Disney’s Theme Parks and Resorts Benefiting from Pent-Up Demand
August 17, 2022
Image Shown: The Walt Disney Company posted a rock-solid earnings report for the period ended July 3 as its business benefited from pent up demand for its theme parks and resorts offerings. Image Source: The Walt Disney Company – Third Quarter of Fiscal 2022 Earnings Press Release By Callum Turcan On August 10, The Walt Disney Company (DIS) reported third quarter earnings for fiscal 2022 (period ended July 3, 2022) that beat both consensus top- and bottom-line expectations. Its theme parks and reports business came roaring back from the worst of the COVID-19 pandemic while its video streaming services continued to add millions of paid subscribers to their customer bases. Shares of DIS have surged higher in recent weeks, and
Stocks Surge: Strong S&P 500 Earnings Growth Expected, Headline Scares With Inflation Tamed, Interest Rates Still Low
August 14, 2022
Image Source: BLS. The pace of inflation looks like it may slow down considerably in 2023 as sequential monthly increases pause their advance. The Consumer Price Index (CPI-U), seasonally adjusted, paused its advance during the month of July, and the markets have generally reacted positively to the news. We’re reiterating our view that inflation is not necessarily bad for the markets over the long haul, and while it may take some time for companies to sort out higher prices across their input bases, inflation is not a new challenge for the markets at all, and the best way for investors to combat inflationary tendencies, by and large, is via stocks, which generate nominal earnings, whose equity prices are quoted nominally,
Albemarle Raises Guidance Yet Again, Expects to Be FCF Positive in 2022
August 11, 2022
Image Shown: Albemarle Corporation’s lithium operations have posted stellar financial performance in recent quarters and underpin the firm’s bright long-term growth outlook. Image Source: Albemarle Corporation – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan On August 3, Albemarle Corporation (ALB) reported second quarter 2022 earnings that matched consensus top-line estimates and beat consensus bottom-line estimates. Albemarle produces lithium derivatives such as lithium carbonate and lithium hydroxide that are used to produce lithium-ion batteries. The firm also produces bromine, which is used as a fire retardant in a wide variety of products, and catalysts for the refining industry. The company once again raised its full-year guidance for 2022 during its second quarter earnings update. Albemarle also raised its
ASML Holding Retains Dominant Position in High-End Semiconductor Equipment Space
August 11, 2022
Image Shown: ASML Holding NV effectively has a monopoly on the high-end space of the semiconductor equipment industry as the Dutch company sells the only lithography systems that can produce the most advanced cutting edge “chips.” We are huge fans of the company’s business model. Image Source: ASML Holding NV – Second Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan Based in the Netherlands, ASML Holding NV (ASML) produces lithography systems that can produce all types of semiconductor components and effectively has a monopoly at the high-end part of this industry given its immense technological lead over its peers. The secular tailwinds driving up demand for “chips” across the globe such as the growing computing power needs of
Garbage Hauler Republic Services Beats Estimates, Raises Guidance
August 10, 2022
Image Shown: Shares of newsletter portfolio idea Republic Services Inc have put up strong performance so far year-to-date in the face of volatile capital markets. By Callum Turcan Garbage hauler Republic Services Inc (RSG) reported second quarter 2022 earnings that beat both consensus top- and bottom-line estimates. The firm’s strong performance during the first half of this year gave management the confidence to boost Republic Services’ full-year guidance during its latest earnings update. We are huge fans of Republic Services’ stellar cash flow generating abilities, ample pricing power, and the “annuity-like” revenue streams it generates by offering essential services (various waste management services including collection, disposal, and more are required to maintain a healthy and well-functioning society). In May 2022,
Best Idea Berkshire Hathaway Continues to Impress
August 10, 2022
Image Shown: Berkshire Hathaway Inc is a stellar cash flow generator in almost any operating environment. Image Source: Berkshire Hathaway Inc – 10-Q SEC filing covering the Second Quarter of 2022 By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B) reported second quarter 2022 earnings that saw its ‘operating earnings’ metric surge higher versus the year-ago level. This metric removes realized and unrealized gains/losses in its large equity portfolio from the picture to provide investors with a better understanding of the company’s underlying performance. Due to the downturn in equity markets seen during the first half of this year, Berkshire Hathaway’s GAAP net income swung to a large net loss last quarter. We include shares of Berkshire Hathaway Class B (ticker:
Exxon Mobil Surging Higher with Room for Upside
August 8, 2022
Image Shown: Exxon Mobil Corporation put up stellar results when reporting its second quarter earnings in late July 2022. Image Source: Exxon Mobil Corporation – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan Exxon Mobil Corporation (XOM) posted second quarter 2022 earnings that flew past consensus top- and bottom-line estimates. The tailwind provided by elevated raw energy resources prices, rising oil & gas production volumes, ongoing cost structure improvement initiatives, and strong “crack spreads” (refining margins) more than offset headwinds arising from its decision to exit Russia in March 2022 and foreign currency headwinds due to a strong U.S. dollar. Exxon Mobil is one of our favorite energy ideas, and we include shares of XOM in several of
Global Payments Buying EVO Payments as Fintech Industry Consolidates
August 6, 2022
Image Shown: Global Payments Inc is in the process of acquiring EVO Payments Inc. Image Source: Global Payments Inc – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan Global Payments Inc (GPN) announced it would acquire EVO Payments Inc (EVOP) for $34 per share through an all-cash deal worth ~$4.0 billion by enterprise value. As its name would suggest, Global Payments provides payment technology and software solutions to customers in over 100 countries. By acquiring EVO Payments, which focuses on providing payment technology and services to small and medium-sized businesses in over 50 markets worldwide, Global Payments will extend its reach into new markets (including Chile, Germany, Greece, and Poland) while enhancing its presence in existing markets (including
Shares of Best Idea Alphabet Remain Incredibly Undervalued
August 3, 2022
Image Shown: Alphabet Inc Class C shares are trading at bargain basement levels, in our view. By Callum Turcan Alphabet Inc (GOOG) (GOOGL) reported second quarter 2022 earnings that missed consensus top- and bottom-line estimates. However, investors were clearly expecting the tech giant to perform much worse as shares of GOOG leapt higher following the report. We continue to like Alphabet Class C shares (ticker: GOOG) as a top-weighted idea in the Best Ideas Newsletter portfolio. Our fair value estimate (adjusted for Alphabet’s recent 20:1 stock split) sits near $157 per share of GOOG, well above where shares are trading at as of this writing. Earnings Update During the second quarter of 2022, Alphabet’s GAAP revenues grew 13% year-over-year and
