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May 2017

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Google is expected to reveal the Pixel smartphones during its upcoming major event

The latest rumors state that Alphabet Inc. (NASDAQ:GOOGL) is going to unveil its highly anticipated Pixel smartphone devices during its upcoming major event on October 4. The Google Pixel and Google Pixel XL will succeed the current generation Nexus devices which have performed brilliantly in the smartphone market. Here is a quick review regarding the Google Pixel smartphone devices.

It is highly believed that Google is attempting to launch a host of new devices under a single brand name which is why the tech giant is going to call its next generation smartphone devices Google Pixel instead of Google Nexus. Even though the US-based tech giant has managed to remain very tight-lipped regarding the possible specifications of its next generation smartphone devices, a few credible sites have speculated the upcoming devices to boast upgraded hardware and software capabilities. So far, reliable sources are certain that Google will replace its current generation Nexus 5X and Nexus 6P with the upcoming Google Pixel and Google Pixel XL, respectively. Also, both upcoming Google Pixel models will run on the latest version of Android Nougat operating system and will incorporate upgraded RAM and internal memory compared to their predecessor models. Furthermore, both upcoming models are expected to sport slightly upgraded display screen and main cameras compared to the current generation Nexus smartphone models.

It is important to remember that the specifications of the upcoming Pixel smartphones are based on rumors and speculation, so it is better if we all waited for an official announcement from the tech giant. Hopefully, Google has a few surprises up its sleeves that could be unveiled during its upcoming live event in California.

The company is poised to return to low single-digit production growth with a more pronounced recovery in earnings

In an initiation note to investors, Hilliard Lyons rated ConocoPhillips (NYSE:COP) a Long Term Buy with a $65 price target, implying 30.89% upside potential over Tuesday’s closing price of $49.66. The firm believes Conoco is poised to revive growth through earnings and cash flow recovery.

Analyst Joel Havard of Hilliard Lyons said, “With the commodity price environment showing indications of a sustainable recovery and several major projects recently concluded, we believe the company is poised to return to low single-digit production growth with a more pronounced recovery in earnings and cash flows.”

Since the downfall in oil prices beginning 2014, Conoco’s breakeven point has significantly declined from over $75 per barrel to below $50. The company was amid a major expansion phase when the downfall began and it required the oil giant to spend more than it earned at triple digit oil prices. Conoco could not keep up the investment level and declined significantly given the downturn in oil sector.

With the new market reality, Conoco’s primary focus was to reduce costs so as to adjust to even lower prices. The two main targets set by the company were its operational expenses and CAPEX budget. Given its continued efforts to cut costs, COP now believes it only requires spending $5 billion on capital expenditure per year to maintain current production levels.

Furthermore, it says operational expenses have averaged about $5.2 billion per year. With the break-even level as low as $50 per barrel, COC is expected to sustain operations in any oil price scenario. As of now, ConocoPhillips seem to have a much stronger position than it had at the start of the oil prices downfall. Therefore, analysts believe ConocoPhillips is a great investment opportunity.

Launch of drones might relieve some pressure in near term but long term downside remains significant

GoPro Inc. (NASDAQ:GPRO) has struggled to find suitable footing upon which it could depend to push for growth. The declines continue for the company along with trends that show popularity recession among teens and households in general. The company has drawn fire from analysts and experts over the lack of innovation and creativity largely because of the failure of the management to innovate and integrate new features in to later models of HERO product line. The company’s sell through rate has declined by about 40% y/y in the United States alone.

The inventory fills are nearing all-time high, says Pacific Crest, the inventory turnover ratio has been poor throughout with sales unable to keep up to the supply volumes. The launch of drone camera kits is also viewed as largely futile in longer term but might help share prices a little in the near term as it has broadened the total addressable market of the company. The downside risk remains very substantial with core action camera business still in shambles with modest traction in drones business over time.

The analyst believes that the company has a very high susceptibility of long term downside as the inventory situations continues to worsen with channel fills at an all-time high and video editing software acquisition remain pointless as innovation remains a major hurdle to core business growth. The only positive for the company amid this situation is the launch of drones which has practically the TAM.

The analyst lowered his estimates for the year but maintained a Sector Weight rating as he believes all is not yet lost. The stock closed at a price of $13.98 on Friday.

Petroleo Brasileiro stock shed more than 4% of its value yesterday, The Country Caller discusses why

Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) stock closed at $6.43 yesterday, down about 4.74% against the previous day’s close. The decline in stock price came on the heels of news that the authorities in United States are taking a closer look at the company’s scandal.

Yesterday, Bloomberg reported that the Brazilian conglomerate Odebrecht SA, along with two other shipyard operators, have also been added to a Washington sell-side firm’s $221 million lawsuit against the Rio de Janeiro based petroleum corporation.

