Month: December 2021

Flotek Industries Receives Unsolicited Indication of Interest, Engages Piper Sandler

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Flotek Industries Receives Unsolicited Indication of Interest, Engages Piper Sandler

Research, News, and Market Data on Flotek Industries

 

HOUSTON, December 27, 2021 – Flotek Industries, Inc. (“Flotek” or the “Company”) (NYSE: FTK) has received an unsolicited indication of interest for a potential transaction for all or part of the Company. To assist in evaluating this unsolicited indication of interest, Flotek’s Board of Directors has engaged Piper Sandler & Co. (“Piper Sandler”) as a financial advisor to assist with the evaluation process.

There can be no assurance that such evaluation will result in one or more transactions or other strategic change or outcome. The Company has not set a timetable for the conclusion of its evaluation of the offer, and it does not intend to comment further unless and until the Board has approved a specific course of action or the Company has otherwise determined that further disclosure is appropriate or required by law.

For further information, interested parties may contact Sanjiv Shah, Managing Director and Global Co-Head of Energy & Power Investment Banking at Piper Sandler (phone: +1 (713) 236- 9999; email: sanjiv.shah@psc.com)

About Flotek Industries, Inc.

Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial, commercial, and consumer markets improve their Environmental, Social, and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes. delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize tile value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream, and upstream customers, both domestic and international. Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.” For additional information, please visit www.flotekind.com.

Forward -Looking Statements

Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of tile Securities Exchange Act of 1934) regarding Flotek Industries, Inc.’s business, financial condition, results of operations and prospects. Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release. Although forward-looking statements in this press release reflect the good faith judgment of management. such statements can only be based on facts and factors currently known to management. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Further information about the risks and uncertainties that may impact the company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the “Risk Factors” section thereof), and in the Company’s other SEC filings and publicly available documents. Readers are urged not to place undue reliance on these forward -looking statements, which speak only as of the dale of this press release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect, any event or circumstance that may arise after the date of this press release.

Inquiries, contact:

Investor Relations

E: ir@flotekind.com

P: (713) 726-5322

Euroseas Ltd. Announces New Charters For Two Of Its Vessels, M/V “Evridiki G” and M/V “EM Corfu”

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Euroseas Ltd. Announces New Charters For Two Of Its Vessels, M/V “Evridiki G” and M/V “EM Corfu”

Research, News, and Market Data on Euroseas Ltd

 

ATHENS, Greece, Dec. 28, 2021 (GLOBE NEWSWIRE) — Euroseas Ltd. (NASDAQ: ESEA, the “Company” or “Euroseas”), an owner and operator of container vessels and provider of seaborne transportation for containerized cargoes, announced today the extension of the charter of its container vessels M/V “Evridiki G” and a new time charter contract for its container vessel M/V “EM Corfu”. Specifically:

  • M/V “Evridiki G”, a 2,556 TEU vessel built in 2001, entered into a new time charter contract for a period of between a minimum of thirty-six and a maximum of thirty-eight months at the option of the charterer, at a daily rate of $40,000. The new rate will commence on February 1, 2022.
  • M/V “EM Corfu”, a 2,556 TEU vessel built in 2001, entered into a new time charter contract for a period of between a minimum of thirty-six and a maximum of thirty-eight months at the option of the charterer, at a daily rate of $40,000. The new rate will commence upon completion of the vessel’s drydocking in mid-February 2022.

Aristides Pittas, Chairman and CEO of Euroseas commented: “We are very pleased to announce new charters for two of our vessels for periods of at least three years each at rates more than twice the levels of their existing employment. The new charters secure a minimum of $85m of contracted revenues and are expected to make an annualized EBITDA contribution in excess of $22.3m combined which is about $19m (or, at least, seven times) higher than their joint contribution over the last twelve months of about $3m. These new charters significantly improve both our profitability and cash flow visibility with our charter coverage for 2022 now exceeding 85% and for 2023 55%.

