Getty Images Previous Coverage In early November last year I reported on Hexcel Corporation ( HXL ) for the first time and rated the stock a BUY based on improving fundamentals, a favorable valuation, and an appealing potential forward return supported by strong projected earnings growth. Since my initial coverage, the stock has fluctuated some, peaking at more than $95 per share and exceeding a 3...
Getty Images Previous Coverage In early November last year I reported on Hexcel Corporation ( HXL ) for the first time and rated the stock a BUY based on improving fundamentals, a favorable valuation, and an appealing potential forward return supported by strong projected earnings growth. Since my initial coverage, the stock has fluctuated some, peaking at more than $95 per share and exceeding a 30% return in early March. However, following that apex, the stock dwindled lower before recovering some over the last month. Over the past ~6 months, HXL has vastly outpaced the SPDR S&P 500 ETF Trust ( SPY ), returning more than 6 times the ETF. Earlier this week, Hexcel announced their Q1 2026 earnings, so let's dig into the call and assess how the company has performed, as well as where it might go, and also look at an updated valuation based on refreshed free cash flow numbers. Data by YCharts Q1 2026 Earnings And Looking Ahead As noted above, on Wednesday, April 22nd, the company announced their most recent earnings report, where it posted Non-GAAP earnings per share of $0.59, exceeding the consensus by $0.15, on revenue slightly above $500 million, which beat analyst expectations by nearly $18 million and was a year-over-year increase of almost 10%. Starting with the Composite Materials segment, sales increased from $365.3 million in Q1 2025 to $398.8 million in the most recent quarter, an increase of $33.5 million, or a little more than 9%. Within this segment, Commercial Aerospace saw an enormous jump in revenue of approximately $40 million, or more than 16%. These strong results were driven by increased volumes for both Airbus and Boeing programs and reinforced by stabilizing inventory levels, heightened OEM build rates, and overall aerospace recovery. Moving on to the Defense, Space & Other piece within Composite Materials, sales declined about $6 million, or 4.8%, partially because of the divestiture of an Austrian industrial business, as well as weaker volumes w...
U.S. House Minority Leader Hakeem Jeffries (D-NY) speaks during his weekly press conference, on Capitol Hill in Washington, D.C., U.S., March 19, 2026. Nathan Howard | Reuters Congressional Democrats on Wednesday vowed to fight with what limited power they have from the minority in the House and the Senate against the Supreme Court' s decision to strike down a voting map in Louisiana. "Today's dec...
U.S. House Minority Leader Hakeem Jeffries (D-NY) speaks during his weekly press conference, on Capitol Hill in Washington, D.C., U.S., March 19, 2026. Nathan Howard | Reuters Congressional Democrats on Wednesday vowed to fight with what limited power they have from the minority in the House and the Senate against the Supreme Court' s decision to strike down a voting map in Louisiana. "Today's decision by this illegitimate Supreme Court majority strikes a blow against the Voting Rights Act and is designed to undermine the ability of communities of color all over this country to elect their candidate of choice," House Minority Leader Hakeem Jeffries , D-N.Y., said at a Congressional Black Caucus press conference on Wednesday. "But we're not here to step back, we're here to fight back." Read more CNBC politics coverage Trump’s lack of focus on economy is spooking Republicans as 2026 election looms Trump orders Navy to ‘shoot and kill any boat’ laying mines in Hormuz Strait U.S. Navy Secretary John Phelan leaving Trump administration: Pentagon The court's 6-3 decision weakens a key provision of the Voting Rights Act — a landmark 1965 civil rights law that prohibits discrimination in voting — and limits the consideration of race in drawing congressional maps. It strikes down a majority-Black district in Louisiana and could precipitate the elimination of other majority-Black districts represented by Democrats elsewhere in the country. Republicans celebrated the ruling. "Today's decision is a victory for the Constitution and the principle that every American citizen is equal under the law. The Supreme Court made clear that our elections should be decided by voters, not engineered through unconstitutional mandates," National Republican Congressional Committee Chair Rep. Richard Hudson, R-NC., said in a statement. "For too long, activists have manipulated the redistricting process to achieve political outcomes, dividing Americans instead of bringing them together. This ruli...
Earnings Call Insights: Acadia Realty Trust (AKR) Q1 2026 Management View “We had another strong quarter in what is shaping up to be a very solid year both with respect to our internal as well as our external growth initiatives,” and management tied results to “continued strong results driven by strong tenant demand, strong tenant performance and attractive investment opportunities” (President, CE...
Earnings Call Insights: Acadia Realty Trust (AKR) Q1 2026 Management View “We had another strong quarter in what is shaping up to be a very solid year both with respect to our internal as well as our external growth initiatives,” and management tied results to “continued strong results driven by strong tenant demand, strong tenant performance and attractive investment opportunities” (President, CEO & Trustee Kenneth Bernstein). “We delivered 11% year-over-year earnings growth, driven by nearly 6% same-store growth,” and management highlighted “over $2.5 billion of transactional activity comprised of $600 million of new investments, over $500 million of recapitalizations within our investment management platform and a new $1.4 billion corporate borrowing facility” (President, CEO & Trustee Bernstein). “Our total volume of signed leases in Q1 was an additional $3.5 million at our share,” and “we've grown our pipeline of new leases in advanced negotiation to $11.5 million” (Executive VP of Leasing & Development Alexander Levine). “We formed a joint venture with TPG Real Estate… a [ $440 million ] transaction,” and “we completed the recap of Pinewood Square and Palm Beach County… a $68 million transaction,” which management described as freeing capital to “accretively redeploy” (Executive VP & Chief Investment Officer Reginald Livingston). “We raised both the high and low of our guidance to $1.22 to $1.26,” and management said this was driven by “the strength in our operations and the accretive acquisitions we've completed to date” (Executive VP & CFO John Gottfried). Outlook “We raised both the high and low of our guidance to $1.22 to $1.26,” which management said “represent[s] 9% growth at the midpoint over the $1.14 of FFO we reported in 2025” (Executive VP & CFO Gottfried). “We anticipate our quarterly run rate will be in the $0.30 to $0.32 range for the balance of the year,” and management said this “does not factor in additional acquisition accretion notwithstandi...
Earnings Call Insights: Phillips 66 (PSX) Q1 2026 Management View “Geopolitical events in the Middle East drove unprecedented commodity price volatility during the quarter.” (CEO & Chairman Mark Lashier) “Due to the closure of the Strait of Hormuz, a significant amount of global refining and petrochemical capacity is down. We, however, continue to operate at high utilization, supplying products to...
Earnings Call Insights: Phillips 66 (PSX) Q1 2026 Management View “Geopolitical events in the Middle East drove unprecedented commodity price volatility during the quarter.” (CEO & Chairman Mark Lashier) “Due to the closure of the Strait of Hormuz, a significant amount of global refining and petrochemical capacity is down. We, however, continue to operate at high utilization, supplying products to our customers.” (CEO & Chairman Lashier) “This quarter has seen a significant and favorable shift in market fundamentals.” (CEO & Chairman Lashier) “Unplanned downtime in global refining assets has reduced inventories and will support margins.” (CEO & Chairman Lashier) “Reduced petrochemical production globally due to downtime and higher naphtha prices has reduced inventories and will also support margins.” (CEO & Chairman Lashier) “We have a strong commercial organization with 6 offices across the globe.” (Executive Vice President of Marketing & Commercial Brian Mandell) “We trade over 6 million barrels of liquid hydrocarbons every day.” (Executive Vice President Mandell) “Volatility is likely to persist into next year.” (Executive Vice President Mandell) “First quarter reported earnings were $207 million or $0.51 per share. Adjusted earnings were $200 million or $0.49 per share.” (Executive VP & CFO Kevin Mitchell) “The company's financial results were impacted by mark-to-market losses of $839 million related to short derivative positions used as economic hedges.” (Executive VP & CFO Mitchell) “We had a use of operating cash flow of $2.3 billion.” (Executive VP & CFO Mitchell) “We returned $778 million to shareholders, including $269 million of share repurchases and $509 million of dividend payments.” (Executive VP & CFO Mitchell) “We increased the quarterly dividend 7% on an annualized basis.” (Executive VP & CFO Mitchell) Outlook “Looking ahead to the second quarter... In Chemicals, we expect the global O&P utilization rate to be in the low 80s, driven by the uncertain...
benedek/iStock Unreleased via Getty Images It's fair to say that the automotive sector isn't loved right now (most manufacturers), and it's also fair to say that Mercedes ( MBGYY ) is a company that is, in fact, not loved. While my position over time is still not deeply negative due to a very low cost basis, the recent few months of performance have been poor, to say the least. The company is bein...
benedek/iStock Unreleased via Getty Images It's fair to say that the automotive sector isn't loved right now (most manufacturers), and it's also fair to say that Mercedes ( MBGYY ) is a company that is, in fact, not loved. While my position over time is still not deeply negative due to a very low cost basis, the recent few months of performance have been poor, to say the least. The company is being viewed as a "HOLD" by most - and even a "SELL" by Wall Street analyst averages. So what do I see that causes me to, at least provisionally, hold a different view on the company here? My latest article is about 4 months old at this point, and the results posted today warrant an update for the company valuation target and my estimates. I not only invest in automotive manufacturers, I also invest in the entire space at the right valuation. This includes parts and seating, like Magna ( MGA ), it includes airbags like Autoliv ( ALV ), it includes technology and chips like Infineon ( IFNNY ), and it also includes the straight manufacturers, like Mercedes-Benz. Infineon is a good example of an automotive investment that has in fact paid excellent dividends ( in the sense that my returns for the company have been superb from my point of investment). Oftentimes, when you invest in a company at a low, and set a target (and miss out on that target), you fail to see the objective upside beyond the current market sentiment. It's currently my view that Mercedes-Benz is a tricky company to invest in. I've honestly made more money with Daimler Trucks ( DTRUY ) the past few years. But I do believe that the company's "day will come". Please also note that in my last article, I made a case for rotation, which I also did at profit for 65% of my stake. This does not mean that my current position is "scot-free" or that I defend myself or the performance using this. It highlights certain aspects of my strategy, however, that I believe to be beneficial I'll try to show you why here - what makes,...
KPMG Ends U.S. Gov't Audit Business After Losing Army Contract KPMG, one of the Big Four accounting firms, is winding down its federal government audit business after losing a $64 million-a-year U.S. Army audit contract, a major setback as the Department of War under Defense Secretary Pete Hegseth moves to bring in another accounting firm. According to the Financial Times , the Army's shift to a n...
KPMG Ends U.S. Gov't Audit Business After Losing Army Contract KPMG, one of the Big Four accounting firms, is winding down its federal government audit business after losing a $64 million-a-year U.S. Army audit contract, a major setback as the Department of War under Defense Secretary Pete Hegseth moves to bring in another accounting firm. According to the Financial Times , the Army's shift to a new auditor comes as pressure intensifies on Hegseth to gain control of the DoW's finances after nearly a decade of failed independent audits. The DoW, which oversees an annual budget of roughly $840 billion, has not passed an independent audit in eight years, and Washington lawmakers have set a deadline for the department to do so by 2028. "We're ending the wasteful process of agency-by-agency opinions and slashing the number of disjointed separate audits by two-thirds," Hegseth said. "The mission is simple: break down bureaucratic barriers to get you, the taxpayer, concrete results." FT sources said the Army was KPMG's largest federal audit client, and 450 U.S. staff who oversaw the federal audit work will be transitioning to other roles. "Over the past few years, KPMG has prioritized advisory services for the federal government," KPMG said, adding, "We are transitioning out of federal audit roles through an orderly, multiyear process, meeting all client and regulatory obligations. As demand continues to grow across both audit and advisory, we will be redeploying our talented federal audit professionals across the firm to meet client needs." Meanwhile, EY remains the prime auditor for the Air Force, Navy, and Marines. The Marines are the only military branch to have received an unqualified audit opinion. The DoW says the new consolidated audit strategy will streamline the process toward full audit compliance by 2028. Last month, Platte Moring, the Pentagon's inspector general, stated, "This new composite approach to auditing and its implementation reflect meaningful progre...
filo/iStock via Getty Images Investment Thesis Despite their focus on a single sector, REITs are saturated with a wide variety of assets that differ significantly in terms of business models and portfolio composition. Results from my previous research have demonstrated that investing in pure-play mREITs is more profitable and efficient, so I continue to maintain my view that AGNC Investment ( AGNC...
filo/iStock via Getty Images Investment Thesis Despite their focus on a single sector, REITs are saturated with a wide variety of assets that differ significantly in terms of business models and portfolio composition. Results from my previous research have demonstrated that investing in pure-play mREITs is more profitable and efficient, so I continue to maintain my view that AGNC Investment ( AGNC ) is highly attractive for investors. Even though the mortgage-backed securities sector is currently facing temporary challenges caused by the escalation in the Middle East, it's my expectation that the financial results of pure-play mREITs will improve in the second quarter. That's why I'm reaffirming my "Buy" rating on AGNC. When it comes to Rithm Capital ( RITM ), while the diversified structure of its hybrid platform helps mitigate interest rate risks, this doesn't solve the main issues with valuing its book value. So, this company's shares are trading at a significant discount. Even though AGNC and RITM represent two different approaches in the mortgage sector, both are competing for the same spot in the portfolios of income-focused investors. Currently, when the Fed's high-interest rates appear set to remain in place longer than expected, selecting between the two models for handling mortgage-backed securities is no longer merely a question of yield levels. Rather, this is a question of the degree of risk investors are willing to assume in exchange for the offered returns. I will analyze in this article why AGNC's portfolio will remain the ideal choice for alpha-driven investments in 2026, even though RITM's highest rating remains "Hold." Does the 32% premium on AGNC relative to book value justify RITM's "black box" discount, given that interest rate risks could impact the former’s returns, paving the way for the recovery of the investment holding company’s hybrid platform? You will find all the answers in the sections of this article. Previous Analysis In my previou...