manager for the offering.

The Company had granted to the underwriter a 30-day option to purchase up to an additional 2,142,857 shares of common stock at the public offering price, less underwriting discounts and commissions, of which the option to purchase an additional 2,137,098 shares of common stock has been exercised. The gross proceeds to Cocrystal, before deducting underwriting discounts and commissions and offering expenses, including the partial exercise of the underwriter’s option to purchase 2,137,098 additional shares of common stock, are approximately $17.2 million. The Company intends to use the net proceeds from this offering for the expansion of our COVID-19 and Influenza treatment development programs and general corporate purposes and working capital.

The shares of common stock were offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-237738) originally filed with the Securities and Exchange Commission (the “SEC”) on April 17, 2020, and declared effective by the SEC on May 13, 2020. The offering of the shares of common stock was made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC and are available on the SEC’s website at https://www.sec.gov/ and may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by telephone at (646) 975-6996 or e-mail at placements@hcwco.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Cocrystal Pharma, Inc.

Cocrystal Pharma, Inc. is a clinical stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, hepatitis C viruses, coronaviruses and noroviruses.>

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to our intended use of proceeds and other statements that are not historical fact. We have based these forward-looking statements largely on our current expectations and projections about future events. Some or all of the events anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to, risks arising from our reliance on continuing collaboration with Merck Sharp & Dohme Corp. under the collaboration agreement entered into last year, market and other conditions, any impact from the COVID -19 pandemic and its impact on the economy, the availability of products manufactured by third parties, the future results of preclinical and clinical studies, general risks arising from clinical trials, receipt of regulatory approvals, our ability to find and enter into agreements with suitable collaboration partners, unanticipated litigation and other expenses and factors that affect the capital markets in general and early stage biotechnology companies specifically. Further information on our risk factors is contained in our filings with the SEC, including our Prospectus Supplement dated August 26, 2020, our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Investor and Media Contact:

JTC Team, LLC
(833) 475-8247
COCP@jtcir.com

The Biggest COVID Winners are in the Business of Making Winners

Posted on August 30, 2020 by Admin

Esports Betting is on a 4,000% Winning Streak

There’s a habit I picked up working on a Wall Street trading desk years ago. I don’t admit this to my friends that are not active in the markets; they wouldn’t understand. But, I think Channelchek users will be able to relate to it. Perhaps you do this yourself: When global news unfolds, my initial reaction is not, “oh my god, that’s horrible,” or even “hey, that’s fantastic.” My first mental response, usually unspoken, asks, “Is this bullish or bearish? Who wins, who loses? How will it impact different business sectors?” I haven’t worked on a large trading desk for a number of years, but this habit is still ingrained in me — Hurricane. “Who sells lumber?” War in the Mideast. “Will there be an oil disruption?” Lehman goes bust? …well, you get the point.

When the initial talk of the novel coronavirus, social distancing, lockdowns, and working remotely started to become a reality, this instinct was in high alert. Back in March, when Disney decided to close their theme parks, I was speaking with the Noble Capital Markets trading desk and others in the market whom I trust. We were sure who this would be the worst for. Any company related to travel and hospitality was expected to see severe weakness. After this weakness, we saw an eventual opportunity. The conversations then led to discussions determining what public companies this would quickly benefit. We were spot-on thinking credit card companies, tech and communication services, and of course, some pharmacy and biotech names. However, what was never on my radar, yet in hindsight, makes so much sense, is esports and, more precisely, betting on esports (electronic sports).

Sports Betting

In 2018 the Supreme Court ruled that a federal ban on sports betting was unconstitutional. Since then, the market in the United States for sports betting has grown dramatically. Seventeen states, in addition to Nevada, have now legalized sports betting in various forms. With the growth in this offshoot of two industries (professional sports and gambling) investments in esports and have taken a steep upward trajectory.

Esports Meets Pandemic

As entertainment from more traditional professional sports became unavailable with the suspension and cancellation of regular season play earlier this year, some athletes and spectators pivoted and joined the ranks of the already growing population of esports athletes and audience members. As esports became a higher percentage of the few professional sports competitions being broadcasted with any consistency, esports competitions filled the void for those that enjoy the thrill of human competition. Making it even more inviting is that many casinos closed with concerns over COVID-19. The potential for many sportsbook operators to grab an increased share of esports gambling from these online sports grew and is still growing.

