The Wax Report - Week Ending 03/17/2017
The cagily managed Wax Ink Portfolio was up 0.9% for the week.
By comparison, the Dow was up 0.1%, the Nasdaq was up 0.7%, the S&P 500 was up 0.2%, the Russell 2000 was up 1.9%, and the Volatility Index, commonly known as the VIX, was down 3.3%.
Year to date (there are only 278 days remaining until the first day of winter), the Wax Ink portfolio is down 0.1%, while the Dow is up 5.8%, the Nasdaq is up 9.6%, the S&P 500 is up 6.2%, the Russell 2000 is up 2.5%, and the VIX is lower by 19.7%.
The portfolio breakdown is roughly 53% cash, 47% equities, and 0% bonds. The current value of portfolio cash on a per share basis is $25.41 and the current value of portfolio equities on a per share basis is $23.71, making the average per share price $48.71.
The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $26.54 and the average market closing price of all equities held in the Wax Ink Portfolio is $26.12, making the current portfolio growth potential factor 1.6%.
WTI Crude ended the week at $48.78, up 0.6%, while Brent Crude ended the week at $51.76, down 0.8%, creating a crude price spread of $2.98, an increase of 3.5%. Distillate RBOB Gasoline ended the week at $1.5989, down 0.1%, and Heating Oil ended the week at $1.5085, down 0.3%, moving the Gulf Coast 3:2:1 Crack Spread (two barrels of gasoline + one barrel of heating oil – three barrels of crude oil) / 3) to $17.11, an decrease of 1.5% for the week. Henry Hub Natural Gas ended the week at $2.95, down 2.0%.
Year to date WTI Crude is lower by 9.2%, Brent Crude is lower by 8.9%, the WTI/Brent Crude Spread is lower by 3.9%, Henry Hub Natural Gas is lower by 20.7%, RBOB Gasoline is lower by 4.3%, Heating Oil is lower by 12.7%, and the Gulf Coast 3:2:1 Crack Spread is lower by 09%.
Treasury and Bond Yields
The 5 Year Treasury ended the week at 2.00, down 3.8%, while the 10 Year Treasury ended the week at 2.48, down 2.7%. The 5 Year AAA Municipal Bond ended the week at 1.41, unchanged, and the 10 Year AAA Municipal Bond ended the week at 2.19, up 0.9%. Lastly, the 5 Year AAA Corporate closed the week at 2.12, down 4.9%, with the 10 Year AAA Corporate ending the week down 3.9% at 3.03.
Year to date the 5 Year Treasury is up 5.8%, the 10 Year Treasury is up 2.5%, the 5 Year AAA Muni is down 19.9%, the 10 year AAA Muni is down 14.5%, the 5 Year AAA Corporate is up 2.9%, and the 10 Year AAA Corporate is down 3.3%.
I am a deep value, long-term buy and hold investor with a minimum holding time for shares in the Wax Ink portfolio of 60 months (1825 days).
Wax Ink maintains a position in HollyFrontier Corporation, General Electric, McDermott International, Inc., and Marathon Oil Corporation, companies mentioned in this report.
As companies file their latest SEC 10-K information, I will be updating my baseline valuation worksheets, so expect to see changes in the average per share baseline valuation numbers over the coming few weeks.
Baseline Valuation Estimates and Worksheets
Baseline Valuation Estimates are initial valuations which Accredited Investors, after completing their own due diligence, can either increase or decrease in accordance with their individual risk tolerance or investing philosophy.
Financial data used in the creation of each Baseline Valuation Estimate is the most recent SEC 10-K ANNUAL financial data as reported to the U.S. Securities and Exchange Commission.
Archived worksheets may be downloaded by going to the Worksheets page at the site and selecting an industry which will move you to all of the worksheets I have updated for the selected industry.
Worksheets were either created or updated during the week for the following companies.
HollyFrontier Corporation (NYSE: HFC) - FYE 12/2016
General Electric (NYSE: GE) - FYE 12/2016
McDermott International, Inc. (NYSE: MDR) - FYE 12/2016
Marathon Oil Corporation (NYSE: MRO) - FYE 12/2016
Baseline Valuation Estimates
Baseline Valuation Estimates
Baseline valuation estimates are determined through fundamental analysis of the listed company's most recent annual financial information and are intended as a starting point for continued due diligence. Baseline valuation estimates were either created or updated during the week for the following companies:
HollyFrontier Corporation - $47
General Electric - $13
McDermott International, Inc. - $14
Marathon Oil Corporation - $24
Current Growth Estimates
Current growth estimates are determined utilizing current pricing levels, year over year earnings growth, dividend yield, the current PE ratio, and an earnings growth estimate. Because current growth estimates are EXTREMELY volatile, what is presented here is a single current growth estimate. Current growth estimates were either created or updated during the week for the following companies:
HollyFrontier Corporation - $12
General Electric - ($490)
McDermott International, Inc. - $10
Marathon Oil Corporation - $15
Current Momentum Estimates
Current Momentum estimates are determined by utilizing current pricing levels, current earnings, year over year earnings growth, estimated future earnings growth, and current bond yields. The use of future anything makes the estimate result EXTREMELY volatile. Current Momentum estimates were either updated or created during the week for the following companies:
HollyFrontier Corporation - $65
General Electric - ($347)
McDermott International, Inc. - $9
Marathon Oil Corporation - $5
Future Value Estimates
Future Value estimates utilize year over year price changes and year over year dividend payments to determine a stock return on investment. The stock return on investment is then used to advance the recent price year by year for a 5 year period. Future Value estimates contain EXCESSIVE risk because past performance is not a guarantee of future returns. Future Value estimates were either updated or created during the week for the following companies:
HollyFrontier Corporation - $64
General Electric - $48
McDermott International, Inc. - $4
Marathon Oil Corporation - $15
Investment Investigation Summaries
HollyFrontier Corporation - Positive - the current baseline valuation and key performance indicators (KPIs) support investment investigation
General Electric - Negative - the current baseline valuation and key performance indicators (KPIs) no longer support investment investigation
McDermott International, Inc. - Positive - the current baseline valuation and key performance indicators (KPIs) support investment investigation
Marathon Oil Corporation - Positive - the current baseline valuation and key performance indicators (KPIs) support investment investigation
Have a great week.
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