Stockchase Insights

LNTH beat EPS estimates of $1.54 coming in at $1.69. Revenue beat estimates of $349.2M coming in at $370M displaying a 23% year-over-year increase. Growth was primarily fueled by the robust sales of PYLARIFY and DEFINITY. Strategic investments in the pipeline and business development, including partnerships like Perspective Therapeutics, enhance LNTH's radiopharmaceutical capabilities. Operational excellence and strategic marketing campaigns have solidified PYLARIFY's position as the market leader in PSMA PET imaging. We have other comments posted on our take on the growth. Management did have some issues with forecasting its extremely rapid growth over the past couple of years. But it seems to have learned a few things. It is debt free, with cash, very cheap, and produces solid free cash flow. 
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EPS was essentially flat vs expectations of a tiny loss. Revenue of $1.8B beat estimates by 1.2%. EBITDA of $455.7M beat by 3.4%. GFL's revenue, Ebitda and free cash flow exceeded consensus, reflecting benefits from last year's solid-waste divestitures and efforts to shed low-margin contracts. Reported revenue was flat due to the 2023 divestitures but included 4% organic growth in solid waste, where price increases offset volume declines, and which drove 160 bps of segment margin expansion. Environmental Services revenue fell 10% organically amid reduced emergency-response activity. Free cash flow topped expectations, though GFL's net leverage rose to 4.3x due to a $322 million increase in debt. The company used C$112 million for acquisitions and expects to spend C$600-$650 million on deals for the full year. However, net leverage is still seen approaching 3.65-3.85x by year-end. Guidance WAS increased, but only marginally. The stock is not cheap at 44X earnings, but we still think it is buyable. 
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ACLS designs and manufactures processing equipment used in the fabrication of chips and is now trading at 14.2x times' Forward P/E. In Q1-2024, ACLS’s revenue was largely flat compared to last year's $252M, beating estimates of $242.6M and EPS was $1.57, beating estimates of $1.24. The operating results were solid, above the company’s guidance. The balance sheet is strong, with a net cash of $485M. The company generates healthy cash flow and returns some as buybacks. Based on consensus estimates, sales are expected to be flat this year and start to grow by 10% next year. We think there is some cyclicality in ACLS’s business but nowhere close to a secular decline. We think it looks decent today. 
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Preventing Investment Scams: Don’t answer that call

A lot of scams start with a random phone call. It could be someone offering you an investment or it could be someone posing as an employee of the bank you deal with. But think about it: Do you really think that there is a legitimate random stranger phoning you with a legitimate, safe, high-return investment opportunity? This is not how the investment world works.

Banking and other scams, on the other hand, prey on fear. A caller might tell you that your bank account has been hacked and your savings could be drained. But again, you need to use common sense here.

If your bank account has been hacked and the bank knows enough about it to call you, the easiest solution is to simply freeze the account until the problem can be investigated. You can go to the bank with identification to help solve the problem. At the very least, hang up and then call the bank back. Not on the number the scammer gives you, but the number you might regularly call or the main number from the bank’s website.
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We quite like TMDX and believe it should do well over time. Its small size adds risk, but it seems to have a better mousetrap for organ transplant. Sales growth is very high and it was profitable last quarter. It has approval for several organs and will add more over time. Its solution allows for a better patient outcome. There are always complaints about costs, and the sector is a hot political potato. But we like what the company has accomplished so far and the quarter and guidance are solid. The market size is not huge, but big enough for the company, and 'probably' small enough to keep the big players from bothering. We would consider TMDX to be one of our better high risk ideas right now. 
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QSR is now trading at 21x times' Forward P/E. In the 1Q-2024, QSR revenue grew 8% to $1.74B, beating estimates of $1.7B and EPS was $0.73 beating estimates of $0.72. The balance sheet has net debt of $12.3B, and a net debt/EBITDA of 4.8x. The leverage level has gone down slightly from last year of 5.1x. Comparable sales were solid across all brands except Firehouse, which the company recently acquired. Long-term guidance remains unchanged, which the company expects comparable sales to grow 3% with 5% restaurant growth on average until FY2028. Overall, we think the quarter was decent, and valuation is not too expensive relative to other restaurant names, and we are okay to add some here.
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We like RUN for its play in modernizing the world's electrical grid, but sales are expected to be flat in FY2024, and analysts are not expecting profitability for the next few years. Margins have not shown much improvement over the past several years, but it is trading below book value. From a valuation perspective, it looks to be trading at cheap levels, but sales growth is minimal, and its margins could be stronger. We would be more interested in the name if sales growth picked up again, and margins began improving.
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Detecting Financial Scams: Don’t be greedy

Most scams prey on two strong emotions: fear and greed. On the greedy side, a lot of scams offer investors huge returns. Whether it is a sophisticated cryptocurrency trading platform or a basic pyramid scheme, the common element is that investors get excited about returns of 30 per cent or more and their greed makes them do less due diligence.

