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B&O: Back with a Bang?

Danish high-end consumer electronics maker Bang & Olufsen has been struggling ever since the Great Recession. It is not surprising that the stock is down from its highs in 2006–2007. However, I was indeed a bit surprised that it’s down by a staggering 98%! Even since a temporary recovery attempt that culminated in 2018, the stock has fallen by more than 90%! Over the last twelve months, though, shares are up by 46%. Management has ambitious plans to bring the struggling brand back on track. Could this be now a good entry point?

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When do buybacks create shareholder value?

Buying back own stock on the open market is a frequently used tool to let shareholders participate in the success of a company. At least in theory. Ideally, free cash flow is used to repurchase equities to lower share count, thus making every single piece a bit more valuable. There are examples where buybacks indeed created shareholder value. On the other hand, plenty of money has been wasted with the goal to appease shareholders, but without a positive outcome. Are buybacks good or bad, respectively when so?

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PVH Corp.: Trading at 6x earnings – still not a buy

While it likely makes sense to be cautious when a stock trades at a high valuation multiple, the case of PVH Corp. might raise some eyebrows – at least at first sight. The company owns two well-known apparel brands, has been constantly profitable, is generating healthy free cash flow and even buying back its own shares aggressively at a low valuation, seemingly generating strong shareholder value. Shares, however, only trade at a 6x price to earnings ratio. I’ll tell you while this likely is still not a bargain.

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Is Insmed a Promising Biotech Blockbuster? + new research report

Insmed, a biotech company with one approved drug and a very promising pipeline, in the last 13 months saw its stock going up by a factor of no less than 4x – plus 300%! There were two key events each propelling the stock decisively higher. Both were updates on ongoing clinical trials only. I am saying deliberately “only”, because it is not even a given that biotechs surge so much after drugs get approved by the FDA, yet, here it happened twice following just updates to clinical trials. The reason: Insmed’s assets are very promising with each potentially achieving blockbuster status (> 1 bn. USD is sales, both potentially multi-billions). Is it now time to jump onto this precious opportunity? My Premium PLUS members will soon receive my latest stock idea with a much more attractive setup.

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Don’t Get Hooked: How clinging to stock peaks can capsize profits + new stock idea

Some investors tend to put too much weight on a stock’s all-time high when fishing for bargains. Only because a stock has been (much) higher in the past, does not automatically mean the current setup is attractive or even dirt-cheap. Unfortunately, often this reference point – the all-time high – is used as a justification for why a stock must be cheap now. I am raising my finger. It is not enough to just look at the former high. The entire setup must be attractive, otherwise the risk to grab a value trap is high. All my paid-members will receive my latest stock idea – a barely known, profitable growth company with an excellent market position where the all-time high should be taken out soon.

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The case of e.l.f. Beauty — chic story meets a glamorous valuation

The comparatively young company e.l.f. Beauty is famous among younger generations thanks to low-price, high-value and cruelty-free cosmetics. Its stunning rise, disrupting the industry with bold innovation, has glossed its stock with a remarkable run, reflecting glamorous growth and consistent market share gains for years. After its peak, the stock fell by three quarters and has more than doubled again since then. After the latest earnings, shares surged by more than 20% as a big acquisition was announced. Is this a beautiful compounder to have an eye on?

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4 prestigious giants set to slash their dividends

Here we go again with one of my favorite contrarian topics: Buckle up, the dividend butcher is sharpening his axe once more! Four prestigious dividend stocks once deemed safe havens are poised to slash their generosity to ribbons. With worsening fundamentals, overstretched balance sheets and drying cash flows in a challenging environment, these firms will likely need to trim the fat from their dividends in the not-too-distant future.

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WD-40: an overlooked portfolio lubricant?

Last Sunday, I finally went after an annoying task that had been waiting for me for too long: to remove sticky and really ugly glue from an entire big window frame. My first attempts failed miserably and I had left it untouched for some time. But that stuff needed to be finally done. After some research, I found the solution: WD-40, the home workers best friend. While in full swing, I remembered that WD-40 is also a publicly listed company! The stock has practically always been extremely expensive, but I haven’t covered it for years. Time for an update to answer the question whether this is a smooth slide or a rusty bet.

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Will Big Oil have to cut their dividends if oil prices stay low?

Over the last years many energy companies made gigantic windfall profits which allowed them to ramp up their shareholder distributions. Dividends and buybacks are often the reasons for investments in big energy companies. Since the high in 2022, oil prices have almost halved, though. With the main driver oil now trading around 60–65 USD, the question arises whether these generous payouts are sustainable. Short answer: no, if we see a longer period of low energy prices. What does this mean for the Supermajors and their investors? And how do I handle this unfavorable environment? Is it maybe even advantageous for my setup?

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PepsiCo – refreshing buy or just a crushed can?

The stock of soft drinks and snacks giant PepsiCo over the last five years has done exactly nothing. Dividends were the only form of returns, but this will hardly make investors high-five this market-lagging performance. With a just raised-again dividend, a yield on the high-end of the historical range, a comparatively low PE ratio of 16x and an uncertain economic environment, this consumer staple company might qualify for a defensive portfolio.

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