December 19, 2016

Chris Grisanti was on Bloomberg Television this morning. Below is a clip from his guest host appearance, in which he discusses macro events, including the election, and their effect on the GCM portfolio.

August 2, 2016

Chris Grisanti was guest host of Bloomberg Surveillance this morning. Here’s a clip in which he discusses why we have a high cash position and why we are cautious about the market.

May 4, 2016

Chris Grisanti on Bloomberg TV this week discussing our contrarian attraction to the financial sector.

Will Baker Hughes Walk?

Chris Grisanti was quoted in a Barron’s article about the Baker Hughes dilemma.

 

Will Baker Hughes Walk?

By Vito J. Racanelli

April 9, 2016

The clock has begun ticking in earnest on whether the Halliburton (HAL) and Baker Hughes (BHI) merger will actually take place. Last Wednesday, both companies said they intended to “vigorously contest” the Justice Department antitrust lawsuit filed the same day, blocking their proposed combination.

Under the terms of the deal, announced in November 2014, when oil-patch conditions were much stronger, either party can walk away from the deal after April 30, 2016. Baker Hughes stock jumped to $43.11 from $39 last week because it stands to get a $3.5 billion termination fee, but the two companies face uncertain futures near term.

Both are in no-win positions. Contesting the Justice Department lawsuit could take many more months in what has already been a long and contentious wait for the deal to close. In the interim, the oil-service business has been mauled by one of the worst downturns in its history and, like the industry, the two companies have suffered.

The courts could rule in favor of the deal or against it, but either way, with potential appeals, it will require some time, further dragging out a process that has taken too long already, distracting and weakening both companies.

Baker Hughes stock rose last week because many investors believe the company will choose to walk and take the termination fee—one fifth of its market value—with it. That’s a nice chunk of change, but probably not enough to make up for the general disruption, employee turnover, and loss of focus and market share that Baker Hughes has endured.

It faces a long mending process. Post-breakup, Baker Hughes will be on its heels as the company prepares to return to independent operations. The shares of both companies could trade down in the short term if the deal officially breaks up. Baker Hughes might find itself with its newfound cash but worse off in the longer term.

“It seems clear that this thing is over and that Baker Hughes will likely walk,” says Christopher Grisanti, a portfolio manager at Grisanti Capital Management, which sold its stakes in both companies in 2015.

There’s been speculation that General Electric (GE) would step in and buy Baker Hughes, but that’s a big bite even for a company the size of GE, given the industry’s woes. Industry balance sheets are stressed, and managers get punished for oil-patch mergers, Grisanti adds.

Last year (in “Baker Hughes Blues,” Nov. 14, 2015), we noted there was a less than 50% chance that the deal would clear regulatory hurdles, and that Baker Hughes could fall another 20% to 30%. Its stock is down 10% since then. We’re closing out this call and taking our chips home. There’s too much uncertainty.

Baker Hughes and Halliburton declined to comment.

It’s rarely a good idea to get involved with stocks when a single government decision can make or break it. Now it looks to be up to a judge, if Baker Hughes doesn’t walk first.

 

(Source: www.barrons.com)

[URL – http://www.barrons.com/article_email/will-baker-hughes-walk-1460174732-lMyQjA1MTI2MzEzMTkxMTExWj]

March 28, 2016

Chris Grisanti was on Bloomberg Television explaining why we continue to like the much maligned financial sector.

March 24, 2016

CEO Chris Grisanti from Grisanti Capital Management discusses the price, production and storage of oil on “Bloomberg Markets.” (Source: Bloomberg)

November 23, 2015

Chris Grisanti was the guest host of Bloomberg Surveillance this morning.  Here is a brief clip from his appearance in which he discusses our first purchase of oil production stocks in ten years.

March 10, 2015

Below is a clip of Chris Grisanti on Bloomberg Surveillance.  He discusses our view that oil is in a supply-driven glut, which may take a long time to resolve.  We continue to favor investments like airlines, refiners and retailers that will benefit from lower energy prices.

February 18, 2015

Below is the link to Chris Grisanti’s appearance on Bloomberg’s Closing Bell.  He discusses why low oil prices may last a while, because they have has been caused by over-supply rather than a lack of demand.