Offsetting portfolio capital gains by taking losses is permitted by the IRS. Within the tax guidelines, this generally occurs during the last month of the year as individuals and financial advisors strive to minimize money owed to the IRS. The stocks sold, naturally, are underperformers. This activity has a tendency to set the stage for a late December rally or a January rebound. This is especially true of the sectors or asset classes that were most sold. This is because portfolio managers often wish to keep a similar allocation, which translates to them then waiting 30 days or more before buying something that may be viewed as substantially similar.
With the major indexes like the S&P 500, Nasdaq 100, and Small Cap S&P 600 all down double digits this year, there are stocks that are doing far worse than index averages – just as there are stocks doing far better. Of course, if you own an ETF, you have to treat it like it is one stock and cannot offset a good underlying individual company sold with an underperforming company. In this way, holders of individual company shares can benefit more because they will have more options. And may even find it easier to qualify for the additional $3,000 tax benefit the IRS allows.
What happens after the 30-day period? Some investors try to get in, or back in, early with the notion that the most beaten-down stocks from 30 days earlier, could quickly bounce back hard for a time. This would all begin to occur following what could be perceived as the tax loss selling dip, (aged 30 days). The so-called Santa Rally is somewhat attributed to this, but that rally has not occurred during December 2022. The chart above shows a very weak December. So the buying may be postponed until early next year.
Without substantial buying this December, the first month or two of 2023 may bring buying as investors replace holdings for allocation purposes, plus any additional purchases used to bring the beaten-down sectors’ portfolio weightings up to whatever fits the investors’ strategy.
DoubleLine founder Jeffrey Gundlach told CNBC on Wednesday that risk assets will likely rally in January once retail investors finish tax-loss selling. Strategists at Evercore wrote on Nov. 30 that they were “buyers of stocks whose 2022 tax loss selling pressure will soon abate.”
Take Away
The main drivers of market moves next year are likely economic concerns such as inflation, recession, and monetary policy. But the potential for the most beaten down sectors this year, those that underperformed in December, may represent opportunity. The opportunity may not be long-lived, but for those involved in the markets, it is worth understanding why it may be occurring.
As the Bear Market Melts Down, Where Will the Grass Be Greenest?
Bear Markets and snowmen have one thing in common; they don’t last forever.
The entry point into an investment can have a huge impact on performance. Exits tend to be more critical when the stock has shown that it is not performing as planned. While this kind of exit may result in a loss, it allows the investor to preserve capital, liquid assets they can deploy if another good entry presents itself. The major stock market indices for 2022 are down 20% and more. Has this sell-off provided for performance-producing entry points in some stocks? Let’s look where we are as the countdown to 2023 has already begun.
About this Bear Market
Bear markets end – they always have. Pinpointing an exact bottom is not possible, so trying to be the first in for that great entry point may include a few false starts and some unhoped-for exits. The current slide in the stock market started around January 1, 2022. This was because some doubted whether inflation was transient at the time; by March, most understood the Fed was concerned that price increases were pervasive.
Fed Chair Powell, along with many Fed Presidents, began speaking hawkishly to not unduly surprise and unsettle markets as the central bank unwound the liquidity used in response to the novel coronavirus. What followed was unprecedented. Overnight lending rates went from an effective 0.08% to an effective 4.33% during the course of the year. This is more than 52 times the base lending rate at the start of the year. With these increases, no wonder the bear market continued.
Where Are We Now?
Expectations of overnight rate hikes in 2023 are for another 0.50%-0.75% increase leaving the target at, or just north of, 5%. This increase in the cost of money is small (.17 times) compared to the massive (52 times) rocking the markets in 2022.
So rate hikes are expected to be much lower as a percentage of current rates next year. And after the last FOMC meeting, markets have seemingly repriced lower with this expectation. If all goes as it is thought it will, the market is already priced for the worst. This is a bullish sign.
Put another way; most believe that with Fed funds beginning 2022 around zero, we’re likely much closer to the end of the Fed Funds tightening than to the beginning.
