Stocks - r/Stocks Daily Discussion & Options Trading Thursday - Jul 08, 2021 |
- r/Stocks Daily Discussion & Options Trading Thursday - Jul 08, 2021
- Cramer telling folks “Get as many Didi shares” before IPO versus “Investors Should Stay Away From Didi” after IPO.
- Elon going full Xi Jinping mode
- Chinese ride-hailing firm DIDI sued in US as Shares Slide
- Wells Fargo tells customers it’s shuttering all personal lines of credit
- Here is a Market Recap for today Thursday, July 8, 2021
- Every investor needs to learn what a rule 10b5-1 plan is and stop panicking every time a company insider sells some shares!
- Looking into these mining stocks for gains
- Stock Performance of CEOs Listed on Glassdoor's Top CEOs of 2021
- Biden targets rail and maritime shipping industries.
- Calling all travel recovery bulls/bears: Can you tell me why SABR isn't going to double?
- Calling SoFi bulls, can you tell me why SoFi isn't just a regular bank dressed up for millennials?
- Doordash Stocks
- BTG an undiscovered gem
- Thoughts on XLF etf
- Anyone a little worried about yield curve?
- Opinions of defensive stocks and industries right now?
- Anticipating Pullback and Corrections via Options Open Interest - A Small Case Study of SPY, QQQ, and IWM
- Linkdoc shelves IPO plans after $DIDI crackdown
- Called CARV on Tuesday look at my history next is CRTD
- What’s some your guys favorite cyber security stocks?
- Puts on Newegg
- Current State of the Plastics Industry: A Short Term Analysis of Resin Manufacturers LyondellBasell and Danimer Scientific
- Preparation for trading day - July 08, 2021
- Alexion acquisition by Astrazeneca closing in
| r/Stocks Daily Discussion & Options Trading Thursday - Jul 08, 2021 Posted: 08 Jul 2021 02:30 AM PDT This is the daily discussion, so anything stocks related is fine, but the theme for today is on stock options, but if options aren't your thing then just ignore the theme and/or post your arguments against options here and not in the current post. Some helpful day to day links, including news:
Required info to start understanding options:
See the following word cloud and click through for the wiki: If you have a basic question, for example "what is delta," then google "investopedia delta" and click the investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned. See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 06:04 AM PDT June 28: Get as many Didi shares as you can after the Chinese ride-hailing giant goes public, Jim Cramer says July 6: Why Jim Cramer Says Investors Should Stay Away From Didi Honestly, avoid taking this guy seriously. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elon going full Xi Jinping mode Posted: 08 Jul 2021 08:12 AM PDT "A little censorship can't hurt: Tesla reportedly asked the Chinese government to block posts that addressed alleged Tesla brake problems. Government censorship and a dictatorship are bad. We all agree on that, but Elon Musk apparently thought a little censorship could be quite useful. For instance, when annoying posts threaten the company's image. A comprehensive report from Bloomberg Business reveals the practices Tesla uses to operate in China. This includes normal PR, ensnaring journalists and influencers, inviting them to discussion panels and plant tours. It's common practice in Western countries, too. But informants also told Bloomberg that Tesla has complained to the government in Beijing about unwarranted criticism of the company on social media. Tesla is said to have asked the government to use its well-known censorship measures to block posts critical of Tesla" "Previously focused on state-run media, Tesla is now trying to build relationships with auto-industry publications and influencers on platforms such as Weibo and WeChat, for example by inviting them on factory tours, and conducting group "discussion sessions" with policymakers, consumers, and media outlets. According to people familiar with the matter, it's also complained to the government over what it sees as unwarranted attacks on social media, and asked Beijing to use its censorship powers to block some of the posts." [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chinese ride-hailing firm DIDI sued in US as Shares Slide Posted: 08 Jul 2021 01:29 AM PDT The two lawsuits come a week after Didi's New York Stock Exchange debut. The company's US market value has fallen by more than 20% since a Chinese regulator told online stores to pull the app. Beijing's cybersecurity watchdog says the app illegally collected users' personal data. The lawsuits, which were filed in federal court in New York and Los Angeles on Tuesday, say Didi failed to disclose ongoing talks it was having with Chinese authorities about its compliance with cybersecurity laws and regulations. The complaints named Didi's chief Executive officer Will Wei Cheng and several other executives and directors. The lead underwriters for the company's share sale - Goldman Sachs, Morgan Stanley and JPMorgan Chase - were also named as defendants. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wells Fargo tells customers it’s shuttering all personal lines of credit Posted: 08 Jul 2021 11:04 AM PDT Can't wrap my head around this. They can borrow at near 0% rates and lend it out for much higher. What reason do they have for shutting down? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Here is a Market Recap for today Thursday, July 8, 2021 Posted: 08 Jul 2021 01:36 PM PDT PsychoMarket Recap - Thursday, July 8, 2021 Stocks dipped across the board today, putting a stop to the recent record-setting rally that has seen both the Nasdaq (QQQ) and S&P 500 (SPY) reach countless fresh intraday highs in the last six weeks or so. The SPY and Dow Jones (DIA) both fell roughly 0.9% while the tech-heavy QQQ fared slightly better, closing 0.65% down. It seems there a few differing factors that contributed to the drop today, including but not limited to, (1) rising coronavirus fears outside of the US due to the highly contagious Delta variant, (2) the Fed's June Meeting Minutes, which showed members are increasingly talking about accelerating the timeline to taper quantitative easing, (3) a disappointing weekly unemployment report, and (4) general profit-taking after such a monster rally in the market. In positive news, the benchmark 10-year Treasury yield sank for the fourth straight day, hovering around a multi-month low at 1.29%, a sign that inflation fears are further tapering. In a sign of rising concerns over the highly contagious coronavirus delta variant, the Japanese made a last minute announcement that a state of emergency would be re-instituted across Tokyo and that all events would take place behind closed doors, with no spectators, walking back an earlier decision to allow locals to attend the games. On Wednesday, 16 days before the Opening Ceremony, the Tokyo Metropolitan Government reported 920 COVID cases, over 200 more than any other single-day total since May. On Thursday, it reported 896, the second-highest count since May. Other countries, like India and Brazil, are also dealing with an extremely worrying surge of cases. Even in the US, where roughly 50% of those eligible are fully vaccinated, the country is seeing a small surge in cases recently, with the delta variant accounting for 51.7% of all new infections. Yesterday, the Federal Reserve released the June Meeting minutes, which are notes about what was discussed in the latest meeting, which helps market participants decipher that path forward for monetary policy and possible timelines for any adjustments. The Fed said the economic recovery "was generally seen as not having yet been met", but said they are ready to act if inflationary pressures indeed begin to materialize. The minutes said, "Participants generally judged that, as a matter of prudent planning, it was important to be well positioned to reduce the pace of asset purchases, if appropriate, in response to unexpected economic developments, including faster-than anticipated progress toward the Committee's goals or the emergence of risks that could impede the attainment of the Committee's goals". This is not surprising, as I have been saying for weeks now, as the pace of economic recovery improves, quantitative easing, or the purchase of government bonds in order to inject money into the economy, is always the first policy to be tapered. I am not worried about the tapering of quantitative easing and encourage everyone to read up about the 2013 Taper Tantrum, which happened when the Fed announced QE would be tapered since the economy had largely recovered from the 2008 crisis by then. In other news, after a strong run of outperformance in reports about the labor market, the most recent weekly unemployment report showed new jobless claims unexpectedly tick higher. According to the Department of Labor, there were 373,000 new jobless claims filed last week, higher than the 350,000 expected. While it is slightly disappointing, jobless claims in the US have been continuously declining for months, a sign that the labor market continues to improve as the US continues to reopen. Ian Shepherdson, Chief Economist at Pantheon Macroeconomics