1 00:00:03,800 --> 00:00:08,119 Speaker 1: Broadcasting live to New York Bloomberg eleventh Rio to Washington, 2 00:00:08,240 --> 00:00:13,240 Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, 3 00:00:13,360 --> 00:00:17,360 Speaker 1: Bloomberg nine to the countries es Exam Channel one nine 4 00:00:17,720 --> 00:00:21,240 Speaker 1: and around the globe the Bloomberg Radio plus Stappen Bloomberg 5 00:00:21,239 --> 00:00:25,800 Speaker 1: got gone. This is taking stock. Coming up on taking stock. 6 00:00:26,040 --> 00:00:30,000 Speaker 1: Low oil prices and x On Mobile has tightened its 7 00:00:30,040 --> 00:00:34,159 Speaker 1: spending belts, slashing capital outlays by thirty three percent in 8 00:00:34,240 --> 00:00:36,800 Speaker 1: the first quarter and it was actually forced to borrow 9 00:00:36,840 --> 00:00:39,800 Speaker 1: money in order to meet dividend payments. Will find out 10 00:00:39,840 --> 00:00:42,720 Speaker 1: more about oil and stocks, but right now, let's go 11 00:00:42,800 --> 00:00:44,479 Speaker 1: to Catherine Cottery and the Bloomberg news room for a 12 00:00:44,479 --> 00:00:47,800 Speaker 1: Bloomberg business flash. Thank you, Pam. While the downward momentum 13 00:00:47,840 --> 00:00:50,199 Speaker 1: continues on Wall Street today, the S and p F 14 00:00:50,280 --> 00:00:52,280 Speaker 1: Founded is headed for its worst two day drops in 15 00:00:52,360 --> 00:00:56,040 Speaker 1: February and the disappointing earnings reports. Billiott Sciences is the 16 00:00:56,040 --> 00:00:58,800 Speaker 1: biggest dragon the Benchmark index after its profit fell short 17 00:00:58,800 --> 00:01:01,639 Speaker 1: of analysts estimates on lower than expected sales of its 18 00:01:01,680 --> 00:01:05,759 Speaker 1: hepatitis C treatments, and Apple is declining for a seventh session. 19 00:01:06,280 --> 00:01:08,440 Speaker 1: We tek the markets every fifteen minutes throughout the trading 20 00:01:08,480 --> 00:01:11,280 Speaker 1: day down, Bloomberg Radio down. Industrial average is down one 21 00:01:11,360 --> 00:01:14,520 Speaker 1: hundred point six tenths of a percent, trading at seventeen thousand, 22 00:01:14,600 --> 00:01:18,119 Speaker 1: seven hundred thirty SMP five founded down sixteen point three 23 00:01:18,160 --> 00:01:20,680 Speaker 1: quarters of a percent to two thousand fifty nine, and 24 00:01:20,760 --> 00:01:23,000 Speaker 1: nast Act is down forty one point seven eighths of 25 00:01:23,040 --> 00:01:26,360 Speaker 1: a percent to forty seven sixty four less. Texas Enermedia 26 00:01:26,440 --> 00:01:28,680 Speaker 1: crude oil down two cents a barrel to forty six 27 00:01:28,680 --> 00:01:31,400 Speaker 1: O one. Spout gold is up twenty nine dollars forty 28 00:01:31,400 --> 00:01:34,520 Speaker 1: cents a ounce of twelve ninety ninety ten year treasury 29 00:01:34,560 --> 00:01:36,720 Speaker 1: up two thirty seconds with the yield of one point 30 00:01:36,720 --> 00:01:40,120 Speaker 1: eight one percent. Among today's top business stories, rob has 31 00:01:40,160 --> 00:01:43,679 Speaker 1: agreed to buy the digital video recording pioneer TiVo in 32 00:01:43,720 --> 00:01:46,480 Speaker 1: a deal valued at one point one billion dollars. A 33 00:01:46,560 --> 00:01:51,320 Speaker 1: story from Bloomberg's Charlie Palette, Catherine Rov provides on screen 34 00:01:51,440 --> 00:01:54,800 Speaker 1: guides for pay TV listings. The offer breaks down to 35 00:01:54,800 --> 00:01:58,160 Speaker 1: two seventy five sharing cash and seven ninety five a 36 00:01:58,240 --> 00:02:01,840 Speaker 1: share in common stock. All the new company, Rov is 37 00:02:01,880 --> 00:02:04,880 Speaker 1: based in Santa Clara. TiVo is based in San Jose. 38 00:02:05,440 --> 00:02:09,440 Speaker 1: The deal combines to TV technology patent holders out of 39 00:02:09,480 --> 00:02:13,920 