10
Aug

Monday Morning

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Market Sentiment Watch:

  • Increased U.S. China tensions,
  • U.S. Covid stimulus in question,
  • Busier week on the energy data front (EIA STEO, OPEC Monthly,  IEA Monthly)

In today's post please find:

  • The Week That Was,
  • The Five Things,
  • an updated 2Q20 calendar that adds week #4,
  • a quick update of WKHS 2Q results,
  • and some other odds and ends.

 

Ecodata Watch:

  • We jet job openings at 10 am EST (no forecast, last read was 5.4 mm).

The Week Ahead: 

  • Tuesday - NFIB small business, PPI, EIA STEO,
  • Wednesday -  CPI, federal budget, EIA oil inventories, OPEC monthly,
  • Thursday - Jobless claims, import prices, EIA natural gas storage
  • Friday - Retail sales, productivity, unit labor cost, industrial production, capacity utilization, consumer sentiment, business inventories.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today - The Five Things, Calendar Update, WKHS
  5. Odds & Ends

 

Holdings Watch:

ZLT (Zman Long Term portfolio)

  • Last Week’s Trades:  Added to and then sold all of our GPOR risk gas position. Added to a our MR core position.
  • ​The Blotter is updated.

Commodity Watch:

Crude oil rose 2.4% to close at $41.22 last week with the strip rising similarly ending at $42.76. We see prices as near the upper end of the near term range. The potential for another sizable draw on crude stocks is elevated this week but we also get reports from EIA (STEO) and OPEC and IEA that can drive near term prices. Over the next few week we are concerned that oil could come under pressure due to a combination of seasonal throughput retreat and over stored product inventories.  This morning crude is trading up $0.60.

  • Libya Watch:  The head of Libya's NOC warned that armed conflict at it's ports could leaded to a disaster worse than Beirut.  Libya's production is said to be blow 0.1 mm bopd currently.

Natural gas was again in major rally / short covering mode last week, rising 24% on prompt month gas to end at $2.238 and more importantly up 8% on the strip to close at $2.75.

  • Storage remains just short of record territory.
  • The supply / demand balance continues to slowly improve.
  • We expect a larger storage build this week (similar to last year's build) and a smaller build next week.
  • This morning gas is trading flat.

Weather Watch:

  • Last week:  Cooling Degree Days (CDDs) came in at 69 vs 73 normal and 90 in the prior week.
  • This week's forecast:  This week, CPC predicts CDDs will rally to 91 vs 69 normal.

The Week That Was

Stuff We Care About Today

The Five Things (weekly change in red)

  1. Coronavirus:
    1. Cases are rising, the pace of rise is slowing in some states. We've seen less about moves to rollback re-openings and schools are opening in a number of states.
    2. U.S. death toll is climbing more swiftly again as expected.
    3. A number of vaccines will enter Phase 3 trials now through September.
    4. Several existing drugs are showing efficacy as treatments.
    5. The extra $600 per week in unemployment benefits expired at the end of July. Congress and Administration talks failed. The president signed executive orders that appear to split the difference on what the two parties want although last we checked he does not have the power of the purse.
  2. Production Curtailments, Guidance, Rig & Spread Counts, and Tank Tops:

