Building_Benjamins
Building_Benjamins
Founder of Tradition Capital Management in 2000. Named “PSN Manager of the Decade” for All-Cap in the 2000s and “PSN Manager of the Decade” for Dividend Value in the 2010s.
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Economic and Market Review March 2025

$Dow Jones(.DJI)$ $S&P 500(.SPX)$ $NASDAQ 100(NDX)$ $iShares 20+ Year Treasury Bond ETF(TLT)$ $Gold - main 2506(GCmain)$ $Silver - main 2505(SImain)$ $WTI Crude Oil - main 2505(CLmain)$OverviewTrump’s shifting tariff pronouncements continued to introduce significant uncertainty, with inflation indicators ticking higher. This combination pushed market sentiment into extremely bearish territory, with consumer confidence registering its lowest reading in 12 years.However, this pessim
Economic and Market Review March 2025

Melco is a Discounted Way into Asia-Pacific Gambling Recovery

Melco’s strategic shift to an asset-light model promises improved capital efficiency while maintaining its strong 15.6% Macau market share.Ongoing property renovations across the portfolio to organically attract high-value customers after junket market contraction.2025 Projected capex increase of 70.5% to $415 million, backed by a $1.1 billion cash position.Targeted expansion into emerging markets like Sri Lanka and potentially Thailand creates long-term growth avenues beyond the core Macau operations.Despite 6.1x net debt to EBITDA ratio, management’s focus on deleveraging and potential Manila asset sale should strengthen the balance sheet.Investment Thesis$Melco Crown Entertainment(MLCO)$ is an integrated casino-resort operator primarily focused
Melco is a Discounted Way into Asia-Pacific Gambling Recovery

PVH’s Undervalued Brand Renaissance at 5.6x PE

Trading at just 5.6x PE following a 38.7% YTD decline.PVH’s strategic consolidation of its Tommy Hilfiger and Calvin Klein brands aims to restore pricing power and improve brand control, driving longer-term earnings power.Despite operational challenges, PVH maintains robust free cash flow of $715.3 million over the trailing twelve months, and a healthy balance sheet of 2.6x debt to EBITDA.While China represents 6% of revenue and 16% of EBT, PVH’s addition to China’s “unreliable entity list” appears to be priced in.PVH’s strategic initiatives including organic e-commerce growth and manufacturing consolidation position the company for potential margin improvement toward its long-term 15% operating margin target.Investment Thesis $PVH Corp(PVH)$ is a
PVH’s Undervalued Brand Renaissance at 5.6x PE

JOE has Hidden Value in Discounted Real Estate Portfolio

1.25% YieldOwns 167,000 acres of land in the Panhandle of Florida, which we believe can be monetized at a current present value of at least $100 per share.The major Bay-Walton Sector Plan covering 110,500 acres slated for development through 2064, including 170k residential units and 22 million sqft of commercial space.Special zoning status reduces regulatory hurdles for planned residential and commercial development.Record-setting year for hospitality segment offset the slowdown in the region’s housing market after a boom in 2021-22.The Bay-Walton County area has an annual population growth rate of 3.2%, providing a secular demographic tailwind.Investment Thesis $St. Joe(JOE)$ is a property developer located in North Florida, owning 167,000 acres.
JOE has Hidden Value in Discounted Real Estate Portfolio

Automotive Drives Solid Revenue Base for HIMX

3.0% Yield.HIMX’s automotive display-driver sales increase just under 20% year over year, now representing around 50% of global market share.Invested in partner FOCI, seeking to accelerate development of CPO (co-packaged optics) to improve efficiency in data transmission within datacenters.Continued partnership with “leading AR (augmented reality) partner” in creating new consumer AR wearables device.Computer vision partnership with $NVIDIA(NVDA)$ , allowing HIMX’s technology to be plug-and-play with NVDA software.Investment Thesis $Himax(HIMX)$ is a semi-fabless semiconductor design and manufacturing firm specializing in optical and driver components for displays and sensors. HIMX holds a significant mar
Automotive Drives Solid Revenue Base for HIMX

