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Luby"s to issue first liquidating distribution to shareholders

Houston-based Luby's Inc. (NYSE: LUB) is making its first liquidating distribution to shareholders as it continues to wind down its business. The liquidation is expected to be complete by June 30, 2022......»»

Category: topSource: bizjournalsOct 13th, 2021

Avante Logixx Inc. Announces Adjusted EBITDA of $0.6 Million (or $0.03 Per Share) for Its Second Quarter Ended September 30, 2021 on Revenues of $22.6 Million

Not for distribution to U.S. news wire services or for dissemination in the United States TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Avante Logixx Inc. (TSX.V: XX) (OTC:ALXXF) ("Avante" or the "Company") released financial results for its second fiscal quarter ended September 30, 2021 (all amounts in thousands of Canadian dollars, unless otherwise indicated). In addition, the Company's Board of Directors continues to make progress on and evaluate the various strategic alternatives available to the Company as announced on August 24, 2021 (the "Strategic Review"). RESULTS FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2021 Avante's Fiscal Year End is March 31. Three Months Ended Expressed in C$ thousands, unless otherwise noted 30-Sep-20 30-Jun-21 30-Sep-21 Revenues $23,602 $24,120 $22,601 Gross profit (1) $5,774 $5,894 $4,242 Gross profit margin (1) 24.5% 24.4% 18.8% Direct Operating Expenses (1) $4,034 $3,840 $3,668 EBITDA (1) $1,190 $1,799 ($2,085) Adjusted EBITDA (1) $1,719 $2,008 $627 Comprehensive income (loss) attributed to Avante shareholders ($367) $277 ($2,926) Basic and fully diluted income per share ($0.025) $0.013 ($0.138) Basic and fully diluted Adjusted EBITDA per share (1) $0.081 $0.095 $0.030 Cash Flow from Operations before Working Capital $1,713 $1,370 $623 "During Q2 we have been responding to the challenges created by the current economic environment," said Craig Campbell, CEO and Director of Avante. "It is a difficult operating environment, driven by inconsistent re-opening and return to work policies and implementation, coupled with a tight labour market and supply chain constraints resulting in significant increases in our labour costs as a percent of revenue. I am proud of the team and our businesses that despite these challenges, we have demonstrably grown recurring and contractual revenue, while reducing our direct operating expenses. It is my belief that these challenges are transitory and short term in nature. While navigating these challenges we continue to drive profitable growth in new markets while onboarding net new customers, increasing wallet share with existing customers all while remaining focused on improving our ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaNov 29th, 2021

CloudMD Reports Solid Performance with Third Quarter 2021 Financial Results; Record Revenue of $39.2M and First Quarter with Positive Adjusted EBITDA

Q3 2021 is the first quarter that fully recognizes the financial results from all previously announced and closed acquisitions Record Q3 2021 revenue of $39.2 million; an increase of 150% compared to Q2 2021 and an increase of 1066% compared to Q3 2020 First quarter with positive Adjusted EBITDA of $0.8 million compared to a loss of $0.7 million in Q2 2021 and a loss of $1.3 million in Q3 2020 Increased annualized revenue run rate to over $185 million demonstrating strategic capital allocation and strong organic growth Increased engagement on the Comprehensive Integrated Health Platform; added an additional 300,000 employees and family members, resulting in a total of 560,000 individuals Positive client outcomes with Net Promoter Score of 80, 98% satisfaction rate and 164 new clients added in the quarter Program with Sun Life delivered proven data-driven individual health outcomes including: 89% of those experiencing depression and 91% of those experiencing anxiety noticed ‘major improvements' 82% said they would recommend the service based on their own experience 46% increase in plan members utilizing their mental health benefits for the first time VANCOUVER, British Columbia, Nov. 29, 2021 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV:DOC, OTCQB:DOCRF, Frankfurt: 6PH)) (the "Company" or "CloudMD"), a healthcare technology company revolutionizing the delivery of care, announced its financial results for the third quarter ended September 30, 2021. All financial information is presented in Canadian dollars unless otherwise indicated. "This was a milestone quarter for CloudMD as it's the first quarter we recognized full revenue contributions from all the recently closed acquisitions and clearly demonstrated that our whole-person, patient-centric approach to healthcare is working. We've onboarded 560,000 individuals onto our Comprehensive Integrated Health Platform and are providing valuable data-driven outcomes, which is proven by our successful program with Sun Life where 89% of those experiencing depression and 91% of those experiencing anxiety noticed major improvements. We've also achieved positive client outcomes across engagement, attachment rate, and net promoter scores," said Dr. Essam Hamza, CEO of CloudMD. "I am extremely proud of the Company's progress and the team's ability to execute on our growth strategy across all divisions, which is evident by new clients wins, rapid growth and improved profitability. Our unique, proprietary healthcare offering is an industry first, and I'm confident that we will be able to continue our North American and global expansion." Third Quarter 2021 Financial Highlights Q3 2021 revenue was $39.2 million, compared to $15.7 million in Q2 2021 and $3.4 million in Q3 2020. The increase is primarily attributable to acquisition growth with 4 acquisitions completed in the preceding quarter, and 14 acquisitions completed in the last 12 months. Q3 2021 gross margin1 was 34.0%, compared to 35.5% in Q2 2021 and 37.5% in Q3 2020. The decrease is due to revenue mix where the Company's patient support programs and online eyewear platform, currently lower-margin businesses, represented 32% of revenues for the current quarter. The Company expects its gross margin to increase due to ongoing efforts to integrate its acquisitions and increase its operational efficiency. Net comprehensive loss attributable to equity holders of the Company in Q3 2021 was $4.2 million or $0.02 per share, compared to $6.2 million or $0.03 per share in Q2 2021 and $2.7 million or $0.02 per share in Q3 2020. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA1") was $0.8 million in Q3 2021, compared to a loss of $0.7 million in Q2 2021 and a loss of $1.3 million in Q3 2020. Cash and cash equivalents were $53.7 million as at September 30, 2021, compared to $60.9 million at June 30, 2021 and $59.7 million at December 31, 2020. The decrease for the period was primarily attributable to payments related to the acquisitions completed near the end of June 2021, which will not reoccur in the future. Third Quarter & Subsequent Corporate Highlights On September 14, 2021, the Company announced a partnership with 19 new post-secondary institutions across Canada to provide its Aspiria Student Assistance Program and multi-layered mental health resources to over 167,000 additional students. On September 28, 2021, the Company announced the appointment of KPMG LLP as the Company's independent auditors to hold office until the end of the next annual general meeting of shareholders. On October 5, 2021, the Company announced the appointment of Angel Paravicini as Senior Vice President of Business Development and Customer Success to drive expansion in the United States and globally. On October 27, 2021, the Company announced that through one of its subsidiaries, it has received U.S. Patent Approval for its Real Time Intervention Platform ("RTIP") which is the technology backbone for CloudMD's comprehensive healthcare platform that addresses all points of a patients care from one, connected platform. On November 9, 2021, the Company announced the appointment of Duncan Hannay and Karen Adams to the Board of Directors of CloudMD. On November 15, 2021, the Company announced it had entered into a definitive agreement (the "Arrangement Agreement") with MindBeacon Holdings Inc. ("MindBeacon") pursuant to which CloudMD agreed to acquire all of MindBeacon's issued and outstanding common shares for cash and shares of the Company. Under the terms of the Arrangement Agreement, each common share of MindBeacon will be exchanged for $1.22 cash and 2.285 common shares of CloudMD. Closing of the transaction is subject to a number of customary closing conditions, including approval by at least two-thirds of the votes cast at a special meeting of MindBeacon's shareholders, as well as court and regulatory approval. The MindBeacon shareholder meeting is expected to be held on or about January 10, 2022 and, subject to the satisfaction or waiver of the other closing conditions, closing is expected to occur shortly thereafter, on or about January 14, 2022. On November 29, 2021, the Company announced it has partnered with Sun Life to expand the seven month pilot program and start rolling out its Mental Health Coach as part of Sun Life's Group Benefits offering. Findings from the pilot include (1) 89% of those experiencing depression and 91% of those experiencing anxiety noticed ‘major improvements'; (2) 82% said they would recommend the service based on their own experience; and, (3) 46% increase in plan members utilizing their mental health benefits for the first time. Outlook CloudMD is creating innovation in the delivery of healthcare services, by leveraging technology to improve access to care leading to better health outcomes. Through its team-based, patient-centric approach, CloudMD provides one, connected platform for patients, healthcare practitioners, and enterprise clients to address whole-person, coordinated care. The Company has a multi-pronged growth strategy which focuses on organic growth, accretive mergers and acquisitions and leveraging assets across all divisions. The Company's long term growth will be largely driven by: (1) continuing to integrate all its proprietary health technology solutions into its ecosystem, including the recently announced proposed acquisition of MindBeacon; (2) realizing cost savings and cross-selling opportunities to new and existing customers across CloudMD; (3) winning new customers with its unique healthcare offering and providing meaningful data driven outcomes; and (4) continuing to execute on its defined expansion strategy across North America and Globally. CloudMD has proven out its integration strategy and by leveraging its proprietary technology, has successfully integrated all its recent acquisitions into one connected platform. In respect of the recently announced proposed acquisition of MindBeacon, CloudMD has already identified cost savings of approximately $2 million and cross-sell synergies and has started to plan the integration of MindBeacon's synergistic healthcare solutions into its mental health services offerings. In addition, the Company believes there are an additional $2 million in potential synergies available over time through the integration of MindBeacon and its other acquisitions. CloudMD's proprietary Comprehensive Integrated Health Platform continues to see impressive adoption rates within the Enterprise Health Solutions division, and the Company has onboarded 560,000 employees and family members on the platform who are receiving individualized care. CloudMD has achieved positive client outcomes including a Net Promoter Score of 80, 98% satisfaction rate and 164 new clients added in the third quarter. CloudMD continues to win new clients and customers including Sun Life and other large organizations in retail, transportation, and financial sectors with its industry-leading approach that delivers important outcomes that measure the patient success and engagement of its connected platform. The technology that underpins the platform is scalable and the Company will continue looking at opportunities to expand its unique offering to clients across North America and globally. CloudMD has built an experienced sales team, and with the recent addition of Angel Paravicini, expects to drive sales and business development to open new distribution channels and attract new clients in the United States. Upon close of the proposed acquisition of MindBeacon, CloudMD will have a strong balance sheet with over $60 million in cash and cash equivalents. The Company will continue to deploy capital towards a robust pipeline of accretive, synergistic acquisitions, focused on products, capabilities, clinical specialties, and technologies that are highly scalable and rapidly growing. CloudMD will continue to focus on delivering meaningful shareholder value by executing on its growth strategy through the continued integration of its comprehensive healthcare offering, winning new business and clients with its unique, Comprehensive Integrated Health Platform, expansion of its scalable product across new geographies including the United States, and strategic capital allocation to drive its rapid growth. Selected Financial Information All results were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. (In thousands of Canadian dollars, except per share amounts)   Three months ended     Nine months ended     September 30,     September 30,     2021     2020   (%)   2021     2020   (%) Revenue $ 39,162   $ 3,359   1066%   $ 63,596   $ 9,205   591%   Cost of sales   (25,866)     (2,100)   1132%     (41,152)     (5,792)   610%   Gross profit (1)   13,296     1,259   956%     22,444     3,413   558%   Gross margin   34.0%     37.5%       35.3%  .....»»

Category: earningsSource: benzingaNov 29th, 2021

Reasons to Add OGE Energy (OGE) to Your Portfolio Right Now

OGE Energy (OGE) makes a strong case for investment, given its estimates revision, strong earnings surprise history, systematic capital expenditures and ongoing expansion of the customer base. OGE Energy’s OGE regular investments to add clean power generation assets to its generation portfolio, strong economic growth and load growth as well as customer additions make it a solid choice for investment in the utility space.Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Growth ProjectionsThe Zacks Consensus Estimate for 2021 earnings per share has moved up 0.9% in the past 60 days. The Zacks Consensus Estimate for earnings for 2021 and 2022 indicates year-over-year growth of 5.8% and 0.2%, respectively.Return on Equity & Dividend YieldReturn on Equity (ROE) indicates how efficiently OGE Energy is utilizing shareholders’ funds to generate returns. At present, OGE Energy’s ROE is 14.55%, higher than the industry average of 9.26%.Currently, OGE Energy has a dividend yield of 4.75% compared with the industry’s 3.39%.Surprise History and Earnings GrowthOGE Energy delivered an average earnings surprise of 24.1% in the last four quarters.OGE Energy’s long-term (three to five years) earnings growth is projected at 4.5%.Customer & Load GrowthOGE Energy’s is gaining from strong economic conditions in its service territories. OGE is expected to register 2.2% year-over-year load growth in 2021 and strong customer growth. OGE Energy reported a 1.3% increase in customers in third-quarter 2021 from 2020 levels. Strong load trends are expected to continue in 2022, driven by an increase in residential and commercial customers of OGE. Regular Investments & Emission ReductionOGE Energy plans to spend around $4.2 billion between 2021 and 2025. Out of the planned investment, 75% will be directed toward low-risk transmission and distribution operations. For 2021, the company has allocated $750 million, which includes $670 million for distribution, solar panel subscription, generation and grid advancement activities, and $80 million for transmission projects.OGE Energy has plans to lower carbon dioxide emissions to 50% from 2005 levels by 2030. To achieve this target, the company has converted two coal-fired generating units at the Muskogee Station to natural gas, among other measures. OGE is also deploying more renewable energy sources to lower emissions.Price PerformanceOver the past 12 months, OGE Energy’s shares have returned 12.1% compared with the industry’s 5.5% growth.Image Source: Zacks Investment ResearchOther Stocks to ConsiderOther top-ranked stocks in the same sector include Otter Tail Corporation OTTR, California Water Service Group CWT and Chesapeake Utilities CPK, each holding a Zacks Rank #2.Otter Tail, California Water Service, and Chesapeake Utilities delivered an average earnings surprise of 27.9%, 10.8%, and 12.6%, respectively, in the last four quarters.The Zacks Consensus Estimate for 2021 earnings per share of Otter Tail, California Water Service, and Chesapeake Utilities has moved up 0.8%, 7.6%, and 3.5%, respectively, in the past 60 days.Year to date, shares of Otter Tail, California Water Service, and Chesapeake Utilities have returned 60.9%, 18.2%, and 22%, respectively, compared with the Zacks Utility Sector’s 5% growth. Investor Alert: Legal Marijuana Looking for big gains? Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0% You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report OGE Energy Corporation (OGE): Free Stock Analysis Report Chesapeake Utilities Corporation (CPK): Free Stock Analysis Report California Water Service Group (CWT): Free Stock Analysis Report Otter Tail Corporation (OTTR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 29th, 2021

Emerson Electric (EMR) is a Top Dividend Stock Right Now: Should You Buy?

Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Emerson Electric (EMR) have what it takes? Let's find out. Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.Emerson Electric in FocusEmerson Electric (EMR) is headquartered in St. Louis, and is in the Industrial Products sector. The stock has seen a price change of 12.37% since the start of the year. The maker of process controls systems, valves and analytical instruments is paying out a dividend of $0.51 per share at the moment, with a dividend yield of 2.28% compared to the Manufacturing - Electronics industry's yield of 0.34% and the S&P 500's yield of 1.36%.In terms of dividend growth, the company's current annualized dividend of $2.06 is up 2% from last year. Emerson Electric has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 1.28%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Emerson Electric's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.EMR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $4.82 per share, with earnings expected to increase 17.56% from the year ago period.Bottom LineInvestors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, EMR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy). Investor Alert: Legal Marijuana Looking for big gains? Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0% You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Emerson Electric Co. (EMR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 29th, 2021

Transcript: Steve Fradkin

     The transcript from this week’s, MiB: Steve Fradkin Northern Trust, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast… Read More The post Transcript: Steve Fradkin appeared first on The Big Picture.      The transcript from this week’s, MiB: Steve Fradkin Northern Trust, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast I have a special guest. His name is Steve Fradkin, and he runs one of the larger pools of assets that you probably had no idea about. He is the President of Northern Trust Wealth Management. They run over $350 billion in client assets. They serve some of the wealthiest families in America. One in five wealthy families actually has assets with Northern Trust. They have something like 20 percent of the Forbes 400, just a very interesting perspective on how to manage through periods of uncertainty, changing tax laws, rising inflation. Also, it’s really interesting perspectives. It’s less about predicting the future, Steve tells us, then thinking in terms of planning and probabilities. And I think that was really interesting advice. He — he is about as knowledgeable as anybody is going to get in the – both wealth management business and ultra-high net worth management business. I found the conversation really intriguing, and I think you will also. So, with no further ado, my interview of Steve Fradkin of Northern Trust. VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Steve Fradkin. He is the President of Northern Trust Wealth Management. Running about $355 billion in assets, they serve about one in five of the wealthiest families in America. Previously, Steve ran the Corporate and Institutional Services. He was Head of International Business for Northern Trust, as well as the firm’s Chief Financial Officer. Steve Fradkin, welcome to Bloomberg. FIRRMA Thank you, Barry. Great to be here. RITHOLTZ: So, you spent your entire career at Northern Trust having joined in — in 1985. How do you make the leap from really CFO to President which, to me, I think of President I think of someone who’s running like a CEO, running a — a division? What were the challenges of that transition? FRADKIN: Well, it’s a great question and, you know, careers are mysterious experiences. The — the bigger mystery really, Barry, was the move to CFO. So I joined Northern Trust as a youngster, didn’t know what I wanted to do, worked my way through a variety of entry-level jobs, ultimately culminating at that point in running our growing international business, and loving it, traveling the world to clients in Asia, Europe, the Middle East, Africa, South America, you know, really fun and interesting stuff, and was asked, at that point, to serve as CFO, which was the unnatural job. Was not a controller, was not a treasurer, and so serving as CFO of a large public company was — shall we say traumatic when they asked. But did that for six years, including through the global financial crisis. And it was, at that point, I went back to doing what I normally do, which is running businesses. I ran our Corporate and Institutional Services business, and then after that Wealth Management. So — so it wasn’t so much going from CFO to wealth management as it was ending up as CFO, if you will, by accident from my point of view. RITHOLTZ: Really interesting. So — so you guys had a pretty good year in 2020. How did that carry over to this year? Is it just more of the same? What were the big success stories relative to all those challenges we soar last year? Well, you know, it’s — it’s really an interesting phenomenon, and it shows you the – in some ways, the unpredictability of what can happen. You know, if you think about COVID-19 and its impact in 2020, and if I said to you, you know, look here’s what’s going to happen, we’re — we’re going to go as a society not just Northern Trust from, you know, we all come in and we work and so forth and so on. And one day, on about the same day worldwide, everyone’s going to start working from home facetiously. What — what do you think is going to happen to the markets? I think most people have said, well, first of all, it could never happen that way. It’s not going to be true that people in Sydney, and London, and New York, and Sao Paulo are all going to be, you know, as much as one can working from home. That’s just impossible. And second of all is that where to happen on a sustained basis. Well, gee, you know, the economy is going to crater because no baseball games, no concerts, no – you know, less use of restaurants, et cetera, et cetera. I don’t think people would have said, you know, the markets would do as well as they’ve done. So look, it’s been an incredible journey. Northern Trust has navigated exceptionally well through it last year and continues to perform well today. And there are a variety of factors in that. But each and every day has been a navigation because we’re still not out of the pandemic and we’re still operating in a hybrid mode. And, you know, balancing safety of our partners, our — our employees, and the needs of our clients is a — a daily — a juggling act that we’re still working through and I suspect will be working through for a while longer here. RITHOLTZ: We’re going to talk a little more about how you guys manage doing the pandemic in a bit, but I want to stay with the success of Northern Trust. You’re one of the biggest ultra-high net worth investment managers. But relative to your size, you guys kind of fly under the radar. Why is that? FRADKIN: Well, you know, it’s — it’s an interesting question, Barry. The – so in terms of size, we’re in the top 20 banks in the country as measured by our balance sheet. But really the — the better marker of our size is the assets that we manage and the assets that we administer for clients. And we’re a very quiet company. We don’t do lots of big acquisitions. We do the same thing today that we’ve been doing since 1889, serving the same clientele, and so we’re a very focused institution. A little over half our profits come from the provision of services to wealthy families in America and around the world. And the other half come from essentially providing the same services, but to large global institutional investors, serving wealth funds, pension funds and the like. And so, we’re a quiet company that has been extraordinarily successful and consistently so for many, many years. So, we’re proud of what we’ve got, but we — we — we — we fly under the radar scream — screen intentionally to just keep a low profile and stay focused on our clients. RITHOLTZ: And — and that would make sense given the nature of your clients who are less Instagram stars and more quiet wealth. Is that a — is that a fair way to describe it? FRADKIN: Yeah. Today, we serve little over 30 percent of the Forbes 400 wealthiest Americans and, obviously, many other affluent families. And interestingly, Barry, you know, sometimes people think of Northern Trust in its wealth management business as focusing on — or serving multigenerational well-healed, you know, families. And that’s true, we certainly serve many of those. But there are many entrepreneurs in Silicon Valley, in New York, in Miami, in Dallas, in — all over the country and all over the world. And if there’s one thing I’ve learned in being here is that wealth is created in a lot of mysterious ways. And so, your — your reference to Instagram and so forth, I would say our clients are definitely low profile, but where they create their wealth emanates from every segment of the economy. It’s really a — a fascinating part of the privilege of being in this — this kind of role. RITHOLTZ: Let’s stay with that because I was just involved in a conversation recently about the amount of wealth that has been created over the past couple of decades. Wherever you look, especially in the United States, it seems that people are coming up with new ideas, new technologies, new just even business processes that if you go back to the 90’s, I don’t think people could have imagined the sort of things that are generating the massive amounts of wealth that we’ve seen. And — and I’m not even talking about NFTs or things like that, I mean, businesses with clients that are just doing tens of millions of dollars of — of revenue a year. FRADKIN: Well, I think the — the fascinating thing that I think we see is that wealth can be created in a lot of different ways. And I — and I think you’re right that as the world has sped up, the wealth creation has sped up, too. You know, to caricature it, it used to be you would start a business in your garage in Louisiana and, overtime, you would, you know, build a vacuum cleaner, whatever it happened to be. And you would start selling it from a store and, you know, it would — you know, you — you’d have a second store. And — and the next thing you know, you have a — a — a big business that you never envisioned having, and you could sell that company and — and create tremendous amount of wealth. Today, that phenomenon still absolutely happens, but it also happens with the power of the Internet that the pace at which companies in some industries can grow and accelerate has — has really multiplied. So, wealth creation, in some instances, is still a slow laborious step-by-step process. But in others, I don’t want to say it’s overnight, but it happens a lot faster with digitalization in the — the pace at which the world moves today. So, we — we see both phenomena, and that’s part of the fun and excitement of the American economy. And this certainly happens elsewhere in the world as well. RITHOLTZ: Quite interesting. So, let’s talk about how you guys had to operate during the lockdown. You mentioned this earlier. What were you doing when, you know, it became clear the country was shutting down in March of 2020? FRADKIN: It’s a great question, Barry. Well, we started like many other institutions with the safety of our clients and the safety of our employees. And it all happened relatively quickly in terms of shutting down offices to the bare minimum, getting people home, and making sure that they could function effectively from home. And if you go back to — and — and, by the way, we have 20,000 employees worldwide, so we were doing the same thing in Manila, in the Philippines as we were doing in London, as we were doing in Dublin, as we were doing in Houston, as we were doing in Las Vegas. And so I want you to think about the operational, and logistical, and infrastructural needs of pretty much all at the same time trying to get people out of the office, enable them to function effectively from home, still be able to serve our clients, and all the family and other issues that people were wrestling with. So, I would say the beginning of the pandemic was stressful. You know, we were working 24/7 trying to make sure that technology worked and people could still get cash and all those things. It has gotten to a much better, you know, I’ll call it normalcy in a strange sort of way. But the early days of the pandemic were — were challenging. We navigated through well, but it’s certainly not something that anyone had anticipated. RITHOLTZ: Really quite interesting. So, I’m assuming you guys have your offices, more or less, reopened. What are you going to do going forward? Is it going to be a hybrid model or is everyone back in the office or people working from home? FRADKIN: Our offices are open and — and really to different extents in different geographies, you know, which makes sense. The — the infection rates, hospitalization rates, all the metrics that we track are very different in different cities and countries around the globe. You know, in terms of where it goes in the future, I think the future of work and how people work is forever changed. You know, we always had a pretty flexible workforce and the ability to work from home and, you know, people’s — people’s lives and — personal lives and business lives had crossed over long ago that, as an employer, we had to be flexible. I think that’s going to be even more so coming out of the pandemic. People have gotten used to it. The technology has gotten better. Client expectations are different. And so, I think we will be in a — you know, what we — what we think of today as a hybrid model will be a normal model tomorrow. And that doesn’t mean everyone will work from home, but it certainly means a lot more flexibility for employees to inevitably juggle the — the conflicting needs of family and work life. And we’re well prepared for that. (COMMERCIAL BREAK) RITHOLTZ: So as investors, COVID was pretty much an exogenous shock. It — it came out the left field. How did the whole COVID crash and recovery compare to past crises, whether it’s 9/11 or dot-com implosion or the great financial crisis? How do you — how do you wrap your head around this one compared to ones from — from recent past? FRADKIN: You know, it’s — it’s a great question. And I think, Barry, my perspective would be that we often call events like the COVID-19 pandemic tail events or once in a lifetime events. And in some ways, they are and, in some ways, they aren’t. If — if I think about it through the prism of my career experience, we had the crash of October 1987. We’ve seen the collapses of things like Enron and WorldCom. We’ve seen September 11th. We’ve seen Bear Stearns go down. We had the global financial crisis of 2008 and, of course, the pandemic. And each time we call it a tail event, but at some point, we have to admit that there are a lot of tails. So, I want to take you back just to compare and contrast COVID-19 with 2008. I’ll give you this example. I want you to imagine it’s the end of 2007, and you’re presenting the 2008 plan for Northern Trust to our board. And you go to the board and you say, “Look, we expect our revenues to do this and our expenses to do that, and so forth and so on.” And one of the board members raises his or her hand and he says — he or she says, “Barry, that’s — that’s terrific. Sounds like a great plan for 2008.” But I — I — I just want to get your perspective. What happens if Bear Stearns collapses, Freddie, Fannie, Washington Mutual, Wachovia, Merrill Lynch, you know, et cetera, et cetera, Lehman? You know, the whole thing collapses in 2008. How will we perform? I think you’d — you know, I — I think if you had been CFO at that time, you would have said, “Well, you know, that’s just — that’s never going to happen,” but it did. And Northern Trust navigated through that exceptionally well. Not unscarred, but exceptionally well. If you take — if you fast forward from that paradigm to COVID-19, it’s very similar. You know, if — if we had been talking to our board the year before and put forward our plan, I think our board would have said, “Well, okay, you know, that sounds like a great plan. What happens if there’s a global pandemic in every office from which we operate is going to be shut down or substantially shut down? Everyone’s got to work from home on the same day globally.” And, by the way, it’s going to be for a year and a half or more. I’m quite confident you or we would have said, well, that — you know, that’s just not — you know, I don’t know what we’ll do. That’s not going to happen, but it did. And so, I think the — the lesson from these crises is that while they’re different every time, they happen a lot. And so, we have to think about our approach to business, our approach to research, our approach to preparing for the unanticipatable. And as I say, each — each of your examples, September 11th, and COVID, and 2008 are different, but they were all — they all featured substantial disruption, substantial unanticipatable disruption. And at Northern Trust and every other company around the world, you have to be prepared to be agile and adapt quickly. And — and that’s what we’ve been able to do pretty consistently over our 130 plus years of experience. RITHOLTZ: So, given that history and the fact that a big chunk of your clients are ultra-high net worth, how do you think about managing assets compared to what — I don’t know, let’s use the phrase “mass affluent,” that typical approach. Is this more about preserving wealth and it is striking at rich. These folks are, after all, already fairly wealthy. How does this specific demographic change and challenge the way you manage assets for them? FRADKIN: Well, I think, look, wherever one sits on the spectrum of wealth, they generally want to optimize their returns over time. And people have different risk preferences as you would expect. So to caricature it, if you come from nothing and you’ve done exceptionally well financially, you may — not always, but you may have a predisposition to have a stronger defensive component to your portfolio because you don’t want to end up back where you were. You know what it’s like not to have money, you have it, and you want to be defensive. On the other hand, there are people who whether they came from nothing or not, they’ve had tremendous success. They’ve seen the power of capitalism, and they want to not only do as well as they can, but keep going. So, we see things through the eyes of our clients across the continuum. What I would say is people in the ultra net — ultra-high net worth space, at least from my point of view, it’s not so much about they’re more defensive or more offensive. They have more flexibility for choice. They can be defensive because they’ve, you know, so to speak, got more than enough or they can lean in and be more aggressive because they have a bigger cushion than the rest of us. And our clientele is all ends of that spectrum. There’s no — the — the — the notion that some people have, well, once someone’s made a certain amount of money they’re — they’re just trying to preserve it. There are certainly clients that — that exhibit that behavior, but there are an equal number who want to optimize it and aren’t in a completely defensive mindset. So, it depends on the personality type. RITHOLTZ: Very interesting. One of the clichés of the industry is three generations from, you know, short tales to short tales, referring that generational wealth very often gets — I don’t want to say wasted, but frittered away irresponsibly or recklessly. Some people take too much risk. How do you manage around that? Do you — do you ever have families coming to you and say, “Hey, we want to leave money to the next generation, but we want to make sure they get it and that it’s not just, you know, Ferraris and — and weekends in Vegas.” FRADKIN: Yes, all the time. Again, every family is different. Every client is different but, you know, one thing to — one thing that I think is a little bit unfair in — in — not by you, but in the characterization that you refer to is this notion, well, you know, by the third generation it is, you know, frittered away. I think you — you have to remember a couple things. First, when — when we say it’s frittered away, the comparison point is often to someone who did the extraordinary. So if I started from nothing and created $1 billion — $1 billion of wealth, it’s a little unfair to say my kids or my grandkids, you know, they’re not as smart as I am because, you know, they didn’t do it, too. You know, People who have created extraordinary wealth have done so, by definition, it’s — it’s extraordinary, and it’s not reasonable. Even if you have bright, talented, you know, high-functioning kids, it’s not reasonable to assume that each generation is just going to — you know, mom made $1 billion. Mom’s kid made $2 billion and — and mom’s grandkid made — made $4 billion. You know, it’s — mathematically, that’s not a reasonable probability. That’s sad. There is definitely an art to optimizing wealth through the generations. And, of course, it starts in the home and how you raise kids and values and, you know, what you demand of them or not. But a lot of our clients do a great job of trying to steward their wealth, trying to educate their kids, trying to make use of family governance to — to help everyone understand how things work for the family. And so, each client is different, but as with most things, the more you put into it, the more you’re likely to get out of it. And for those who believe it’s an important responsibility to steward that wealth, pass it to future generations, educate those generations, make them or trying to help them be important members of society, they tend to get better outcomes than the rest of us. It’s a — it’s a very — it’s, you know, raising kids and money are two challenging vectors, but we see some great examples of people stewarding wealth through multiple generations not just the — the founder, so to speak. RITHOLTZ: Quite interesting. Let’s talk a little bit about what you call Goals Driven Wealth Management. Start out with what — what exactly is that. FRADKIN: Sure. Goals Driven Wealth Management at Northern Trust is the framework that — that we’ve devised to build personalized wealth plans for clients and it focuses on helping them achieve their individual goals with confidence. It provides a big picture of their wealth and transparent steps on how to manage and optimize wealth over time. So, Barry, one way to think about it is — and I’m being a little bit facetious, but just to make the point, it used to be in this industry that the starting point for how money might be managed was a function of your outlook on the market. You think equities are going to go up, et cetera, so you allocate more to equities. Goals Driven Wealth Management comes at investing through a different lens. The starting point is not so much our call on the markets though that will be important at some point. Our starting point in Goals Driven is what are you and your family trying to accomplish. Once we understand what you’re trying to accomplish and the assets you