Harrison Schwartz
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Agnico Eagle Mines: Undervalued Miner With Lower Risks As Gold Prices Soar

Summary Gold is one of the top-performing assets in 2024, with a strong surge as the Japanese Yen crumbles. Gold miners, such as Agnico Eagle Mines, have performed well, outperforming peers Newmont and Barrick, which are seeing costs rise too quickly. Agnico's lower jurisdictional risk significantly benefits its peers, as the gold bull thesis largely implies increased political and economic unrest in developing countries. Based on an updated income estimate, I believe AEM's forward "P/E" today is closer to 12X to 13X. While I am neutral on most large gold miners, I believe AEM's advantage should continue in the long run. Vitoria Holdings LLC Gold is one of the top-performing assets in 2024, boasting a ~16% return YTD. Gold miners have also performed decently, with the gold miner ETF (
Agnico Eagle Mines: Undervalued Miner With Lower Risks As Gold Prices Soar

B. Riley Financial: Securities Lending Business Raises Eyebrows Due To Liquidity Risk

Summary B. Riley's stock has fallen by 71% since I wrote a bearish opinion in 2021, as its income has declined while its balance sheet risks have grown. The company's future seems uncertain as short interest reaches 30%, making it among the most short-sold stocks today. Fundamentally, the company is operating too many segments, failing to develop a competitive edge in most, leading to low margins. B. Riley's securities lending business stands out compared to peers but could result in notable risks due to the potential undercollateralization of these loans in the event of a large market decline. Although B. Riley's risk exposure appears high, its performance may recover depending on macroeconomic circumstances. Further, its short interest is high enough that it has high short-squeeze potent
B. Riley Financial: Securities Lending Business Raises Eyebrows Due To Liquidity Risk

Rio Tinto: Iron And Copper Prices Likely To Crash In 2024 As China Stimulus Fails (Rating Downgrade)

SummaryMining stocks, including Rio Tinto, BHP Group, and Glencore, have significantly increased recently as China's iron ore demand rebounded.Rio Tinto's three-year performance has been lackluster overall, unable to break into new highs despite seasonal rallies.China's economy and its demand for iron ore are the primary drivers of RIO's profitability, making it dependent on China's construction market.Tremendous efforts to support China's economy in 2023 are being proven unsuccessful, pointing toward a potential property bubble pop this year.Despite its positive qualities, the Company is too dependent on commodities that China's economy drives, giving it tremendous downside risk associated with China's potential economic depression.TexBrWhile mining stocks have not been solid in recent ye
Rio Tinto: Iron And Copper Prices Likely To Crash In 2024 As China Stimulus Fails (Rating Downgrade)

Rio Tinto: Iron Ore Glut Will Accelerate By Year-End, Potentially Halving EBITDA

Summary Rio Tinto has lost ~14% of its value since January, while the S&P 500 has risen by 20%, stemming from a sharp decline in iron prices. I expect China's iron ore demand to continue to plummet along with its property sector, potentially leading to a permanent 15-25% decline in global iron demand. Rio Tinto's exposure to China is exacerbated by its significant Australian iron ore mining, which has supported China's property development bubble. The coming glut in iron ore may push the commodity down into the $60 range, dramatically reducing Rio Tinto's overall EBITDA. Copper and aluminum are also negatively exposed to this trend, but they have closer ties to manufacturing demand, which may face a more transitory decline due to a global economic slowdown. Abstract Aerial Art/DigitalV
Rio Tinto: Iron Ore Glut Will Accelerate By Year-End, Potentially Halving EBITDA

Robinhood: Interest Rate Cuts To Cause Sharp Decline In Net Income By 2025

Summary Interest rates drive around 40% of Robinhood's net revenues, and a large recessionary rate cut would likely erase most of that revenue segment. Robinhood attracts speculative retail accounts, which see activity and flows ebb and flow more dramatically than peers with the overall stock market trend. Since individual investors lack prominent uninvested cash positions and recession odds are high, Robinhood's net revenues may also decline due to lower transaction-based sales. Assuming Robinhood's sales and income remain steady, the stock appears significantly overvalued, trading at a roughly 150% premium to IBKR. HOOD's bullish momentum is strong enough that it may not be a good short opportunity, but it may be a decent pair trade against its much more reasonably valued competitor, IBK
Robinhood: Interest Rate Cuts To Cause Sharp Decline In Net Income By 2025

