The Zacks Analyst Blog Highlights:Amazon.com, Facebook, Whiting Petroleum, Kodiak Oil & Gas and Clayton Williams Energy
CHICAGO, July 15, 2014 /PRNewswire/ -- 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 the Amazon.com Inc. (Nasdaq:AMZN-Free Report), Facebook (Nasdaq:FB-Free Report), Whiting Petroleum Corp. (NYSE:WLL-Free Report), Kodiak Oil & Gas Corp. (NYSE:KOG-Free Report) and Clayton Williams Energy, Inc. (NYSE:CWEI-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Amazon Seeks FAA Approval to Test Drones
E-commerce giant Amazon.com Inc. (Nasdaq:AMZN-Free Report) has requested Federal Aviation Administration (FAA) to grant permission to fly drones out of their test facility.
Per earlier FAA guidelines, hobbyists and model aircraft makers are allowed to fly drones, but commercial drone delivery to people for a fee remains illegal. Amazon has, therefore, requested FAA for an exemption so that it could test its drones in the U.S.
Amazon is currently working on a drone-based delivery service which will use airborne robotic drones to deliver packages to consumers in 30 minutes. The company claims that these eighth and ninth generation drones can fly up to 50 miles per hour and carry nearly 5 pounds. The company also said that it will abide by stricter safety measures than required by FAA policies and regulations for such operations.
Drones are Unmanned Aerial Vehicles that are either pre-programmed or controlled by pilots from the ground. While some of these drones are small enough to fit in a child's palm, others are as massive as jumbo jets. These can be programmed to perform various tasks ranging from surveillance, agriculture, pizza delivery, extreme photography to rescue operations. However, the technology is still in a nascent stage.
Amazon, which so far focused on selling products, is now striving to beef up its delivery system in order to improve customer service. In this regard, Amazon purchased Kiva Systems in 2012 for $775 million to include robots in its distribution centers. Also, last month, Amazon unveiled a new food takeout service to expand Amazon Local services. The service was launched in Seattle and is expected to be gradually offered globally. However, it is not certain how Amazon plans to expand this service.
It is interesting to note that Amazon, the world's largest online search engine, is increasingly strengthening its foothold in new markets. Other technology giants like Facebook (Nasdaq:FB-Free Report) are also expanding their presence in the dynamic world of robotics, increasing the competition for Amazon.
Amazon currently holds a Zacks Rank #5 (Strong Sell).
Whiting Petroleum Buying Kodiak to Become Top Bakken Producer
Whiting Petroleum Corp. (NYSE:WLL-Free Report) announced that it will acquire Kodiak Oil & Gas Corp. (NYSE:KOG-Free Report) in a transaction valued at $6 billion, comprising $3.8 billion in stock and $2.2 billion of debt assumption of Kodiak.
The transaction, uniting the two Denver, CO-based exploration and production companies, would make the combined entity the largest producer in the North American prolific shale play Bakken and Three Forks. The first quarter production from both the companies was over 107,000 oil equivalent barrels per day from the region.
As per the terms of the agreement, shareholders of Kodiak will get 0.177 share of Whiting Petroleum for every Kodiak share they hold. On completion of the agreement, Whiting Petroleum shareholders will be the owner of about 71% of the combined company whereas Kodiak shareholders will have 29% ownership.
Whiting Petroleum mentioned that the combined company is expected to have an initial enterprise value of $17.8 billion. Additionally, the combined entity will expectedly have 2014 production of 152 thousand barrels of oil equivalent per day and proved reserves of 606 million barrels of oil equivalent – which constitute about 80% oil.
Whiting Petroleum stated that it has increased its borrowing base to $4.5 billion, which it believes would suffice the new combined company's financial needs as well as settle Kodiak's borrowings under its credit facility. The transaction is expected to close in the final quarter of the year.
Management at Whiting Petroleum stated that the transaction adds significant high return drilling acreage to its inventory and is expected to be accretive to the company's cash flow, earnings as well as production from 2015 onwards.
Kodiak management stated that it expects the transaction to bring about operational and financial flexibility in the combined company that will facilitate better and faster development of the company assets. Moreover, Kodiak expects the deal to be tax free for the company's U.S. shareholders.
Currently, Whiting Petroleum has a Zacks Rank #2 (Buy), while Kodiak has a Zacks Rank #3 (Hold). Other stocks to consider from the oil exploration and production industry include Clayton Williams Energy, Inc. (NYSE:CWEI-Free Report), a Zacks Rank #1 (Strong Buy) stock.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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