need to accomplish it, we can, in effect, back in to how to deploy those assets — in stocks, bonds, other asset classes — to give you the best probability of achieving your life goals over time. So, it’s really just a different starting point for how to think about creating an asset allocation that is most effective for you and your family. RITHOLTZ: So, let’s talk about that framework. And again, the question comes back, how different is it for the ultra-high net worth than for the merely wealthy or — or is there a lot of overlapping between the two different types of planning? FRADKIN: The process is really the same no matter where you are on the wealth spectrum. You and your family have goals, and whether you have $1 million, $100 million, $1 billion, $10 billion or whatever the number is, you have something you want to achieve over time. You plan to live to age 90 or 100. This is what you need to live in the style to which you want to be accustomed, and we do a variety of work to figure out, first of all, are you asset-sufficient, meaning under reasonable scenarios, do I have enough if I steward it effectively to live my life the way I want to live it over time? And that happens whether you have, you know — again, whatever the number is, $500,000 or $10 million. The difference, Barry, comes in with the flexibility and options that you have as you create more wealth. So, the starting point is the same: understand your goals, understand your needs, and let’s figure out an asset allocation to give you the best chance to get there. What becomes different for people in the ultra-high net worth space relative to the rest of us is that they can take advantage of more planning techniques. They can take advantage of more techniques to optimize philanthropy. They can take advantage of gifting to future generations and so forth, and so the process is the same. But as you accumulate more money, in general, you have more flexibility on some other things you can do. The ultra-high net worth also have more investment optionality. They have the ability to invest in asset classes like private equity hedge fund and so forth where they may have to trade off some liquidity for a period of time. Those of us who are lower on the spectrum may not be able to endure that in a down market. Those who have more wealth can — can oftentimes weather that storm more. So, the process is the same, but you get more flexibility as your wealth grows. (COMMERCIAL BREAK) RITHOLTZ: We’re going to talk more of about alternative investments in a little bit. I want to stick with a couple of interesting things I read in some Northern Trust research. One of the things that I kind of knew, but I didn’t realize it was this intense was the number of clients you see relocating to new states. It’s been a record volume. Some of that is pandemic related, some of it predates the pandemic. How does that challenge the planning process? How different is it from state-to-state when it comes to things like tax planning? You mentioned trust. You mentioned philanthropic issues. What happens when somebody picks up from one state and relocates to another state? FRADKIN: Yeah, it’s an interesting question. Look, clients relocating has always been with us. If you look at Northern Trust history, we are headquartered in Chicago in the middle of the United States. It’s cold here in the winter, lovely city, but it does get rather cold at wintertime. And often times, as people age and, you know, their kids finish school and so forth, they opt for better environments in the wintertime, so they may want to be in Florida or Arizona or Texas or California. So, one phenomenon we’ve always seen is migration from state-to-state. That phenomenon is also impacted by state tax rates, by state tax considerations. And so, both, because of the pandemic and for tax reasons and lifestyle reasons, were continuing to see movement across state lines. And so, you know, I think the — the message to urban planners is taxes do matter to people. It’s not necessarily the only factor, but even affluent people will think through where do they want to be, where do they want to live, what environment to they want to be in, and what’s the tax impact for their clients. And that phenomenon is — is alive and well. It’s always been there, but it — it does seem to be important as different states consider different policies, if you will. People — residents make their choices, and so it’s — it’s — it’s a phenomenon that’s very much at the front of mind for many of our clients. RITHOLTZ: Interesting. You mentioned taxes. There was a new administration came to town this year, and the expectations are there will be some sort of change in tax policy, potentially including increases in capital gains and increases in estate taxes and, in some cases, fairly substantial increases. How do you plan around that? And since nothing is known for certain in advance what an administration is — is going to do, how do you make decisions in — in the face of that uncertainty? FRADKIN: Yeah, I think our starting point on behalf of our clients is to prepare rather than predict. So, let me give you an example that — that you referred to. The newly proposed tax law change would change the lifetime gift and estate tax exemption amount from $11.7 million down to $5 million. And what this means for people that built up substantial wealth is that if the proposal goes forward as — as offered, you have until the end of this year if you want to make a gift to your heirs of — if you can afford to and if you want to, make a gift of $11.7 million. And again, I can’t tell you whether this will happen. But if we just think about the financial impact here, if you have enough capacity to do that and you choose to do it, you can take $11.7 million out of your estate today, get it to your kids, grandkids, whoever it happens to be tax-free as opposed to, on January 1st, if the law goes forward only as — as offered, you can only do $5 million. And what that means is the difference between — sorry to get, you know, numbers all over — but the difference between 11.7 and five, which is $6.7 million will be taxed, you know, when you die at a — at a high rate. And so we have literally thousands of clients all across the country and each one we’re working with individually to evaluate what’s their financial circumstance, what do they want to do, do they want to make the gift. And by the way, this — this — this tax law change may or may not happen, so people have to make a choice without knowing for sure whether it’s going to happen. I think the bottom line though is people are looking at this carefully. They’re studying it and they’re trying to prepare and make judgments about what might happen and what’s best for their individual circumstance. But tax law changes matter and — and we are in the business of helping our clients figure out what’s the best choice for them with the information that we have. RITHOLTZ: Quite, quite interesting. So, we talked a little bit about alternatives earlier. Let’s address that a bit. There seems to be a growing appetite for all manner of — of alternative investments given that stocks and bonds are all a little bit pricey. Let’s start with private equity. What — what sort of demand is there from your clients for private equity. And — and how do you guys respond to the question of potentially better returns in exchange for far less liquidity? FRADKIN: Sure. Look, investment has become much more granular over the decades and again, just to be facetious, you know, large-cap stocks versus high quality bonds, you know, 40 years ago. Today, clients think in terms of small-cap, mid-cap, large-cap, value, international, emerging markets, private equity, and thousands of flavors of private equity; hedge fund the same thing. So, in the quest for optimizing returns, clients and their professional money managers, Northern Trust included, have searched for different asset classes to combine together to give people the best chance to — to achieve their objectives. Private equity clearly has been in the aggregate — there are winners and losers in private equity, but has been a asset class that has done well for many. There are tradeoffs with private equity, particularly in terms of liquidity. But I would say amongst our clientele, the appetite for private equity and private equity, as a more normalized asset class, continues to grow. It’s not the right asset class for every client, but for clients who have the capacity, the risk tolerance and so forth, it — it definitely can play an important role in a client’s portfolio. And increasingly, we’re seeing more use of private equity today than we did say 10 years ago. RITHOLTZ: What about venture capital or hedge funds, two totally different entities from both each other in private equity, what’s the demand like for those products? FRADKIN: Demand exists for venture capital and for hedge funds as well. Again, the devil is in the detail, not all hedge funds are created equally. The — the — the fees that they charge, the performance that they’ve delivered can differ substantially, but there is again this same notion of I want to diversify my portfolio. I want a — a range of options and so-called alternative investments. Whether you call it private equity, venture capital, hedge funds seem to continue to be growing in appeal to our clientele. RITHOLTZ: What about crypto and things like blockchain and Ethereum? There seems to be a lot of real interest in the space. Are — are you finding your client bases crypto-curious? FRADKIN: I would say the demand for crypto is more muted amongst our clientele than some of what you read in the public press. And that doesn’t mean we have examples of clients who have invested in crypto and done exceptionally well in a right time. But I would say, in general, if I had to caricature it, I would say that crypto is still an evolving asset class that is misunderstood by many. And I think most are treating it carefully. And the ones that are making crypto investments are viewing it more as a — more as a roll of the dice than a rational analytical view of what crypto is trading at today and what it’s going to trade it tomorrow. They view it as a bit of a roll the dice. They may jump in a little bit, but they understand that what goes up can also go down. So, I would say amongst our clientele overall, crypto is still not widely in use. RITHOLTZ: So, we mentioned briefly the market is certainly pricier than it was five or 10 years ago. How do you manage around stocks and bonds neither of which are inexpensive? FRADKIN: Yeah, look, I think for many of our clients, the market does go up, the market got does go down. And one of the great features of our — the goals-driven methodology that we use for clients is that we build a portfolio such that after a lot of analytical work to evaluate their goals and so forth that enables them to endure and not have to sell in a down market. We — we create something that’s called a portfolio reserve. I would liken it to the moat around your castle. Some people like a wide deep moat, some people need a narrower and less deep mode, but think of that as a high-quality fixed income. If the stock market goes down, your — your bonds are still fine. You can still pay your mortgage. Life is good. You can wait until the market goes up or — or returns to normal. So, the one thing we know on behalf of our clients is markets go up and down, and so you have to plan and prepare for that. And so, it’s very difficult to know. You know, again using the COVID-19 example, I think they’re a lot of people who might have argued the markets are going to crash, you know, everyone’s working from home and we can’t get the essentials, and people don’t want to go to the grocery store, and yet the market went up dramatically. So, we try and take a long-stewarded view and help our clients plan and prepare themselves so that when the market does go down, they can get through and — and not have to take adverse steps and sell in dire circumstance. And that’s been very helpful for our clients. RITHOLTZ: So, in terms of forward return expectations, does that — and historically low-bond yields, high equity prices tend to suggest low returns going forward, does that work its way into the planning process or is that really more of an academic theory? FRADKIN: No, it absolutely works its way into the planning process because our starting point is what needs does a client have over the near-term for financial resources. We — we got to make sure they can buy their groceries, and pay their mortgage, and we have to deploy assets against those goals. But once, in working with a client, we figured out the right mix of assets to — to enable them to — to afford those goals over a reasonable period of time, we then have to deploy the rest of the portfolio toward so-called risk assets, equities, private equity, hedge funds, venture — whatever the asset class. And in so doing, we have to bring our judgment about risk and return expectations for each of those asset classes. So, our view of asset classes and what they’re likely to bring over the relatively short-term is still an important part of the process. RITHOLTZ: So, what do you tell investors who say, “You know, I’m really not happy with my muni bond portfolio. It’s barely thrown off two or 2.5 percent.” Investors are always seen to be looking for more yield. How do you respond to that group of clients? FRADKIN: Yeah, I think it — my — our response is really you have to remember what you’re trying to do with that muni bond portfolio. No one is saying it’s a great high returning asset class, but that’s not its role. Its role is to be — I’m making this up, Barry, but generally, the role of that muni bond portfolio is to provide you with certainty, security, confidence, and not have to worry about the other part of your portfolio, let’s just call that equities gyrating up and down. So, of course, people want their muni bonds or their high-quality fixed income to return as much as it can, and it’s our job to try and help people achieve that. But I think you always have to come back to what role is this trying to play. And for most clients, it’s trying to play a role of stability, and reliability, and consistency, and that’s the paramount feature. And in providing that consistency and — and stability and predictability, they give up a little bit of return on that asset class, but they’re trying to get that elsewhere with their equities, private equity, and so forth. So, you had — you had discussed previously, hey, you know, it’s up to us to make the most of a low rate environment. What does that mean? Get — how does one make the most of a low rate environment? FRADKIN: Well, I think, you know, low — low rates create — low interest rates create challenges and opportunities. Maybe two simple ways to think about it are, one, on the challenge side, if you’re living on a fixed income as assets reprice to — and you’re reliant on bonds — your bonds to provide income, the lower rates make the yield on those bonds lower, and so that’s bad from, you know, how much cash flow I have to — to fill my needs. The flipside to that is that when rates are very low, if you want to, if it’s appropriate, if it’s thoughtfully done, you can use credit rather than liquidating stocks to — you know, if you want to buy a new toy, so to speak, a boat, whatever it happens to be, one way to do that is to sell stocks in your portfolio and buy the — you know, whatever it is you want to buy. Another way is to let those stocks keep working on your behalf and, because rates are so low, take advantage of credit. Take a loan, buy that boat and — or whatever it happens to be and pay it back over time. So low interest rates, you know, how can have different conflicting phenomenon, opportunities on the credit side and headwinds on the bond investment site. RITHOLTZ: So — so how do you incorporate all this inflation chatter to — to your planning? We’ve started to see rates tick up the 10-year as — as recording this just about 1.5 percent. And I know there’s an irony in saying that rates are all the way up to 1.5 percent, which historically is incredibly low. How do you figure inflation into your modeling and — and thinking about the future? FRADKIN: Yeah, well, we use multi-scenario modeling. The — the reality is no one knows and so you have to, you know, the — the prognosticators will — will have a view. Some — some believe inflation is here and is going to continue. Others argue it’s so-called transitory. And the truth is we don’t know. We’ll — we’ll find that out tomorrow, so to speak. And so as we work through planning with our clients, we generally are running multiple scenarios, low inflation, medium inflation, high inflation. And we’re trying — as we — as we help clients make decisions, we’re trying to make the best judgment we can at a given point in time. But that’s why you — you really have to — be you have to plan for multiple scenarios and bring agility to your process because we don’t know whether the stock market is going up or down. We don’t know whether inflation will be higher or lower. We have a view. We can have probabilities. But as we’ve seen, whether it was with 2008 or COVID, we — everyone can be wrong. And so, you have to plan and adapt and leave yourself a buffer for when you are wrong, and hopefully it’s not — not catastrophic. RITHOLTZ: So, I know I only have you for a little bit of time. Let me jump to my favorite questions that I ask all of my guests, starting with tell us what you’re streaming these days, what’s keeping you entertained at home, either on Netflix or Amazon Prime or — or wherever. FRADKIN: Well, I’ve — I’ve been working hard so I — I can’t say I’ve — I’ve made great use of Netflix. But what I have just started and this will show you, Barry, how far behind I am is I’ve just started Ted Lasso. So I’m behind the rest of the world, but that’s what I’m on right now. RITHOLTZ: All right. Well, well, you’ll — I could tell you this much, you will enjoy it and — and enjoy catching up with us. What about mentors? Who helped to shape your career? FRADKIN: You know, I’ve had a lot of mentors at Northern Trust over the years, people who were senior to me and people who weren’t, but I learned from everyone. I think when I think about mentors, for me, it’s less about people with whom I work and maybe it’s my interest in history. But I try and learn from people who have overcome insurmountable odds, the Mahatma Gandhis, the Martin Luther Kings, the Winston Churchills, the Vaclav Havels, the Abraham Lincoln. And there’s so much wisdom that I see in people like that because they really faced incredible circumstances and worked through them generally to good outcomes. And so there — those great thinkers are probably the people I’ve learned the most from as I wouldn’t call them mentors to me, but I’ve certainly read about all of them and — and learned a lot from each of them. RITHOLTZ: Let’s talk about books. What are you reading right now and what — what are some of your favorites? FRADKIN: You know, I think in keeping with that theme of mentors over periods of time that interest me, I’ve really enjoyed “The Splendid and the Vile” by Eric Larson, which is about Churchill and the blitz of World War II. And — and again, it — it helps you — it helps me to see just how dire the circumstances were and what he and others had to navigate through. The other book that I’ve dusted off recently, I read some time ago, but I think in view of the pandemic, it seemed interesting to me was “The Hot Zone” by Richard Preston, which has nothing to do with the pandemic, but there are parallels to what we’re dealing with, and it was sort of a gripping — a gripping book if you have time for a good read. RITHOLTZ: Sounds interesting. What sort of advice would you give to a recent college grad who is interested in a career in either investment management or finance? FRADKIN: Yeah, I think, Barry, I’d offer a — a — a couple of themes on this. And I — I don’t know that I narrowed these themes to an interest in investments or finance, although I think they do overlap. But I’d start by saying, it probably be easiest place to get my view there would be to go to YouTube and I — I gave a commencement address at the University of Illinois Chicago and tried to formulate those themes for — for young people. But a — but a few that come to mind at least through my lens are comfort is the enemy of accomplishment. If you want to be the best you can be, you can never be satisfied with where you are. You’ve got to push, push, push and make yourself better each and every day in everything you touch. I think a couple of the other themes that would come to me would be in — in the same vein, we see this in Northern Trust all the time. Excellence is not a part-time job. For people who want to be excellent, who want to do the best job for our clients and our shareholders, you can’t be excellent only when it’s convenient, only when you want to do it or only when you feel like it. You’ve — you’ve got to — excellence is an all-in phenomenon. And then probably the — the — the last thing that comes to my mind is persevere beyond your accomplishments. It’s not what you did yesterday, it’s — you can be proud of what you’ve accomplished. But again, you want to be better going forward. And so be proud of who you are, be proud of your grades, and your — your school, and your degrees, and all that sort of stuff, but those are what you did, you know, two years ago, five years ago, 10 years ago whatever it happens to be, keep pushing forward to be the best you can be. So, persevere beyond your accomplishments. RITHOLTZ: And our final question, what do you know about the world of investing today you wish you knew 35 years ago when you were first starting with Northern Trust? FRADKIN: That is a long list, Barry, but I think what I would say is you don’t have to be right on everything and sometimes being right is more about luck and timing than it is about specific analytical acumen. Uninspiring choices in a bull market can turn out just fine, and well-reasoned ideas in a down market can turn out to be not so good. So, get the direction right more often than not and you’ll be just fine. RITHOLTZ: Really good advice. Thank you, Steve, for being so generous with your time. We’ve been speaking with Steve Fradkin. He is the President of Northern Trust Wealth Management. If you enjoy this conversation, well, be sure and check out any of the other 388 prior discussions we’ve had over the past seven years. You can find those wherever you normally find your favorite podcast, iTunes, Spotify, wherever. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. You can sign up for my daily suggested reading list at ritholtz.com. Check out my regular column at bloomberg.com/opinion. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack that helps put these conversations together each week. Paris Wald is my Producer. Michael Batnick is my Head of Research. Atika Valbrun is our Project Manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Steve Fradkin appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureNov 29th, 2021

