Whitney Tilson has a new short

• Akin Oyedele
 

• 19h
• 11,406

Hollis Johnson/Business Insider

EXAC Exactech

 26.65 0.15 (+0.60 %)

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LL Lumber Liq Hldg

 17.92 0.02 (+0.10 %)

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WING Wingstop

 30.57 0.58 (+1.90 %)

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Whitney Tilson has a new short: Wingstop.

The founder of Kase Capital, who bet against Lumber Liquidators on allegations that the hardwood-flooring retailer sold toxic products, revealed his new short Tuesday at the Robin Hood Conference.

Shares of the chicken-wing chain fell by as much as 3% in regular trading. 

In a slide deck on his website, Tilson listed five reasons why he was short the stock, or betting that it would fall. 

First, he found the valuation to be "absurd," and listed the stock as trading at 62 times its trailing earnings per share.

Also, Tilson cited a decline in sales at stores open for at least one year since the middle of 2014.

Third, Tilson said Wingstop was in a very competitive market, and there was nothing "proprietary or unique" about the business of chicken wings. Besides other chains like Buffalo Wild Wings, Wingstop is up against small grocery stores and anywhere else that sells chicken wings, according to Tilson. 

Fourth, Tilson said he was skeptical that Wingstop can hit its goal of 2,500 units in the US. And finally, the 22-year-old company generated "a mere" $87 million in revenues and $15 million in net income over the last 12 months.

Wingstop shares on 11/29/16MarketsInsider

Tilson said he was no longer short Lumber Liquidators, as the company had settled most of its investigations with regulators. 

He reiterated his bet against Exact Sciences, the colorectal-cancer diagnostics company, which he first pitched in 2014. He said he was long shares of Berkshire Hathaway, as Warren Buffett's firm "provides more certainty than any other company" in an uncertain world. 

Below are the slides from Tilson's presentation that explain his Wingstop short:

View As: One Page Slides

Kase Capital

Kase Capital

Kase Capital

Kase Capital

Kase Capital

Kase Capital

Kase Capital

Kase Capital

Kase Capital

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ALLIANCEBERNSTEIN: Here are the 12 most crowded US stocks

More: Features Whitney Tilson Wingstop Short Selling 

It's a bloodbath in Chinese commodity futures

DAVID SCUTT 

NOV 30, 2016, 6:30 PM   

Photo by Kevin Frayer/Getty Images

It’s went from bad to worse for Chinese commodity futures on Wednesday.

One look at the final scoreboard needs no other word but “ouch”.

• SHFE Copper ¥46,300 , -4.28%
• SHFE Aluminium ¥13,255 , -3.60%
• SHFE Zinc ¥22,585 , -7.02%
• SHFE Nickel ¥91,300 , -5.69%
• SHFE Rebar ¥3,000 , -7.01%
• DCE Iron Ore ¥556.00 , -7.95%
• DCE Coking Coal ¥1,294.50 , -8.09%
• DCE Coke ¥1,775.00 , -8.93%

It was carnage, with many contracts, including rebar and iron ore, finishing limit-down for the session.

Quite simply, the only thing that prevented them from falling further was they weren’t allowed to based on market rules, at least for this session.

The declines followed a string of storming gains in the previous week, with the reversal starting on Monday evening following tighter restrictions being placed on traders by regulators.

This was done in an attempt to reduce speculative forces that were responsible for most of the recent gains.

It’s clearly been effective, with the carnage seen today underlining just how much of a casino these markets have become.

A spike in short-dated Chinese interest rates could also have exacerbated the price declines with 14-day bond yields hitting the highest level seen since March.

“There’s a liquidity crunch in China so that’s not good for commodities in China,” Helen Lau, analyst at Argonaut Securities, told Reuters. “The speculators and retail investors have big (long commodity) positions, so the swings in prices are amplified.”

Dalian May 2017 Iron Ore Future. Source: Thomson Reuters Eikon

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STRESS TESTS: Barclays, RBS, and Standard Chartered found to have 'capital inadequacies'

• Ben Moshinsky
 

• 9h
• 555

Matt Cardy / Getty Images

LONDON – Royal Bank of Scotland, Barclays, and Standard Chartered came up lacking in the Bank of England's stress tests.

RBS had to submit plans to the regulator detailing how it would raise capital and boost resilience to financial shocks.

"While the Prudential Regulation Authority (PRA) Board judged that some capital inadequacies were revealed for three banks (The Royal Bank of Scotland Group, Barclays and Standard Chartered), these banks now have plans in place to build further resilience," the central bank said.