Speaker 1: time when cable operators like Comcast and tech companies including Google, Apple, 40 00:02:13,960 --> 00:02:17,320 Speaker 1: and Amazon are all vying for control of the household 41 00:02:17,480 --> 00:02:21,960 Speaker 1: set top box. Charlie Pellet, Bloomberg Radio, Astra, Zeneca, and 42 00:02:22,040 --> 00:02:23,840 Speaker 1: Feiser are said to be among the firms that are 43 00:02:23,840 --> 00:02:28,079 Speaker 1: considering a counter offer for Metivation, challenging Santa Fee's nine 44 00:02:28,080 --> 00:02:31,359 Speaker 1: point three billion dollar bid for the company. People familiar 45 00:02:31,360 --> 00:02:33,920 Speaker 1: with the matter, State of Artist is also exploring a bit. 46 00:02:34,360 --> 00:02:38,200 Speaker 1: Metivation has rejected Santo Fee's offer, saying it's substantially undervalues 47 00:02:38,280 --> 00:02:40,600 Speaker 1: the company. And now let's get an update of some 48 00:02:40,639 --> 00:02:45,480 Speaker 1: of the other stories we're following today. I'm Bloomberg Radio Catherine. 49 00:02:45,480 --> 00:02:48,000 Speaker 1: Thank you from the Bloomberg news room. I'm Mark Crumpton. 50 00:02:48,320 --> 00:02:50,520 Speaker 1: This news update is brought to you by the Jeep 51 00:02:50,560 --> 00:02:54,840 Speaker 1: Grand Cherokee, the most awarded suv ever. The Grand Cherokee 52 00:02:54,880 --> 00:02:58,520 Speaker 1: continues to raise the bar with its luxurious interior and 53 00:02:58,639 --> 00:03:02,480 Speaker 1: legendary four by for capability. Drive one at your local 54 00:03:02,600 --> 00:03:06,600 Speaker 1: Jeep dealer. Today, Russia and China are asking the United 55 00:03:06,639 --> 00:03:09,280 Speaker 1: States to back off on a plan to install an 56 00:03:09,280 --> 00:03:13,239 Speaker 1: anti ballistic missile system to protect South Korea. White House 57 00:03:13,240 --> 00:03:17,560 Speaker 1: Press Secretary Josh earnest that equipment would be oriented towards 58 00:03:17,560 --> 00:03:20,480 Speaker 1: the threat that is posed by North Korea, not oriented 59 00:03:20,520 --> 00:03:23,919 Speaker 1: towards China or Russia. President Obama today announced what he 60 00:03:24,000 --> 00:03:27,679 Speaker 1: called common sense steps to curb gun violence. They include 61 00:03:27,720 --> 00:03:30,600 Speaker 1: requirements that smart guns would have to meet for law 62 00:03:30,680 --> 00:03:33,960 Speaker 1: enforcement agencies to buy and use them. Smart guns use 63 00:03:34,080 --> 00:03:37,880 Speaker 1: new and enhanced safety technology to prevent accidental shootings or 64 00:03:37,920 --> 00:03:41,200 Speaker 1: to track down a missing gun. Indiana Governor Mike Pence 65 00:03:41,240 --> 00:03:44,920 Speaker 1: today endorsed Ted Cruz for president. The Texas senator spoke 66 00:03:44,960 --> 00:03:48,040 Speaker 1: to reporters during a campaign stop in Fort Wayne. I 67 00:03:48,080 --> 00:03:54,080 Speaker 1: think Governor Mike Pence is an optimistic, positive, unifying force, 68 00:03:54,800 --> 00:03:59,600 Speaker 1: a strong leader who I respect. Indiana's primary is Tuesday. 69 00:03:59,640 --> 00:04:02,760 Speaker 1: At Neck Cities casinos won an immediate vote on bills 70 00:04:02,800 --> 00:04:05,880 Speaker 1: that could increase profitability and let the state take over 71 00:04:05,920 --> 00:04:09,800 Speaker 1: the city's finances. The Casino Association of New Jersey called 72 00:04:09,800 --> 00:04:13,320 Speaker 1: on Assembly Speaker Vincent Prieto today, asking him to post 73 00:04:13,400 --> 00:04:16,320 Speaker 1: his version of an Atlantic City aid package, one of 74 00:04:16,360 --> 00:04:20,440 Speaker 1: two competing measures being considered by the state legislature. Global 75 00:04:20,480 --> 00:04:23,200 Speaker 1: News twenty four hours a day, powered by our two 76 00:04:23,320 --> 00:04:26,120 