Don't overdo your enthusiasm. Remember that June reflects the 2nd quarter estimated income tax payments received and minimal individual tax refunds.
OT: Stock and Investment Thread
- Thread starter RU05
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Don't overdo your enthusiasm. Remember that June reflects the 2nd quarter estimated income tax payments received and minimal individual tax refunds.
So $27.2 billion in tariffs produced a $27 billion surplus. So ex-tariffs the budget showed a $200n million (not billion) deficit. How many quarters since the pandemic has the deficit been that low? And even that's misleading give the revenue timing.
Proof that the 60/40 portfolio sucks:
Another BTC pump, another ATH. Now over 0.119M.
BUMP! The real thread lives.
@Tango Two - would you please merge the new/ON3 Stock thread into this one? Thanks!
@Tango Two - would you please merge the new/ON3 Stock thread into this one? Thanks!
I often see stocks that I once owned and then sold, which are now way higher and say, man, I should have held on to that one.
But sometimes I do well in a stock, sell it, and then down the road I say, glad I got out of that one.
One such stock that I'm glad I got out of is DOW. I probably sold that thing when it was in the $50's, and now it's a tick below $30.
But I'm looking at it again. Why? 9.25% dividend to start. Secondly, after this a trough year of earnings in 2025 at just .06 per share, they are expected to get back to .96 cent's per share in 2026 and $3.48 of expected eps in 2028.
So when we look at the chart and see a falling knife, well that stock price has followed a downward earnings trend, so one would expect if the earnings do indeed rebound, then the stock price will as well.
(The free cash flow remains strong at $3.64 per share).
As per that falling knife chart, it has held it's ground since the April 2nd low, a bit higher but for the most part sideways. Now did April 2nd just pull fwd that downward trend, and the plateau merely biding the time till the downward trend continues? Or did it flush out the sellers and mark the bottom? It's currently a bit above it's 50 day, a bit below it's 100 day, and well below it's 200 day(up around $38).
Now is that Dividend in danger of being cut? Mgmt has expressed that they are committed to keeping the dividend though analysts are split. There is some thought that cutting the div could be a boost for the stock price. I think that the current free cash flow number, combined with expected EPS, supports the idea that div is relatively safe.
On top of all that, I can sell the Aug 15th $35 calls for a 1% premium. Those are juiced by earnings later this month, but I'm thinking of getting in and layering some covered call premium's on top of that div yield. Try to get that income up to 15ish%.
But sometimes I do well in a stock, sell it, and then down the road I say, glad I got out of that one.
One such stock that I'm glad I got out of is DOW. I probably sold that thing when it was in the $50's, and now it's a tick below $30.
But I'm looking at it again. Why? 9.25% dividend to start. Secondly, after this a trough year of earnings in 2025 at just .06 per share, they are expected to get back to .96 cent's per share in 2026 and $3.48 of expected eps in 2028.
So when we look at the chart and see a falling knife, well that stock price has followed a downward earnings trend, so one would expect if the earnings do indeed rebound, then the stock price will as well.
(The free cash flow remains strong at $3.64 per share).
As per that falling knife chart, it has held it's ground since the April 2nd low, a bit higher but for the most part sideways. Now did April 2nd just pull fwd that downward trend, and the plateau merely biding the time till the downward trend continues? Or did it flush out the sellers and mark the bottom? It's currently a bit above it's 50 day, a bit below it's 100 day, and well below it's 200 day(up around $38).
Now is that Dividend in danger of being cut? Mgmt has expressed that they are committed to keeping the dividend though analysts are split. There is some thought that cutting the div could be a boost for the stock price. I think that the current free cash flow number, combined with expected EPS, supports the idea that div is relatively safe.
On top of all that, I can sell the Aug 15th $35 calls for a 1% premium. Those are juiced by earnings later this month, but I'm thinking of getting in and layering some covered call premium's on top of that div yield. Try to get that income up to 15ish%.
