Closed with Stop-Loss at price $70.60 - loss is about 7,37%

Gilead Sciences, Inc. (Nasdaq: GILD)

Ticker: GILD
Buy market: $76.22
Take Profit: $86

Gilead Sciences, Inc. (Nasdaq: GILD) develops and sells treatments for life-threatening infections. The company focuses on medicine for HIV, hepatitis B, and C. Acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have added products for cardiovascular diseases and cancer treatment. Recently, the GILD announced additional data for Remdesivir.

Remdesivir is an antivirus medicine for the treatment of COVID-19. Data was collected using a comparative analysis of phase 3 SIMPLE and a real retrospective cohort of patients with severe COVID-19.

Remdesiriv shows to improve clinical recovery and reduce the risk of mortality by 62% compared to standard treatment.

Fundamental indicators

•   PE is at the industry average of 19.6.
•   Current assets exceed current liabilities.
•   Interest payments on liabilities exceed EBIT by more than 5 times.
•   Current dividend yield is at 3.54%.
•   66% of Profit is spent on dividend payments.

Technical analysis

The daily chart is moderately positive. Correction after the last upward movement is more than 50%. Security can continue its growth and reach the upper border of the ascending channel. The price is above the daily pivot. We will consider a change in the scenario for the stock when it consolidates below $72.

Screenshot 2020 07 22 at 22.24.14
Risks

•   The debt burden exceeds equity.
•   Short-term assets do not cover long-term liabilities.
•   The Price to Book Ratio is 4.4, which is higher than the industry's 3.7.
•   Weak forecast for revenue growth.

Summary

We think that Gilead Sciences is stable and until the end of the year can add 12% to their value; additionally, a sharp growth is possible in case of new successes in the treatment of COVID-19.

05.06.2020 shares were sold at the price of $125. The investment idea brought 23.76% return in 44 days.

The Walt Disney Company (Nyse: DIS)

Ticker: DIS
Buy market: $101
Take Profit: $125

The Walt Disney Company (Nyse: DIS) is the largest entertainment company, consisting of several segments.

The Media Networks segment (35.7% of total revenue) includes video content production and internal broadcasting over cable networks under the Disney, ESPN, Freeform, FX, National Geographic, ABC brands.

The Studio Entertainment segment (16% of revenue) produces and distributes movies under the brands Walt Disney Pictures, Fox Twentieth Century, Marvel, Lucasfilm, Pixar, Fox Searchlight Pictures and Blue-Sky Studios; organizes, conducts and licenses live entertainment events; produces and distributes music.

The Parks, Experiences & Consumer Products segment (37.7% of revenue) combines a global consumer goods business with a network of parks and resorts around the world.

The Direct-to-Consumer (DTC) & International segment (13.4% of revenue) manages Disney +, ESPN +, Hotstar, and Hulu, the international television networks, channels and streaming services.

Key catalysts

The company's revenue has been growing steadily over the past 3 years. In fiscal 2019, it amounted to $69.57 billion, which is $10 billion more than the revenue in 2018 and $14 billion more than the revenue in 2017.

50 million Disney + subscribers as of April 2020.

In November 2019, Disney launched a global streaming channel deployment. The first countries to be launched were the USA, Australia, New Zealand, and the Netherlands. March 24, 2020 was launched in Ireland, France, Germany, Italy, Spain, Austria, Switzerland.

Disney + offers about 500 films and 7,500 television episodes from brands such as Disney, Pixar, Marvel, Star Wars and National Geographic, as well as original Disney + works.

The service costs $6.99 per month or $69.99 per year, which will bring the company $3.5 billion in revenue from the calculation of the annual subscription, while the number of subscribers is growing.

Along with this, total operating expenses and expenses for the production of original content are expected to reach $2 billion.

In 2018, Disney already launched ESPN +, which offers live streaming of sporting events around the world. As of February 2020, the service totaled 7.6 million subscribers with a payment of $4.99 per month.

In 2020, the beginning of 2021, the release of the blockbusters Mulan, Black Widow, and Eternal from Marvel is expected.

Risks

Disney + will face severe competition in the streaming market from Netflix (Nasdaq: NFLX) and Amazon Prime (Nasdaq: AMZN). Netflix (Nasdaq: NFLX) takes advantage of the pioneer in the streaming market, it is distinguished by a solid original software portfolio.

Disney expects operating profit in the second quarter of fiscal year 2020 to be negative due to the closure of amusement parks.