“Undoubtedly, the containership markets continue to show their strength and momentum as indicated by the rate and the duration of the above charters. We expect to be able to continue benefitting from the present strong market as there are another two of our vessels opening up for re-chartering within the next four months and, yet, another two vessels later in 2022. Furthermore, we started exploring chartering options for our two newbuildings which are expected to be delivered by the end of first and second quarters of 2023, respectively, as initially scheduled. If the present market levels continue, renewals of expiring charters should result in significant further increases in our profitability and employment coverage for the following years, providing a solid liquidity foundation for further growth of our company and rewards to our shareholders as our Board or Directors sees fit.”

Fleet Profile:

After the new charters of M/V “Evridiki G” and M/V “EM Corfu” the Euroseas Ltd. fleet and employment profile will be as follows:

Name Type Dwt TEU Year Built Employment(*)

TCE Rate ($/day)


Container Carriers		            
MARCOS V Intermediate 72,968 6,350 2005 TC until Dec-24
plus 12 months option		 $42,200
option $15,000
AKINADA BRIDGE(*) Intermediate 71,366 5,610 2001 TC until Oct-22 $20,000
SYNERGY BUSAN(*) Intermediate 50,726 4,253 2009 TC until Aug-24 $25,000
SYNERGY ANTWERP(*) Intermediate 50,726 4,253 2008 TC until Sep-23 $18,000
SYNERGY OAKLAND(*) Intermediate 50,787 4,253 2009 TC until Jan-21 then until Mar-22
then until Mar-26		 $202,000
$130,000
$42,000
SYNERGY KEELUNG (+) Intermediate 50,969 4,253 2009 TC until Jun-22 plus 8-12 months option $11,750;
option $14,500
EM KEA (*) Feeder 42,165 3,100 2007 TC until May-23 $22,000
EM ASTORIA (+) Feeder 35,600 2,788 2004 TC until Feb-22 $18,650
EM CORFU(+) Feeder 34,654 2,556 2001 TC until Nov-21 then repositioning trip to drydock


TC until Feb-25		 $10,200
$5,125 for up to 37 days ($35,000 if more than 37 days)
$40,000
EVRIDIKI G (+) Feeder 34,677 2,556 2001 TC until Jan-22
TC until Feb-25		 $15,500
$40,000
DIAMANTIS P. (*) Feeder 30,360 2,008 1998 TC until Oct-24 $27,000
EM SPETSES(*)

Feeder		 23,224 1,740 2007 TC until Aug-24 $29,500
JONATHAN P(*) Feeder 23,351 1,740 2006 TC until Sep-24 $26,662(**)
EM HYDRA(*) Feeder 23,351 1,740 2005 TC until Apr-23 $20,000
JOANNA(*) Feeder 22,301 1,732 1999 TC until Oct-22 $16,800
AEGEAN EXPRESS(*) Feeder 18,581 1,439 1997 TC until Mar-22 $11,500
Total Container Carriers 16 635,806 50,371      


Vessels under construction Type Dwt TEU To be delivered
H4201 Feeder 37,237 2,800 Q1 2023
H4202 Feeder 37,237 2,800 Q2 2023

Notes:  
(*)        TC denotes time charter. Charter duration indicates the earliest redelivery date; all dates listed are the earliest redelivery dates under each TC unless the contract rate is lower than the current market rate in which cases the latest redelivery date is assumed; vessels with the latest redelivery date shown are marked by (+).
(**)       Rate is net of commissions (which are typically 5-6.25%)

About Euroseas Ltd.
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA. 

Euroseas operates in the container shipping market. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements. 

After the delivery of M/V Leo Paramount, the Company will have a fleet of 16 vessels comprising of 10 Feeder and 6 Intermediate containerships. Euroseas 16 containerships have a cargo capacity of 50,371 teu. Furthermore, after the delivery of two feeder containership newbuildings in the first half of 2023, Euroseas’ fleet will consist of 18 vessels with a total carrying capacity of 55,971 teu.

Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for containerships, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. 

Visit our website www.euroseas.gr

Company Contact Investor Relations / Financial Media
Tasos Aslidis
Chief Financial Officer
Euroseas Ltd.
11 Canterbury Lane,
Watchung, NJ 07069
Tel. (908) 301-9091
E-mail: aha@euroseas.gr		 Nicolas Bornozis
President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: nbornozis@capitallink.com

Can Market Strength Last into 2022?

