Page 146 – Channelchek

Super Micro Shares Plunge 12% as DOJ Investigates Alleged Accounting Violations

Posted on September 26, 2024September 26, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– DOJ opens probe into Super Micro amid allegations of accounting manipulation.
– Shares tumble 12% following the report, building on earlier losses after a Hindenburg Research short position.
– Super Micro, a major AI player, is under scrutiny as the investigation unfolds.

Super Micro Computer, Inc. (SMCI) saw its shares plummet over 12% on Thursday after a report emerged that the U.S. Department of Justice (DOJ) has initiated an investigation into the company. The investigation follows allegations from Hindenburg Research regarding possible accounting manipulation, which has cast a cloud over the company in recent months.

The DOJ probe, which is reportedly in its early stages, was first disclosed by The Wall Street Journal. While few specifics have been released, the inquiry is focusing on potential accounting violations linked to the company’s financial practices. CNBC has not yet independently verified the claims made by Hindenburg or the details of the DOJ’s investigation.

Super Micro, which designs and manufactures computers and servers for applications such as artificial intelligence (AI) algorithms, has been a significant player in the AI revolution. The company boasts major partnerships with industry leaders like Nvidia, AMD, and Intel. However, the recent news of the DOJ probe has shaken investor confidence, leading to a sharp sell-off in its stock.

The roots of this controversy trace back to late August when Hindenburg Research, a well-known short-seller, announced its short position in Super Micro, citing “fresh evidence of accounting manipulation.” Hindenburg’s report sent shockwaves through the market, causing Super Micro’s stock to plunge by nearly 20% at the time. Compounding matters, the company missed its deadline to file its annual report with the U.S. Securities and Exchange Commission (SEC), further fueling concerns. It remains unclear whether the delay is related to the allegations made by Hindenburg.

As the investigation gains traction, reports suggest that a prosecutor from the U.S. Attorney’s office in San Francisco has sought information about a former employee who previously accused Super Micro of engaging in questionable accounting practices. This has intensified scrutiny on the company’s financial integrity, leading many investors to reassess their positions.

Super Micro, founded in 1993, has enjoyed substantial growth in recent years, particularly benefiting from the AI boom. Its hardware is critical for the infrastructure powering websites, data storage, and AI computing. The company’s shares had been on an upward trajectory, driven by strong demand in the tech sector, until these allegations surfaced.

The fallout from the DOJ probe marks another chapter in a tumultuous period for Super Micro. It remains to be seen how this investigation will unfold and what its ultimate impact will be on the company’s financial health and market standing. At this stage, neither the DOJ nor Super Micro has offered substantial comment on the matter.

The investigation raises broader questions about corporate governance and financial transparency in tech companies. As Super Micro continues to face these allegations, the company will need to work swiftly to restore investor confidence and navigate the potential legal challenges ahead.

V2X (VVX) – Noble Conference Presentation

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , 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.

Noble Conference. We hosted V2X President and CEO Jeremy Wensinger at our Basic Industries Virtual Investor Conference. Mr. Wensinger touched on the Company’s end-to-end capabilities, including full lifecycle solutions, large backlog, positive future opportunity, and an expanding addressable market. A replay of the presentation, including Q&A can be viewed at: https://www.channelchek.com/videos/v2x-inc-vvx-noble-capital-markets-basic-industries-virtual-conference-replay

Expanding Addressable Market. With the combination of Vectrus and Vertex, V2X is now able to pursue opportunities previously out of either individual company’s reach, expanding V2X’s addressable market. The prime example of this is the July award of the $3.7 billion War Fighter Training Readiness contract, which combined strengths of both the old Vectrus and Vertex into a winning proposal, even against stiff competition.

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*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.

Snail (SNAL) – An Opportunistic Entry Point

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

Stock slips below $1. The SNAL shares are down roughly 40% YTD. We believe this slide is an over reaction to the company’s “miss” in first half earnings, which was largely related to deferred revenue. The company has a favorable long term fundamental outlook and is financially healthy, with a sizable cash position and positive cash flow generation.

