JPMorgan Expands Oil & Gas Practice With Morgan Stanley Hires

JPMorgan Chase & Co. is expanding its oil and gas group with two hires from Morgan Stanley.

Jonathan Cox is joining the New York bank as global co-head of oil and gas investment banking and co-head of its Houston office, according to an internal memo obtained by Bloomberg and confirmed by a spokeswoman. Michael Johnson is joining as a vice chairman of investment banking.

They’ve each spent almost eight years at Morgan Stanley, where Cox was most recently head of energy mergers and acquisitions investment banking and Johnson was a senior adviser within that group.

A representative for Morgan Stanley didn’t return a call for comment.

As part of the changes at JPMorgan, Paschall Tosh, will become a vice chairman of investment banking, reporting to Eric Stein, head of investment banking. Tosh was most recently co-head of oil and gas investment banking.

Cox and Johnson joined Morgan Stanley in 2010 together from Deutsche Bank AG. Cox joined the Frankfurt-based bank in 2004 and prior to that he had worked at Goldman Sachs Group Inc.

Johnson worked at Deutsche Bank since 2001 after stints as chief financial officer for a technology startup and as a banker at firms including Donaldson, Lufkin & Jenrette.

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Apple's Next iPhone Chip Is Now in Mass Production

Arguably the most important component inside of a smartphone is the applications processor. This controls how quickly and efficiency apps run, how smoothly 3D games run, and the quality of the photos and videos that users take. Each year,Apple(NASDAQ:AAPL) makes substantial advances in the performance and capabilities of the chips that power its latest iPhones, which ultimately helps Apple build devices with new and exciting features to get people to buy its latest devices.

According to a new report fromBloomberg, which generally provides accurate information about Apple products, Apple’s contract chip manufacturing partner,Taiwan Semiconductor Manufacturing Company(NYSE:TSM), has begun cranking out Apple’s latest A12 processor using the former’s new 7nm chip manufacturing technology. Apple’s current A11 Bionic chip inside of the company’s latest iPhones is manufactured using TSMC’s 10nm technology.

Apple's iPhone X.

Image source: Apple.

Since Apple likely intends to launch its latest iPhones in just three months (assuming a typical product announcement in September), it makes sense that TSMC would be cranking the A12 out now. Indeed, once those chips are manufactured, they need to be sent to Apple’s contract manufacturers who will then assemble all of the required components into finished devices — a process that can take a while.

The Apple A12 will clearly allow Apple to market new levels of mobile performance and features, but a question that chip investors might be interested in is the following: What does the mass production of the A12 mean for TSMC?

Let’s dive in.

7nm will be huge for TSMC in 2018

On its most recent earnings conference call, TSMC said that it expects its revenue from 7nm product shipments to make up 10% of its total revenue for 2018. The current average analyst estimate for TSMC’s 2018 sales is $35.6 billion, so this means that TSMC expects to sell about $3.5 billion worth of 7nm wafers to its customers.

Now, Apple won’t be the only company to use TSMC’s 7nm technology this year — Apple rival Huawei is likely to use it to manufacture its next-generation high-end mobile applications processor — but it’ll certainly be, by far, the largest buyer of 7nm wafers for the foreseeable future. TSMC’s prediction that 7nm will make up 10% of overall revenue in 2018 when that figure was 0% for the first two quarters of 2018 means that TSMC is expecting Apple to buy alotof 7nm chips in support of the next-generation iPhone ramp up.

Keep in mind, though, that while Apple will be buying a lot of 7nm chips, it’s in the process of ramping down its 10nm production volumes. In fact, on TSMC’s most recent earnings call, CFO Lora Ho said that the company’s inventory increased to 63 days of sales “due to an increase of raw wafer[s] and the 10nm wafer pre-build before the capacity is converted to 7-nanometer.”

In other words, TSMC is going to be dramatically reducing its 10nm production capacity and reusing much of the factory space and equipment that’s used to build those chips to manufacture new 7nm chips. So, TSMC’s 7nm ramp up for Apple isn’t all upside for the company — 7nm revenue should increase dramatically but much of that growth will be offset by a big reduction in 10nm chip sales.

Investor takeaway

Ultimately, TSMC beginning the production of Apple’s A12 chip isn’t groundbreaking news, but it’s a sign that the development of both Apple’s A12 chip as well as TSMC’s 7nm technology went as expected to support Apple’s upcoming iPhone launch. What’ll matter to both TSMC and Apple investors shortly is how well Apple’s new iPhones powered by the A12 chip will be received by consumers.