VYM: A Low Dividend Investment With Greater Risk Than Bonds

Summary Many individual investors focus on high dividend-paying stocks and funds, like Vanguard High Dividend Yield ETF, for consistent cash payments. VYM has underperformed the S&P 500 over the past decade and offers a marginally lower average rate of return. VYM and the S&P 500 offer low returns compared to 5.5% yielding short-term Treasury bonds. VYM's dividend yield is currently just ~1% higher than the 10-year real Treasury rate, implying overvaluation to bonds of at least ~20%. I expect VYM to fare slightly better than the S&P 500 due to its reduced exposure to growth stocks, but income-oriented investors will likely find better yields, with lower volatility, in bonds. Dilok Klaisataporn Many individual investors today focus on high dividend-paying stocks and investment f
VYM: A Low Dividend Investment With Greater Risk Than Bonds

BND: Bonds Are Rising Again, But They Face 2 Key Risks

Summary BND's short-term outlook is positive due to lower inflation expectations and a potential end to or reduction in QT activity. Key bond risks include potential oil price spikes from geopolitical tensions and rising corporate credit risk during stock market crashes. In the long term, BND is not ideal due to concerns about US government debt, which makes its debt unpayable without chronically elevated inflation. I expect a repeat of 2020-2022 when inflation declined in the short term but was eventually pushed to a new high as the Federal Reserve overstimulated. Speculators may take advantage of BND's current rally, but may not want to hold the ETF for too long. NoDerog/E+ via Getty Images The medium and long-term bond markets have reacted well to economic data indicating a slowdown. I'
BND: Bonds Are Rising Again, But They Face 2 Key Risks

AMC Entertainment: Weakening Consumer Demand May Be Final Nail In Coffin

Summary AMC Entertainment's financial position remains precarious, with negative working capital and higher interest rates following the refinancing deal. Consumer trends and reduced spending capacity pose risks to AMC's revenue recovery and operating income, potentially leading to further declines. Despite debt refinancing reducing immediate bankruptcy risks, the high interest rates and dilutive terms may lead to an inevitable failure of AMC's equity. AMC remains dependent upon equity investor hope. Should its market capitalization rise, it may raise enough capital to deleverage. Should it fall, its ability to raise capital will too. AMC's key balance sheet risks are now extended to 2029, but they may be pushed forward if its operating income remains negative. Marti157900 Going
AMC Entertainment: Weakening Consumer Demand May Be Final Nail In Coffin

Tyson Foods: Overvalued Amid Prolonged Margin Compression

Summary Meat commodity prices have stabilized in 2023 after experiencing extreme volatility from 2020 to 2022 but remain generally elevated. Investors should expect the possibility of prolonged negative profit margins for Tyson due to labor shortages and rising input costs. Tyson faces a significant debt maturity in 2024, likely increasing its interest costs materially due to higher interest rates. I believe Tyson Foods is materially overvalued today and has a fair value closer to $30 based on income projections discounted by its risk. Anna Moneymaker/Getty Images News After facing extreme volatility from 2020 to 2022, meat commodity prices generally stabilized in 2023. Beef and poultry commodity prices have seen moderate declines since their 2022 peaks but remain typically elevated compar
Tyson Foods: Overvalued Amid Prolonged Margin Compression

Beyond Meat: Beyond Salvation, Equity Raise Expected

Summary Beyond Meat's stock has lost 60% of its value since I last covered it and has a high short interest, indicating potential restructuring or failure. The company's Q3 earnings report will be crucial in determining its survival, as analysts expect negative income through 2026 and likely beyond. Beyond Meat may need to dilute equity soon based on its cash burn rate and face challenges in refinancing its debt by 2027. The company's marketing strategy based on health does not appear to be working, as consumers care primarily about price and taste. Joe Raedle Early this year, I published a detailed bearish article regarding Beyond Meat (NASDAQ:
Beyond Meat: Beyond Salvation, Equity Raise Expected