Fundamentals do NOT appear broken. We expect company fundamentals to improve over the next eighteen months. In 2024, revenue and adjusted EBITDA are expected to increase to $88.7 million and $12.3 million, respectively, up from $60.9 million and negative $9.7 million in 2023. In 2025, we anticipate revenue and adjusted EBITDA to reach $105.0 million and $24.5 million. This growth is backed by a number of exciting developments, including the rollout of more Down Loadable Content (DLC) packages for Ark: Survival Ascended, which should help alleviate noise surrounding deferred revenue.

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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).

MustGrow Biologics Corp. (MGROF) – Transitioning from R&D to Commercialization

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , 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.

Update and Presentation. On Tuesday, we had the opportunity to participate in a webinar presentation and interview with MustGrow’s management providing an update on the current progress of the Company’s pipeline and its future. Key takeaways of the update, in our view, were the progress towards sales of its TerraSante product, advancing towards commercialization of its TerraMG product, and the expansion of the Company’s intellectual property portfolio.

TerraSante. The Company has been underway in its planning for larger-scale production on TerraSante. The Company had its initial commercial production run in 2023 and had its first sales during the third quarter this year. Management is seeing strong initial interest in the product, primarily from California, and has the opportunity for multiple applications per year for various crop markets, which could potentially triple acre coverage. We believe that we will continue to see more state approvals for the product in the near term as management has focused on getting such approvals.

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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).

Hemisphere Energy (HMENF) – Hemisphere Provides an Operational Update and Declares a Special Dividend

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

Operational update. Hemisphere has drilled six horizontal wells into its southeast Alberta Atlee Buffalo F and G pools over the past two months, with two wells left to drill as part of its summer program. Drilling operations are expected to be completed early in the fourth quarter with wells put into production as they are tied-in through the remainder of the year. Hemisphere has also commenced polymer injection at its new pilot enhanced oil recovery project in Marsden, Saskatchewan. Management anticipates that it could take until mid-2025 to increase reservoir pressure and to evaluate the production response at the three producers.

Updating estimates. Crude oil prices have weakened since our last update. We have lowered our 2024 adjusted funds flow (AFF) and earnings per share (EPS) estimates to C$43.8 million and C$0.31, respectively, from C$45.4 million and C$0.35. Our third and fourth quarter EPS estimates were lowered by C$0.02 each to C$0.08 and C$0.06, respectively, based on average per barrel WTI crude oil prices of $75.69 and $71.20. While futures prices suggest 2025 WTI pricing in the $68 to $70 per barrel range, we are leaving our 2025 estimates unchanged for now based on a WTI crude oil price of $74.95 per barrel.

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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).

Great Lakes Dredge & Dock (GLDD) – Noble Conference Presentation

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , 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.

Noble Conference. We hosted Great Lakes CFO Scott Kornblau at our Basic Industries Virtual Investor Conference. Mr. Kornblau touched on the Company’s recent strong operating performance, backlog, positive future opportunity, the ship building program, and capital structure. A replay of the presentation, including Q&A can be viewed at: https://www.channelchek.com/videos/great-lakes-dredge-dock-company-gldd-noble-capital-markets-basic-industries-virtual-conference-replay

Operating Performance. Great Lakes has completed three successful quarters in a row and the Company believes the strong operating outlook will continue for the foreseeable future, driven by record budgets at the U.S. Army Corps, supplemental funding for hurricane impacted areas now being released, and other additional funding for large projects expected in the second half of the decade.

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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).

AZZ Inc. (AZZ) – Highlights from the Noble Virtual Basic Industries Equity Conference.

Posted on September 26, 2024September 26, 2024 by cpereira@noblefcm.com

Thursday, September 26, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

New manufacturing facility is on schedule and on budget. AZZ Inc. participated in Noble’s Virtual Basic Industries Conference on September 25. AZZ is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end markets. With AZZ Precoat Metals’ new manufacturing facility in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth in fiscal year 2026 while capital expenditures decline. Approximately 75% of the facility’s production is already committed that we estimate could generate approximately $50 million to $60 million in revenue. A link to the presentation replay is here.