said, "The consensus ignored the tendency for unadjusted claims to rise in weeks when July 4 falls on a Sunday, so the risk was always to the upside. But this is noise, not signal. The seasonal adjustments are struggling simultaneously with the July 4 holiday period and the annual automakers' retooling shutdowns, which can make the headline numbers even more volatile than usual. The noise will persist through late July, but we have no doubt that the underlying trend will remain downwards." I agree and remain encouraged by the pace of recovery in the labor market. Another potential explanation for today's pullback, coupled with the other reasons listed, may be general profit taking after such a monster run by the broader market. Since mid-May, the Nasdaq and SPY are up 12.3% and 6% respectively, a great run by any judgement. Nothing ever goes straight up, sometimes dips are needed for the market to recharge for another move higher. Looking ahead, market participants are waiting for Q2 earnings season, which is set to kick off next week with big banks reporting. Highlights
"It is only in our darkest hours that we may discover the true strength of the brilliant light within ourselves that can never, ever, be dimmed." - Doe Zantamata [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 10:02 AM PDT Some of the most common FUD I see on here and any investor forum is, "OMG the company executives are selling stocks! They know the company is going to tank...SELL SELL SELL!" But this panic is from misguided investors (or people purposely trying to sew doubt), and not actually how it works at all in a lot of cases. Most people are aware that company insiders are beholden to very strict regulations regarding insider trading. In the most simple terms, they are not allowed to trade their company stock (buy shares, sell shares, execute options, anything) based on MNPI (Material Non Public Information)...ie they can't make any moves based on any important information about the company that the public does not have. The rule outlining prosecution of these insider trading violations is known as SEC Rule 10b5-1. The inherent problem is that this rule creates somewhat of a paradox. Company insiders obviously always know more than the public, so almost any trade they make could potentially be considered an insider trade. So how do executives trade their shares without violating the rule? To get around this risk, many company executives are typically asked to sign what are known as 10b5-1 plans. This is essentially an agreement between themselves and a brokerage firm, outlining the exact price minimums they want to sell shares at, along with the volume and frequency. These plans are typically entered BEFORE shares are even issued, or pre-IPO if its a newly public company. The plan does 3 things (https://ccbjournal.com/articles/the-10b5-1-plan-what-executives-need-to-know):
The executive signs the agreement...and the brokerage carries out the trades based on the pre-determined instructions. The insider has no influence over the future sales of their stock. At the bottom of form 4 filings in the "Explanation of Responses" section, look for a note that says something like: " (1) The sales reported in this Form 4 were effected pursuant to a Rule 10b5-1 trading plan adopted by the Reporting Person" If you see that note, it means that insider has a 10b5-1 plan, the sale was pre-determined well in advance, and has 0 to do with the executive's sentiment towards the company. It is 100% normal for executives to take share profit periodically to supplement their income, especially post-IPO...and means nothing about performance. Now, these plans aren't bulletproof, and can be modified or suspended. But if the insider has any MNPI, they can get in deep shit if they're caught doing something shady. Over 57% of S&P companies are under such a plan, and most new IPOs I see are doing them. 10b5-1 Plan...learn it, love it, and use it to tell FUDsters to GTFO EDIT: Here's some great simplified info about them: https://media2.mofo.com/documents/faq10b51.pdf [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Looking into these mining stocks for gains Posted: 08 Jul 2021 04:55 AM PDT I am aiming to make good gains with some mining stocks and I must say that the pandemic made me do this. It seems like everyone is so into mining stocks and I thought it would be a good addition to my portfolio. Right now, I just invested in these companies that are showing great promise through their vision as companies and their mining projects that show great promise. LODE - Comstock Mining Inc.