Speaker 1: hundred journalists in more than one hundred fifty news bureaus 77 00:04:26,160 --> 00:04:29,839 Speaker 1: around the world. From the Bloomberg news Room by Mark Crumpton, Catherine, 78 00:04:31,200 --> 00:04:33,040 Speaker 1: thank you, And now let's get a quick update of 79 00:04:33,080 --> 00:04:36,479 Speaker 1: the equity benchmarks. Dow Industrial Average is down sixty seven 80 00:04:36,520 --> 00:04:40,200 Speaker 1: points and narrowing earlier losses, trading at seventeen thousand, seven 81 00:04:40,279 --> 00:04:43,200 Speaker 1: hundred sixty three. Smp FI foundered down thirteen points at 82 00:04:43,200 --> 00:04:46,560 Speaker 1: two thousand sixty three, NASTACK down thirty four points at 83 00:04:46,600 --> 00:04:51,040 Speaker 1: forty seven seventy one. And that's a Bloomberg business flash. 84 00:04:52,240 --> 00:04:55,719 Speaker 1: You're listening to Taking Stock with pin Box and Kathleen 85 00:04:55,800 --> 00:05:01,800 Speaker 1: Hayes on Bloomberg Radio. Oil Texas t oil prices lower. 86 00:05:01,839 --> 00:05:05,120 Speaker 1: What does that mean for the profits of large integrated 87 00:05:05,120 --> 00:05:08,560 Speaker 1: oil companies such as x on Mobile and Chevron. Well, 88 00:05:08,560 --> 00:05:11,239 Speaker 1: it means you're making less money. But should you invest 89 00:05:11,279 --> 00:05:13,599 Speaker 1: in these companies? Let's find out from Libby two dues 90 00:05:13,880 --> 00:05:18,200 Speaker 1: partner portfolio manager Cushing Asset Management with four point three 91 00:05:18,400 --> 00:05:22,479 Speaker 1: billion dollars of assets under management, joining us from Dallas, Texas. Libby, 92 00:05:22,600 --> 00:05:24,360 Speaker 1: thanks very much for being with us. Go ahead, tell 93 00:05:24,440 --> 00:05:27,120 Speaker 1: us about x On Mobile and Chevron and what this 94 00:05:27,200 --> 00:05:31,200 Speaker 1: means for an investment opportunity. Yeah, I think I think 95 00:05:31,200 --> 00:05:33,400 Speaker 1: you kind of said it him. You know, first quarter 96 00:05:33,440 --> 00:05:37,800 Speaker 1: results show they continue to struggle in this locommodity price environment. Uh, 97 00:05:37,839 --> 00:05:40,480 Speaker 1: there were some bright spots because they are both big 98 00:05:40,520 --> 00:05:44,440 Speaker 1: diversified energy companies, so businesses that are more what we 99 00:05:44,520 --> 00:05:47,560 Speaker 1: call the downstream part of the supply chain that benefit 100 00:05:47,640 --> 00:05:51,000 Speaker 1: in locomodity prices. They did well. But the bottom line, 101 00:05:51,040 --> 00:05:56,000 Speaker 1: the broader implications here are that big energy companies need 102 00:05:56,120 --> 00:05:59,440 Speaker 1: to figure out how to adapt to a more moderate 103 00:05:59,560 --> 00:06:02,840 Speaker 1: crew to environment. I will say on both calls, you 104 00:06:02,880 --> 00:06:07,800 Speaker 1: did hear a commitment from management to their distributions. Exons 105 00:06:07,800 --> 00:06:11,040 Speaker 1: about a three and a half percent yield, Chevron is 106 00:06:11,080 --> 00:06:14,840 Speaker 1: about four. I think it's four too. So I do 107 00:06:14,960 --> 00:06:19,800 Speaker 1: think that the businesses UM, although struggling, are continuing to 108 00:06:19,800 --> 00:06:23,479 Speaker 1: to to move forward. Chevron, They've got a lot of 109 00:06:23,640 --> 00:06:27,400 Speaker 1: large creative projects coming online and in the second quarter 110 00:06:28,040 --> 00:06:31,480 Speaker 1: UM And I think that these these are good companies 111 00:06:31,480 --> 00:06:35,120 Speaker 1: for for investors to look at. Tell me about the 112 00:06:35,160 --> 00:06:38,640 Speaker 1: strategy of acquisitions in order to replace reserves at a 113 00:06:38,680 --> 00:06:41,799 Speaker 1: company like let's say Exon Mobile