Post by Admin/YBB on Feb 11, 2023 9:27:34 GMT -6
Pg 12-13.
REVIEW. New SANCTIONS on Russian oil products haven’t affected their market prices. Like those on crude oil previously, the new sanctions impose bans on G-7 and European countries, but only the price-caps for all others (crude oil $60/barrel, diesel $100/barrel). So, Russian crude oil and oil products now go to Asia, and then, some of it can be reexported to G-7 and European countries. One problem may be that Asian countries with spare refining capacity may want only Russia crude oil, not Russian oil products, so the true impact of these sanctions has yet to be seen.
PREVIEW. T-Mobile/TMUS growth may slow as subscriber growth slows industry wide. It beat earnings estimate but missed revenue estimates. Its stock may struggle. Cable companies are also aggressively pushing sales of wireless plans.
DATA THIS WEEK. Small business optimism index, CPI (+6.2% YoY, core +5.4%; this is the 1st report with the revised CPI) on TUESDAY; housing market index, retail sales, capacity utilization, industrial production, business inventories on WEDNESDAY; housing starts, PPI (+5.4% YoY, core +4.9%; both lower than CPI) on THURSDAY; LEI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Hertz (HTZ; fwd P/E 8; buybacks; low debt; revitalized after emerging from bankruptcy in 2021; expanding EV fleet; risk is falling used car prices – it sells its cars after a few years; warrants HTZWW; pg 14);
Toast (TOST; 2021 IPO; positive EBITDA by 2023, profits by 2026; business is portable payment systems for restaurants that integrate several other restaurant services and tools; revenues from software subscriptions and %cut of sales; competitors FISV, SQ, etc do only general payment processing; pg 15);
6 European stocks (financial CRZBY; energy BP, E, SHEL, REPYY; healthcare AZN; weakening dollar adds to foreign returns of the US investors; risk is that persistent US inflation and geopolitical events may make dollar stronger; pg 16);
Paramount (PARA; nonexecutive chair and controlling shareholder Shari REDSTONE, CEO Robert BAKISH; operating companies include Viacom, CBS, Paramount Movie Studios, streaming Paramount Plus; turnaround would be difficult in a competitive media environment; new book, Unscripted by James STEWART and Rachel ABRAMS; pg 24).
BEARISH.
Pg 21, INCOME INVESTING. SHAREHOLDER YIELD ( = %dividend-yield + %buyback) of 7%+, along with good fundamentals, are offered by BMY, HIG, PRU, VLO, WBS; an ETF is DIVB. This year, investors seem to prefer dividends over buybacks. A new 1% tax on buybacks took effect on 1/1/23, but the new proposal by President BIDEN to raise it to 4% may not pass.
Pg 22: FUNDS. Q&A with Burton MALKIEL (90), Emeritus Professor, Princeton and corporate director. He still supports the EFFICIENT MARKET hypothesis; while prices are volatile in the short-term, they settle down in the long-term. It’s hard to outperform broad INDEXES over long-terms. He himself is a news and data junkie, and plays with some stocks for fun, but he hasn’t found any consistent outperformance by ACTIVE managers once the ERs and cash-drag are accounted for. He doesn’t like active ETFs as their ERs are too high. He and Jack BOGLE agreed on many things but differed on INTERNATIONAL diversification (he is for it, Bogle believed that multinationals were enough) and ETFs (passive; Bogle just didn’t like their continuous trading during market hours). Market VALUATIONS now are still high. He is skeptical of MEME stocks and CRYPTOS. BEHAVIORAL FINANCE has some explanations for market manias. Famous book, A Random Walk Down Wall Street, 50th anniversary edition in 2023 is 13th.
Pg 26: FUNDS. Aerospace and defense ETFs (PPA, ITA, XAR, etc) are expensive but still attractive due to continuing US appropriations for Ukraine ($112 billion so far) and higher US defense spending (and elsewhere). There are other hotspots, Middle East, Taiwan, etc. The sector is also recession resistant.
Pg 27, TECH TRADER. “Masa” SON of Japanese SoftBank Group/SFTBY made an early bet on AI with its Vision Funds, but he hasn’t benefitted from the current AI frenzy. SoftBank also owns the UK-based chip-design company Arm Holdings. After a failed attempt to sell Arm to Nvidia/NVDA (obstacles were regulatory), Son will now take Arm public by late-2023. He may deploy proceeds to paydown debt.
Pg 27, ECONOMY. CHINA reopening may not have much global impact; each +6% incremental growth in China leads to +1% incremental global growth. First, it may be delayed to late-2023; second, growth may not be strong enough. The demographics, labor-force and productivity growth, and government infrastructure spending and company capex don’t support strong economic growth.
Pg 54, OTHER VOICES. Allan SLOAN, independent journalist. Nestle/NSRGY has spent a lot of money on PEANUT ALLERGY treatment. It bought the US Aimmune Therapeutics in 2020 that developed the Palforzia-treatment, now FDA approved for kids 4-17. The idea is to develop peanut tolerance by using increasing amounts of Palforzia – capsules filled with peanut powder – under medical supervision; (there are no drugs involved except when there are allergic reactions). The trials require long doctor visits every 2 weeks for 6 months that cost $1,000/mo (covered during trials). But the company is having troubles signing up kids for these trials. After the trials, kids need to have maintenance level of peanut exposure.
Ad Supplement, GUIDE TO WEALTH has features on retirement planning (hybrid portfolios, annuities, work-life balance, Social Security, Medicare, expense management, social activities), withdrawal strategies/longevity/retirement communities, healthcare in retirement (medical inflation, Medicare, Medigap, Medicaid, Social Security, LTCI, annuities), 5 featured advisors. Then, there are lists for top advisors by states, top RIA firms and top advisory teams.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. With politicians active in the stock market, there are now ETFs NANC (after Nancy PELOSI) and KRUZ (after Ted CRUZ); both have ERs of 0.75%. Other political ETFs include MAGA (AUM $18.8 million; ER 0.72%) and DEMZ (Aum $21.9 million; ER 0.45%). These belong to a crowded pool of 280 THEMATIC ETFs.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. New SANCTIONS on Russian oil products haven’t affected their market prices. Like those on crude oil previously, the new sanctions impose bans on G-7 and European countries, but only the price-caps for all others (crude oil $60/barrel, diesel $100/barrel). So, Russian crude oil and oil products now go to Asia, and then, some of it can be reexported to G-7 and European countries. One problem may be that Asian countries with spare refining capacity may want only Russia crude oil, not Russian oil products, so the true impact of these sanctions has yet to be seen.
PREVIEW. T-Mobile/TMUS growth may slow as subscriber growth slows industry wide. It beat earnings estimate but missed revenue estimates. Its stock may struggle. Cable companies are also aggressively pushing sales of wireless plans.
DATA THIS WEEK. Small business optimism index, CPI (+6.2% YoY, core +5.4%; this is the 1st report with the revised CPI) on TUESDAY; housing market index, retail sales, capacity utilization, industrial production, business inventories on WEDNESDAY; housing starts, PPI (+5.4% YoY, core +4.9%; both lower than CPI) on THURSDAY; LEI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Hertz (HTZ; fwd P/E 8; buybacks; low debt; revitalized after emerging from bankruptcy in 2021; expanding EV fleet; risk is falling used car prices – it sells its cars after a few years; warrants HTZWW; pg 14);
Toast (TOST; 2021 IPO; positive EBITDA by 2023, profits by 2026; business is portable payment systems for restaurants that integrate several other restaurant services and tools; revenues from software subscriptions and %cut of sales; competitors FISV, SQ, etc do only general payment processing; pg 15);
6 European stocks (financial CRZBY; energy BP, E, SHEL, REPYY; healthcare AZN; weakening dollar adds to foreign returns of the US investors; risk is that persistent US inflation and geopolitical events may make dollar stronger; pg 16);
Paramount (PARA; nonexecutive chair and controlling shareholder Shari REDSTONE, CEO Robert BAKISH; operating companies include Viacom, CBS, Paramount Movie Studios, streaming Paramount Plus; turnaround would be difficult in a competitive media environment; new book, Unscripted by James STEWART and Rachel ABRAMS; pg 24).
