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January 2019

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The assets targeted for the drop down will be with around $1.4 billion of annual earnings to the master limited partnership of MPC, MPLX LP

Coming ahead of OPEC’s meeting in Vienna two months back, leading to rise in oil and gas prices, many companies in the energy sector have unfolded their long-awaited plans.

Similar is the case with Marathon Petroleum Corp. (NYSE:MPC) that has recently announced plans to fast pace its asset drop down program. The latest move comes after the Elliott Management Corp., hedge fund came forth with its doubts over the company.  Back in November, the hedge fund dispatched its concerns in a letter to the energy company advising it to break up.

Not only the acceleration of asset drop down deals, but the company also aims to strategically review its Speedway. The assets targeted for the drop down will be with around $1.4 billion of annual earnings before taking into account interests, depreciation and amortization charges and taxes to the master limited partnership of MPC, MPLX LP.

MPLX LP is formed by Marathon Petroleum for the procurement, development, and operations of the midstream properties. No exact dates for the drop down deals have yet been announced however the company as stated that it will take place “as soon as practicable.” As per the company’s estimates the asset drop down deal will happen in 2017 only.

For the purpose of this transaction, the company has formed a special committee of the board that would carry out the strategic review of the Speedway properties. Speedway happens to be one of the leading brands of MPC, under which several gas stations and convenience stores come in.

Gary Heminger, Chairman of Marathon Petroleum, stated that the public market speculations have a major role to play in the undervaluation of the company and that the post latest move, the crude oil company will be able to preserve investor confidence in MPC. Elliott Management has also expressed its contention over the company’s latest move.

Credit Suisse has downgraded the stock and slashed its TP by $11

Credit Suisse has downgraded SolarCity Corp (NASDAQ:SCTY) from an Outperform to a Neutral, as the brokerage now feels that its previous price target of $38 is too high in its view. The brokerage house however suggests that the renewable energy company’s stock prices will not rise by much, which is why its revised TP has come down to $27. The recent coverage comes at a time when the company is already facing immense pressure from the Street on the recent acquisition offer by Tesla Motors. It was even referred to as the next SunEdison by an analyst.

SolarCity’s financial position has not been up to the mark as the company has not reported profits in its books. Moreover, the company’s cash flow position is also very weak as its operations have not been efficient. The fact that the market for solar energy is in its developing stages suggests that it will take some time for the company to gain traction from the masses.

The recent acquisition offer by billionaire Elon Musk was criticized much by the Street as it felt that the deal had no substance to offer for Tesla Motors and would only add to the financial burden of the Palo-Alto based EV Maker. Meanwhile the overall impact on SolarCity was expected to be a Neutral. Both companies represent different class of customers that might not have the same requirements as SolarCity customers aim to save costs, while Tesla caters to the luxury car market.

The street views differ with regards to the company as a few brokerages such as Barclays and Axiom Securities recommend selling the stock, while houses such as Morgan Stanley and Robert W. Baird maintain Buy ratings. The overall consensus TP of SolarCity Corp. stands at $32.27, which offers more than 30% upside from current levels. Let’s see if the recent downgrade will have an impact in today’s trading session.

This is the GPU from Advanced Micro Devices that enthusiasts have been calling for

We heard rumors last week of an exclusive Advanced Micro Devices, Inc. (NASDAQ:AMD) event that was reportedly taking place in the presence of invited media. Despite the secrecy, some information has leaked out. It has now been confirmed that Vega did indeed make its debut at the said event and AMD demoed its gaming capabilities to the press.

DOOM’s gameplay running on Vega-based GPU popped up online and you can watch it here. The game was running on Ultra quality settings at 3480×2160 and it managed to hold the 60fps target well, hovering past 70fps often. This is the same level of performance as NVIDIA’s GeForce GTX 1080. It is impressive performance considering the drivers used were not optimized for Vega and is likely to improve with supported final driver. Also notice the device ID in the benchmark info, which is the same ID we discovered in Ashes of the Singularity’s online benchmark database few days ago. The score then was in the same ballpark as GTX 1080.

AMD did not disclose what the Vega GPU was but it has been confirmed that it features 8GB HBM2 on-board and 512 GB/s memory bandwidth. How do we know? Computerbase talked to an employee who let the 512 GB/s bandwidth figure slip for the new MI25 GPU. Both the MI25 and this unknown consumer GPU are based on Vega and feature HBM2. Since MI25 features 16GB HBM2, it could have either four stacks of HBM2 operating at 500 MHz or two stacks clocked at 1000 MHz to achieve the 512 GB/s figure. AMD was secretive enough to tape the cases so the appearance of the GPU could not be pictured.  

AMD’s New Horizon event will take place in a few hours and it is expected that we may also see a new Radeon GPU announcement amidst all the excitement for Zen.

Apple’s Mac OS, which is normally regarded as a bastion of security, might have its security compromised for as little as $100 a pop

Apple Inc.’s (NASDAQ: AAPL) Mac OS has a particularly power exploit loose as users with Mac devices such as the MacBook Air, Pro, and the Mac Pro can be compromised by any hacker who has physical access to the hardware in question. This is thanks to an EFI firmware hack which exploits the fact that Apple devices are often unlocked via SCBO files, something that is generally provided to users who request them from Apple’s Support team. Requests like these, while routine, are essentially granted once ownership of the device gets confirmed.

Assuming social engineering is not an option here, as these files are readily available online for as little as $100 on various hacking forums, it is safe to say that the exploit is essentially public at least on the dark web. The existing security flaw was noticed by security researcher fG! who also has a detailed guide on how to replicate this on other hardware. According to the research, even though it is slightly harder to compromise newer Macs where the new Flash chip is BGA type, something that requires a complete information dump using the Debug port, all current generation and previous generation Macs which use the exploitable UEFI model are essentially toast in the right hands.

The research report also notes that the SCBO files are digitally signed by Apple, with secure, private keys, and the fact that they are being sold online readily means that either somebody has cracked the underlying security and recovered Apple’s private keys (which is highly unlikely), or is social engineering it (which is somewhat unlikely), or possibly has direct access to Apple customer support representatives or solutions, something that could explain the SCBO files being sold openly. Irrespective of the origin, while Apple has chosen not to publicly comment on the issue, it should be able to pinpoint the underlying security problem.

Note that in order to be able to exploit this data and to use the said SCBO files, one would need physical access to a Mac computer to be able to compromise it, somewhat significantly limiting the scale of such an attack with remote access not yet possible for hackers. Despite having limited use for most hackers, the exploit itself exists within the Mac OS framework and should be fixed immediately by Apple in the coming hours. Whether this comes from a rouge employee, unauthorized access, social engineering, or leaked private keys is, however, something that remains to be seen as each essentially pertains to a different scale of security breaches.

Operations at the gas field would not only boost production, but also provide employment opportunities

With the energy downturn having hampered oil & gas companies’ financial profiles, Chevron Corporation (NYSE:CVX) had almost delayed major project startups. However, with the slight price rally in oil prices in the second and third quarters of this year, the energy giant started production of natural gas at the Alder field.

The latest move has already given rise to employment in the UK , Aberdeen, and Invergordon. Natural gas pumped at the field would be carried through a 28-kilometer pipeline to a Britannia platform. It shall be noted that the gas field is being tapped, around seven decades post its initial discovery.

Delays in the discovery majorly came as the company realized the impossibility of operating in the region. The field’s reservoir lying under the seabed is probe to significant challenges that makes operations to be conducted there, highly unviable.

According to Chevron, viability is now possible at the gas project due to the correct mix of infrastructure, export, processing, and technology. Commercial conditions also seem to be appropriate for the project at present.

Managing Director of upstream operations, Greta Lydec, expressed her contention toward the latest move, stating that the project marks an important milestone for the oil company. She further added that the gas block represents Chevron’s “commitment to investing and developing resources in the UK.”

Analyzing the current situation, The Country Caller believes that the Alder gas discovery would help boost the national economic recovery of the UK along with increasing gas production levels of Chevron. Via the latest discovery, the field life of Britannia would also be extended, a crucial part of Chevron’s North Sea asset profile.

Deirdre Michie, CEO of Oil and Gas UK, also viewed the Alder gas discovery as a way to pave more energy opportunities. Exploration and production (E&P) at the North Sea would also be boosted via new gas discoveries, adding to the fiscal game of the UK.

Chesapeake gives a ray of hope to its investors following Barnett Shale exit and recovering crude oil prices

Chesapeake Energy Corporation (NYSE:CHK) has been performing poorly for several quarters now. The disappointment continued when the company posted its financial results for 2QFY16. It missed the Street expectations on the bottom line and posted more loss than expected of 14 cents. The company also saw a decline of 46.5% year-over-year in its revenues, amounting to $1.6 billion. It, however, surpassed the consensus estimate on the top line as it beat its expectations of $970.3 million in revenues.

Founded in 1989, the company has a history of providing healthy gains to its investors. However, in the last few years its performance has been rather unsatisfactory. The Okhloma-based company credits this performance to fluctuating crude oil prices that affected all the oil producers in the market. Due to falling oil prices, the company has seen a decline of 83% in its stock price since mid FY14. Due to this, the company had accumulated more than $8.6 billion in debt which is considered very high for a company that barely has a market capitalization of $3.89 billion. However, as the prices seem to improve, the investors have confidence that the company would soon return to its winning streak.

The oil exploration company further strengthened this confidence by announcing its exit from Barnett Shale, last week. With this exit, the company is expected to increase its operating income by $300 million approximately through FY19 by reducing $715 million in gas gathering, producing and transportation expenses. Also, it would reduce $1.9 billion in future liabilities associated with the long-term pipeline agreements. CEO Doug Lawler is positive that he would successfully transform the company by increasing its profitability, thus giving a ray of hope to its investors. He has also showed continued commitment towards the oil producer, stating that there is still a long road to recovery but a very positive one.

Following this news, the shares of the company have risen in the market. The stock of Chesapeake Energy is trading up 11.58% year-to-date through Friday. Its competitors have also shown some improvement, such as BP plc (ADR) (NYSE:BP) which is also trading higher at 7.92% YTD. The market indexes, Dow Jones and S&P 500, also reinforce the idea that companies in the oil producing industry are to recover soon, as they are trading up 6.61% and 6.84%, respectively on YTD basis from their all-time lows.

As the investors’ confidence has been restored, they remain bullish over the shares of the company. The petroleum company has 776.96 million shares outstanding in the market, where as 32.37 million trade after the market has opened. The shares have maintained a 52-week range of 1.5-9.55 and a daily range of $4.92-5.09. Investors of the oil producer have restated holding on to the stock and the FactSet Fundamentals’ analysts have given four Buy, one Overweight, 18 Hold, two Underweight, and nine Sell ratings on the stock. They have increased the median price target on the stock by three cents over the last close and have set it at $5.05.

Stretching Adobe’s PDF document solutions to include a major partner

The digital Document Cloud service from Adobe Systems Incorporated (NASDAQ:ADBE) is being updated today to incorporate added support for the company’s PDF solution to Microsoft Corporation (NASDAQ:MSFT) OneDrive.

Under the new partnership between the two companies, users utilizing the advantageous Document Cloud service can now easily access their files and documents stored on OneDrive for tools such as Adobe Sign and others. We expect the company to introduce further updates in the coming months to expand this support for third-party services and make it easier for its user-base to switch their content around, while still being able to utilize its exclusive tools. 

Today’s update to the Document Cloud service is also accompanied by the addition of new Adobe data centres across Europe. According to the company, the new server-power is going to help meet new European guidelines that go into effect from July this year. Furthermore, the mobile application Adobe Sign can now access Adobe Marketing cloud tools from anywhere on both iOS and Android.

In a press release, Adobe’s Vice President Bryan Lamkin expressed the importance of enabling easy access for companies and organization for its Document Cloud and Adobe Sign solutions. Combined with “the best customer experience possible,” Lamkin believes that today’s updates are going to greatly strengthen the company’s values.

Investors applaud another job creation and investment announcement, as well as more details about the Model 3

Yesterday, The Country Caller reported that Nevada Governor Brian Sandoval announced that Tesla Motors Inc. (NASDAQ:TSLA) will offer an additional $350 million investment and create 550 new skills jobs in the state as it plans to build the electric motors and gear boxes of its upcoming compact sedan, the Model 3, at the Gigafactory 1.

Following the announcement, Tesla shares surged and closed the market up 1.18% at $238.36, representing its eight-hour high closing price. About 3.77 million shares had been traded compared to an average daily trading volume of 4.57 million.

The news merely confirmed a report TCC covered a few months ago regarding the new Drive Unit at the Gigafactory 1 which we said would produce drivetrain units for the Model 3. But why was it considered so big? Here’s what we think:

First, the announcement points at the Model 3 being on schedule for production this summer and on track for launch during the second half of 2017. Even after the fourth quarter and 2016 delivery targets miss, Tesla shares have climbed over 11.54% year-to-date through Wednesday, mainly on the back of revelation of more details about the Model 3 and the Gigafactory 1, which is expected make the $35,000-vehicle profitable for the company.

Hence, it is clear that any news related to the Model 3 or Gigafactory 1 production will be seen positively by investors, who are currently focusing on the long-term story.

Secondly, the report reflects another major step by Tesla to concentrate its vehicle parts’ manufacturing. The company is already one of the most vertically-integrated auto manufacturers. Tesla CEO Elon Musk believes that this move would save a lot of costs for the company and accelerate production processes over the long term. With Gigafactory 2, the company plans to bring all the production processes, from battery to EVs, under the same roof for its European customers.

Third, some analysts like Trip Chowdry of Global Equities Research believe that any news related to job creation or investments within the US will be cheered on at the Street under the upcoming Trump administration, which plans to bring manufacturing jobs back to the US. Since the presidential election, we have noticed several tech companies highlighting their contribution to the domestic economy and some have even announced future job creation plans within the country.

FireEye Inc is currently under the digestion phase after having made acquisitions at the beginning of the year

After having made 2 major acquisitions in the beginning of the year, FireEye Inc (NASDAQ:FEYE) has seemingly entered a period of calm where it seemed to benefit from the integration of the aforementioned acquisitions. According to Cowen, the company’s current focus will be to synergize and harness growth from its two recently acquired assets but it will also be keeping a close eye on the possible acquisition targets.

The analyst further explains that FireEye has established its name in the internet and information security market and has plethora of clients among the Forbes 500. The company’s path to growth is clearly via timely and correctly judged acquisitions. The analyst listed 4 potential acquisition targets for FireEye and expects the company to make a move in order to acquire one or more of the said in near future. The list includes Bromium, ForeScout, Cato Networks and Securonix as the likely acquisition targets for FEYE. Apart from the acquisition, the key focus areas for FEYE are Internet of Things, Endpoint Security, Cloud computing and Security Analytics.

The two acquisitions by FireEye in the year include, iSIGHT Partners and Invotas International. iSIGHT Partners was a privately held company which was acquired by FEYE towards the end of January this year. The deal was finalized for a consideration of $275 million inclusive of earn-outs. The said acquisition has enabled FireEye to improve its cyber threat intelligence mechanism along with enhancing data collection capabilities. The acquisition of Invotas on the other hand came at a cost of $30 million and has enabled the company to respond to threats in an automated fashion.

The analyst opinion for the stock has 6 Strong Buy, 8 Buy and 18 Hold ratings from total of 32 analysts. The stock now trades at $16.57 in the stock market and has lost 0.16% since the opening of the market.

HDR capability is coming with the new technology update

Advanced Micro Devices, Inc. (NASDAQ:AMD) has just announced FreeSync 2, the update to its display technology introduced in 2015. (via Anandtech) In a nutshell, where FreeSync was introduced to play a role in syncing refresh rate to provide a smoother and tear-free gaming experience, FreeSync 2’s highlight is High Dynamic Range and Wide Color Gamut.

Those who have seen HDR in action can tell you that it looks impressive but it also comes with the disadvantage of increased input lag, it’s the reason why 4K HDR TVs with minimal input lag have become popular among gamers. FreeSync 2 aims to reduce input lag. It may look like it that it will allow you to convert your typical SDR display into an HDR one, but that’s not the case. In order to be FreeSync 2 certified, displays need to have 2x the perceived brightness and color space of sRGB, which is something only high-end displays are capable of at the moment.

The way it works by eliminating the process of display tone mapping and natively produces an image based on the display’s color space. To make use of FreeSync 2, applications have to use an API by AMD.

AMD’s drivers will also handle automatic switching when running a non-compatible application such as desktop due to limitations of Windows operating system.

It is now mandatory for FreeSync displays to support Low Framerate Compensation (LFC).