Rocket Lab doesn’t deal in dreams. They build rockets. Reusable ones. Eighty-one launches to date, dropping satellites into orbit like a seasoned poker player dealing cards. They’re prepping Neutron, a bigger bird, to haul heavier loads. It’s a simple business, if you can manage the physics.
One observes the holdings of Bernzott, and a pattern emerges. Vanguard’s broad market exposure, a sensible foundation. Colombus McKinnon, a name less heralded, yet possessing a quiet strength. And now, Silgan, ascending to become the third largest position within their portfolio. This is not the behavior of those chasing ephemeral gains. It is the accumulation of solid, if uninspiring, businesses, those that quietly provide essential goods and services, and which, therefore, are less vulnerable to the whims of popular fancy. The market prizes novelty; Bernzott seeks endurance.
Consider Microsoft, a behemoth whose shares recently suffered a most undignified tumble after announcing profits that grew by a rather robust 60% year over year. A 10% decline! As if the market, in its infinite wisdom, deemed such prosperity…improper. It is as if the company had committed the sin of too much success. One wonders if they’ve offended some ancient market deity with their abundance.
XRP remains, statistically, a significant entity. Its fully diluted market capitalization, a figure recited with increasing weariness by analysts, stands at $162 billion. It functions as the native token of the XRP Ledger, a system intended to expedite and reduce the cost of cross-border transactions. The intention, one suspects, is less about revolutionizing finance and more about creating a more efficient mechanism for the inevitable transfer of value – a process as relentless and impersonal as the turning of gears.
Initially, the light touched USA Rare Earth (USAR +15.83%), a company poised to capture the nascent rays of this governmental endeavor. Now, however, the glow has spread, illuminating the uranium sector, and particularly, the fortunes of Energy Fuels. For it appears the ambitions of Project Vault extend beyond the merely rare, reaching for the elemental heart of power itself.
The current dip, so the experts say, is linked to this Kevin Warsh, the potential Federal Reserve Chair. Apparently, he’s historically been a bit of a hawk on monetary policy. Which translates to… pessimism? It’s all so opaque. Everyone wants lower interest rates, naturally. It makes borrowing cheaper, and then you can buy more… things. Or, in my case, more Bitcoin. Though, maybe not right now.
The story isn’t complicated. It’s about a company that’s been underperforming, plain and simple. They’re chasing the shadow of AutoZone and O’Reilly, companies that know how to squeeze a dime until the buffalo hollers. Advance’s EBITDA margin? Let’s just say it’s currently residing in the basement. Which explains the price-to-sales ratio. It’s low. Very low. And where there’s a low price, a value investor starts to pay attention.
Now, management doesn’t offer specific forecasts for dividend growth – a tactic I suspect involves a complex algorithm designed to confuse both investors and the very fabric of reality. However, signs suggest a substantial increase is on the horizon. Perhaps even in the double digits. The last time they dared to venture into double-digit territory was back in 2007. (A time when, if memory serves, trousers were considerably wider and the prevailing philosophical question was whether or not to add glitter to everything.)
Maytree Asset Management, a Hong Kong-based firm with a penchant for the exotic, has recently acquired a stake of some $11.16 million in AXT. A substantial sum, certainly, though in the grand theatre of finance, merely a pleasant distraction. The truly wealthy, one suspects, measure their fortunes in lost masterpieces, not mere silicon.
There was a flurry of excitement a while back, a grasping for shares of those who dig the rare earths from the bones of the land. USA Rare Earth (USAR +16.33%) felt the rush, a fevered bloom, then a settling. Now, the fever returns, and it seems the digging won’t stop with just those elusive elements. The scope widens, like a farmer realizing his field isn’t large enough for all he hopes to grow.