BXG 2018 Third Quarter Update

Since floating the IPO in November 2017, Bluegreen Vacations Corporation’s (BXG) share price has come full circle.  The stock opened its first day of trading at $13.55, rallied to a high of $25.91 in July and has since fallen back to $11.85 (as of 11/9).  Although there are company-specific factors that precipitated the sell-off, the shares of nearly all publicly-traded timeshare companies have experienced similar losses so far in 2018. Continue reading

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After Earnings, GE’s Stock Hits a 9-Year Low

General Electric (GE) reported 2018 third quarter results on Tuesday, October 30.  This was the first conference call for newly-installed Chairman and CEO H. Lawrence (Larry) Culp, Jr. Continue reading

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Thoughts and Observations on Campbell Soup’s Upcoming Proxy Fight.

On May 18, 2018, in conjunction with the release of fiscal 2018 third quarter earnings report, Campbell Soup Company (CPB) announced a “CEO transition.”  Denise M. Morrison, who had served as Campbell’s President and CEO since August 2011, was retiring and Keith R. McLoughlin, a member of Campbell’s Board of Directors, was named Interim CEO. Continue reading

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Friday’s Drop in Unemployment: Less Than Meets The Eye?

The reaction to Friday’s labor market report was sharp and swift. Bond yields, especially on the long end of the yield curve rose and stocks sold off. The yield on the 10-year Treasury note ended the week at 3.23%, its highest level since April 2011. The financial markets fear that the Fed now has sufficient support from the economic data to continue raising the Fed Funds target rate by another quarter point in December and perhaps as many as three more quarter-point increases in 2019. Continue reading

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Questions About ESL’s Debt Reduction Proposal for Sears

On Sept. 23, in a 13D filing with the Securities and Exchange Commission, ESL Investments attached a proposal that it had made to Sears Holding (SHLD) that would reduce SHLD’s total outstanding debt by 78% through a combination of asset sales, proposed real estate transactions and conversion of debt into equity.  ESL has hired a financial advisor, legal counsel and public relations firm to assist in formulating and implementing the proposal.  SHLD has not yet endorsed the proposal, but since Edward S. Lampert, the founder, chairman and CEO of ESL Investments, is SHLD’s largest shareholder with a 75% ownership stake and also its Chairman and CEO, it is hard to imagine that the company will disagree. Continue reading

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Barrick and Randgold Agree to Merge

On Monday, September 24, 2018, Barrick Gold Corp. and Randgold Resources Ltd. announced that they had agreed on a share-for-share merger that would create the largest publicly-traded gold company in the world.  Under the terms of the merger, each Randgold shareholder will receive 6.1280 share of Barrick.  At Friday’s closing price of $10.47, that represented a value of $64.16, a premium of only 0.4% to Randgold’s 9/21 closing price of $63.91.  Since the announcement, however, both Barrick and Randgold shares have rallied, with Barrick rising 7% to $11.18 on 9/25. Continue reading

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A Review of AT&T’s Prospects Following the Time Warner Acquisition

AT&T completed its acquisition of Time Warner on June 14, 2018.  Under the merger agreement, Time Warner shareholders received $53.75 per share in cash and 1.437 shares of AT&T stock for each TWX share held.  In total, Time Warner shareholders received 1.126 billion shares, equivalent to a 15.5% stake in AT&T.  Together with the cash, Time Warner shareholders received $79.1 billion in total consideration.  In addition to the consideration paid to Time Warner shareholders, AT&T assumed $50.6 billion of liabilities, including $22.8 billion of debt, bringing the total cost of the acquisition to $129.7 billion.  AT&T ended the second quarter (June 30) with total assets (post-merger) of $534.7 billion. Continue reading

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Diamond Offshore Works to Stay Afloat

Diamond Offshore is the offshore drilling company that is 53%-owned by Loews Corporation.  The company currently owns a fleet of 17 “floaters” (self-propelled drillships and semisubmersible rigs), four of which are currently cold-stacked. Continue reading

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Barrick Gold: A More Speculative Bet on Gold

Barrick Gold is the second largest publicly-traded gold producer, with an equity market capitalization of $11.6 billion.  Like its rival, Newmont Mining, Barrick is focused on reducing costs and improving operating efficiency to maximize free cash flow generation in this rangebound gold price environment.  The company has also reduced debt by $7.3 billion or 55.7% since the end of 2014. Continue reading

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Newmont Mining: A Safer Bet on Gold Mining

Based in the Denver, Newmont Mining Corporation (NEM) is the largest publicly-traded gold miner by equity market capitalization.  Its geographic segments include North America (the U.S.), South America (Peru and Surinam), Australia and Africa (Ghana).  Newmont’s share price rebounded sharply in 2016, outperforming its peer group, as new, more profitable mines came into production replacing those that were sold in 2014 and 2015.  The company continues to execute on its plan to increase production (mostly so far to replace developed reserves) and reduce production costs through targeted mine and mill expansion projects. Continue reading

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