It"s a job seeker"s market out there — here are 4 hiring trends applicants should know

Job applicants have more power to negotiate for benefits and perks, and more hiring managers are taking vaccination status into consideration. Employers are increasingly flexible about remote work and relocation requests.Klaus Vedfelt/Getty Images One silver lining of the pandemic is that it's created a job seeker's market. Into the new year, job applicants will have more power to negotiate for desired work benefits. Know that shiny perks don't always equal a positive work culture, so tread carefully and ask questions. We're right in the middle of what's been called "The Great Resignation," with a record number of workers saying goodbye to their employers. According to a recent report from the United States Bureau of Labor Statistics, 4.3 million Americans (or around 2.9% of the workforce) quit their jobs in August. This is a startling figure, reflective of the plethora of reasons why people are leaving their jobs, including family or work/life balance issues, general job dissatisfaction, a desire for more remote work flexibility, or other significant life changes. The good news is that if you're looking to shift jobs, you're in luck. It's a job seeker's market out there now — and that's going to continue well into 2022. Job seekers rejoice: You got thisOne silver lining of the pandemic is that it's put hopeful employees in the driver's seat, says Olga Etkina, the founder of Black Swan Careers. "Companies are going through their very own reckoning, as they have to come to terms with whether or not they are doing enough to keep employees happy and attract new talent," she explained. But what does this mean for you? You've got room to negotiate all of the different must-haves on your dream job list. Do you want to work remotely two days a week? Ask for better pay? More flexibility on your hours? Whatever would make you the happiest (and the most successful!) in your position, don't be afraid to ask for it. "Whether you're a rock star with top companies on your resume looking for the perfect next opportunity, an underdog just waiting for your moment to shine, or a career changer wishing for someone to take that chance on you, 2022 will be a year everyone can and should take advantage of this heavy candidate-sided market," Etkina added. Vaccination status will be factored While the COVID-19 vaccination continues to be a heated political debate, it's a no-brainer requirement for many employers. Many companies, particularly in healthcare and education, are already requiring all employees to be fully vaccinated, notes Amanda Augustine, a career expert for TopResume. And according to at least one recent survey, 33% of hiring managers will eliminate resumes that don't include a COVID-19 vaccination status. In fact, Augustine wouldn't be surprised if sharing your vaccination status on your job-search materials, such as your resume and your LinkedIn profile, becomes standard practice in 2022. (A quick search on LinkedIn shows that many people are already doing it!) "While this information is personal and it's completely up to you, the job seeker, to decide whether or not you feel comfortable disclosing such details, it's important to note that a growing number of employers expect to see it," she continued. "If you're not comfortable disclosing your vaccination status, target positions where this may be a non-issue, such as fully remote positions or listings that don't mention such a requirement."Perks will be plentiful — but proceed with cautionSince job seekers are leading the game right now, companies are doing all they can to attract ideal candidates. As Etkina explains, many are relying heavily on highlighting all of their perks, and while perks can be great, employees should tread carefully. Good perks do not always translate to a positive culture, so make sure you ask questions. "Often candidates conflate ping pong tables, free lunch, and happy hours as a sign of good culture. And why wouldn't they? The attraction factor is so high when it comes to things that are so overtly fun and shiny," she said. "Too often I see candidates accept job offers because they envision themselves hanging out and playing ping pong with peers, happily eating lunch with their coworkers, and rubbing shoulders with senior leadership during company-sponsored happy hours." But it doesn't always work that way — company culture is born from how you're treated, not how many nap pods there are, Etkina cautions. Before you get too excited about perks, as the following questions: How does the company handle work-life balance? How do they address burnout? Do employees feel psychologically safe? How does the company prioritize creating a culture that ensures all employees feel seen, heard, and valued? Location, location, location (doesn't matter anymore)Historically, many top jobs have been focused only in major metropolitan areas, like New York City, Los Angeles, Chicago, San Francisco, and others. However, as remote work becomes increasingly popular and companies forgo creating a physical headquarters, Augustine says we'll see greater distribution of these professionals across the United States."More careers will become location-agnostic, allowing many of us who have sampled remote work during the pandemic to continue working from home on a full-time basis," she said. "Before you consider relocating for work, tap into your network and scour online job boards to see what available opportunities offer a virtual location or speak to your boss about transitioning to permanent remote work."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 29th, 2021

4 REITs Your Black Friday Shopping Cart Must Have

As consumers are expected to splurge this holiday season amid rising wages and considerable savings, don't forget to add some REIT stocks that house retailers or support e-retailing. Americans celebrated nature’s bounty on Thanksgiving Day. Now, Black Friday will kick off the annual holiday shopping season, giving retailers a chance to enjoy abundant sales.  And why not? With rising income backed by wage compensation and hefty savings accumulated during the pandemic, consumers are ready to splurge.According to the National Retail Federation (“NRF”) Chief Economist Jack Kleinhenz, “The unusual and beneficial position we find ourselves in is that households have increased spending vigorously throughout most of 2021 and remain with plenty of holiday purchasing power.”In fact, the projections from NRF paint an encouraging picture, with holiday retail sales — excluding restaurants, automobile dealers and gasoline stations — anticipated to climb 8.5-10.5% from the prior year to a total of $843.4-$859 billion, suggesting the highest holiday retail sales on record. Online and other non-store sales are estimated to jump 11-15% to a total of $218.3-$226.2 billion, up from the $196.7 billion reported during the same period last year.Even though e-commerce is expected to remain a significant contributor, people are expected to opt for a more traditional holiday shopping experience this year and shift back to in-store shopping. In anticipation, the hiring for positions in bricks-and-mortar stores and warehouse and distribution centers have gained momentum.This optimism would translate into greater benefits for the real estate sector – particularly the REITs. Higher retail sales — whether online or at physical stores — bring huge profits for these REITs. Increased footfall at malls and shopping center would create further demand for space. Online sales too need real space for storage and efficient distribution.In addition, retailers are utilizing the last-mile stores as indispensable fulfillment and distribution centers to serve the dense population close by and outperforming pure e-commerce players on delivery times and cost efficiency. Also, curbside pick-up, combined with click-and-collect options, are likely to continue gaining attention in the present environment and even in the post-Covid era. And REITs making efforts along these lines are likely to add competitive advantage in current times.Stock PicksTo capitalize on this trend, we have handpicked four stocks for your Black Friday cart. Aside from having solid fundamentals, these better-ranked REITs have high chances of market outperformance over the next 1-3 months. These stocks are witnessing positive estimate revisions too, reflecting analysts’ upbeat view.We suggest investing in Simon Property Group SPG, which is a behemoth in the retail REIT industry and enjoys a portfolio of premium retail assets in the United States and abroad. The adoption of an omni-channel strategy and successful tie-ups with premium retailers have been aiding Simon Property Group. It is also tapping growth opportunities by assisting digital brands to enhance their brick-and-mortar presence, as well as capitalizing on buying recognized retail brands in bankruptcy.Additionally, Simon Property is exploring the mixed-use development option, which has gained immense popularity in recent years among those who prefer to live, work and play in the same area. Moreover, with a solid balance-sheet strength and available capital resources, SPG looks poised to ride this growth curve and bank on opportunities emanating from market dislocations.In the third quarter, Simon Property recorded increased leasing volumes, occupancy gains, shopper traffic and retail sales. Also, management raised the 2021 funds from operations (FFO) per share guidance to the $11.55-$11.65 range, up from the $10.70-$10.80 band projected earlier, suggesting an increase of 85 cents at the mid-point. Simon Property announced a 10% sequential hike in its fourth-quarter 2021 dividend. The company will now pay out $1.65 per share compared with the $1.50 paid out earlier. The increased dividend will be paid out on Dec 31 to its shareholders of record as of Dec 10, 2021.Simon Property Group currently carries a Zacks Rank #2 (Buy). Over the past month, the Zacks Consensus Estimate for 2021 FFO per share witnessed upward revision of 3.8% to $11.28, reflecting analysts’ bullish outlook.Another retail landlord is Federal Realty Investment Trust FRT, a North Bethesda, MD-based retail REIT boasting of a portfolio of premium retail assets — mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles — along with a diverse tenant base, both national and local.Federal Realty has strategically selected first-ring suburbs of nine major metropolitan markets. Due to the strong demographics and the infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on open-air format and “The Pick-Up” concept has poised it well to lure tenants even amid the current health crisis. Furthermore, with the resumption of the economy, widespread vaccination and solid consumer spending, the retail REIT is poised to benefit from its superior assets in premium locations and experience improving leasing environment.Currently, FRT carries a Zacks Rank #2 and has a long-term growth rate of 8.4%. Moreover, for 2021, the stock has seen the Zacks Consensus Estimate for FFO per share being revised 4.9% upward to $ 5.36 over the past month. This also suggests an increase of 18.6% year over year.Our next pick is an industrial REIT stock — Rexford Industrial Realty, Inc. REXR — which is focused on the acquisition, ownership and operation of industrial properties situated in Southern California in-fill markets. Recently, Rexford announced shelling out $125.9 million to acquire five industrial properties in the prime in-fill Southern California submarkets.With these buyouts, Rexford’s 2021 acquisition activity has reached $1.4 billion. Also, more than $300 million of acquisitions are under contract or have accepted offer. Southern California is considered a highly valued industrial property market with supply constraints in the United States.Presently, Rexford carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised 2.5% upward over the last 30 days. This also indicates a projected increase of 23.5% year over year.The cart will be incomplete without another industrial REIT. A promising one on the shelf is Bellevue, WA-based Terreno Realty Corporation TRNO, which targets functional buildings at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points.Terreno Realty recently shelled out $7.7 million to purchase an industrial property in Los Angeles, CA, as part of its acquisition-driven growth strategy. Backed by expansion efforts, TRNO is well poised to enhance its portfolio in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estate.Terreno Realty currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised marginally upward to $1.72 over the last 30 days. This calls for an increase of 19.4% year over year.Here’s how the above stocks have performed in the past three months.Image Source: Zacks Investment ResearchNote: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Simon Property Group, Inc. (SPG): Free Stock Analysis Report Federal Realty Investment Trust (FRT): Free Stock Analysis Report Terreno Realty Corporation (TRNO): Free Stock Analysis Report Rexford Industrial Realty, Inc. (REXR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 26th, 2021

Primerica (PRI) Stock Up 15% YTD: Is There More Room to Run?

