--- the subscriber area has no ads and those above are not selected or endorsed by this site ---

Covanta & Clearway 2Q20 schedules and much more ?4

The market is buzzing about the first results for a U.S. vaccine candidate to be published in a peer-reviewed medical journal (and NEJM is as good as they get).  The results are good enough to allow Moderna to jump right to Phase 3 trials by the end of the month, but that still indicates that availability would be around the end of next year, at the earliest.

Some other updates to the notes below are that Google's first major Indian investment is a 7.73% stake in Reliance Jio for $4.5b.  This tells me that Google is likely to stick to the MVNO route, to the extent that it gets further involved in telecom at all.  That and the U.K. decision to ban Huawei 5G purchases as of year end, and replace existing equipment by 2027, are slightly negative for Vodafone. Consequently, I favor CTL for value in the industry, but will still hold off on NOK, even though the company says it is ready to pounce.  Dividend resumption is coming, with a fiber win in Sri Lanka and 4G spectrum re-farming, but price still isn't right.  VIRT is on the only other yield stock that I see as undervalued at the moment, and that could change quickly.

For ERII, I'll also note that although SWRO desalination is still the cheapest way to produce fresh water at scale, other technologies are gaining traction.

The most interesting development to me since market close is UDC creating a separate corporate to develop its OVJP television printing.  I see this as recognition that it's now or never for the technology, in response to the Chinese backing Japan.  It's also become clear that LED back lighting is going to dominate mainstream TV models, and the high end will eventually be taken by Samsung's modular micro-LED approach.  Ramping production is expensive, to UDC is creating a separate company to try to get others to help foot the bill.  I expect that the effort will be too little, too late, but we'll see who has money burn, since there is certainly plenty of it flying around.

Look for that to increase ahead of the American presidential election, but keep in mind that the pandemic has accelerated many trends.  New technology adoption is not really one of them, but rise of the east and decline of the west is.  Invest carefully.

On 7/14/20 9:05 AM, Esekla wrote:
Covanta has scheduled its second quarter data to be released on the evening of Thursday, July 30th.  The average of 7 analyst estimates comes to a loss of 19 cents per share from $451M of revenue rising to $460M this quarter.  If these estimates are met they will still represent the company's worst results bar the last one.  Covanta should see relief in metals, but it's questionable whether or not improved energy prices will be of any actual help.  Selling at market prices could result in more downward guidance.  Waste volume and composition will be a very interesting window on reopening efforts in the U.S.  I think the market is overpricing the tailwinds and failing to account for the headwinds, especially the rise landfill to RNG, such as the Golar and Xebec deals that I've cited since Covanta's last report.  Technology like that limits Covanta to rich, crowded geographies and decreases the chance of a new deal that could free the company from playing defense.

Clearway Energy will report on its second quarter a week later, on the morning of August 6th.  The average of 4 analyst estimates comes to 57 cents of EPS from $346M of revenue rising seasonally $374M.  For CWEN(A) the market will probably just want to hear confirmation on the restoration of the full dividend at 32-33 cents.  At 6% yield, that penny is the difference between $21.33 and $22 fair value.  I'll also be listening to see if management has anything further to say about the pandemic generating special growth opportunities.

Vuzix is also touting the increased number of patent filings in its portfolio.  This is a sign of confidence, and I do think the portfolio has value.  However, Vuzix was down to just over $6M in cash as of the last report, and I see this as grandstanding to prepare for yet another capital raise, hopefully ahead of mass manufacturing of the M-4000.  VUZI is very clearly in a short squeeze, and I want no part of the stock at this point.

Elsewhere in devices, Google has formally offered to not use Fitbit data for ad-targeting, which I don't think was ever its design anyway.  The spread is down to 7% in response, and although this is a positive step in the dance, I don't see it as an especially good entry point, even though the annualized profit for closing in November would still be above 20%.

Amsc has finalized its third SPS (Ship Protection System) contract.  This was expected, but since I still see AMSC shares as somewhat undervalued, don't be surprised to see a pop in price once the market opens.

Finally, Energy Recovery announced a $20.9M desalination win this morning in the conversion of a thermal plant to SWRO for Riyadh, Saudi Arabia.  The project is scheduled to be commissioned next year, and the amount is large, by historical standards.  However, it is nowhere near enough to raise fair value above my $5 maximum.  The ERII gains indicated by the pre-market are poorly informed, in my opinion, as is most market movement.  That makes me more interested in stocks like VIRT, and the ones I mentioned yesterday.  Invest wisely.