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Side note, been using Google AI, as well as Meta AI(which is in the instagram app), to research stocks. For the most part it's a synopsis of sourced material, but it provides links like traditional search if you ask for a chart or something like that.
Concise and very digestible information.
Concise and very digestible information.
A little more on DOW.
Comparing it to a recent successful turnaround stock, MMM.
On the 3 year chart DOW held a pretty decent lead through the first two years, but interestingly, DOW's drop and MMM's bounce happened at pretty much the exact same time. Through 3 year's MMM is now up 40% while DOW is down 40%.
Zoom out to the 5 year chart and the 2 stocks are basically dead even at basically no gain, or loss, for either. Which I again find interesting. Though of course as both provide strong dividends, both are in the green on total returns over that time.
Comparing it to a recent successful turnaround stock, MMM.
On the 3 year chart DOW held a pretty decent lead through the first two years, but interestingly, DOW's drop and MMM's bounce happened at pretty much the exact same time. Through 3 year's MMM is now up 40% while DOW is down 40%.
Zoom out to the 5 year chart and the 2 stocks are basically dead even at basically no gain, or loss, for either. Which I again find interesting. Though of course as both provide strong dividends, both are in the green on total returns over that time.
The old is new again. I posted that one in the app.We have been MERGED!
My dad worked for DOW for 38 years and still has a bunch of stock (not just DOW but also a few spin-offs after the merger with DuPont.....IIRC). From Morningstar:
Dow's Low-Cost Production Should Generate Long-Term Profit Rebound Despite Near-Term Uncertainty
Apr 24, 2025
Dow Chemical is one of the largest chemicals producers in the world, producing key components for a broad range of industrial and consumer chemical and plastic products. The company’s history spans over 125 years and features an evolving product portfolio. In its current form, Dow is the commodity chemicals company created in 2019 from the DowDuPont merger and subsequent separations.
The majority of Dow’s production capacity resides in North America, where it benefits from low-cost natural gas-based feedstocks. This allows Dow to manufacture at a significant cost advantage to marginal cost producers that rely on higher-cost crude oil-based feedstocks to make the same products. Dow’s commodity chemicals are generally priced off of the marginal cost of production. Low natural gas prices and high oil prices have led to substantial profits for firms operating in North America, and we expect this dynamic will persist.
Over half of Dow’s customer base comprises the plastic packaging and polyurethane industries, with the other half are well diversified between several industrial and consumer end markets. The firm is especially focusing on consumer packaging, infrastructure, and automotive markets to drive revenue expansion. Dow’s strategy is to grow profits through incremental operational improvements. The company’s growth capital expenditures have been allocated toward capacity expansions and efficiency improvements that will enhance profitability over time.
Over the long run, Dow plans to widen its circularity initiatives, which aim to use plastics as feedstock for its manufacturing operations. The company is improving its recycling capabilities through partnerships with Mura Technology and Valoregen. Construction of the requisite recycling facilities will take at least 10 years, so the firm’s circularity initiatives will ramp up gradually. However, these projects will help Dow capitalize on rapidly accelerating demand for more environmentally friendly products as a result of evolving regulations and consumer preferences.
Fair Value and Profit Drivers
We reduce our fair value estimate to $50 from $65 following Dow's first-quarter earnings. The decrease is due to our lower near- and medium-term outlooks driven by lower prices and volume, and higher input costs, all of which will weigh on profits. We forecast a profit decline in 2025, marking the third straight year of falling profits. Our forecast assumes an economic slowdown in 2025 as a result of tariff-related inflation and trade disruption.
We forecast top-line growth will average around 1% per year through 2029. Dow's asset-heavy commodity chemicals manufacturing plants are subject to a high degree of operations leverage. As a result, plant capacity utilization is a key profit driver. Even in a favorable cost environment, reduced volume can still drive margin contraction due to high operating leverage. Longer term, we forecast firmwide operating margins will expand to nearly 11% over the next five years, up from less than 5% in 2024 as demand normalizes and Dow's efficiency initiatives take hold.