A compelling portfolio, strong market presence and a sturdy financial position continue to drive Primerica (PRI). Shares of Primerica, Inc. PRI have gained 14.9% year to date (YTD), outperforming the industry’s increase of 5.4%. With a market capitalization of $6.1 billion, the average volume of shares traded in the last three months was 0.1 million.Primerica boasts a stockholder return of 200% over the last five years, outperforming the S&P 500 Insurance Index’s 56%.A compelling portfolio, strong market presence and a sturdy financial position continue to drive Primerica, which beat earnings estimates in two of the last four quarters, while missed the same in the other two, the average surprise being 3.26%. Image Source: Zacks Investment ResearchReturn on equity in the trailing 12 months was 22.6%, better than the industry average of 11.4%, reflecting PRI’s efficiency in utilizing shareholders’ fund.   Can PRI Stock Retain the Momentum?The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 0.3% and 0.8%, respectively, in the past 30 days, reflecting analysts’ optimism.The Zacks Consensus Estimate for 2021 indicates a year-over-year improvement of 22.8% on 20.7% higher revenues. The consensus estimate for 2022 indicates a year-over-year improvement of 12.8% on 11.3% higher revenues.Primerica believes that it is well poised to cater to the middle market's increased demand for financial security due to its strong business model. After acquiring an 80% stake in TeleQuote, Primerica introduced the Senior Health segment that added senior health offerings to its financial solutions for the middle-income families.Primerica boasts being the second-largest issuer of term life insurance coverage in North America with solid demand for the protection products, driving sales growth and policy persistency. It expects 12% growth in adjusted direct premiums in the fourth quarter of 2021. While Investment and Savings Products sales are estimated to rise between 20% and 25% in the fourth quarter, the same is expected to increase 40% in 2021.With sales normalizing, Primerica guides sales in the Term Life segment to increase more than 10% from the pre-pandemic levels in 2021. Margin is expected between 19-20% in the fourth quarter of 2021.Zacks Rank #3 (Hold) PRI’s U.S. mortgage distribution business is also gaining traction. Thus, the company remains focused on expanding distribution.Primerica’s leverage ratio has been improving, while the times interest earned has increased over the last two years. PRI scores strongly with credit rating agencies.Primerica remains focused on driving value by expanding its business and generating capital to return to its stockholders. The board of directors recently approved a $275 million repurchase program through next year and raised dividend 10 times in the last nine years.Primerica is well poised to progress as evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all the three factors.Stocks to ConsiderSome better-ranked stocks from the insurance space include American Equity Investment Life Holding AEL, Athene Holding ATH and Old Republic International ORI.American Equity sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for 2021 and 2022  earnings has moved up 3.9% and 5.1% in the past 30 days. American Equity delivered a four-quarter average earnings surprise of 31.49%.The Zacks Consensus Estimate for 2021 earnings of Athene, carrying a Zacks Rank #2 (Buy), has moved up 9.9% in the past 30 days and implies 123.7% year-over-year growth. Athene delivered a four-quarter average earnings surprise of 46.12%.Old Republic International sports a Zacks Rank #1. The Zacks Consensus Estimate for 2021 and 2022  earnings has moved up 11.5% and 12.5% in the past 30 days. Old Republic delivered a four-quarter average earnings surprise of 54.63%.Shares of AEL, ATH and ORI have gained 32.6%, 101.2% and 25.2%, respectively, year to date.  Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Equity Investment Life Holding Company (AEL): Free Stock Analysis Report Primerica, Inc. (PRI): Free Stock Analysis Report Old Republic International Corporation (ORI): Free Stock Analysis Report Athene Holding Ltd. (ATH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 26th, 2021

Altria (MO) Benefits From Pricing, Oral Tobacco Expansion

Altria (MO) strives to expand on! amid consumers' rising preference for low-risk tobacco alternatives. Moreover, strong pricing for tobacco products bodes well. Amid dwindling cigarette sale volumes, renowned tobacco company — Altria Group, Inc. MO — manages to stay afloat on the back of prudent pricing strategies. Consumers’ rising health consciousness has compelled tobacco companies, including Altria, to explore opportunities in low-risk alternatives. Altria’s oral tobacco offering on! has been doing well. Let’s delve deeper.Pricing PowerStrong pricing for tobacco products is supporting Altria. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases due to the addictive quality of cigarettes. During third-quarter 2021, higher pricing supported revenues across the Smokeable, Oral Tobacco and Wine categories. Higher pricing aided adjusted operating companies income (OCI) across all the segments.Rising Popularity Oral Tobacco ProductsAltria, through its subsidiary Helix Innovations, has full global ownership of on! — a popular tobacco-derived nicotine (TDN) pouch product. Management believes that on! is a worthwhile addition to Altria’s smokeless portfolio as oral TDN products are gaining popularity in the United States, owing to their low-risk claims. Management continues to expand the manufacturing capacity and the commercial availability of the product. As of Sep 30, 2021, Helix expanded its U.S distribution of on! to 110,000 stores. During the third quarter, on! contributed 3% to the total oral tobacco category, up 1 percentage point sequentially. The company submitted pre-market tobacco product applications (PMTA) for the entire on! portfolio to the FDA, which is awaiting approval. Altria is also undertaking efforts to expand in the cannabis industry.Reduced Cigarette Sales & Other HeadwindsRegulations pertaining to the manufacturing, marketing and sales of cigarettes has been a headwind for companies in the tobacco space. This includes self-critical advertisements and precautionary labels. Cigarette sales, in general, are being affected by anti-tobacco campaigns and increased consumer awareness regarding the harmful impacts of tobacco consumption. During third-quarter 2021, Altria’s domestic cigarette shipment volumes fell 12.9% year over year, mainly driven by the industry’s rate of decline and trade inventory changes.Altria’s right to sell IQOS, a heat-not-burn device, is currently under regulatory purview. In September 2021, the International Trade Commission (“ITC”) imposed a ban on importing and issued cease-and-desist orders (CDO) on IQOS, Marlboro HeatSticks and infringing components. However, Altria disagrees with the ITC’s decision as it believes that IQOS does not infringe any of the plaintiff’s patents. The ITC’s decision is currently under a 60-day review. If the decision is not rejected post review, the CDO will take effect on Nov 29, 2021, making all IQOS and Marlboro HeatSticks products unavailable in the marketplace.Wrapping UpAmid headwinds surrounding cigarette sales, Altria’s efforts to expand in the oral tobacco space looks prudent. The company is expected to keep gaining from well-chalked pricing strategies. The legal entanglements related to IQOS are expected to be settled soon. Altria’s subsidiary, PM USA, is preparing to comply with the ITC’s orders and is designing contingency plans.Efforts Undertaken by Other Tobacco PlayersPhilip Morris International Inc. PM is acclaimed for developing leading low-risk alternatives. The company is progressing well with its business transformation, with smoke-free products generating nearly 30% of the company’s adjusted net revenues. PM is well placed toward becoming a majority smoke-free company by 2025.Philip Morris is engaged in manufacturing IQOS. The marketing and technology sharing agreement between Altria and Philip Morris, on the sale of IQOS in the United States, was approved by the U.S. Food and Drug Administration in 2019. Although IQOS faces challenges in the United States, the product is doing well internationally. PM is also on track with plans of generating at least $1 billion in annual net revenues from the "Beyond Nicotine" products by 2025. The initiative leverages its expertise in life sciences, inhalation technology and natural ingredients among others.Kentucky-based tobacco company — Turning Point Brands, Inc. TPB — is engaged in manufacturing and marketing a wide range of products under three segments, namely Zig-Zag, Stoker's and NewGen Products. The company’s Stoker's product category has been gaining from rising same-store sales of MST. TPB has been investing to strengthen its NewGen segment, which has low-risk offerings like vaping products. Solace and Nu-X are some of the well-performing brands in this category.Turning Point Brands submitted Premarket Tobacco Applications to the FDA for products in the vapor segment. TPB is also undertaking measures to enhance shareholders’ returns. Last month, the company expanded its existing share repurchase authorization by an additional $30.7 million.Vector Group Ltd. VGR is engaged in manufacturing and selling cigarettes in the United States. Some of the renowned cigarette brands of the company are Liggett, Pyramid and Grand Prix. VGR is also engaged in the real estate business, where it provides residential real estate brokerage, relocation, sales and marketing services.During third-quarter 2021, Vector Group registered operating-income growth in the tobacco business. The Liggett brand continued to perform well in terms of market share. VGR is progressing well with its marketing and infrastructural growth strategies for the tobacco business. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Altria Group, Inc. (MO): Free Stock Analysis Report Philip Morris International Inc. (PM): Free Stock Analysis Report Vector Group Ltd. (VGR): Free Stock Analysis Report Turning Point Brands, Inc. (TPB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 26th, 2021

President’s letter

Knowledge is Power, Motivation, and the beginning of Understanding! I publish this issue to dispel myths, recognize excellence and illuminate people to the advantages available to organizations through inclusion. There is untapped economic opportunity to be created and taken advantage of through inclusion. Whether you are a minority business owner, a “diverse” person, or an ally, you can do so much more to resolve economic disparities and drive growth. Inclusion also brings more value to shareholders,….....»»

Category: topSource: bizjournalsNov 26th, 2021

Invesco (IVZ) Down 2.1% Since Last Earnings Report: Can It Rebound?

Invesco (IVZ) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Invesco (IVZ). Shares have lost about 2.1% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Invesco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Invesco Q3 Earnings Top Estimates, Revenues & AUM RiseInvesco's third-quarter 2021 adjusted earnings of 77 cents per share outpaced the Zacks Consensus Estimate of 73 cents. The bottom line grew 45.3% from the prior-year quarter.Results reflected an improvement in revenues and solid growth in AUM balance. However, a rise in operating expenses was a headwind.On a GAAP basis, net income attributable to common shareholders was $330.1 million or 71 cents per share, up from $191.7 million or 41 cents per share a year ago.Revenues & Expenses RiseGAAP operating revenues were $1.75 billion, growing 16.9% year over year. Adjusted net revenues increased 22.1% to $1.33 billion.Adjusted operating expenses were $771.9 million, up 13% from the prior-year quarter.Adjusted operating margin was 42.1%, up from 37.2% a year ago.AUM Balance ImprovesAs of Sep 30, 2021, AUM was $1.53 trillion, which soared 25.5% year over year. Average AUM at third-quarter end totaled $1.54 trillion, up 27.7%.The company witnessed long-term net inflows of $13.3 billion during the quarter, up from $7.8 billion in the prior-year period.Strong Balance SheetAs of Sep 30, 2021, cash and cash equivalents were $1.77 billion, up 33% sequentially. Further, long-term debt amounted to $2.08 billion.As of Sep 30, 2021, the credit facility balance was zero.OutlookManagement expects net savings related to its cost-saving program of $200 million by 2022-end. Of this, more than $150 million is expected to be achieved in 2021 (almost 74% of the targeted $200 million has already been achieved).Total one-time transaction costs for the realization of the cost-saving program are projected to be $250-$275 million. Of this, $190 million have already been incurred. The company expects the remaining transaction costs of $60-$85 million to be incurred through the end of 2022.Going forward, management expects money market fee waivers to remain in place for the foreseeable future until rates begin to recover to more normalized levels.Performance fee in the fourth quarter of 2021 is expected to be in line with the company's experience across the first three quarters of the year.For fourth-quarter 2021, total operating expenses are expected to be relatively flat sequentially, assuming no change in markets and foreign exchange levels as of Sep 30, 2021. However, a modest rise in marketing-related expenses is expected as spend generally increases in the fourth quarter.The company anticipates outsourced administration costs (which is reflected in property, office and technology expenses) to increase by $25 million on an annual basis or $6 million per quarter. To offset this, there will likely be a corresponding increase in service and distribution revenues, resulting in a minimal impact on operating income.For the fourth quarter, the non-GAAP effective tax rate is expected to be 23-24%.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresAt this time, Invesco has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Invesco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Ltd. (IVZ): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksNov 25th, 2021

Boyd (BYD) Down 7.9% Since Last Earnings Report: Can It Rebound?

Boyd (BYD) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. A month has gone by since the last earnings report for Boyd Gaming (BYD). Shares have lost about 7.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Boyd due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Boyd Gaming Q3 Earnings Beat Estimates, Increase Y/YBoyd Gaming reported solid third-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate as well as rising year over year. Both the metrics surpassed their respective consensus mark for the sixth straight quarter.Q3 Earnings and RevenuesIn the quarter under review, adjusted earnings per share were $1.30, outpacing the Zacks Consensus Estimate of $1.21 by 7.4%. The metric increased significantly from 38 cents reported in the prior-year quarter.Quarterly revenues of $843.1 million beat the consensus mark of $837 million by 0.7%. The top line increased 29.3% on a year-over-year basis.Total adjusted EBITDAR during the reported quarter amounted to $360.6 million compared with $259.9 million in the prior-year quarter. Property adjusted EBITDAR margins came in at 42.8%, up from 39.8% reported in the year-ago quarter.Segmental DetailLas Vegas LocalsDuring the third of 2021, revenues in the segment amounted to $231.3 million, up 35.2% year over year. The segment’s adjusted EBITDAR totaled $125.4 million, up 58.9% from $78.9 million reported in the year-ago quarter. During the quarter under review, adjusted EBITDAR margin rose more than 809 basis points (bps) year over year to 54.2%.Downtown Las VegasDuring the quarter, revenues in the segment rallied 140.2% from the prior-year quarter’s figure to $42.1 million. Adjusted EBITDAR was $13.2 million against ($1.5) million reported in the year-ago quarter. Adjusted EBITDAR margin during the third quarter came in at 31.4% against (8.6%) reported in the prior-year quarter.Midwest and South SegmentDuring the third quarter, revenues in the segment increased 22.9% year over year to $569.7 million. Adjusted EBITDAR amounted to $222.1 million, up 21.7% from $182.5 million reported in the year-ago quarter. Adjusted EBITDAR margin during the quarter came in at 39% compared with 39.4% reported in the prior-year quarter.Operating HighlightsDuring third-quarter 2021, the company’s total operating costs and expenses came in at $619.9 million compared with $525.2 million reported in the year-ago quarter. During the quarter, selling, distribution and administration expenses came in at $91.2 million compared with $85.9 million reported in the prior-year quarter.Balance SheetAs of Sep 30, 2021, the company had cash on hand of $ $570.9 million compared with $334.5 million as of Jun 30, 2021. Total debt during the third quarter amounted to $3.38 billion compared with $3.39 billion in second-quarter 2021.Backed by the solidarity of its balance sheet, the company authorized a new share repurchase program worth $300 million. The initiative was a testament to the company’s long-term growth prospects and balanced approach in allocating capital to growth investments, deleveraging and returning free cash flow to shareholders. The company stated availability of $61 million under its previous repurchase program.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 11.16% due to these changes.VGM ScoresAt this time, Boyd has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Boyd has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boyd Gaming Corporation (BYD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 25th, 2021

Why Is Hasbro (HAS) Up 5.1% Since Last Earnings Report?

