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December 2018

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The Country Caller explains why ConocoPhillips is a long term Buy and should be considered as a profitable investment despite negativityStrong Co-Relation with Oil PricesFocus towards EfficiencyAnalyst Estimates

ConocoPhillips (NYSE:COP) has lost around 6.63% Year-to-Date (YTD). The decline in stock price comes when oil prices have recovered and hover just below the $50 a barrel threshold. Despite of the stock’s poor performance, we believe Conoco provides a long term investment opportunity to investors.

Strong Co-Relation with Oil Prices

The oil prices at the beginning of the year remained at lower levels. After crude hit its lower levels in February this year, stock began to rise along with the recovery in crude prices. Since start of March this year, Conoco’s stock has appreciated by 28.61%.

As per rig count data of Baker Hughes, the US rigs count increased by 11 to 341. This increase was the fourth increase in the past five weeks ending. Although the number was significantly lower than 640 rigs in same period a year ago, it’s quite higher on week-over-week (WoW) basis.

The recovery in rig count data signifies confidence amongst the US exploration companies and signifies their expectations that oil had already bottomed out and is set to rise. Hence, they are opting for higher drilling activity in expectation of better crude prices. Any upward movement in crude prices could result in further rally in Conoco’s stock.

Focus towards Efficiency

Much of Conoco’s production comes from Lower 48 region such as Permian Basin and Eagle Ford, as represented

The main reason behind Conoco’s focus towards Lower 48 region is the higher efficiency, i.e. lower costs and higher production. Also, the company has sold off some assets in this region, but major production is still coming from this region which highlights its efficiency.

Despite its assets sell off and the decline in number of rigs, the production from the region has declined by about 3% on YoY basis only. The efficiency of the region can also be gauged by image below, which highlights that company would lower its capital investment in the region substantially this year, but the production is expected to remain almost flat.

Analyst Estimates

The average Price Target by analysts covering the stock at Street is of $52.05, which is much higher than stock’s current price of $43.51. The highest and lowest estimates by the analyst are of $71.00 and $37.00, respectively.

The stock receives coverage from 25 analysts across the street. 12 rate the stock as Hold, while six analysts rate the stock as Buy. Five have rated the stock as Strong Buy, while one each has rated as Underperform and Sell, respectively.

According to UK privacy watchdogs, Facebook is suspending its questionable action using WhatsApp users’ data

Pressure from UK privacy watchdogs has led Facebook Inc. (NASDAQ:FB) to stop using WhatsApp users’ data. Watchdogs made the announcement on Monday that the social media giant has stopped using customers’ personal information from WhatsApp for products improvement and advertisements. The watchdogs believe that this was a privacy breach and customers were not being protected.

Watchdogs in the country are protecting user information and have not only sent out a warning to Facebook but one to Yahoo as well. Social media platforms should not take users information without their consent, and the necessary measures are now being taken to rectify this.  The Information Commissioner’s Office announced that Facebook has agreed to put pause data sharing from WhatsApp to Facebook while investigators analyze whether this is against British law or not.  Numerous meetings have taken place between the two parties regarding the development.

The head of ICO, Elizabeth Denham, made a statement: “We’re pleased that they’ve agreed to pause using data from UK WhatsApp users for advertisement or product improvement purposes. If Facebook starts using data without valid consent, they made face enforcement action from my office.” The ICO also believes it to be important that customers should be better informed if their personal data is being used so that they have more control over their privacy. Consumers deserve to know where their personal information is going, but companies often violate their privacy.

A spokesperson for Facebook said that the update in privacy policy was given to WhatsApp users, which stated how the service functions and even information regarding how users’ data is being used. Facebook is cooperating with regulators to come up with a solution for these recent concerns.

If Facebook decided not to agree with regulators, it could have faced a fine, which wouldn’t have harmed its profits as much as it would certainly have dented its image. The social media giant also says that it collects data that is very limited, and only a fraction of that information is later shared. The good news for now is that information sharing between these two well-known platforms has been suspended for the time being.

The feature is referred to as Discover, and will give new meaning to Groups

Facebook Inc. (NASDAQ:FB) has come a long way, improving and working on each and every one of its features over the time. This can be said about its ‘Groups’ feature as well. The feature has become much more than random groups for people to join, and can instead be relied upon for information today. To improve Groups even more, Facebook is working on integrating a new feature that will be made available for iOS and Android versions of the app.

The new feature, referred to as ‘Discover’, will allow users to identify friends that belong to local groups, according to Mashable. Additionally, it will give users the ability to examine public and private groups in detail.

Basically, Groups will be categorized with different hobbies like food, gaming and social media, thus making the feature much more feasible than before.

As for when the feature will be rolled out, it is expected to be released in the next few weeks. The feature is still being tested by the social media giant, but nothing else regarding the update is out in the open as of yet.

Facebook has not commented nor given further details about the feature, but it will definitely enhance its platform and give new meaning to Groups. The social media giant has so far been highly successful with the myriad of features and tools it has introduced to its platform, and it does not seem to be stopping anytime soon; not that it should, seeing how much it has helped beat its competition, Twitter, in this regard.

“What we do with that series is TBD at this point”

In the original Mass Effect trilogy, saves from each game were transferred to the sequels, which means the decisions the players made in the games would carry forward. This time around, even though Mass Effect Andromeda is not going to be the beginning of a new trilogy, creative director Mac Walters, in an interview with Game Informer, still advised players to keep their saves even after they end the game. 

Mac Walters said: “I don’t think it would hurt to keep them, Right now, to be honest, we are focused on this game, and as I’ve said to people before, we very much think of Andromeda as a series. What we do with that series is TBD at this point. I think right now, we know we don’t want it to be a trilogy, in the sense of, we’re planning this three-part story in three games. But that said, key elements like the Pathfinders, even the Ryders themselves, those are things that are going to make another appearance in the next game.” 

Walters didn’t go into too much detail about how the latest Mass Effect game will play out structurally mainly because he doesn’t want to get too ahead of himself and talk about the “future” of the series and just focus on this game alone. He did, however, talk about the ending which he said will be extremely complex and bold, much like Mass Effect 1 and Mass Effect 2. Considering how Mass Effect 3 ended, Bioware will be cautious of the backlash so ending Andromeda strongly will be the top priority.  

Other things that Mac Walters discussed were regarding the PC version and how the different states within the gameplay will impact the overall experience. He also confirmed the fact that the game will be separate from commander Shepard’s story, but it will pay homage to the original trilogy. 

Mass Effect Andromeda is planned to be released in March next year.

While Microsoft’s recent run has been good for investors, the stock is still a bit shy of its 52-week high

Microsoft Corporation (NASDAQ:MSFT) reported its fourth quarter results on Tuesday, July 19. Earnings topped consensus expectations as the company continues its shift to cloud-based services from software. The company reported $22.6 billion in revenues for the quarter ended June 30, 2016, whereas the earnings turned out to be $0.69 per share. Both the earnings and revenues were noted to be ahead of the consensus.

The $444 billion company reported 102% year-over-year growth in Azure, its cloud platform, while revenue grew 7% YoY to $6.7 billion for the segment. The consensus had projected intelligent cloud segment to reach $6.61 billion for the quarter. Following the bright results, Microsoft shares climbed higher. Through yesterday’s trading session, Microsoft stock gained 1.38% to close at $56.57.

However, the technology company still lags behind its 52-week high of $56.85 which it achieved in December 2015. Over the past month, the stock has surged over 16%.

Microsoft’s solid results were mainly driven by strong growth in the cloud business. CEO Satya Nadella commented in a press release: “The Microsoft Cloud is seeing significant customer momentum and we’re well-positioned to reach new opportunities in the year ahead.” Microsoft’s Windows hardware and software sales, however, fell 4% YoY to $8.9 billion.

The consensus 12-month price target for Microsoft stock stands at $59.30, reflecting an upside potential of 4.82% over the last close. Out of the 36 analysts covering Microsoft stock, 18 rate it a Buy, 12 rate it a Hold, three rate it an Overweight, while two rate it a Sell. Microsoft Corporation has a market capital  of $443 billion.

Samsung will start conducting tests for its Galaxy S8 in January and initiate selling it in March

Samsung Electronic KRW5000 (OTCMKTS:SSNLF) was surrounded by speculations of launching the Galaxy S8 earlier in order to remove the disastrous Note 7 incidents from customers’ minds. According to reports from ‘The investor’, the South Korean company is going to begin tests for the Galaxy S8 from January and the phablet will go on sale by March at the MWC. The early launch could also aid Samsung in covering the damage it had to face due to the two major Note 7 recalls and recently 2.8 million of washing machines.

There have been speculations that Samsung might delay the S8’s launch from March to April instead. However, that will not make a major difference. This prediction might be wrong, as one of Samsung’s major suppliers said that they’ll be giving components for the Galaxy S8 to the company in January. The key suppliers made this revelation on November 8, Tuesday, informing that the major shipment of components will being in February. This is a major indication that Samsung could start the tests in January with shipments taking place in February.

It should not come as a surprise that Samsung will take its sweet time on its impatiently waited for smartphone because of the problems it has faced in the past, causing it to lose billions of dollars. However, if the launch is pushed to April instead, it would be new as the tech giant reveals most of its products at the yearly Mobile World Congress in Barcelona.

The Samsung Galaxy S8 will undergo more tests in comparison to most of the company’s previous products in order to make sure that phone does not cause problems similar to the Galaxy note 7; it is definitely better to be safe than sorry. The good news is that customer who purchased the faulty Note 7 will get a discount on the Galaxy S8.  A new AI assistant might also be coming with the Galaxy S8, but no Home button.

HPE’s SimpliVity acquisition will enhance its access to hyperconverged market, which is expected to grow at 25% CAGR

Hewlett Packard Enterprise Co (NYSE:HPE) announced on January 17 that it has signed a definitive agreement to acquire Nutanix Inc’s (NTNX) rival, SimpliVity –  a market leading supplier of software-defined, hyper-converged infrastructure – for $650 million. Under this agreement, Hewlett Packard and its partner will develop the market’s first built-for-business hyper-converged offering.

According to HPE CEO, Meg Whitman, the deal expands the company’s software-defined abilities. It is also consistent with its strategy to develop Hybrid IT simple, providing consumers with user-friendly interface and a more resilient and secure infrastructure. The deal is also likely to expand the company’s offerings and strengthen its enterprise data services.

It will also enhance HPE’s access to hyper-converged market, which is expected to grow at 25% compound annual growth rate and reach $6 billion by calendar year 2020 (CY20). Consequently, the post-acquisition company is likely to witness accelerating financial performance going forward.

Moreover, SimpliVity’s CEP, Doron Kempel is also optimistic about the deal. He believes that Hewlett Packard acquisition will provide SimpliVity with complementary technology coupled with widespread partner channel and extensive sales reach that it requires for delivering world-class hybrid IT solutions to its customers.

The California based-company expects to close the deal during the second quarter of fiscal year 2017 (2QFY17). Within two months of completion of transaction, HPE plans to offer SimpliVity Omni Stack software. It further intends to market a greater range of integrated systems during the second half of FY17. The deal is currently subject to customary closing conditions and regulatory approval.

Consequently, investors continue to be bullish over HPE. Furthermore, out of 30 Street analysts covering the stock, 12 rated it as a Buy, three tagged it as Overweight, 13 recommended a Hold, and one each rated the shares as Underweight and Sell, respectively. The stock has a 12-month average PT of $24.63 with 8.6% upside potential over Tuesday’s closing price.

The Country Caller discusses earnings whispers for Everest Re Group and Corelogic ahead of their third quarter announcements

After the market closes on Monday, October 24, the Street will be looking forward to the financial results of Everest Re Group Ltd (NYSE:RE) and Corelogic Inc (NYSE:CLGX). The two companies are expected to provide results for their respective third quarters of fiscal year 2016 (3QFY16). Historically, both companies have outperformed the Street, both on top and bottom line. Given this performance, Estimize.com expects them to beat the Street atleast on their top line.

Everest Re Group 

For the third quarter, Everest Re Group is anticipated by the Street to announce earnings of $4.56 per share. In the previous quarter, it published $3.17 in earnings per share (EPS), implying 43.85% sequential beat for the Street. The company is also expected to outperform $2 EPS, reported in 3QFY15, by a healthy margin of 128% year-over-year (YoY).

The Bermuda-based company reported $1.43 billion revenue in previous quarter. The Street expects it to announce revenue in-line with 2Q this season. Estimize.com predicts a slight beat over Street estimate, with its estimate of $1.44 billion. The company reported $1.36 billion net sales in 3QFY15, indicating that Street anticipates a top line beat by 5.22% YoY.

Corelogic Inc 

According to our research, Corelogic is projected by the Street to fall in line with its bottom line performance, exhibited in the preceding quarter. It reported 65 cents EPS for 2QFY16. If it does, the $3.39 billion company would observe EPS growth of 20.37% YoY, as it stated 54 cents EPS for the same period last year.

Our research also shows that Street analysts have provided the California-based with $503.83 million top line estimate. Estimize.com looks forward to a top line beat this season, as it expects $505.9 million in revenue. The company published $500 million net sales in 2Q, thus the consensus expects the revenue to be up slightly, sequentially. Street predicts Corelogic to post 30.39% YoY increase over $386.4 million revenue, announced for the third quarter of FY15.

The Country Caller compares the two light-weight powerhouses to see which is better

If you are in the market for an ultraportable laptop, then you might have noticed plenty of variety. However, most agree currently two devices are sitting on top of the ultraportable device market. The Apple Inc.’s (NASDAQ:AAPL) MacBook 2016 and Microsoft Corporation’s (NASDAQ:MSFT) Surface Pro 4 are arguably the best devices you can buy. Both devices offer ultra-thin designs and barely weigh anything while boasting powerful specs and gorgeous displays. Today, we compare the two ultraportable powerhouses in terms of design, performance and specs to see which device is better.

Design, Size and Weight

Even though the two devices are very different in design, aesthetics share much common attributes in terms of weight and dimensions. Both devices feature a 12-inch display, which is handsomely carved on a single piece of aluminum. The Surface Pro 4 weighs in at 786g without the touch cover and 1.06kg with the cover. The MacBook 2016 weighs a measly 920g, which makes it one of the lightest laptops in the market today. The Surface Pro 4 with the Touch Cover comes out to be 13.4mm thick, while the MacBook is 13.1mm.

Usability

The two devices are however completely different when it comes to daily use. The Surface Pro 4 is basically a tablet with a touch stylus and comes with a detachable keyboard that serves as a touch cover. It is a perfect device for the versatile users who use the stylus for drawing on suites, such as Adobe Illustrator, and the efficient touch keyboard provides a pleasant typing experience that does not compromise on productivity.

Apple’s MacBook is by far one of the best laptops manufactured by the company in recent years. The new laptop offers an ultraportable design, a beautifully designed touch pad, and a gorgeous display that constitutes a perfect user experience. In terms of design quality, MacBook offers a better user experience due to its strong design build.

Performance

Both devices offer powerful specs; Apple MacBook is available with the Core m3, m5 and m7 processors. The Surface Pro 4 comes with the core m3 for the base version, while i5 and i7 for the higher-end variants. This makes Surface Pro 4 more powerful than the MacBook. The Surface Pro 4 can also be bought with 16GB of RAM, whereas the MacBook tops out at 8GB.

Both devices are not much different when it comes to everyday use. The core m3, m5 and m7 variants match their series variants in most performance terms. The difference is sometimes present when there is heavy multitasking, though it is unlikely to affect the everyday user.

Verdict

There is no clear winner as both devices offer powerful specs and unique features. For some users, Surface Pro would be the best device due to its touchscreen and stylus, whereas the MacBook is the perfect laptop that some would keep at home.

An acquisition could prove to be a perfect fit for both the businesses

Twitter Inc.’s (NYSE:TWTR) acquisition proved to be a disaster after potential suitors backed away. However, Bloomberg L.P., New York City Mayor’s financial terminal house, has now come under the radar with rumors that say that it may take over Twitter. Therefore, potential suitors that backed out previously, such as Walt Disney Co., Alphabet Inc.’s Google, and Salesforce.com, Inc. received increasing shareholder pressure. Consequently, the shares for all the previous potential buyers traded in red lately.

Bloomberg, being private, does not need to worry about shareholder pressure, which is why it is expected to easily pull off the acquisition. Moreover, going private would enable the micro-blogging website to fully develop its long-term growth plan and monetization strategy. The financial media business could also benefit from its data.

Twitter can aid Bloomberg in its media empire expansion. Currently, the company owns Bloomberg Radio and Bloomberg TV, which recently partnered with Twitter to include live broadcasts of recent US Presidential debates. The company’s latest Presidential debate live stream has observed a 30% rise in unique viewers over the first one. The partnership suggests that Bloomberg has already understood the power of Twitter. Moreover, instant messaging and breaking news aspects of a $12.63 billion business are quite appealing.

Bloomberg may face no difficulty to digest the acquisition due to its ample financial resources. It pulls in about $10 billion in annual revenue with hefty margins of 40%. Its market value could be observed around $80 billion using below market multiple, whilst Twitter has a capitalization of just $13 billion.

The deal could be considered unusual for the private company but it has never shown restraint when it sees good value. In 2009, it bought Business Week and later Bureau of National Affairs in 2011. The deal may seem far-fetched at first, but if looked deeply, it may prove to be perfect fit for both businesses.