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Saudi Arabia Attacked, Oil Prices Shoot Higher

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Image Shown: Saudi Arabia’s oil infrastructure was attacked over the weekend, causing WTI and Brent to rally at the start of the trading session. By Callum Turcan Disaster struck this weekend when several drones took out the Abqaiq oil processing facility and the massive onshore Khurais oil field in Saudi Arabia (KSA) on Saturday, with WTI and Brent both surging on the news once trading resumed at the start of the week. The Khurais oil field produces around 1.5 million barrels of crude per day and the Abqaiq oil processing facility is the largest in the world. Saudi Arabia’s oil production capacity was reduced by 5.7 million barrels of crude per day due to these attacks and the country is … Read more

BP Says Goodbye to Alaska After 60 Years

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Image Source: BP plc – IR Presentation By Callum Turcan On August 27, BP plc (BP) announced it was selling its entire Alaskan operations to privately held Hilcorp Alaska (an affiliate of Hilcorp Energy Company) for $5.6 billion. BP sold Hilcorp some of its Alaskan assets five years ago and both companies have had a working relationship since then. This truly marks the end of an era as BP was long a staple of Alaska’s oil & gas industry. BP operates the Prudhoe Bay oil field, one of the largest in the world, which was responsible for over half of Alaska’s oil production in 2018. Additionally, BP is a major shareholder in the company that owns the 800-mile long Trans … Read more

Berkshire Hathaway Gets Ready to Put Part of Its Large Cash Pile to Use

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Image Source: Fortune Live Media By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B), specifically Class B shares trading as BRK.B, is a top holding in Valuentum’s Best Ideas Newsletter portfolio. The massive holding company is invested in much more than just insurance (a portfolio which includes Geico, Cornhusker Casualty Company, General Re, Oak River Insurance Company, and more), Berkshire has exposure to American railroads (through its ownership of BNSF), global consumer goods sales–through its ownership of See’s Candy and stake in Kraft Heinz Company (KHC)–and a slate of other industries. We give shares of BRK.B a fair value estimate of $229, with a fair value range of $183/share – $275/share. As BRK.B trades at the lower end of our fair … Read more

Oil Major Second-Quarter 2019 Earnings Roundup

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Image Source: Exxon Mobil Corporation – IR Presentation By Callum Turcan Earnings Coverage by Ticker: BP, COP, CVX, RDS.A/RDS.B, TOT, XOM Let’s look at the Oil Majors that have recently reported earnings. BP’s Upstream Operational Execution Remains Strong On July 30, BP plc (BP) reported non-GAAP flat year-over-year underlying replacement cost profit of $2.8 billion in the second quarter of 2019. Marginal reductions in operating income from its upstream and downstream segments were offset by a reduction in corporate-level expenses. BP owns a 19.75% stake in Rosneft (OJSCY) which saw earnings move lower in the second quarter by an estimated ~25%. Unlike its peers who generally reported significant weakness at their downstream operations (refining, petrochemicals, marketing, and retail operations), BP’s … Read more

Dividend Increases/Decreases for the Week Ending July 12

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Below we provide a list of firms that raised their dividends during the week ending July 12. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Antero Midstream (AM): now $0.3075 per share quarterly dividend, was $0.3025. Bank of America Corporation Deposit Shs Perp Pfd Shs Series E (BAC.PE): now $0.2556 per share quarterly dividend, was $0.2472. BP Prudhoe Bay Royalty Trust (BPT): now $0.5510 per share quarterly dividend, was $0.3449. Clough Global Allocation Fund (GLV): now $0.1032 per share monthly dividend, was $0.1023. Cummins (CMI): now $1.311 per share quarterly dividend, … Read more

Checking Out ARAMCO, Saudi Arabia’s Sleeping Giant

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Image Source: Trending Topics 2019 By Callum Turcan Recent events have piqued our interest in the actions of Saudi Arabian Oil Company, better known as ARAMCO (ARMCO), the giant in charge of the Gulf nation’s hydrocarbon industry. Saudi Arabia is reportedly restarting ARAMCO’s IPO according to comments made by the Saudi Energy Minister, reviving a plan the country had previously put on ice primarily due to expectations that the company wouldn’t fetch a high enough valuation to suit the needs of the Kingdom. Many view ARAMCO as the most valuable company in the world, but whether this is a USD$2 trillion company or not is in the eye of the beholder (many see that target as overly ambitious, as do … Read more

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

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Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more

Berkshire’s Buybacks, More Earnings Reports

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Berkshire’s Buybacks, More Earnings Reports — In alphabetical order by ticker symbol: ANET, ATVI, BRK.B, CHD, DWDP, DNKN, GILD, HBI, K, TEVA — Arista Networks (ANET): Arista reported a solid first-quarter report May 2, but its outlook for the second quarter left something to be desired. The cloud networking company could offer a hint to what to expect from Cisco (CSCO) when it reports in the coming week or so. Arista’s revenue during the first quarter was fine, jumping 26%, and earnings per share also handily beat, but top-line guidance for the second quarter came in at $600-$610 million, below consensus forecasts. It’s still early in the year to jump to any conclusions, but investors in Cisco should perhaps set expectations … Read more

Energy Earnings Roundup

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Image Source: Exxon Mobil Corporation – First quarter 2019 earnings presentation By Callum Turcan Energy earnings season is upon us and several major oil & gas companies have just reported their first quarter results. Global crude pricing benchmarks tanked during the last three months of 2018 and only partially recovered during the first three months of 2019, which depressed upstream raw energy resource realizations for those with a large liquids production base (meaning those that produce more natural gas liquids, crude oil, and condensate than “dry” natural gas). Chevron Corporation (CVX): The energy giant posted EPS of $1.39 during the first quarter, down from $1.90 in the same period last year. Weaker realized raw energy resource prices offset a 7% … Read more

Occidental Petroleum, Backed by Buffett’s Financial Firepower, Makes a Go At Anadarko Petroleum in an Affront to Chevron

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Image Source: Occidental Petroleum Corporation – IR presentation The bidding war over Anadarko Petroleum is heating up with Warren Buffett’s Berkshire Hathaway offering to invest $10.0 billion in a new 8% preferred issue from Occidental Petroleum, along with warrants to purchase up to 80 million shares of OXY at $62.50, if the energy company successfully acquires Anadarko. Occidental is bidding against Chevron because both firms want Anadarko’s Permian Basin acreage, but the leverage Occidental would take on the fund the deal would be extremely onerous in our view. By Callum Turcan Apparently three’s a crowd in the energy world, with the bidding war over Anadarko Petroleum Corporation (APC) heating up now that Warren Buffett has thrown his hat into the … Read more