Best Energy Stocks For 2019

U.S. equities mostly finished lower on Wednesday as a breakdown in crude oil weighed on equities — resulting in the longest selloff since the election.

In the end, the Dow Jones Industrial Average lost 0.3%, the S&P 500 lost 0.2%, the Nasdaq Composite gained a fraction and the Russell 2000 lost 0.6%. Treasury bonds were weaker again, the dollar was stronger, gold lost 0.6% and oil was hit hard on a large U.S. inventory build pushing West Texas Intermediate down 5.4% to fresh lows for the year.

The crude carnage boosted the ProShares Ultra Short Crude (NYSEARCA:SCO) 10.4% for Edge subscribers as the United States Oil Fund LP (ETF) (NYSEARCA:USO) fell below its 200-day moving average for the first time since late November to end a four-month trading range. This also represents another failed breakout attempt for energy prices near the $55-a-barrel level.

Best Energy Stocks For 2019: SL Green Realty Corporation(SLG)

Advisors’ Opinion:

  • [By Max Byerly]

    Get a free copy of the Zacks research report on SL Green Realty (SLG)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Joseph Griffin]

    Swiss National Bank lessened its stake in SL Green Realty (NYSE:SLG) by 13.9% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 315,900 shares of the real estate investment trust’s stock after selling 51,200 shares during the period. Swiss National Bank owned 0.35% of SL Green Realty worth $30,589,000 as of its most recent SEC filing.

Best Energy Stocks For 2019: UGI Corporation(UGI)

Advisors’ Opinion:

  • [By Logan Wallace]

    Rhumbline Advisers trimmed its stake in shares of UGI Co. (NYSE:UGI) by 2.6% during the first quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 299,796 shares of the utilities provider’s stock after selling 7,970 shares during the quarter. Rhumbline Advisers owned about 0.17% of UGI worth $13,317,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Logan Wallace]

    Quantitative Systematic Strategies LLC boosted its holdings in shares of UGI Co. (NYSE:UGI) by 35.6% during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 8,986 shares of the utilities provider’s stock after acquiring an additional 2,359 shares during the quarter. Quantitative Systematic Strategies LLC’s holdings in UGI were worth $399,000 at the end of the most recent quarter.

  • [By Stephan Byrd]

    Mountain Pacific Investment Advisers Inc. ID reduced its holdings in UGI Co. (NYSE:UGI) by 0.9% during the 1st quarter, HoldingsChannel reports. The fund owned 313,995 shares of the utilities provider’s stock after selling 2,800 shares during the quarter. Mountain Pacific Investment Advisers Inc. ID’s holdings in UGI were worth $13,948,000 at the end of the most recent reporting period.

Best Energy Stocks For 2019: Global Eagle Entertainment Inc.(ENT)

Advisors’ Opinion:

  • [By Garrett Baldwin]

    Retail stocks are in focus after the U.S. Census Bureau released monthly sales figures before the bell Tuesday. The bureau said that retail sales increased by 0.3% in April, a figure that matched trade expectations. Markets had expected consumer spending to increase, however home improvement sales were not the major factor that most expected. This was evident from The Home Depot’s earnings report. Markets are increasingly optimistic over U.S. trade negotiations with China. Chinese President Xi Jinping’s No. 1 economic advisor will visit the United States this week to continue the nation’s dialogue with America. In addition, roughly 100 companies and trade associations will be sounding off to the Trump administration about the potential impact of tariffs in the Chinese markets.
    Stocks to Watch Today: TSLA, AMZN, GS
    Amazon.com Inc. (Nasdaq: AMZN) is in focus thanks to tax policy in Seattle. On Monday, the Seattle’s City Council passed a bill that will tax Amazon and 131 other companies $275 per employee each year in order to create a fund to address homelessness in the Seattle. The tax is half what was originally proposed and remains a contentious issue for Amazon, which is the city’s biggest employer. Goldman Sachs Group (NYSE: GS) is sounding the alarm about the state of the markets. The company warned that the U.S. budget deficit is increasing while America’s unemployment rate is falling. This hasn’t occurred since the World War II. The bank believes that the combination of the two could cause the Fed to spike interest rates in the near future. This comes at a time when the Fed has already lost control of interest rates. Look for additional earnings reports from Eagle Materials Inc. (NYSE: EXP), Bitauto Holding Ltd.(Nasdaq: BITA), Virtusa Corp. (Nasdaq: VRTU), Global Eagle Entertainment Inc.(Nasdaq: ENT), and Kamada Ltd. (Nasdaq: KMDA).