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	Image Credit: Towfiqu barbhuiya (Pexels)

Will the Markets Continue to March Higher in 2022?

 

A relentless bull market, Covid variants, supply-chain issues, and inflation are likely to each have a chapter of their own when the story of the market’s strength throughout 2021 is written. With all the concern during 2021 over whether stocks would stay strong, whether disease outbreaks would crush the economic recovery, and the risks of inflation, the outcome is quite positive. Had an investor built a diversified portfolio on January 1, then ignored it the rest of the year, there is a good chance it would have outperformed the historical averages of the major indexes.

 

 

For those who diversified away from equities and decided to play it “safe” in the bond market, many U.S. aggregate bond funds were negative on the year. High yield funds tended to return a paltry return relative to stocks.

 

 

Consumer Prices

Inflation started the year as a talking point and ended as the center of attention. The U.S. economy entered 2021, with consumer prices rising at a low 1.4% year-over-year. This was below the Federal Reserve’s long-run target of 2%. If inflation concerned the Fed at all early in the year, it believed it should be a little higher.

Later in the year, supply-chain-related shortages had made it from business news to mainstream news programming. Prices became a normal dinnertime topic after the Dollar Store raised all of their prices. The weakest supply chain links were reported to be at ports where containers with imported goods waited to be put on a truck for delivery to its U.S. destination. Both available drivers and trucks are still well below the current demand level.

Stimulus

Supply and delivery problems were half of the issues that worked their way into producer and consumer prices. Another stimulus bill out of Washington worth $1.9 trillion signed by the new administration (added to the previous $900 billion package, and the $2.1 trillion Cares Act passed the prior year) put an excessive amount of money into the economy.  The Fed was supporting borrowing by purchasing Treasury securities at nearly a $1 trillion annual rate, along with nearly $500 billion in agency mortgage-backed securities, which continues to keep mortgage rates well below current inflation. The high level of cash that was pumped into the markets to offset lockdowns and slowdowns, along with the inability to deliver goods on time worked its way into prices. Inflation now stands at the end of the year at close to 7%. This is a rate not seen since 1982.

 

Easy Money

Although not counted directly in the CPI-U basket of goods, larger homes increased in price 20% or more as people working from home now felt they wanted more space. Early in the year, Fed Chairman Powell called the surge in single-family home prices a “passing phenomenon.”

Along with housing, inexpensive money seemed to drive asset prices up on much more speculative assets.  This included collectible non-fungible tokens (NFTs). Few had even heard of an NFT at the start of 2021, but by year-end the stratosphere-level prices had many investors taking notice and many companies entering the space. Low cost of money inflates the value of assets. Cheap, abundant capital can justify all manner of additions to one’s life, from electric vehicles, to stationary computerized bicycles, to speculative cryptocurrencies.

A shortage of computer chips led to a shortage of stand-alone computers and auto and marine engines that rely on these chips. This helped drive up used car and boat prices as much as 10% in one month.

  

Take-Away

In 2022, one can only guess, much of what drove prices up (new money, supply problems) will diminish. It already seems that a stimulus package that only a couple of months ago had the votes to pass, may not be even close to the expected size first envisioned. With this in mind, money management and investment selection become even more important. One cannot just put their money in a diversified fund and expect it to ride the wave.

The Channelchek platform houses current equity research and well thought out articles that are added to daily. It is a great online source to discover actionable ideas and understand what industry experts are thinking.
Register at no cost now for Channelchek to help stimulate your investor knowledge in 2022.

 

Suggested Reading:



Why Small Cap Stocks May Outperform Large Caps in 2022

Market Index Inclusion and Spikes in a Stock’s Demand





Will there be Enthusiasm for Ark Invest’s ESG ETF?

ESG Ratings Could Miss Problematic Supply Chain Issues

 

Sources:

https://www.bls.gov/

https://apps.bea.gov/itable/index.cfm

www.koyfin.com

 

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Kratos Defense & Security (KTOS) – Another Major UAS Contract

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Monday, December 27, 2021

Kratos Defense & Security (KTOS)
Another Major UAS Contract

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

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

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

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

    Target UAS Award. On Thursday, Kratos was awarded a $50.9 million contract modification exercising an option to procure 65 BQM-177A Subsonic Aerial Targets, 50 for the Navy, seven for the government of Japan, and eight for the government of Saudi Arabia, as well as associated technical and administrative data in support of full rate production lot three.