VR - Victory Resources Corporation
What do you think about these? Please set me straight. I need your thoughts. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Performance of CEOs Listed on Glassdoor's Top CEOs of 2021 Posted: 08 Jul 2021 01:03 PM PDT
*Public companies on this list have returned 1481% in approximately 8 years with the CEOs on this list. *Some CEOs have been in their positions for a few decades while others, less than a few years. *While some of these companies have had nice returns, what this really shows is buying and holding is the way to go. Long term, great companies will reward investors. *Companies shown on here that have underperformed (severely) in comparison to those companies with higher returns doesn't show the lifetime performance of a given company. The reason could be the CEO hasn't been in the current role for very long and/or the company is facing short-term challenges. Here is a visual of this table in an infographic form. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Biden targets rail and maritime shipping industries. Posted: 08 Jul 2021 05:44 AM PDT https://www.SunDispatch.com/biden-targets-rail-and-maritime-shipping-industries/ Amid rising concerns of rapid deceleration of the US economy, President Joe Biden will direct U.S. transportation agencies to address competition in rail and sea shipping in the coming days in an effort to reduce the price of delivering products for businesses, a source familiar with the plan told Reuters on Thursday. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calling all travel recovery bulls/bears: Can you tell me why SABR isn't going to double? Posted: 08 Jul 2021 01:57 PM PDT I'm 22K shares deep in SABR and after riding the wave from $6 to $17, I've been absolutely wrecked the past two months. On one hand, I understand that travel stocks as a whole have gotten some pullback – deservedly so, given that some were trading above pre-pandemic levels. On the other hand, SABR is trailing well below (50%) its pre-pandemic levels, yet full of cash and well on its way to financial recovery. Does no one see what I see? Is the market truly forward-looking? All opinions/sources are welcome. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calling SoFi bulls, can you tell me why SoFi isn't just a regular bank dressed up for millennials? Posted: 08 Jul 2021 11:44 AM PDT Been reading SoFi DD's on here and WSB and, unless i'm missing something, SoFi just seems like a run-of-the-mill bank targeted for people 20-35. I personally use SoFi because at the time they had the best APR and access to all ATM for free (they don't have this policy anymore). I don't know much about their home, college and auto loan business but i cant imagine people taking out a loan with SoFi just because they have a checking account. When i take out a loan, I'm looking at the rates first and everything else second. Convenience is nice but I'd suck it up if Chase is offering me a used car loan for 4% vs some other bank for 8%. There are people that say Galileo is the key to SoFi, and this justifies people lumping SoFi into the fin-tech industry. But investing in SoFi because of Galileo is another issue all together, and right now, Galileo is about 1/8 of SoFi's business. I should also say that I haven't dug deep into SoFi, but everything i've looked at so far has told me it's a bank trading like a tech company. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Jul 2021 07:33 PM PDT Doordash driver here with a question. What do investors even see in Doordash. I mean yes, it's a huge moneymaker, but their servers are terrible and crash on a nearly weekly basis. When this happens, they screw restaurants and customers nationwide. I'm sure it's only a matter of time until they face a lawsuit from some large chain like McDonald's over the profit loss due to wasting out all that product. Maybe Doordash is compensating those restaurants, but that has to be draining them more and more every time the servers crash. It seems to me that Doordash is a ticking time bomb for stockholders, and far from a good company to invest in. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 11:04 AM PDT So I know people here aren't interested in meme stocks and are probably annoyed by people trying to create the next "Gamestop" and I want to make it clear this isn't that. BTG is the name for B2 Gold a gold mining corporation that currently has 3 gold mines across the globe with plans to expand in the coming years. Their stock currently sells for $4 a share however many stock analysts are confident that the stock will rise to between $7 to $9 a share before the year is up. My belief is that this will happen for 2 reasons the first being that the company has actual growth plans that will lead to more mines being open which will generate significantly more revenue for the company and their investors the second being that major brokerage companies are sitting on this stock and waiting to promote it later to their rich clients they'll buy up thousands of shares for next to nothing and almost overnight there investments will triple and B2 Gold will be able to expand and once again the rich get richer. So I say let's beat them to the punch if we all buy shares now we can all make some money as well and the best part is we won't have to sell are shares they'll just keep rising till they stop at about $12 or $13 a share from there they'll going to grow and attract even more investors over time it won't be immediate like Gamestop but it will be perfect for people who understand how the stock market works and know how to invest. Please read this and share it with friends and family and allow them and yourselves in on a great opportunity. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 12:59 PM PDT Thoughts on this? After the big run off it seems like the sector is diving faster than the broader market, so you think it's a good idea to enter now or wait for the interest rates raise ? I have a high average cost since I seem to have joined a bit late now I'm contemplating adding more positions. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anyone a little worried about yield curve? Posted: 08 Jul 2021 12:21 AM PDT The downshift in the benchmark 10-year Treasury note yield continued Wednesday, when the rate fell to 1.296%, its lowest level since February. Higher yields reduce the value of future earnings relative to current earnings, meaning that the appetite for growth stocks tends to rise when rates fall Why has 10-year treaeury yield been going down? I heard that when yield curve starts to get flat, it's a sign of economic recession. Is it time for us to start to get bullish? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Opinions of defensive stocks and industries right now? Posted: 08 Jul 2021 11:39 AM PDT What are your opinions on shifting toward defensive stocks as growth is a little shaky currently? What are your picks? (Defensive not defense stocks) industries like healthcare, consumer staples… Reits.. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 04:52 AM PDT Hey folks, I'm a huge believer in anticipating stock movements based on options open interest. This will be a short post but it'll be worth your time. First of all, what is open interest? "Open interest indicates the total number of open option contracts that are currently out there". The word to remember here is "open" contracts. That means these are the contracts that people are sitting on, and have not sold yet. How can we use this information? Basically, there are a couple of things I've observed in my backtests and some manual analysis.