Hasbro (HAS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Hasbro (HAS). Shares have added about 5.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Hasbro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Hasbro Q3 Earnings & Revenues Beat EstimatesHasbro reported solid third-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The bottom line outpaced the consensus mark for the fifth straight quarter, while the top line beat the same for the second consecutive quarter.The company reported adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.73. In the prior-year quarter, the company had reported adjusted earnings of $1.88 per share.In the quarter under review, net revenues were $1,970 million that beat the consensus mark of $1,957 million. Moreover, the top line rose 11% on a year-over-year basis.Brand PerformancesDuring the fiscal third quarter, the Franchise Brand reported revenues of $882 million, up 9% year over year. The upside was backed by growth in MAGIC: THE GATHERING, MY LITTLE PONY and TRANSFORMERS.During the quarter, Partner Brands’ revenues fell 10% year over year to $ 366.7 million. Although the brand registered growth in Hasbro products for the Marvel portfolio, it was more than offset by declines in other properties.Revenues at Hasbro Gaming amounted to $281.9 million, up 18% from the prior-year quarter’s levels. Its total gaming category revenues increased 21% year over year to $ 658.6 million. The uptick was primarily led by growth in tabletop and digital gaming including DUNGEONS & DRAGONS as well as games such as THE GAME OF LIFE, CONNECT 4 and GUESS WHO.Emerging Brands’ revenues during the fiscal third quarter increased 15% year over year to $177.5 million owing to growth in PJ MASKS, PEPPA PIG and GI JOE products.Revenues from TV/Film/Entertainment surged 58% year over year to $261.9 million. The segment’s revenues benefited from increased deliveries in scripted, unscripted as well as animated television and film.Segmental RevenuesDuring first-quarter fiscal 2021, the company had changed its reportable segments to Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment.In the fiscal third quarter, net revenues from the Consumer Products segments fell 3% year over year to $1,282.7 million. Adjusted operating margin came in at 16.4% compared with 17.2% reported in the prior-year quarter.During the quarter under review, the Wizards of the Coast and Digital Gaming segment’s revenues totaled $360.2 million, up 32% from $273.4 million reported in the year-ago quarter. The segment benefited from robust performance of MAGIC: THE GATHERING and DUNGEONS & DRAGONS as well as licensed digital gaming. The segment’s adjusted operating margin came in at 44.3% compared with 51.8% reported in the year-ago quarter.Revenues in the Entertainment segment increased 76% year over year to $ 327.1 million. The segment’s adjusted operating margin came in at 12.9% against (1.9%) reported in the prior-year quarter.Operating HighlightsDuring the fiscal third quarter, Hasbro's cost of sales (as a percentage of net revenues) came in at 30.9% compared with 34.3% in the prior-year quarter. Selling, distribution and administration expenses — as a percentage of net revenues — were 18.4% compared with 18.3% in the prior-year quarter.Balance SheetCash and cash equivalents as of Sep 26, 2021 were $1,181.2 million, up from $1,132.4 million on Sep 27, 2020. At the end of the reported quarter, inventories totaled $544.1 million compared with $540 million in the year-ago period. As of Sep 26, 2021, long-term debt came in at $3,977.4 million compared with $4,777.8 million as on Sep 27, 2020.The company’s board of directors announced a dividend of 68 cents per common share. The dividend is payable on Nov 15, 2021, to shareholders of record at the close of business as of Nov 1.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -25.97% due to these changes.VGM ScoresCurrently, Hasbro has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hasbro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hasbro, Inc. (HAS): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksNov 25th, 2021

Are You Looking for a High-Growth Dividend Stock? Essa Bancorp (ESSA) Could Be a Great Choice

Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Essa Bancorp (ESSA) have what it takes? Let's find out. All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.Essa Bancorp in FocusHeadquartered in Stroudsburg, Essa Bancorp (ESSA) is a Finance stock that has seen a price change of 15.73% so far this year. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 2.77%. In comparison, the Financial - Savings and Loan industry's yield is 2.49%, while the S&P 500's yield is 1.34%.Looking at dividend growth, the company's current annualized dividend of $0.48 is up 2.1% from last year. Over the last 5 years, Essa Bancorp has increased its dividend 3 times on a year-over-year basis for an average annual increase of 7.39%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Essa Bancorp's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.ESSA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $1.73 per share, representing a year-over-year earnings growth rate of 4.85%.Bottom LineInvestors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that ESSA is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy). Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ESSA Bancorp, Inc. (ESSA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 25th, 2021

Reasons to Add Alliant Energy (LNT) to Your Portfolio Now

Alliant Energy (LNT) makes a strong case of investment, given its estimates revision, strong earnings surprise history and systematic investments to strengthen its infrastructure to serve customers efficiently. Alliant Energy Corporation’s LNT regular investments to add clean power generation assets to its generation portfolio, expansion of the customer base and strong liquidity make it a solid choice for investment in the utility space.Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Growth ProjectionsThe Zacks Consensus Estimate for 2021 earnings per share has moved up 1.9% in the past 60 days. The Zacks Consensus Estimate for earnings for 2021 and 2022 indicates year-over-year growth of 8.6% and 4.2%, respectively.Surprise History and Earnings GrowthAlliant Energy delivered an average earnings surprise of 4.4% in the last four quarters.Alliant Energy’s long-term (three to five years) earnings growth is projected at 6.1%.Return on Equity & Dividend YieldReturn on Equity (ROE) indicates how efficiently Alliant Energy is utilizing shareholders’ funds to generate returns. At present, Alliant Energy’s ROE is 11.01%, higher than the industry average of 9.26%.Currently, Alliant Energy has a dividend yield of 2.78% compared with the Zacks S&P 500 composite’s 1.33%.Regular Investments & Emission ReductionAlliant Energy announced plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to the generation portfolio. Alliant Energy has plans to strengthen electric and natural gas distribution systems as well as make regular investments to strengthen infrastructure. Alliant Energy has plans to invest $5.8 billion between 2022 and 2025.Alliant Energy voluntarily announced the goal of retiring all existing coal-fired generation units by 2040, with an objective of lowering emissions from 2005 levels by 50% and 100% within 2030 and 2050, respectively. In total, Alliant Energy will replace 2 gigawatts of coal-fired generation with clean energy sources over the next few years.Price PerformanceOver the past 12 months, Alliant Energy’s shares have returned 10.9% compared with the industry’s 5.2% growth.Image Source: Zacks Investment ResearchOther Stocks to ConsiderOther top-ranked stocks in the same sector include Otter Tail Corporation OTTR, California Water Service Group CWT and Dominion Energy D, each holding a Zacks Rank #2.Otter Tail, California Water Service, and Dominion Energy delivered an average earnings surprise of 27.9%, 10.8%, and 2.4%, respectively, in the last four quarters.The Zacks Consensus Estimate for 2021 earnings per share of Otter Tail, California Water Service, and Dominion Energy has moved up 0.8%, 7.6%, and 0.3%, respectively, in the past 60 days.Year to date, shares of Otter Tail, California Water Service, and Dominion Energy have returned 67%, 22.3%, and 2.2%, respectively, compared with the Zacks Utility Sector’s 6.7% growth. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dominion Energy Inc. (D): Free Stock Analysis Report Alliant Energy Corporation (LNT): Free Stock Analysis Report California Water Service Group (CWT): Free Stock Analysis Report Otter Tail Corporation (OTTR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 25th, 2021

Roger Sugar Reports Fourth Quarter 2021 Results, Solid Performance from the Maple and Sugar Segments, Driven by Steady Demand from Customers

MONTREAL, Nov. 25, 2021 (GLOBE NEWSWIRE) -- Rogers Sugar Inc.'s ("RSI", "our," "we", "us" or "Rogers") (TSX:RSI) today reported fourth quarter fiscal 2021 results with consolidated adjusted EBITDA of $24.8 million and $91.0 million for the current quarter and the year, respectively. "We are pleased with the results achieved in the fourth quarter in both of our business segments, as we met our volume targets with improved overall sales margins, said Mike Walton, President and Chief Executive Officer of Rogers and Lantic Inc. "In 2021, our team delivered strong financial results as we successfully navigated through unfavorable crop conditions in Alberta and the continued impacts of a global pandemic on customer demand and supply chain. This performance is a testament to the collaboration and dedication of our employees and of our operational flexibility to ensure customer needs were met." "Over the next year, we anticipate improved financial performance for both of our business segments, supported by normal operating conditions in Alberta and a return to a more traditional and profitable sales mix. This will allow us to continue to create value for our shareholders." Fourth Quarter 2021 Consolidated Highlights(unaudited) Q4 2021(2)   Q4 2020(2)   FY 2021(3)   FY 2020(3)   Financials ($000s)                 Revenues 243,231   246,212   893,931   860,801   Adjusted gross margin(1) 31,020   40,065   120,811   126,118   Adjusted EBITDA(1) 24,786   31,231   91,022   92,259   Net earnings 16,140   12,952   47,527   35,419   per share (basic) 0.16   0.13   0.46   0.34   per share (diluted) 0.15   0.12   0.44   0.34   Adjusted net earnings(1) 9,620   14,551   33,866   35,245   Adjusted net earnings per share (basic)(1) 0.09   0.14   0.33   0.34   Trailing twelve months free cash flow(1) 45,505   46,537   45,505   46,537   Dividends per share 0.09   0.09   0.36   0.36                     Volumes                 Sugar (metric tonnes) 214,753   225,396   779,505   761,055   Maple Syrup (thousand pounds) 11,678   13,181   52,255   53,180     (1) See "Cautionary statement on Non-GAAP Measures" section of this press release for definition and reconciliation to GAAP measures.   (2) The fourth quarter of fiscal 2021 consists of 13 weeks and the fourth quarter of 2020 consists of 14 weeks   (3) Fiscal 2021 consists of 52 weeks and fiscal 2020 consists of 53 weeks       The fourth quarter and the 2021 fiscal year consist of 13 weeks and 52 weeks respectively, while the comparative periods for last fiscal year consisted of 14 weeks and 53 weeks respectively. The impact of the additional week of fiscal 2020 on volume for the Sugar segment and the Maple Segment is approximately 15,000 metric tonnes of sugar and 1 million lbs of maple syrup; Consolidated adjusted EBITDA for the fourth quarter of 2021 was $24.8 million, down $6.4 million from the same quarter last year, driven by lower adjusted EBITDA in the Sugar segment including approximately $6.0 million of non-recurring variances, partially offset by higher adjusted EBITDA in the Maple segment; Adjusted EBITDA for the 2021 fiscal year was $91.0 million, down 1.3% from the same period in 2020, largely as a result of lower adjusted EBITDA in the Sugar segment, partially offset by higher adjusted EBITDA in the Maple segment;   Sales volume in the Sugar segment decreased by 4.7% to 214,753 metric tonnes in the fourth quarter of 2021, including the 2020 extra week impact of approximately 15,000 metric tonnes making volume higher than the same quarter last year. For the whole 2021 fiscal year, volume was 779,505, an increase of 2.4% compared to 2020, despite one less week in 2021;   Adjusted EBITDA in the Maple segment was $4.2 million in the fourth quarter, an increase of $0.9 million or 27.8% from the same quarter last year as a result of lower operating costs, lower administration and selling expenses as well as lower distribution costs; Free cash flow for the trailing 12 months ended October 2, 2021 was $45.5 million, slightly lower than the prior year balance of $46.5 million; In the fourth quarter of 2021, we distributed $0.09 per share to our shareholders for a total amount of $9.3 million; On August 6, 2021, the Canadian International Trade Tribunal issued a decision to pursue its order against dumped and subsidized sugar from ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaNov 25th, 2021

Curtiss-Wright (CW) Hikes Share Buyback Authorization by $100M

Curtiss-Wright (CW) rewards shareholders with another $100 million share buyback program, thus exhibiting strong fundamentals and financial strength. Shares of Curtiss-Wright Corporation CW rallied 3.9% to attain $139.66 on Nov 23, following the company’s announcement to hike its shares repurchase program by $100 million. The share price appreciation reflects investor optimism surrounding the move.  Curtiss-Wright’s announcement to repurchase an additional $100 million shares is in sync with the company’s commitment to increase its shareholders’ total return. With the current authorization, Curtiss-Wright can now make share repurchases worth $350 million in 2021. The initiative highlights the financial strength of the company. It also reflects the highest level of annual share repurchase commitment in Curtiss-Wright’s history.Details of the ProgramCurtiss-Wright anticipates completing the repurchase program of the new authorization by the end of 2021 via a 10b5-1 program. The $100 million share repurchase program will be conducted concurrently with the previously authorized $50 million to be repurchased in 2021. It follows the conclusion of the recent $200 million opportunistic program, which the company had implemented previously.The company also has the authority to repurchase up to $250 million worth of shares, following the conclusion of the current $100 million share repurchase program. Quite obviously, such initiatives by Curtiss-wright will be accretive to its earnings per share going forward. The move also reflects the company’s disciplined capital allocation strategy and its ability to generate additional cash flow for distribution.Strong Fundamentals Supporting Shareholder-Friendly MovesCurtiss-Wright’s focus on returning cash to shareholders is backed by a disciplined and balanced capital allocation strategy. Notably, since 2016, the company has consistently repurchased shares, courtesy of a strong cash flow generation. It has repurchased more than $630 million in share repurchases since 2016, while meeting its capital requirements for growth.The company has been rewarding shareholders with increased share repurchases activity and dividends quite regularly. Evidently, in September 2021, Curtiss-Wright received an approval to hike its share repurchase authorization by $400 million, thus taking the authorization to repurchase shares up to $550 million in the 2021-2023 period. Earlier, in May 2021, management hiked its quarterly dividend by 6% to 18 cents per share.Such a solid distribution strategy is backed by its ability to generate strong revenues and free cash flow. Evidently, Curtiss-Wright witnessed a solid 12% year-over-year improvement in third-quarter 2021 adjusted sales. Meanwhile, cash flow from its operating activities worth $155.8 million at the end of September 2021, reflected a massive improvement from year-ago figure of $3.8 million.Looking ahead, Curtiss-Wright expects to witness sales growth of 7-9% during 2021. Additionally, it anticipates generating free cash flow in the range of $330 million to $360 million during 2021 via its financial discipline. Such solid fundamentals are likely to enable Curtiss-Wright to smoothly continue with its solid capital deployment strategy in the days ahead.Peer MovesRewarding shareholders with share buybacks is one way to highlight the financial strength of the company. In this context, other companies in the same sector that have deployed their capital in share repurchasing activity are:In November 2021, Northrop Grumman NOC announced that it has entered into an accelerated share repurchase (“ASR”) agreement with Goldman Sachs & Co. LLC to repurchase $500 million of Northrop Grumman’s common stock. The ASR is in addition to previously planned repurchases, including open market share repurchases. With this move, Northrop Grumman is now targeting greater than $3.5 billion of repurchases in 2021.Interestingly, Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate by 11.8%. Shares of NOC have returned 17.5% in the past one year.Raytheon Technologies RTX repurchased $1 billion shares during the third quarter of 2021. The company currently expects to generate free cash flow of approximately $5 billion compared with the earlier range of $4.5-$5 billion in 2021, which is likely to provide a further boost to its share repurchase program.Raytheon’s third-quarter 2021 adjusted earnings per share of $1.26 outpaced the Zacks Consensus Estimate by 17.8%. In the past one year, RTX stock has gained 17.4%.L3Harris Technologies LHX generated $1,988 million in adjusted free cash flow during the first nine months of 2021. The company has returned $3,493 million to shareholders through $2,875 million in share repurchases and $618 million in dividends.L3Harris Technologies’ third-quarter 2021 adjusted earnings was $3.21 per share, which surpassed the Zacks Consensus Estimate by 1.6%. Shares of LHX have gained 13.1% in the past one year.Price MovementIn the past one year, shares of Curtiss-Wright have gained 11.7% compared with the industry’s growth of 11.3%.Image Source: Zacks Investment ResearchZacks RankCurtiss-Wright currently carries a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northrop Grumman Corporation (NOC): Free Stock Analysis Report CurtissWright Corporation (CW): Free Stock Analysis Report L3Harris Technologies Inc (LHX): Free Stock Analysis Report Raytheon Technologies Corporation (RTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 24th, 2021