    On Target.  We had previously mentioned that just in the second half of this year, Kratos could receive awards from the Air Force and Navy for target drones, a confidential program, an international target award, and an engine award. Well, the Air Force, Navy, International, and engine awards have been won. This bodes well for the future …



This 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. 

Ridesharing Giant DiDi Employees Banned from Selling Shares

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Some DiDi Chuxing Stockholders Take an Unplanned Detour

 

DiDi Chuxing (DIDI) is back in the news and confusing investors once again. The ridesharing giant that announced plans to delist its shares on the NYSE in early December, after their IPO in June, just made another surprising announcement. According to an article in the Financial Times, December 27th was the date marking the end of the lockout period for employees to be able to sell their shares; this ban on liquidating employee-owned stock has now been extended.

For DiDi employees there was a scheduled 180-day window after the June 30, 2021, IPO during which they were not permitted to sell their holdings. The company that went public at $14 per share, announced on December 2
nd that it planned to delist from the NYSE to catch another ride on the Hong Kong Exchange. Investors theorized the abrupt turn may have resulted from pressure from China’s cybersecurity “watchdog.” The employee ban is now ongoing without an end date indicating when this class of stockholders may cash out of the sinking stock.

 

 

This new set of rules marks another change of direction for the ride-hailing company. Employees have to date lost 56% of their value, or about $ 37 billion in market capitalization, since their initial public offering in New York last summer.

The company has also been prohibited from registering new users, while at the same time, Chinese cyberspace regulators ordered the app stores to remove 25 other related apps, including apps that register new drivers.

According to the Financial Times article, DiDi’s current and former employees will not be permitted to sell their shares until the listing on the Hong Kong Exchange is successful; there was nothing mentioned about when this might be.

 

Suggested Reading:



When Stocks Like DiDi Delist, What Happens to Shareholders?

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Publicly Traded Chinese Companies Duty to Shareholders

Will the ExxonMobil Accident Impact Fuel Costs?

 

Sources:

https://www.reuters.com/markets/us/didi-bars-employees-selling-shares-indefinitely-ft-2021-12-27/

https://www.ft.com/content/695b5519-983f-4e44-a9c0-7e1cf1eca525

https://www.youtube.com/watch?v=qx1io0VIYxw

 

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Newrange Gold Corp. (NRGOF)(NRG:CA) – Option Exercised on Western Fold Property at North Birch

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Monday, December 27, 2021

Newrange Gold Corp. (NRGOF)(NRG:CA)
Option Exercised on Western Fold Property at North Birch

As of April 24, 2020, Noble Capital Markets research on Newrange Gold is published under ticker symbols (NRGOF and NRG:CA). The price target is in USD and based on ticker symbol NRGOF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Newrange Gold Corp is an exploration stage company focused on acquiring and exploring exploration and evaluation assets in Colombia and the United States. The Company operates in a single reportable operating segment-the acquisition, exploration, and development of mineral properties. Some of the projects acquired by the company are Pamlico gold project in Nevada and Rocky mountain project in Colorado. The company also holds an interest in the Yarumalito property, El Dovio property and Anori property in Colombia.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

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

    Acquisition of Western Fold property. With payments amounting to C$200 thousand in cash and the issuance of 1 million shares, Newrange Gold earned a 100% interest in the Western Fold property which forms the eastern portion of its North Birch project. Recall that in early 2021, Newrange acquired the H Lake property, which forms the western portion of North Birch. Together, the two properties encompass 3,850 hectares, or 9,514 acres, and cover an entire iron formation and are considered to be highly prospective for both iron formation hosted and high-grade quartz vein hosted gold mineralization.

    IP survey informs drilling plans at North Birch.  In April 2021, Newrange completed an induced polarization (IP) survey over the eastern portion of the North Birch project area covering 7 kilometers of strike length along the main target horizon. The survey revealed several well-defined chargeability anomalies which will be targeted for drilling that coincide with the target horizon along the limb …



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. 