How Much Growth

Forecasts for the industry suggest that even as traditional sports return (both in-person and on our flat screens), the growth in esports and wagering on it will remain on a strong path upward. According to one report that reviewed betting data across ten bookmakers in the months of March and April of this year, esports betting was shown to have grown by 4,000%. Much of this explosion was captured by two major esports titles, FIFA and NBA2K, but others experienced even higher growth from their lower base. The study also brought to light those involved. Half of the core betting audience of esports is represented by high income, full-time professionals between ages 26 and 35. This demographic grew up playing computer and console games. Their interest isn’t unlike someone thirty-years older naturally betting on a boxing match or a bowl game.

The opportunity for long-term growth in the industry is high as gamblers become more aware of esports and its offerings. Additionally, betting opportunities are more plentiful in esports because, for example, a single FIFA match takes 8 to 15 minutes while a football game lasts hours. Additionally, esports is not seasonal — competitions occur year-round with no off-peak periods.

Who Wins in the End

Had I known in March when travel came to a screeching halt, professional sports were halted, and the Las Vegas strip hung “Closed” signs on their doors, what I know now, would I have included esports in my conversations as presumed winners in a pandemic world? That’s hindsight. The best investors look forward. I have been discussing this now with people involved in the markets. It is now on my list of growth industries. The reason is simple, despite its explosive growth from obscurity, the potential for an even greater number of people involved as both players and those wagering is a large multiple from its current state. I certainly wouldn’t bet against it.

Paul Hoffman

Managing Editor, Channelchek

Suggested Reading:

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Each event in our popular Virtual Road Shows Series has maximum capacity of 100 investors online. To take part, listen to and perhaps get your questions answered, see which virtual investor meeting intrigues you here.

Sources:

Rise in Esports Betting

Esports Taking Over Traditional Sports in COVID 19

Research Shows a Growing Interest in Esports Gambling

E-sports betting guide – Best bookmakers to bet on e-sports

Hurricane Laura Shut Down Gulf Production with Barely Any Impact on Prices

Posted on August 28, 2020 by Admin

Barely an Impact on Oil Prices Despite Laura’s Wrath

Hurricane Laura ripped through the Gulf of Mexico this week forcing oil platforms to shut down. The Category 4 storm caused 84% of the production in the Gulf to go offline after reaching sustained winds of 150 miles per hour. Laura hit land on Wednesday night in the Lake Charles area, the heart of the domestic refinery business. Over 45% of total U.S. petroleum refining capacity is located along the Gulf Coast. One would expect oil prices to rise on drop in supply. Instead, oil price hovered in the $42 to $43 range. The benign impact on oil prices reflects changing dynamics in the U.S. energy industry.

The Gulf is Less Important Due to Permian Basin Oil Production. Twenty years ago, production in the Gulf of Mexico represented almost one-third of domestic production. The boom in production in shale plays such as the Permian Basin have greatly decreased the country’s reliance on the Gulf of Mexico for oil. Now, the Gulf of Mexico represents only 17% of U.S. crude oil production.

Oil Inventories Were High. Petroleum product inventories were higher than normal before Hurricane Laura shut down oil refineries. The EIA reports that U.S. commercial crude oil inventories are about 15% higher than the five-year average for this time of year. The increase reflects a dramatic decrease in demand since the pandemic. Patrick De Haan, head of petroleum analysis at GasBuddy, estimates that gasoline demand, for example, is down 15% due to the effects of COVID-19. We are beginning to see a reduction in supply and an increase in demand, but it may take at least a year to work down excess inventory. The temporary drop in production due to Hurricane Laura can easily be met by oil in inventory.

Producers Have Gotten Better at Restoring Production Quickly. In the past, a major hurricane resulted in a major disruption in production. The chart below shows the sudden drop off in production during Hurricanes Katrina and Rita in 2005 and Hurricanes Gustav and Ike in 2008. However, note the limited impact of Hurricane Barry last year. The smaller reduction in production may reflect the fact that Hurricane Barry was less severe than the earlier hurricanes. However, it also reflects the fact that hurricane forecasts have improved allowing producers to prepare for the hurricane and return to production sooner.