B. Riley: Survival Potential Uncertain, But Valuation Is Now Reasonable

Summary B. Riley faces immense risks due to significant debt maturities, weak consumer brands, and a tarnished reputation that may harm its advisory business. Despite a 67% stock plummet, short interest remains high, indicating market skepticism about its survival and potential for a short squeeze. The company's future hinges on asset sales, creditor leniency, and potential take-private offers, making its equity value highly speculative. Given its seemingly binary prospects and the potential for significant upside, if liquidity risks are mitigated, I now have a neutral outlook on RILY. Reputation matters in investment banking, meaning B. Riley may struggle with keeping its key clients and employees. J Studios In July, I published "
B. Riley: Survival Potential Uncertain, But Valuation Is Now Reasonable

Chevron: A Defensive Value Investment As Oil Drilling Falters Demand Concerns

Summary Gasoline prices are down again due to global demand concerns. The average US retail gas price is $3.3, down from nearly $3.8 in May. This year, energy is the worst-performing sector, as investors view oil as cyclical after 2008 and 2020 despite its historically non-cyclical pattern. The Federal Reserve's surprisingly quick dovish shift and geopolitical should encourage investors to look toward supply side inflation hedges. Chevron's strong balance sheet, low debt-to-equity ratio, and strategic acquisitions position it well for future growth despite its slightly higher valuation. In a recession, Chevron's diversified operations and consistent dividend make it a safer bet, particularly given US drilling activity has already declined due to concerns of a slowdown that may not occur. N
Chevron: A Defensive Value Investment As Oil Drilling Falters Demand Concerns

DoorDash: Overvalued Amid Unstable Labor Dynamic And Competitive Pressure

Summary Speculative growth stocks rebounded in 2023 after declines in 2022 as retail investors sought to buy growth companies at discounted valuations. DoorDash, Inc. stock has doubled in value this year but remains unprofitable, with notable dilution due to high stock-based compensation. DoorDash faces economic risks such as a potential decline in demand, labor shortages, and lower net pay for drivers, which may impact its profitability. The company's valuation appears relatively high with a 2027 forward "P/E" over 18X, particularly given the risk it fails to achieve this goal. hapabapa After experiencing tremendous declines in 2022, many speculative growth stocks have rebounded this year. Last year, the prospects of higher interest rates lowered the fair value of many pre-profit companie
DoorDash: Overvalued Amid Unstable Labor Dynamic And Competitive Pressure

Sprouts Farmers Market: Valuation Concerns Rising, But Growth And Stability Match Momentum

Summary Sprouts has seen significant growth over the past three years, with extremely high momentum over the past six months. Sprouts benefits from consumer trends favoring low-cost or high-cost outlets, which gives it a widening market share as the "middle" middle-class shrinks. Despite a strong balance sheet and business model, Sprouts may face recession risks and potential pricing pressure on non-essential goods, though that may be offset by competitors' closure risks. The company's valuation is much higher than when I first became bullish in 2021; however, its growth trajectory makes it likely cheaper than COST. At its current price, it may be best to wait for a correction before taking a bullish position in SFM. SDI Productions Three years ago, I published a very bullish outlook on th
Sprouts Farmers Market: Valuation Concerns Rising, But Growth And Stability Match Momentum

PulteGroup: Overvalued As Housing Shortage Slows And Home Prices Falter

Summary PulteGroup's high valuation and profit margins are unsustainable due to low home affordability and a fading housing shortage, making it a potential short opportunity. Despite strong recent performance, PulteGroup's backlog and new orders are declining, signaling reduced demand and increased risk exposure. The Federal Reserve's interest rate cuts should not significantly lower mortgage rates, meaning home affordability is unlikely to improve without lower prices. PulteGroup's aggressive investment in new projects amidst economic uncertainty could exacerbate losses if the economy enters a broader recession, though a 2008-repeat is unlikely for numerous reasons. krblokhin The home construction industry faces a strange mix of trends today; some support the market, while others are a gr
PulteGroup: Overvalued As Housing Shortage Slows And Home Prices Falter