Kratos Defense Security (KTOS) – Another Major UAS Contract

Posted on by Admin

Monday, December 27, 2021

Kratos Defense & Security (KTOS)
Another Major UAS Contract

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

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

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

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

    Target UAS Award. On Thursday, Kratos was awarded a $50.9 million contract modification exercising an option to procure 65 BQM-177A Subsonic Aerial Targets, 50 for the Navy, seven for the government of Japan, and eight for the government of Saudi Arabia, as well as associated technical and administrative data in support of full rate production lot three.

    On Target.  We had previously mentioned that just in the second half of this year, Kratos could receive awards from the Air Force and Navy for target drones, a confidential program, an international target award, and an engine award. Well, the Air Force, Navy, International, and engine awards have been won. This bodes well for the future …



This 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. 

Grindrod Shipping (GRIN) – Added Stock Buy Backs Reinforce Favorable Outlook

Posted on by Admin

Thursday, December 23, 2021

Grindrod Shipping (GRIN)
Added Stock Buy Backs Reinforce Favorable 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.

    Added buy backs of $1.65 million announced. Over the past two weeks, an additional ~109k shares were bought back at an average price of $15.20/share, or $1.65 million. Combined with earlier buy back of ~592k shares at an average price of $14.38/share, a total of ~700k shares have been bought back in 4Q2021 at an average price of $14.51/share, or $10.16 million. This number is ~4% of the shares outstanding and represents a significant jump from ~92k shares bought back at an average price of $14.87/share, or a total of $1.4 million, in 3Q2021.

    No change to 2021 EBITDA estimate, but higher than expected stock buy backs lower cash portion of 4Q2021 dividend estimate.  Due to continued higher-than-expected stock buy back activity (earlier buy backs were highlighted in a December 10th note), our 4Q2021 dividend estimate of $0.69/share now includes cash of $0.16/share (down from $0.25/share) and stock buy backs of $0.53/share (up 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. 

Will the ExxonMobil Accident Impact Fuel Costs?

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	Image: Google Maps

The Explosion and Fire at the ExxonMobil Plant in Texas May Have Lasting Impact

 

The ExxonMobil explosion has the potential to impact fuel prices through this winter or longer. The Baytown refinery complex in Texas is one of the largest integrated refinery and petrochemical facilities in the US.  This is a “major industrial accident” according to the local Sheriff’s office, as there are multiple injuries and evidence that the plant, which has been in operation since 1920, may be severely crippled.

The refinery, which is about 25 miles east of Houston, houses a chemical plant, an olefins plant, and an oil refinery that has the capacity to produce 584,000 barrels a day (bpd). Total U.S. production in 2020 was 16.5 million bpd, which is higher than any other country. Although it is unclear what the production rate was at the time of the explosion and fire, any reduction in output is likely to put upward pressure on refined oil prices. Oil futures that had been trading lower prior to the explosion rose slightly hours after the early morning explosion. Also trading up pre-market are small producers such as North American-based InPlay Oil (IPOOF, 
IPO:CA), and overseas Indonesia Energy (INDO).

The plant also produces olefins. Olefins are used in finished petroleum products as building blocks to plastics, adhesives, and detergents. Olefins also provide octane to gasoline. Most olefins are highly flammable. 

ExxonMobil said its emergency response teams were still working to extinguish the fire, and “our first priority is people in the community and in our facilities.” The company also said, “We are saddened to inform that four people were injured and are receiving medical treatment. All other personnel have been accounted for.”

According to ExxonMobil, its industrial hygiene team is monitoring air quality at the site and fence line, and that “available information shows no adverse impact at this time.” It also informed, “We are coordinating with authorities as appropriate. We deeply regret any disruption or inconvenience this may have caused the community.”

The Baytown refinery began operations in 1920, with the chemical plant opening in 1940. The facility is located along the Houston Ship Channel on about 3,400 acres of land and employs about 7,000 people. The company website describes the Baytown facility as “one of the largest integrated and most technologically advanced refining and petrochemical complexes in the world.” Taking the plant’s production offline may have a long-term impact on fuel prices, chemical supply chains, and the many businesses impacted by these. 