Nordstrom (JWN) Q3 Earnings Lag Estimates, Revenues Beat

Nordstrom's (JWN) Q3 results gain from greater Nordstrom banner sales, solid online show and improved store traffic. Yet, supply chain headwinds and higher labor cost remain concerns. Nordstrom, Inc. JWN reported third-quarter fiscal 2021 results, wherein the bottom line missed the Zacks Consensus Estimate while the top line beat the same. Both the metrics rose year over year. The results gained from improved merchandise, innovative brand partnerships, solid e-commerce growth and sturdy performance at its Nordstrom banner store. The company is making efforts to optimize inventory levels and improve Nordstrom Rack’s performance.It is progressing well with the merchandising strategy and has recently partnered with Fanatics and ASOS in a bid to offer a broader assortment in new and existing categories. The ASOS brand will now be available on nordstrom.com and in two stores. The company intends to expand in-store ASOS offering with a market rollout launch this spring. Nordstrom is on track with plans to integrate the network of stores and digital platforms for this year’s holiday season.JWN slumped more than 23% in the after-market session on Nov 23. This might be due to supply-chain disruptions, high labor costs and weakness in its Nordstrom Rack off-price stores. Consequently, the Zacks Rank #3 (Hold) stock has declined 15.5% in the past three months, underperforming the industry’s fall of 7.3%.Image Source: Zacks Investment ResearchQuarterly HighlightsNordstrom posted adjusted earnings of 39 cents per share, up 77.3% from the year-ago reported figure of 22 cents. Yet, the metric missed the Zacks Consensus Estimate of 56 cents per share.Total revenues grew 17.7% year over year to $3,637 million and beat the Zacks Consensus Estimate of $3,536 million. This marked the fifth straight quarter of sequential top-line growth. Net sales jumped 18% year over year to $3,534 million, while the metric declined 1% from third-quarter fiscal 2019. Credit Card net revenues grew 18.4% from the prior-year quarter to $103 million.For third-quarter fiscal 2021, net sales for the Nordstrom brand rose 11% year over year to $2,343 million and improved 3% from third-quarter fiscal 2019. Better store traffic and increased consumer spending aided quarterly growth. Strength in home, active, designer, and beauty categories remained upsides, with products including dresses, men's suiting and dress shirts, dress shoes, and makeup witnessing a sequential improvement.Sales for the Nordstrom Rack brand advanced 35% year over year to $1,191 million but declined 8% from third-quarter fiscal 2019. This was mainly due to low inventory levels in premium brands and core categories such as women's apparel and shoes. Nordstrom Rack is known for offering premium brands at affordable prices. That said, management is making efforts to strengthen Rack's brand awareness and drive traffic. The company launched a new marketing campaign, namely More Reasons to Rack, in September. It expects gains from this endeavor in the fiscal fourth quarter, with a significant improvement in first-half fiscal 2022.Nordstrom also remains focused on improving supply chain and inventory, accelerating delivery speed, expanding in-store shopping as well as other omni-channel capabilities like same-day and next-day pickup along with increasing labor and fulfillment velocity and throughput in distribution and fulfillment centers to drive top-line growth at both Nordstrom and Nordstrom Rack.Digital sales fell 12% year over year but rose 20% from the third quarter of fiscal 2019. For the fiscal third quarter, digital sales represented 40% of net sales compared with 54% in the year-ago period.Nordstrom's gross profit margin expanded 230 basis points (bps) year over year to 35% for the reported quarter. This substantial growth resulted from lower markdowns and leverage from higher net sales. The metric also expanded 80 bps from third-quarter fiscal 2019 on the back of reduced buying and occupancy costs as well as improved merchandise margins.Ending inventory grew 13% from third-quarter fiscal 2019, owing to forward receipts in order to support early holiday sales and partly offset supply chain backlogs.Selling, general and administrative (“SG&A”) expenses — as a percentage of sales — expanded 230 bps year over year to 34% for the fiscal third quarter due to higher labor cost, which was somewhat offset by robust sales growth. The metric also expanded 260 bps from third-quarter fiscal 2019 due to higher fulfillment and labor costs, offset by gains from the resetting of cost structures in 2020.Earnings before interest and taxes (“EBIT”) of $127 million reflected growth of 19.8% from $106 million in the year-ago quarter. The increase was mainly the result of higher sales volume and expanded merchandise margins, which somewhat offset elevated labor cost. EBIT declined $66 million from third-quarter fiscal 2019 due to higher fulfillment and labor costs, offset by gains from the resetting of cost structures in 2020.Other FinancialsNordstrom ended third-quarter fiscal 2021 with a strong balance sheet. Available liquidity as of Oct 30, 2021 was $867 million, including $267 million of cash and cash equivalents. It had long-term debt (net of current liabilities) of $2,851 million and total shareholders’ equity of $359 million.As of Oct 30, 2021, the company provided $277 million of net cash for operating activities and spent $361 million as capital expenditure.Nordstrom, Inc. Price, Consensus and EPS Surprise Nordstrom, Inc. price-consensus-eps-surprise-chart | Nordstrom, Inc. QuoteFiscal 2021 OutlookDespite persistent supply chain issues and higher labor cost, management retained its fiscal 2021 view. The company continues to anticipate revenue growth of more than 35%. It still expects an EBIT margin of 3-3.5% compared with the previously mentioned 3%. Nordstrom predicts supply chain disruptions to persist in the next year.For the fiscal fourth quarter, the company envisions significant gross margin improvement on a two-year basis driven by lower promotional activity and higher regular price sell-through. SG&A expense related to fulfillment and labor costs is likely to remain high in the fiscal fourth quarter.Here's How Other Stocks FaredWe have highlighted three top-ranked stocks in the Retail - Wholesale sector, namely, Boot Barn Holdings BOOT, Tractor Supply Company TSCO and Costco COST.Boot Barn Holdings — the lifestyle retailer of western and work-related footwear, apparel and accessories — currently sports a Zacks Rank #1 (Strong Buy). Shares of the company have rallied 48.5% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Boot Barn Holdings’ sales and earnings per share (EPS) for the current financial year suggests growth of 54.4% and 183.3%, respectively, from the year-ago period. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average.Tractor Supply Company, a rural lifestyle retailer in the United States, presently carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of the company have gained 18.6% in the past three months.The Zacks Consensus Estimate for Tractor Supply Company’s sales and EPS for the current financial year suggests growth of 19% and 23.9%, respectively, from the year-ago period. TSCO has an expected EPS growth rate of 9.6% for three-five years.Costco, which operates membership warehouses, carries a Zacks Rank #3 at present. The company has a trailing four-quarter earnings surprise of 7.7%, on average. Shares of Costco have gained 19.6% in the past three months.The Zacks Consensus Estimate for Costco’s sales and EPS for the current financial year suggests growth of 9.6% and 9.7%, respectively, from the year-ago period. COST has an expected EPS growth rate of 8.7% for three-five years. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tractor Supply Company (TSCO): Free Stock Analysis Report Nordstrom, Inc. (JWN): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 24th, 2021

Why HP (HPQ) is a Great Dividend Stock Right Now

Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does HP (HPQ) have what it takes? Let's find out. Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.HP in FocusHP (HPQ) is headquartered in Palo Alto, and is in the Computer and Technology sector. The stock has seen a price change of 30.91% since the start of the year. The personal computer and printer maker is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.41% compared to the Computer - Mini computers industry's yield of 1.51% and the S&P 500's yield of 1.33%.Looking at dividend growth, the company's current annualized dividend of $0.78 is up 0.6% from last year. HP has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.20%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. HP's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.Earnings growth looks solid for HPQ for this fiscal year. The Zacks Consensus Estimate for 2021 is $4.03 per share, representing a year-over-year earnings growth rate of 6.33%.Bottom LineFrom greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, HPQ is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold). Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 24th, 2021