    1. Curtailments - Mostly de-curtailed now. EIA weekly read on L48 oil production is starting to actually reverse lower now, again.
    2. Production and Capex Guidance - guidance was re-initiated for a few of the names with the 2Q calls. Expect more to re-establish official guidance 3Q and guide more officially for 2021 early (with the 3Q calls this year). 
    3. Rigs have fallen sharply since March 2020.   As expected the pace of reductions has slowed recently. Rigs are likely to ebb into 4Q unless prices move consistently/apparently sustainably over $40.
    4. Frac Spreads Stabilizing. As expected, the frac spread count is stabilizing after a late spring move below 50.  Operators will use DUCs to try to stave off natural production declines.
      1. LBRT thinks frac spreads will be at 100 in the U.S. by year end 2020
      2. LBRT thinks we need 165 spreads to hold oil flat in the U.S. in 2021.
      3. LBRT thinks we need an additional 80 spreads beyond that to grow U.S. production by 1 mm bopd in 2021.
      4. LBRT thinks we need 25 to 30 spreads to maintain natural gas production.
      5. This means, to maintain oil and gas production in 2021 at the then current end of 2020 levels we need 190 to 200 spreads.
      6. Current active spread count is 70, down 6 from the prior week.
    5. Oil in storage is at 61% of U.S. working capacity last week.
    6. Distillate Stocks:  83% of capacity (new high again this week). This is an especially troubling level especially given time of year. Much more build here and we are likely to see throughput recovery become more muted.
  3. Natural Gas Sentiment:  Cautious but improving as the 2021 Strip firms markedly)

    1. Exports are temporarily down solely due to LNG and they appear to be bottoming now and set to rally into 4Q20.
      1. Dozens of cargoes were cancelled for June and July and we understand a smaller amount were cancelled for August and September as well.
      2. We noted that China announced in April it will be taking shipments from the U.S.
      3. Lower LNG prices are prompting some Asian countries to switch from coal to LNG faster than expected.
      4. LNG exports:  3.8 Bcfgpd (just off recent lows of 3.2) vs the weekly average record of 9.6 Bcfgpd set in early 2020.
      5. AR sees LNG exports back to the 7 to 8 range on better international demand and pricing in late 2020.
    2. Non heating demand remains solid to near record.
    3. Summer temps are here. We expect this to drive strong gains in gas-fired generation in the very near term.  So far so good.
    4. Production
      1. Was down 8.2 Bcfgpd last week, from the highs set in November 2019,
      2. Production is down to in line with year ago levels depending on the week now.
        1. Shale gas production is down 5.5% (4.0 Bcfdpg) through mid year.
      3. Production has fallen almost weekly over the last several months.
      4. Supply (production plus net imports) is ranging from up 2 to down nearly 5 Bcfgpd vs the year ago level due to exports and easing production.
    5. The net short position is approaching neutral (best level of the year this week).
    6. Subdued oil prices and the expected further reduction in the oil production forecast for the U.S. is leading to some natural gas group sentiment improvement.
  4. Election 2020: We await Biden's VP pick (it should be this week).  Biden has rolled out an economic plan including higher corporate taxes. For upstream names, we are more concerned about changes to SEC reserves rules than we are to frac bans on federal lands at this time.   We see Warren as increasingly unlikely to be granted a VP slot which would be worse for oil and gas in the U.S.  In Colorado the political theater regarding frac bans appears to be on hold through 2022.  Polls show Trump at a distinct disadvantage to Biden at this time and we are seeing an increasing amount of sellside commentary that U.S. oil and gas stocks are not discounting a Biden win enough (meaning they should be lower). We are of mixed minds on this. Biden would likely only limit fracs on federal lands. This would lift oil and potentially natural gas prices.
  5. Alternative Energy:  Sentiment continues to improve and we are now just over 50% renewables/green. This likely ties in with #4 (Election 2020) above but also relates to extended tax credit timelines, and the ongoing global corporate effort to focus on ESG. We are seeing a big push for H2 in Europe and elsewhere.  We noted over the weekend a bank in Denmark said it will no longer provide auto loans for ICE vehicles. Biden's plans for renewable energy point to 1,000's of new wind turbines, millions of solar panels, and 10's of thousands of EV chargers in his first 4 years.

 

2Q20 Energy Calendar Update - Adds Week 4 - if you know of names we are missing please let us know. 