Economic and Market Review January 2025

A popular theory among traders is that US stocks rise higher in January than in other months. Appropriately deemed the January Effect, the effect is typically explained by traders entering position after tax-loss selling has completed, but over the last decade the effect has lost much of its visibility. Similarly, if stocks rise in January, the year will end positively in 85% of cases.US stocks had a volatile start to January, with the Fed raising long-term inflation targets, Trump following through on tariffs, and disruptions in the tech industry. The S&P was buoyed by consumer spending coming in above expectations with inflation coming in at expectations.Oil prices peaked in the middle of the month at $78.71 following stronger industrial demand signals from China and the US but quick
Economic and Market Review January 2025

LYB Expects 2025 Recovery to Support 6.9% Yield

6.9% Yield.Despite a high cash payout ratio of 106.3%, LYB intends to increase its dividend in 2025, backed by a $3.4 billion cash position.LYB reported growing industrial demand in North America, with high utilization rates and cost advantages from low natural gas prices.LYB is reviewing six underperforming assets in Europe, potentially leading to divestitures, closures, or efficiency investments.LYB is shutting down its Texas refinery, incurring $345 million in closing costs but freeing up $240 million in working capital.LYB’s net debt/EBITDA ratio of 2.1x is below the industry median of 2.4x.Investment Thesis $LyondellBasell Industries NV(LYB)$ is an international manufacturer of chemicals, with more than 20% global market share in ethylene prod
LYB Expects 2025 Recovery to Support 6.9% Yield

2025 Is ENVX’s Inflection Point With First Commercial Production

First to market 100% silicon anode lithium-ion battery, with 30% better energy density and faster charging than graphite anode batteries.Fab2 Production ramp in Malaysia, expecting first customer samples by mid-2025 and full serialized production by the end of September 2025.OEM agreements secured with 2 of the top 8 global smartphone manufacturers, a major IoT company, and 2 wearables customers.Automotive potential with a non-binding agreement to co-develop larger-scale battery cells for EV (Electric Vehicle) applications.Raised $100M in 2024, has enough funding to operate until at least September 2025.Investment Thesis $Enovix Corporation(ENVX)$ is a Silicon Valley based battery design and manufacturing firm, specializing in the first 100% silic
2025 Is ENVX’s Inflection Point With First Commercial Production

Ring Energy Eyes Production Expansion Over the Medium Term

Production increase of 11.5% for the first 9 months of 2024, though a lower pricing environment had sales up 8.3% over the same period.Targeting leverage ratio of 1.0x debt to adjusted EBITDA, currently 1.59x.After REI reaches its target leverage, we expect management to ramp organic production or engage in another acquisition.Based on transactions of similar asset profiles, REI could be worth $2.44/share in private market value.Investment Thesis $Ring(REI)$ is a Permian exploration and production company operating in the Central (CPB) and Northwest Shelf (NWS). With 85% liquids and 66% oil mix, REI produces 20.1 kboe/d (thousand of barrels of oil equivalent per day). REI has a higher-than-peers reserve life of 18 years.Despite an increase in produ
Ring Energy Eyes Production Expansion Over the Medium Term

Economic and Market Review January 2025

A popular theory among traders is that US stocks rise higher in January than in other months. Appropriately deemed the January Effect, the effect is typically explained by traders entering position after tax-loss selling has completed, but over the last decade the effect has lost much of its visibility. Similarly, if stocks rise in January, the year will end positively in 85% of cases.US stocks had a volatile start to January, with the Fed raising long-term inflation targets, Trump following through on tariffs, and disruptions in the tech industry. The S&P $.SPX(.SPX)$ was buoyed by consumer spending coming in above expectations with inflation coming in at expectations.Oil prices peaked in the middle of the month at $78.71 following stronger i
Economic and Market Review January 2025

