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Fed Rate Decision, UAW Strike Continues, Microsoft Ups Payout

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Image Source: Mike Mozart By Brian Nelson, CFA If you’re thinking like us about the ongoing Fed rate-hiking cycle, you’re probably thinking that perhaps we’ll see another rate hike or two down the road, even if the Fed pauses at today’s September 20 meeting. However, whether the Fed pauses from here on out or executes a couple more rate hikes, it really shouldn’t matter much to long-term investors. From where we stand, the conversation about interest rates should now be shifting away from worries about elevated inflation to the future positive prospects that correspond to the work that the Fed has already done. With the market-cap weighted S&P 500 (SPY) just a stone’s throw away from all-time highs, despite aggressive … Read more

Shares of Lithium Producer Albemarle Are Soaring So Far In 2022

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  Image: Albemarle’s shares have rocketed higher the past few years and are soaring during 2022. By Brian Nelson, CFA On November 2, Albemarle Corp. (ALB) reported mixed third-quarter results that showed a modest miss on the top line versus consensus estimates, but a strong showing on the bottom line that beat what most analysts were looking for. Through the close of November 4, Albemarle’s shares have advanced more than 20% so far this year, and we think there may be more room to run based on the high end of our fair value estimate range ($300 per share). For those just getting familiar with key ideas in the simulated ESG Newsletter portfolio, here is some background on Albemarle’s operations … Read more

South32 Continues to Improve Its Asset Base

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Image Source: South32 – October 2021 Sierra Gorda Acquisition IR Presentation By Callum Turcan South32 (SOUHY) represents one of our favorite ideas in the mining space, and we include shares of SOUHY as an idea in the new ESG Newsletter portfolio (more on that here). We view both South32’s capital appreciation and income generation upside quite favorably, keeping in mind the firm has a variable dividend policy that is subject to foreign currency movements. On a scale of 1-100 (with 100 being the best), South32 earns a nice ESG rating of 93 (based on our proprietary ESG rating matrix) as the miner continues to pivot towards commodities that will be essential to making the green energy revolution possible. Before we … Read more

Newmont Posts a Stellar Earnings Report, Raises Dividend

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Image Shown: An overview of Newmont Corporation’s recent accomplishments. Image Source: Newmont Corporation – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan Shares of Newmont Corporation (NEM) are included in the Dividend Growth Newsletter portfolio because we view its long-term dividend growth trajectory quite favorably, and the gold miner has not disappointed. At the start of 2020, Newmont significantly increased its quarterly dividend as we covered in this article here. Due to a combination of its enlarged dividend, very promising growth outlook, sizable expected synergies from its 2019 acquisition of Goldcorp, and its stellar cash flow profile, we added shares of NEM as a holding to our Dividend Growth Newsletter portfolio on January 13, 2020 (link here). As … Read more

Our Thoughts on Newmont’s Bright Outlook

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Image Shown: Newmont Corporation’s gold reserves are extensive and should support the gold miner’s ability to generate meaningful cash flows over the years and decades to come. Image Source: Newmont Corporation – August 2020 IR Presentation By Callum Turcan Back on January 13, we added shares of gold miner Newmont Corporation (NEM) as a holding to the Dividend Growth Newsletter portfolio (link here). In July, we significantly increased our fair value estimate for Newmont and please note the top end of our fair value estimate range sits at $72 per share of NEM (Newmont’s 16-page Stock Report can be accessed here). We will cover why we boosted our fair value estimate in just a moment. As of this writing, shares … Read more

Newmont Surges Higher, Posts Solid Earnings Report

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Image Shown: Newmont Corporation’s operational and financial performance has held up well in the face of the pandemic, relatively speaking. Image Source: Newmont Corporation – Second Quarter of 2020 IR Earnings Presentation By Callum Turcan Back on January 13, 2020, we added gold miner Newmont Corporation (NEM) to the Dividend Growth Newsletter portfolio at a modest weighting. Since then, shares of NEM are up ~64% as of this writing on August 6. Please note we significantly increased our fair value estimate for Newmont in July, and the firm’s updated 16-page Stock Report can be viewed here. Part of the reason for the positive revision came from Newmont expecting that it will generate greater synergies than first envisioned when it acquired Goldcorp … Read more

Freeport-McMoRan’s Outlook Improves Considerably

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Image Source: Freeport-McMoRan Inc – February 2020 IR Presentation By Callum Turcan Global copper, gold, and molybdenum miner Freeport-McMoRan Inc (FCX) suspended its quarterly common dividend in March 2020 and provided a revised outlook for the full-year in April 2020 due to the coronavirus (‘COVID-19’) pandemic hampering both commodity prices and its operational performance. One of those hurdles involved the Peruvian government imposing restrictions on its Cerro Verde mine in March 2020 (as part of COVID-19 containment efforts), a copper mine that Freeport-McMoRan owns a ~54% stake in. Another hurdle involved the collapse in commodity prices earlier this year (though gold prices have held up quite well in 2020). First, let us provide some background before highlighting why Freeport-McMoRan’s outlook … Read more

BHP Benefiting from an Industrial Rebound in China

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Image Source: BHP Group – Fiscal 2019 Annual Report By Callum Turcan In recent months, iron ore futures prices have surged higher due to an ongoing recovery in China’s industrial sector and supply concerns in Brazil, which has culminated into the Dalian Commodity Exchange’s September 2020 iron ore deliveries hitting a record high since the futures contract was first launched in 2013. Pivoting to copper, three-month copper futures prices based on trading activity on the London Metals Exchange have also perked up on the back of an apparent recovery in Chinese economic activity. Rising metals prices bodes well for major and minor miners around the globe, including BHP Group (BHP) (BBL). Brief Aside Please note BHP is the ADR for … Read more

Southern Copper’s Payout Is Not That Healthy

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Image Shown: An overview of Southern Copper’s core operations in Mexico and Peru. Image Source: Southern Copper Corporation – May 2019 IR Presentation By Callum Turcan Copper (symbol Cu, atomic number 29) is an essential building block of modern civilization as it is used as a conductor for heat and electricity. Electrical components, utility-scale electrical transmission systems, residential and commercial heating appliances, electric vehicles, and much more all rely on copper products (electromagnets, heat exchangers, heat sinks, integrated circuits, printed circuits, copper wiring, and copper fittings are all examples of products that contain copper). The largest consumer of copper is China, accounting for roughly half of global demand making the Middle Kingdom an essential part of the copper supply chain. … Read more

Little Progress Seen in Iron Ore Market Balancing

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Image Source: Peter Craven By Kris Rosemann Recent reports from the likes of BHP Billiton (BHP) have echoed our previous concerns with the iron ore market, “Iron Ore Market Stability Still A Ways Off.” A number of factors on both the supply and demand sides of things are expected to provide pressure to the price of iron as we move further into the back half of 2016. BHP, for one, anticipates economic uncertainty, political instability and well supplied markets to continue weighing on iron ore prices, among other commodities.  Seasonal factors will weigh on Chinese (FXI) demand–the nation is the world’s largest purchaser of seaborne iron–in the winter months when construction typically slows as a result of more inclement weather. … Read more