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Content:



Energy Industry Report – 3Q 2021

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Indonesia Energy – Virtual Roadshow (Video)

Sources:

https://www.chemicalsafetyfacts.org/olefins/

https://www.nsenergybusiness.com/projects/exxonmobil-baytown-refinery/

https://nypost.com/2021/12/23/explosion-at-exxon-refinery-in-baytown-texas-leaves-several-injured/

https://www.newsnationnow.com/us-news/southwest/fire-erupts-at-texas-exxon-plant-at-least-4-hospitalized/?utm_medium=referral&utm_source=t.co&utm_campaign=socialflow

https://corporate.exxonmobil.com/

 

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Why a Less Dovish Fed Doesn’t Translate into a Hawkish Fed

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	Image Credit: Nigam Machchhar, (Pexels)

Facts About the Fed Being Hawkish

 

In my reading last week, I came across a number of articles suggesting the US Federal Reserve (The Fed) has done a 180-degree turn to a more “hawkish” stance. This would mean that they have become inflation fighters.  As a reformed “bond guy” that participated in the Treasury’s first TIPS auction, I can’t help but mourn for the old bond market, the one that seemed to trade largely on inflation expectations rather than on kitchen sink monetary resolve. Below discusses why the Fed may actually be more “Dovish” than ever before in history with inflation above 4%. The ramifications of this have implications for the US Stock and Bond markets going into the New Year.

With year-over-year U.S. inflation running at 6.8% (CPI-U) and the Fed inflation projection for 2022 at 2.6% to 2.7%, one would expect 30-year Treasuries to be yielding higher than the annual inflation rate. Instead, it’s running 500 basis points (bp) below the pace, and 50 bp below the FOMC’s seemingly optimistic projections. Does the bond market know something that undermines the most basic tenets of interest rate movement? Or, is something else impacting bond prices?

Source: https://home.treasury.gov/

  

Background

During the early summer of 2020, in response to pandemic-related stress on the economy, the Fed introduced yield curve control as one of their tools. The way this seldom-used tool works is the Fed enters the open market and buys bonds across a large period of the yield curve in order to prevent rates from rising above a pre-set level. In this way, if market demand would tend to let rates rise, the Fed is there to bid prices up (keep rates down). If bond prices (yields) of targeted maturities remain above the pre-set level, the central bank does nothing. The Fed, in this way, provides unlimited demand should bonds trade-off.

Additionally, the Fed has been implementing quantitative easing (QE) since March 2020.  The result is the Fed now holds $5.64 trillion in Treasuries out of the $22.3 trillion available U.S. Treasury debt.

Along with Treasuries the Fed also holds $2.63 trillion in government-guaranteed Mortgage-Backed Securities (MBS). These securities, which are also backed by the full faith and credit of the US, trade at a small spread to similar duration Treasuries.  

When QE got underway last year, the Fed purchased roughly $110 billion a month in MBS: $40 billion a month in new money and $70 billion to replace principal pay downs. Unlike other market participants, the Fed does not trade these securities, they get put away until they pay off. Investors need not worry if the extremely large buyer may decide to sell one day. They won’t.

Out of the $5.64 trillion of Treasuries held by the Fed, only $326 billion mature within a year. The remaining $5.31 trillion impact longer rates, in fact, $1.02 trillion mature in 5-10 years, and $1.34 trillion mature in over 10 years. With over two trillion in debt securities pulled from the five years or longer end of the market, it now holds long-dated Treasury debt equivalent to 10% of U.S. GDP.

 

Is
Tapering Tightening?

While the Fed now regularly addresses inflation in its comments and intentionally avoids the word “transitory” when referring to it, there is very little economic brake tapping being done from a monetary policy level. Instead, it continues to suppress rates by buying bonds. While the Fed is not dropping as much money into the bond markets as they had been to control yields, they are still purchasing massive amounts. Each month they are tapering their purchases by $20 billion. But still, last month the Fed took down $120 billion in government-backed bonds – $80 billion in Treasury debt and $40 billion in mortgage-backed securities. These are now securities the market doesn’t have to absorb, which keeps rates down, but it is also stimulative as these securities were purchased on the open market.  

