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    Stock Market - We’ve been doing it all wrong

    May 01, 2021

    Stock Market - We’ve been doing it all wrong

    We’ve been doing it all wrong

    Posted: 01 May 2021 01:14 PM PDT

    I do not think it means what you think it means

    Posted: 01 May 2021 02:46 PM PDT

    Most Anticipated Earnings Releases for the week beginning May 3rd, 2021

    Posted: 01 May 2021 04:56 AM PDT

    I found that betting on home builders is a good way to play the current housing shortage. A lot more upside coming , I expect to sell NAIL at $200 or more before the end of the summer. $NAIL #stockmarket

    Posted: 01 May 2021 07:09 AM PDT

    The most discussed stocks on social media, and the stocks with the biggest increase in mentions last week, along with their sentiment scores.

    Posted: 01 May 2021 11:25 AM PDT

    Sony Recorded The Highest Net Profit In History

    Posted: 01 May 2021 06:48 PM PDT

    DEAR HODLERS

    Posted: 01 May 2021 03:22 PM PDT

    Waste Management (NYSE: $WM) DD I wrote for a discord I'm in

    Posted: 01 May 2021 07:08 PM PDT

    When searching for a company to do a DD on this week for this Discord, I initially was struggling to land on a company. There are just so many dividend growth companies on my watchlist that I didn't know where to start. Initially I was wanting to do a write up on HanesBrands, ticker $HBI, due to everyone needing underwear and socks but then I realized I hadn't put on underwear since I got home from work on Friday, so I just couldn't bring myself to break that streak to product test this company as thoroughly as I would have liked. However, this did lead me to throwing away some older underwear from the back of my drawer and having to race out to get them in the bin before the truck picked up this morning. Funnily enough, it was this little act that led me down the rabbit hole of America's first, largest, and objectively best waste management company, $WM. This write up will attempt to go over some of the reasons I view $WM as a prime choice for any dividend growth investor who is seeking to add to their industrial holdings by buying a company worth holding for 20+ years, including some basic financial information, how WM can grow into the future, as well as some potential problems with the stock that I see. Finally I am not a financial advisor and this is written purely for the purpose of sharing some publicly available stock info in the form of a poorly written, weed induced WM DD, I hope you enjoy.

    The aptly named Waste Management, ticker symbol $WM, is an industrial sector powerhouse with first mover-advantage specializing in the waste management sub-sector that has been slowly and steadily raising its dividend over the last 18 years. Waste Management operates primarily with four different revenue streams consisting of waste collection, landfill operations, waste transportation, and finally, recycling. It is with these four primary sources of revenue that allow $WM to boast a current dividend yield of 1.68% with a yearly dividend of $2.30 paid out quarterly in March, June, September, and December. This dividend represents a payout ratio of only 53% which is not very high at all and is actually very sustainable. In fact, it has a dividend safety score of 98 from simplysafedividends.com and is over where management is aiming for their dividend to be (between 40-50% according to their 2020 Investors day presentation.) In addition to being very sustainable, a payout ratio of 53% also leaves room for growth, and $WM has been doing just that. While it's 4 year average dividend yield is just slightly higher at 1.98% compared to todays at 1.68% the amount that yield represents has been growing at an average rate of 41.46% over the last 5 years, 28.24% over the last 3 years, and even in the shitstorm that was 2020, WM raised its dividend by 6.34% just showing that this company not only cares about it's dividend growth, but that it can easily afford to raise its dividend as one important thing to note is that during the last 18 years (since 2004) of consistent dividend increases, the payout ratio has more or less remained unchanged, maintaining managements preferred 40-50% payout ratio with occasional outbreaks such as where we are currently due to a contagious outbreak that rocked the entire world. Finally, Waste Management has a Current Price of ≅ $138, an analyst price range of $125-$160, and an average analyst price target of $144 showing some room for this stock to still raise or fall to a better entry point if it does fall to test the lower analysts prediction.

    Moving on from the dividend and surface level stock price breakdowns, $WM has a current P/E ratio of 37.7 and I know this might seem very high, it actually isn't when you compare it to other waste management companies. For instance, WM's next three largest competitors are Republic Services, with a P/E of 35.2, Clean Harbor, with a P/E of 36.7, and Waste Connections, which has a huge P/E of 141.13 (this is the only one of the three that I went and checked multiple sites and yes, it really is that big...) As you can see, a P/E ratio in the low to mid 30's basically comes with the territory of being in the waste management sub-sector. Just as the P/E ratio comes with the sub-sector; growth in the form of acquisitions will almost always bring some additional debt as its +1, and this is the next aspect of $WM's balance sheet that I want to touch on. In 2019 Waste Management achieved a major milestone for any company, it officially made enough to fully pay down it's yearly short term debt and pay off future long term debt, an achievement it had not completed since at least 2016 (and possibly before but this is the furthest back I could find regarding short term debt payments). Regardless, this is still an important feat as it shows that $WM is making enough money to support not only a growing dividend, but also additional amounts of debt to fund new acquisitions now and in the future. Now how can I make the claim that they can afford to take even more debt on? Well in 2020 (yeah the shitiest of shity years for businesses) $WM paid off all their short term debt and an additional $7.8 Billion in long term debt as well, just showing the strength of it's balance sheet and how the acquisitions it's made are paying off in time.

    Finally the last bit of financial digging I did resulted in me coming across something that did cause me to pause and I feel that any decent DD should include some potential negatives to put the positives into a better, more complete light. The elephant in the room in regards to Waste Management is it's unusually high P/B ratio of 7.7ish. While this ratio is generally not as important in the industrial waste management compared to say the financial sector, it is still important to compare it to its peers. The same three competitors mentioned above all have lower P/B ratios than $WM. Ultimately this just means it is slightly overpriced compared to its book value, this can be explained away simply by the fact that in 2019, seeing that it could pay off all it's short term debt, Waste Management added a large amount of debt to its balance sheet so that it could buy new acquisitions, one such acquisition was Advanced Disposal for 4.6 Billion. This higher P/B ratio also explains Morningstars 2 star rating. However my response to this information is just this: If you plan to buy and hold a stock for 20 years, isn't it better to open your position early, accrue dividends and price appreciation, while buying dips, than to just wait for its P/B ratio to dip down to a level you're more comfortable with? Especially considering that there is a very good chance that as the debt goes down as the acquisitions begin paying for themselves, so too will the P/B ratio fall.

    Moving on from financials and more towards hard assets, Waste Managements true strength starts to take form as it truly lives up to what one imagines from a company with first-mover advantage in its respective sub-sector. The company services over 20 million residential and 2 million commercial customers in 48 US States, Canada, DC, and Puerto Rico. $WM has a total of 293 active landfills with an average remaining lifespan of 22 years per landfill. They also have 346 waste transfer/consolidation stations, 146 recycling centers making it the largest recycling network in the nation , 16 waste to energy facilities that burn up to 23,000 pounds of trash to generate up to 670 MW/hour of electrical/steam energy, enough to power 660,000 homes. Waste Management also boasts 4 new Renewable Natural Gas (RNG) facilities that have already created more than 16 million gallons of RNG since coming online. This is enough RNG to power 1/3 of their 26,000 strong fleet and sell the remaining to local energy companies that then use the RNG to power roughly 460,000 homes. Finally every other landfill that WM owns and operates that isn't a special waste-to-energy or RNG facility also has some more basic ways to capture the methane that comes naturally with decomposing trash and sells that to local gas-to-energy companies that use the supplied methane to help power an additional 180,000 homes per year, bringing the total number of homes powered by trash to a whopping 1.3 million and WM only plans to raise that number to over 2 million in the coming years.

    The last aspect of Waste Management that I want to discuss is their future growth prospects and why I am bullish on them as a company overall despite the higher than average P/B ratio the company currently has. Everyone creates waste and we all need that waste taken away somewhere so that we can live the normal lives we have become accustomed to. In addition to being the largest, the first, and objectively the best waste management company, $WM is also investing heavily into renewable energy by harnessing the naturally occurring methane and other RNG's that are simply by-products of their primary business. In addition to selling the naturally produced energy that they found themselves having on their hands, $WM has also found a way to make money off of full and capped landfills by taking advantage of existing power lines that run to and from local electrical infrastructure turning them into solar farms and boosting the local power supply. Waste Management is also currently undergoing a change in it's payment model, a shift away from a flat rate bundled model that didn't take into account the costs of processing and holding the waste $WM picks up, and is changing to a fee-for-service model which will take into account everything from pick-up to transport, to recycling to even the costs it takes to turn that waste into energy. This move will essentially turn every action $WM takes into a way to make money. By providing such an essential service that no-one is exempt from needing, $WM has positioned itself amazingly to continue being the industry leader in waste management for decades to come. And that is no understatement, Waste Management has proven to be a very sticky company with a customer typically being a customer for 10+ years. The final aspect of $WM's growth potential I want to dig up hits closer to home for me and those in Texas than others, and that is Waste Management basically has a monopoly in Texas. Yes there are competitors here, but between being headquartered in Houston which is the 4th largest city in the nation and rapidly growing, and having cornered the market in the new silicon valley cities of San Antonio and Austin, $WM can rest easily knowing they have future customers for years to come.

    Overall I am extremely bullish on Waste Management and see this as an investment to hold for the 25 to 30 years I have left until retirement and honestly, with $WM I might get to retirement early, and while investing in trash might not be a dirty job, as someone who grew up watch Mike Rowe, I think it's only fitting that I make my portfolio get a little dirty to make money.

    submitted by /u/TheFondestComb
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    The former restaurateurs, now both 68, have watched as their money survived a series of booms and busts. After 30 years of retirement, their nest egg currently sits at $1 million.

    Posted: 01 May 2021 06:20 PM PDT

    Their pants are down! ��

    Posted: 01 May 2021 02:43 PM PDT

    Target prices for OXY? - OXY trending down, confusing why with oil prices staying above $60 a barrel. Seems like OXY is significantly undervalued. Curious on people's thoughts.

    Posted: 01 May 2021 04:50 PM PDT

    The obvious downside to OXY is potential weakness that resurfaces again in the oil market and it's debt load. Although, as long as the oil market stays reasonable price it's debt load seems highly manageable. Also, if the oil market stays reasonably priced for the next year or so I think it's highly likely OXY redeclares dividends which should boost it's stock price.

    ​

    Specifically, for their last quarter, 4Q2020, and pursuant to their earning call slides, they had cash flow from operations, before working capital expenditures, of $1.4 billion.

    ​

    Those same slide indicated an approximately $215 million annual cash flow, or $53.75 million quarterly cash flow increase per $1 increase of oil prices.

    ​

    Pursuant to OXY's 10-k, the average realized oil price for 2020 was $39.

    ​

    The average oil price for this year has varied between $47.62 and $67.98. With essentially all of this year being above $50. Thus, a conservative approximation of average realized oil price is probably at least $53 barrel.

    ​

    That's a difference of at least $14 per barrel translating to a quarterly cash flow increase of $752.5 million and, adding that to 4Q2020, cash flow, giving a quarterly cash flow of $2.152 billion.

    ​

    In the same 4Q2020 earning slides, there is a projected 2021 cap ex expenditures of $2.9 billion, or $725 million. per quarter. Thus, giving $1.4 billion in free cash flow generation.

    ​

    Pursuant to OXY's 4Q2020 10-k, OXY's biggest yearly debt burden is in the next 6 years through 2026, with several $1 billion debt maturing and a $3 billion debt maturing. The total debt maturing in the next 6 years is $13.565 billion, which averages out to $2.260 billion per year, or $560 million per quarter.

    ​

    Thus, with oil at or above $53 barrel and generating $1.4 billion in free cash flow generation, it should be more than enough to plan for and pay off OXY's significant debt payments coming in the next 6 years. Allocating the amount as calculated above, it would leave about $840 million per quarter in free cash flow after debt payments.

    ​

    That should be more than sufficient to bring back substantial dividends, maybe not at the same level as before but could easily be in the $0.50 to $0.7 per quarter range, and, thus, over $2 per year.

    ​

    With dividends of $2 per year, and assuming an approximately 6% yield, it would give the stock price a value of $33.33.

    ​

    Altogether, it seems as long as WTI oil is at or above $50 a barrel OXY's ability to handle it's debt is pretty safe and it begins to turn back into a cash flow giant. All of these numbers above feel fairly conservative, at least to me, since this quarter oil is likely to average closer to the $60 mark then the $50 mark which simply makes the case for OXY more compelling. Also, the world is beginning to come back to normal so there's a good chance oil demand increase even further driving oil prices higher.

    ​

    The if here, which is admittedly a big if, is the stability of oil prices and the oil market. Overall though, it does seem like OXY is undervalued and, if you have faith in the oil market, OXY is significantly undervalued.

    ​

    Curious of people's thoughts on this.

    ​

    TL;DR: With oil market stabilizing/stabilized, it seems like OXY can safely handle it's debt and is likely a cash flow giant. Seems underpriced to me, a little confused why OXY hasn't trended up more with WTI oil recently trending up back above $60 per barrely. barely

    submitted by /u/JuanPabloElTres
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    warren buffet advice to beginners in annual meeting 2021

    Posted: 01 May 2021 06:21 PM PDT

    Buffett says Berkshire “not competitive” with SPACs on deals

    Posted: 01 May 2021 05:35 PM PDT

    WEEK 2 Earnings Table | Earnings Season (With TICKERS)

    Posted: 01 May 2021 02:38 PM PDT

    Screener for stocks that are consolidating or have dipped?

    Posted: 01 May 2021 05:42 AM PDT

    Hello!

    I'm looking for some help if anyone could give me the correct settings for a finviz scanner on stocks that have dipped hard in the past few days and stocks that have been in consolidation for a week.

    ​

    I need this to try and find stocks that have been in consolidation or have dipped and reached their support and are ready to go back to their price. If there is something wrong with this way of trading or finding stocks like this then advice would be appreciated since I'm still somewhat new and trying to learn.

    ​

    I don't really know how to set up these screeners so any help on this appreciated!

    ​

    Thanks in advance.

    submitted by /u/ConsequenceGecko
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    RKT: dismantling bear case and why you should buy

    Posted: 01 May 2021 09:50 AM PDT

    RKT... I know the bear arguments: rising rates, housing bubble, etc. But don't miss the bigger picture. They are increasing market share at an insane pace and now expanding into online auto sales similar to carvana/vroom in addition to offering financing for said auto sales. Also the huge 500 million block trade was sold at $25. With share price sitting in $22s it's clear to see how undervalued it is. Even the CEO said that at $43 during the peak of the March pump it was undervalued. People like to throw around "gamma squeeze" often. However in this case it is very applicable. Take a look at OI for 5/21 $30c. Or 6/18. The fundamentals are there. The technicals scream buy. More catalysts are coming. What more do you need to see? Unfortunately RKT was erroneously lumped in with GME/AMC due the dividend and ER being at the same time GME media attention. Don't be deceived. RKT is the real deal.

    submitted by /u/BigDaddyJ_Stocks
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    Biden's new tax proposal worries investors

    Posted: 01 May 2021 05:11 PM PDT

    Financial advisers and analysts say they have already received a flurry of phone calls and emails from clients asking about President Biden's proposed tax plan, which would tax those making more than $1 million a year at a rate of 39.6% on profits on assets such as stocks, bonds, real estate and businesses. That is nearly double the current rate of 20%.

    Many want to know what changes, if any, they should make to their investments. And others are worried about how markets will fare under a higher-tax rate environment.

    "Conversations about taxes have picked up over the last two weeks," said Marc Scudillo, managing officer of EisnerAmper Wealth Management & Corporate Benefits LLC. "This is coming much faster than people anticipated," Mr. Scudillo added, referring to some investors' belief that Mr. Biden wouldn't attempt a tax overhaul until 2022.

    ​

    A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data.

    While the proposal requires approval by Congress, where it will be subject to negotiations and possible changes, here is what experts say investors should take away from the plan:

    Not all investments would be subject to the new tax rate.

    Most investors hold a variety of assets, ranging from taxable brokerage accounts to IRAs and employer-sponsored savings plans like 401(k)s. Only some of these accounts are taxable.

    In fact, in a Tax Policy Center study, analysts estimated just a quarter of U.S. corporate stocks are held in taxable accounts, down from more than four-fifths in 1965. Much of the rest appears to be held in accounts that are exempt from taxes, including retirement accounts, pension funds and, in many cases, assets owned by foreign investors.

    The actual number of taxpayers who would be affected by the rate increase will also be relatively limited. The White House estimates just 0.3% of taxpayers fall into the income bracket that would be hit by the boost.

    submitted by /u/Itachi_Uchiha-0357
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    LRC can make everyone Rich!

    Posted: 01 May 2021 07:10 PM PDT

    Loopring is an Layer-2 scaling protocol. It allows for building high-throughput, low-cost, non-custodial AMMs, orderbook exchanges, and payment applications on Ethereum by leveraging Zero-Knowledge Proofs.

    LOW COST

    Loopring performs most operations, including trade and transfer settlement, off of blockchain. This dramatically reduces gas consumption and overall transaction cost to small fractions of comparable on-chain cost.

    HIGH THROUGHPUT

    Loopring powers highly scalable decentralized exchanges and payments by batch-processing thousands of requests off-chain, with verifiably correct execution via ZKPs. The performance of crypto is no longer the bottleneck.

    submitted by /u/Ballerjoe_612
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    Trading OTC vs Listed (NASDAQ/NYSE)

    Posted: 01 May 2021 05:26 AM PDT

    Watched some interviews with successful day traders, who are students of tim skyes, and they mentioned how it is different trading OTC vs listed, that they just stick to OTC.

    So some of the reasons they mentioned were that OTC charts tend to be more cleaner (which i guess to be respecting support and resistance lines more; forming better setups that offer an easy stop), less prone to manipulation and algo trading (thus less noise and cleaner ?).

    Personally for me I've been trying to learn trading with listed big cap high volume stocks (with high volume options) because i'm using a small account (at least starting small), hence i wanna keep spreads as small as possible. And it doesn't help that OTC has a 6.95 fee that eats away a chunk of my profits / magnify my losses.

    Can someone please provide more insight and explanation regarding the differences between trading OTC and listed, as well as the implications? Is there one that is objectively/markedly better/easier?

    Also considering trying to learn OTC trading, but i'm not sure whether it's worth, given how i've invested so much time into learning trading on listed, plus not sure how profitable i can be given my small position size and relative high commissions.

    submitted by /u/sl33pycabl3
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    SELLING VOLATILE STOCKS

    Posted: 01 May 2021 05:11 PM PDT

    When deciding to sell a volatile stock, do we just place our sale prices in rounded numbers or in order to actually execute a sale more successfully, do we need to look at current ASK prices? I've noticed how ask prices can be shown including fractions of a penny.

    i.e, instead of an exact 10.00 P/S sale price, I've seen target sell prices that in this example can be 9.20. Then at that price a buyer will buy and if not, sale lost over asking by just .80 more.

    I hope my question was understood but now I think it applies more towards penny stock. Like a price of 0.0238.

    Anyway, my ask reason is due to something else that's blown me away and I've learned. It's incredibly insane how big a difference in millions or billions of dollars those fractions can amount to. Just by 1 fraction of a penny.

    Just trying to get all my i's dotted and t's crossed.

    submitted by /u/Humble-Assistant-10
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    NIO Stock Analysis, NIO Q2 April Vehicles Deliveries, Deutsche Bank Anal...

    Posted: 01 May 2021 06:45 AM PDT
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