    FollowMoney MorningonFacebook,Twitter, andLinkedIn.

  • [By Stephan Byrd]

    Get a free copy of the Zacks research report on Global Eagle Entertainment (ENT)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Ethan Ryder]

    ENTCash (ENT) is a PoW/PoS coin that uses the X11 hashing algorithm. ENTCash’s total supply is 600,000,000 coins. ENTCash’s official website is entcash.com. ENTCash’s official Twitter account is @Eternity_Group and its Facebook page is accessible here.

Buy Allcargo Logistics; target of Rs 163: Motilal Oswal

Motilal Oswal’s research report on Allcargo Logistics

4QFY18 revenue rose 13% YoY to INR15.4b (est. of INR19.8b), led by 18% YoY growth in MTO revenue. EBITDA stood at INR739m (-30% YoY, -21% QoQ), lower than our estimate of INR994m, due to higher provisions in the P&E segment. Adj. PAT fell 68% YoY (-47% QoQ) to INR185m (est. of INR444m), as the tax rate was higher at 65% v/s 18% in the year-ago period.

Outlook

P&E segment should see reduced losses due to an uptick in asset utilization. Valuations at 13.4x/10.3x FY19/20E appear attractive, given AGLL’s strong fundamentals and earnings CAGR of 27% over FY18-20E. We value AGLL at 14x FY20E P/E and arrive at a TP of INR163. Maintain Buy.

For all recommendations report,click here

Disclaimer:The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Short Sellers Still Cool to Solar Stocks, Betting Against Alt Energy

Short interest moves among solar and alternative energy stocks were mixed during the two-week reporting period that ended on May 15. Of the companies we watch, short interest fell on two of three solar stocks and rose on three of four alternative energy stocks.

First Solar Inc. (NASDAQ: FSLR) saw short interest decrease by 8.1% to 4.05 million shares, which represents about 5.6% of the company’s float. Days to cover remained at 2. In the two-week short interest period, the stock’s share price jumped by 9.9%. Its 52-week trading range is $35.33 to $81.72, and it closed at $68.37 on Thursday, down less than 0.1% for the day.

SunPower Corp. (NASDAQ: SPWR) short interest increased by 7.1% to 15.86 million shares, or 26.1% of the company’s float. In the short interest period, the share price rose by 8.3%. The stock’s 52-week range is $6.46 to $11.70, and it closed at $8.87 on Thursday, up about 0.5% for the day. Days to cover rose from five to seven.

Canadian Solar Inc. (NASDAQ: CSIQ) saw a decrease of 3.1% in short interest during the first two weeks of May. Some 3.2% of the total float, or 1.45 million shares, were short, and days to cover remained unchanged at three. The company’s share price rose by about 2.3% over the two-week period, and shares closed Thursday at $16.72, down about 1.2% for the day, in a 52-week range of $12.24 to $19.09.

FuelCell Energy Inc. (NASDAQ: FCEL) posted an increase of 17.8% in short interest during the period. Some 6.9 million shares were short as of May 15. The stock closed at $1.88 on Thursday, down about 1.1% for the day, in a 52-week range of $0.93 to $2.49. Shares traded up about 1.4% in the short interest period, and days to cover rose from eight to 14.

Plug Power Inc. (NASDAQ: PLUG) saw short interest rise by 6.2% to 36.55 million shares. Days to cover fell from 10 to seven, and about 16.2% of the company’s shares were short. In the two weeks to May 15, the share price soared about 16.6%. The stock’s 52-week range is $1.53 to $3.21, and shares closed Thursday at $2.15, up about 0.5% for the day.

Clean Energy Fuels Corp. (NASDAQ: CLNE) saw a drop of about 7.6% in short interest to 3.88 million shares. About 4.4% of the company’s float was short, and days to cover fell from nine to two. The share price skyrocketed 27.5% in the two-week period. The stock closed at $2.74 on Thursday, up about 4.6% for the day, in a 52-week range of $1.31 to $3.05.

Pacific Ethanol Inc. (NASDAQ: PEIX) saw short interest rise by 3% in the two-week period to 2.34 million shares, about 5.5% of the company’s float. Days to cover rose from five to six. The stock price was unchanged in the two weeks to May 15. Shares closed at $3.50 on Thursday, unchanged on the day, in a 52-week range of $2.75 to $7.50.

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