Refineries Outside the Gulf Were Running Below Capacity. Because of a drop in oil prices and oil demand following the economic impact of COVID-19, domestic oil production has decreased. Lower production has meant that domestic refineries are running below capacity. U.S. refineries were operating at 82% of capacity on August 21, 2020 according to the U.S. Energy Information Administration. Refineries that are not shut down due to Hurricane Laura should be able to increase production and offset lost production in the Gulf.

Sources:

https://finance.yahoo.com/news/oil-gas-prices-slip-hurricane-115423327.html, Jonathan Garber, Fox Business, August 27, 2020

https://finance.yahoo.com/news/oil-industry-shuts-platforms-rigs-214017121.html, Cathy Bussewitz, Associated Press, August 26, 2020

https://www.marketwatch.com/story/oil-prices-edge-lower-shrugging-off-hurricane-lauras-landfall-2020-08-27, Myra P. Saefong and William Watts, MarketWatch, August 27, 2020

https://www.marketwatch.com/story/hurricane-laura-may-do-little-to-disturb-relative-calm-in-summer-gasoline-prices-2020-08-27, Myra P, Saefong, MarketWatch, August 27, 2020

https://www.wwno.org/post/hurricane-barry-caused-biggest-gulf-oil-drop-more-decade, Travis Lux, WWNO, October 9, 2020

https://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf, EIA, August 21, 2020

Suggested Reading

OPEC Forecasts Lower Demand as Output Cuts Taper

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Main image source: The Weather Channel, 11:00 am CST, August 27, 2020

1-800-Flowers.com (FLWS) – Long Legs in E-Commerce Trends; Raising Price Target

Posted on August 28, 2020 by Admin

Friday, August 28, 2020

1-800-Flowers.com (FLWS)

Long Legs in E-Commerce Trends; Raising Price Target

1-800-FLOWERS.COM, Inc. is the leading provider of gourmet and floral gifts for all occasions. For nearly 40 years, 1-800-FLOWERS® has been helping deliver smiles for customers with gifts for every occasion, including fresh flowers, premium, gift-quality fruits, and other gourmet items from Harry & David®, popcorn and specialty treats from The Popcorn Factory®; cookies and baked gifts from Cheryl’s®; premium chocolates and confections from Fannie May®; gift baskets and towers from 1-800-Baskets.com®; premium English muffins and other breakfast treats from Wolferman’s; carved fresh fruit arrangements from FruitBouquets.com; and top quality steaks and chops from Stock Yards®. The Company’s BloomNet® international floral wire service provides a broad range of quality products and value-added services designed to help professional florists grow their businesses profitably.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Blows through Q4 estimates.Q4 revenue and cash flow estimates were over achieved based on strong ecommerce trends. Revenues were $417.6 million, nearly 7% better than our $391.4 million estimate. Cash flow, as measured by Adj. EBITDA, was better than expected as well, $32.5 million versus our estimate of $27.3 million.

Raising fiscal Q1 and full year 2021 estimates. Management provided Q1 guidance that was better than expected, with strong revenue growth of 40% to 45% and break even to slightly positive cash flow, a nice surprise in a typical seasonally unprofitable quarter. We are raising our fiscal 2021 cash flow estimate from …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report.
NOTE: investment decisions should not be based upon the content of
this research summary. Proper due diligence is required before
making any investment decision.

DLH Holdings Corp. (DLHC) – A Significant Renewal

Posted on August 27, 2020 by Admin

Thursday, August 27, 2020

DLH Holdings Corp. (DLHC)

A Significant Renewal

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

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

Refer to the full report for the price target, fundamental analysis, and rating.

Head Start Renewal. Yesterday, DLH announced it had been awarded a contract to continue providing national monitoring support services to the Administration for Children and Families’ Office of Head Start. The OHS contract is one of DLH’s Big 3 contracts, along with the two VA contracts. The renewal adds certainty to a major portion of DLH’s revenue base going forward, in our view.

Details. The contract includes a base period of eight months, with four one-year options, valued at $150 million including the option periods, and it continues DLH’s longstanding relationship with ACF. In 2019, support for Head Start generated …

Click to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report.
NOTE: investment decisions should not be based upon the content of
this research summary. Proper due diligence is required before
making any investment decision.

Comstock Mining (LODE) – Taking a Methodical Approach Toward Advancing Dayton and Spring Valley

Posted on August 27, 2020 by Admin

Thursday, August 27, 2020

Comstock Mining (LODE)

Taking a Methodical Approach Toward Advancing Dayton and Spring Valley

Comstock Mining Inc is a mining company with a focus on gold and silver deposits in the Comstock and Silver City mining districts in Nevada. Its operations are divided into two segments, namely mining and real estate. Its mining projects include The Lucerne Resource area, the Dayton Resource area, the Spring Valley exploration target, the Northern Extension, Northern Targets and Occidental areas. The Real Estate segment involves land, real estate rental properties and a hotel, restaurant & bar provided by the Gold Hill Hotel located in Gold Hill, Nevada just south of Virginia City and the Daney Ranch, located just south of Silver City. The majority revenues are generated from the real estate segment.

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

Refer to the full report for the price target, fundamental analysis, and rating.

Planned airborne geophysical survey of Dayton and Spring Valley. Geotech Ltd of Aurora, Ontario, Canada will conduct an airborne geophysical survey of the Dayton resource area and Spring Valley exploration targets in mid-September and will provide Comstock with three dimensional interpreted results by mid-October. The results will enhance management’s understanding of the resource expansion potential at Dayton and Spring Valley. Management will finalize targets for an upcoming drill program based on results from the geophysical survey and a detailed structural interpretation of the Dayton resource.

Advancing to full feasibility study and mine plan. By year-end 2020, Comstock plans to publish a Securities and Exchange Commission (SEC)-compliant S-K 1300 technical report for the Dayton resource area and Spring Valley targets that will support a later preliminary economic assessment. The new technical report is expected to provide a new resource estimate and a phased drilling plan which is likely to …

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report.
NOTE: investment decisions should not be based upon the content of
this research summary. Proper due diligence is required before
making any investment decision.

Do Analyst Price Targets Matter?

Posted on August 26, 2020 by Admin

Half the Analysts Following Apple Have a Buy Rating Even Though the Stock is Above Their Target

The shares of AAPL have surged above $500 per share after having risen 70% year to date. Most of the surge has come since the company announced a four-for-one stock split on July 30^th. Since the stock split announcement, the shares of AAPL have risen approximately 30%. Sixty-one percent of the analysts following the stock have a positive rating on the shares of AAPL despite the shares trading above price targets. The highest price target is $520 per share, and the average price target is $430 per share. Whether or not analysts following AAPL raise their price targets or lower their ratings remains to be seen. The current disparity, however, raises a bigger picture question: do analyst price targets matter at all? In theory, an analyst’s price target is an indication of where an analyst thinks the stock will trade at a future date (usually twelve months). As such, the difference between an analyst’s price target and the current stock price is a measure of how much an analyst believes the stock is under or overvalued. In reality, price targets do not fully reflect an analyst’s sentiments regarding a stock for reasons discussed below.

Bull Case (price targets are useful)

Price targets are regulated and can not be arbitrary. Following the collapse of Enron in 2002, regulators added additional restrictions regarding the use of price targets. FINRA rules 2241 and 2241 require that price targets have a “reasonable basis” and include a disclosure of risks that may impede achievement of the price target. Most analysts will justify their price targets mathematically, perhaps by applying a price-to-earnings ratio, a sum-of-the-parts calculation, or a discounted cash flow estimate.

Price targets imply direction more than magnitude. As mentioned earlier, price targets represent an analyst’s estimated value of a stock. That value, however, is not static. It may be based on many factors that are constantly changing, including company fundamentals, its competitive environment, overall stock market conditions, interest rates, and many other factors. In theory, an analyst should be changing his or her price target every day if not continuously. This, of course, is impractical. As such, investors should pay more attention to the direction of price targets, especially when they are updated. A study by researchers at the University of Waterloo and Boston College found that analyst target price revisions are more accurate predictors of future stock price performance than the actual price target.