Declining debt balance and cost of capital. Based on the company’s strong first quarter fiscal year 2025 results and outlook, we have assumed AZZ will pay down $90 million of debt this fiscal year, or at the high end of the guidance range. On September 24, AZZ executed a fourth amendment to its existing credit agreement and reduced the interest rate of the Term Loan B by 75 basis points to the Adjusted Term Secured Overnight Financing Rate (SOFR) plus 250 basis points.

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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).

Gevo Acquires CultivateAI to Strengthen Verity’s Carbon Accounting Solutions

Posted on September 26, 2024September 26, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Gevo acquires CultivateAI for $6 million to boost Verity’s carbon tracking capabilities.
– The acquisition will accelerate revenue growth and provide advanced agricultural analytics.
– CultivateAI’s SaaS platform integrates real-time agricultural data, driving sustainability and profitability for farmers.

Gevo, Inc. (NASDAQ: GEVO), a renewable energy and carbon solutions company, has announced the acquisition of Cultivate Agricultural Intelligence, LLC (“CultivateAI”) for $6 million in cash. This strategic acquisition will bolster Gevo’s Verity business unit, accelerating the development of Verity’s carbon tracking capabilities, while integrating new revenue streams from CultivateAI’s agricultural data and analytics platform.

CultivateAI, a cloud-based software as a service (SaaS) platform, provides agricultural operators with real-time analytics, helping them make data-driven decisions to improve productivity, sustainability, and profitability. With expected 2024 revenue of $1.7 million and positive cash flow, CultivateAI is already a proven business. Gevo aims to leverage this platform to strengthen Verity’s carbon accounting and tracking solutions, focusing on carbon abatement across sectors like food, feed, fuels, and industrial markets.

Dr. Paul Bloom, Head of Verity and Chief Carbon Officer of Gevo, expressed excitement about the acquisition: “Adding CultivateAI and its inventive approach to Verity will help us grow revenue by providing the most complete set of data-driven analytics services to farmers, agronomists, and researchers. This acquisition accelerates our ability to deliver value to our customers.”

Verity’s primary focus is creating an innovative platform that tracks, verifies, and empirically values carbon intensity throughout the entire carbon lifecycle. With the addition of CultivateAI’s tools and customer base, Verity will extend its reach beyond biofuels and tap into new revenue streams. This integration is poised to strengthen Gevo’s role in promoting sustainability and profitability, particularly for farmers and agricultural service providers.

Gevo’s CEO, Dr. Pat Gruber, emphasized the broader implications of the acquisition: “We are constantly looking for development opportunities that bring new revenue streams to the company. As Verity accelerates, we expect to see more customer relationships and growth opportunities, supporting our mission to build a circular economy.”

CultivateAI’s advanced platform, with its real-time data capabilities, will allow Verity to offer the highest quality carbon abatement solutions while helping clients understand their operations better. The SaaS platform enables farm operators, agronomists, and researchers to access timely, reliable insights, enhancing their ability to manage resources efficiently and sustainably.

Gevo is committed to converting renewable energy and biogenic carbon into sustainable fuels and chemicals with a net-zero or better carbon footprint. With this acquisition, the company takes another step toward its mission of fostering a sustainable, circular economy while driving shareholder value through scalable revenue growth.

As Verity continues to expand its platform, the integration of CultivateAI will not only help improve agricultural operations but will also support the carbon footprint reduction efforts in various industries. By offering clients innovative, data-driven solutions, Gevo aims to lead the way in sustainability-focused business practices.

Mortgage Refinance Boom Takes Hold as Weekly Demand Surges 20%

Posted on September 26, 2024September 26, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Refinancing applications surged 20% in one week amid declining mortgage rates.
– Mortgage rates fell to 6.13%, the lowest in two years, driving demand.
– The refinance share of mortgage applications reached 55.7% of total demand.