Inflation (CPI) for December won’t be reported until January 12, 2023. The latest CPI numbers show YoY up 7.1% in November, a slowing from 7.7% in October, which tapered from 8.2% the month before. The November reading of 7.1% taken by itself is a long way away from the Fed’s 2% target. But the trend in the CPI and PCE deflator also suggest the Fed is likely to monitor previous hikes to see if they will have the desired impact.
The Fed Has Been Transparent
The Fed lowered rates in line with what they promised during the pandemic. Then after some transient talk, they raised rates as they expressed they would in 2022. Following the December FOMC meeting, they suggested they were not at the end, but the voting members’ expectations for where they will settle is an average of 5.40%. The forward-looking stock market, if they believe the Fed will again do as promised, should recognize this is a much lower increase. It is perhaps near the time to begin to build on positions. This could be the entry point many investors have been waiting for.
Small Cap Phenomenon
The chart below shows how much small cap stocks outperformed during the 12- months following the pandemic plunge. While small cap outperformance has been experienced during the past century of stocks’ post-sell-off periods, one only has to look back to the pandemic plunge to remember that it was small-caps (depicted below as IWM) that had been beaten down the most and by far outran the other major indices for the next year from the low of 2021.
Could this small cap phenomenon occur again after markets reach the bottom? Data demonstrates that small cap stocks tend to lead following a period of economic dislocation. One reason is US small caps have more of their business within the states and as a bonus, do well with a rising dollar. Current conditions suggest exploring smaller stocks. They have outperformed large caps following nearly every bear market of the last century. And today, the dollar has risen above its six-month high and is trending higher. While past movement comparisons don’t always include all the crosscurrents of the future, a strong argument could be made that a turnaround is near and small caps may again be the leaders by a wide margin.
Some Disclosure
Channelchek, the investment information platform you’re now reding has small cap stocks as its primary focus. The deep platform provides data on over 6000 stocks, with quality research updated regularly on many of them. Channelchek also provides videos and articles that may inspire informed stock selection. Stock selection, rather than just plowing investment dollars into an indexed ETF, may be preferable as indexed ETFs include sectors and stocks that may not be worthy of your portfolio.
Diversification across asset classes, sectors, and market capitalizations is considered prudent for long-term portfolios; individual allocations can be built on depending on where we are in the business and interest rate cycle. This includes an allocation to small cap equities, which perhaps should be expanded if the Fed is near the end of its tightening cycle. It could always be reduced later if the economy is deep into a growth cycle.
Take Away
Although we do not have a crystal ball to know exactly when the best entry point in any company stock is, if a century’s worth of data is any guide, the period following the end of a market downturn has been a good time to increase exposure to the small cap sector.
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What if the U.S. placed a tax on robots? The concept has been publicly discussed by policy analysts, scholars, and Bill Gates (who favors the notion). Because robots can replace jobs, the idea goes, a stiff tax on them would give firms incentive to help retain workers, while also compensating for a dropoff in payroll taxes when robots are used. Thus far, South Korea has reduced incentives for firms to deploy robots; European Union policymakers, on the other hand, considered a robot tax but did not enact it.
Now a study by MIT economists scrutinizes the existing evidence and suggests the optimal policy in this situation would indeed include a tax on robots, but only a modest one. The same applies to taxes on foreign trade that would also reduce U.S. jobs, the research finds.
“Our finding suggests that taxes on either robots or imported goods should be pretty small,” says Arnaud Costinot, an MIT economist, and co-author of a published paper detailing the findings. “Although robots have an effect on income inequality … they still lead to optimal taxes that are modest.”
Specifically, the study finds that a tax on robots should range from 1 percent to 3.7 percent of their value, while trade taxes would be from 0.03 percent to 0.11 percent, given current U.S. income taxes.
“We came into this not knowing what would happen,” says Iván Werning, an MIT economist and the other co-author of the study. “We had all the potential ingredients for this to be a big tax, so that by stopping technology or trade, you would have less inequality, but … for now, we find a tax in the one-digit range, and for trade, even smaller taxes.”
The paper, “Robots, Trade, and Luddism: A Sufficient Statistic Approach to Optimal Technology Regulation,” appears in the advance online form in The Review of Economic Studies. Costinot is a professor of economics and associate head of the MIT Department of Economics; Werning is the department’s Robert M. Solow Professor of Economics.