Please see the link at upper left for details

WKHS (unowned) Reports Startup 2Q20 Results; Reaffirms 2020 Delivery Target

  • Revenue of $0.092 mm vs $0.27 mm expected,
  • To see our initial write up of WKHS click here.
  • Delivered 3 C-series vans (Ryder, Electric Fleet Solutions),
  • Now only medium duty BEV permitted to sell in all 50 states
  • Reaffirms 300 to 400 deliver target for 2020.
  • Noted their 10% ownership in Lordstown valued to their share at $160 mm,
  • $105 mm in cash on hand.  Notes most of the interest expense jump is non cash on a convertible mark to market
  • We're just here to learn for now. That and our ownership in TPIC who makes their bodies.
  • Conference Call: Today, 10 am EST.

Other Stuff

  • Look for a requested name update later this week,
  • Look for the gassy Players update in Wednesday's post,
  • Look for a number of cheat sheet updates this week,
  • Look for a free piece to go to Seeking Alpha on TPIC early this week.

Odds & Ends

Analyst Watch:

  • TBA in comments

87 Responses to “Monday Morning”

  1. 1
    zman Says:

    NKLA (unowned) – wins order for at least 2,500 garbage trucks.

    Win for NKLA, win for H2.

  2. 2
    zman Says:

    PLUG – getting marked higher this Monday morning. It remains our 3rd largest holding, cost of $4.37. We noted another short article over the weekend. Last one I was prompted to read had baseless claims and what written just above $4.

  3. 3
    zman Says:

    WKHS (unowned) finally on the tape, comments in a bit, call at the top of the hour.

  4. 4
    zman Says:

    WKHS (unowned) very brief blurb added to bottom of post. Miss on revenues but that’s really not relevant. Reaffirmed guidance. As I note, I’m just here to learn and for the TPIC bit of business.

    There was a big ramp in COGS this quarter, prep for 2Q, also a bigger jump in inventories, as they get set for a jump in sales in 2H20.

  5. 5
    zman Says:

    If you missed our original workup on WKHS including why we care at all about this one click here:

    https://zmansenergybrain.com/2020/07/07/tuesday-morning-wkhs/

  6. 6
    zman Says:

    At the open

    Oil at $42

    https://www.dailyfx.com/crude-oil

    NG at $2.20, off 4 cents

    https://www.investing.com/commodities/natural-gas

  7. 7
    zman Says:

    Analyst Watch

    BCEI – Truist (no idea who they are) ups target from $16 to $19.

  8. 8
    zman Says:

    as BCEI notches a $20 handle. Please see last Friday’s comments for our take on the quarter (long story short – it’s still cheap, it’s going to $0 debt by year end).

  9. 9
    zman Says:

    OT – grabbing coffee, shout of if you need something.

    The site is open to the public today so if you are reading this and want to comment, register and you should be able to comment without paying. If you are a decommissioned subscriber your old user name should work for you as well.

  10. 10
    zman Says:

    Got asked via email this morning about frac spread counts and holding production flat.

    My response:

    “Liberty has done a good bit of work on this and I’ve done a little. Their numbers do not appear out of alignment with my view of reality.

    To hold 2021 flat they see a need for about 190 spreads working on average next year.

    Current count is 70.

    Their split is 25 to 30 of those in the gas basins and about 160 in the oily basins.

    The 160 number in just oil is seen holding oil flat in the L48 at about the 10.3 mm bopd level which is our view of year end L48 oil production.

    To grow from that level by 1 mm bopd next year they said we’d need 80 to 90 more spreads just in oil (so 240 to 250 working). “

  11. 11
    zman Says:

    PLUG with a $12 handle.

  12. 12
    zman Says:

    TPIC – please see Friday’s post here for our thoughts on the quarter.

    https://zmansenergybrain.com/2020/08/07/t-g-i-f-181/

    We have a piece in prep for SA on this.

    Cup and handle breakout at hand.

  13. 13
    zman Says:

    MR – up 5%, also in that Friday post referenced in #12.

  14. 14
    zman Says:

    WKHS (unowned) 2Q20 call notes

    WKHS down < 1% at start of call.

    No updated slide deck I see.