GreenWood Investors 3Q21 Commentary: Defense, Offense & Conviction

GreenWood Investors commentary for the third quarter ended September 2021, titled, “Defense, Offense & Conviction.” Q3 2021 hedge fund letters, conferences and more When Defense Misfires “Offense wins games. Defense wins championships.” This past quarter, much of my curiosity has been focused on the differences between offense and defense. Given I’ve spent little time watching […] GreenWood Investors commentary for the third quarter ended September 2021, titled, “Defense, Offense & Conviction.” if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more When Defense Misfires “Offense wins games. Defense wins championships.” This past quarter, much of my curiosity has been focused on the differences between offense and defense. Given I’ve spent little time watching team sports, it’s been an interesting exploration. As my mind was occupied by defining an offensive playbook for our two coinvestments, we took our eyes off the ball of our protective, defense-oriented portfolio activities. The performance in the quarter was impacted by a 4% headwind generated by one particular short, which was the primary reason our fund underperformed indices in the quarter. While it was a painful lesson, we immediately evolved our short process in order to prevent our defensive measures from ever hurting our performance to such an extent going forward. Cutting to the chase, the performance in the quarter for the Global Micro Fund was -7.7% net (+30.5% YTD), and this compares to our benchmark MSCI ACWI index returning -1.1% in the quarter (+11.5% YTD). Without any FX headwinds, euro-denominated Luxembourg fund returned -3.3% net (+39.4% YTD). Separate account composites had similar returns, as Global Micro strategy returned -8.1% net (+15.0% YTD) and our longest-running and long-only Traditional accounts returned -6.8% net (16.5% YTD). The Builders Fund I returned -5.2% net in the quarter (+84.5% YTD) driven partially by foreign exchange. Builders Fund II, which was launched in the quarter, returned +3.0% net (+3.0% YTD). Aside from the one short mentioned, our returns were also impacted by corrections at Superdry PLC (LON:SDRY) and Peloton Interactive Inc (NASDAQ:PTON), each taking away roughly 2% from our performance in the quarter. They are both experiencing very different situations right now in the aftermath of Covid, but both are pressing their offense strategies with increased vigor. We remain undeterred with Superdry despite popular skepticism on the brand’s turnaround. Such perspectives look mismatched with a reinvigorated influencer strategy targeting a whole new generation, which have just driven same-store-sales to positive territory on a two-year stack. This is ahead of a pivotal autumn-winter season, when its jackets, coats and sweaters have traditionally shined. Having missed last winter due to Covid, we are excited to see the new product resonate with an entirely new base of consumers. We recently followed the Chairman and CEO’s insider buys, and purchased more shares on weakness. We continue to be encouraged by the progress made; and for a slightly longer discussion on where our thoughts are on Superdry, click here to see a tweet thread. Peloton has experienced a round trip of home workout demand back to pre-covid levels. Thus, while it is launching new products and new geographies, and retains an industry-leading engaged base of 6.2 million exercisers with low monthly subscription churn, this position will have to return to old fashioned marketing to continue on its path towards its incredibly ambitious goal of impacting 100 million users’s fitness routines every month.. With its customer satisfaction, as measured by the Net Promotor Score, remaining one of the highest, if not the highest, in the world, we would not bet against this heavily engaged cult of growing endorphin-filled users. We believe the company still has a very significant market opportunity to both attack and define. Revisiting The Defense Playbook “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” Warren Buffett Stretching the offense and defense analogies over to investing, this past year has rewarded risk-taking (offensive) strategies, particularly those that are furthest out on the risk curve. But over the long-term, value-oriented investing wins the championship. That means taking a conservative underwriting approach to investment opportunities and maintaining a defensive posture when everyone else is doing the opposite. In our opinion, that also means running a short book, which allow us to remain opportunistic in periods of greater stress. It is not a good time to be reducing a defensive posture, in our opinion. Over the first 11 years of GreenWood’s existence, we have almost never been idea-constrained. Rather, we have been only constrained by the capacity we have to analyze the large opportunity set. That has typically meant, aside from the earliest years, we have had minimal cash left over. Given we have gravitated towards misunderstood assets and areas neglected by robotic index funds, not only does this portfolio tend to not carry a large cash balance, but it has exhibited more volatility than an index. Accordingly, carrying a short book is essential for us to be able to remain opportunistic in periods of stress. And quite frankly, our defense track record could use some improvement. While this defensive posture paid off in 2008, 2011, and 2018, we had few opportunistic shorts going into 2016 and 2020, right when we needed them. I’m personally committed to improving on that 3-2 market defense track record. I’m also committed to lowering any significant portfolio tilt towards specific factors, as our fundamental research capabilities are not able to be matched on a macroeconomic scale. There are too many factors and estimates to know anything on a large scale with any degree of certainty. For us, conviction is the most important function of an asset manager. It was with that intention we have been carrying a full short book ever since late 2020. And that short book largely paid off over the first half of this year, as the current environment has proved to be fertile in finding over-valued, value-less businesses. In fact, most of these shorts underperformed the market so quickly and so dramatically, that short book turnover caused Chris and I to run on a faster and faster treadmill throughout this year. When we found the short that ended up causing us so much pain in the quarter, it sounded too good to be true. It was a perfect offset to some of our chunkier portfolio factor exposures, but even more, it became clear this was not only a terrible business model, but it was likely a fraud. As Chris and I dug further into the business, there was a never-ending string of yarn that we kept pulling, and the more we pulled, the more damning the evidence was on the founder, company and target markets. In that excited process, we failed to appreciate the risk posed by the meme-trading phenomenon, in the assumption that an Italian company was unlikely to get caught up in the retail trading frenzy that has generated so many distortions elsewhere. Bypassing that debate proved to be our mistake, as the less liquid nature of the stock meant that it was more easily manipulated higher for a few months. As it was getting squeezed, I took action to eliminate that portfolio risk, even knowing that the stock would eventually go to zero. And in the wake of that experience, we also exited other shorts that had largely run their course, but that posed some possible retail trading risk. In our post-mortems, that are published on our investors-only research area, we identified one of the problems we were trying to solve for was the treadmill we found ourselves on. Because each piece of incremental evidence made it more and more compelling, we actually didn’t pause to have a proper bull-bear debate, which is what we have done for every other position. We had put too much pressure on ourselves to maintain a timely short book, and in many ways that papered over the obvious truth that the borrow was hard to obtain and liquidity was not accommodative. We revised our ranking framework to ensure there is a significantly higher bar for less liquid shorts in the future. Furthermore, we decided that any “gaps” in needed short exposure would more easily be filled immediately with index funds that could directly help offset some of the chunkier factor risks to our portfolio, namely European value stocks. We don’t intend to hold these index hedges forever, but believe it will help take pressure off of us to prematurely add new shorts to the portfolio. We have a lot of candidates in the backlog, but we are determined to ensure that we get the timing right as opposed to just the company thesis and factor exposure. At their core, our defensive moves should first do no harm. This analogy mirrors perhaps the most quoted Buffett lesson about rule number one, noted above. In that vein, our current short portfolio is comprised of large, liquid index constituents with very low short interests, cheap borrows, and are largely well-loved. Similar to most of our short positions in the past, they also have mounting liabilities as decades of unconscious behaviors or corruption have eroded the core values of the businesses. We recently published our research on two newer positions on our investor-only research site. These shorts have multiple catalysts over the next few quarters, that we believe, will cause both a material impact to their financials while also possibly downgrading the market’s behavioral narrative. More Conscious Than ESG “Sustainability is built into our business model. If we are focused on the long term, there is no conflict between profitability and the interests of stakeholders. If you are focused on the short term, there is. It’s that simple!” Sir Martin Sorrell Most importantly, these two businesses that we are short have some deeply unconscious features. While each case is different, this means that we’ve found evidence of corruption or deliberate sales of defective or toxic products for decades prior to being discontinued. All of these behaviors are only now catching up to these companies and present material downside risks to these businesses that have historically been run for short-term profit maximization as opposed to long-term value creation or innovation. These are the kinds of companies that are causing the ESG movement to gain major traction around the world. But while we applaud action being taken on protecting the environment, the ESG movement is not solving the root of the problem. The movement is addressing the symptoms rather than the causes. In a white paper that I can’t wait to publish, we’ll show evidence that the fundamental issue facing business today is one of unaccountable agents seeking immediate gratification. There’s a lack of ownership and accountability in a market that continues to outsource much of the “ratings” to agents. Large funds managed by agents with no skin in the game are relying on ratings agencies, also with no skin in the game, to dictate qualitative criteria that often don’t tie to value creation, but rather liability minimization. And that is important, but not sufficient on its own. It is defense without the offense. Or sometimes, it’s all marketing covering up flimsy foundations. Owners or founders exhibit more long-term, conscious capitalist behavior. They generally don’t give quarterly profit guidance, and instead prefer to focus on their customer satisfaction and employee morale. They invest more in their own businesses rather than paying that capital out to shareholders or to acquisition targets. Great shareholder returns are the result of a highly conscious business model, not the goal in and of itself. Exhibit 1: Builders Have Happier Customers & More Engaged Employees Source: GreenWood Investors, OO = owner operators, DC = dual share class structures, S&P = S&P 1200 Global Index But what does it mean actually to be conscious? That’s the subject that Anil Seth seeks to answer in his latest work, Being You. In seeking to demystify the mystery of consciousness, he discusses the most robust model that has been put forward for understanding and measuring how conscious an organism is. Integration information theory (IIT) postulates that consciousness is measured by the degree to which information is integrated into a system or action. Seth explains, “This underpins the main claim of the theory, which is that a system is conscious to the extent that its whole generates more information than its parts.” This concept struck me, as it has many direct parallels to well-worn concepts in investing. Of course it makes sense that the more conscious an organization is, the better it is at integrating information into action. But what really struck me here is that using this IIT framework- an organization is only conscious if the whole is greater than the sum of its parts. To me this infers that if the parts of a business don’t come together to produce something more powerful or valuable than the sum of those individual units, segments or components, the business is not a conscious business. Seth later explained how conscious perceptions are largely built from best guesses and confidence. A key insight of Bayesian inference is that perception is largely a function of updating beliefs about the world based on the precision and reliability of new information. Our minds seek to eliminate prediction errors everywhere and all the time, and we do so by converging our beliefs to the level of conviction we have in the information. In this age of ubiquitous and free information, we differentiate ourselves by the level of conviction we have in the quality and reliability of the insights we have. Conviction is the key. And as Seth later demonstrated, such insights are virtually worthless if not paired with action. This echoes the sentiment that Warren Buffett expressed in talking about getting fat pitches in one’s career, and that one must “swing big,” as they don’t happen very often. This is indeed why we are “swinging big” with Coinvestment II, as this is one of the fattest pitches we’ve ever been thrown. Moving From Defense to Offense “High expectations are the key to everything.” -Sam Walton As my mind was more occupied with offensive capital allocation strategies in the quarter, this pairing of action with insight particularly spoke to me, highly conscious offense playbook strategies are rare. Instead the norm is that most offensive actions are typically made from a defensive motive, and are not based on novel insights. As I wrote in last year’s fourth quarter letter, we endeavor to only get involved in turnaround situations where we either have a board presence, or where a founder or owner operates the business. In our view, these managers have been more resilient in defending their businesses from adversity. Simply put, they cannot just give up and move on. As Covid ripped through the world and economies, far too many managers decided to give up. In the depths of the Covid crisis, at the Presidential inauguration ceremony, National Youth Poet Laureate Amanda Gorman articulated rather eloquently that, “Your optimism will never be as powerful as it is in that exact moment when you want to give it up.” Founders are inherently optimistic, and they don’t give up. In exploring the differences between defense and offense, I’ve come to realize that it is even more important to have an owner-oriented management culture when moving from defense to offense. Defense is inherently reactive, reacting to “known knowns” or “known unknowns.” Reactions are easier than proaction. Traditional boards are typically very good at liability minimization. But as important as liability reduction is, these actions do not create value. New business and invention is inherently venturing into the unknown, seeing what others don’t, and pursuing the path untravelled. It comes naturally to a founder or owner, whose authorship imbues the business with the optimistic, entrepreneurial impulse that often started it in the first place. As my friend Bill Carey has articulated, most managers compensated via stock options act more like stock brokers as opposed to owners. Similar to brokers, their time horizons have shrunk considerably. They are simply rent-seeking for a short period of time. And as my friend Chris Mayer likes to say, “no one washes a rental.” Our research on the differences in the behaviors of owner operators and these renters, shows these renters are not very good at offense strategies either. They are very good at competitive reactions, cost cutting and margin optimization. These are important, just as any defense strategy is, but they typically fail to create any lasting value. The value that is captured from these tools generally only lasts as long as the brief period in which the manager’s stock options vest. Given 70-90% of mergers and acquisitions fail, and stock repurchases have taken a notably pro-cyclical, buy-high, sell-low, history, these renters have a typically poor track record in value-creating initiatives and capital deployment. This short-term rental behavior often results in mediocre outcomes. As the late great Sergio Marchionne regularly reminded, “mediocrity is not worth the trip.” Marchionne acted like an owner even before he was one. And he created so much value that his net worth neared $1 billion when he shuffled off this mortal coil. While much of that was indeed generated by options that he exercised, such options were struck at twice and three times the level at which he came in to rescue Fiat in 2004. His package inspired the design of CTT’s options package for top and first level managers. Sergio was very good at seeing things others didn’t. He and his venerable team of managers, to whom he dedicated so much of his energy, were very good at transforming ignored products and assets into gold. Of particular note, Jeep grew from just over 2%of the market in the US to just under 6% when he passed- and it became a truly global brand. He invented Ferrari’s Icona series, which made the irregular limited edition profits part of the regular P&L of the brand without diluting the exclusivity of such models. He and parent holding company Exor have continued to provide much of the inspiration behind our activities with both coinvestments. We endeavor to replicate their divide & conquer strategy, which allowed the Fiat Group to become stronger as stand-alone Fiat-Chrysler (now Stellantis), Ferrari, CNH, and soon to be Iveco Group. Just as Sergio advised the few believers throughout his career, investors will be “owning multiple pieces of paper” as the journey unfolds. In hindsight, we can all agree on the value creation prowess of him and his team. But we easily forget that for most of his career, he was faced mostly by skeptics and doubters. He was not afraid to look dumb. In his own words, “A lot of what I do is challenge assumptions . . . which often looks like you are asking stupid questions.” Being entrepreneurial, by definition, means taking the path untraveled, and heading into the unknown with daring boldness. Offense playbooks, by design, must take competition by surprise. Coming from a humble place with brands and companies that were ridiculed by competitors, when Sergio put medium-term plans out to the market, they were not timid. He would always aim higher than anyone, especially his competitors, believed he and his team could reach. And while not every target was always achieved, the formidable results speak for themselves. This past earnings season, as Twitter was the only social media company to deliver on guidance while also confirming the quarter ahead to be at least as good, the stock sold off materially as its monetizable daily active user (MDAU) targets in the medium-term were called into question. While founder Jack Dorsey is clearly unafraid to look foolish to the public, or even in front of congress, he also manages multiple businesses at the same time. Competitors openly make fun of him. But his team is exceptionally loyal to him, and they have set out very ambitious targets for themselves over the next few years. The recent sell-off in Twitter shares was like deja vu all over again, as I reminisced about the Fiat capital markets day in 2014, fittingly on Twitter in this tweet thread. With its product and revenue servers rebuilt, it can now innovate and launch new ad formats faster than ever before. We look forward to the Twitter team pressing its offense strategy as a major peer loses focus on its core business. Into The Unknown “Action is inseparable from perception. Perception and action are so tightly coupled that they determined and define each other. Every action alters perception by changing the incoming sensory data, and every perception is the way it is in order to help guide action. There is simply no point to perception in the absence of action.” Anil Seth, Being You What does it mean to move into offense? One thing very clear to us, is that it has to be a dynamic and reflexive approach. It cannot be built into a three or five year plan and remain fixed over that duration. As Anil Seth’s work on consciousness explains, a highly conscious being is constantly ingesting and integrating information, evolving actions based on reliability, precision and conviction. As capital-markets focused investors, we believe one of the highest values we can provide to our companies is information that can be integrated into their offense and defense playbooks. Thanks to our collaborative approach, we get nearly daily recommendations and thoughts from our investors with new information, new case studies, and new suggestions on how to continue iterating. One of the biggest differentiations between good and great investments, that is often overlooked, is the value added by good capital allocation- be it with a very well-done merger, opportunistic buyback or even more, venture-style investments that are almost in no one’s “model” or perception. Small acquisitions that bring new tools and managers can often upgrade the business model. As Clayton Christensen suggested in The Big Idea: The New M&A Playbook, these are often the most overlooked investments. But during the quarter, when posed with the question of how to best allocate capital over the long term, I found myself tongue tied. For it’s a dynamic and reflexive question to ask. It’s easy to see what to do right now, and where to build in the next few years. But sound capital allocation is a function of the opportunities that present themselves. It is also about creating new possibilities, particular ones that competitors don’t see. At CTT, with defensive, problem-solving actions becoming less of a focus, attention can now turn to offense. What that looks like in the near term, at least to me, should be continued progress and convergence on the strategy to become the Shopify of Iberia. With Portugal e-commerce order frequency at very small fractions of neighboring Spain, we believe it is CTT’s responsibility to make itself the most convenient and most cost effective way of conducting commerce. Through more parcel lockers, better digital tools, while maintaining or improving on best-in-class quality of service, we believe much of the responsibility to make online the most convenient commerce channel in Portugal will fall on CTT’s shoulders. Going further with online shop enabling, more cost effective payments tools, and an integrated fulfillment offer, that continues through to returns and customer service, it has every tool it needs to enable this digital transition. This convergence is happening at the same time EU recovery stimulus dollars will be directed towards digitalizing the economy. Case studies like Kaspi, which started as a bank, evolved into a payments company, then launched an e-commerce marketplace and then further expanded into logistics, provide more inspiration than any company in the logistics industry. This reminds me of Google’s earliest days, when its managers encouraged their teams to ignore the traditional competitors and instead go where other competitors hadn’t dared to venture- into the unknown. We believe CTT has greater competitive advantages than some “new economy” companies playing throughout the same e-commerce value chain, often trading at significantly higher valuation multiples. Whether we’re talking about fulfillment services, parcel lockers, or alternative purchase financing, it’s the customer relationship that differentiates and builds competitive advantages. That is why one of the first priorities of the new management was to improve customer satisfaction. And while some analysts that cover the company still use traditional methods to frame the opportunity, the shareholder base has largely transitioned away from income-oriented investors. More like-minded shareholders, aligned with management, can enable the team to build something truly great. Building Great Companies “The urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.” DaVinci What started for us as an approach to separate the bank from the industrial company, and achieve a sum of parts valuation, has been upgraded to that of building a great compound machine. As Exor articulated in 2019, its purpose to “build great companies,” is an aspirational philosophy for us. While we certainly aren’t doing the building here, perhaps through setting the right strategic priorities, incentives, and providing timely and right information, we can assist in the build underway. Exor has provided an exemplary model of how to enable its teams to build greater value by dividing, conquering, and then often later combining with more synergistic peers. Just like Anil Seth described, the whole must be greater than the sum of the parts in a highly conscious organization. When a company’s sum of the parts is greater than the total, the organization is not conscious, and therefor not capable of adding material value. Just as Exor has executed masterfully in its portfolio companies over the past decade, the path forward is one of both dividing and one of conquering. Extending the business and commerce services that CTT provides is a natural offense-oriented positioning that further reinforces the strength of the whole. But there are other parts of this organization that aren’t adding as much to the sum total- those can, and should be separated to pursue their own offense playbooks in a more focused and agile manner. Such an approach goes well beyond ESG, and it goes well beyond most other broker-oriented management teams. It is a highly conscious capitalist approach, aligned with long term value creation and sustainability. And that process should result in considerable returns as an effect, not as a goal. As owner operators’ short, medium, and long term benchmark outperformance demonstrates, this strong alignment between management and ownership is a championship-winning combination. Exhibit 2: Owner Operators’ Stock Index Outperformance Source: GreenWood Investors In the months ahead, we anticipate thoroughly engaging with the management and board of the target at the Builders Fund II. This company is mirroring CTT’s current posture, in that it is in the process of finishing nearly a decade of defense-oriented actions. After years of strategic actions focused on fixing problematic areas, contracts or business dynamics, most of these reactive or defensive actions are increasingly passing into the rearview mirror. It is entering a new phase of life in a position to also divide and conquer, and it has exceptional assets. With both coinvestments representing a substantial portion of our net exposure, we move forward with conviction. While this quarter was a lesson that we, nor our companies, can lose sight of a strong defense strategy, we are increasingly looking forward to our portfolio pressing offense strategies moving forward. Committed to deliver, Steven Wood, CFA GreenWood Investors Updated on Nov 24, 2021, 4:37 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 24th, 2021