A Sufficient Statistic: Wages
A key to the study is that the scholars did not start with an a priori idea about whether or not taxes on robots and trade were merited. Rather, they applied a “sufficient statistic” approach, examining empirical evidence on the subject.
For instance, one study by MIT economist Daron Acemoglu and Boston University economist Pascual Restrepo found that in the U.S. from 1990 to 2007, adding one robot per 1,000 workers reduced the employment-to-population ratio by about 0.2 percent; each robot added in manufacturing replaced about 3.3 workers, while the increase in workplace robots lowered wages about 0.4 percent.
In conducting their policy analysis, Costinot and Werning drew upon that empirical study and others. They built a model to evaluate a few different scenarios, and included levers like income taxes as other means of addressing income inequality.
“We do have these other tools, though they’re not perfect, for dealing with inequality,” Werning says. “We think it’s incorrect to discuss this taxes on robots and trade as if they are our only tools for redistribution.”
Still more specifically, the scholars used wage distribution data across all five income quintiles in the U.S. — the top 20 percent, the next 20 percent, and so on — to evaluate the need for robot and trade taxes. Where empirical data indicates technology and trade have changed that wage distribution, the magnitude of that change helped produce the robot and trade tax estimates Costinot and Werning suggest. This has the benefit of simplicity; the overall wage numbers help the economists avoid making a model with too many assumptions about, say, the exact role automation might play in a workplace.
“I think where we are methodologically breaking ground, we’re able to make that connection between wages and taxes without making super-particular assumptions about technology and about the way production works,” Werning says. “It’s all encoded in that distributional effect. We’re asking a lot from that empirical work. But we’re not making assumptions we cannot test about the rest of the economy.”
Costinot adds: “If you are at peace with some high-level assumptions about the way markets operate, we can tell you that the only objects of interest driving the optimal policy on robots or Chinese goods should be these responses of wages across quantiles of the income distribution, which, luckily for us, people have tried to estimate.”
Beyond Robots, an Approach for Climate and More
Apart from its bottom-line tax numbers, the study contains some additional conclusions about technology and income trends. Perhaps counterintuitively, the research concludes that after many more robots are added to the economy, the impact that each additional robot has on wages may actually decline. At a future point, robot taxes could then be reduced even further.
“You could have a situation where we deeply care about redistribution, we have more robots, we have more trade, but taxes are actually going down,” Costinot says. If the economy is relatively saturated with robots, he adds, “That marginal robot you are getting in the economy matters less and less for inequality.”
The study’s approach could also be applied to subjects besides automation and trade. There is increasing empirical work on, for instance, the impact of climate change on income inequality, as well as similar studies about how migration, education, and other things affect wages. Given the increasing empirical data in those fields, the kind of modeling Costinot and Werning perform in this paper could be applied to determine, say, the right level for carbon taxes, if the goal is to sustain a reasonable income distribution.
“There are a lot of other applications,” Werning says. “There is a similar logic to those issues, where this methodology would carry through.” That suggests several other future avenues of research related to the current paper.
In the meantime, for people who have envisioned a steep tax on robots, however, they are “qualitatively right, but quantitatively off,” Werning concludes.
According to the Bureau of Labor Statistics, consumer prices rose 9.1% from June 2021 to June 2022, the highest rate since 1981. That figure is an average of price increases for bananas, electricity, haircuts, and more than 200 other categories of goods and services. But households in different age groups spend money differently, so inflation rates vary by age, too. The diagrams below show average spending for households at different ages, in the categories that make up the inflation index.
Young households spend more of their budgets on gasoline, where prices rose 60% in the last year. Gasoline has been the largest single-category driver of inflation since March 2021, accounting for nearly 25% of inflation by itself. Gas has had an outsized impact considering that the category is 4.8% of Consumer Price Index spending. (Gasoline prices began falling in mid-June.)