    $105 mm in cash currently.

    Saying they don’t need more financing into 2022.

    Through CARB they will get 1.5 credits for each vehicle sold.

    Expect to sell $200 to $300 apiece to other car makers to help meet their credit requirements.

    Can sell C1000 and C650 vehicles in California and 13 other states that meet CARB emission standards.

    3 deliveries
    – 2 C1000 (that’s cubic feet) to Ryder
    – 1 C650 to EFS)

    Ryder has 11 charging facilities in CA.

    Etrucks deal – previously announced – 20 trucks

    Lordstown – first full sized pickup for commercial fleet market, production in 2021, with over 20,000 pre orders ($1.4 B). WKHS IP at heart of the vehicle (basically drivetrain, motor, bat)

    Saying post close that’s $160 mm.

    LMC prepaying $4.75 mm of licencing fees on first Lordstown sales.

    Body built in U.S., (yes, by TPIC).

    Aircraft segment (BUAVs)

    • lots of progress since last talked publicly.
    • last mile, high precision delivery.
    • April – demonstration with UPS, autonomous delivery in front of govt officials, used only 1 person for Horsefly vs 3 for others.
    • Horsefly 1.0 almost final, also new roof design on the truck.
    • last mile is hard, now in 4th year of development – now delivered 100’s of packages. Auto from truck to home, winch drop, back to truck. Operator just loads the package and hits go.

  15. 15
    zman Says:

    BCEI – we added to our position twice on July 23 at $19.43 and $19.20.

    Position cost is now $19.54.

    Stock at $20.90 today, stress that it’s still cheap. Good margins and better oil diffs than people probably think given posted DJ oil prices of late.

  16. 16
    ram Says:

    Zman, any of the technical folks here have a price point for a PLUG entry?

  17. 17
    zman Says:

    WKHS (unowned) – 2Q20 notes 2

    Horsefly – 3 cents a mile.

    Noted that fixed base market opportunity is huge. Noted pharmacies, hardward stores, etc.

    Said they can’t talk more about the USPS deal at this time do to a NDA.

    Going to Q&A 22 minutes into the call (started 5 minutes late).

  18. 18
    zman Says:

    re 16 – I’ll ask Zorg his thoughts, will give mine after WKHS (unowned) Q&A.

  19. 19
    zman Says:

    WKHS (unowned) – 2Q20 Q&A 1

    Q) backlog
    A) still roughly 1,200 units
    Expect channel partners to help us add to it, especially given 50 state approval.

    Q) UPS
    A) that order is still out there, we are making sure the trucks we deliver to them “knock it out of the park”.

    Q) what does it take to get you to the 100 per month delivery rate.
    A) we start slow, dealing with customers to make sure everything in good order with first trucks,
    Notes 3Q will only be a handful of trucks

    October is the USPS decision month by the way.

    Q) $50,000 voucher program
    A) C650 and C1000 both qualify for it, it’s 200 units per fleet per year.

    Q) Ability to meet offers.
    A) Their Union City plant can meet any capacity level, has the ability to do 60,000 (per year). Could take some capacity over at Lordstown facility, says could be done potentially cheaper, that at Union.

    Notes the vehicles they tested with the USPS used hub motor tech. Notes that Lordstown is using hub motor tech in its Endurance pickup.

    Kind of think this name doubles on a USPS go in October and gets halved on a NO GO.

    Wonder about politics around the US postal service now and upgrading trucks if the current post master has much to say about a $25 B van contract.

  20. 20
    zman Says:

    HCAC (personal only) rumored to be in advanced talks with Canoo. This is not the Proterra deal we wanted them to bring public but a weird little VW bus looking slow speed city platform (urban BEV) that is planned to be subscription only. There’s a youtube out there I saw a month back or so with them showing it around town with Jay Leno. I didn’t think much of it. Stock off 5% on the rumor. Proterra could still happen I suppose but Canoo is no Proterra.