Turnaround Looks Likely for B2Gold with Geopolitical Risks Mitigated

3.4% Dividend YieldOpportunistic repurchase authorization funded with dividend reduction.Fekola mine in Mali concerns are resolved, expecting to receive mining authorization in early 2025.First commercialization of Goose mine in Canada in September.BTG expects 2025 production growth of 27%.Strong financial position, selling off royalties and issuing convertible notes to bolster cash position and pay down high-interest revolver.Investment Thesis $B2Gold(BTG)$ is a gold mining company operating the tier-1 Fekola mine in Mali and several other low-AISC (all-in sustaining cost) mines. In our last coverage, we emphasized the broader macroeconomic tailwinds for gold. Since then, gold has reached record highs. However, BTG has seen its share price collaps
Turnaround Looks Likely for B2Gold with Geopolitical Risks Mitigated

Perrigo Paves the Way for Recovery with Margin Focus

4.6% Dividend Yield, 21 consecutive years of growth.Concluded quality assurance program in the infant formula segment, expects to ramp production and return to form by 2026.Entering cost saving program, through consolidation of the organization and headcount cuts expects to save $150 million by 2026.Creating new ‘disruptive growth’ team to identify new markets to enter.Refinanced debt on the balance sheet, with new maturities not starting until 2030. Expects meaningful deleveraging below 3.0x net debt to EBITDA by 2026.Entering into voluntary non-renewals of contracts that are margin dilutive.Investment Thesis $Perrigo Co PLC(PRGO)$ is a pure player in the OTC consumer healthcare market. Since our last coverage on PRGO, it has continued to slim do
Perrigo Paves the Way for Recovery with Margin Focus

Secular Silver Shortfall Could Keep Prices Higher for Longer

$0.40 annual base dividend, yielding 1.89%.Variable dividend program linked to gross debt, paying up to $0.72 annually or yielding 3.3%.Demand projected to continue to outstrip supply in silver markets, with PAAS estimating an annual shortfall of 150 Moz to 2028.Strong base of gold assets (73% of revenue) with high silver exposure (20% of revenue).Record high cash position of $887.3 million thanks to the sale of non-core assets, giving PAAS no net debt.For the year ending December 2024, PAAS had an output of 21.1 Moz of silver and 893 Koz of gold.Investment Thesis $Pan American Silver(PAAS)$ is the second largest primary silver producer in the world, focused on developing primary deposits in the Americas. For the year ending December 2024, PAAS ha
Secular Silver Shortfall Could Keep Prices Higher for Longer

First Solar Shines Through Cloudy Market

Growing manufacturing base to 25GW by 2026, with 14GW in the US. Fully integrated supply chain independent of Chinese supply mitigates most tariff risks.Sell-off driven by fears of loss of IRA tax credits, however, FSLR remains profitable without the credits and its unlikely they will be repealed in their entirety.Largest US solar manufacturer and #10 in the world by market share.FSLR’s 17 TOPCon patents might yield a third-party sale or royalties, as the U.S. International Trade Commission looks into banning infringing imports and the Chinese government upheld FSLR’s ownership.FSLR’s CdTe modules have higher temperature tolerance and lower annual degradation rates compared to Chinese-dominated c-Si modules.Investment Thesis $First Solar(FSLR)$ is
First Solar Shines Through Cloudy Market

Economic and Market Review December 2024

$.DJI(.DJI)$ $.SPX(.SPX)$ $.IXIC(.IXIC)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $SPDR S&P 500 ETF Trust(SPY)$ $WTI Crude Oil - main 2502(CLmain)$ $Gold - main 2502(GCmain)$ $iShares 20+ Year Treasury Bond ETF(TLT)$ OverviewDespite a “Santa Claus Rally” not materializing, the S&P500 ended the trading year up 23%, after rising 24% in 2023. This back-to-back performance is the best since 1997 and 1998.
Economic and Market Review December 2024

Shift to Smoke-Free Sparks Steady Dividend Growth

4.5% dividend yield, 16 consecutive years of dividend growth.Renewed interest in the US market, bringing new IQOS products to market in the second half of 2025 and continued investment in the Zyn brand.Plans to re-institute share repurchase program after reaching 2.0x net debt to EBITDA target, currently 3.0x.Smoke-free nicotine products have 2.6x the gross margin per unit compared to cigarettes.Brand-loyalty in cigarettes has meant price increases have offset or even exceeded volumes.Investment Thesis $Philip Morris(PM)$ was formed in 2008 when $Altria(MO)$ spun out its international segment. Since then, PM has grown to be the largest public tobacco company in the world by volume, holding 14.0% market share
Shift to Smoke-Free Sparks Steady Dividend Growth

Onshoring Brightens Canadian Solar’s Future

Trading at far less than the sum of its parts, with Recurrent Energy and CSI Solar combined being worth $89.89 per CSIQ share.Sold 20% of utility-scale project manager to Blackrock, repositioning it to begin operating battery-storage and solar-generation to enhance recurring revenues.The global push toward renewable energy is secular and likely to accelerate as AI-driven datacenter demand rises.Onshoring more of the manufacturing base to the US will mitigate tariff risks in both batteries and solar.CSI Solar has shipped over 22 GW of solar components year to date, making it the #5 spot in global market share.Investment Thesis $Canadian Solar(CSIQ)$ is a solar power company that designs and manufactures solar power solutions and provides utility-le
Onshoring Brightens Canadian Solar’s Future

Civitas Continues to Deliver Peer-leading Free Cash

4.2% base dividend, 50% of free cash flow going toward share repurchases.Colorado regulatory uncertainties have historically pressured valuations, but the early 2024 agreement has delayed major risks until 2028.Civitas has partially shifted to the Permian Basin, emphasizing cost reduction in drilling operations rather than outright production gains.Still some minor expansion in DJ Basin, advancing with 4-mile lateral drills in premium-priced high-grade oil.Investment Thesis $Civitas Resources(CIVI)$ was formed in 2021 through the merger of two Colorado DJ Basin Pure Players, Bonanza Creek and Extraction Oil and Gas. Since then, it has become the second largest producer in the DJ Basin and has recently expanded operations into the Permian Basin in
Civitas Continues to Deliver Peer-leading Free Cash

Bath and Body Works Has Long Term Earnings Potential

2.2% Dividend YieldLoyal customer base, with loyalty members making up 80% of sales.85% of the supply chain originated in North America, mitigating tariff risk.Produces 55% of its end products in-house, with 40% of products on offer being seasonal only.Peer leader in sales per square foot with $1,074/sqft in sales.Expanding into ‘adjacent’ markets like products marketed at men and products marketed to Gen Z to boost new-customer growth.Investment Thesis $Bath & Body Works Inc.(BBWI)$ is a North American chain of home-good stores specializing in scented products and self-care. BBWI was formed after L Brands spun off Victoria’s secret into its own publicly traded entity (VSCO), with L Brands changing its name to Bath and Body Works. In recent ye
Bath and Body Works Has Long Term Earnings Potential

Tyson Foods Farms Free Cash Despite Cyclical Downturn

3.14% Dividend Yield13 consecutive years of dividend increases, most recently increasing by 2% in November 2024.Despite overlapping downcycles in pork and beef markets, Tyson generated $1.5 billion in free cash flow.Shifting more production to high margin value-added products like pre-made food and pre-seasoned meat across all segments.Targeting leverage ratio of net debt to EBITDA of under 2.0x, currently 2.6x with most debt maturing past 2027.Investment Thesis $Tyson(TSN)$ is an American meat-processing giant, producing about 20% of the consumer beef chicken and pork sold in the United States. With both pork and beef markets experiencing a cyclical downturn, coupled with a strained consumer, Tyson has seen its margins contract and volumes remain
Tyson Foods Farms Free Cash Despite Cyclical Downturn

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