EIG Management and Co., accompanied by eight funds that it manages, claimed that the afore-mentioned companies and Petrobras conspired to trick the investment firm into investing funds in an offshore drilling business which is now declared bankrupt and is named Sete Brasil Participacoes.

The sell-side firm’s updated complaint was filed on Wednesday of this week in a federal court in Washington. The first filing of the case happened in February when EIG Management alleged the Brazilian petroleum company of concealing a hefty bribery coupled with kickback scheme, which surfaced publically two years ago.

The regulatory authorities in the United States started an investigation on over 12 companies during the past week. The regulators believe that the companies under investigation are associated with bribes and kickback schemes conducted at Petrobras, leading to more than 150 Brazilian officials being arrested.

As the semi-public multinational petroleum corporation is also listed at the New York Stock Exchange (NYSE), the intervention of United States’ government was inevitable. The company’s scandalous activities have led several investors suffering huge losses, rooting to the policies and illegal flight of capital at Petrobras.

During the past week, the company published financial results for the first quarter of this year. It reported revenue of about $18.07 billion, dropping from $74.35 billion revenue reported during the same quarter a year ago. It also missed the consensus estimate of $21.02 billion. Moreover, Petrobras registered a loss of $0.049 per share during the first quarter.

Except Tesla stores in California, Sierra’s recent study reveals poor EV shopping experience in others states and at auto dealerships

Tesla Motors Inc (NASDAQ:TSLA) has been waging war against the anti-direct sales states, as well as their franchise dealers, to provide the best retail experience to its loyal users. The company claims that auto dealers ignore electric vehicles (EV) in favor of fat margins on fuel-driven cars, their staff is not well trained, and they have small inventory of EVs.

Clean Technica reported that Sierra Club, a non-profit organization, published a new research on ‘Multi-State Study of the Electric Vehicle Shopping Experience’ that was conducted in 308 stores and dealerships of 13 different car manufacturers in 10 states having zero-emission mandate. The study clearly supported many of Tesla’s claims.

Out of Tesla’s home-state, most of the dealers did not even had a single EV in inventory and if they did, their vehicles were not charged enough to allow customers to test drive them. Conversely, 92% of Tesla Stores & Galleries had EVs at display.

John D. visited Ford’s dealership in California and noted in the report: “They had no EVs in stock. I was told they didn’t have the charging infrastructure because it would cost $150,000 for the dealer to get the charging infrastructure.” Louise A. went to a Nissan dealership in Connecticut, but couldn’t take a test drive because an EV’s key was lost and was convinced to buy a gasoline-powered car instead. This is the same state where have influential dealers lawmakers to kill the Tesla bill in Senate two times in a row.

Nancy P. called a Ford dealership in Maine and was informed that they cannot sell EVs and their sales staff cannot handle them. A Chevrolet dealership was difficult to find in Texas and when he called their headquarters to ask if he could take a test drive on an EV, they said that there was no Chevy Volt “within a thousand miles.” Texas is another state which forbids automakers from directly selling their vehicles.

Here’s probably the best quote in the study: “I called the dealership and said I’d like to test drive an EV. They said they had several. A few hours later, I received an email stating they had no EVs on the lot and I’d have to visit the Bay Area to find any.” Since Bay Area is home to Tesla, it technically means that the Volkswagen staff suggested the volunteer to visit Tesla’s stores.

The volunteers that visited the retail locations gave Tesla the highest ranking, followed by BMW, Chevrolet, and Nissan. Porsche, Hyundai. Volvo got the worst points out of the lot.

Last month, 2016 Pied Piper Prospect Satisfaction Index ranked Tesla last again, only because it does not operate like other franchise dealers and doesn’t force their customers to buy vehicles. Instead, Tesla’s salespersons focus on providing knowledge about EV and give test drives.

Citron Research’s Andrew Left issues cautious sentiments on NVIDIA stock; predicts stock to plunge to $90 in 2017

NVIDIA Corporation (NASDAQ:NVIDIA) stock closed in red yesterday at $109.25, plunging about 7% as compared to the previous day’s close. Today, the stock has already plummeted nearly 3% during the pre-market trading hours.

The Santa Clara, California-based company’s stock headed south soon after Citron Research’s Andrew Left tweeted about his prediction that he sees the tech company’s stock tanking back to $90 in 2017. Furthermore, the short-seller also elaborated about several risks the shareholders of NVIDIA are exposed to.

Mr. Left pointed out six risks which the shareholders are discounting. First, he mentioned about the company’s market share which has been majorly captured from the gaming space and at the expense of AMD. Second, while NVIDIA is focusing on entering the Data Centre market, the competition in the space is on a rise from existing as well as emerging players.

Third, Mr. Left mentioned that the IP licensing deal between NVIDIA and Intel Corporation (NASDAQ:INTC) is about to end this year. Fourth, the Attrition is forecasted to have a significant impact on the company’s EBITDA in 2017. Fifth, NVIDIA’s Gross Margin is also jeopardized due to Intel entering the competition in mid-2017. Intel has the capacity to charge about 37% less for the chips it manufactures and earn exactly the same gross margin as NVIDIA – 80%. Sixth, competition from existing peers like Alphabet Inc’s (GOOGL) Google TPU and Apple Inc (AAPL) in GPU space may also hamper NVIDIA’s stock price performance.

NVIDIA stock has skyrocketed 231% since the start of this year through yesterday. Despite such an impressive surge, making the stock one of the best performers of the S&P 500 Index, Mr. Left believes that the stock is not at all worthy of its valuation. The short-seller elaborated that the stock’s price-to-earnings ratio was recently at 57 times, on trailing 12-month terms.

The Country Caller takes a look at Sunedison’s asset sales deal with GCL-Poly Energy

Sunedison Inc. (OTCMKTS:SUNEQ) saw some good fortunes on Monday, as it finally attracted interest from one of the buyers for buying its assets. The interest came in from GCL-Poly Energy Holdings Ltd, which is the largest solar equipment maker in China. In recent times, the demand for cleaner and alternate forms of energy has increased sharply. China is a country which is making robust progress in its solar industry.

GCL, in a filing on Monday, indicated that it has signed an agreement with Sunedison on August 26, for buying assets worth $150 million through one or more direct and/or indirect wholly-owned subsidiaries of the company. The subsidiaries for Sunedison include Sunedison Products Singapore, Solaicx Inc. MEMC Pasadena Inc. and SMP Ltd (A Sunedison joint venture in Korea).

Sunedison earlier in the year was forced to file for chapter 11 bankruptcy. In December last year, around 190 countries met in a global climate summit called the COP 21 in Paris. The summit mainly focused on how countries would experience transition from unfriendly and harmful forms of energy to safer ones. Following the summit, the US investment tax credit’s (ITC) date was also extended and more and more benefits for solar producers were expected to come up.

While the opportunity was great for solar producers in the US, Sunedison wasn’t able to fully capture the opportunities to come. Sunedison, through Yieldco Terraform, had wanted to acquire Vivint Solar Inc. (NYSE:VSLR). However, the move saw resistance from hedge fund Appaloosa Management, which claimed the deal to be one sided and only for the benefit for Sunedison. Later on, things began to get worse.

Sunedison had hidden the true extent of financial turmoil it was in and was also accused of using cash provided by Terraform for projects in India for its personal use. These conflicts, amid the ailing financial position of the company, forced it to file for bankruptcy. Now through the latest set of asset sales, the company looks to improve its position by raising the much needed cash.

Apple Inc.’s (NASDAQ:AAPL) Mac devices were the target of ransomware hacks after bittorrent software called Transmission was infected

Apple Inc. (NASDAQ:AAPL) had to move quickly this weekend to thwart hackers as many of its mac users were victimized in a ransomware exploit through corrupted bittorrent transmission files. The ransomware software infected Macs and encrypted users’ data, demanding a fee to unlock them. This is the first publicly known instance of a ransomware exploit on Apple’s Mac computers as prior exploits have focused on Windows users.

Palo Alto Networks, a leading security company announced that they had found “KeRanger” ransomware software disguised in the free Mac BitTorrent client called Transmission, which is popular among Linux users. Transmission also warned its users that the 2.90 version of its software was compromised and urged users to download the 2.92 version immediately. It is unknown how the hack was carried out at this point. What is known is that Transmission has a legitimate Mac approved developer certificate and that the infected version was evidently able to use this to bypass Apple’s security. It is very possible that Transmission’s website was compromised and corrupted files replaced legitimate one’s carrying the ransomware software.

KeRanger software, after installation, waits 3 days before connecting to a remote Tor protected server and encrypts 300 files on the computer. After this, a ransom of 1 bitcoin, equivalent to $404 is demanded for decryption. Worst of all, once it has been installed, there is little that can be done to defend against the software.

Apple’s response to the problem was to remove the certificate for the corrupted software while Transmission pushed users to update their software. Mac has largely remained untouched from exploits of this sort mainly due to the fact that it has so few users. However, users of Apple’s personal computers are usually from a pay bracket above the average Windows users, making them more ‘able’ and thus more likely to pay. However, it is companies and institutions that Apple has partnered with that may pay the brunt of such exploits.