  21. 21
    zman Says:

    WKHS (unowned)

    Q) when ramp
    A) 100 / month in 4Q, then see 150 to 200 / month (sometime in 2021). Market driven. Seeing a lot of interest. Notes they are cheaper to run.

    Says at gross margin positive at 200 / month.

    Said Covid slows customer testing ability.

    Q) Europe interest given their green new deal.
    A) said seeing Europe, also Brazil, Canada.

    • Can sell into Canada
    • Looking into refrigerated trucks and there is a big market for that in the UK.
    • saying there is a large demand for this, want to get it right, efficiently.

  22. 22
    zman Says:

    Zorg on MR

    “Cutting through supply on high relative volume….far resistance at 7”

  23. 23
    zman Says:

    Our add to MR on Friday after the call:

    ” 8/7/20 – MR -Adding more gassy exposure to the portfolio via an add to our MR core position at $5.30. MR is a low cost, medium debt level name, liquids rich gassy name (12% NGLs, 5% NG this quarter) with optionality in their resource portfolio (they can fairly rapidly shift to more liquids or more dry gas and since early year 2020 have been leaning more to dry side spending). Cost metrics on a per unit basis are impressive given their modest size among their Appalachian peers. Net debt to TTM is EBITDA 2.4x. They are free cash flowing and set to see further free cash flow expansion in the second half which is pegged for further debt reduction. The company is hedged but in a way that allows for upside.It’s a bit of a sleeper of a name within the gassy space and they don’t have a near term path to a dividend in our view but that could change year after next. We had a $8.13 cost going into today and have brought that down to $7.68 with today’s adds. This takes MR to a 6% position in the portfolio, our 2nd largest “gassy” one with COG remaining our #1 gassy play at a 9% position.

    Note that the company reported a solid quarter today, see post for details. We see the name as overly cheap now as the natural gas macro improvement shows signs of being noticed by traders.”

  24. 24
    zman Says:

    TPIC with a $30 handle. We will have something for Seeking Alpha out tomorrow which will include our recent upside target price comments.

  25. 25
    zman Says:

    WKHS (unowned) call over.

    Tone was cautious optimistic.

    October will be a big month for them, just not sure which way. We may take a small starter and wait and see. Long term very interesting.

  26. 26
    zman Says:

    Ram – Zorg basically said he missed it, said he wouldn’t add here, hard to pick a point. My thoughts are I’m long but not adding. LT I see it significantly higher. From a short term perspective, it just left a gap and probably back around that level would be where I’d potentially add. Right now, at #2 in the portfolio I’m not thinking of adding. I’ve also said I like the BLDP financials more and we own less of that by a good margin (it’s currently in slot #15 in the roster having added once to a starter position). Planning a cheat sheet update for both very soon.

  27. 27
    zman Says:

    OT – grabbing coffee, back shortly.

  28. 28
    zman Says:

    More from Zorg

    BCEI ~ “22.17 first upside target on this break of resistance on high relative volume”

    PE ~ “needs to break 11.80”

  29. 29
    ram Says:

    Re 20 That is definitely no Proterra. I guess that is why the stock has been soft.

  30. 30
    zman Says:

    re 29 – my guess as well, I’m likely to punt.

  31. 31
    ram Says:

    Me too

  32. 32
    zman Says:

    COG – good to see the wake up there.

    • Strong balance sheet
    • Underspending nicely (a lot more now)
    • Will pay off more debt in 2021 with FCF
    • Dividend in good shape, can be increased next year (slight increase likely, they stress sustainability).
    • lightly hedged this year.
    • No natural gas hedges (yet) for 2021.
  33. 33
    zman Says:

    re 31 – watching that little Austin based AYRO (unowned) come off too. Every time they announce a contract they announce a secondary. That gets tiring. Earnings later this week. Would like to see it break $4 and dive first.

  34. 34
    zman Says:

    Zorg noting big volume on the COG rally for time of day.