As a commodity chemicals manufacturer, Dow's profitability is also impacted by evolving feedstock costs. Most of the company's products see prices change based on Brent crude oil price movements as marginal-cost producers used oil-based naptha feedstock. Around 75% of Dow's production capacity sits in North America and is made from natural-gas-based feedstocks. As a result, a good directional indication of Dow's profits is changes to the oil-to-gas ratio, calculated as the price of Brent crude oil divided by the price of Henry Hub natural gas. A ratio above 7 times implies a comparative cost advantage according to the EIA. Our midcycle forecasts for Brent oil ($60 per barrel) and Henry Hub natural gas ($3.30 per million British thermal units) imply the oil-to-gas ratio will average around 18 times.
In a scenario where we see a prolonged economic slowdown from tariff-related stagflation, gas prices would remain elevated, while Brent oil prices would fall. We assume sharply reduced exports creates oversupply in North America and weighs on all producer volumes. In this scenario, we assume revenue declines at an average 1% per year while midcycle operating margins are roughly 8%. Our fair value estimate would fall to $30 in this scenario.
I saw that Morningstar liked it.
Fellow Chemical sector company LYB with a very similar but better chart. Better fundamentals too(earnings trough not as deep). 8% div.
The chemical sector is pretty tough, but anything could be a great buy at the right price. DOW definitely seems undervalued.
In other news, futures a little soft, but gold is up! GLD ready for another pump?
I see F's 50 day crossed above it's 200 day recently.
Similar to DOW and LYB, flat in terms of expected rev's but 2025 is the trough EPS. Looking for $2 in EPS by 2028. Currently has a 5% div.
GM by comparison does not have that trough/upswing in EPS. Their EPS expected flat for the next 2 years. It's chart does look pretty good, though, above both the 50 day and 200 dma, with that 50 day cross over likely coming soon.
Similar to DOW and LYB, flat in terms of expected rev's but 2025 is the trough EPS. Looking for $2 in EPS by 2028. Currently has a 5% div.
GM by comparison does not have that trough/upswing in EPS. Their EPS expected flat for the next 2 years. It's chart does look pretty good, though, above both the 50 day and 200 dma, with that 50 day cross over likely coming soon.
Dude, the golden cross!Now you are really starting to dumpster dive!
**** getting crazy. BTC breaks the 0.121M level.
HOOD also back to the $100 level. Market is rolling.
NVDA up big pre market as they have the green light to sell their H2O chips to China…
I’ve always thought the chemical sector as somewhat more volatile than typical industrials.
June CPI Report - overall, pretty good.
Headline = MoM at 0.3% as expected, YoY slightly higher at 2.7%
Core = MoM at 0.2% and YoY at 2.8%, both lower than expected
Largest driver of inflation? Still shelter. FED hello? Mortage rates. D'uh.
Headline = MoM at 0.3% as expected, YoY slightly higher at 2.7%
Core = MoM at 0.2% and YoY at 2.8%, both lower than expected
Largest driver of inflation? Still shelter. FED hello? Mortage rates. D'uh.
I’m kicking myself for not getting in this one at IPO. I worked at there data center for over a year and may be at another one soon.
That should have been in your wheelhouse! But I missed it as well.
I know ugh. The Compound podcast on it scared me off. Lots of red flags they saw. Oh well.
S&P keep on going!
NVDA, AMD AVGO and PLTR crushing it so far today.
Can’t find the crypto thread so I’ll leave this here. “Does this stupid bonk coin do anything?” was asked here many a time. Yes, if brings in more revenue than the second biggest crypto coin there is. Bonk has a $2.5B market cap, Ethereum is at $380B. Something is mis-priced
Super tame PPI print today (completely flat this month). Life is good!