Cancellation of sporting events is detrimental to the ESPN business.
Streaming Subscription Market

According to Ampere Analysis, Netflix (Nasdaq: NFLX) US subscriber growth is slowing, while Disney + has gained a good market share in two quarters.


00DIS

Technical analysis

After falling to $80, the stock price recovered 29%. Disney's stock price is above strong levels in the region of 95-100, but so far it has not managed to go above the middle of a long-term channel built since 2009. The chart shows that the paper corrected by more than 50% and is trading at 61.8 from the last global movement. AO moved into the positive zone, but buyers are not enough to demonstrate strong growth. A good signal is price fixing above the central Pivot Point.

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Summary

We believe that in the medium term, Disney shares (Nyse: DIS) will be able to show 25% growth due to the company's large margin of safety. After quarantine ends, the parks will begin to open, sporting events will attract visitors, and the development of streaming services can become the main driver of the company's revenue growth. 

06.07.2020 shares were sold at the price of $9.2. The investment idea brought 82.9% return in 101 days.

ETF MANAGERS GROUP COMMODITY TR I BREAKWAVE DRY BULK SHIPPING ETF
(NYSE:BDRY)

Ticker: BDRY
Buy: market ($5.03)
Take profit: $8.6

The investment idea is based on the purchase of an exchange fund - Breakwave Dry Bulk Shipping ETF (BDRY). This is the first and only exchange-traded fund tracking contracts for the transportation of exclusively bulk cargo.

Bulk cargo - iron ore, coal, grain and other mineral and agricultural products - is by far the largest cargo segment in the world.

This segment suffered quite a lot due to the closure of factories around the world, and in particular in China, the world's largest consumer of goods. Restrictions were imposed on transport communications, up to the introduction of quarantines, to control the spread of the outbreak of coronavirus. China's exports in February fell by 20.7% year on year.

Since September 2019, BDRY has declined by more than 80% and is at its historic low.

fraht

The current price level is quite attractive for ETF holding with hold until the end of the year.

• We believe that the main negative from a new type of coronavirus is already priced. At the same time, China has created global conditions in the fight against the spread of the virus and at the moment, the percentage of cases of growth in the country is sharply reduced. Key enterprises returned to work with the necessary precautions. Other countries clearly understand the severity of the problem and take appropriate measures to contain the epidemic.
• G7 governments and monetary authorities are taking unprecedented measures to maintain their economies and stimulate domestic demand.
• During the period of the epidemic and quarantines, economic relations are broken, which leads to a reduction in inventories. As soon as the world begins to cope with the threat of the virus and production begins to recover, inventories will need to be replenished. This may create supply shortages in the maritime freight segment. For example, in order to stimulate its economy, China plans huge investments in infrastructure, which will lead to a significant increase in imports of iron ore and coal for steel production.
• The current low demand for sea freight for bulk goods has led to lower freight rates to very painful levels for ship owners. If the crisis continues for a long period, some of the companies (especially holders of old ships) will leave the market, which will reduce supply in this segment.

In addition, from January 1, 2020, the International Maritime Organization tightened standards by seriously reducing the maximum sulfur content in marine fuel (bunker fuel oil) from 3.5% to 0.5%, which led to the use of low-sulfur fuel, or the installation of scrubbers.

Research by the Swedish company SEB shows that by the beginning of 2020, less than 2,000 vessels out of the total merchant fleet (about 60,000 units) have installed “scrubber” systems. Taking into account the production capacities of existing manufacturers of “scrubbers”, a shortage of finished “scrubbers” is expected in the next few years, which will lead to higher prices for low-sulfur fuel (LSFO) and, consequently, to increased financial costs for shippers.

Summary

We believe that a new type of coronavirus will have a rather negative, but not long-term impact on the global economy. Given the unprecedented incentive measures, we expect the global economy to recover in the second half of 2020. Perhaps a decrease in demand for transported goods will continue to put pressure on the shipping industry for a few more months. But in the medium term, we expect BDRY to return to a value of $8 - $9.

04.06.2020 shares were sold at the price of $58.8. The investment idea brought 30.67% return in 43 days.

Restaurant Brands International Inc. (NYSE: QSR)

Ticker: QSR
Buy market: $45
Take profit: $60

Restaurant Brands International Inc. (NYSE: QSR) - operator of fast food restaurants. The company operates more than 26,000 restaurants under the brands Burger King, Tim Hortons, Popeyes.

Positive sides

- The market of fast food restaurants is growing by more than 4% per year and will reach more than $690 billion by 2022 according to Zion Market Research.

- Due to the possibility of serving guests from the car, some of the company's restaurants suffered less than the classic business models.