    OT – grabbing coffee, back shortly. I’ll be working on earnings prep for VWDRY call tonight (4 am EST) and then GDP (owned, position increased in early June at just over $8) and NIO (unowned but I’m curious, don’t see the battery swap tech taking off but that’s just me, maybe it works so areas). Also working up a new piece on TPIC on SA. Shout if you have questions.

  35. 35
    zman Says:

    Zorg on COG

    “coming into important defined resistance levels……hasn’t been here with Nat Gas acceptance over $2 in a year…”

  36. 36
    ram Says:

    I wonder how Proterra comes to market now?

  37. 37
    zman Says:

    re 36
    – ear to ground
    – could still be this way, this is just a rumor.
    – note the spac hasn’t extended it’s maturity date yet. Expires Sept 5 which would result in a cash return back to current shareholders which should be in the $10’s.
    – I will gone by then most likely.

  38. 38
    zman Says:

    GDP – look for an upbeat call here tomorrow.
    Small program (just 5 net wells, up from 4 as of 4Q19, but capex maintained)

    Not growthy but few want that of them.
    Balance sheet in good shape (1.3x ttm, 1.6x annualized 1Q).

    Hedges:
    – About half hedged this year,
    – Less next year but what they do have is swapped at $2.46.

    Not concerned with the quarter EBITDA/EPS, could easily miss given volatility of the quarter.

    Outlook similar to last one, solid (low cost, gassy, strong balance sheet) but with a better price back drop.

    It’s a thin trader on the small float but it’s also quite cheap still. We’ll likely not add today but could very well tomorrow morning. Call tomorrow at 11 am EST. We’ve bolstered the MR position and we hold a now 10% weighting in COG and we added to GDP in June near current levels.

  39. 39
    zman Says:

    Literally had guys on SA shout at me that BCEI was a $0, earlier this year. That it will never see $20 again. Hope they enjoyed the short.

  40. 40
    zman Says:

    OT – grabbing lunch, back in a bit, shout if you need something, otherwise I’m all TPIC writing mode when I get back.

  41. 41
    zman Says:

    Mid Atlantic, 40 to 60% development chance next 5 days, headed west.

    https://www.nhc.noaa.gov/gtwo.php

  42. 42
    zman Says:

    PLUG up 7%
    BCEI up 8%
    MR up 8%
    LBRT up 5% (we had a new piece out there for SA mid quarter)
    https://seekingalpha.com/article/4355615-liberty-oilfield-services-is-fundamental-nadir-of-2020
    and you can see our 2Q comments on this site here:
    https://zmansenergybrain.com/2020/07/29/wednesday-morning-be-lbrt/

  43. 43
    zman Says:

    Big 10 cancels season.

  44. 44
    ram Says:

    Zman, Any insight on PLUG. I’m out at HCAC at 10.68.

  45. 45
    ram Says:

    Re 43 All sports? I wonder if they honor scholarships?

  46. 46
    zman Says:

    re 44 – you saw our write up there last week?

  47. 47
    zman Says:

    re 45 – Not sure, know it covers football, would assume rest of team sports at least.

    All I have seen so far are honoring scholarships.

  48. 48
    zman Says:

    re 46 – here?

    https://zmansenergybrain.com/2020/08/06/thursday-morning-earnings-avalanche-day-3/

  49. 49
    ram Says:

    I’ll find it.

  50. 50
    ram Says:

    Thanks

  51. 51
    zman Says:

    TPIC holding over $30.

    Recall 3 weeks ago, JPM, a not too small voice in renewables, cut them to hold at $24.

  52. 52
    zman Says:

    re 50 – yw, we’re in here alone today for some reason, thanks.

  53. 53
    zman Says:

    Reuters at +52 Bcf for Thursday, right in line with our comments from Friday and today’s post, in line with year ago level of 51 Bcf.

    Expect a smaller number next week on the heat wave.

  54. 54
    ram Says:

    I finally got to PLUG at 12.

