(Bloomberg) -- A New York Times story based on Donald Trump’s long-sought-after tax data shows he avoided paying income taxes for most of the past two decades and paid only $750 the year he was elected president.That doesn’t mean he isn’t a billionaire.By pairing moneymaking businesses with spectacular money-losers, the Trump Organization has been able to shield profits generated by office properties and “The Apprentice” from tax collectors. It’s a souped-up version of the formula deployed by America’s landlord class for decades. But tax losses are different from operating losses, and the new data don’t necessarily show his business empire is heading into crisis, even if it’s carrying sizable debts.“Your tax return at the end of the day shows income and whatever deductions are claimed against that income. That’s it,” said Thorne Perkin, president at Papamarkou Wellner Asset Management. “It doesn’t necessarily show net worth.”The newspaper’s report described the extent of Trump’s tax-cutting strategies, such as taking deductions for consulting fees to his daughter and for hairstyling, which resulted in paying far less than poorer Americans. Although the report raises questions about the legality of some of the maneuvers, the new details don’t affect the Bloomberg Billionaires Index estimate of his wealth. His net worth is based chiefly on the value of his office and commercial property holdings, minus debts that were already known. The index estimated his net worth at $2.7 billion as of August, down $300 million from mid-2019, hurt by declining prices for certain types of real estate holdings.Trump’s office properties include commercial spaces at Trump Tower, a leasehold on 40 Wall Street in downtown Manhattan and a 30% interest in two office towers co-owned with Vornado Realty Trust. Collectively, the assets are valued at about $1.9 billion, and Trump’s share of the debt that encumbers them is about $670 million -- meaning they constitute almost half of his net worth.Financial records for his golf courses in Europe have long shown that, after including items such as depreciation, they run in the red. The tax data obtained by the Times reveal Trump’s American golf courses operate similarly.Depreciation is crucial for real estate investors. Depending on the type of property at hand, they can write off a portion of its value over a useful lifetime pre-determined by the Internal Revenue Service. That allows investors to claim tax losses on the property even when they’re putting money in their pockets.“You want to show as much losses as you possibly can for your deductions,” said Papamarkou’s Perkin. “That’s a big part of the advantages of real estate investing.”Tim Murtaugh, a spokesman for Trump’s re-election campaign, said in an interview on Fox News on Monday that the Times story is “not accurate” without specifying which parts. “I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits,” Trump wrote on Twitter.The Times in a Monday story also revealed that when he did pay taxes it was because of cash from his role fronting “The Apprentice” and not as a real-estate developer. He earned $197 million from the show and $230 million from branding, speaking engagements and licensing deals off the back of the fame the series provided. As well as borrowing against Trump Tower and selling stocks and bonds, he plowed some of that money into the money-losing golf courses.Carrying LoansThe tax documents described by the Times aren’t enough to draw conclusions about the profitability of Trump’s empire. But even if his golf courses are bleeding money, they contribute comparatively little to the tally of his fortune -- about $430 million before debt. Prices for golf resorts are down after years of decreasing interest in the sport. Younger generations simply aren’t taking it up as quickly as their elders are leaving it behind.Trump has long been required to disclose a road map to his assets and liabilities. In 2015, then a contender for the Republican party’s nomination for president, he released a financial disclosure listing the lenders behind his loans, ranges for their outstanding balances, when they were issued and when they must be repaid.That several are due in the next few years isn’t unusual in commercial real estate, where most loans run five to 10 years and are refinanced regularly. Unless there is a serious deterioration in the performance of his properties, it’s likely his portfolio can be refinanced before loans mature.Though Trump has carried on this balancing act for years, his re-election could make obtaining new loans harder if potential lenders don’t want to face the prospect of foreclosing on a sitting U.S. president. Conversely, Trump is engaged in a variety of court fights that could accelerate once he leaves office and complicate refinancing. The Covid-19 pandemic also may take a lasting toll on the value of his holdings, making future loans more onerous.His biggest financial vulnerabilities remain his hotel in Washington, where the pandemic has slowed business, and Doral, a sprawling golf resort in Florida. He has taken out nearly $300 million of personally-guaranteed loans from Deutsche Bank AG against these properties. The debts mature in 2023 and 2024, according to his personal financial disclosure.Room to BorrowBut Trump, whose earlier career included a series of bankruptcies, also has a safety valve: the office properties.When he refinanced Trump Tower in 2012 with a $100 million loan, it was appraised at $480 million. A 2015 refinancing of 40 Wall Street fetched a $160 million loan on a $540 million appraisal.That left both properties relatively low-levered for Manhattan real estate, suggesting either a newly learned financial conservatism on Trump’s part or a squeamishness on the part of the lender, Ladder Capital. Ladder, which specializes in loans for commercial property, is Trump’s second-biggest lender after Deutsche Bank.An August appraisal of the buildings by the Bloomberg Billionaires Index, based on current net income and prevailing capitalization rates, was less sanguine, valuing them at $365 million and $375 million respectively. But so long as the pandemic doesn’t crater office values, the properties could carry far more debt, were Trump to need it.(Updates with earnings from the “Apprentice” in 11th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
For some, Tesla Inc's (NASDAQ: TSLA) battery day was a letdown: the technology sounded great, but it's still several years away, and Tesla did not have an onstage demo. Now CEO Musk has said in a tweet that the new 4680 cells have been used in prototype vehicles for months.While the vehicle models are unknown, a safe guess would be the Plaid Model S demonstrated on-screen at the event. > Suppliers. We're only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn't clear that we've actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard.> > -- Elon Musk (@elonmusk) September 26, 2020Benzinga's Take: This is great news. The fact that Tesla has been using the batteries for months mean they work well enough for Tesla to feel confident in sharing that they are coming.The last concern would be longevity, but there are laboratory testing methods to speed up battery degradation to find an estimated battery lifespan. Photo from Tesla Battery Day presentation.See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Tesla Looking To Acquire Stake In LG Battery Business: Report * How Catherine Wood's Diverse Ark Investment Team Is Paying Huge Dividends(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
According to the company's website, the vehicle is the first to offer "true four wheel drive" using four in-wheel hub motors to significantly improve the truck's control. The Endurance also has the fewest moving parts of any motor vehicle, resulting in fewer maintenance costs and a significantly lower total cost of ownership than traditional commercial vehicles.
