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Audit the Fed, China’s New No. 1, Short Canada? and More!

Contrarian Profits — Thu, 09 Jul 2009 16:00:28 +0000

pIdiocracy in action: Congress blocks bill to audit the Fed#8230; No surprise: American loan defaults hit record… Surprise: Could Canadians be next? China takes another “World’s No. 1” from U.S. #8230; a href="http://www.contrarianprofits.com/articles/author/dan-denning/" class="alinks_links"Dan Denning/a, Byron King on recent triumph and tragedy in the oil patch#8230;/p p strongGreat news: The Federal Reserve will retain its right to operate in secrecy. /strong/p tr p align="center"/p /tr p align="center"“Thank God for Rule 16!”/p pLate yesterday, the Senate majority put the kibosh on a last-hour provision in the 2010 spending bill that would audit the Fed. Not because it’s a bad idea… but because of the arcane Rule 16, which prohibits policy legislation from being added to spending bills. (The kind of “rule” that’s only evoked when the majority gets uncomfortable.)/p p“The Federal Reserve will create and disburse#8230;/p

Zacks Analyst Blog Highlights: Exxon, TransCanada Corp., ConocoPhillips, BP and National Semiconductor. – Press Releases

Zacks Market Commentaries — Mon, 15 Jun 2009 13:53:29 +0000

For Immediate Release

Chicago, IL - June 15, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Exxon (XOM), TransCanada Corp. (TRP), ConocoPhillips (COP), BP (BP) and National Semiconductor (NSM).

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Here are highlights from Friday's Analyst Blog:

Exxon Throws Weight Behind Alaskan Pipeline

Exxon (XOM) has finally decided to throw its weight behind the TransCanada Corp. (TRP)-sponsored Alaska Pipeline project that will bring stranded Alaskan natural gas to consuming markets in the U.S. Lower 48. TransCanada's 1,700 mile, 48-inch diameter pipeline has the support of the Alaskan and Canadian governments. The Alaska government passed legislation last year that would subsidize the initial project costs by up to $500 million.

While details of the deal between the two companies were not released, it is expected that TRP will remain the project's operator. This pipeline, expected to cost approximately $26 billion to build, would be the largest civil engineering project in North America. The pipeline would stretch from the North Slope of Alaska through Yukon and British Columbia to the Alberta border, where it would be linked to existing infrastructure reaching the U.S. market.

While a number of companies have natural gas reserves in Alaska, three are the most important; Exxon, ConocoPhillips (COP) and BP (BP). The last two have been sponsoring their own rival pipeline project.

Without the inclusion of BP and COP, it would be difficult, if not altogether impossible for the XOM-TRP project to get off the ground. But with Exxon, the largest natural gas resource holder in Alaska, getting behind the project, its prospects have brightened significantly.

National Semi Results Digested

Yesterday afternoon after the bell, National Semiconductor (NSM) reported results for the fourth quarter of fiscal year 2009 ending May 2009. Revenue for the third quarter was $280.8 million, down -4.0% sequentially and down -39.2% year over year.

The gross margin was 59.3%, up 37 bps sequentially. The slight increase was mostly due to employee layoffs and cost reductions.

The utilization rate remained very low, increasing from 37% in Q3 to 38% in Q4. NSM is particularly hit by lower utilization rates as the company manufactures around 90% of its products in-house.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Exxon Makes Alaska Pipeline Deal – Analyst Blog

Zacks Market Commentaries — Fri, 12 Jun 2009 19:05:16 +0000

Exxon Throws Weight Behind Alaska Pipeline

Exxon (XOM) has finally decided to throw its weight behind the TransCanada Corp. (TRP)-sponsored Alaska Pipeline project that will bring stranded Alaskan natural gas to consuming markets in the U.S. Lower 48. TransCanada's 1,700 mile, 48-inch diameter pipeline has the support of the Alaskan and Canadian governments. The Alaska government passed legislation last year that would subsidize the initial project costs by up to $500 million.

While details of the deal between the two companies were not released, it is expected that TRP will remain the project's operator. This pipeline, expected to cost approximately $26 billion to build, would be the largest civil engineering project in North America. The pipeline would stretch from the North Slope of Alaska through Yukon and British Columbia to the Alberta border, where it would be linked to existing infrastructure reaching the U.S. market.

While a number of companies have natural gas reserves in Alaska, three are the most important; Exxon, ConocoPhillips (COP) and BP (BP). The last two have been sponsoring their own rival pipeline project.

Without the inclusion of BP and COP, it would be difficult, if not altogether impossible for the XOM-TRP project to get off the ground. But with Exxon, the largest natural gas resource holder in Alaska, getting behind the project, its prospects have brightened significantly.

At its maximum capacity, the pipeline would transport 5.9 billion cubic feet per day, roughly 10% of total U.S. demand. Proved reserves in Alaska are around 35 trillion cubic feet (Tcf), but the state's overall resource potential is believed to be much higher. As a comparison, the total U.S. natural gas consumption in 2008 was 23.2 Tcf.

A number of hurdles remain for this long-delayed project. In the next stage, the project needs commitments from companies who would use it to ship their gas before it can get the final go-ahead signal from the Federal Energy Regulatory Commission (FERC). Aside from these procedural/logistical issues has been the question of long-term U.S. natural gas outlook, which has changed materially following the recent discovery of abundant shale natural gas. Exxon's reputation for conservatism and investment savvy goes some way to answering that question. In the best case scenario, the pipeline would begin operations in 2018.
Read the full analyst report on "XOM"
Read the full analyst report on "TRP"
Read the full analyst report on "COP"
Read the full analyst report on "BP"
Zacks Investment Research