"The Financial Policy Committee (FPC) judged that, as a consequence of the stress test, the banking system is in aggregate capitalised to support the real economy in a severe, broad and synchronised stress scenario."

The tests examined how the UK's seven biggest banks would weather a domestic and global depression, and cope with high fines for misconduct.

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The other four lenders – Santander, HSBC, Lloyds, and Nationwide – managed to pass the scenario with enough capital.

The scenario was the toughest yet for the Bank of England.

"The stress scenario is estimated to lead to system-wide losses of £44 billion over the first two years of the stress, around five times the net losses incurred by the same banks as a group over 2008–09," the regulator said.

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OPEC has reportedly agreed a production cut — and oil is going wild

• Lianna Brinded and Will Martin

• 1h
• 4,398

The price of oil is surging on Wednesday after reports that the oil producers cartel OPEC has agreed a deal to cut output. Bloomberg News reports that an unnamed "delegate to the group"confirmed output will be cut be 1.2 million barrels per day to 32.5 million per day. Reuters also reports that a deal to cut output by the same margin has been agreed.

As of 2:50 p.m. GMT (10:50 a.m. ET), the price of Brent oil bounced by more than 7%, or more than $3 per barrel, after cratering on Tuesday afternoon. Earlier in the day, oil prices had increased more than 8%, but pulled back from those highs:

Investing.com

The price of US West Texas Intermediate crude has also followed suit:

Investing.com

A deal was reportedly struck after Saudi Arabia and Iran managed to reach a compromise after weeks of tensions. "It appears the Saudis accepted that Iran, as a special case, can raise production to about 3.9 million barrels a day," Bloomberg says.

Reuters reports that Saudi Arabia will now cut its output to 10.06 million barrels per day, adding that Indonesia has been suspended from the group, according to an OPEC source.

Reuters' source said OPEC's agreement was as a result of a proposal first tabled by Algeria's delegation.

As with most OPEC meetings, it is currently hard to tell if the information coming from the meeting is simply rumours. The cartel's gatherings are notorious for the sheer volume of chatter and leaked "news" that tends to emerge before members officially announce their decisions.

On Wednesday morning, Reuters reported that a delegate from the Iraqi contingent said that "there will be an agreement today," while the Iranian Oil Minister Bijan Zanganeh said "I'm optimistic."

OPEC delegates started a closed-door session at around 1000 GMT (5:00 a.m. ET) and are expected to give a press conference at around 3.00 p.m. GMT (10.00 a.m. ET).

Earlier, Reuters reported that Saudi Energy Minister Khalid al-Falih said OPEC was close to clinching a deal to limit oil output, adding that OPEC is focusing on reducing output to a ceiling of 32.5 million barrels per day, or cutting by more than 1 million bpd, and hoped Russia and other non-OPEC members would contribute a cut of another 0.6 million bpd.

"It will mean that we (Saudi) take a big cut and a big hit from our current production and from our forecast for 2017. So we will not do it unless we make sure that there is consensus and an agreement to meet all of the principles," Falih said, according to Reuters.

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There's a long list of reasons people might not like Trump's pick for Treasury secretary

• Matt Turner
 

• 2h
• 16,462

Steve Mnuchin at the 2009 Milken Institute Global Conference in Beverly Hills, California. Thomson Reuters

President-elect Donald Trump has made his pick.

After much back-and-forth over who would be appointed Treasury secretary, Trump has settled on Steve Mnuchin.

Mnuchin is likely to be a controversial pick, however, who is unlikely to sit well with voters who backed Trump's anti-Wall Street campaign rhetoric.

He is a former Goldman Sachs mortgage bond trader who has worked or entered into deals with hedge fund managers like George Soros, Eddie Lampert, and John Paulson.

He then led a deal to buy IndyMac, a failed bank, in the depths of the financial crisis, most likely making a huge amount of money in the years that followed. During his tenure at the top of the bank, it faced a consent order over its foreclosure process, and more recently the bank has been accused of discriminating against blacks, Hispanics, and Asians.

Here's some highlights from Mnuchin's career:

• Mnuchin spent 17 years with Goldman Sachs, and his father worked at the bank for 30 years in stock trading.
• He was the head of the mortgage department in the early days of collateralized debt obligations and credit default swaps, instruments that many have argued had a part to play in the financial crisis.
• In that role, he worked for Goldman Sachs' current CEO, Lloyd Blankfein, who at the time was head of fixed income. Blankfein said earlier this month that Mnuchin a "highflier," "a very nice guy," and a "smart, smart guy."
• He left Goldman to join Eddie Lampert's hedge fund ESL Investments. Lampert had been a roommate at Yale. Lampert is now the CEO of the retailer Sears. You can read about how that has played out here.
• He then set up an investment fund with George Soros.
• Blankfein and Soros were featured in a campaign ad for Trump that took aim at a "global power structure" that had "robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities."
• During the depths of the financial crisis in 2009, a group led by Mnuchin bought the troubled housing lender IndyMac. The buyer group included Soros, hedge fund billionaire John Paulson, former Goldman Sachs executive Chris Flowers, and tech billionaire Michael Dell. After renaming the company OneWest, Mnuchin served as chairman until selling it to CIT Group in 2015.
• In 2011, the Office of Thrift Supervision issued a consent order against the bank after a review. Mnuchin was chairman at the time. "The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy," a statement at the time said.
• Two California housing watchdogs have filed a federal complaint accusing OneWest of violating the Fair Housing Act by discriminating against blacks, Hispanics, and Asians. According to the complaint, market share and regulatory data shows that "since at least 2011, respondent made few loans to Asian American, African American, and Latino borrowers and communities in absolute terms, in relation to the demographics of the counties in respondent's CRA assessment area, and/or in relation to the industry as a whole."
• Mnuchin oversaw OneWest until it sold to CIT for $3.4 billion, more than double the $1.55 billion the buyer group paid. The owners also took out $1.9 billion in dividend payments from the bank, according to the Los Angeles Times. Mnuchin stayed on and took a seat on the board of CIT, which is valued at about $7.9 billion.
• He was one of the early backers of Donald Trump, much to the surprise of some of his former Wall Street colleagues. He told Max Abelson and Zachary Mider at Bloomberg in August that a top Washington job appealed to him. "Nobody's going to be like, 'Well, why did he do this?' if I end up in the administration," he said then.

Mnuchin, if he does get selected by Trump, will have to go through confirmation hearings with the Senate Finance Committee. It's likely to be an interesting process.

“Given Mr. Mnuchin’s history of profiting off the victims of predatory lending, I look forward to asking him how his Treasury Department would work for Americans who are still waiting for the economic recovery to show up in their communities," Senate Finance Committee Ranking Member Wyden (D-OR) said in a statement. 

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Hundreds of American Uber drivers are joining nationwide workers' protests for better pay

• Lisa Baertlein, Reuters

• Nov. 28, 2016, 5:54 A

Uber driver Sam Salem, 29, protests with other commercial drivers with the app-based, ride-sharing company Uber against working conditions outside the company's office in Santa Monica, California June 24, 2014. REUTERS/Lucy Nicholson

LOS ANGELES (Reuters) - Drivers for ride service companyUber will join planned nationwide protests on Tuesday, when activists and low-wage workers renew their call for better pay and the right to join a union in the wake of Donald Trump's U.S. presidential election win, organizers said.

Hundreds of Uber drivers in two dozen cities, including San Francisco, Miami and Boston, for the first time will add their voices to the union-backed "Fight for $15" campaign that has helped convince several cities and states to raise starting pay significantly above the U.S. minimum wage of $7.25.

Justin Berisie, 34, drives for Uber in Denver and is joining Tuesday's protests.

"Someone who lives in America and goes to work every day, that person deserves a decent living," said Berisie, who has a 5-year-old daughter and is struggling to make ends meet. He said he earns $500 or less, before expenses such as gasoline, during an average week where he is on duty for 50 to 60 hours.

The four-year-old "Fight for $15" movement includes fast-food workers, home care aides, airport baggage handlers and other low-wage employees. Organizers from "Fight for $15," which is backed by the Service Employees International Union, say the campaign's Nov. 29 demonstrations will take place in 340 cities and nearly 20 of the nation's busiest airports.

U.S. policy is expected to become less worker friendly following the election of Trump, a international businessman who will be president as fellow Republicans control both chambers of Congress as well as federal agencies that govern the formation of unions, overtime rules and more.

Uber drivers have sued the company in several states, accusing it of depriving drivers of various employment protections by misclassifying them as independent contractors.

The lawsuits are a test for companies such as Uber Technologies Inc, a high-profile player in the so-called "sharing economy," which say that their contractor model allows for flexibility that many see as important to their success. A legal finding that drivers are employees could raise Uber's costs and force it to pay Social Security, workers' compensation, and unemployment insurance.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Cynthia Osterman)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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