Tag Archives: Cash flow

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Nine lost years — Bottom in sight for Nestlé?

Since its peak at around 130 CHF per share and a market cap of almost 400 billion CHF, consumer staples heavyweight Nestlé has highly disappointed its fan base of predominantly defensively oriented investors. Who’d have thought that THE core investment in the consumer staples sector (besides Coca-Cola) could see its stock price get almost cut in half? Although I have not written a weekly about Nestlé so far, my readers know that Nestlé has not been interesting all the time. Is it now worth a look?

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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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Old money doesn’t go out of style – Ralph Lauren + new research report

Whether markets go up or down, it seems as if the spotlight only belongs to stocks linked to the sectors of tech, certain resources like uranium, lithium and maybe some oil and gas as well as the typical dividend stories. However, in the background and barely noticed by the broader public an entirely different name has made a ferocious comeback – Ralph Lauren. Boring for some, timeless for others, shares of RL outperformed the S&P 500 over the last one, three and five years (and even quarter-century). Not by little, but by a wide margin. Even before dividends. So, what’s in store for this iconic name?

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Retail crowd’s favorite REITs: disappointment likely to continue

REITs, or real estate investment trusts, are an asset class that is typically followed and bought by investors with a focus on cash flows in the form of dividends. One of the main arguments is that this way they don’t have to bother about stock price fluctuations, as their dividend income is safe. Sounds logical, but the long-term performance of three highly celebrated such REITs is simply weak. The worst thing, I am expecting this trend to continue or even to worsen.

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Warm-up for 2025 – better expect the unexpected

Despite having done a combined review-and-outlook Weekly already, I decided to write another one with the focus solely on the outlook for 2025. Over the last weeks, I have gathered new ideas, but also brought my thoughts in order during the days that I took off. There are a few other things I wanted to share. What could the next investing year have in store for us?

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Post the Volatility crash – next leg up? + new stock idea to benefit

Isn’t it amazing how forgetful market participants can be? Not even a full month ago, sentiment was as if the (financial) world were about to implode. Just a week later the panic-induced market losses were already gained back and three weeks later the crowd is smelling new all-time highs again. What I’m concerned about is expectations seem to be that nothing unfortunate will happen again. I have become a bit concerned, as complacency seems to be EXTRAORDINARILY high. In such an environment, small shifts are enough to cause a market panic – there are a few signs to be aware of. And a new stock idea for my members to capitalize on that, too.

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Estée Lauder – after –75% still not pretty + dividend in danger

A common misconception is that lower stock prices are akin to cheaper shares. Without much explanation, it is logical that this can only apply when the underlying business has at least been stable. Otherwise it is possible that a stock even becomes more expensive! While this is not the case at Estée Lauder, despite a 75% drop from its all-time high, the stock is still looking ugly valuation-wise. A decent downside risk remains. On top, the likelihood for a dividend cut or even entire suspension is significant.

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Three consumer discretionary darlings I’m not buying (yet?)

Browsing through Twitter / X, I often see people posting about “buy-the-dip” candidates. While this is not necessarily the case for energy stocks (where as my readers and especially members know, I have a positive opinion about), in the recent past more and more consumer discretionary stocks have been presented. The main arguments are always the same – they are cheap(er) now! I have some doubts that it’s time to rush in.

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Investing in oligopolies isn’t always a winning strategy

Everyone knows that market concentration leads to less competition and in turn to more powerful entities within this group. Such oligopolies by definition should allow the respective companies to achieving strong results and high margins due to pricing power, but also where applicable economies of scale. In reality, however, not every sector or company offers automatically a good stock investment, even when factually operating in an oligopoly.

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Burberry – closed at a loss + what to take home

As is with investing, from time to time, there will be losing positions in a portfolio in company to big winners. This is what happened among my ideas for my Premium PLUS members. Last week, I threw out Burberry after I lost patience due to deteriorating fundamentals. Today, I am looking back at how I formed my thesis, what happened in the meantime and I explain why I finally pulled the brake as well as why this decision was necessary.

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