Bond purchases are monetary policy tools used to ease rates and stimulate the economy; they are a tool used to tighten. The purchases repress rates along the entire curve and serve to reduce borrowing costs spread to Treasuries that would include everything from mortgage borrowing to junk bonds.

Take-Away

If the Fed has become an inflation fighter and is now hawkish, the stock market, particularly companies that rely on borrowing, have a lot to be concerned about. Interest rates across the entire curve have been held down for a long time. By historical measures, interest rates should be paying inflation plus a premium for uncertainty. A rapid return to historical norms would be devastating for stocks. More directly, it would be devastating for bonds.

The Federal Reserve Act mandates that the Fed conduct monetary policy “so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” Allowing rates to seek their natural level any time soon would impact the markets, which is not mentioned as a mandate. However, “maximum employment” is one of the goals of monetary policy. Allowing the markets to sink would likely reduce employment greatly. With this, the Fed is likely to remain accommodative using all the tools necessary to maximize employment.

As long as rates are low, savers will need to search for ways to protect their money from inflation. This could keep the stock market on its upward trend.

  

Suggested Reading:



How Difficult Will it be for the Fed to Control Inflation?

Inflation Seems Persistent, What Now?





Yield Curve Control, Stock Prices, and Trust (June 2020)

The Fed is Clear that they Intend to Hold Rates Down

 

Sources:

https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details

https://www.bls.gov/opub/ted/2021/consumer-prices-up-6-8-percent-for-year-ended-november-2021.htm

https://www.usinflationcalculator.com/inflation/current-inflation-rates/

https://www.sifma.org/resources/research/us-treasury-securities-statistics/

https://www.statista.com/topics/6441/quantitative-easing-in-the-us/#:~:text=The%20Federal%20Reserve%20announced%20on,as%20quantitative%20easing%20(QE)

 

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Harte Hanks (HHS) – New Credit Facility Is Another Big Step Forward

Posted on by Admin

Thursday, December 23, 2021

Harte Hanks (HHS)
New Credit Facility Is Another Big Step Forward

Harte-Hanks is a marketing services company that provides multichannel marketing solutions as well as consulting, data analytics, and strategic assessment. The company’s offerings focus on business-to-business, retail, finance, and automotive segments through digital, social, mobile, and print media offerings. Harte-Hanks strives to develop better customer relationships through its marketing and analytical services for clients. The majority of its revenue is derived from its marketing services in the retail, technology, and consumer brand segments.

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

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

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

    New credit facility. On December 21, 2021, the company announced a $25 million secured revolving credit agreement with Texas Capital Bank. According to the company’s press release, the new line of credit will be used to repay existing debt, invest in growth initiatives, and will be a source of working capital. The credit line is secured by certain subsidiaries of Harte Hanks.

    Expanded credit, greater flexibility.  The $25 million line of credit is a significant increase from the company’s existing line of $15 million. Moreover, the credit agreement is for three years, which is longer than the company’s previous agreements. We believe the expansion of the credit line, as well as the agreement’s extended time frame, will allow the company greater financial flexibility …



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. 

Why a Less Dovish Fed Doesnt Translate into a Hawkish Fed

Posted on by Admin 


	Image Credit: Nigam Machchhar, (Pexels)

Facts About the Fed Being Hawkish

 

In my reading last week, I came across a number of articles suggesting the US Federal Reserve (The Fed) has done a 180-degree turn to a more “hawkish” stance. This would mean that they have become inflation fighters.  As a reformed “bond guy” that participated in the Treasury’s first TIPS auction, I can’t help but mourn for the old bond market, the one that seemed to trade largely on inflation expectations rather than on kitchen sink monetary resolve. Below discusses why the Fed may actually be more “Dovish” than ever before in history with inflation above 4%. The ramifications of this have implications for the US Stock and Bond markets going into the New Year.

With year-over-year U.S. inflation running at 6.8% (CPI-U) and the Fed inflation projection for 2022 at 2.6% to 2.7%, one would expect 30-year Treasuries to be yielding higher than the annual inflation rate. Instead, it’s running 500 basis points (bp) below the pace, and 50 bp below the FOMC’s seemingly optimistic projections. Does the bond market know something that undermines the most basic tenets of interest rate movement? Or, is something else impacting bond prices?