Price targets lag behind changes in fundamental company developments but will adjust. Analysts will typically review their price targets whenever they write a report. They will take into account all changes that have occurred since their last report. However, they will probably not make a change to their price target unless the change is significant. If a drop in interest rates warrants raising a price target by $0.50, they may decide to wait until conditions warrant a larger change. Consequently, price target levels typically lag minor changes in company fundamentals or other data points.

Bear Case

The analyst just raises their targets when they are hit. Although analysts tend to think of price targets as a way to communicate their feelings on a stock, some investors and traders view them as a price limit for buying the stock. Investors and traders get frustrated when analysts simply raise their price targets when stock prices reach their target. The chart below shows the stock price of Apple shares (yellow line graph) and the median twelve-month price target for Apple (white line graph). As you can see, the two lines mirror each other, with the gaps growing during periods when the stock price has stagnated. As indicated earlier, this may be a function of the fact that analysts are not constantly changing their targets, instead of waiting until the fundamental change is large enough to make a major move. Often, such a move occurs when a company releases earnings or other news. Of course, such an announcement often is associated with an increase in the company’s stock price. Analysts try to stay ahead of the stock price, but that is not always possible when there are sudden moves.

Price targets are sticky on the downside. Price targets typically increase over time. If an analyst used a P/E ratio to set a price target, the price target would increase each year, assuming the company is growing earnings. Occasionally, company fundamentals or other factors deteriorate, causing an analyst to lower high price targets. This is certainly true in situations where a company makes a major negative announcement. It is less true when a company’s fundamentals deteriorate slowly. It is not unusual for an analyst’s price target to become outdated under such a scenario.

Conclusion

Price targets are a second tool (in addition to a stock’s rating) for analysts to communicate feelings about a stock’s value. Price targets can become outdated when a stock’s price moves quickly. However, that does not mean it is not important. Investors and traders need to be cognizant of the limitations of using price targets for making investment decisions when making decisions regarding buying and selling stocks. Price target changes may provide more information that the price target level. Often, the magnitude of the change or the reasons behind the change tell a more complete picture.

Suggested Reading:

Investors Should Pay More Attention to ATM Offerings

Investment Journalists Would Make Horrific Fund Managers

Fear of Missing Out on the Next Apple

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Sources:

https://www.barrons.com/articles/wall-street-analyst-stock-price-targets-51561597085, Al Root, Barron’s, June 27, 2019

https://realmoney.thestreet.com/articles/08/03/2013/why-price-targets-matter, James Deporre, Real Money, August 3, 2013

https://www.theglobeandmail.com/globe-investor/investor-education/what-every-investor-should-know-about-analysts-price-targets/article627565/, John Heinzl, The Globe and Mail, March 29, 2012

https://financialpost.com/investing/analysts-target-prices-rarely-accurate-global-study-finds#:~:text=%E2%80%9CWe%20find%20that%20analyst%20target,subject%20to%20conflicts%20of%20interest.%E2%80%9D, David Pett, Financial Post, March 07, 2013

https://www.finra.org/rules-guidance/rulebooks/finra-rules/2241, FINRA

https://osboncapital.com/price-targets-are-obsolete-why-are-they-still-a-thing/, John Osbon, Osbon Capital Management, September 12, 2018

Gevo, Inc. (GEVO) – ATM Offering and Warrant Exercises Add Almost $60 Million

Posted on August 26, 2020 by Admin

Wednesday, August 26, 2020

Gevo, Inc. (GEVO)

ATM Offering and Warrant Exercises Add Almost $60 Million.

Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.

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

Refer to the full report for the price target, fundamental analysis, and rating.

Existing ATM program tapped to issue 38.5 million shares at $1.30/share netting $46.1 million. Combined with existing cash of $21.1 million on August 20th per the prospectus, pro forma cash increases to ~$67.2 million, or slightly higher than expected.

Series A Warrant exercises further boost cash. On August 20th, Series 2020-A Warrants were exercised and 22.97 million shares were issued. Gross proceeds of $13.8 million should move pro forma cash into the $80 million range. Remaining Series 2020-A Warrants to issue …

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report.
NOTE: investment decisions should not be based upon the content of
this research summary. Proper due diligence is required before
making any investment decision.

Kelly Services Inc. (KELYA) – Are the B Shares Telling Us Something?

Posted on August 25, 2020 by Admin

Tuesday, August 25, 2020

Kelly Services Inc. (KELYA)

Are the B Shares Telling Us Something?

Kelly Services Inc is a provider of workforce solutions and consulting and staffing services. The company’s operations are divided into three business segments namely Americas Staffing, Global Talent Solutions (“GTS”) and International Staffing. It provides staffing solutions through its branch networks in Americas and International operations and also provides a suite of innovative talent fulfilment and outcome-based solutions through GTS segment. Americas Staffing generates maximum revenue from its operations.

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

Refer to the full report for the price target, fundamental analysis, and rating.

B Shares on a Tear. Since August 11th, Kelly Services’ B shares (KELYB) have traded in a range of $18 to $90, completely disconnecting from the A shares. On the 11th, the shares more than doubled to $38.28 on 494,100 shares of volume, with an additional 558,800 shares changing hands this past Friday.Yesterday the B shares closed at $35.17, with the A shares at $19.44 Historically, the A and B shares have traded in tandem with little price difference.

What are the B Shares? The 3.4 million outstanding B shares actually control the Company as they are the only voting shares. The Adderley Trust held 3.1 million of the B shares as of March 16, 2020, unchanged from the original Schedule 13D filing of October 19, 2018. If the Trust were to make a material change in its holding …

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report.
NOTE: investment decisions should not be based upon the content of
this research summary. Proper due diligence is required before
making any investment decision.

Will the COVID Crisis Permanently Change the Way We Work?

Posted on August 25, 2020 by Admin

How Plausible is a Massive Permanent Switch to Work from Home?

The COVID-19 crisis has already caused significant changes in the way we live, from face mask regulations to social distancing, to restrictions on capacity. Many predictions have been made by the chattering class about how COVID-19 will change the way we live and work. But how plausible are some of these predictions?

One of the most common forecasts is a permanent move to “work from home” setups. Such a move enforces social distancing on employees, making wholesale disruption from another crisis less likely. From a company’s standpoint, employees working from home could reduce the amount of real estate needed, enabling firms to reduce a whole host of costs associated with owning or leasing real estate. According to the Bureau of Labor Statistics, pre-pandemic some 15% of U.S. employees had regularly scheduled work at home days, with about 25% of U.S. employees working from home at least occasionally.

Those Least Likely

But how plausible is a massive switch to work from home? According to the Bureau of Labor Statistics, as of July 2020, there were approximately 118 million private-sector non-farm payroll jobs. Of these, some 20 million worked in the manufacturing, construction, and mining industries. Trades unlikely to see any meaningful move to “work from home.” Another 26 million jobs were in the Trade, Transportation, and Utilities segment. It wouldn’t appear many of the 5.3 million transportation jobs can be done at home. How many of the 14.8 million retail jobs can be done remotely is up to debate. How many of the 19.5 million health care jobs or the 12.6 million Leisure jobs can be performed from home? Now, some 21 million jobs are in the Professional & Business Services and Finance classifications, and its possible some portion of these jobs could be accomplished from home.

Other Challenges

But apart from the deciphering, whether a job can be performed adequately remotely, there remains a whole host of other questions. Working at your kitchen table temporarily is one thing. To do so on a full-time basis is untenable. Who pays to create office space in existing housing? Who pays to furnish such an office? What about utilities? Office supplies? Will employee collaboration be better or worse under a Zoom environment versus a face-to-face environment? How much flexibility is built into work schedules when an employee has their office in the home and can access it 24/7/365? Does a company need to alter the way productivity and performance are measured?

While a work from home reaction to a serious crisis sounds reasonable at face value, many more questions need to be answered before such a switch becomes plausible.

Suggested Reading:

Will Digital Media and Technology Stocks Take a Breather?

Can One “Do Good” and “Do Well” in Tandem?

Warren Buffett vs. Elon Musk, Who’s Right?

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Sources: