EWA

Best Idea Alphabet Growing Global Cloud Presence

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Image Shown: Alphabet Inc Class C shares, a top-weighted idea in our Best Ideas Newsletter portfolio, are up ~65% over the past year. By Callum Turcan Alphabet Inc (GOOG) (GOOGL) has historically focused primarily on growing its digital advertising revenues since the company was founded under the Google name back in 1998. More recently, the technology giant has begun seriously seeking to broaden its revenue base, and we like what we see on this front. We include Alphabet Class C shares (ticker: GOOG) as an idea in the Best Ideas Newsletter portfolio given its immense capital appreciation upside potential as a net cash-rich, free cash flow generating powerhouse (topics that we have covered often in the past). Our fair value … Read more

Newmont’s Third Quarter Earnings Disappoints Though Management Remains Very Shareholder Friendly

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Image Shown: Though Newmont Corporation’s third quarter earnings disappointed, the gold miner remains very shareholder friendly. Image Source: Newmont Corporation – Third Quarter of 2021 IR Earnings Presentation By Callum Turcan One of our favorite mining plays is the gold miner Newmont Corporation (NEM), which has producing assets around the world including in Australia (EWA), Argentina, the Dominican Republic, Ghana, Mexico (EWW), Peru, Suriname, Canada (EWC), and the US. Newmont has a robust development pipeline in those countries via new producing mines and expansion projects (roughly 88% of Newmont’s reserves are in the Americas and Australia), along with potential upside in Japan, Ethiopia, Colombia, and elsewhere. The company’s management team is incredibly shareholder friendly (its quarterly payout has grown from … Read more

Oil Prices Collapse, Reiterating 2,350-2,750 S&P 500 Target Range; Credit Crunch Looming?

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Image Source: Value Trap: Theory of Universal Valuation From Value Trap: “The banking sector was not the only sector that faced considerable selling pressure during the Financial Crisis of the late 2000s, of course. Other companies that required funding to maintain their business operations faced severe liquidity risk, or a situation where refinancing, or rolling over debt, might be difficult to do on fair terms, making such financing prohibitive in some cases. Those that faced outsize debt maturities during the most severe months of the credit crunch faced a real threat of Chapter 11 restructuring had the lending environment completely seized. In thinking about share prices as a range of probable fair value outcomes, equity prices tend to face pressure as … Read more

Earnings Not So Hot, High Yield Dividend Newsletter Archives

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No change to newsletter portfolios. By Brian Nelson, CFA Against a backdrop of US-China trade tensions, a Fed that continues to balance the need to hike rates with caution against purposefully and meaningfully inverting the yield curve, US GDP growth humming along at 2%-3%, and news from Tesla (TSLA) CEO Elon Musk, who says something big is in store for tonight. Incidentally, he changed his Twitter name to Elon Tusk. Was it to match our typo yesterday? Elon – if you’re listening, give us a shout out! We love Tesla’s future expected free cash flow! Just some housekeeping items before we get started. For our High Yield Dividend Newsletter members and our Exclusive members, we do not house the archived … Read more

Trump Targets China with Tariffs

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Image: Shanghai, China (December 2016), Andrey Filippov Stock markets in the US are slowly building in the prospect of retaliation (a “trade war”) from China, as a result of President Trump’s new tariffs. We maintain our view that the stock market has been frothy for some time, and the recent volatility may just be the beginning of a reversion to normalized valuations, with or without concerns about global trade. By Brian Nelson, CFA The market may be using concerns about a “trade war” as a reason to sell overpriced stock. According to Factset, as of March 16, the forward 12-month price-to-earnings ratio for the S&P 500 is still over 17 times, one turn more than the 5-year average and nearly … Read more

Your Hard-Earned Money

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By Brian Nelson, CFA It was Thursday afternoon, February 11, crude oil prices just hit a 13-year low, and the S&P 500 (SPY) was about to break below key technical support. Then, just as the markets were to fall further, rumors again emerged that OPEC may be scheduling a meeting to curb crude oil output, driving crude oil prices from the depths and the market higher off technical support. A barrel of crude oil continues to trade below the $30 mark, but it was quite the “save.” From where we stand, the market hasn’t been this fragile than at any time during the past decade or so, including during much of the Financial Crisis. Optimists may be whistling past the … Read more

Excited About Putting Cash to Work…Eventually

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Investors are fretting over a lot of things as of late. China (FXI) announced January 19 that fourth-quarter GDP fell to 6.8%, with many noting that the measure was a 25-year low. Even if you believe that number, which may be a stretch in light of collapsing local stock markets in Shanghai and Shenzhen, the outlook can’t be much better. Steel mills across the country are reeling, and while published housing numbers don’t look that bad, we have a difficult time believing the Chinese banks are in good shape. HSBC (HSBC), Standard Chartered, and Citigroup (C) remain most exposed to what we would describe to be the growing likelihood of a contagion from weakening commodity-dependent sectors in the country. Intel … Read more

ICYMI: 5 Concerns About Impending Rate Hikes

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The first Fed rate hike in nearly a decade came and went December 16, putting an environment of ZIRP (zero interest rate policy) to an end, a policy that grew out of the Financial Crisis and the depths of the Great Recession late last decade. The Fed had paused plans to hike the federal funds rate for much of 2015 as a result, in our view, of getting a more informed read on the potential implications of emerging market developments–namely dislocations in the local Chinese equity markets (FXI) and recessionary conditions in Brazil (EWZ)–and the stock market crash (SPY) in the US in August that sent equities of some of the most well-known stocks including Apple (AAPL) and General Electric … Read more

Standard & Poor’s Notes Heightened Default Risks

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Not all is well in Big Oil, or at least, not all is what it once was. The upstream oil and gas arena continues to face significant pressure from falling energy resource pricing, runaway capital spending projections and conditions that may not subside anytime soon. At the heart of the problem is OPEC’s strategy to maintain market share, apparently at all costs, which is different than the cartel’s efforts in previous cycles to support the price. Though upstream industry constituents have announced capital spending reductions and some have idled rigs, commercial inventories of crude oil remain at decade highs, and risks to the global economy, not the least of which from China (FXI), Brazil (EWZ), and Australia (EWA), threaten the … Read more

Talking Technicals: The “Golden Triangle of Destiny”

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The markets recently reminded me of a Sesame Street episode that my little boy loves to watch, involving Minnesota Mel, Texas Telly, and the Golden Triangle of Destiny! If you’ve missed that episode, here it is. It’s a good one. A so-named “Golden Triangle of Destiny” is now developing in the S&P 500 (SPY) – i.e. a “symmetrical triangle pattern” forming in advance of the Federal Reserve meeting September 17. Chart readers will tell you that such a pattern signals a dampening of volatility as the market bounces between the upper (resistance) and lower (support) bounds as the day of the Fed meeting nears. We frankly can’t wait for the news. The suspense is near-unbearable, and the repercussions are far-reaching. … Read more