Going forward with point # 2 above, if we look at the open interest for SPY, QQQ, and IWM from yesterday, we will see a clear pattern that signifies an anticipated dip. $QQQ open interest for calls and puts: https://i.gyazo.com/64891f29341a8444a7789c6358fc0447.png $IWM: https://i.gyazo.com/ffcfa8e5dbc0301d14338d375e0d9ce7.png $SPY: https://i.gyazo.com/8764dfc851a12c8b0e4dfd0d9ba0ba56.png You'll see a trend here. In all of these, either the PUTS open interest is increasing, or the calls open interest is decreasing. Both are signs of caution and looking at pre-market data today, this was a perfect way to anticipate that a downward move will happen soon. Hope this is useful for everyone. I know some people are going to say this is hindsight, but I've been observing OI trends for the last 6 months, and they work really well. Try it out with any other stock!! Have a good day. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Linkdoc shelves IPO plans after $DIDI crackdown Posted: 08 Jul 2021 12:02 AM PDT
[link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Called CARV on Tuesday look at my history next is CRTD Posted: 08 Jul 2021 02:07 PM PDT Called CARV based on technicals as CRTD is next. Same exact kind of set up but not as extreme but is a ticking time bomb but with the price could be bigger percent gain then CARV. 2 million float, almost half shorted, volume high low floor and total amount to buy free float is $10 million. It's dumb that people are shorting these kind of companies in this market cause it's just a matter of time it blows up. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| What’s some your guys favorite cyber security stocks? Posted: 08 Jul 2021 09:24 AM PDT I think that as everything, and I mean everything, seems to be going at least partially digital nowadays, cyber security will continue to be increasingly important. I've done some research and didn't find any that I really loved, especially at current prices. I am curious to see what you guys are into. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 10:11 AM PDT I am fairly new to this stuff but Newegg had an unusual spike in price and I felt it couldnt last so I bought puts around the $60 mark. Today that stock fell and is at $47, which if I understand this correctly would be a good thing for my put option, however my contracts dropped almost 40% in value even tho the stock is rapidly dropping. So I'm wondering what I am missing and why that contract isn't going up in price instead of rapidly declining? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 08 Jul 2021 01:01 PM PDT Disclaimer: I am currently involved in pitches and investments related to these securities, along with having personal interest in the future of both. Much of what is stated is extrapolated from my knowledge as an engineering student, but for most I try to include sources as much as I can. LET US BEGINIn the wake of the Texas power outages due to the inadequacy of ERCOT to efficiently maintain power during severe weather conditions, the state of the resin manufacturing industry has been thrown into disarray. A large quantity of domestic resin production in the United States is centered around the gulf coast, fueled by the oil fields in the Midwestern South. This decrease in production has resulted in turmoil within the resin-based stock market, as many tickers hit by the industrial decline which coincided with the latter half of these outages have struggled greatly. Between June 8th and the date of this writing (June 25th), LyondellBasell (NYSE: LYB) fell 10.00%, and Danimer Scientific Inc. (NYSE: DNMR) fell 13.83%. In this, I detail an analysis on both stocks, along with my thoughts on what the recovery of the resin industry will look like. LyondellBasell Industries N.V., the Case for a Strong Resin ResurgenceLyondellBasell Industries (NYSE: LYB) is, as of 2018, the third largest independent chemical manufacturer in the United States, with a particular focus on polyethylene production. Formed in 2007 through the purchase and subsequent merging of the Lyondell Chemical Company into Basell Polyolefins. They are the worlds largest licensor of polyolefin technology, and have the majority of their plastic resin producing facilities in the United States based in Texas, with the largest being located in Channelview, TX, just outside of Houston. Polyethylene is the worlds most produced type of plastic, coming in Low-Density (LDPE), Linear Low-Density (LLDPE), and high-density (HDPE) variations. It is also the most used type of plastic in packaging, a plastics industry consumes up to 40% of the plastic production worldwide. Polyethylene, especially low-density polyethylene, is perfect for many packaging uses. It is a lightweight, clear, destructible material that is food safe, nonreactive with most chemical compounds, and has a