On CNBC's "Mad Money Lightning Round," Jim Cramer said to a viewer he is right to buy Boeing Co (NYSE: BA). He likes it because American Airlines Group Inc (NASDAQ: AAL) got some money from the government, airlines are able to test people before they get on a plane and masks work in planes.It's not General Electric Company's (NYSE: GE) year, said Cramer. It has a very good turnaround plan, but it's not ready yet, he added. This time next year, it's going to be a much better stock, but a lot of people aren't that patient.Cramer feels like he had his call with Rocket Companies Inc (NYSE: RKT) and he is now ready to move on. He explained that there are a lot of people with short positions because they don't like the ownership structure.RedHill Biopharma Ltd (NASDAQ: RDHL) is a smart Israeli company, but Cramer would rather own Royalty Pharma plc (NASDAQ: RPRX).Cramer is worried about Walgreens Boots Alliance Inc (NASDAQ: WBA) because its prescription drug side and the front of the store are under attack. He doesn't know what could make it trade higher.Instead of Illumina, Inc. (NASDAQ: ILMN), Cramer would rather buy Thermo Fisher Scientific Inc. (NYSE: TMO) and Danaher Corporation (NYSE: DHR).Cramer likes Ping Identity Holding Corp (NYSE: PING).See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Mike Khouw Updates His Nike Options Trade * 'Fast Money' Picks For September 28(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Margarita Louis-Dreyfus took another hefty dividend from the eponymous agricultural-commodity trading house she controls, as the billionaire continues to squeeze the business for cash.During the first six months of the year, Louis Dreyfus Co. paid a dividend of $302 million. The payout related to last year’s profit, the sale of several assets in Canada and its former metals-trading business, according to the company’s interim financial statement. The dividend reduced the company’s equity to $4.48 billion at the end of June, down from $4.79 billion six months earlier.Louis-Dreyfus, who controls more than 96% of the holding company that owns LDC, has been taking big dividends over the past few years to help repay about $1 billion she borrowed to buy out other family members. The payouts, often surpassing the trading house’s profit, have steadily reduced the company’s value.The billionaire owner has been in talks to sell a minority stake in the company, recently holding negotiations with Abu Dhabi sovereign wealth fund ADQ. A successful deal would give the trading house an injection of much-needed cash.On top of its owner’s troubles, the company has struggled over recent years, amid frequent management changes and declining earnings. Veteran Michael Gelchie will become chief executive officer later this week -- the seventh CEO appointed by Dreyfus in eight years -- replacing Ian McIntosh.Despite its recent travails, the first half of 2020 showed some improvement for LDC. Net income climbed 77% to $126 million from a year earlier, despite significant losses from the collapse of Luckin Coffee Inc. Net sales decreased to $16.3 billion, as both prices and volumes shipped fell year-on-year.“The results reported today put LDC in a strong position from which to advance its ambitious growth plans,” said Gelchie.Net debt fell to $6.7 billion at the end of June, from $6.9 billion at the end of 2019, reducing its adjusted leverage ratio to 2.8 times.Dreyfus is the D in the vaunted “ABCD” group that dominates the world of agricultural commodities trading. The others are Archer-Daniels-Midland Co., Bunge Ltd. and Cargill Inc.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bull or bear market, no investment is a sure thing. Especially in the current financial environment, which remains riddled with uncertainty, finding compelling plays can be challenging for even the most seasoned market watchers. However, this is not to say that investment opportunities with stand-out growth prospects can’t be found.Roth Capital research analyst Zegbeh Jallah pointed to the healthcare sector, in particular, as an area of the market worthy of investor attention.“Biotech had had a strong performance during the midst of the pandemic, and we expect it to remain so, largely driven by solid fundamental catalysts. This is supported by the resumption of preclinical and clinical efforts at many companies, albeit with some new procedures in place,” Jallah noted.Bearing this in mind, our focus turned to two penny stocks from the healthcare space backed by Roth Capital. Along with the stamp of approval, the firm believes that both of these tickers trading for less than $5 per share are primed for a massive rally.Digging a bit deeper, we used TipRanks’ database to find out what makes both so compelling despite the risk involved.Seelos Therapeutics (SEEL)Primarily focused on neurological and psychiatric disorders, Seelos Therapeutics works to bring cutting-edge therapies to market. Currently going for $0.67 apiece, Roth Capital believes that its share price presents investors with an opportunity to get in on the action.Calling SEEL “substantially undervalued,” firm analyst Jonathan Aschoff points to two of the company's pivotal programs, SLS-002 (intranasal racemic ketamine), its treatment for acute suicidal ideation and behavior (ASIB) in patients with major depressive disorder (MDD), and SLS-005 (trehalose), its ALS treatment, as major upside drivers.SLS-002 is set to enter a proof-of-concept (POC) trial, with the FDA “eager for a useful anti-suicide drug.” Aschoff noted, “We firmly believe that, although it is formally called a POC trial, achievement of two endpoints, the primary endpoint of Montgomery-Åsberg depression rating scale (MADRS) and the key secondary endpoint of Sheehan-suicidality tracking scale clinically meaningful change measure (S-STS CMCM), will be enough to allow SEEL to file for approval of a ketamine importantly differentiated by its ability to reduce suicidal ideation.”Aschoff believes it’s likely that SEEL will have already kicked off the 120-patient randomized trial portion when it publishes data from 16 patients dosed with SLS-002. The analyst added, “We also believe that SEEL was given extremely helpful trial design guidance from the FDA due to the clearly evident observation that current national and global affairs are contributing to suicide more strongly now than perhaps ever.”As for SLS-005, the company recently got permission from the FDA to proceed with its registrational Phase 2b/3 ALS trial. Based on data from multiple preclinical studies, treatment with the therapy resulted in the preservation of motor neurons, motor function and prolonged survival.What’s more, SLS-005 has been granted Orphan Drug Designation (ODD) in the U.S. and E.U. for other indications such as Sanfilippo syndrome, spinocerebellar ataxia type 3 (SCA3) and oculopharyngeal muscular dystrophy (OPMD), as well as Fast Track designation for OPMD."We believe that a trial in SCA3 is more likely to come first [...] We anticipate SEEL's SCA3 trial to enroll about 150 patients and evaluate patients by SARA at six months, in which showing stability would be meaningful and showing improvement would be a home run," Aschoff wrote. To this end, Aschoff rates SEEL a Buy along with a $12 price target. This puts the upside potential at a massive 1,715%. (To watch Aschoff’s track record, click here)Turning now to the rest of the Street, 2 Buys and no Holds or Sells have been published in the last three months. Therefore, SEEL has a Moderate Buy consensus rating. With the average price target clocking in at $8, the upside potential lands at 1,111%. (See SEEL stock analysis on TipRanks)Acer Therapeutics (ACER)Developing therapies for rare and life-threatening diseases, Acer Therapeutics wants to address the unmet medical needs of patients. With several catalysts slated for the near-term, Roth Capital thinks its $2.50 share price reflects an attractive entry point.Analyst Jonathan Aschoff, who also covers SEEL for the firm, points out that during a recent meeting with management, the “overwhelmingly focus was on emetine, ACER-001 and Edsivo, and each of these programs are capable of providing at least one meaningful near-term investment catalyst.”Emetine, a potential COVID-19 treatment, is being developed as part of a collaboration with the National Center for Advancing Translational Sciences (NCATS), one of the National Institutes of Health (NIH). Speaking to the therapy’s potential, Aschoff notes that the candidate reactivates the cellular stress response, making it a strong antiviral with nanomolar potency about 50 times greater than remdesivir, Gilead’s COVID-19 treatment. The broad antiviral activity could also allow the drug to be used against future novel viruses, in the analyst’s opinion. ACER is pursuing BARDA and Gates Foundation funding for the program. While Aschoff acknowledges that the company could fund part of the clinical development itself, he argues the program is more likely to progress with external funding. The capital would allow ACER to submit an IND in 1H21 and initiate a Phase 2/3 trial later that year. As a response from BARDA is set to come in Q3 2020, the analyst sees a major possible catalyst.As for ACER-001, its fully taste-masked, immediate-release formulation of sodium phenylbutyrate (NaPB) developed using a microencapsulation process, Aschoff believes ACER is speaking to several larger pharmaceutical companies about partnership opportunities, with plenty of upside in store should an agreement be reached.“We highly favor ACER-001's edge over the competition, given Buphenyl's awful taste and smell and Ravicti's egregious pricing of about $900,000 per year. With ACER-001's taste masking and parity pricing to Buphenyl (about $350,000 per year), ACER-001 is a no brainer, in our view...We believe that FDA buy in on the food effect without requiring addition clinical work would be a meaningful stock catalyst,” the analyst commented.Additionally, Edsivo, ACER’s new chemical entity (NCE) designed for the treatment of vEDS, reflects a key point of strength, in Aschoff’s opinion. Ehlers-Danlos Syndrome (EDS) is a group of hereditary disorders of connective tissue. “We essentially view Edsivo as a call option, with significant share price upside if the FDA allows ACER to amend and refile its NDA after only having to include existing natural history data... Edsivo could generate meaningful U.S. revenue for ACER, about $350 million annually, if approved for vascular Ehlers-Danlos syndrome,” he explained.It should come as no surprise, then, that Aschoff stayed with the bulls. To this end, he left a Buy rating and $10 price target on the stock. Investors could be pocketing a gain of 300%, should this target be met in the twelve months ahead.Looking at the consensus breakdown, opinions are more varied. As 2 Buys and 3 Holds have been issued in the last three months, the word on the Street is that ACER is a Moderate Buy. At $10, the average price target matches Aschoff’s. (See ACER stock analysis on TipRanks)To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
If you really want to know which stocks the experts – and those in the know – are buying, pay attention to what they’re doing. Stock reports, company reviews, and press statements are helpful, but you’ll get significant information from watching what the insiders are up to.The insiders – the corporate officers and board members – have to disclose when they snap up shares to prevent any unfair advantages. Tracking their stock purchases can be a useful strategy because if an insider spends their own money on a stock, it could signal that they believe big gains are in store.So, investors looking for stocks that may be flying ‘under the radar,’ but with potential to climb fast, watching for insider purchases identify some sweet market plays. To make that search easier, the TipRanks Insiders’ Hot Stocks tool gets the footwork started – identifying stocks that have seen informative moves by insiders, highlighting several common strategies used by the insiders, and collecting the data all in one