jetcityimage/iStock Editorial via Getty Images Navient Corporation ( NAVI ) appears to be going through a process of making significant headcount reductions, being required to outsource servicing of their federal loans to our understanding as a consequence of the CFPB decision, and therefore after a restructuring will benefit from a leaner structure and more mix towards higher margin consumer lend...
jetcityimage/iStock Editorial via Getty Images Navient Corporation ( NAVI ) appears to be going through a process of making significant headcount reductions, being required to outsource servicing of their federal loans to our understanding as a consequence of the CFPB decision, and therefore after a restructuring will benefit from a leaner structure and more mix towards higher margin consumer lending, still in the market segment of education loans. The company funds and finances in such a way that there isn't too much exposure on earnings from rate changes, but should rates rise the net effect on earnings per share is expected to be positive. IR sensitivity (10-Q) The positives of the thesis would be for the macro tendency now of higher rates possibly supporting NAVI income, and the mix shift and cost cutting plans. The negatives would be refinancing originations driving growth in originations, reflecting overall pressure in end markets, without considerably more loan loss provisions in the income statement. Additionally, we are skeptical about the prospects of long-term growth in this market outside of the mounting credit concerns that come from a worsening macro backdrop. Our thinking is that both demographics and overly expensive and often not very useful higher education with low ROI are going to make alternative, less expensive schooling more fashionable. Navient is also not a particularly well regarded corporation by most stakeholders , particularly indebted youth wondering about loan forgiveness programmes. While a 12x forward PE isn't high, it's also higher than plenty of other less complicated businesses out there. Discussion of results First thing to note is that there is a considerable gap between net interest margins on their increasingly marginal Federal loan portfolio and what is going on in their consumer lending business. FFELP loans have a fourth of the profitability of the consumer lending businesses. Therefore, as the FFELP balances fall and the r...
Shares of FedEx Corp. ’s former freight division fell on Monday in their first day of trading as an independent, publicly held company. The stock fell as low as $141.33, about 12% lower than the final price in Friday’s pre-spinoff trading, triggering a trading halt for volatility. FedEx Freight shares lagged transportation peers, which were broadly weak on Monday amid an uptick in oil prices. As a...
Shares of FedEx Corp. ’s former freight division fell on Monday in their first day of trading as an independent, publicly held company. The stock fell as low as $141.33, about 12% lower than the final price in Friday’s pre-spinoff trading, triggering a trading halt for volatility. FedEx Freight shares lagged transportation peers, which were broadly weak on Monday amid an uptick in oil prices. As a standalone company, FedEx Freight is one of the largest public freight firms in North America. Trading on the New York Stock Exchange under the ticker FDXF, the company is set to join the S&P 500 Index before the start of Tuesday’s trading, replacing EPAM Systems . “A transition to a standalone LTL carrier could drive uneven early performance,” BMO analyst Fadi Chamoun wrote last week in a note to clients, referring to the company’s less-than-truckload business. “Establishing execution credibility — likely required to support higher valuation — may take time.” The stock-market debut marks the finalization of a spinoff roughly a year and a half in the making. FedEx CEO Raj Subramaniam first announced plans to separate the freight unit from the core parcel and supply chain business in December 2024, saying the move would allow the companies to better focus on their own businesses and improve shareholder value. FedEx Freight is coming into the public market at a dynamic time for the trucking industry. While the sector is beginning to see an uptick in rates following a prolonged freight recession that kicked off during the pandemic, it is also under pressure from high fuel prices brought on by the war in Iran. BMO’s Chamoun started coverage of the stock with a hold-equivalent rating and a price target of $140, saying that execution would determine whether the company could take advantage of a “sizeable” opportunity to grow its margins. FedEx shares were little changed on Monday after accounting for the removal of the freight division from its market valuation.
Naphatthakan Trakunchansaeng/iStock via Getty Images Overview Nuveen Credit Strategies Income Fund ( JQC ) provides investors with direct access to a wide range of income-producing securities. These sort of debt focused investments tend to serve as a strong hedge against the equity markets. However, I think the appeal of these sort of income funds are fading, especially in a scenario where interes...
