James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com
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Two Canadian companies and one from Israel are on the verge of entering the large and lucrative US market, hoping to cash in.
Pembina Pembina Pipeline is a NYSE listed company (PBA), is an energy infrastructure company relatively unknown to most US investors. The coming months will change their profile in the US, as they are aiming to make a positive final investment decision to purchase Jordan Cove liquid natural gas (LNG) export facility along the coast of Oregon, for $10 billion. Pembina received conditional approval from the Federal Energy Regulatory Commission (FERC) if it adheres to strict rules about reducing its environmental impact.
Canada Goose Canada Goose manufactures high-end winter clothing, and is already a popular brand in the US, but its direct retail presence in the lower 50 is minuscule. With only 4 stores in the US (and only 11 worldwide) the company is poised to make an impact on the US retail market. The company is planning on opening its 5th store in the US at the Mall of America in Bloomington, Minnesota, the location picked because it is a key tourist destination. The store will even feature a “cold room” where customers can try the coats on in the environment they were meant to be worn in.
UroGen Pharma Israeli-based UroGen Pharma (NASDAQ-URGN) plummeted 34% over the past 12 months, and 10% since the beginning of 2019, but investors should think of the price decline as a bargain and opportunity, and not necessarily a warning. The company develops drugs to treat rare cancers of the urinary tract. UGN-101 is the company’s leading candidate for approval in the US, as it has built a good reputation leading up to approval by US regulators later in 2019. Analysts say the drug should reach peak yearly sales of over $500 million. This might not seem like much compared to top selling pharmaceuticals that can make as much as $1 billion, but the company today is valued at only $800 million. Bottom line, most investors are in the dark about UroGen Pharma, but we expect that to change before 2019 ends.
Flight Centre, the world’s largest travel agency and ASX-listed company, purchased 25% of The Upside Travel Company. The company did not disclose how much they paid, but Flight Centre is now the largest single shareholder of Upside.
Flight Centre anticipates that Upside’s unique tech platform will add value to its Corporate Traveler brand. They look forward to using Upside to target customers in North, Central and South America immediately, and move on to customers in the UK at a somewhat later date.
“Upside … has the potential to disrupt traditional offerings in the [small and medium-sized enterprise] sector in the future,” said Graham Turner, Flight Centre managing director.
Dean Smith, Flight Center’s president, said the company would gain an edge over its competitors from Upside’s “cutting edge artificial intelligence” technology.
“Its use of machine-learning models to dynamically price business travel packages in real-time to save clients’ money while increasing traveler options is just one example of Upside’s best in class technology,” he said.
Flight Centre’s stock gained two percent after the announcement, trading at $44.07 in the afternoon.
The SEC has decided that Exxon does not have to allow its shareholders to vote on a company proposal to make public its goals for lowering CO2 emissions. This move is in reaction to a push by activist investors and led by the New York state comptroller to have Exxon set annual targets which will reach the goals prescribed by the international Paris climate agreement of 2015.
In January Exxon requested the SEC disallow a vote on the proposal to disclose such climate-oriented goals. The SEC answered this week, stating that it would not recommend the SEC to take any enforcement action against Exxon if the company decides to keep the proposal out of May’s annual shareholder meeting.
Activists say they want to vote on the issue to compel Exxon to be more responsible and accountable about climate change.
A lawyer for the SEC said the oversite agency decided in Exxon’s favor because the proposal would “micromanage” the company and harm the value and supplant the judgement of Exxon managers and directors.
Some recent moves made my Harley-Davidson points in the direction of the company’s embrace of electric vehicles of the two-wheel variety. LiveWire and some other concepts indicate the iconic motorcycle company wants a piece of where the future lies in electric transportation.
Included in the future is the growing consumer appetite for renting their transportation rather than owning. H-D vice-president of product portfolio, Marc McAllister spoke on CNN business about the e-bike rental platform. McAllister said that the fast-growing e-bike platform is more of a commodity market place and H-D is exploring how it could offer its brand to customers in this type of platform.
The thought of Harley-Davidson, so well-known as the bike of choice for serious bikers, is considering a life in the world of cute little electric scooters, is a bit mind-bending. But the company has faced enormous pressure over the past few years in what has become a frighteningly competitive market for big bikes.
So, it’s not so surprising that the company has plans to introduce a naked motorcycle, an adventure tourer, and even a small-cap bike for consumers in places like India. The company is now working on launching a full-electric ecosystem for its LiveWire. It is likely that entrance into the e-scooter space will bring more riders to the bond with Harley.
The joy experienced by global and US business after US President Donald Trump’s 2017 corporate tax break has turned into fear due to his isolationist trade policies, at least according to Fidelity International analysts.
The new study shows that “almost half of all analysts globally say Trump’s policies will be a drag on their sector.” Compare this sentiment to just last year when the same Fidelity analysts reported broad optimism about US leadership and policies.
This year Fidelity says that “most significant is the shift among analysts covering North American companies, whose watchful optimism has entirely evaporated.”
Fidelity’s research is based on 16,000 interviews with chief executives and chief financial officers conducted by Fidelity International, the non-US affiliate of Fidelity Investments. Each year they ask 165 analysts what companies in the sector they cover are expecting for the up and coming year.
Most significant was the doubt Fidelity’s analysts had about Trump’s trade policies. Forty-five percent said the policies would be a burden on business, up from thirteen percent last year. Seventy percent of its China analysts predict that companies’ return on investment will go down in 2019. Only twenty-nine percent thought the same last year.
Global chief of research for fixed income for Fidelity said that “as expected, the impact of trade wars is a key issue amongst our analysts, which has brought a lot of uncertainty into the system.”