Taking an average of all categories, as the inflation index does, shows that inflation is currently highest for younger households. It is about 2 percentage points higher for households headed by 21-year-olds as it is for octogenarians who live at home. That has not been true for most of the last 40 years. Inflation rates calculated in this way were higher for older households as recently as early 2021, when medical care costs were rising faster than gasoline prices.
These estimates are imperfect. The Bureau of Labor Statistics notes in its estimate of inflation for elderly households that different age groups may buy different items within each category or buy them from different types of stores. They may also live in locations with costs of living so dissimilar that national changes in prices are not relevant. Over the past 12 months, inflation was 6.7% in the New York City metropolitan area and 12.3 in the Phoenix metropolitan area, due in part to different housing markets.
The above was adapted from USAFacts and is the intellectual property of USAFacts protected by copyrights and similar rights. USAFacts grants a license to use this Original Content under the Creative Commons Attribution-ShareAlike 4.0 (or higher) International Public License (the “CC BY-SA 4.0 License”).
Investors Watching for a “Santa Rally” the Last Trading Week of 2022
Stocks in the US closed higher Friday after consumer inflation continued to ease modestly, and consumer expectations are for the trend to continue. This could set the stage for the week ahead as some expect the probability of a “Santa rally” as investors may begin using their dry powder to wave in some stocks that have gone down with the crowd but are historically cheap and showing value.
Stock markets in London, Toronto, Sydney, Hong Kong, and Johannesburg are closed. on Tuesday, December 27, since Boxing Day was already a holiday since Christmas fell on a Sunday.
The four-day trading week ahead includes the latest data on home prices with the S&P CoreLogic Case-Shiller National Home Price Index and Freddie Mac’s House Price Index (October). On Wednesday, the National Association of Realtors (NAR) will issue pending home sales figures (November). The strength of the manufacturing sector on Friday, with the Chicago Purchasing Managers’ Index (PMI) for December, has market-moving potential on the last trading day of the year.
Monday 12/26
Markets and Government Offices closed.
Tuesday 12/27
Stock markets in London, Toronto, Sydney, Hong Kong, and Johannesburg are closed.
8:30 AM ET, The US Goods Deficit (Census basis) is expected to narrow to $97.0 billion in November after deepening by more than $6 billion in October to $98.8 billion.
8:30 AM ET, Wholesale Inventories, where buildups have been lessening, are expected to rise 0.4 percent in the advance report for November.
9:00 AM ET, Case-Shiller Home Price Index, forecasters see the adjusted 20-city monthly rate falling 1.2 percent again in October after a decline of 1.2 percent in September for an unadjusted annual rate of 8.1 percent versus September’s 10.4 percent.
Wednesday 12/28
10:AM ET, Richmond Fed Manufacturing Index, the manufacturing composite is expected at minus 6, in December vs. minus 9 in November and minus 10 in October.
Thursday 12/29
8:30 AM ET, Jobless Claims for the December 29 week are expected to come in at 222,000 versus 216,000 in the prior week.
Friday 12/30
• 9:45 AM ET, The Chicago PMI is expected to bounce back in December to 41.0 versus November’s much weaker-than-expected 37.2.
The Bond markets are scheduled to close at 2 PM. Stocks have the benefit of a full trading day to close out 2022.
What Else
Replays of the Noble Capital Markets analysts’ discussions of companies they cover on Wall Street Wish List, are now available on Channelchek to help you create your own wish list for 2023. Find them here in Channelchek’s Video Content Library. And if you haven’t signed up for regular emails from Channelchek now is a good time to sign-up and see how helpful they are
Happy New Year from the entire content team at Channelchek!
Delivery speeds of goods worldwide have improved, impacting everything from shipping and freight to retail stores – and it should help provide a lower inflationary balance between demand and supply. Demand is waning, and supply speeds are normalizing. Months-long back-ups of ships are now gone, with shipping rates close to pre-pandemic levels, the post-pandemic era now has to adjust again.
Supply Chain Pressure
A government measure compiled by the Bureau of Labor Statistics (BLS) consisting of transportation and manufacturing pressures, called the Global Supply Chain Pressure Index Pressure (GSCPI), shows significant easing during 2022.