melt temperature just above 105 Celsius. With the proper additives, LDPE can also be made static resistant. This makes it ideal for wrapping electronic products and components that are sensitive to static electricity. As COVID-19's effect on the economy wanes, there has been a significant increase in consumer spending. According to the United States Bureau of Economic Analysis, consumer spending has nearly reached pre-lockdown levels. With the influx of stimulus money into the public, the spending of consumers has seen a dramatic recovery. This significant increase of products being sold requires a large amount of plastic to package, plastic that is created using resin that LyondellBasell manufactures and licenses. A difficulty to create resin does not necessarily coincide with a drop in profitability. Instead, a discrepancy has been created. A high demand for LDPE fueled by consumer spending, along with a low supply caused by production hampering along the Gulf Coast is unlikely to result in a devaluation of the material, but instead a significant increase in the price of the resin per pound. LyondellBasell is perfectly poised to take advantage of this and profit significantly during the second quarter, as a scarcity in resin allows them to charge premium prices without having to worry about risking their customers. The control that resin manufacturers now have over the market assures the health of said manufacturers. LDPE is not just a commodity; it is a necessity. Therefore, the demand of LDPE is assured, and the pricing will simply move to reflect the lucrative industry packaging plastics has become in recent months. Danimer Scientific Incorporated, the Case Against a New ContenderDanimer Scientific Incorporated (NYSE: DNMR) is a corporation centered around the production and manufacturing of bioplastics and biodegradable polymers. Founded in 2004 and debuting on the NYSE in December of 2020. Their flagship product, Nodax, is a polyhydroxyalkanoate (PHA) with a claimed biodegradation time of as little as two months. Produced on a 1:1 ratio through the fermentation of canola oil with relevant microorganisms, Nodax seems to be poised to take over the plastics market. Nodax is a plastic with thermal properties that can stretch between Low-density and High-density Polyethylene, as well as having a tensile strength located right between the two. Through its mechanical properties and its range of uses, Nodax could have the potential to replace the wasteful packaging industry with a material that can biodegrade without harming the environment, and without sacrificing the properties that make petroleum-based polymers attractive for such uses. That being said, the company still has a long way to go before it can successfully produce a relevant amount of Nodax to fulfill the market demand for an acceptable environmentally friendly replacement to petroleum-based polymers. Danimer still has a long way to go before it could possibly benefit from a wounded resin industry, including issues with properly handling this new waste and also supplying for its production. The first bit of skepticism comes from their claims of the biodegradability of their plastic. The claim that Nodax is capable of completely degrading within two months is based on perfect conditions, which is not realistic. Their conditions require microorganisms producing polymerase which can break down Nodax, and these microorganisms are not ubiquitous at all corners of our lives. In 60% of cases, plastic waste ends up in landfills instead of being recycled. The assumption that landfills will possess the correct microorganisms to degrade these plastics is questionable, as many landfills are specifically designed to limit the decomposition of inner components. While this is great overall, as it reduces methane gases being released into our atmosphere, this is devastating for the proposition of a biodegradable plastic. While one could always assume that we should just make sure that these bioplastics reach their end of life in controlled environments, the world's previously mentioned issue with ensuring plastics are recycled calls into question the viability of trying to create foolproof systems to make sure that Nodax end up where it should. In addition, the production of Nodax requires an extreme amount of growth in canola related agriculture. Nodax is produced using canola/rapeseed oil at about a 1:1 ratio. In 2015, the world consumed around 380 million tons of plastics per annum. Of that, around 40% or 152 million tons are used in packaging. The majority of these packaging plastics are made of ethylene based polymers or polypropylene, both of which are mostly petroleum-based. Current canola/rapeseed production worldwide comes out to about 27.3 million tons per year. In addition to this, the average production of canola/rapeseed oil per acre is 1,840 pounds, or .831 metric tons. Therefore, to replace traditional packaging polymers, canola/rapeseed agricultural output would have to increase 5.56 times over to meet the demand. With such a large increase of agricultural expansion, this could have severe impacts on the environment. With current acreage on canola/rapeseed production, we would need 183 million acres of land to use for new farmland. For reference the entire state of Texas in the United States is 171 million acres. An amount of farmland larger than the size of Texas would be required to replace packaging needs worldwide. The agricultural production needed just does not exist right now. Even with the current production of canola/rapeseed, this plastic could only take up 2% of the current market share for plastic resin production worldwide, assuming that they can use every drop of canola oil produced. Will Danimer succeed in the short term? In all likelihood, yes. The criticism of this company and their product has so far ignored the potential for extreme profits even with the limited amount they can produce. The potential for custom made packaging, as pointed out by a peer of mine, cannot be understated. Their deals with companies like Nestle show that huge businesses are still interested in it. What Danimer and Nodax are not, however, is a silver bullet to the packaging needs of the United States or of the world. It is unlikely that the resurgence of the resin market, then, will affect Danimer's revenue. What is more likely is that speculation on the future of Nodax and its use in plastics will drive spikes in market value, and this will be followed by a period of slow and consistent growth as either the supply of the necessary materials and/or Danimer's list of partners expands. Danimer's growth will be its own, and it will be as the above-mentioned problems, especially in the raw material supply needs, are resolved. TL;DR: The resin industry will be doing great, but now is not the time to expect new contenders to make huge gains and huge amounts of customers. An investment in both will likely be profitable, but you will have to wait a while for significant gains from DNMR.[link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preparation for trading day - July 08, 2021 Posted: 08 Jul 2021 04:51 AM PDT Preparation for trading day - July 08, 2021Note that this only includes stocks with larger market cap and stocks considered popular. Notable Price Upgrades and DowngradesFireEye (FEYE):
Charles Schwab (SCHW):
Moody's (MCO):
Etsy (ETSY):
Datadog (DDOG):
Today's Economic Calendar
IPO market (This week)
That's all folks, have fun and stay green Disclaimer: I am not a financial advisor, and nothing in this post shall be seen as a financial advise. Always make to sure to vet the accuracy of statements and do your own research before using it in any way [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alexion acquisition by Astrazeneca closing in Posted: 08 Jul 2021 10:42 AM PDT I was typing this post as a question, but since I have now solved the question while I had almost finished writing the post, I will share it anyway, as a news item. In December 2020 it was announced that Alexion ($ALXN) and Astrazeneca stroke a deal, where Astrazeneca would fully acquire Alexion. The deal is as follows: "Alexion shareholders will receive $60 in cash and 2.1243 AstraZeneca American Depositary Shares (ADSs) (each ADS representing one-half of one (1/2) ordinary share of AstraZeneca, as evidenced by American Depositary Receipts (ADRs)) for each Alexion share. Based on AstraZeneca's reference average ADR price of $54.14, this implies total consideration to Alexion shareholders of $39bn or $175 per share. The boards of directors of both companies have unanimously approved the acquisition. Subject to receipt of regulatory clearances and approval by shareholders of both companies, the acquisition is expected to close in Q3 2021, and upon completion, Alexion shareholders will own c.15% of the combined company." At the time of the announcement, the share price of $ALXN shot from $120 to $156. In April 2021 the US gave clearance to the deal. On May 11 2021, shareholders of Alexion approved the acquisition, and this week the EU approved the buyout. The Alexion shareholders now have the option to receive the stock value by receiving either 2.1243 shares of Astrazeneca -ADR- traded at the NASDAQ, or by receiving 1.06215 ordinary shares of Astrazeneca traded at the LSE. Regardless of this choice, the acquired stock value at Astrazeneca's currently traded price is about $125, totalling the deal at circa $185 per share, slightly above the currently traded price of $182. [link] [comments]  |
| You are subscribed to email updates from Stocks - Investing and trading for all. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment