Charged Alpha Stock Encyclopedia

Science Applications International (SAIC) Q2 FY2027 — Shares gapped 11.5% on results day and touched a 52-week high of $142.66, then handed the whole move back to close at $128.22, up just 1.79% on 4.6x volume; one session later they sit at $126.78.

SAIC's income before income taxes ROSE 10.2% to $119M. Its net income FELL 19.7% to $102M. The entire $36M gap is one line: the base quarter carried a $47M tax benefit from settling an IRS audit of fiscal 2016-2019, which the 10-Q names outright. That is $1.00 per prior-year diluted share. It is why adjusted EPS of $3.01 against $3.63 reads as -17.1% - and why, against a base cleaned of that credit ($2.63), the same quarter is +14.5%. The same dollar sits inside FY2026's $10.75 full-year adjusted EPS, so guidance of $10.65-$10.75 looks flat and is really about +10%. But the operating business is barely growing: book-to-bill was 0.6 in the quarter and 0.8 over twelve months against 1.1 at the January year end, and SAIC's own raised revenue guidance implies a second half that SHRINKS 4.2% after a first half that grew 3.8%. We rate SAIC a HOLD, fair value $127.83 against $126.78.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$127.83 vs ~$126.78 today.

KEY METRICS:

- Revenue $1,880M +6.3% (5.3% organic) beat consensus by $116M; operating income $152M +9.4%, margin 8.1% vs 7.9%

- Income before income taxes $119M, +10.2% - but net income $102M, -19.7%

- The tax line swung $36M: a $17M charge this year against a $19M net CREDIT last year

- Effective tax rate 14.2% this quarter vs NEGATIVE 17.2% in the base quarter (10-Q tax note)

- The cause, quoted in the 10-Q: a $47M tax benefit from settling an IRS audit of fiscal 2016-2019

- $47M across the 46.8M prior-year diluted shares = $1.00 per share of non-repeating base

- Adjusted EPS $3.01 vs $3.63 = -17.1%; vs a cleaned $2.63 base = +14.5%

- EPS basis PROVEN quarterly: H1 GAAP $5.00 less Q2 $2.38 = the filed Q1 $2.62; H1 adj $6.24 less $3.01 = the filed $3.23

- Of the $0.38 of real adjusted EPS growth, $0.25 was the buyback and only $0.13 the business

- Adjusted operating margin 10.2% vs 10.3%; adjusted EBITDA margin 10.3% vs 10.5% - BOTH lower

- SG&A $87M, +16.0%, on revenue up 6.3% - the line that erased a 50bp segment margin gain

- Book-to-bill 0.6 in the quarter, 0.8 TTM, vs 1.1 at the January year end; backlog $22.1B, -$486M in six months

- Guidance raised to $7.2B-$7.3B revenue and $10.65-$10.75 adjusted EPS - but the EPS raise ($0.70) is EXACTLY the quarter's beat

- That guide implies H2 revenue of $3.46B, -4.2%, after H1 grew +3.8% - an 8.0 point swing

- H1 operating cash flow $273M vs $222M - and last year's included $101M pulled forward by selling receivables, this year's $0

- Net debt $2,359M = 3.13x guided adjusted EBITDA; tangible book value is NEGATIVE $2,204M

- Fair value $127.83: DCF $130.08, 10.25x guided EBITDA $125.10, 12x guided adjusted EPS $128.40, weighted 35/35/30

What to watch: Trailing book-to-bill back above 1.0 would make the guided H2 decline a phasing problem rather than a trend, and make us buyers at an 11.1% free cash flow yield; a third quarter below 1.0 turns it into a run-rate

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sasol Limited (SSL) FY2026 — SSL closed at $12.45, +3.6% against the $12.02 prior close, on 1.99m shares - about 2.4x the prior session. The ADR has risen 79% in twelve months and is still 12.9% below the $14.29 it reached on 5 May.

Secunda - the coal-to-liquids complex behind almost all of Sasol's profit - had its highest annual output in five years and beat guidance. Sasol wrote it down anyway: R7.7bn, the third consecutive impairment of the same refinery, R27.3bn in three years. The company's own explanation is that management actions did improve the recoverable amount, and 'these benefits were offset by the stronger forecast Rand/US$ exchange rate'.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$11.65 vs ~$12.45 today.

KEY METRICS:

- PERIOD: the year ended 30 June 2026. Form 20-F accession 0001104659-26-104048, filed 1 September 2026; KPMG unmodified opinion. Sasol reports in SOUTH AFRICAN RAND

- TURNOVER R272.1bn (+9.2%) - ADJUSTED EBITDA R60.7bn (+17%) - OPERATING PROFIT BEFORE WRITE-DOWNS R43.0bn - EBIT R25.7bn (+37%) - gross margin 46%

- HEADLINE EPS R38.31 (+9%) vs BASIC EPS R18.99 (+79%). Attributable earnings rose R5.4bn; R3.3bn of that is only a smaller impairment charge. 61% of the increase is the write-down shrinking

- IMPAIRMENTS R16.8bn: Secunda refinery R7.7bn, Mozambique gas R3.8bn, polyethylene R3.7bn. Secunda impaired R7.8bn / R11.8bn / R7.7bn in three straight years = R27.3bn; R112.4bn group-wide

- SASOL'S OWN WORDS: management actions improved the recoverable amount and 'these benefits were offset by the stronger forecast Rand/US$ exchange rate'. The test assumed R17.09; spot R16.18

- EVERYTHING ELSE IN THAT MODEL HELPED: Brent raised to $76.80/bbl from $72.16, refining margin to $9.81, SA discount rate CUT 14.50% to 11.50%. It impaired anyway

- CASH: cash generated by operating activities R42.0bn, DOWN 12%, in the year profit rose 79%. Net working capital 18.3% of turnover vs a 15.5-16.5% tatarget - the only miss

- FREE CASH FLOW R11.9bn (-5%), capex down 18% to R20.9bn. SEGMENTS: Fuels EBIT R19.9bn from R5.2bn; Chemicals Africa swung to a R3.3bn LOSS from R5.0bn of profit

- NO DIVIDEND FOR A THIRD YEAR: policy pays 30% of free cash flow only below $3.0bn net debt. It is $3.3bn, about $300m short, and FY2027 guidance is 'lower than $3.3 billion'

- FY2027 GUIDANCE: capex R23-26bn (UP from R20.9bn), SA break-even $53-58/bbl (UP from $49), International Chemicals EBITDA $450-600m (DOWN from $604m), net debt below $3.3bn

- AT $12.45: market cap $7.97bn on 640.1m shares; EV R199.8bn = 3.29x EBITDA; 5.3x headline earnings; 0.79x book; 9.2% FCF yield. One ADS = ONE ordinary share

What to watch: A rand back through R18 to the dollar - which lifts rand earnings, lifts the recoverable amount in the impairment test and shrinks the dollar net debt against the dividend gate at once. Against that: a fourth Secunda write-down next September, or International Chemicals at the $450m floor.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Yext (YEXT) Q2 FY2027 — YEXT closed the reaction session at $6.53, -3.5% on 2.90m shares, 2.2x the prior session - a beat, sold.

Adjusted diluted EPS went $0.12 to $0.21 against a $0.17 bar. Decomposed, 4.4 cents of the 8.1-cent rise is the smaller share count and only 3.8 cents is higher profit - so 54% of the growth came from the denominator, and the share-count effect is larger than the 4.0-cent beat itself. Run the same profit over last year's diluted count and it is $0.162: a miss.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$6.58 vs ~$6.53 today.

KEY METRICS:

- PERIOD: Q2 of fiscal 2027, the three months ended 31 July 2026

- REVENUE $111.1m (-1.8%) - and $197,000 under the $111.3m consensus

- ADJUSTED EPS $0.21 diluted vs a $0.17 bar - but $0.162 at last year's share count, which is a MISS

- EPS BRIDGE: of the 8.1-cent rise, 3.8 cents is profit and 4.4 cents is the buyback = 54%

- ADJUSTED EBITDA $34.0m (+29.0%), a record 30.6% margin vs 23.3%

- ANNUAL RECURRING REVENUE $440.8m (-0.8%) - $50K+ cohort $405.9m (+1.6%), NRR 98%

- FIRST HALF: Adjusted EBITDA +19.4% while free cash flow -0.7% - the cash did not follow

- SELF-TENDER: 24,347,825 shares at $5.75 for $140m, completed 23 March 2026 - the FLOOR of a $5.75-$6.50 range

- THE CEO HAD OFFERED $9.00 a share and WITHDREW it on 2 February 2026

- BALANCE SHEET: cash $154m to $87m, debt $98m to $148m, equity $159m to $36m

- VALUATION: EV $707m = 1.60x ARR, 5.8x annualised Adjusted EBITDA, 12.2x trailing free cash flow

- FAIR VALUE $6.58 (HOLD, 3/5) vs $6.53 - DCF $6.14, EBITDA $7.39, FCF $6.67

What to watch: Total annual recurring revenue actually printing a positive year - our cohort arithmetic only gets there in year two. Against that: the $50K-plus cohort stalling, cash falling toward the $35m covenant floor, or more borrowing at 9.5% to buy a 8.2% free-cash-flow yield.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

MiniMed Group (MMED) Q1 FY2027 — MMED closed the reaction session at $22.42, +10.7% - the highest close it has ever had, on 6.07m shares, 5.1x the twenty-day median and 21.7% of the entire public float.

MiniMed Flex - the insulin pump behind a U.S. growth acceleration to 13.1% and a +10.7% session - was developed on $324m of funding from Blackstone Life Sciences. For the first two years after U.S. approval and commercial launch, Blackstone earns the greater of a mid-to-high single-digit royalty on net sales or a minimum payment: $157m on Flex and $162m on the MiniMed Fit patch pump. Flex launched in the quarter just reported and Fit was filed with the FDA on the morning of this print, so both clocks are now running. The earnings release does not contain the word Blackstone.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$23.97 vs ~$22.42 today.

KEY METRICS:

- PERIOD: Q1 of fiscal 2027, ended 31 July 2026, in a year ending 30 April 2027. The SEC submissions metadata says December - it is wrong

- NET SALES $843m (+16.6% reported, +15.8% organic) - CGM $431m (+19.9%, now 51% of revenue) - CONSUMABLES $261m (+13.8%) - PUMPS $144m (+21.5%) - U.S. $240m (+13.1%) - INTERNATIONAL $603m (+18.1%)

- THIS WAS A 14-WEEK QUARTER: 25 April to 31 July 2026, 98 days against 91. The calendar moved off Medtronic's 52/53-week year to month-end; the company puts the benefit at 4-6%

- THE GUIDANCE RAISE IS CLEAN: the June guide said ~10% organic 'includes a 1.0 to 1.5% expected benefit from the extra week'; today's says ~10.5% on identical treatment. 50bp of genuine upgrade

- OPERATING INCOME $5m on $843m - a 0.59% margin. Gross profit +$56m, other operating expense -$38m, SG&A -$29m, litigation +$19m, R&D +$10m. Every one of those moved more than the entire result

- GAAP EPS $0.00 vs -$0.08. $4m of pre-tax income against a $4m tax provision - a 100% effective rate. MiniMed publishes NO adjusted EPS; any $0.12 you see has no counterpart in the filing

- GROSS MARGIN 55.2% vs 56.6%, down 141bp - in a quarter carrying an extra week, which should have helped. Incremental gross margin 46.7%, ten points below the book it was added to

- BLACKSTONE (10-K Note 11): $324m of development funding recognised, $212m tied to Flex and Fit. Minimums $157m and $162m; then royalties until a low single-digit multiple of the funding is repaid, then five more years

- BALANCE SHEET at 24 April 2026: $298m cash, no borrowings, $500m revolver undrawn, $455m still due from Medtronic. FY2026 operating cash flow -$197m, capex $223m, free cash flow -$420m

- OWNERSHIP: Medtronic holds 252,813,348 shares, approximately 90%, and has announced its intention to divest. The float is 28.0m shares and 21.7% of it traded on the day of this print

- VALUATION: enterprise $6.00bn, 1.93x FY2026 sales, 1.75x the guided FY2027 - against Insulet at 3.50x on almost identical revenue. DCF $19.57, peers on profit $17.01, peers on revenue $39.73, weighted $23.97

- STREET, by firm and date: BTIG $28 (1 Sep, raised), Wells Fargo $26 (1 Sep, raised from $22), UBS $25 (28 Jul, initiated Buy), Piper Sandler $16 (4 Jun). Average $23.75, a 75% spread

What to watch: Gross margin rising year on year in any single quarter, or operating expense held within 2% of the prior year in dollars for two consecutive quarters - which is what a 16% adjusted margin actually requires. Against that: a second straight quarter of falling gross margin, or cash below $200m once the royalty starts settling.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

NIO Inc (NIO) Q2 2026 — NIO closed the reaction session at $4.06, -4.0% - the lowest close in twelve months, on 81m shares. It is 49.4% below its $7.89 high of 2 October 2025.

NIO delivered 24,193 more vehicles in the June quarter than in the March quarter - a 29.0% jump, and 49.4% more than a year ago. Those extra cars brought RMB1,047m of incremental gross profit and cost RMB1,086m of incremental operating expense, so the operating loss WIDENED, from RMB309m to RMB347m. SG&A per vehicle fell just 1.9% on 29.0% more volume. And the volume is now gone: 35,934 cars in July, 35,836 in August, and a Q3 guide of 108,000-111,000 that is only +0.3% to +3.1% sequential.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$2.44 vs ~$4.06 today.

KEY METRICS:

- PERIOD: the THREE MONTHS ended 30 June 2026. NIO is a foreign private issuer: it files a 6-K, reports in RMB and translates at one rate, RMB6.7851 to US$1.00 (30 June H.10 noon buying rate). One ADS = ONE ordinary share

- DELIVERIES 107,658 (+29.0% QoQ, +49.4% YoY) - but July 35,934 and August 35,836 against a Q2 monthly average of 35,886. Still 13.7% under the Q4 2025 peak of 124,807

- THE INCREMENTAL BRIDGE: +RMB1,047m gross profit vs +RMB1,086m opex = a RMB38m gap, exactly the widening in the operating loss. Incremental gross margin 15.9% vs 18.4% blended

- REVENUE $4,736m (+69.1% YoY) - GROSS MARGIN 18.4%, up 840bp in a year - VEHICLE MARGIN 18.5% - OPERATING LOSS $51m - NET LOSS $78m - GAAP EPS -$0.04 vs a -$0.07 estimate

- EARNINGS QUALITY: the RMB24.8m 'adjusted net profit attributable' is a RMB722m loss plus RMB554m stock comp plus RMB192m of accretion on redeemable NCI. Strip that last add-back and it is a RMB168m LOSS

- BALANCE SHEET: RMB56.7bn ($8,352m) of cash - but trade and notes payable are $8,900m, MORE than the whole cash pile, and 209 days of cost of sales. NIO equity is 2.97% of assets. No cash flow statement in this release

- GUIDANCE Q3 2026: 108,000-111,000 vehicles (+0.3% to +3.1% sequential) and RMB33,285m-RMB34,051m revenue. The company frames it as +53% to +56% YoY

- VALUATION: EV $7.89bn = 0.42x annualised sales. 2028 scenarios $1.15 / $2.43 / $4.72 weighted to $2.44. The price implies a 5.15% operating margin vs the 0.64% just posted

- WALL STREET: not one house has published since this print. Newest target 22 May 2026 (102 days before). Bernstein $6.00, CMB Int'l $7.00, BofA $6.80, HSBC $6.80; average $6.65. We are at $2.44

What to watch: Two consecutive months above 38,000 deliveries, or a quarter where SG&A per vehicle falls faster than volume rises. Against that: September deliveries below 36,230 would miss the guide outright.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sibanye Stillwater (SBSW) H1 2026 — SBSW went in at $11.85 and closed the reaction session at $11.66 (-1.6%) - a record half-year, and the tape shrugged. It is 44.8% below its January close of $21.12 and 45.8% above its July low of $8.00.

Every one of Sibanye-Stillwater's four producing operations mined LESS metal in the six months to 30 June 2026 - SA PGM 4E -1.8%, SA gold -2.2%, US PGM 2E -2.3%, Century zinc -11.8%. Revenue still rose 64% to a record R90.0bn and the group swung from a $211m loss to a $1,147m profit, because the 4E basket rose 67% and gold rose 35%. Unit costs rose everywhere too. Nothing here was earned at the rock face - so we value it as a claim on a price deck, not as an operator.

THE CALL: BUY (3/5, MODERATE) — base-case value ~$14.93 vs ~$11.66 today.

KEY METRICS:

- PERIOD: the SIX MONTHS ended 30 June 2026 - a semi-annual foreign private issuer filing a 6-K, not a 10-Q. There is no quarterly Street EPS bar here

- PRODUCTION FELL AT ALL FOUR OPERATIONS: SA PGM 789,647oz 4E (-1.8%), SA gold 293,665oz (-2.2%), US PGM 137,930oz 2E (-2.3%), Century zinc 45kt (-11.8%)

- PRICES ROSE AT ALL FOUR: 4E basket +67% to R43,996/4Eoz ($2,681), gold +35% ($4,597/oz), US 2E basket +70% to $1,672, zinc +12%

- Revenue R89,977m (+64%, a record); adjusted EBITDA R31,843m (+111%); profit R18,807m ($1,147m) vs a R3,906m ($211m) loss

- Attributable to owners $1,082m; NCI R1,062m. Basic EPS 627 SA cents/ordinary share = $1.53 per ADR (1 ADR = 4 ordinary shares)

- Part of the swing is an absence: H1 2025 carried $526m of impairments, H1 2026 none. Headline earnings, which strip impairments from BOTH years, still roughly tripled to $1,036m

- CASH QUALITY: operating cash R19,614m, but R9,361m (48%) is a working-capital swing in payables. Notional free cash flow is $881m vs negative $123m a year ago

- Costs rose everywhere: SA PGM AISC +10% to R26,252/4Eoz, SA gold +14%, US PGM +12% to $1,347/2Eoz - and the filing guides costs HIGHER in H2

- Balance sheet repaired: gross debt -20% y/y to $1.99bn, net debt -56% since December to $593m, net debt/EBITDA 0.18x. Interim dividend 49.73 US cents per ADR ($352m), the TOP of policy

- Recycling was the only genuine grower and it is not a mine (+536% underlying ex-45X). Keliber lithium lost $15m, EUR719m spent, nothing sold yet

- VALUATION: EV $8,844m at 4.0x EV/adjusted EBITDA on each reported half annualised - H1 2026 deck $21.11, H2 2025 $13.82, H1 2025 $8.41; weighted 30/50/20 = $14.93. You pay 2.28x / 3.41x / 5.41x today

- That fair-value range $8.41-$21.11 is almost exactly the ADR's own 12-month range of $8.00-$21.12 - this stock is a derivative on a price deck

- STREET, all PRE-print: BMO Market Perform $12 (cut from $18, 14 Jul); RBC Outperform $16.50 (29 Jun); HSBC Buy $24.80 (23 Jan). Average $17.77 vs our $14.93 - we are 16% BELOW the Street, 28% above the tape

What to watch: H2 unit costs inside guidance rather than at the top, Keliber's first lithium sale, or gross debt past the halfway mark of the 50% reduction target. Against that: a 4E basket back below R35,000/4Eoz, a fresh Keliber impairment, or H2 costs at the top while the basket falls.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Medtronic plc (MDT) Q1 FY2027 — Shares closed $92.04, up 1.5%, after opening at $94.00 and giving most of the pop back.

Fiscal 2027 is a 53-week year and the extra week landed in Q1. Medtronic's own footnote puts it at $570m - 49% of the entire organic revenue increase. Strip it out and organic growth is 7.0%, not 13.7%, which is below the bottom of the 7.25-7.75% full-year guide the company raised on the same page.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$89.39 vs ~$92.04 today.

KEY METRICS:

- Revenue $9.756bn, up 13.7% reported and 13.7% organic - but the 53rd week supplied $570m of it

- Ex-week organic growth 7.0%, below the raised 7.25-7.75% FY2027 guide

- Adjusted EPS $1.45 vs $1.39 consensus - a 6c beat, but only a 2c raise at the FY guide midpoint

- Adjusted operating margin 23.7%, up just 10bp on 13.7% revenue growth (incremental margin 24.7%)

- R&D grew 6.2% vs revenue 13.7% - 56bp of margin relief, 5.6x the margin actually delivered

- GAAP EPS $1.14 (+40.7%), but +22.5% once the minority-investment mark is stripped from both years

- Free cash flow $1.290bn, up 120.9%; operating cash flow $1.793bn on flat capex

- Electrophysiology $2.218bn, +29.1% organic and +41.1% in the US - 44% of the organic increase

- Fair value $89.39 vs $92.04 close (-2.9%); Street consensus $95.54, median $97

What to watch: Q2 FY2027 on 17 November has no extra week in it. Organic growth near 7% confirms the base case; a five confirms the bear.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

nCino (NCNO) Q2 FY2027 — NCNO went into the print at $20.81, closed the reaction session at $21.51 (+3.4%) and $22.99 two sessions later - 10.5% up on the print, and 64% above its March low of $14.01.

nCino grew revenue 8.2% to $161.0m and swung GAAP operating income to +$13.6m from -$9.3m. But in the same six months it spent $175.7m retiring its own stock against $114.8m of free cash flow - and the $60.9m shortfall is within $1.0m of the $61.9m of net new debt on the balance sheet. The 10-Q says it outright: the repurchase was funded with cash on hand and term loan proceeds. The buyback worked - $16.16 average against $22.99 today. The board has just authorised another $100m at the higher price.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$17.33 vs ~$22.99 today.

KEY METRICS:

- Revenue $161.0m, +8.2% YoY, vs a $159.2m bar; subscription $143.5m, +9.7%; services $17.5m, -2.9%

- GAAP operating income +$13.6m vs -$9.3m; non-GAAP operating margin 25.4% from 20.2% - but DOWN 256bps sequentially from 27.9%

- GAAP diluted EPS $0.05. nCino publishes NO adjusted EPS - the reconciliation stops at operating income - so the widely-quoted $0.27 'miss' compared a GAAP print to a non-GAAP bar. Rebuilt properly, non-GAAP EPS is $0.31: a beat

- Six months: $175.7m of buybacks vs $114.8m of free cash flow - a $60.9m shortfall, within $1.0m of $61.9m of net new debt

- Debt $213.5m to $275.4m; $200m term loan taken 30 March 2026, matures Oct 2029, applicable rate 5.64%

- Buyback: 10.83m shares at a $16.16 average; diluted share count -8.6% YoY; a new $100m authorisation struck at $22.99

- Guide implies only 1.1% revenue growth over the next six months (2.3% annualised): $161.0m to $162.3m guided to $162.8m implied

- The beat did not flow through: revenue beat by $1.9m, the full-year guide rose $1.5m at the midpoint

- Mix: US non-mortgage subs +11.4% and international subs +12.7%; US mortgage -1.0% and the UK book -7.2%

- Stock comp $63.8m annualised, 9.9% of guided revenue. Charge it and $139.5m of guided FCF becomes $75.7m of owner earnings

- Enterprise value $2,623m: 4.1x guided revenue, 18.8x guided FCF, 34.7x owner earnings

- Market cap $2,431m on the 10-Q cover's 105.74m shares - our data vendor's $2,519m is 3.6% high on a stale share count

- Reverse DCF: $22.99 requires 11.0% revenue CAGR for five years. The company guides 1.1% over six months

- Our fair value $17.33 (bear $8.80, base $17.27, bull $32.42) vs $22.99 - 24.6% downside

What to watch: A Q3 above the top of the guide with the mortgage line growing again, the UK returning to growth, or stock compensation below 7% of revenue with the operating margin held. Any of those moves our owner-earnings number a long way.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

CMB.TECH NV (CMBT) Q2 2026 — The stock rose 3.6% on the print and closed the week at $18.35, a twelve-month high.

CMB.TECH earned $364.4m in the June quarter - $1.26 a share against $0.04 a year earlier - on revenue of $703.9m, up 81.5%. We tested the obvious objection (that the profit was really vessel sales) and rejected it: disposals were 35% of profit, not the whole of it. Our problem is the price and the balance sheet.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$13.54 vs ~$18.35 today.

KEY METRICS:

- Revenue $703.9m, up 81.5% year on year (H1 $1,223.6m, up 96.4%)

- EBITDA $552.8m vs $224.1m; core EBITDA ex vessel sales $415.7m vs $168.7m

- Profit $364.4m = $1.26 per share vs $0.04; Street bar was $0.875

- Vessel disposal gains $127.4m = 35% of profit (Q1 2026 was 73%)

- Pre-tax profit ex all disposals $237.7m vs a $60.2m loss a year ago

- VLCC spot TCE $126,790/day vs $44,981; Suezmax $123,405 vs $40,160

- Capesize C5TC $39,806/day vs a 10-year average of $22,926 (58%)

- Contract backlog $3.26bn; 83% of Q3 VLCC days and 85% of Newcastlemax days fixed

- Intended distribution $0.64/share ($0.21 dividend + $0.43 share premium)

- H1 operating cash flow $417.3m; H1 payout $232.1m paid + $185.7m proposed = 100% of it

- Net debt $5,292.8m against a $5,324.6m market capitalisation; EV $10,617.4m

- Book value $10.76/share; price/book 1.71x; EV/mid-cycle EBITDA 13.6x

- Our fair value $13.54 (NAV $17.32 / DCF $13.10 / mid-cycle multiple $0.58, 55/30/15)

What to watch: the Q3 fixed-cover percentages and whether the $0.64 distribution survives a softer quarter - the next print is late November 2026

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

HEICO Corporation (HEI) Q3 FY2026 — HEI went into the print at $351.05 and closed at $336.53 three sessions later, -4.1%, having set a 12-month closing high of $374.67 on August 14. The non-voting Class A (HEI.A) closed at $250.06, -2.7% over the same three sessions.

HEICO reported record net sales of $1,413.1m (+23.1%), record operating income of $355.2m (+34.0%) and record net income attributable to HEICO of $235.4m (+32.8%), with diluted EPS of $1.67 against a $1.51 consensus - a beat on both lines. HEICO's own release put CONSOLIDATED ORGANIC growth at 14%. Nine of the 23 headline growth points were acquired, and HEICO spent $1,018m of cash on acquisitions in nine months to buy them.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$219.46 vs ~$336.53 today.

KEY METRICS:

- Net sales $1,413.1m, +23.1% YoY - a record, vs a $1,357.9m consensus

- Diluted EPS $1.67 vs a $1.51 bar - a $0.16 beat; HEICO publishes no non-GAAP EPS, so bar and print share a basis

- Consolidated ORGANIC net sales growth 14%, against the 23.1% headline - a 9.1-point acquired gap

- Flight Support: sales $947.8m +18.1%, organic 12%, operating margin 25.88% (from 24.71%)

- Electronic Technologies: sales $483.5m +35.9%, organic 18%, operating income +55.0%, margin 25.97% (from 22.76%)

- Operating income $355.2m, +34.0%; consolidated operating margin 25.1% from 23.1%

- TTM acquisitions $1,018m against $81m of capex - 12.6x, and 99% of free cash flow before M&A

- Goodwill $4,356m plus intangibles $1,777m = 61.7% of $9,937m total assets; tangible equity is negative

- Redeemable noncontrolling interests $617.9m, +32.2% in nine months; put rights start in fiscal 2031

- Net debt/EBITDA 1.57x (from 1.60x) after $550m of 4.950% 2031 notes and $650m of 5.400% 2036 notes

- Shares: 55,241,647 HEI (one vote) + 84,515,758 HEI.A (1/10 vote) = 139.76m; market cap $39.72bn

- Valuation: 46.9x TTM net income of $848m, 29.1x TTM EBITDA of $1,467m, 2.59% FCF yield before M&A

- Our fair value $219 (bear $161, base $219, bull $274) vs $336.53 on HEI and $250.06 on HEI.A

What to watch: Two more quarters of 18% organic growth at Electronic Technologies would make our fade too steep and is worth roughly $30-$40 of fair value. Flight Support organic below 12% in Q4, or acquisition spending rising again while the organic rate falls, confirms the bear case.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.