BEARISH.
Pg 21, INCOME INVESTING. SHAREHOLDER YIELD ( = %dividend-yield + %buyback) of 7%+, along with good fundamentals, are offered by BMY, HIG, PRU, VLO, WBS; an ETF is DIVB. This year, investors seem to prefer dividends over buybacks. A new 1% tax on buybacks took effect on 1/1/23, but the new proposal by President BIDEN to raise it to 4% may not pass.
Pg 22: FUNDS. Q&A with Burton MALKIEL (90), Emeritus Professor, Princeton and corporate director. He still supports the EFFICIENT MARKET hypothesis; while prices are volatile in the short-term, they settle down in the long-term. It’s hard to outperform broad INDEXES over long-terms. He himself is a news and data junkie, and plays with some stocks for fun, but he hasn’t found any consistent outperformance by ACTIVE managers once the ERs and cash-drag are accounted for. He doesn’t like active ETFs as their ERs are too high. He and Jack BOGLE agreed on many things but differed on INTERNATIONAL diversification (he is for it, Bogle believed that multinationals were enough) and ETFs (passive; Bogle just didn’t like their continuous trading during market hours). Market VALUATIONS now are still high. He is skeptical of MEME stocks and CRYPTOS. BEHAVIORAL FINANCE has some explanations for market manias. Famous book, A Random Walk Down Wall Street, 50th anniversary edition in 2023 is 13th.
Pg 26: FUNDS. Aerospace and defense ETFs (PPA, ITA, XAR, etc) are expensive but still attractive due to continuing US appropriations for Ukraine ($112 billion so far) and higher US defense spending (and elsewhere). There are other hotspots, Middle East, Taiwan, etc. The sector is also recession resistant.
Pg 27, TECH TRADER. “Masa” SON of Japanese SoftBank Group/SFTBY made an early bet on AI with its Vision Funds, but he hasn’t benefitted from the current AI frenzy. SoftBank also owns the UK-based chip-design company Arm Holdings. After a failed attempt to sell Arm to Nvidia/NVDA (obstacles were regulatory), Son will now take Arm public by late-2023. He may deploy proceeds to paydown debt.
Pg 27, ECONOMY. CHINA reopening may not have much global impact; each +6% incremental growth in China leads to +1% incremental global growth. First, it may be delayed to late-2023; second, growth may not be strong enough. The demographics, labor-force and productivity growth, and government infrastructure spending and company capex don’t support strong economic growth.
Pg 54, OTHER VOICES. Allan SLOAN, independent journalist. Nestle/NSRGY has spent a lot of money on PEANUT ALLERGY treatment. It bought the US Aimmune Therapeutics in 2020 that developed the Palforzia-treatment, now FDA approved for kids 4-17. The idea is to develop peanut tolerance by using increasing amounts of Palforzia – capsules filled with peanut powder – under medical supervision; (there are no drugs involved except when there are allergic reactions). The trials require long doctor visits every 2 weeks for 6 months that cost $1,000/mo (covered during trials). But the company is having troubles signing up kids for these trials. After the trials, kids need to have maintenance level of peanut exposure.
Ad Supplement, GUIDE TO WEALTH has features on retirement planning (hybrid portfolios, annuities, work-life balance, Social Security, Medicare, expense management, social activities), withdrawal strategies/longevity/retirement communities, healthcare in retirement (medical inflation, Medicare, Medigap, Medicaid, Social Security, LTCI, annuities), 5 featured advisors. Then, there are lists for top advisors by states, top RIA firms and top advisory teams.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. With politicians active in the stock market, there are now ETFs NANC (after Nancy PELOSI) and KRUZ (after Ted CRUZ); both have ERs of 0.75%. Other political ETFs include MAGA (AUM $18.8 million; ER 0.72%) and DEMZ (Aum $21.9 million; ER 0.45%). These belong to a crowded pool of 280 THEMATIC ETFs.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).