Source: https://home.treasury.gov/

  

Background

During the early summer of 2020, in response to pandemic-related stress on the economy, the Fed introduced yield curve control as one of their tools. The way this seldom-used tool works is the Fed enters the open market and buys bonds across a large period of the yield curve in order to prevent rates from rising above a pre-set level. In this way, if market demand would tend to let rates rise, the Fed is there to bid prices up (keep rates down). If bond prices (yields) of targeted maturities remain above the pre-set level, the central bank does nothing. The Fed, in this way, provides unlimited demand should bonds trade-off.

Additionally, the Fed has been implementing quantitative easing (QE) since March 2020.  The result is the Fed now holds $5.64 trillion in Treasuries out of the $22.3 trillion available U.S. Treasury debt.

Along with Treasuries the Fed also holds $2.63 trillion in government-guaranteed Mortgage-Backed Securities (MBS). These securities, which are also backed by the full faith and credit of the US, trade at a small spread to similar duration Treasuries.  

When QE got underway last year, the Fed purchased roughly $110 billion a month in MBS: $40 billion a month in new money and $70 billion to replace principal pay downs. Unlike other market participants, the Fed does not trade these securities, they get put away until they pay off. Investors need not worry if the extremely large buyer may decide to sell one day. They won’t.

Out of the $5.64 trillion of Treasuries held by the Fed, only $326 billion mature within a year. The remaining $5.31 trillion impact longer rates, in fact, $1.02 trillion mature in 5-10 years, and $1.34 trillion mature in over 10 years. With over two trillion in debt securities pulled from the five years or longer end of the market, it now holds long-dated Treasury debt equivalent to 10% of U.S. GDP.

 

Is
Tapering Tightening?

While the Fed now regularly addresses inflation in its comments and intentionally avoids the word “transitory” when referring to it, there is very little economic brake tapping being done from a monetary policy level. Instead, it continues to suppress rates by buying bonds. While the Fed is not dropping as much money into the bond markets as they had been to control yields, they are still purchasing massive amounts. Each month they are tapering their purchases by $20 billion. But still, last month the Fed took down $120 billion in government-backed bonds – $80 billion in Treasury debt and $40 billion in mortgage-backed securities. These are now securities the market doesn’t have to absorb, which keeps rates down, but it is also stimulative as these securities were purchased on the open market.  

Bond purchases are monetary policy tools used to ease rates and stimulate the economy; they are a tool used to tighten. The purchases repress rates along the entire curve and serve to reduce borrowing costs spread to Treasuries that would include everything from mortgage borrowing to junk bonds.

Take-Away

If the Fed has become an inflation fighter and is now hawkish, the stock market, particularly companies that rely on borrowing, have a lot to be concerned about. Interest rates across the entire curve have been held down for a long time. By historical measures, interest rates should be paying inflation plus a premium for uncertainty. A rapid return to historical norms would be devastating for stocks. More directly, it would be devastating for bonds.

The Federal Reserve Act mandates that the Fed conduct monetary policy “so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” Allowing rates to seek their natural level any time soon would impact the markets, which is not mentioned as a mandate. However, “maximum employment” is one of the goals of monetary policy. Allowing the markets to sink would likely reduce employment greatly. With this, the Fed is likely to remain accommodative using all the tools necessary to maximize employment.

As long as rates are low, savers will need to search for ways to protect their money from inflation. This could keep the stock market on its upward trend.

  

Suggested Reading:



How Difficult Will it be for the Fed to Control Inflation?

Inflation Seems Persistent, What Now?





Yield Curve Control, Stock Prices, and Trust (June 2020)

The Fed is Clear that they Intend to Hold Rates Down

 

Sources:

https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details

https://www.bls.gov/opub/ted/2021/consumer-prices-up-6-8-percent-for-year-ended-november-2021.htm

https://www.usinflationcalculator.com/inflation/current-inflation-rates/

https://www.sifma.org/resources/research/us-treasury-securities-statistics/

https://www.statista.com/topics/6441/quantitative-easing-in-the-us/#:~:text=The%20Federal%20Reserve%20announced%20on,as%20quantitative%20easing%20(QE)

 

Stay up to date. Follow us: