Stock Thoughts
An Investment in Knowledge Pays the Best Interest
Benjamin Franklin
Perrigo Paves the Way for Recovery with Margin Focus
• 4.6% Dividend Yield, 21 consecutive years of growth.
• Concluded quality assurance program in the infant formula segment, expects to ramp production and return to form by 2026.
• Entering cost saving program, through consolidation of the organization and headcount cuts expects to save $150 million by 2026.
• Creating new ‘disruptive growth’ team to identify new markets to enter.
• Refinanced debt on the balance sheet, with new maturities not starting until 2030. Expects meaningful deleveraging below 3.0x net debt to EBITDA by 2026.
• Entering into voluntary non-renewals of contracts that are margin dilutive
Secular Silver Shortfall Could Keep Prices Higher for Longer for Pan American Silver
• $0.40 annual base dividend, yielding 1.89%.
• Variable dividend program linked to gross debt, paying up to $0.72 annually or yielding 3.3%.
• Demand projected to continue to outstrip supply in silver markets, with PAAS estimating an annual shortfall of 150 Moz to 2028.
• Strong base of gold assets (73% of revenue) with high silver exposure (20% of revenue).
• Record high cash position of $887.3 million thanks to the sale of non-core assets, giving PAAS no net debt.
• For the year ending December 2024, PAAS had an output of 21.1 Moz of silver and 893 Koz of gold.
Solar Stocks to Brighten Your Portfolio: Canadian Solar (CSIQ) and First Solar (FSLR)
CSIQ:
• Trading at far less than the sum of its parts, with Recurrent Energy and CSI Solar combined being worth $87.26 per CSIQ share.
ion to enhance recurring revenues.
• The global push toward renewable energy is secular and likely to accelerate as AI-driven datacenter demand rises.
• Onshoring more of the manufacturing base to the US will mitigate tariff risks in both batteries and solar.
FSLR:
• Growing manufacturing base to 25GW by 2026, with 14GW in the US. Fully integrated supply chain independent of Chinese supply mitigates most tariff risks.
• Sell-off driven by fears of loss of IRA tax credits, however, FSLR remains profitable without the credits and its unlikely they will be repealed in their entirety.
• Largest US solar manufacturer and #10 in the world by market share.
First Solar Shines Through Cloudy Market
• Growing manufacturing base to 25GW by 2026, with 14GW in the US. Fully integrated supply chain independent of Chinese supply mitigates most tariff risks.
• Sell-off driven by fears of loss of IRA tax credits, however, FSLR remains profitable without the credits and its unlikely they will be repealed in their entirety.
• Largest US solar manufacturer and #10 in the world by market share.
• FSLR’s 17 TOPCon patents might yield a third-party sale or royalties, as the U.S. International Trade Commission looks into banning infringing imports and the Chinese government upheld FSLR’s ownership.
• FSLR’s CdTe modules have higher temperature tolerance and lower annual degradation rates compared to Chinese-dominated c-Si modules.
Shift to Smoke-Free Sparks Steady Dividend Growth
• 4.5% dividend yield, 16 consecutive years of dividend growth.
• Renewed interest in the US market, bringing new IQOS products to market in the second half of 2025 and continued investment in the Zyn brand.
• Plans to re-institute share repurchase program after reaching 2.0x net debt to EBITDA target, currently 3.0x.
• Smoke-free nicotine products have 2.6x the gross margin per unit compared to cigarettes.
• Brand-loyalty in cigarettes has meant price increases have offset or even exceeded volumes.
Onshoring Brightens Canadian Solar’s Future
• Trading at far less than the sum of its parts, with Recurrent Energy and CSI Solar combined being worth $87.26 per CSIQ share.
• Sold 20% of utility-scale project manager to Blackrock, repositioning it to begin operating battery-storage and solar-generation to enhance recurring revenues.
• The global push toward renewable energy is secular and likely to accelerate as AI-driven datacenter demand rises.
• Onshoring more of the manufacturing base to the US will mitigate tariff risks in both batteries and solar.
• CSI Solar has shipped over 22 GW of solar components year to date, making it the #5 spot in global market share.
Civitas Continues to Deliver Peer-leading Free Cash
• 4.2% base dividend, 50% of free cash flow going toward share repurchases.
• Colorado regulatory uncertainties have historically pressured valuations, but the early 2024 agreement has delayed major risks until 2028.
• Civitas has partially shifted to the Permian Basin, emphasizing cost reduction in drilling operations rather than outright production gains.
• Still some minor expansion in DJ Basin, advancing with 4-mile lateral drills in premium-priced high-grade oil.
Bath and Body Works Has Long Term Earnings Potential
• 2.2% Dividend Yield
• Loyal customer base, with loyalty members making up 80% of sales.
• 85% of the supply chain originated in North America, mitigating tariff risk.
• Produces 55% of its end products in-house, with 40% of products on offer being seasonal only.
• Peer leader in sales per square foot with $1,074/sqft in sales.
• Expanding into ‘adjacent’ markets like products marketed at men and products marketed to Gen Z to boost new-customer growth.
Tyson Foods Farms Free Cash Despite Cyclical Downturn
• 3.14% Dividend Yield
• 13 consecutive years of dividend increases, most recently increasing by 2% in November 2024.
• Despite overlapping downcycles in pork and beef markets, Tyson generated $1.5 billion in free cash flow.
• Shifting more production to high margin value-added products like pre-made food and pre-seasoned meat across all segments.
• Targeting leverage ratio of net debt to EBITDA of under 2.0x, currently 2.6x with most debt maturing past 2027.
StoneCo’s Elevated Take-Rate Yields $350 Million Buyback
• Recently announced $350 million repurchase agreement, representing more than 10% of shares.
• Despite pressure from low-cost payment architectures, STNE has been able to maintain a high take-rate thanks to value-added services.
• Management indicated it may sell off the software arm to run a more lean and transparent business.
• Obtained banking license in early 2024, allowing it access to cheaper funding and increases the stickiness of the business model.
• Brazil has a fragmented payments industry with ample cross-selling opportunities.
Despite Neuroscience Setback AbbVie has Strong Recovery Ahead
• 3.95% Dividend Yield.
• Stock dropped 17.3% on the failure of Emraclidine in Phase 2 Trials, a drug only projected to make up ~7% of revenues.
• Aggressively expanding oncology offerings, acquiring ADC (antibody drug conjugates, non-chemo cancer drugs) expert ImmunoGen.
• Expects to replace Humira revenue in 2025 with two new immunology drugs and grow to be more than $27 billion in annual revenues.
• Shifting focus in neuroscience to Alzheimer’s and Parkinson’s, areas with few effective on-market treatments.
Fidelity National Financial has Strong and Safe Dividend Despite Housing Market
• 3.3% Dividend Yield recently announced 4% dividend increase.
• Expects robust housing recovery in 2026, betting on a similar timeline for commercial real estate.
• #1 market share in the US for title insurance, in both agency and direct sales.
• F&G has secular tailwind in life and annuity from aging population.
• Despite downturn in housing market, FNF grew revenues by 8% over the first 9 months of 2024.