    I hope the next stimulus package has more investments for the long term rather than the short term.

  55. 55
    ram Says:

    Zman, Have you seen the DJ transportation index? Closing in on January highs. I wondering if the companies have written off 2020 and are looking at 2021 expectations?

  56. 56
    zman Says:

    re 54 – thoughts

    I doubt the next one will. If they do something beyond the executive orders, and I do think they will, it will be unemployment assist, rent eviction control, some money for testing and for front line workers.

    The next bill after that will be a fight or maybe not depending on the election.

    What happened to the infrastructure talk? Seems to come up every blue moon and fade in about 3 hours.

    I’d DCA on PLUG if I had to start now and again I’d await that gap fill (although I can also say I tried that on ENPH which didn’t close gaps so far though ENPH has a more easily viewed growth path). Also BLDP is pretty interesting and cleaner in my view but I own way less. The Long Term guide on PLUG (2024) is massive.

  57. 57
    zman Says:

    Just got notice of an extension or redemption decision on HCAC. They are offering $10.28 cash to redeem. Stock is at $10.82 now.

  58. 58
    zman Says:

    re 55 – I have not. What’s in the DJT nowadays?

  59. 59
    ram Says:

    Airlines/Package: ALK, AAL, DAL, FedEx, JBLU, LUV, UAL, UPS
    Trucking: CHRW, EXPD, JBHT, R
    Rail: UNP, NSC, KSU, CSX
    Ocean: KEX, MATX,
    Car rental: CAR

    It’s nice to see the DJT try and confirm the DJIA move to recovery highs for long term.

  60. 60
    ram Says:

    Now that we are near mid August at $42 for oil, do you have a new average for 2020?

  61. 61
    zman Says:

    re 59 – oh I hear ya now, thanks.

    re 60 – officially $38, using $30 and $40 and $50 for modelling.

    Note my quarters are not bullish back half. I really don’t care for 83% distillate storage as a % of working capacity going into the fall maintenance cycle. If it’s higher I’m set up to benefit but if we start seeing throughput mark lower in a traditional seasonal way but from the current levels that will be a real problem for thoughts of price support in the fall. This is all well and good for natural gas by the way but not so great for oily names, where it will hit sentiment but and also capex which is again good for gassy names in a feedback loop kind of way.

  62. 62
    zman Says:

    re 61 – if you are looking for a mark to market average it’s through June at the moment but would probably be about $40 instead of $38. As per the post though, I don’t see much reason for a move over $42 let alone the $44 beyond a technical gap fill to $44.

  63. 63
    Viper1 Says:

    Z that may be it for HCAC ?

  64. 64
    zman Says:

    re 63 – rumor has it they will take Canoo public. If they don’t and don’t do that choices are sell it, hold it, redeem it. Redeem it gets you the cash value there (a bit over $10), sell it gets you market, and then hold it gets you whatever happens with Canoo or Proterra or some other BEV.

  65. 65
    zman Says:

    MR 1.2x normal days volumes, good to see the 10% move. More please. We added here last week. Cheat sheet update later this week.

  66. 66
    zman Says:

    From the coming TPIC piece

    Valuation: Our upside target thoughts. At the beginning of July we established two upside targets

        Next 3 to 6 months: We wrote that we saw upside to $30 this year (with the stock near $23) and that it was possible we could see greater revenue growth than currently forecast as transportation grows more meaningfully in 2021. This target was achieved yesterday.
        Looking out 12 months: The name remains cheap on 2021 TEV/EBITDA relative to historical levels and barring unforeseen Covid related issues we would expect the expanding wind market growth and transportation segment blossoming to drive the name potentially as high as $40 which would be a 10x------- multiple of current street 2021 EBITDA (which we see as potentially too low) and note that it is currently trading at 11.4x -----the now reduced for Covid 2020 estimate.
    