Global supply chain pressures are well off the high reached last December, although they have just modestly ticked up. The largest contributor to this slight reversal is the increase in supply chain pressures from Chinese delivery times, though improvements were shown in U.S. delivery times and Taiwanese purchases. The GSCPI’s recent movements suggest that developments in Asia are slowing down the return of the index back to historical levels.
Shipping Impact
Goods are moving through the largest U.S. port complex faster than at any time since cargo was backed up for weeks at the Los Angeles-Long Beach docks during the pandemic. The average dwell time for containers is just 2.8 days, according to the Pacific Merchant Shipping Association. Meanwhile, U.S. container imports reached their lowest level in November since the early months of 2020.
The improvements and reduced demand have impacted ocean shipping rates. The daily spot rate to move a shipping container from Asia to the U.S. West coast is near $1,400, down from about $7,500 in July and roughly $15,000 a year ago, according to the Freightos Baltic Index. This current cost represents a slight discount over pre-pandemic rates.
Freight Impact
Maersk is a large logistics company that is involved in many aspects of shipping and tracking. Vincent Vlerc will take over as CEO on January 1. Mr. Clerc said, “You can’t deploy more capacity than what our customers need.” He explained, “we are going through a significant inventory correction in the U.S. and Europe, and we made significant capacity adjustments to our capacity in and out of Asia.” Maersk has indicated it is transporting 30% fewer containers across the Pacific since last year.
The current chief executive of Maersk, Soren Skou said, “it’s obvious that freight rates peaked and began to normalize, driven by falling demand and an easing supply-chain congestion.” In November, the shipping company lowered its 2023 forecast for container demand. It now expects a decline from 2% to 4%, from a maximum decline of 1% previously.
Rail Transportation
The major railroads, in addition to having averted a strike, have managed to hire more train and engine crew members during the second half of 2022. Recruiting had been challenging earlier. They reopened some hump yards and took out locomotives from storage to help ease some bottlenecks.
These changes helped to improve rail service from a low in the Spring when dwell time and train speeds were historically low. “We have turned the corner on service,” Norfolk Southern CEO Alan Shaw said during the company’s investor day in early December.
The railroads say they intend to draw more cargo currently on trucks back to rail, as rail service improves.
Parcel Delivery
FedEx and other regional carriers are having an easier time delivering packages. On Tuesday, FedEx reported average daily parcel volumes fell 10.2%, declining for the fourth straight quarter. There is a trend where shoppers are venturing back out; this has reduced online shopping.
There is now a surplus of capacity to deliver packages. In 2020 and 2021, their ability to deliver fell short of daily capacity.
Before the holiday season, parcel carriers noted consumers had reduced online orders. People seemingly have other pent-up demands to meet. They have resumed spending on travel, parties, and entertainment. Also, in-person shopping has increased post-pandemic.
Impact on Retail
After more than a year of paying higher and higher prices for shipped goods, Walmart and other retailers can resist price increases. In fact, they may even be successful negotiating discounts. With significant inventory and, in some cases, excess inventory, retailers have more bargaining power with shippers and suppliers. Dollar General Corp., after years of blaming high transportation costs as a drag on the business, said in December that falling transit prices could begin lifting the company in 2023.
Take Away
A new balance is being found in the shipping and delivery of goods. Where there was once more demand than supply, a more normal balance is surfacing. This balance is a relief to both sellers and buyers as products become available. Even more, it is likely to help bring inflation down. Also working to help this balance is higher interest rates that are intended to slow demand while supply-side channels catch up. The balance is much closer than it was when the Fed began tightening, this helps bring the costs of goods down, and as an added gift to those most hurt by inflation, it also has helped ease tight labor markets.
TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications upon the BitcoinSV platform, and developing, operating, and managing distributed computing systems for enterprise users.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Terminating Research Coverage. As expected, TAAL announced the completion of the previously announced plan to take the Company private. Calvin Ayre has acquired all of the remaining TAALF common shares and now owns 100%. The transaction was approved by the Ontario Superior Court of Justice on December 21st. TAALF common shares will be de-listed from the Canadian Securities Exchange no later than the close of business on December 23, 2022. As a result, we are terminating research coverage of TAAL Distributed Information Technologies. Effective upon termination of coverage, investors should no longer rely on any of our prior research, financial estimates, or ratings for the Company.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Private placement closed.Aurania closed the second and final tranche of its private placement of 4,244,598 units of the company for gross proceeds of approximately C$1.9 million. A total of 2,417,166 and 1,827,432 units were sold in the first and final tranches, respectively. In each case, units were priced at C$0.45 per unit and were comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of C$0.75 per warrant share for up to 24 months following the date of issuance. Net proceeds will be used to fund drilling and exploration activities at the Lost Cities project, along with working capital needs.
Drilling continues at Tatasham. Drilling began at the Tatasham porphyry copper target in late November. Except for a brief holiday break, drilling is expected to continue through January 2023. The company expects to drill three or four holes at Tatasham to test areas identified during the company’s Anaconda mapping program. Following Tatasham, the company anticipates drilling at the Awacha porphyry copper target.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Nuclear Fusion’s Potential to Be a Highly Disruptive Breakthrough with Investment Opportunities
Scientists at the Energy Department’s Lawrence Livermore National Laboratory (LLNL) in California announced the first-ever demonstration of fusion “ignition.” This means that more energy was generated from fusion than was needed to operate the high-powered lasers that triggered the reaction. More than 2 megajoules (MJ) of laser light were directed onto a tiny gold-plated capsule, resulting in the production of a little over 3 MJ of energy, the equivalent of three sticks of dynamite.
This important milestone is the culmination of decades’ worth of research and lots of trial and error, and it makes good on the hope that humanity will one day enjoy 100% clean and plentiful energy.
This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes of U.S. Global Investors (GROW). Find more of Frank’s articles here – Originally published December 19, 2022.
Unlike conventional nuclear fission, which produces highly radioactive waste and carries the risk of nuclear proliferation, nuclear fusion has no emissions or risk of cataclysmic disaster. That should please activists who support renewable, non-carbon-emitting energy sources such as wind and solar and yet oppose nuclear power.
75th Anniversary of Another Great American Invention, The Transistor
I think it’s only fitting that this breakthrough occurred not just in the U.S., the most innovative country on earth, but also on the 75th anniversary of the invention of the transistor.
Like fusion energy, the transistor’s importance can’t be overstated. Invented in December 1947 in New Jersey’s storied Bell Labs—also the birthplace of the photovoltaic cell, fiber optic cable, communications satellite, UNIX operating system and C programming language—the transistor made the 20th century possible. Everything we use and enjoy today, from our iPhones to our Teslas, wouldn’t exist without the seminal American invention.
In 2021, the electric vehicle maker unveiled its proprietary application-specific integrated circuit (ASIC) for artificial intelligence (AI) training. The ASIC chip, believe it or not, boasts an unbelievable 50 billion transistors.
Private Investment in Fusion Technology Has Been Increasing
Getting your electricity from a commercial fusion reactor is still years if not decades away, but that hasn’t stopped money from flowing into the sector. This year, private investment is estimated to top $1 billion, following the record $2.6 billion that went into fusion research in 2021, according to BloombergNEF.
Private Sector Investment in Nuclear Fusion May Top $1 Billion in 2022
At the moment, there aren’t any publicly traded fusion companies. However, Bloomberg has a Global Nuclear Theme Peers index that tracks listed companies with exposure to the industry, estimated by Bloomberg to one day achieve a jaw-dropping $40 trillion valuation. Some of the more recognizable names include Rolls-Royce, Toshiba, Hitachi and General Electric.
For the five-year period, the index of 64 “nuclear” stocks has advanced approximately 100%, compared to the MSCI World Index, up 38% over the same period.
The number of private firms involved in R&D continues to grow, raising the possibility that some will tap public markets in the coming years.
Among the largest is Commonwealth Fusion Systems, or CFS, which spun out of MIT’s Plasma Science and Fusion Center in 2018. The company raised $1.8 billion in December 2021, on top of the $250 million it had raised previously. Its investors include Bill Gates and Google, along with oil companies, venture capital firms and sovereign wealth funds. CFS claims to have the fastest, lowest cost solution to commercial fusion energy and is in the process of building a prototype that is set to demonstrate net energy gain by 2025.