Synchrony Financial: Consumer Lending May Meltdown If Unemployment Continues To Rise

Summary Synchrony Financial faces risks from declining consumer credit and a potential economic recession, which should slow loan originations and may increase defaults. Despite slightly elevated delinquency rates, Synchrony's high interest rates provide a cushion, but its high loan-to-deposit ratio and unsecured loans pose risks. Consumer borrowing and spending are slowing, and low personal savings could potentially increase demand for credit and long-term default risks. I am bearish on SYF due to its exposure to negative economic headwinds, which I expect will increase its delinquencies over the coming year. J. Michael Jones A key theme to my outlook is the decline in consumer credit lending associated with potential recession risk. After being calm for most of the 2010s, consumer lendin
Synchrony Financial: Consumer Lending May Meltdown If Unemployment Continues To Rise

Diamondback Energy: Increased Geopolitical Tensions Raise Free Cash Flow Outlook

Summary Diamondback Energy is poised for growth, supported by its merger with Endeavor, which will enhance its position in the Permian Basin. The oil market remains range-bound, but geopolitical tensions and low US supply growth could drive prices higher, benefiting FANG's free cash flow. FANG's valuation is almost reasonable compared to peers, with potential upside from higher oil prices and increased production capacity post-merger. US oil producers like FANG offer a hedge against geopolitical risks and inflation, making them a strategic addition to portfolios. Pla2na The energy market has been among the few to be eerily quiet in 2024. While stocks face heightened volatility and gold surges to consecutive all-time highs, crude oil remains stuck in the ~$70 to ~$80 range since the end of
Diamondback Energy: Increased Geopolitical Tensions Raise Free Cash Flow Outlook

Cracker Barrel: Losing The Shrinking 'Middle-Middle' Customer Base

Summary The restaurant industry faces pressures from the declining middle class, which affects middle-income family restaurants like Cracker Barrel. These restaurants have struggled with rising costs and declining traffic. Cracker Barrel's high operating overhead and attempts to modernize may alienate its core demographic, risking further financial instability and potential equity dilution. Despite positive cash from operations, Cracker Barrel's liquidity issues and high operating costs suggest it may need to raise capital or close stores. The company's future hinges on economic conditions and middle-income spending; if income trends are negative by 2025, it may be a "value trap." sanfel The restaurant industry is facing significant pressures from the bifurcation of consumer spending. This
Cracker Barrel: Losing The Shrinking 'Middle-Middle' Customer Base

American Airlines: 2025 Refinancing Risks Grow As Air Travel Demand Peaks

Summary American Airlines stock has declined by 35% since March, while short interest on it has risen to 12.7%, indicating hedge funds or speculators may be betting on continued declines. AAL's financial stability is at risk due to high debt, declining profitability, and a potential decline in airline demand. To me, this makes it the least solvent US airline after Spirit. I expect AAL's operating margins to continue to slide, with recession risks potentially exacerbating negative headwinds in 2025. American Airlines' refinancing risks appear high, with over $4B in current LT debt maturities and negative free cash flow. AAL's stability will likely depend on Federal Reserve stimulus, with significant rate cuts potentially necessary to carry it through its refinancing pressures. FangXiaNuo In
American Airlines: 2025 Refinancing Risks Grow As Air Travel Demand Peaks

Brinker International: Sales Growth May Prove Transitory As Consumer Restaurant Spending Slows

Summary The full-service dining industry was under profit margin and demand pressures before 2020 but has been dramatically exacerbated. Brinker International may indirectly benefit from economic strains as it gains market share from closing independent restaurants and, more recently, competing chains. That trend has resulted in same-store sales growth that I expect will prove transitory as slowing consumer demand spreads into the "middle-class" restaurant market. Although Brinker's valuation is not excessive, it is relatively high if we assume a decline in revenue and potential margin pressures due to economic turbulence. EAT's short interest level of 19% indicates ample negative speculation on the stock, which may not be warranted if economic conditions stabilize. sanfel One of the more
Brinker International: Sales Growth May Prove Transitory As Consumer Restaurant Spending Slows

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