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MicroVision dilutes, Schlumberger warns, CVA drops -3

18:34 04-Dec-18


MicroVision has announced that it is selling more stock, though no quantities are available.  What we do know is that MVIS is currently trading at about 70 cents.  I'd already warned about a reverse split.  At this point, it almost doesn't matter what technology the company has or can develop.

Schlumberger is in a very different situation.  It's operating from a position of strength, but today's warning that business in North America will be about 15% lower than the already maudlin outlook given with the third quarter report shows that the worst is far from over.  With North America accounting for over a third of revenue, and the stock having just gone ex-dividend, there's room for further decline even from lows last seen only briefly after the financial crisis.  The Brent/WTI spread is down to about $9.30, and natural gas is up to $4.50.  The question in my mind will be to what extent American shale recovers versus production shifting elsewhere.  We'll see what management has to say in mid-January.  As implied by this morning's note, America still has the inside track, but I'm not expecting a whole lot of clarity in hydrocarbons until at least March.

The situation is a little different for the overall market.  Today's action was complicated by tomorrow's market closure.  Overall, I still think the indexes will have trouble recovering but volatility leaves room for choppy upside in the dividend names that I've been partial to.  In particular, CVA should be next up for a dividend announcement, and it has dropped 6% in the past two days after briefly touching what I regard as minimum current fair value.  The only recent news is a local article about an unlikely appeal against the Rookery project, and possible rate review in Marion county.  Both are the sorts of thing that go on all the time, and do nothing to diminish my assessment of Covanta as one of the best combinations of safety, income and growth potential.