Another major player is TAE Technologies. Located in California, the company has raised a total of $1.2 billion as of December 2022, from investors such as the late Paul Allen, Goldman Sachs, Google and the family office of Charles Schwab. TAE says it is developing a fusion reactor, scheduled to be unveiled in the early 2030s, that will generate electricity from a proton-boron reaction at an incredible temperature of 1 billion degrees.
Other contenders in the field include Washington State-based Helion Energy, Canada’s General Fusion and the United Kingdom’s Tokamak Energy. In February 2022, Tokamak broke a longstanding record by generating 59 MJ of energy, the highest sustained energy pulse ever.
As an investor, I would keep an eye on this space!
Solar Accounted For 45% Of All New Energy Capacity Growth In The U.S.
In the meantime, energy investors with an eye on the future still have renewable energy stocks to consider.
2022 has been a challenging year for the industry, with much of it facing supply constraints. According to Wood Mackenzie, total new solar installations in the U.S. were 18.6 gigawatts (GW), a 23% decrease from 2021.
Even so, solar accounted for 45% of all new electricity-generation capacity added this year through the end of the third quarter. That’s greater than any other energy source. Wind was in second place, representing a quarter of all new energy power, followed by natural gas at 21% and coal at 10%, its best year since 2013.
WoodMac expresses optimism in the next two years. Solar projects that were delayed this year due to supply issues may finally come online in 2023, and by 2024, the real effects of President Biden’s Inflation Reduction Act (IRA) should be felt. The U.K.-based research firm forecasts 21% average annual growth from 2023 through 2027, so now may be an opportune time to start participating.
One of our favorite plays right now is Canadian Solar, up more than 11% for the year. On Thursday of this week, the Ontario-based company announced that it would begin mass-producing high efficiency solar modules in the first quarter of 2023. Canadian Solar shares were up more than 1% last week, despite experiencing two down days on this week’s news of continued rate hikes into 2023.
US Global Investors Disclaimer
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.
The BI Global Nuclear Theme Peers is an index not for use as a financial benchmark that tracks 64 companies exposed to nuclear energy research and production. The MSCI World Index is a free-float weighted equity index which includes developed world markets and does not include emerging markets.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Tesla Inc., Canadian Solar Inc.
BRENTWOOD, Tenn., Dec. 22, 2022 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (CoreCivic or the Company) announced today that it is delivering an irrevocable notice to the holders of all of the Company’s previously issued $350,000,000 original aggregate principal amount of 4.625% Senior Notes due 2023 (2023 Notes) that the Company has elected to redeem in full the 2023 Notes that remain outstanding on February 1, 2023 (Redemption Date). The 2023 Notes were otherwise scheduled to mature on May 1, 2023. The 2023 Notes will be redeemed at a redemption price equal to 100% of the principal amount of the then outstanding 2023 Notes, plus accrued and unpaid interest on such 2023 Notes to, but not including, the Redemption Date (Redemption Price). As of December 21, 2022, the principal amount of the outstanding 2023 Notes was $153.9 million. The Company intends to use a combination of cash on hand and available capacity under its revolving credit facility to fund the Redemption Price.
Redemption of the 2023 Notes is consistent with the Company’s multi-year debt reduction strategy. Following the redemption, the Company will have no debt maturing until April 2026.
This press release shall not constitute a notice of redemption of the 2023 Notes.
About CoreCivic
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believes it is the largest private owner of real estate used by government agencies in the United States. CoreCivic has been a flexible and dependable partner for government for nearly 40 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Forward-Looking Statements
This press release contains forward-looking statements (as defined within the meaning of the Private Securities Litigation Reform Act of 1995), including statements regarding CoreCivic’s redemption of the 2023 Notes and its funding of the Redemption Price. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Important factors that could cause actual results to differ are described in the filings made from time to time by CoreCivic with the U.S. Securities and Exchange Commission (SEC) and include the risk factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, the Company’s Quarterly Reports on Form 10-Q and other reports filed with the SEC.
