No, we are not going to investigate World Wrestling Entertainment (now part of TKO Holdings).
I need two new ideas for my Top 20 Model Portfolio. I think I want to replace one of my healthcare names, and maybe Kinder-Morgan is getting too expensive. Yes, time for a few more lists. These are the ideas I am wrestling with:
First comes a group of 10 stocks where I have not finished my research, or have not yet reached a conclusion. I want to finish by year end.
AES Corp. - AES - $13 is this a Harris company in a Trump world? 5% yield
Iridium - IRDM - $30 - L-band not really what Musk is trying to do, difficult to understand, maybe I have a satellite fetish
Thor - THO - $104 - big RVs, will the banks lend on these monsters? horrible retailers
Devon Energy - DVN - $34 - natural gas prices have bounced, but the stock acts like death
Civitas - CIVI - $48 - I triple hate the variable dividend idea, unique Colorado assets, doing great in the Permian
Atlas Energy Solutions- AESI - $23 - kinda crazy guys building 37 mile conveyor belt to bring fracking sand to the Permian, my favorite idea from the Three Part conference
Honda Motor - HMC - $25- do they have the same bad debt exposure as Ford?
Ashland - ASH - $74 - chemicals, keeps getting cheaper
Alexandria Real Estate - ARE - $102 - REIT, big labs for drug companies, really smart guys, yielding 5%
Hillenbrand - HI - $32 - what is left now that the restructuring is done?
The next list is stocks where I have reached a conclusion, and cannot quite make the case for inclusion in the Top 20 Model Portfolio. I either need new information, or the stock price needs to decline further.
Dow - DOW - $ 41 - too much housing, too much China
Vail Resorts - MTN - $190 - will we get enough snow?
Etsy - ETSY - $59 - great strategy, is consumer too leveraged?
Coty - COTY - $7 - complex ownership issues
Rio Tinto/Teck RIO/TECK - $62/$44 - way too much China exposure, buy warming to copper story
Phillips 66 - PSX - $123 - too similar to HF Sinclair, but very well run
Eastman Chemical - EMN - $99 - too much cigarette exposure?
Antero Midstream - AM - $15 - maybe the safest stock?
Hasbro - HAS - $62 - tariffs are perhaps an issue?
Oxford - OXM - $82 - is Tommy Bahama a fad?
MGP Ingredients - MGPI - $45 - are we just drinking less alcohol?
LKQ - LKQ - $38 - too few car crashes?
Polaris - PII - $63 - I still prefer Brunswick
YETI - YETI - $44 - has bounced off the bottom
Core & Main - CNM - $54 - infrastructure roll-up, maybe below $40
First Watch/Portillo’s - FWRG/ PTLO - $19/$9 - maybe JACK is too risky?
BorgWarner - BWA - $34 - too tied to EVs?
Ball - BALL - $58 - are we drinking too little beer?
Wynn’s - WYNN - $95 - China?, well run
WPP - WPP - $56 - competitors merging?
Rogers - ROG - $105 - new management?
Azenta - AZTA - $45 - smart guys?
Charles River - CRL - $190 - drug companies outsourcing ever again?
Renaissance Re - RNR - $268 - can anyone understand?
Cubesmart - CUBE - $46 - well run, getting cheaper
Estee Lauder - EL - $80 - China?
Nike - NKE - $77 - direct business a pain for retailers
Tronox - TROX - $11 - crushed by the big miners?
Astrana Health - ASTH - $38 - getting cheaper, neat concept
Huntsman - HUN - $19 - housing?
Nucor - NUE - $125 - too much Trump hype?
Teradyne - TER - $123 - has bounced, China?
Carmax - KMX - $86 - credit risk?
Ford/Subaru - F/FUJHY - $10/$8 - never done a Japanese stock before
Magnite - MGNI - $16 - big bounce on streaming ads
Macy’s - M - $15 - new management?
Whirlpool - WHR - $123 - housing a mess, dividend?
I constantly look at a list of stocks that are within 20% of their 5-year lows. This is the bargain bin, the “blue light” special (for you old K Mart shoppers). Right now this list has only 93 names, from about 2700 stocks over $1 billion. In olden times, before screens, all we had was the WSJ new low list. These are companies with significant problems. I admire the managers that still own these stock, even while I question their sanity. Twenty years ago I was likely to choose stocks from this list, of course twenty years ago this list was much longer.
Krispy Kreme - DNUT - $10 - the most unhealthy company?
Stepan - SCL - $74 - interesting insulation products
FMC - FMC - $54 - pesticides, Bobby Kennedy issues?
Flowers Foods - FLO - $21 - dominating a declining business?
Neogen - NEOG - $12 - is farm spending the only problem?
Cable One - CABO - $378 - can a solid internet business be enough, cable stinks?
TreeHouse Foods - THS - $34 - too many small problems
Northwest Natural - NWN - $42 - boring
Advance Auto - AAP - $44 - tough competitors
Leggett & Platt - LEG - $12 - can the balance sheet survive?
Carter’s - CRI - $55 - kids cloths, need to learn more
GlobalFoundries - GFS - $44 - one of the only cheap tech names, building semi chips in NY?
Kimberly-Clark - KMB - $130 - losing Costco diapers?
ConAgra - CAG - $28 - boring, but frozen dinners is still a growing ceategory
Baxter - BAX - $30 - not much intelligence found here
Stanley - SWK - $83 - too leveraged - pass
Dollar General - DG - $78 - nasty story about state AG’s looking at their pricing strategies- pass