You do not need to be a financial expert to know that guaranteed investment certificates currently pay about five per cent. So, if you have been promised 20 per cent on some investment, you should know right away that something isn’t right. Sure, some investments can certainly return 20 per cent, but they involve a ton of risk, even if they are not outright scams. Your return is highly correlated with risks. This is something to remember with any investment.
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"Regular" dividends are 30c quarterly, for a yield of 1.7%. However, TOU pays a special dividend approximately every four months as well, and we have tried to capture that in the yield, as it has done this for four years in a row and intends to keep doing so. In the past year TOU has paid special dividends of 50 cents (March 2024), $1.00 (November 2023), $1.00 (August 2023) and $1.50 (May 2023). 
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HBND targets a 10%+ yield and writes call options on around 50% of its holdings.
The ETFs distribution yield can benefit if interest rates or the expectation of interest rates rise, as not only the yield on the underlying bond holdings will increase along with interest rates, but a rising yield also means bond prices fall, which benefits the covered call portion of the ETF. But, this means that the price of the underlying bond holdings in the ETF could decline in value, and thus the unit price of the ETF.

If an investor feels that interest rates will continue to rise, then we think HBND can be beneficial in that scenario as the distribution yield and covered call feature will benefit, but the price of HBND will decline as bond prices fall. However, if rates stagnate or decline, this ETF may see some capital appreciation, but its yield can be negatively impacted. In other words, for an investor primarily seeking income, if rates continue to rise, this ETF can be attractive as its yield and covered call portion will benefit (but its unit price will decline). But if rates stagnate or decline, and for an investor seeking income, the yield on this ETF may come under pressure, but its unit price can see capital appreciation. Overall, it is an interesting security to enhance one's yield from a bond ETF. But, it is down 7.7% this year, so on a net basis hasn't really done much (yet) for investors. We think it is OK, but would like to of course see longer performance numbers. 
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We think MAG fits the bill. Its Mexican (safe) mine only recently went into production, and 2024 will be the first year of material revenue/cash flow for the company. The stock is acting well this year as it gets re-rated as a producer. It is not overly expensive and has good growht/exploration potential. 
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Company Highlight: Prime Water Corporation (PRMW)

The second best performer was Prime Water Corporation (PRMW) whose stock price was up 12% on the month, 24% YTD and 24% over the past year. It is a leading direct provider of bottled water to consumers and water filtration services in North America and Europe, having withdrawn from Russia in the 2nd quarter of 2022.

The low for the stock price during the  past year was $16.58 in mid June 2023 from where it rose strongly  near the close to $24.64. The stock ranked no 3 performer in August 2033

Management notes that 2023 was a year of transformation and strong financial performance. PRMW continued to execute against its transformational strategy to become a pure-play North American company, achieving a major milestone as it completed the sale of a significant portion of the international businesses. On December 29, 2023 the European business was sold for $575 million. This plus cash on hand enabled PRMW to redeem in full $750 million of 5.5% senior notes. Cash on hand at year end was $507.9 million

Year end results were announced on February 28,2023: Revenues at $1.772 billion up 4.7%; net income at $238.1 million was up $208.5 million, of which $174.3 million came from discontinued operation.
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EPS was -35c, vs estimates of -63c. Sales were $881M vs $850M estimates. The stock is down as management noted it expects EBITDA to moderate in the second half of the year. Average revenue per user could decline. Sales did rise 19% in Q1. Though 2Q guidance was in line with consensus, it may be premature to assume pressures have eased. Tough comparisons will create 2Q headwinds and higher marketing spending will likely weigh on 2H Ebitda. Average revenue per user in 1Q improved sequentially, but there is growing competition in the connected-TV ad space, especially with the launch of Amazon Prime video ads. Comparisons are tough in part due to a cooldown in the streaming wars and a lapping of price hikes, which may crimp platform revenue gains to high-single-digits. While platform gains should accelerate in 2025, pressures may build after the Walmart-Vizio deal closes, especially in active account growth. The outlook is certainly 'less great' but with the stock decline we think this is reflected in the new valuation.
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EPS of 89c beat estimates of 62c. Revenue of $1.18B beat estimates by 8%. EBITDA was strong at $339M vs $229M expected. Atlassian could keep winning share as enterprises consolidate providers amid a tough IT-spending environment. The company's broad solutions and investment in artificial intelligence may keep powering double-digit growth momentum. Client softness in net additions might not see a reversal in short order, yet early adoption of Atlassian Intelligence -- 10% of its client base is already on the service -- may keep driving upselling. An overall improvement in the economy might boost customer additions and seat expansion gains, though this might happen more toward the end of the calendar year. Atlassian's May 1 investor day will likely emphasize upselling opportunities from AI-based capabilities and potential margin expansion. Investors post-release have focused on slower-than-expected user growth, and of course the resignation of the co-CEO. Both are a bit concerning, but likely reflected in the valuation now. We still think it is a decent company overall, with a good niche. It is expensive, and momentum may take it a bit lower. But we would still see it as worth holding. 
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GOOG reported strong growth in its Q1 earnings, particularly in the cloud division. It is proving that companies can spend money on AI and still see net gains. It also announced its first-ever dividend and a large stock buyback. Results in most metrics were well above expectations. 
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