Day: October 23, 2024

While that type of component needs less sophisticated manufacturing than the processors that run computers and phones, the addition of new electronic features to everyday devices has made Texas Instruments’ products more valuable.

The company is spending heavily on new plants — part of an effort to bring most production back in-house — and that’s weighing on profit in the meantime. Texas Instruments has said the effort, when complete, will give it a cost advantage over rivals.

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So here’s the thing: Citadel and Millennium don’t have a crystal ball. While it’s interesting that both funds own Pfizer stock during an otherwise tumultuous time in the company’s history, there’s no guarantee that these investments will prove wise.

I think a few things are influencing the moves of Citadel and Millennium. First, Pfizer is an existing position for both firms. I don’t see the recent purchases as anything more than simply adding to an existing allocation. Moreover, considering Citadel and Millennium own large baskets of stocks across a variety of industry sectors, Pfizer likely represents a hedge against other peers.

It’s important to remember that initiatives involving Seagen will take years to play out. Moreover, there is no guarantee that Pfizer will ever succeed in the weight loss space. However, considering how far Pfizer’s shares have fallen, there’s an argument to be made that investor expectations are so low that something catastrophic would need to occur in order to send the stock spiraling even further.

While a number of questions linger in the background, investing in Pfizer at its depressed valuation could look like a smart move in hindsight as the company executes on new opportunities. To me, buying Pfizer stock right now should be rooted in the company’s turnaround and your conviction that the business can diversify further into oncology as well as potentially getting involved in weight loss.

Before you buy stock in Pfizer, consider this:

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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.

Do Billionaires Israel Englander and Ken Griffin Know Something? Each Just Bought This Plagued Value Stock. was originally published by The Motley Fool

On a forward earnings basis, the company is much more in line with peers but still at the top of the group. Given the amount of competition in this space, investors are likely wary of Day Force’s valuation, even though the company’s doing some good things.

Paper manufacturer International Paper (NYSE: IP) has more than 15.5% of publicly available shares sold short. The stock is up nearly 30% in 2024, so it’s beating the broader market this year. International Paper has been involved in takeover rumors all year, most recently regarding the Brazilian paper company Suzano. This seemed to drive up the share price because the expected offer would have been at a premium to International Paper’s stock price when the rumors first hit. But Suzano ended its takeover attempt in June, and the stock price has hung in, possibly due to more favorable market conditions.

Meanwhile, International Paper has been in the process of acquiring DS Smith, a transaction expected to close later this quarter. The deal is expected to result in cost synergies, so perhaps the market likes the idea, but I would have thought the stock would have retreated more after Suzano didn’t buy International Paper.

Shares of the well-known pharmacy chain Walgreens Boots Alliance (NASDAQ: WBA) have tanked slightly more than 60% this year. Brick-and-mortar pharmacies have not fared well due to increasing competition from online players like Amazon and other operational issues like hiring struggles. Walgreens also had to take a $6 billion impairment charge on its controlling stake in VillageMD, which it purchased a few years ago.

Walgreens has seen declining free cash flow, and it also had to cut its dividend in half earlier this year. Recently, the company reported earnings that beat analyst estimates and said it would close 1,200 stores to boost earnings and free cash flow. It could be a turnaround story, but many challenges remain.

Auto technology company Aptiv (NYSE: APTV) rounds out the group, with more than 14% of shares sold short. The stock is down more than 22% this year. Aptiv has struggled because it makes car parts for electric vehicles, which have seen weakening demand and production in 2024. The company has a significant presence in China, which saw its economy hit hard by weak consumer demand and a housing downturn. Aptiv also faces increased competition after Volkswagen and Rivian joined forces to create a new unit that will make software for electric vehicles.

I would first point out that the bears could be wrong about all five of these companies. That’s why two sides make a market. You don’t have to write off any of these stocks, but investing in them will require a good amount of research to ensure you are comfortable with buying.

I think the bears are wrong about Aptiv, which now has several tailwinds. Government stimulus in China should help the country rebound, or at least put it in a better position than it has been in. Aptiv also seems to be on decent financial footing, having grown revenue and profits in the second quarter (from the linked quarter) despite the difficult backdrop.

In Q2, Aptiv also announced a new $5 billion share repurchase program, including a $3 billion accelerated repurchase program, showing that management is confident in the stock. Finally, the company’s price-to-earnings ratio has been cut in half this year to 5.3, and short interest has begun to come down from highs, so it looks like the bears are starting to get flushed out.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Aptiv, Asana, Paycom Software, Paylocity, Volkswagen, and Workday. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

These Are the 5 Most Shorted Stocks in the S&P 500 Index. The Bears Are Wrong About 1 of Them. was originally published by The Motley Fool

Through September, Roberts has calculated, new-vehicle sales to individual buyers, excluding sales to rental companies and other commercial fleets, are up 7%. Of that growth, 43% came in the $20,000-to-$30,000 price range — the largest share for that price category in at least four years. (For used vehicles, the shift is even more pronounced: 59% sales growth in the $15,000-to-$20,000 price range over that period.)

