I first made Royal Bank of Canada (RY) a Long Idea in April 2018 and most recently reiterated my bullish thesis on the stock in September 2023. The market isn’t fully appreciating the strength of this business, and its stock remains undervalued. My thesis highlighted Royal Bank of Canada’s diversified business, position as an industry leader, growing net interest margins, and attractive valuation. Today, the company continues to grow its deposits and loans, as well as net interest income and net interest margins. Meanwhile, I think the valuation of the stock is cheap and offers attractive risk/reward. RY offers favorable…

Let’s say you’ve noticed that AI-related stocks like Arista Networks, Nvidia, Service Now, C3.AI and others have been selling off lately, sometimes in dramatic fashion. You’ve considered the amount of intense hype surrounding artificial intelligence claims and you’ve decided to at least diversify out of the sector. For something completely different, some investors have been picking up value stocks rather than fantasizing about the possibilities of Silicon Valley’s dream world. Names with low price-earnings ratios don’t always make the front page but a few possess no (or almost no) debt, a quality factor of the old school. And some pay…

The Federal Open Market Committee has seven remaining scheduled meetings for 2025 with the next on March 19. The expectation of fixed income markets is that interest rates will be cut in 2025 most likely two or three times. However, these cuts may be weighted towards later in the year, with the next interest rate cut most likely in June. There was no change in interest rates when the FOMC met in January. The FOMC’s Meeting Calendar The FOMC’s next two interest rate decisions on March 19 and May 7 are seen as less likely to deliver interest rate cuts…

In the shadow of recent White House tensions between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy, coupled with the new administration’s aggressive tariff policies, global investors are reassessing their portfolios. As U.S. equity markets experience a notable rotation from growth to value, Europe emerges as a compelling destination for value-oriented investors seeking both stability and opportunity. Value Investing Finds Its European Home The European market has long been overlooked by international investors focused on high-flying American tech stocks. However, as growth stocks lose momentum in the face of economic uncertainty, Europe’s value-rich landscape offers a refreshing alternative. European…

In the first two months of this year, technology stocks fell more than 4% and consumer discretionary stocks fell about 5%. They were the only two sectors with losses among the 11 market sectors tracked by Standard & Poor’s Dow Jones Indices. Is that the way this year is going to go? I don’t think so. Here’s my take on each sector. Technology One year ago I wrote, “I’d pencil the tech group in for a 15% gain over the coming 12 months.” That was pretty close. The actual figure was 18.4%. For the coming 12 months, I predict that…

During a recent client meeting, I talked about Amazon (AMZN) and did a deep dive into its valuation. The results were shocking. When you look under the hood of the stock’s valuation, you see that the market’s expectations for future cash flows are shockingly high. Shocking. Let’s get specific Expectations Investing Analysis on AMZN As I do for all of my Reverse DCF Case Studies, I use my firm’s valuation models to quantify the future performance of the company required to justify its current stock price. Specifically, my model shows that to justify ~$239/share Amazon would have to: grow revenue…

Shares of Mixue Group, China’s largest bubble tea chain controlled by billionaire brothers Zhang Hongchao and Hongfu, jumped 43.2% in its highly anticipated Hong Kong stock market debut on Monday, boasting a market cap of $14.1 billion. The company, best known for selling freshly-made drinks for about $1, ended its first trading day at HK$290, up from its IPO price of HK$202.5 apiece. The company raised HK$3.45 billion ($444 million) from the IPO, which attracted a raft of cornerstone investors, including Chinese investment firms Hongshan and Boyu Capital, as well as existing backers Hillhouse and Meituan-backed fund Long-Z. Mixue said…

Kinder Morgan (KMI) is a blue-chip energy payer that boasts 79,000 miles of pipelines, which transport crude oil, carbon dioxide and other products, though chiefly natural gas. In fact, some 40% of natural gas produced in the U.S. flows through Kinder’s systems. It also has 139 terminals that store petroleum products, chemicals, renewables, and more. But venerable though it might be, Kinder Morgan is having a rocky start to the year, courtesy of a nearly 15% slide since its Q4 earnings report in January—and this sudden downturn in price has me eyeballing KMI (and a handful of other high-dividend energy…

The family office market is an increasingly significant segment of the global wealth management industry. Yet, despite its growing prominence, there remains a striking lack of consensus on its size, structure, and even its definition. Estimates of the number of family offices worldwide range wildly, from 3,500 to 20,000, depending on the source. Deloitte’s 2024 estimate of 8,030 family offices, growing at a compound annual growth rate (CAGR) of 4.8% to reach 10,720 by 2030, is one of the more recent attempts to quantify this elusive market. At the same time, some new family office market sizing models are being…

Here’s where I see stocks now: Yes, we’ve got some legitimate concerns as some economic warning signs appear—and run up against the tech-driven optimism that’s powered stocks to lofty heights. The result? Volatility. So today we’re going to look at a couple quick moves we can make to both protect ourselves and tap into the bargain income opportunities—including a 10.6%-paying closed-end fund (CEF)—that times like this always turn up. For that, we’re really talking about two things. First up, we’re going to add income plays beyond stocks. Specifically, we’re going to look at corporate bond–focused CEFs, many of which are…