place.Fresh from that database, here are the details on three stocks showing ‘informative buys’ in recent days.TravelCenters of America (TA)We’ll start with a company that you probably don’t think about often, but that does provide an essential service. TravelCenters of America is the largest publicly traded owner, operator, and franchisor of full-service highway rest stops in the US. TA started out operating truck stops for rest, repair, and maintenance, and has since expanded to full-service fueling stations offering both gasoline and diesel, fast-food restaurants, convenience stores, and other rest stop amenities. Their network of rest stops is part of the infrastructure that makes long-distance motor transport, both private and commercial, possible in the USA.As can be imagined, the social lockdowns and travel restrictions during the coronavirus pandemic were not good for TA. The good news is, the worst of the pandemic hit during Q1, and the first quarter is normally TA’s slowest of the year. This year, the first quarter showed a net loss of $1.81 per share. In the second quarter, when warmer weather normally leads to increased driving, the pandemic restrictions were also – at least partially – lifted, and TA reported a sudden turnaround, with a 59 cent EPS profit. Even so, that missed the forecast by almost a dime. The outlook for Q3, normally TA’s strongest of the year, is for EPS of 73 cents.Turning to the insider trades, Adam Portnoy of the Board of Directors has the most recent informative buys. Earlier this month, he purchased over 323,000 shares, laying out more than $5.32 million for the stock. Analyst James Sullivan, of BTIG makes two observations about TravelCenters. First, he points out, “The long-haul trucking industry has an approximate 71% share of total primary tonnage in the U.S. freight industry, making it the primary mode of freight transportation.” Sullivan then adds that this opens up opportunity for TA going forward: “The increasing demands of the nation’s large trucking fleets for consolidated service providers that can provide fuel and truck service on a national basis appear likely to drive additional consolidation in the industry.”Sullivan rates TA shares a Buy, and his $34 price target suggests the stock has an impressive 82% upside potential for the coming year. (To watch Sullivan’s track record, click here)Overall, shares in TA are rated a Strong Buy from the analyst consensus, based on 5 recent reviews including 4 Buys and 1 Hold. The shares are selling for $19.24, and the $22.70 average price target implies room for 18% upside growth. (See TA stock analysis on TipRanks)Highwoods Properties (HIW)The next stock is a real estate investment trust. Highwood operates mostly in the Southeast US, but also in Pittsburgh, where it acquires, develops, leases, and manages a portfolio of suburban office and light industrial properties.Where most companies reported heavy losses during the corona crisis, HIW saw revenues in 1H20 remain stable. EPS has grown sequentially into Q1 and remained flat in Q2 at 93 cents. Both quarter beat EPS expectations.Despite the solid financial results, HIW shares have still not recovered from the market collapse of midwinter. The stock is down 27% year-to-date.Through all of this, Highwoods has maintained its dividend, as is common among REITs. The company has a 17-year history of dividend growth and reliability, and the current payment of 48 cents per common share has been stable for the past 7 quarters. At this level, it annualizes to $1.92 and gives a yield of 5.8%.Highwoods’ insider trading has come from Board member Carlos Evans, who purchased 10,000 shares for $337,000 dollars last week. His move was the first informative buy on HIW in the last 6 months.Truist analyst Michael Lewis is impressed by the quality of HIW’s portfolio. He writes, “We continue to believe that HIW’s portfolio is one of the best-positioned among traditional office REITs in light of the COVID-19 pandemic. Rent collections have been excellent and there are no large near-term lease expirations. More broadly, the portfolio should benefit from being focused in drivable, close-in Sunbelt suburbs.”In line with these comments, Lewis rates the stock a Buy. His price target, $45, indicates a 31% potential upside from current levels. (To watch Lewis’ track record, click here)Overall, HIW has a cautiously optimistic Moderate Buy consensus rating from the Street. This breaks down into 2 Buy ratings and 1 Hold. We can also see from TipRanks that the average analyst price target is $43, which implies a ~25% upside from the current share price. (See HIW stock analysis on TipRanks)VEREIT (VER)The last stock on our insider trading list is another REIT. VEREIT is major owner and manager of retail, restaurant, and commercial real estate, with a portfolio that includes over 3,800 properties worth a collective $14.7 billion. The company’s assets are 45% retail and 20% restaurants; the rest is mainly office and light industrial sites. The total leasable square footage is 88.9 million square feet.So VEREIT is a giant in the REIT sector – but size didn’t protect it from the general downturn this year. Share performance has been lackluster, and revenues have been falling off gradually since Q4 of last year. The second quarter results showed $279 million on the top line, the lowest in a year – but the quarter also saw earnings turn back upwards, reaching 17 cents per share.VER cut back on its dividend earlier this year, reducing the payment to 8 cents per share to keep it in line with earnings. That dividend has been maintained, and the next payment is set for mid-October. The current dividend yield is 4.5%, well over double the average found among S&P stocks.The big insider trade on VER comes from Board member and CEO Glenn Rufrano. He spent over $252K on a block of 40,000 shares, pushing the insider sentiment on this stock into positive territory.Covering the stock for JPMorgan, 5-star analyst Anthony Paolone sees an important strength in VER, noting that the company