  67. 67
    snuhart Says:

    Re AYRO and your post # 33. Will you be kind enough to explain your
    Thinking. I bought some on the recent bulge and have been behind the
    ‘8” ball ever since.

    TIA

  68. 68
    zman Says:

    re 67 sure, thoughts:

    1) we don’t own it.
    2) I wrote it up here:
    https://zmansenergybrain.com/2020/07/22/wednesday-morning-new-idea/
    3) still learning
    4) with the last big contract announcement they used the pop to drop a secondary. This has happned repeatedly.
    5) their website has an annoying pop up web chat deal I can’t seem to kill but I find it gitchy, typical Austin tech and a nuisance.
    6) 5 is irrelevant but be warned if you visit their site.
    7) I will be on the call Thursday.

  69. 69
    zman Says:

    WKHS (unowned) – down 8% now after what was a fairly “as expected” type call.

  70. 70
    snuhart Says:

    Re 68: That’s pretty nice of you to respond so quickly and thoroughly.

    Thank you.

  71. 71
    zman Says:

    re 68 – it’s my job. Use me.

  72. 72
    zman Says:

    MR with a $6 handle. The name had a really strong bounce in 2019 after years of really poor performance. It has however been a lot more volatile this year. We’ve been adding on weakness and at times on strength. It’s our #2 gassy go to name. To repeat they are a serial guide and beat type name and that has not stopped.

  73. 73
    zman Says:

    Beerthirty, back shortly.

  74. 74
    zman Says:

    TPIC prices and submitted to SA.

  75. 75
    zman Says:

    CXO (personal holding) – on the tape with a senior notes pricing

    $500 mm of 2031 notes, priced just under par, at 2.4%

    Using to term out 4.375% debt.

    Nice.

  76. 76
    zman Says:

    GDP reports before open.

    Street looking for 141 MM/d (mid point of full year) and EBITDA of $13 mm.

    Unlikely to see GDP reduce guidance.

    VSDRY reports late tonight, call at 4 am, will have notes in Tuesday post.

  77. 77
    zman Says:

    Zorg on MR

    “at 1st upside target…5.92….a pause/consolidation here expected”

  78. 78
    zman Says:

    What the heck just happened, watching the president’s daily update, guy gives him a message and he walks off stage.

  79. 79
    zman Says:

    Looks like someone tried to get into the White House, Secret Service shot them.

  80. 80
    zman Says:

    TPIC piece

    https://seekingalpha.com/article/4367273-tpi-composites-performing-well-in-uncertain-times

  81. 81
    zman Says:

    If Chinese companies do not fully comply with US accounting they will be delisted. By the end of next year. ~ Mnuchin

  82. 82
    zman Says:

    2.2 mm barrels back out of the SPR for this reporting period (last week). Companies rented a almost 23 mm barrels. U.S. purchases to add to the SPR were negligible. Higher prices prompts the names who rented to space to start pulling it back out now. If you missed that I’m not a “bull” on oil at the moment please see every Thursday post for the last few months or just read last Thursday’s oil inventory slide show or even today’s The Week That Was section.

  83. 83
    zman Says:

    For new and old alike, there are no dumb questions here. Promise.

    OT – grabbing dinner, prepping for Vestas call. Back in 2 hours.

  84. 84
    zman Says:

    The ZLT positions page is updated.

    https://zmansenergybrain.com/subscriber-data/holdings-wiki/

  85. 85
    zman Says:

    OK, offline, back in about 5 hours.

  86. 86
    zman Says:

    VWDRY – good call, strong revenue quarter, miss on EBIT on a one customer warranty provision that does not impact current / future blades.

    Reintroduced revenue guidance at pre Covid level, backlog to record, said they’re not pushing anything from 2020 to 2021, said they’re not holding back. Full notes in the Tuesday post out in a few hours.

  87. 87
    Wrap – Week Ended 8/14/20 | Zman's Energy Brain ~ oil, gas, stocks, etc… Says:

    […] Last Monday's post. […]

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