Sales of compact and subcompact cars and SUVs from mainstream auto brands are growing faster than in any year since 2018, according to data from Cox Automotive.

The sales gains for affordable vehicles is, in some ways, a return to a pattern that existed before the pandemic. As recently as 2018, compact and subcompact vehicles — typically among the most popular moderately priced vehicles — had accounted for nearly 35% of the nation’s new vehicle sales.

The proportion started to fall in 2020, when the pandemic caused a global shortage of computer chips that forced automakers to slow production and allocate scarce semiconductors to more expensive trucks and large SUVs. As buyers increasingly embraced those higher-priced vehicles, the companies posted robust earnings growth.

In the meantime, they deemed profit margins for lower-prices cars too meager to justify significant production of them. By 2022, the market share of compact and subcompact vehicles had dropped below 30%.

This year, that share has rebounded to nearly 34% and rising. Sales of compact sedans were up 16.7% through September from 12 months earlier. By contrast, CarGurus said, big pickups rose just under 6%. Sales of large SUVs are barely up at all — less than 1%.

Ford’s F-Series truck remains the top-selling vehicle in the United States this year, as it has been for nearly a half-century, followed by the Chevrolet Silverado. But Stellantis’ Ram pickup, typically No. 3, dropped to sixth place, outpaced by several less expensive small SUVs: the Toyota RAV4, the Honda CR-V and the Tesla Model Y (with a $7,500 U.S. tax credit).

The move in buyer sentiment toward affordability came fast this year, catching many automakers off guard, with too-few vehicles available in lower price ranges. One reason for the shift, analysts say, is that many buyers who are willing to plunk down nearly $50,000 for a new vehicle had already done so in the past few years. People who are less able — or less willing — to spend that much had in many cases held on to their existing vehicles for years. The time had come for them to replace them. And most of them seem disinclined to spend more than they have to.

With loan rates still high and average auto insurance prices up a whopping 38% in the past two years, “the public just wants to be a little more frugal about it,” said Keith McCluskey, CEO of the dealership where Chumley bought her Trax.

Roberts of CarGurus noted that even many higher-income buyers are choosing smaller, lower-priced vehicles, in some cases because of uncertainties over the economy and the impending presidential election.

The shift has left some automakers overstocked with too many pricier trucks and SUVs. Some, like Stellantis, which makes Chrysler, Jeep and Ram vehicles, have warned that the shift will eat into their profitability this year.

At General Motors’ Chevrolet brand, executives had foreseen the shift away from “uber expensive” vehicles and were prepared with the redesigned Trax, which came out in the spring of 2023, noted Mike MacPhee, director of Chevrolet sales operations.

Trax sales in the U.S. so far this year are up 130%, making it the nation’s top-selling subcompact SUV.

“We’re basically doubling our (Trax) sales volume from last year,” MacPhee said.

How long the preference for lower-priced vehicles may last is unclear. Charlie Chesbrough, chief economist for Cox Automotive, notes that the succession of expected interest rates cuts by the Federal Rates should eventually lead to lower auto loan rates, thereby making larger vehicles more affordable.

“The trends will probably start to change if these interest rates start coming down,” Chesbrough predicted. “We’ll see consumers start moving into these larger vehicles.”

____

AP Economics Writer Christopher Rugaber in Washington contributed to this report.

Uranium is needed to generate nuclear power and prices have increased significantly, up roughly 60% since the beginning of the year.

• Cameco Corporation (NYSE:CCJ) is a uranium producer with several projects including Millennium, Yeelirrie, Kintyre and Exploration. Cameco shares are up nearly 45% over the past month.

• Centrus Energy Corp. (AMEX:LEU) supplies enriched uranium fuel for commercial nuclear power plants in the U.S. and internationally. Centrus Energy stock gained 21% on Friday after the Department of Energy awarded the company a contract aimed at expanding its domestic commercial production.

Last week, Oklo’s co-founder and CEO Jacob DeWitte joined CNBC’s “Money Movers” and highlighted the current opportunities for companies in the nuclear power industry.

“It’s an extremely exciting time for nuclear … the numbers are staggering here. The power demand numbers, frankly, they’re mind-blowing,” DeWitte said. “It’s a huge opportunity for a lot of players in the space, and nuclear offers a really great solution. “

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