- In our opinion, after the quarantine is lifted, the fast food restaurant market will recover faster than the classic restaurant business, due to a decrease in real incomes.

- Over the past year, the company showed a 5.1% increase in profits compared to an average growth of 1.6% in the industry.

- In the current situation of economic uncertainty, an important indicator is the current ratio. It allows you to determine the ability of the company to pay for its short-term obligations. Restaurant Brands International has this indicator at 1.29, that is, liquid assets cover 29% of short-term liabilities.

Competitive analysis

Restaurant Brands International looks stronger than its direct competitors in fundamental terms.

  Restaurant Brands Int    McDonald's    Starbucks    Yum! Brands
PE    17.7    22.3    23.5    19.2
Current ratio    1.29    0.98    0.68    0.99
Dividend Yield       4.91%    2.82%    2.26%    2.32%

Риски

- A high share of borrowed capital to equity - 282%.

- The second wave of new coronavirus infection and repeated quarantines.

Summary

Restaurant Brands International seems undervalued in relation to the market. In the medium term, we expect stock prices to increase by more than 30%, due to the increase in the number of consumers in the more accessible segment after the abolition of quarantines around the world.

 

On 05.06.2020 was closed with stop-loss at a price 450 NOK. Investment idea brought about 0.65% yield in 4 months

SALMAR ASA
(OSL: SALM)

Ticker: SALM
Buy: market (447.1 NOK)
Take profit: 520 NOK


SALMAR (OSL: SALM), founded in 1991, is the fourth largest salmon producer in the world. The head office is located on the island of Froya, Norway.

The company owns 59% of Arnarlax Ehf, Iceland's largest salmon farm, and 50% of Norskott Havbruk AS, which owns 100% of Scottish Sea Farms Ltd, the UK's second largest salmon farm.

Statista projected salmon market to grow by 3.7% per year.

Снимок экрана 2020 01 31 в 17.34.08

Source: statista.com 

The one-year Beta is at 0.15, the value of the 5-year Beta is -0.31.

This indicator allows you to judge about the relatively high independence of the asset. Below is a graph of the stock price compared to the SP500 (SPX) and the Oslo Exchange Index (OBX).

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Current dividend yield of 5.03% (next dividend payout is June 2020). The company has been steadily increasing dividends over the past 10 years.

Снимок экрана 2020 01 29 в 12.30.36

The Nasdaq Salmon Index shows an increase in the average cost of salmon per kilogram from 40 to 78 kroons per kg in the 4th quarter of 2019, which suggests a positive dynamic of revenue in the upcoming reports.

Снимок экрана 2020 01 29 в 12.57.04 Price / Earnings at 17.7, with an average of 26.5 in the food industry.


Balance Analysis

 - The ratio of borrowed capital to equity decreased from 50.3% to 32.5% over the past 5 years.

 - The company's assets are 2.08 times higher than total liabilities.

 - Intangible assets in the balance sheet structure are less than 27%.

Competitors Analysis

The company has been showing better dividends and maximum profitability for 5 years. At first glance the company's weak point can be considered an overestimation of Price to Book Ratio, however, given the high margin, we can talk about better management efficiency in the industry.


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Risks

Medium

 - - Salmon price adjustment

 - Reduced yield on farms due to an increase in water temperature and a decrease in flow rate, which leads to active propagation of phytoplankton. The fact is that Phytoplankton adheres to the gills of the fish, which in turn suffocates. Growing on the farm does not allow the fish to swim away from seaweed.

Low

 - Strengthening of the kroon against the dollar (fund currency).

Over the past 10 years, the Norwegian krone has weakened against the dollar, and the difference in interest rates is 0.25%, which does not suggest a strong movement:

 - 1.5% for Krone (was increased from 1.25% in September 2019)
 - 1.75% in US dollars (lowered from 2% in October 2019)

tg image 4112571543

Technical analysis

After a sharp increase from 200 NOK to 520 NOK in 2018, the company's share price corrected by more than 50% and is now in a moderately upward corridor, consolidating ahead of the year-end results. RSI on the daily and weekly charts is in the middle of its range, warning us about possible corrections.

Снимок экрана 2020 01 31 в 15.38.55

Summary

SALMAR is the industry leader in terms of profitability in a growing market and has a low debt burden. In the future 6 months, we expect to see an exit at the level of 520 NOK per share (+ 14% of the current level), while receiving dividends of 5%. The total return for 6 months can be about 19%. This paper will significantly reduce the Beta portfolio and complement diversification by industry.