CoreCivic takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.
With more than 60 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, Scarlett’s Cabaret, Diamond Cabaret, and PT’s Showclub. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
4Q22 Operating Results. RCI recorded revenue of $71.4 million for 4Q22, up 29.9% y-o-y. Adjusted EBITDA in the quarter was $24.2 million, up 37.8% y-o-y and net income rose 361.4% to $10.6 million. EPS was $1.15 and adjusted EPS was $1.45, down 8.2% y-o-y due to a much higher tax rate this year. We had forecast revenue of $68.5 million, adjusted EBITDA of $21 million, and EPS of $1.27.
Segments. Acquisitions drove Nightclubs top line up 40.4% to $56.6 million in the quarter, SSS were up 3.2%. Non-GAAP operating margin was 41.6%, driven by a 53.6% increase in high margin service revenue. Bombshells revenues of $14 million were down slightly from $14.4 million a year ago, SSS were off 13.3%. Operating margin was 18%, ex one time start up costs for the San Antonio location.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation’s largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of 61 stations in 41 markets. The Scripps Networks reach nearly every American through the national news outlets Court TV and Newsy and popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery, Laff and TrueReal. Scripps is the nation’s largest holder of broadcast spectrum. Scripps runs an award-winning investigative reporting newsroom in Washington, D.C., and is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps has held for decades to the motto, “Give light and the people will find their own way.”
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Launches new sports division. Management believes that sports broadcasting is the most valuable asset in the linear TV market and will be implementing a two prong approach for its national and local strategy. The company believes it can provide a unique value proposition for both a local/regional and a national strategy.
Serves a growing viewership gap. Due to cable cord cutting, the Regional Sports Networks have seen a significant decline in viewership. In many cities, 40% to 50% of the households are not watching cable or satellite. The company’s local strategy will focus on markets where it currently operates two or more stations, furthering its reach in those markets. Management highlighted Phoenix and Detroit as two markets it would be interested in for local sports rights.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Cathie Wood isn’t the only one favoring Tesla (TSLA) at recent valuations. Retail accounts have just made it their favorite stock in 2022 as transactions outpace the old favorite, Apple (AAPL). Money from retail trading accounts flowing into the company founded by Elon Musk increased by 424% to $15.41 billion, versus $2.94 billion in 2021. To be fair, the iPhone maker isn’t too far behind, as retail made $15.21 billion in cumulative purchases during the same period.
Vanda is a global independent research company that provides tactical macro and strategic investment analysis to institutional investors. In the firm’s, last research note of 2022, Marco Iachini, senior vice president of research at Vanda, shed some light and data on retail’s current favorite as institutional traders are placing more and more importance on money flows from self-directed investors.
Tesla’s share price has been moving lower in recent weeks as investors and analysts have been critical of the steps the billionaire has taken at his social media company, including the level of focus he has given to his new acquisition. They also show concern of the interrelationship between Musk’s wealth, Twitter’s financial needs, and any tie-in with how Tesla may trade.
Tesla shares are headed for a 60% decline in 2022, which is the worst sell-off since its 2010 public offering. Tesla’s year-to-date loss outpaces the S&P 500’s decline of 18% and the Nasdaq 100’s drop of 31%. The old favorite, Apple stock, has given up 23% during the year.
On a wider scale, investors in Tesla, Apple, and other large-cap tech companies have been slammed this year after two years of above-average returns. Vanda underscored Tesla’s popularity, saying the stock makes up about 11% of the average retail portfolio.
On the Robinhood platform, Tesla is the ninth most popular stock of the year, with Microsoft filling the top position.
Many institutional investors have, over the years, used retail interest as a sign of what to stay away from or even short. “Given its growing importance, we view retail activity around it as a crucial signpost for what may be an eventual full-fledged capitulation in 2023,” said Iachini, who wrote the research note. This flies in the face of institutional chief investment officer and founder of ARK Invest Cathie Wood, who has purchased slightly more than 445,000 shares of the EV manufacturer since October. Over the previous year and a half, Wood has been a net seller of Tesla.
