Vlad Bastion
Founder of Investment Bastion, Systematic Stock Ratings & Algorithmic Portfolios
With the 10-year Treasury yield touching 5%, cash generation and price strength matter more, favoring developed-market large caps that pair the highest free-cash-flow yields with strong momentum. General Motors leads with an 18.8% FCF yield, followed by BP at 13.6%, Marathon Petroleum at 11.6% with a top momentum score of 100, DHL at 11.4% and Shell at 11.3%. Verizon, AT&T, Suncor, Valero and Equinor complete the list with yields of 8.9% to 10.1% and momentum scores from 80 to 100. x.com
GM, Comcast, CVS, Bristol Myers Squibb, Pfizer, Citigroup, Lululemon, UPS, FedEx, Disney, PepsiCo, Target, Netflix and Uber are favorite value stocks right now. The picks rest on valuation, free cash flow, balance-sheet quality and how much pessimism is already priced in. x.com
Shell's stronger refining profits and larger buyback support the view that its breakout holds. Q3 adjusted earnings reached $10.8 billion versus $9.9 billion expected, as refining margins hit a record $42 a barrel; the three-month buyback rises from $3 billion to $5 billion. Those margins will not last forever. x.com
Refiners such as Valero and Marathon Petroleum may be nearing a top, because the cure for high prices is always high prices. The stocks have made monster moves as crack spreads blow out and foreign buyers fight for distillate capacity. x.com
Oil majors such as Shell, BP, ExxonMobil and Chevron deserve their multiples because they have consistently generated 10%+ returns across complete energy cycles. They are integrated, now diversified, and control a key commodity for decades ahead. Investors will do fine if they hold for the long term. x.com
Verizon and AT&T generate plenty of cash flow and can slow their spending if needed. Cell phones are widely used, and the carriers' metrics look fine. x.com
Valero faces structural obsolescence as battery and solar costs fall and transportation shifts from diesel to EVs, a risk the market misses by overweighting the news and the present. Its stock swung from $120 in 2018 to $40 in 2020 to $422 now. Valero and solar maker LONGi sit at opposite ends of who will power future transportation, with opposite present circumstances and opposite structural paths given the evolution of costs. x.com x.com
Petrobras leads this week's EWT Growth Leaders because of surging earnings and sales in the leading energy group. It ranks #1 with a 91 score and A rating: last-quarter EPS rose 121% year over year, sales 60%, and annual EPS 191%. A breakout above 26.42 or a fourth-wave pullback to 24.3-23.0 offers a setup for a projected fifth wave to 32.8-33.2. x.com
Oil producers and royalty companies such as Canadian Natural, Suncor, Freehold Royalties, Viper Energy and Obsidian Energy can make money without oil going higher, if prices stay elevated longer than the market expects, say through year end. Many are still valued on trailing free cash flow yields, realized prices and production rates, none of which reflect the current elevated spot price. x.com
US energy stocks are too cheap to ignore while investors pay up for richly valued growth names. The sector trades at 6 to 8 times earnings with massive free cash flow, yet makes up only 3.5% of the S&P 500. SpaceX and Tesla combined are worth more than the entire energy sector, with the crowd paying 90 times revenue for a rocket company. x.com
Marathon Petroleum's earnings are impressive at $17 a share, and Q3 should be better. The open question is whether it can reach $25 a share and sustain that for a few quarters. x.com