has been successful in collecting rents during the crisis period. “[Its] collections showed good improvement going into July, with 85% collections in 2Q and 91% in July; when considering all the abatements and deferrals, it appears that at this point about 94% of pre-COVID contractual rental revenue has been addressed, and it seems to us that a normalized run rate for this vast majority of the portfolio should take hold in early 2021; the company is making progress in working through the remaining 5-6% of non-collections,” Paolone noted.Paolone gives VER an Overweight (i.e. Buy) rating, and his $8 price target implies a 22% upside for the next 12 months. (To watch Paolone’s track record, click here)All in all, VER has drawn optimism mixed with caution when it comes to consensus opinion among sell-side analysts. Out of 5 analysts polled in the last 3 months, 3 are bullish on the stock, while 2 remain sidelined. With an 11% upside potential, the stock's consensus target price stands at $7.25. (See VEREIT’s stock analysis at TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Space Exploration Technologies Corp CEO Elon Musk revealed Monday that the company has plans to take its satellite broadband unit Starlink public, but not until the revenue growth is "smooth" and "predictable."What Happened: Such an initial public offering would come "several years in the future" as the public market doesn't "like erratic cash flow," the billionaire suggested, adding a laugh.Musk added that whenever such an IPO happens, Starlink can be trusted to prioritize retail investors. "I'm a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it," the SpaceX CEO claimed.> We will probably IPO Starlink, but only several years in the future when revenue growth is smooth & predictable. Public market does *not* like erratic cash flow haha. I'm a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it.> > -- Elon Musk (@elonmusk) September 28, 2020SpaceX is considered to be one of the most valuable venture-backed businesses in the United States, with an estimated valuation above $46 billion as of August.Why It Matters: In March, Musk, who also leads Tesla Inc (NASDAQ: TSLA), said publicly that he was not considering an IPO for Starlink, saying, "We're thinking about that zero."The broadband project involves launching 12,000 satellites in low Earth orbit in order to provide global internet coverage. Analysts contend that SpaceX's value is mostly within its broadband arm, Starlink, and if the project is a success, it could achieve a $120 billion valuation, or else it could drop to $5 billion.Photo courtesy: SpaceX via FlickrSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Tesla Chinese Rivals Not Losing Sleep Over Planned K Electric Vehicle * Cleveland-Cliffs To Buy ArcelorMittal's US Unit For .4B(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
U.S.News & World Report
Silicon Valley companies have been at the center of the Wall Street rebound from the March 23 stock market low. Thankfully, there are technology stocks outside of the tried-and-true FAANG names that also look appealing, both for the month ahead and for long-term investors.
(Bloomberg) -- Back in March, long before a short seller would raise questions about electric-truck company Nikola Corp. and hasten its founder’s exit, early investors in the company were expressing concerns of their own.Those investors, led by mutual-fund giant Fidelity Investments, were worried that Trevor Milton, for all his brash visionary talk and Twitter braggadocio, lacked the ability that Elon Musk possesses to deliver these sorts of newfangled products to market. They lobbied successfully to remove him as CEO before the company’s June IPO and for Milton’s father to leave the board, according to people familiar with the matter. When the deal was done, Milton only held the title of chairman, the post he resigned this month.The back-room negotiations show that Milton’s past was a concern to investors months before General Motors Co. executives placed a bet on the company in a $2 billion deal carved out after the IPO. They liked Milton’s vision and his ability to raise cash and felt the venture was safeguarded from his shortcomings in operations by his push upstairs, say people familiar with the matter. Nonetheless, the events that have unfolded since the short-seller report, with Nikola’s stock plunging amid a steady stream of negative headlines, have exposed just how high the risks still were.Now, it’s up to former GM Vice Chairman Steve Girsky, whose blank-check company VectoIQ took Nikola public via reverse merger in June, and Nikola CEO Mark Russell to stabilize the business and regain investor confidence. The plan with GM was to use Nikola’s hot stock and Milton’s ability to raise money to build a hydrogen-fueled trucking business with GM’s technology.“There is obviously someone on the diligence side who isn’t going to get a nice bonus this year,” said Reilly Brennan, founder of the venture capital fund Trucks Inc. “The best possible thing if you’re a shareholder is that Milton is no longer running the company and you have Girsky as chairman and GM providing technology.”The GM deal was originally scheduled to close Sept. 30, and the automaker has said it plans to carry through, but that timing may slip, say people familiar with the matter. BP Plc is still engaged with Nikola in talks to partner on a network of hydrogen fueling stations for fuel-cell trucks the company hopes to sell, but also is slowing the pace for a deal, said the people, who asked not to be identified discussing private information. BP and GM declined to comment.Shares of Nikola fell 4.78% to $18.55 as of 9:45 a.m. Monday in New York and down 45% since it went public. GM rose 2.5% to $29.72.Milton’s tale reads like a Greek tragedy. The report by short seller Hindenburg Research accused Milton of overhyping Nikola’s technology and has prompted investigations by the Justice Department and U.S. Securities and Exchange Commission. A cousin has accused him of a decades-ago sexual assault, which he denies. The company’s value peaked at $30 billion and is now worth about $7 billion.Girsky and GM Chief Executive Officer Mary Barra have both said publicly that they did plenty of due diligence. People familiar with the matter say that GM found out when scouting the deal that it had better batteries and fuel-cell technology but joined forces because Nikola had a working semi truck and access to capital markets. In addition, GM will get paid to build Nikola’s Badger pickup on existing assembly lines. Milton was so excited to get the Badger pickup program moving that he signed a deal that heavily favored GM, one of the people said.Nikola’s stock and GM’s $2 billion stake are worth less than half what they were on Sept. 8, when the deal was announced. Milton’s own stake is worth $1.7 billion, down from almost $5 billion at one point.Humble BeginningsMilton said in a June interview with Bloomberg News that he grew up in modest surroundings in Layton, Utah. His family moved to Las Vegas when he was very young and he lost his mother to cancer shortly after moving back to Utah in the sixth grade. He wrote on Twitter he didn’t finish high school, earning an equivalency certification instead, and later dropped out of college. His Twitter account has since been deleted.He grew up in a tight-knit Mormon family, according to Aubrey Smith, his first cousin. She went on social media recently and accused him of sexually assaulting her in 1999 when she was 15 and he was 17.In a public account on Facebook and Twitter, and repeated in a phone interview, Smith said that Milton came onto her at the funeral of their grandfather. He took her shirt off without permission, Smith wrote, and then he touched her inappropriately before someone knocked at the door and she ran out.Milton denied the allegations through a spokesman.Smith said Milton raised money from family members to get his start. He founded and ran several businesses, including a home-security company that Milton claims he sold for $1.5 million. Next, in 2009, he founded an e-commerce platform called Upillar.com, which Milton claims “pioneered the shopping cart online.”Clean PowerThen he got into clean propulsion but ended up embroiled in litigation with dHybrid Inc., which he founded in 2009. The company retrofitted diesel vehicles with natural-gas-burning turbines, claiming the dual system had greater efficiency.But a deal with Swift Transportation Co. in 2010 ended in court when Swift alleged dHybrid defaulted on a $322,000 loan and that it retrofitted only half of the agreed vehicles. The case was dismissed in 2015.Milton later tried to sell dHybrid to a company called sPower in May 2012 but that, too, got mired in lawsuits after sPower backed out and accused Milton of exaggerating its technological capabilities.Amid the litigation, Milton started another company with a very similar name, dHybrid Systems, selling it in 2014 to Worthington Industries.During an interview with Bloomberg in June, Milton said that dHybrid Inc. was a success but conceded that, “we ended up closing that one down because of some litigation.”His next startup was Nikola, founding it in 2014 in Salt Lake City before moving to Phoenix. Emulating Musk, he took the name from the electricity pioneer Nikola Tesla, and the company was soon billed as the Tesla of Trucks. His plan was seen as potentially disrupting the entire transportation industry by making trucks that ran on batteries or hydrogen-fuel cells. He also planned to build a network of hydrogen filling stations.Friends and FamilyMilton had friends and family members working for Nikola despite resumes that didn’t match the job. His brother, Travis Milton, is director of hydrogen and infrastructure. His LinkedIn profile shows that most of his experience was being “self-employed” in Maui. The short seller, Hindenburg Research, said that Travis Milton poured concrete as a contractor. Milton’s father Bill was originally on the board but stepped down when VectoIQ took the company public.The company’s stock prospectus said that Nikola had awarded more than 3 million stock options “to recognize the superior performance and contribution of specific employees.” The list included Travis Milton and an uncle, Lance Milton, the document said, acknowledging that they are relatives.As Milton went public with Nikola’s technology, questions soon arose involving his claims about the company’s fuel-cell system. He bragged in an investor video in 2019 that the company had created “what other manufacturers said was impossible to design.” But while Nikola holds patents in fuel-cell and battery technology, most of its planned hardware was coming from German supplier Robert Bosch Gmbh.Nikola DemonstrationsIt became clear that Milton had gotten ahead of himself. A 2016 demonstration showed a truck that didn’t have a working hydrogen-fuel-cell system and was missing key parts, people familiar with the matter said in June. Milton said at the time that the parts were removed as a safety precaution.In July of this year, he recorded a video of the semi truck in which he ran alongside the vehicle as it coasted at low speeds in a parking lot. Aping Musk’s combative social-media persona, Milton took a shot at his detractors saying, “these damned trolls, I wonder if they are going to apologize to everyone for the lies they spread the tens of thousands of comments about how fake we are.”Girsky said in the webcast “Autoline This Week,” in which Bloomberg participated, that he has been in Nikola’s fuel-cell trucks and that they work.Still, when the GM deal was done, GM will be supplying all of the technology for every global market except Europe. Nikola’s pickup truck, called Badger, will use GM’s Ultium battery, and the semis will run on a fuel cell developed by GM and Honda Motor Co.Since Milton’s departure, Nikola has billed itself more as an integrator of other technologies into its Badger pickup and semi trucks.For GM’s part, the automaker is protected from any financial downside. GM got 11% of the stock for no cash investment and gets paid for its technology. If Nikola fails, GM won’t lose a dime.Milton has remained silent and is out of the company. He unknowingly presaged his own downfall in the June interview with Bloomberg: “Part of becoming a better person in life is losing everything you have got and having nothing left.”(Updates with Monday trading in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Sorrento Therapeutics (SRNE) has taken a unique approach to fighting the coronavirus. While most pharma companies taking the good fight to COVID-19 have focused their energies on one area, Sorrento has taken a more scatter gun approach. The biotech is developing a COVID-19 vaccine, a diagnostic test, an antibody test and has several therapeutic candidates.While it remains to be seen whether the varied method pays off, Dawson James analyst Jason Kolbert believes Sorrento might have a fan, who as they say, has some influence in high places.During a presidential press conference, “the president mentioned among promising therapeutics a monoclonal-antibody that is 70% effective," Kolbert said. "We spoke with Sorrento afterward and remain optimistic that the company’s mAB is very effective (>70%) and is progressing towards approval.” Considering Trump has in the past suggested injecting bleach might be an apt treatment for COVID-19, it is open to debate whether such an endorsement amounts to a positive development. Either way, Sorrento has been making progress with its various programs.The company is working on an antibody cocktail that will be capable of providing 100% protection against a SARS-CoV-2 coronavirus infection, one which will remain effective even if the virus mutates.Kolbert believes that through the U.S.'s Project Warp Speed, the cocktail could get a fast track to commercialization.The target took a step closer to fruition on September 17, when Sorrento got the go ahead from the FDA to proceed with the Phase 1 trial of its COVID-19 neutralizing antibody, code named COVI-Guard (STI-1499).The antibody demonstrated promising in vitro results as it was able to completely block the SARS-CoV-2 virus, making STI-1499 Sorrento's “lead candidate for potential cost-effective passive protection against COVID-19.”Additionally, while competitor Eli Lilly is currently further down the line in the COVID-19 neutralizing antibody race, it recently reported positive interim results in a placebo-controlled study of a compound similar to STI-1499. Kolbert believes “the Sorrento antibody could be more potent and manufactured more easily at a larger scale.”All in all, Kolbert keeps a Buy rating on SRNE shares alongside a $21 price target, which implies a 103% upside from current levels. (To watch Kolbert’s track record, click here)Only one other analyst is currently keeping a close eye on Sorrento developments, also recommending the stock a Buy. Put together, Sorrento has a Moderate Buy consensus rating backed with a $25.5 price target. Investors are looking at serious upside of 185.5%, should the target be met over the next 12 months. (See SRNE stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Why do pension fund trustees keep doing this, and falling for one of the oldest games in the business? The $4.8 billion pension fund of New York’s Metropolitan Transportation Authority just became the latest to sue a hedge-fund manager after losing hundreds of millions of dollars in complicated financial vehicles that maybe nobody could understand. The MTA joins a list of woebegone pensions suing German financial giant Allianz over its “Structured Alpha” funds, which collapsed in the market turmoil earlier this year wiping out 97%—yes, really—of investors’ capital.
In the first half of 2020, many companies have cut back on their dividend payments, slashing or suspending them to conserve cash against the downturn. That trend appeared to reverse itself – or at least, to start to reverse itself – in August, when 13 companies announced dividend increases while only 2 announced cuts. Is this a signal that Q3 will show rebounding sentiment toward dividend and buyback policies? The recessionary pressure is easing; and dividends are a powerful attractor for cautious investors.Looking at the current situation from Evercore ISI, market strategist Dennis DeBusschere believes the worse is over, saying, “[A] sharp drop in cash returns is unlikely [in 2h20.]” He believes that companies will continue, albeit slowly, to restore both dividends and buyback policies – but cautions that investors should not expect a return to pre-pandemic levels for until at least 2022.“Though a recovery back to pre-pandemic levels is not likely for at least two years, the negative impact on high cash return names and income strategies should continue to stabilize through year end,” DeBusschere opined. Following DeBusschere’s lead, Evercore’s stock analysts have been tagging high-yield dividend payers as likely prospects for investors looking to buy in. According to the TipRanks data, these are Buy-rated stocks, with at least a 7% dividend yield and upwards of 10% upside for the year ahead. Columbia Property Trust (CXP)The first stock on today’s dividend list is a real estate investment trust, Columbia Property Trust. Columbia holds a portfolio exceeding 6 million square feet of office space in New York, San Francisco, and Washington DC, with smaller investments in Boston, Mass. New York and San Fran were hit hard- by coronavirus and the lockdown policies implemented to halt its spread. That could have badly hurt the company- but Columbia’s 97% lease occupancy and long-term leases (the average term remaining is 6 years) provided a level of insulation.That can be seen by CXP’s performance in 1H20. The company revenues and earning both grow sequentially in the first and second quarters of the year. Finishing the half, the top line reached $79.4 million for the second quarter, and Q2 EPS came in at 40 cents, well above the 35-cent forecast. In a key marker of the company’s fundamental strength, Columbia reported 97.2% success in rent collection, despite the corona pandemic.The strong quarterly results are a welcome contrast to the share performance. CXP fell sharply in the first quarter, during the market’s mid-winter swoon, and has yet to recover.The financial performance was the key, as far as the company’s dividend policy. In August, the company declared the Q3 payment, sent out on September 15, of 21 cents per common share. This was the fourth quarter in a row with the dividend at this level, and the annualized payment of 84 cents per share give a strong yield of 7.8%. CXP has a four-year history of gradual dividend increases.Analyst Sheila McGrath, writing for Evercore, points out the obvious pressures in CXP’s office-space niche: “Sentiment to the office sector with work from home concerns has pressured valuations and increased Betas for the office names.” In analyzing the company’s particular situation, however, she also points out a clear strategy for continued success, saying, “CXP has high occupancy and limited near term rollovers on the horizon. Importantly, the majority of rollover in 2020 is at rents that are substantially below market. Consequently, we expect CXP to work with existing tenants to maximize renewals and minimize downside in the current uncertain environment.”To this end, McGrath gives CXP an Outperform (i.e. Buy) rating, with a $15 price target indicating room for 39% upside growth. (To watch McGrath’s track record, click here)Columbia Property Trust has a Strong Buy rating from the analyst consensus, based on 3 Buys and 1 Hold set in recent months. The stock’s share price is $10.77, and the average price target, at $15.50, is slightly higher than McGrath allows, and suggests an upside potential of 44%. (See CXP stock analysis on TipRanks)AllianceBernstein (AB)Next up is an asset management stock, AllianceBernstein. AB provides both investment services, both research and management, for retail investors and high-net worth individuals around the world. The firm boasts over $640 billion in total assets under management.AllianceBernstein saw 1H20 results that were the opposite of CXP’s above. The company’s share performance saw a large rebound after the February market collapse, and is up 96% from its March trough. That positive result was not reflected in the financial reports during the half. Both quarters saw sequential declines at the top and bottom lines, with the Q2 numbers coming in at 61 cents EPS and $63.2 million in revenue. Even with the decline in 2020, however, EPS was still up 9% year-over-year.Management at AB has a history of both keeping the dividend reliable, not missing a payment, and of regularly adjusting the payment to keep it affordable. They have kept that policy during the corona crisis. The current payment is 61 cents per common share, and while this is down from the 85 cents paid out in February, it still yields 8.9% for investors.John Dunn, writing the review of AB for Evercore, was impressed by the firm’s ability to grow during the corona pandemic. “A repeat of positive flows in both the retail & inst’l channels, setting up an impressive inflow month: AB’s month-end AUM of $643bn was above our / Street quarter-end estimates of $619bn / $618bn. AB saw 3% higher m/m AUM, on market gains in tandem with organic growth which we’ve now seen in 6-of-8 months so far in ’20,” Dunn noted. Dunn gives AB shares a price target of $32, suggesting a one-year upside of 9.5% and supporting his Outperform (i.e. Buy) rating. (To watch Dunn’s track record, click here)Overall, AllianceBernstein shares, with a 2 recent Buy reviews, have a Moderate Buy rating from the analyst consensus. The shares have an average price target set at $30.50, which implies an upside of 11% from the current trading price of $10.77. (See AB stock analysis on TipRanks)MGM Growth Properties (MGP)With the last stock on our list today, we move back to the REIT sector. MGM Growth Properties focuses on entertainment and leisure properties, with a portfolio of 13 destinations in 8 states, mainly casinos and luxury hotels, totaling over 27,000 rentable rooms.As can be imagined, the corona crisis has not been kind to a luxury resort company; social distancing rules and restrictions on commerce have put a damper on both the casino and hotel industries. EPS for each quarter of 1H20 came in at just 56 cents – down from 58 cents in 4Q19 and 59 cents 3Q19. In addition, the 2020 results have come in well below the forecasts. MGP took moves in the second quarter to protect itself from the decline in earnings, with an issue of senior notes worth $800 million.Despite the shock to its business niche, MGP shares showed a strong bounce back from the market crash earlier in the year. The stock is up 119% from its lowest point.The mixed results of the recent months, and the uncertain future during this ‘corona time,’ has not derailed MGP’s dividend policy. The company has been gradually growing the payment for the past 4 years, and raised it again for the June payment this year. The current dividend payout is 48.75 cents per common share, or $1.95 annually. The yield is robust, at 7%, or nearly 3.5x the average found among S&P-listed stocks.Evercore’s Steve Swaka acknowledges weaknesses in MGP’s position, but also points out that the company has a powerful ally in sister-company MGM: “As we have stated at other times recently, although prior to COVID many investors had viewed MGP’s relationship with MGM as a net-detriment to the investment thesis, under the current circumstances it’s hard to see where this has not turned out to be a net-positive.”Overall, Swaka rates MGP shares an Outperform (i.e. Buy) along with a $34 price target. This figure indicates room for 21% growth in the year ahead. (To watch Swaka’s track record, click here)The analyst consensus rating on MGP shares is a Strong Buy, based on 5 Buy reviews and a single Hold set in recent weeks. The stock’s $28.50 share price and $33 average price target make the one-year upside 15.5%. (See MGP stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.