Mortgage refinance activity has seen a significant surge as homeowners across the United States rush to take advantage of falling interest rates. According to the Mortgage Bankers Association (MBA), applications to refinance home loans soared by 20% last week compared to the previous week, driven by the continuous decline in mortgage rates. This marks a stunning 175% increase in refinance demand from the same time last year.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dropped to 6.13% from 6.15%. Though the change may seem small, the cumulative effect of eight straight weeks of declining rates is pushing homeowners to seize the opportunity for potential savings. Joel Kan, vice president and deputy chief economist at MBA, highlighted this ongoing trend: “The 30-year fixed rate decreased for the eighth straight week to 6.13%, while the FHA rate decreased to 5.99%, breaking the psychologically important 6% level.”

Refinance applications now make up 55.7% of all mortgage applications, showcasing how appealing the current rates are for homeowners. However, while the percentage rise is significant, the overall level of refinancing activity remains modest when compared to previous refinancing waves. The ongoing economic environment, combined with seasonal slowdowns in homebuying, has contributed to this pattern.

Despite the seasonal slowdown, mortgage applications to purchase homes rose just 1% over the last week, demonstrating that homebuyers are still facing challenges like high home prices and limited inventory. These factors have kept the pace of new home purchases relatively stable, with purchase applications only 2% higher than the same week last year.

One interesting takeaway from the latest data is that average loan sizes for both refinancing and home purchases have reached record highs. The overall average loan size hit $413,100 last week, the largest in the survey’s history. This reflects both the continued rise in home values and the larger loan amounts that homeowners are seeking, particularly in high-cost markets.

Looking ahead, mortgage rates have not seen significant movement at the start of this week. However, they may react as more pressing economic data, such as jobs reports and inflation numbers, are released in the coming weeks. Any developments in the broader economic outlook could influence the future path of mortgage rates, either stabilizing them or prompting further fluctuations.

For now, homeowners who have yet to take advantage of the current low rates are eyeing the market closely, as more savings could be realized with additional rate cuts. With mortgage rates remaining near their lowest levels in two years, the refinancing boom may continue to gain traction, especially if the Federal Reserve implements further rate cuts to counter slowing economic growth.

Gold Nears Record High as US Data Suggest Further Rate Cuts

Posted on September 25, 2024September 25, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Gold trades near its record high, driven by weak US economic data and rising rate cut expectations.
– Gold has surged 29% this year, with silver also gaining 34%, supported by Fed rate cuts and strong central bank purchases.
– Investors anticipate further gains in precious metals due to geopolitical tensions and US monetary policy shifts.

Gold prices are trading near record highs as weak US economic data strengthens the case for further interest rate cuts by the Federal Reserve. On Wednesday, bullion reached a peak of $2,670.57 an ounce before stabilizing at $2,657.73, reflecting a 29% rise this year. Silver has also seen substantial gains, increasing by 34% since January.

The recent spike in gold prices follows a report indicating a sharp decline in US consumer confidence, marking the largest drop in three years. This data has led swaps traders to increase bets on deeper cuts, expecting the Federal Reserve to lower rates by three-quarters of a point by the end of the year. Lower interest rates typically boost demand for gold, which doesn’t generate interest or dividends, making it an attractive asset in a low-rate environment. The rate cuts have also weakened the US dollar, further supporting gold by making it cheaper for international buyers.

Silver, often trading in tandem with gold, is benefitting from its dual role as both a precious metal and an industrial commodity. Its use in clean-energy technologies, such as solar panels, gives it additional exposure to the global economic cycle. As a result, silver prices have closely followed gold’s upward trajectory. Analysts from Standard Chartered and UBS expect silver to continue outperforming in the current market conditions, given the rising demand for industrial metals driven by global clean energy initiatives and the broader economic recovery.

Geopolitical tensions are also bolstering the demand for gold, with the precious metal seen as a safe-haven asset in uncertain times. With less than six weeks until the US presidential election, the financial markets are bracing for potential volatility. Political uncertainty, coupled with a broader global economic slowdown, has fueled a rush toward assets like gold and silver, which are considered more stable in times of turmoil.

Looking ahead, major banks, including J.P. Morgan, UBS, and Goldman Sachs, predict that gold’s upward trend will persist into 2025. Many of these forecasts are based on continued inflows into gold-backed exchange-traded funds (ETFs) and the expectation of further interest rate cuts by central banks around the world. For instance, J.P. Morgan anticipates that gold could reach $2,775 per ounce by next year, with a potential spike toward $3,000 in 2025. These bullish forecasts reflect a broader market sentiment that gold’s rally is far from over, particularly as the Federal Reserve continues its easing cycle to counter economic slowdowns.

While gold and silver investors are enjoying the current market rally, other sectors, particularly industrial metals, have also seen benefits. Beijing’s announcement of stimulus measures aimed at reviving China’s economy has led to increased demand for metals used in construction and technology, further supporting the price of silver. As these global economic trends continue to unfold, investors will keep a close eye on additional US data, such as the personal consumption expenditures gauge and jobless claims, to gauge the Federal Reserve’s next move.

Release – Lifeway Foods Confirms Receipt of Unsolicited, Non-Binding Proposal from Danone

Posted on September 25, 2024September 25, 2024 by dburczyk@noblecapitalmarkets.com

Research News and Market Data on LWAY

MORTON GROVE, Ill., Sept. 24, 2024 /PRNewswire/ — Lifeway Foods, Inc. (Nasdaq: LWAY) (“Lifeway” or “the Company”), a leading U.S. supplier of kefir and fermented probiotic products to support the microbiome, confirmed that it has received an unsolicited, non-binding proposal from Danone North America PBC (“Danone”) to acquire all outstanding shares of common stock of Lifeway it does not already own for $25.00 per share in cash. According to the Schedule 13D amendment filed yesterday with the U.S. Securities and Exchange Commission disclosing the proposal, Danone beneficially owns approximately 23.4% of Lifeway’s outstanding common stock.

Consistent with its fiduciary duties, Lifeway’s board of directors, in consultation with its independent outside advisors, will carefully review and evaluate the proposal to determine the course of action that it believes is in the best interests of the Company and its stakeholders.

The Company does not undertake any obligation to provide any updates with respect to this or any other proposal or transaction, except as required under applicable law.

Lifeway shareholders do not need to take any action at this time.

About Lifeway Foods, Inc.

Lifeway Foods, Inc., which has been recognized as one of Forbes’ Best Small Companies, is America’s leading supplier of the probiotic, fermented beverage known as kefir. In addition to its line of drinkable kefir, the company also produces a variety of cheeses and a ProBugs line for kids. Lifeway’s tart and tangy fermented dairy products are now sold across the United States, Mexico, Ireland, South Africa and France. Learn how Lifeway is good for more than just you at lifewayfoods.com.

Contacts:

Derek Miller
Vice President of Communications, Lifeway Foods
Email: derekm@lifeway.net

Longacre Square Partners
Joe Germani / Miller Winston
Email: LWAY@longacresquare.com

Forward-Looking Statements

This release (and oral statements made regarding the subjects of this release) contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives. These statements use words, and variations of words, such as “continue,” “build,” “future,” “increase,” “drive,” “believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,” “expect,” and “predict.” Other examples of forward-looking statements may include, but are not limited to, (i) statements of Company plans and objectives, including the introduction of new products, or estimates or predictions of actions by customers or suppliers, (ii) statements of future economic performance, and (III) statements of assumptions underlying other statements and statements about Lifeway or its business. You are cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Lifeway’s expectations and projections. These risks, uncertainties, and other factors include: price competition; the decisions of customers or consumers; the actions of competitors; changes in the pricing of commodities; the effects of government regulation; possible delays in the introduction of new products; and customer acceptance of products and services. A further list and description of these risks, uncertainties, and other factors can be found in Lifeway’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company’s subsequent filings with the SEC. Copies of these filings are available online at https://www.sec.gov, http://lifewaykefir.com/investor-relations/, or on request from Lifeway. Information in this release is as of the dates and time periods indicated herein, and Lifeway does not undertake to update any of the information contained in these materials, except as required by law. Accordingly, YOU SHOULD NOT RELY ON THE ACCURACY OF ANY OF THE STATEMENTS OR OTHER INFORMATION CONTAINED IN ANY ARCHIVED PRESS RELEASE

Euroseas (ESEA) – Favorable Time Charter Contract for the M/V Synergy Busan

Posted on September 25, 2024September 25, 2024 by cpereira@noblefcm.com

Wednesday, September 25, 2024

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.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Hans Baldau, Research Associate, Noble Capital Markets, Inc.

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

New time charter contract. Euroseas Ltd. executed a time charter contract for M/V Synergy Busan at a gross daily rate of $35,500 for a minimum period of 36 to a maximum period of 38 months at the option of the charterer. The M/V Synergy Busan is 4,250 TEU intermediate container ship. Recall that TEU is a unit of cargo capacity that is based on the volume of a twenty-foot-long intermodal container that can be transferred between different carriers. The new charter will commence in early December 2024 in continuation of its existing charter.

Favorable rate and improved charter coverage. The new time charter is a significant improvement over the previous contracted rate of $25,000 per day and is expected to contribute EBITDA of ~$29 million during the minimum contracted period. Recall that Euroseas installed energy saving devices on the M/V Synergy Busan during the ship’s drydock last year which likely factored into the higher charter rate. The new time charter improves Euroseas’ remaining 2024 and 2025 charter coverage to 95% and ~50%, respectively.

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

China’s E-commerce Giants Surge After Stimulus Package Boost

Posted on September 25, 2024September 25, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Alibaba, JD.com, and Pinduoduo stocks soar after China announces new monetary stimulus measures.
– The People’s Bank of China released $140 billion in liquidity by cutting interest rates and reserve requirements.
– Skepticism remains over whether these measures will lead to long-term economic recovery.

China’s major e-commerce players—Alibaba, JD.com, and Pinduoduo—saw a significant stock surge on Tuesday after the People’s Bank of China (PBOC) unveiled its first major stimulus package since the pandemic. The central bank’s efforts aim to inject liquidity into the economy and spark growth amid ongoing challenges in the property market and reduced consumer demand.

Shares of Alibaba rose by 7%, while JD.com jumped 11%, and Pinduoduo saw an increase of nearly 10%. This sharp rise followed the PBOC’s announcement of key interest rate cuts and a reduction in reserve requirements for banks. These measures are expected to free up around 1 trillion yuan ($140 billion) in liquidity, making it easier for businesses and households to access loans at lower interest rates.

The stimulus comes at a critical time for China’s economy, which has been grappling with a cooling property market and weaker-than-expected demand in recent months. The government’s regulatory crackdown on tech companies over the last few years further compounded the struggles of companies like Alibaba and JD.com. At the height of this crackdown, Alibaba was slapped with a $2.6 billion fine for antitrust violations. Despite some recovery in 2024, these companies remain far from their 2020 stock price highs.

The tech sector, which includes major firms such as Baidu, Tencent, and NetEase, saw a broad rally following the announcement. The CSI 300, Shanghai Composite, and Hang Seng indexes all rose over 4%, reflecting optimism among investors about the new economic measures.

While the stock market responded favorably, some experts remain cautious about the long-term impact of China’s stimulus efforts. Charles Schwab’s chief global investment strategist, Jeffrey Kleintop, expressed doubts that these moves will be enough to stabilize China’s property market or significantly improve household incomes. “A lower mortgage rate on existing loans might help households, but it doesn’t do anything to arrest the decline in property prices or aggregate incomes or jobs,” said Kleintop. Wolfe Research chief economist Stephanie Roth echoed these sentiments, noting that similar announcements in the past have generated excitement but did not produce sustained economic improvements.

The stakes are high for China’s economy, which has long been seen as a key driver of global growth. As the world’s second-largest economy, a slowdown in China could have ripple effects across international markets. Investors are keenly watching whether these new stimulus measures will generate enough momentum to help China regain its footing and whether companies like Alibaba and JD.com can continue to capitalize on a more favorable economic environment.

Despite the skepticism, the stock surge offers a brief respite for Chinese e-commerce firms, which have faced intense pressure over the last few years. While these gains are encouraging, the question remains whether this upward trajectory will last or if more comprehensive measures will be needed to keep China’s economic recovery on track.