Naphatthakan Trakunchansaeng/iStock via Getty Images Overview Nuveen Credit Strategies Income Fund ( JQC ) provides investors with direct access to a wide range of income-producing securities. These sort of debt focused investments tend to serve as a strong hedge against the equity markets. However, I think the appeal of these sort of income funds are fading, especially in a scenario where interest rates are hiked over the next twelve months. When I previously covered JQC, I issued a sell rating due to the large use of leverage and unsustainable payouts. Since then, the fund's share price has continued its decline. Now that the macroeconomic environment has shifted, I wanted to revisit the most updated reporting and reassess its overall value proposition. Due to the continuous decline in share price, JQC now trades at a discount to NAV of 10.89%. Referring to the red line on the graph below, we can see that the fund is now trading near the lower end of its historical price to NAV range. For instance, JQC has traded at an average discount to NAV of 8.43% over the last five year period. Despite the deeper discount, I do not think this is a good time to accumulate shares. I believe that the discount is a direct reflection of the challenges that the fund continues to face. CEF Data The fund now offers investors a high starting dividend yield of about 12.3%, while issuing those payouts on a monthly basis. While the starting yield may be enticing, I believe that the fund will have to eventually reduce its payouts before the end of the year if it wants to preserve its NAV. The latest reporting indicates that JQC is still paying out more than it actually earns, which simply isn't sustainable over time. If interest rates are hiked at any point in the next few quarters, I believe that the fund will directly expose investors to the deterioration of the debt markets and threat of borrower defaults. Fund Strategy According to the latest fund overview , JQC now has total managed ...
"Firing On All Cylinders, But..." US Manufacturing Surveys Send Mixed Signals In May With US hard data taking a beating (relative to expectations) last week (red line below), analysts remain hopeful that US Manufacturing will hold up (durable goods orders were solid) with this morning's Manufacturing PMIs set to signal stability. The final May S&P Global US Manufacturing rose to 55.1 (down from th...
"Firing On All Cylinders, But..." US Manufacturing Surveys Send Mixed Signals In May With US hard data taking a beating (relative to expectations) last week (red line below), analysts remain hopeful that US Manufacturing will hold up (durable goods orders were solid) with this morning's Manufacturing PMIs set to signal stability. The final May S&P Global US Manufacturing rose to 55.1 (down from the 55.3 flash print) but the strongest since April 2022 ISM's Manufacturing PMI survey also signaled improvement, up from 52.7 to 54.0 (better than 53.0 expected). "At first glance, the manufacturing sector seems to be firing on all cylinders but lift the hood and the picture is not so clear," says Chris Williamson, Chief Business Economist at S&P Global Market Intelligence . The headline PMI has hit a four-year high, with strong factory production growth for a second successive month in response to a further marked upturn in order books, but since the outbreak of war in the Middle East we have seen production and demand buoyed by stock building as companies worry over rising prices and supply difficulties. This stockpiling was again widely evident in May and makes it hard to take an accurate reading on the underlying health of the manufacturing economy, as growth will cool once this stock build has run its course," Williamson noted. "The incidence of supply chain delays is the highest since August 2022 , with the buying of safety stocks not only adding to the supply squeeze from the closure of the Strait of Hormuz but also pushing prices higher for a wide variety of inputs. Williamson ends on a more ominous - stagflationary - notes: warning that the resulting steep jump in producer costs sends a worrying signal that broader economy inflation has further to rise in the coming months. Tyler Durden Mon, 06/01/2026 - 10:08
vzphotos/iStock Editorial via Getty Images Raymond James raised the price target on Micron Technology's ( MU ) stock to $1100 from $530 while reiterating its Outperform rating ahead of the company's earnings on June 24. Shares of the memory chipmaker surged about 5% on Monday, driving it past the $1000 mark. "Not surprisingly, in our recent travels, MU has been among the most popular topics. While...
vzphotos/iStock Editorial via Getty Images Raymond James raised the price target on Micron Technology's ( MU ) stock to $1100 from $530 while reiterating its Outperform rating ahead of the company's earnings on June 24. Shares of the memory chipmaker surged about 5% on Monday, driving it past the $1000 mark. "Not surprisingly, in our recent travels, MU has been among the most popular topics. While the share price and multiple continue to reach new highs, we note limited pushback among the investor base; there's a general understanding that it really is "different this time." Not only have all suppliers been more rational in capacity additions, the industry also has never seen a similar demand environment, with a significant (understatement of the year) investment being made by multiple customers at the same time," said analysts led by Melissa Fairbanks. The analysts noted that in their recent checks in South Korea and Taiwan, they met with Samsung ( SSNLF ), SK hynix ( HXSCL ), and others in the supply chain, then joined a call last week with Kioxia hosted by their SBI partners in Japan. Supply remains sold out for multiple years, pricing remains strong, and customers are providing much greater visibility into demand longer-term, the analysts added. The analysts said that they have no concerns regarding the ongoing strength of demand or pricing, supported by an increasing number of long-term agreements, or LTAs, but added that current supply limitations are likely to temper revenue upside in the near term. Management noted gross margin was also likely to moderate from what may be peak levels in the May quarter over time, the analysts added. "This in itself is not concerning to us — it's a natural progression under current supply conditions, with incremental supply not coming online until later in 2027 — but we suspect the recent Al-driven momentum could stall with the first quarter of relative softness," said Fairbanks and her team. More on Micron Micron: Bulls, Bea...
vzphotos/iStock Editorial via Getty Images Raymond James raised the price target on Micron Technology's ( MU ) stock to $1100 from $530 while reiterating its Outperform rating ahead of the company's earnings on June 24. Shares of the memory chipmaker surged about 5% on Monday, driving it past the $1000 mark. "Not surprisingly, in our recent travels, MU has been among the most popular topics. While...
vzphotos/iStock Editorial via Getty Images Raymond James raised the price target on Micron Technology's ( MU ) stock to $1100 from $530 while reiterating its Outperform rating ahead of the company's earnings on June 24. Shares of the memory chipmaker surged about 5% on Monday, driving it past the $1000 mark. "Not surprisingly, in our recent travels, MU has been among the most popular topics. While the share price and multiple continue to reach new highs, we note limited pushback among the investor base; there's a general understanding that it really is "different this time." Not only have all suppliers been more rational in capacity additions, the industry also has never seen a similar demand environment, with a significant (understatement of the year) investment being made by multiple customers at the same time," said analysts led by Melissa Fairbanks. The analysts noted that in their recent checks in South Korea and Taiwan, they met with Samsung ( SSNLF ), SK hynix ( HXSCL ), and others in the supply chain, then joined a call last week with Kioxia hosted by their SBI partners in Japan. Supply remains sold out for multiple years, pricing remains strong, and customers are providing much greater visibility into demand longer-term, the analysts added. The analysts said that they have no concerns regarding the ongoing strength of demand or pricing, supported by an increasing number of long-term agreements, or LTAs, but added that current supply limitations are likely to temper revenue upside in the near term. Management noted gross margin was also likely to moderate from what may be peak levels in the May quarter over time, the analysts added. "This in itself is not concerning to us — it's a natural progression under current supply conditions, with incremental supply not coming online until later in 2027 — but we suspect the recent Al-driven momentum could stall with the first quarter of relative softness," said Fairbanks and her team. More on Micron Micron: Bulls, Bea...
The popular fitness-tracking platform, Strava, is restricting access to its API as part of efforts to clamp down on AI scraping, as reported earlier by TechCrunch . Developers who want to build an app using Strava's features now need to pay for a flat $11.99 / month subscription. In an update on its developer hub , Strava blames the change on "zero-code AI tools" that allow users to quickly create...
The popular fitness-tracking platform, Strava, is restricting access to its API as part of efforts to clamp down on AI scraping, as reported earlier by TechCrunch . Developers who want to build an app using Strava's features now need to pay for a flat $11.99 / month subscription. In an update on its developer hub , Strava blames the change on "zero-code AI tools" that allow users to quickly create apps that "hammer" APIs. "We have felt this firsthand - developer applications to our program are up 448% year-to-date, API intermediaries have violated policy terms, and scraping attempts have degraded platform performance for everyone," the compan … Read the full story at The Verge.
BlackRock ( BLK ) announced on Monday a new $25M RFP funding program under its $100M Future Builders initiative aimed at strengthening America’s skilled trades workforce over the next five years. Through two funding rounds, the company will provide $500K-$1M grants to nonprofits that train workers for jobs such as electricians, HVAC technicians, plumbers, and ironworkers. The program aims to help ...
BlackRock ( BLK ) announced on Monday a new $25M RFP funding program under its $100M Future Builders initiative aimed at strengthening America’s skilled trades workforce over the next five years. Through two funding rounds, the company will provide $500K-$1M grants to nonprofits that train workers for jobs such as electricians, HVAC technicians, plumbers, and ironworkers. The program aims to help more people enter skilled trades careers and address growing demand for workers needed in infrastructure projects. The first application window runs from June 1 to July 10, 2026, with selected organizations expected to be announced in the fall. The initiative builds on BlackRock’s recent $30M investment in Texas, which is expected to train more than 12K people for electrical careers over three years. Source: Press Release More on BlackRock BlackRock: Time To 'Buy' This Eventual Dividend Aristocrat Now BlackRock: Not Adding Despite A Stellar Q1 2026 BlackRock, Inc. 2026 Q1 - Results - Earnings Call Presentation Inside weekly crypto ETF outflows: BlackRock's $1B BTC exit & fund rotation Citi and BlackRock's HPS team up for $17.5B program to expand direct lending in EMEA
imaginima/iStock via Getty Images Investment Thesis ASML ( ASML ) might not get the media attention of NVIDIA ( NVDA ), Micron ( MU ), or Taiwan Semiconductor ( TSM ), but as the only supplier of EUV lithography equipment, its role is indispensable. Is the disconnect between its low profile and wide moat a signal of an overlooked opportunity? My DCF model suggests the answer is no. ASML appears ov...
imaginima/iStock via Getty Images Investment Thesis ASML ( ASML ) might not get the media attention of NVIDIA ( NVDA ), Micron ( MU ), or Taiwan Semiconductor ( TSM ), but as the only supplier of EUV lithography equipment, its role is indispensable. Is the disconnect between its low profile and wide moat a signal of an overlooked opportunity? My DCF model suggests the answer is no. ASML appears overvalued even when factoring in a multi-decade secular growth opportunity. ZigZagging Upwards Examining ASML's revenue trends over the past 25 years provides important insights that guide the following FCF forecast. First, revenue is sensitive to the economic cycles, which is more counterintuitive than casual investors think. In a previous article, I noted how Data Center chips have historically been resilient to economic cycles, driven by strategic long-term computing capacity demand estimates. It takes years to build a data center, and deployment decisions extend beyond cycles. One would have thought this resiliency might spill over to semiconductor equipment suppliers. That's not the case. ASML sales fell with each economic slowdown since 2000, except in 2020. This reveals that customers are tactical, not strategic, and more importantly, have the upper hand in contract negotiations. Purchase contracts often provide optionality clauses. ASML might be the practical monopoly for EUV, but the market is concentrated in the hands of a few customers, namely TSM - the main supplier of advanced chip nodes - and, to a lesser extent, GlobalFoundries ( GFS ) and a few others. This brings us to the second point: revenue has trended up despite the cyclicality, driven by digitalization trends. Generative AI seems to have accelerated growth, but orders remain lumpy and seem independent from the level of backlog at the beginning of the year. For example, 2024 revenue growth was the lowest since 2017 in both absolute and YoY % terms, despite starting the year with a €39 billion backlog, t...