or Chevron, buying natural 114 00:06:41,880 --> 00:06:45,880 Speaker 1: gas properties for example. Yeah, I think that um and 115 00:06:45,880 --> 00:06:49,599 Speaker 1: and Excen kind of shied away from UH much in 116 00:06:49,640 --> 00:06:52,480 Speaker 1: the way of M and A commentary. But they both 117 00:06:52,520 --> 00:06:55,800 Speaker 1: companies have a big, solid balance sheets and and could 118 00:06:55,920 --> 00:06:59,920 Speaker 1: But when you're in a low commodity price environment, it's 119 00:07:00,160 --> 00:07:02,720 Speaker 1: much more expensive to drop and drill a will than 120 00:07:02,760 --> 00:07:07,000 Speaker 1: to spend a dollar of capex to buy existing production. So, 121 00:07:07,040 --> 00:07:10,960 Speaker 1: whether it is some weaker players that go into bankruptcies 122 00:07:11,800 --> 00:07:15,040 Speaker 1: or it is other players who maybe are having a 123 00:07:15,120 --> 00:07:18,320 Speaker 1: harder time standing on their own, you better believe that 124 00:07:18,320 --> 00:07:21,080 Speaker 1: that both companies are kind of sharpening UH their their 125 00:07:21,120 --> 00:07:24,400 Speaker 1: pencils right now and trying to figure out how to 126 00:07:24,440 --> 00:07:28,200 Speaker 1: add production in the most cost efficient manner. How can 127 00:07:28,240 --> 00:07:33,120 Speaker 1: people add to their portfolio stocks that may be targets 128 00:07:33,160 --> 00:07:35,400 Speaker 1: of these large integrated oil companies. What are some of 129 00:07:35,400 --> 00:07:38,840 Speaker 1: the characteristics? Well, I think what you want to look 130 00:07:38,880 --> 00:07:42,720 Speaker 1: for is companies that are in the more prolific basins, 131 00:07:43,240 --> 00:07:46,640 Speaker 1: meaning basins that have a lot of growth potential, basins 132 00:07:46,680 --> 00:07:49,960 Speaker 1: that have geology that allow them to have a very 133 00:07:50,040 --> 00:07:54,280 Speaker 1: low finding and development costs UH and basins where you 134 00:07:54,360 --> 00:07:59,400 Speaker 1: have midstream companies that are committed to building UH. The 135 00:07:59,440 --> 00:08:01,800 Speaker 1: infastry sure, because as you know, no matter how much 136 00:08:01,880 --> 00:08:05,040 Speaker 1: you find, if you can't get it to market or 137 00:08:05,040 --> 00:08:07,880 Speaker 1: have the optionality you get it to several markets, it 138 00:08:07,920 --> 00:08:10,080 Speaker 1: doesn't matter. So you've got to look for companies that 139 00:08:10,080 --> 00:08:14,560 Speaker 1: that are in in that have those UH characteristics. Master 140 00:08:14,640 --> 00:08:19,239 Speaker 1: limited partnerships and yield tell us where is it safe 141 00:08:19,680 --> 00:08:23,320 Speaker 1: and where is the opportunity. Yeah, I think that in 142 00:08:23,360 --> 00:08:26,960 Speaker 1: this pricing environment, you want to be with the businesses 143 00:08:27,040 --> 00:08:32,960 Speaker 1: that can prosper UH in a moderate UH pricing environment. 144 00:08:33,080 --> 00:08:37,200 Speaker 1: And midstream business is all about the volumes. Now, the 145 00:08:37,280 --> 00:08:40,480 Speaker 1: companies in the midstream business tend to on average have 146 00:08:40,520 --> 00:08:45,880 Speaker 1: a significantly higher yield here um. And we need about 147 00:08:45,960 --> 00:08:48,960 Speaker 1: four hundred and seventy billion dollars this is a recent 148 00:08:49,000 --> 00:08:53,240 Speaker 1: industry report National Gas Association of infrastructure to be built. 149 00:08:53,480 --> 00:08:57,120 Speaker 1: So these master limited partnerships are going to be the 150 00:08:57,160 --> 00:09:00,480 Speaker 1: companies to build it. Because the excens in the avrons 151 00:09:00,520 --> 00:09:02,880 Speaker 1: of the world, they don't want to spend their capex 152 00:09:03,000 --> 00:09:05,600 Speaker 1: right now, they're trying to to keep the business together. 