Tag Archives: Free Cash Flow

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Drill Baby, drill + new research report “Trump Trade 2.0”

One of the expectations for the second term of president-elect Donald Trump is that “dirty” energy will see a huge revival due to pushing back the strict ESG policies of the current administration. Less wind and solar and back to more oil, gas and coal, maybe with nuclear mixed in. However, despite the perception being that Trump is good for oil and gas producers, the above would be exactly the opposite as more supply means lower energy prices. Will we see aggressive drilling and lower energy prices or shall we prepare for something entirely different? All my members receive my latest stock idea, my second “Trump Trade” which should be a big beneficiary either way.

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Is focus-investing risky?

One of the first principles a new investor stumbles upon is “don’t put all eggs in one basket”. In other words, diversification is said to be the key to investment success. My longer time readers know that I am strictly opposing this approach in its extreme form. The viewing angle might be even the right one – winning by not losing, respectively by minimizing risks – which is also my strategy. However, there’s a material difference between buying blindly a big basket and focussing on a few investments where one has done the homework.

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Antitrust has come into fashion – Capri Holdings after its 50% crash

Back in May, I wrote about the stock of Capri Holdings, the owner of wannabe-luxury fashion brands Michael Kors, Versace and Jimmy Choo. My assessment was that despite looking like a bargain, the stock was too risky due to its weak execution on a business level with deteriorating fundamentals. Capri and competitor Tapestry were appealing the blocked takeover attempt by Tapestry which now has been called off for good by the Federal Trade Commission. Capri crashed by 50% in response to the announcement of the deal-freeze. Is the stock now cheap enough?

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InPost – polish highflier transforms Europe’s parcel delivery market

Delivering parcels to so called parcel machines instead of to the door of the receiver is a major growth story. Coming with benefits for all parties, this win-win concept has not only transformed many big (former) state-owned postal businesses by infusing some new growth into them. It has also created a Polish company that has specialized exactly on this business without operating capital-intensive logistics or legacy mail. It is rolling up many European markets full-steam. The last coup: a takeover in the UK, the continent’s biggest e-commerce market. Is InPost’s stock a must-own?

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VusionGroup – overlooked tech growth story from Europe?

When talking about success stories from the tech sphere, one more likely than not primarily thinks of US companies. While there are a handful of well established big players outside of the US and in addition quite a few ascending, though more locally focussed businesses from Asia and Latin Amerika, too, I must honestly go deep into myself to name two or three European tech success stories of worldwide relevance with a big name, strong growth profile and dominant market position. Among smaller companies, there is a promising candidate to have an eye on – from an unexpected sector.

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Smooth ride or highway to hell for Harley-Davidson?

When a company announces a big buyback (percentage-wise, I don’t care about big headline numbers), I usually start to get interested, provided the case is overall solid. Harley-Davidson on the surface checks several boxes like a famous brand, a loyal customer base, a rock-solid balance sheet, relatively stable earnings and cash flow generation paired with a low valuation – and on top now also a new aggressive buyback program of the equivalent of no less than 20% of stock outstanding. Is this now an incredible contrarian opportunity?

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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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After raising big money during the mania – is Gamestop a buy now?

Over the last weeks, the stock of struggling gaming retailer GameStop has been making big waves for a second time after 2021. Fortunately, management made use of the mania and raised an insane ~4.3 bn. USD via two equity raises. With such a huge cash pile and no debt, GameStop is not in danger of going bankrupt anytime soon. As the stock is down again significantly, is it now worth a look?

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The case of NIKE – NOT worth every price

About two weeks ago, the stock of former darling Nike collapsed by 20%, something many thought could not be possible for a market leader. Especially, as Nike’s shares have fallen already by 40% from their all-time high at truly excessive valuations. But of course it’s possible, as a lower stock even by this margin is not automatically an attractive investment from a risk and reward perspective (sorry buy-the dippers). Today’s Weekly is a lesson about valuations and market behavior, something we need to remind ourselves all over again not to fall into valuations traps, no matter how bullish sentiment is.

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