Category Archives: stocks to avoid

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Why I am skeptical about the “safe copper bet”

Who hasn’t heard of it, yet? The price of copper, together with the respective miners, can only see one way: up, up and upper! This thesis is based on the ongoing electrification of our society. Where there is electricity, copper is needed. More electricity demand = more copper demand, right? What sounds plausible, has some weak points to it. Actually, I am even skeptical that this will play out in the way that the majority thinks, at the very least in the short to medium term.

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Unibail-Rodamco-Westfield – A steel at 0.3x property value?

Who does not dream of owning at least part of a city’s most valuable properties? And what about several prime locations? Unibail-Rodamco-Westfield is Europe’s biggest owner of mainly shopping malls, but also offices, in many metropolitan areas with high foot traffic. The stock is currently valued at a third of its “net reinstatement value”, i.e. its replacement or asset value as an investor would call it. 33% is less than Buffett’s famous “dollar for 50 cents” – is URW a buy?

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The dice are cast – 3M will have to cut its dividend

My long-time readers know that I have pointed my shotgun at candidates with likely coming dividend cuts. I even made two Weeklies out of this topic, as I am still convinced that dividend cuts will be one of the mega trends of this decade, and a fairly underestimated one! There are several companies where I am seeing massive operating and financial issues. In this latest episode, I am targeting again the famous industrial conglomerate and inventor of post-it stickers, 3M.

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Turnaround-bet: Is Vodafone’s 10% dividend yield a no-brainer?

The British red telecom giant announced not only a CEO-change, but also a strategic shift (both often come as one). Meanwhile, the share price is advancing its year-long decline, reaching even a fresh quarter-century low (!), as investors seem totally unimpressed. In the past, Vodafone has been a reliable dividend payer, although the payout was cut in 2019 and not raised again since then. The 10.7% yield seems tempting. Can it get worse or is it worth a shot?

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Earnings quality the worst in three decades – look at free cash flow!

Operating or net income, adjusted operating or net income, earnings per share (EPS), adjusted EPS and the price to earnings (PE) ratio are commonly used to assess a company’s business results and to value it. They are also often used as headline numbers and proof of performance by the companies themselves. However, there is a rising trend of decreasing “earnings quality” – an indicator that neither the economy is doing pretty well, nor many companies.

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What you should know about the SVB collapse – my premium members were warned

As I am publishing this Weekly, already a week has passed after the collapse of not just one bank dealing with startups – that was the 16th largest bank in the US – but indeed three banks. After emotions calmed down a bit, we can have a look at what went wrong and what you should be aware of. My Premium Members already knew about the risks “hidden” on the balance sheets of banks, as I’ve closed an investment case on a profit a month ago due to these risks. And no, this is not a buy-the-dip occasion!

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A king is falling – why Altria’s butt is burnt down

Altria is a stock from the illustrious circle of the “dividend kings”. It is even so special that it has actually raised its dividend more than once a year over the past half century – 57 increases over 53 consecutive years. However, the last few years have been disappointing in operational terms. Recent results, in particular, have shown the direction this company is likely to take. There are still a few puffs left, but don’t be surprised by the impending dividend cut at this darling of many dividend investors.

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Beware the next hype – Helium Producers

In recent months, I’ve been reading more and more about a hot new topic: helium production. Helium is an essential gas in medical as well as industrial applications. The key message being spread is that this so far opaque market is about to become more transparent, as many small exploration companies seem to be embarking on promising projects. Is this really the next sector you should bet on, or is it too much hot air that will deflate, bringing headaches like too much inhaled helium?

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Zombie companies – The Walking Dead?

Being dead and being alive are mutually exclusive conditions. But with stocks, there are companies that to a large extent fit into this scheme. Now facing a heavily toxic cocktail of likely higher interest rates and a slowing economy, many of these businesses will be tested for their survivability. Even if they do survive as a whole business, it is nonetheless dangerous to invest into equities of heavily indebted zombies – no matter how high the temptation might be.

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Are farmland stocks a hedge against inflation?

If you ask people about inflation-proof investments, the answers are most likely energy, real estate, precious metals or nowadays maybe even cryptocurrencies or rare whisky bottles. What is less obvious and very underestimated is farmland. It has proven to be not only a very effective hedge against inflation, but also over the last 25 years outperformed the S&P500 while being less volatile. What about farmland stocks?

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