153 00:09:05,640 --> 00:09:08,079 Speaker 1: They got to spend their capex on, as you said, 154 00:09:08,200 --> 00:09:12,200 Speaker 1: replacing existing production. So these master limited partnerships are going 155 00:09:12,240 --> 00:09:15,400 Speaker 1: to be the beneficiary of of and be the guys 156 00:09:15,440 --> 00:09:17,920 Speaker 1: that are going to build out the infrastructure. So you've 157 00:09:17,920 --> 00:09:20,520 Speaker 1: got a nice income component and a growth component if 158 00:09:20,600 --> 00:09:23,760 Speaker 1: you own a master limited partnerships. Why have so many 159 00:09:23,840 --> 00:09:29,400 Speaker 1: master limited partnerships traded lower when they are not necessarily 160 00:09:29,440 --> 00:09:33,000 Speaker 1: connected to the price of oil or natural gas? Yeah, 161 00:09:33,320 --> 00:09:35,600 Speaker 1: it was. It was amazing to see that last year 162 00:09:35,640 --> 00:09:39,200 Speaker 1: oil service stocks perform better than master limited partnerships when 163 00:09:39,280 --> 00:09:42,240 Speaker 1: when they truly don't have the majority of them don't 164 00:09:42,280 --> 00:09:45,480 Speaker 1: have this pricing connection. I would say, um in in 165 00:09:45,559 --> 00:09:49,640 Speaker 1: the fear of the big decline in in crude oil, 166 00:09:50,160 --> 00:09:52,840 Speaker 1: even natural gas companies kind of the baby got thrown 167 00:09:52,840 --> 00:09:55,120 Speaker 1: out with the bath water. Now, I will say you 168 00:09:55,160 --> 00:09:57,480 Speaker 1: have to be selective. They're about a hundred and fifties 169 00:09:57,760 --> 00:10:01,240 Speaker 1: stocks in the energy publicly traded energy the infrastructure universe, 170 00:10:01,240 --> 00:10:04,400 Speaker 1: which we also call MLP universe. And not all of 171 00:10:04,440 --> 00:10:06,480 Speaker 1: these companies are going to continue to do well. Not 172 00:10:06,600 --> 00:10:08,440 Speaker 1: all of these companies are gonna be able to sustain 173 00:10:08,480 --> 00:10:12,160 Speaker 1: their distributions. So you have to be selective. But there 174 00:10:12,200 --> 00:10:15,080 Speaker 1: are plenty of good companies that over the next decade 175 00:10:15,120 --> 00:10:19,800 Speaker 1: plus are going to be um be able to do well, 176 00:10:20,320 --> 00:10:23,480 Speaker 1: and they're basically on sale right now because they got 177 00:10:23,559 --> 00:10:28,120 Speaker 1: dragged down as crude oil drop. Thank you very much 178 00:10:28,160 --> 00:10:31,000 Speaker 1: for spending time with us. Libby two does two is 179 00:10:31,040 --> 00:10:36,000 Speaker 1: a partner and portfolio manager at Cushing Asset Management and 180 00:10:36,040 --> 00:10:39,240 Speaker 1: giving us details about investing in energy companies such as 181 00:10:39,440 --> 00:10:43,720 Speaker 1: Exxon and Chevron right now. Taking a look at crude oiling, 182 00:10:43,720 --> 00:10:46,880 Speaker 1: it is basically unchanged at forty five dollars and nine 183 00:10:47,520 --> 00:10:49,920 Speaker 1: cents for a barrel of West Texas and to media 184 00:10:50,040 --> 00:10:53,000 Speaker 1: crude natural gas, though moving higher today by more than 185 00:10:53,040 --> 00:10:55,880 Speaker 1: three and a half percent at two dollars in fifteen 186 00:10:55,880 --> 00:11:01,920 Speaker 1: cents per million BTU. This is Bloomberg Radio coming up 187 00:11:01,960 --> 00:11:06,199 Speaker 1: on Taking Stock, a look at companies and their corporate earnings. 188 00:11:06,480 --> 00:11:09,319 Speaker 1: With more than three hundred companies in the SMP five 189 00:11:09,360 --> 00:11:12,360 Speaker 1: hundred already reporting their quarterly results. Will find out the 190 00:11:12,400 --> 00:11:13,480 Speaker 1: trends that's next