Stocks on the radar overview

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Stocks and Securities

Stocks look to stabilize this morning after the Dow dropped nearly 330 points yesterday to 24,252.80, posting its biggest one-day drop since May 29, and closing at its lowest level since May 4. The blue-chip gauge also ended below its 200-day moving average, a closely watched level, for the first time since June 16.

[finviz ticker=IYY width=400] [finviz ticker=SPY width=400] [finviz ticker=QQQE width=400] [finviz ticker=IWM width=400]

The U.S. market was not alone as China’s benchmark Shanghai Composite entered bear market territory, closing down more than 20% below its recent high in January. The index fell 0.5% Tuesday. Chinese stocks have come under pressure in recent weeks from concerns over the strength of the country’s economic growth and an emerging trade war with the United States.

Walgreens (WBA) will officially replace General Electric (GE) on the Dow before the market opens, ending its 110 year membership. GE, the Dow’s worst performer last year, is trying to shrink itself and raise cash to pay down a mountain of debt. The conglomerate is under serious financial pressure following years of bad acquisitions.

One area we remain focused on is the oil patch.  Losses in U.S. crude prices were limited by the likelihood that an outage at Syncrude Canada’s 360,000 bpd oil sands facility would last through July. The outage is expected to limit crude arriving at Cushing, Oklahoma, delivery point of the U.S. futures contract. With that said one oil stock on our radar is Anadarko Petroleum (APC).

[finviz ticker=UCO width=400] [finviz ticker=APC width=400]

Operating primarily in the Delaware Basin in West Texas and New Mexico as well as in Northeast Colorado and the Gulf of Mexico, Anadarko currently produces approximately 643,000 barrels per day and expects that number to increase to an average of 658,000 to 685,000 barrels per day for the full year 2018. Having topped analyst estimates in the most recent quarter, reporting revenues of $3.045 billion and earnings of $0.52/share, the company is expected to earn $2.73/share in 2018. While oil prices may come down over the next few weeks, any period of strong global economic growth and uncertain foreign oil production, especially from Venezuela and Iran, should boost prices later this year and steady growing U.S production should place Anadarko Petroleum as a top beneficiary in the oil sector.

 

Blockchain and cryptocurrency

The narrative of Bitcoin continues to develop more plot twists as the days go on. The price has failed to gain traction. For an asset class that was created with trust and security as one of its founding pillars, small and large investors both large and small are finding it hard to find either one of the two at this time. For instance, recent news has shown over 100 pages of SEC complaints revealing fraud allegations towards Coinbase, a company who could use their position to become industry standard, however, they have seem to forgotten the average investors and have focused mainly on institutional investors. Perhaps this is indicative as though why only 7000 bitcoin exchanged hands last week, determined by looking at UTXO – an Unspent Transaction Output – that essentially looks at the age of a Bitcoin as it was last used. The chart suggests that there is a significant amount of accumulation of Bitcoin. The large holders of Bitcoin have been accused of price manipulation, which has resulted in an SEC prob into the matter. However, investors should at least rest easy, as the Mt. GOX trustee recently stated that they will not be selling anymore Bitcoin.

The colored bands show the relative fraction of Bitcoin in existence that was last transacted within the time window indicated in the legend. The bottom, warmer colors (reds, oranges) represent Bitcoin transacting very recently while the top, cooler colors (greens, blues) represent Bitcoin that hasn’t transacted in a long time. Bitcoin’s money supply grew from 50 BTC to ~17M BTC over this time period, so the chart has been normalized by the BTC in existence at each date (left y-axis). The black line shows the USD/BTC price (logarithmically, right y-axis). Chart by Nelson Morrow based on prior work by @jratcliff – click for direct link to interactive chart

In other news, with the ever growing number of exchanges, the need for insurers has grown. However, this demand is not met by insurers as they are not willing to take the risk. It has been cited by CryptoAware that since 2011 there has been more than $2.3B USD lost due to hacks and scams, with the Bithump hack being the most recent. In total, 1.7m BTC, 4.5m ETH, 304k LTC, 500m NEM, 30m USDT, 17m NANO, and 670k XLM have been compromised. The the high risk associated with such attacks has resulted in insurers being hesitant to work with exchanges.


Stocks on the Radar

Anadarko Petroleum Corporation (APC) [stock_quote symbol=”APC”] as stated above, operating primarily in the Delaware Basin in West Texas and New Mexico as well as in Northeast Colorado and the Gulf of Mexico. Anadarko currently produces approximately 643,000 barrels per day and expects that number to increase to an average of 658,000 to 685,000 barrels per day for the full year 2018. Having topped analyst estimates in the most recent quarter, reporting revenues of $3.045 billion and earnings of $0.52/share, the company is expected to earn $2.73/share in 2018. While oil prices may come down over the next few weeks, any period of strong global economic growth and uncertain foreign oil production, especially from Venezuela and Iran, should boost prices later this year and steady growing U.S production should place Anadarko Petroleum as a top beneficiary in the oil sector.

[finviz ticker=APC width=500]

 

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Disclaimer: The above references an opinion and is for information purposes only.  It is not intended to be investment advice.  Seek a duly licensed professional for investment advice. The Author does not hold any of the securities discussed above.
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