Stock Thoughts
An Investment in Knowledge Pays the Best Interest
Benjamin Franklin
Video: Silvercrest Asset Management SAMG: 4.3% Yield, Sustained Growth in a Difficult Market
SAMG is a stable company with a solid business model in a difficult industry. Its focus on ultra-high net worth is the best area of the industry. OCIO, Institutional and International give SAMG some nice runways for growth. We believe in management and that SAMG provides a stable dividend distribution that will grow over time. We believe the stock is undervalued.
6.3% Dividend Yield for a Refocused AT&T
• 6.3% Dividend Yield.
• TV and Media business units have been divested.
• Fiber and cellular 5G are the focus.
• Pullback in price marked an attractive entry point for dividend-seeking investors.
• Fiber expansion offers a growth opportunity.
JNJ’s Reliable Dividend of 2.9% with Steady Growth
• 2.9% yield with 60 consecutive years of dividend increases.
• Spending 15% of revenue on R&D, over 50 drugs in the 5-year approval pipeline. Strong blockbuster portfolio, with 3 novel therapies expected to be approved in FY23.
• Spin-off of consumer segment, repositioning primary JNJ business unit to be more pharmaceutical and medical device oriented.
• Potential settlement on the horizon for Talc lawsuit, the independent legal unit reportedly has the 75% of claimants required for bankruptcy to move forward.
ONSemi Sweet Spot for High Growth with Fab-Light Model
• Double Digit Secular Grower with Reasonable Valuation
• $16.6 billion in backlog, with $2.5 added in 4Q22.
• Divesting from low-margin industries and fabs, trading top line revenue for investing in high-margin products in markets with less competition.
• SiC (silicon carbide) leader, producing higher margin wafers in fewer facilities.
• Repurchasing $3 billion in shares to FY25, with $698 million in 1Q23. Targeting 50% FCF return to shareholders.
Video: Bloom Energy’s BE Growth Blooms with IRA. Profitable Hypergrowth is Possible.
• IRA (Inflation Reduction Act) should accelerate growth for fuel cells.
• Hypergrowth sector, 2050 neutrality targets, and 2030 reduction targets are approaching fast.
• $10 billion in total backlog, $2.8 in new product backlog.
• First commercialization in carbon capture, expanding hydrogen cells and electrolyzation to Europe. Large expansion in the maritime segment, first successful deployment of a Bloom energy cell on a vessel.
• IRA tax credits significantly incentivize new installations and expand existing modules. Offering $3/kg of hydrogen produced over the electrolyzer’s or fuel cell’s lifetime.
Baidu: Major Potential For China’s Tech Titan
• Strong leadership positions in numerous hypergrowth sectors will drive strong growth expected into 2030.
• Apollo Go self-driving taxis are chartered in several major Chinese cities.
• Macroeconomic recovery in China, the zero COVID policy ended with lots of pent-up demand from consumers and advertisers. Baidu is a leader in search in China.
• Expecting tailwinds in advertising space, as firms shift from cost-saving measures to returning to expansion.
Video: Mobileye MBLY SuperVision Provides Future Growth Avenue. 35% CAGR Revenues and EPS.
• Leader in driver assisted and autonomous driving vehicle technology.
• Strong growth in advanced driver assistance systems, despite making up under 1% of volume, SuperVision makes up 33% of revenue growth.
• $17 billion in contracted sales cumulatively through 2030, with an average system price of $105 expected compared to the current $56.2.
• Robust real-world implementation of SuperVision, with 96,000 units deployed in FY22. Expecting over 100% growth in units shipped for FY23.
• Backed by strong consumer demand for more safety features and more fatigue-reducing driver features.
Bloom Energy’s Growth Blooms with IRA
• IRA (Inflation Reduction Act) should accelerate growth for fuel cells.
• Hypergrowth sector, 2050 neutrality targets, and 2030 reduction targets are approaching fast.
• $10 billion in total backlog, $2.8 in new product backlog.
• First commercialization in carbon capture, expanding hydrogen cells and electrolyzation to Europe. Large expansion in the maritime segment, first successful deployment of a Bloom energy cell on a vessel.
• IRA tax credits significantly incentivize new installations and expand existing modules. Offering $3/kg of hydrogen produced over the electrolyzer’s or fuel cell’s lifetime.
Fiserv: Deep Value Through Dominance In Payments
Fiserv (NASDAQ:FISV) is a financial technology firm specializing in payment processing. Through aggressive M&A, Fiserv hopes to establish a competitive advantage through advanced platform features. Fiserv has consistently outperformed its own estimates and has successfully leveraged several M&A actions in FY22 to gain a foothold globally. These merger actions have already realized $700 million in additional revenue due to acquisitions, 2 years ahead of schedule.
Taiwan Semiconductor Dominates Leading Edge
• Semiconductor market is expected to double in size by 2030. TSM (Taiwan Semiconductor Manufacturing) accounts for 26% of the world’s semiconductor output.
• Largest pure play fabricator, strength comes from long-term relationships.
• Scale and leading-edge technology as one of the only sub 7nm wafer technology manufacturers in the world.
• International expansion slotted in Japanese and American markets driven by a $100 billion CapEx (Capital Expenditure) expansion.
• Western governments want to distance domestic technology products from China and bring manufacturing back to their countries or local allies.
• The US CHIPS and Science Act provides roughly $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States.
4.3% Yield and Strong Business Momentum Despite Market Headwinds for SAMG
• 4.3% forward yield, paying out $0.72 per year. Expecting EPS growth of around 12%.
• Expanding offerings to include OCIO (Outsourced Chief Investment Officer).
• Strong free cash conversion, converting 57% of EBITDA to free cash flow.
• Despite downturn in market, SAMG still has strong AUM growth of 28% since its inception in 2003.
SuperVision Provides Future Vision for Mobileye
• Strong growth in advanced driver assistance systems, despite making up under 1% of volume, SuperVision makes up 33% of revenue growth.
• $17 billion in contracted sales cumulatively through 2030, with an average system price of $105 expected compared to the current $56.2.
• Robust real-world implementation of SuperVision, with 96,000 units deployed in FY22. Expecting >100% growth in units shipped for FY23.
• Backed by strong consumer demand for more safety features and more fatigue-reducing driver features.
