Charged Alpha Stock Encyclopedia

Freeport-McMoRan Inc. (FCX) Q2 2026 — Freeport-McMoRan (FCX), the largest US copper producer, reported a strong Q2 2026: a record realized copper price of $6.17/lb and record gold of $4,520/oz drove revenue of $7.03B (beat ~$6.6B), adjusted EPS of $0.74 (beat $0.62; GAAP $0.68), net income of $984M (+27% YoY), and $2.0B of operating cash flow. Yet the stock fell ~3% on the print. The honest read: this was a PRICE beat, not a volume beat — revenue actually fell 7% YoY, and Freeport sold only 710M lbs of the 786M lbs of copper it produced (and just 123k of 192k gold oz) because the giant Grasberg mine in Indonesia is still ramping back from a 2025 mud-rush incident and the new Manyar smelter is starved of concentrate. Those unsold ounces are deferred, not lost — a catch-up tailwind into H2 2026/2027 as Grasberg climbs to ~65% of capacity (H2 2026), 80% (mid-2027), and full (end-2027). The under-covered kicker: as 'America's Copper Champion' supplying ~70% of US refined copper, Freeport's US pounds sell into a COMEX price carrying a fat premium to LME under the 50% Section 232 copper tariff. Balance sheet is a fortress ($4.1B cash, net debt ~$2B ex-smelter; $0.15 dividend + $110M buybacks). Our copper-price scenario grid lands fair value ~$59 on a $5.25 base case — essentially in line with the ~$63 price and below the Street's ~$72 avg target. Our call: HOLD, 3/5.

Freeport-McMoRan (NYSE: FCX) is the world's largest publicly traded copper producer — huge open-pit mines in Arizona and New Mexico, Cerro Verde and El Abra in South America, and a 48.76% stake in the giant Grasberg complex in Indonesia, one of the biggest gold mines on earth. Q2 2026 looked like a blowout on the surface: a record realized copper price of $6.17/lb (up 36% YoY) and record gold of $4,520/oz drove revenue of $7.03B (beat ~$6.6B), adjusted EPS of $0.74 (crushing the $0.62 estimate; GAAP $0.68), net income of $984M (+27% YoY), and $2.0B of operating cash flow — all against a net cash cost of just $1.97/lb, a cash margin north of $4 a pound. And yet the stock fell about 3% on the day. Why? Because this was a PRICE beat, not a volume beat. Revenue actually fell 7% from a year ago, and Freeport sold only 710M lbs of the 786M lbs of copper it produced — and just 123k of the 192k gold ounces it mined — because the Grasberg block-cave mine is still ramping back after a September 2025 mud-rush incident and the new Manyar smelter is starved of concentrate. That metal isn't lost; it's deferred revenue, a catch-up tailwind as Grasberg climbs to ~65% of capacity in H2 2026, 80% by mid-2027, and near full by end-2027. The under-covered kicker almost nobody is modeling: as 'America's Copper Champion' — Morenci in Arizona is the biggest US copper mine, supplying ~70% of America's refined copper — Freeport's US pounds now sell into a COMEX price carrying a fat premium to the global LME benchmark under the 50% Section 232 copper tariff, while much of its input was exempted. The balance sheet is a fortress: $4.1B cash, net debt of only ~$2B once you strip out ring-fenced Indonesian smelter financing, a $0.15 dividend (half base, half variable), and $110M of buybacks. So how do you value a price-taker? Not on a single record quarter. We normalize the copper price and run a scenario grid: at a through-cycle $5.25 copper, normalized EBITDA is ~$12.5B, which at 8x EV/EBITDA less ~$6B net debt and ~$9B of minority interests (Grasberg + Cerro Verde) across ~1.44B shares lands near $59 a share. If copper reverts to $4, fair value is closer to $40; if the US premium holds and Grasberg fully ramps at ~$6.25 copper, the high-$70s. Our probability-weighted value is ~$58 — essentially in line with the ~$63 price and below the Street's ~$72 average target (Buy, 25 of 41 analysts), which requires record copper and gold to hold. Our call: HOLD, 3/5 — a fortress copper franchise worth owning through the cycle, but the beat was borrowed from record commodity prices, so we won't chase it here. Accumulate into weakness in the low $50s, respect the commodity risk. Not financial advice.

THE CALL: HOLD (3/5, A FORTRESS COPPER FRANCHISE — BUT THE BEAT WAS BORROWED FROM RECORD COPPER & GOLD, SO WE WON'T CHASE IT HERE) — base-case value ~$59 vs ~$63 today.

KEY METRICS:

- Realized copper price: $6.17/lb (Q2 2026) — a RECORD, up 36% YoY (vs $4.54); net cash cost $1.97/lb

- Realized gold price: $4,520/oz (record) vs $3,291 a year ago

- Revenue $7.03B (beat ~$6.6B, but −7% YoY); adjusted EPS $0.74 (beat $0.62); GAAP EPS $0.68

- Net income to shareholders $984M (+27% YoY); operating cash flow $2.0B; FCF ~$1.1B

- Volume gap: copper sold 710M lbs vs 786M produced; gold sold 123k oz vs 192k produced (Indonesia bottleneck)

- Grasberg ramp: ~34kt/day (April) to ~69kt/day (June); guide ~65% capacity H2 2026, 80% mid-2027, full end-2027

- FY2026 guide: ~3.1B lbs copper, ~650k oz gold, unit cash cost ~$1.90/lb, capex ~$4.3B (~$3B growth)

- Balance sheet: $4.1B cash, net debt ~$2B ex-smelter; $0.15 dividend + $110M buybacks (1.7M shares)

- Tariff angle: largest US copper producer (~70% of US refined); COMEX premium to LME under 50% Section 232 tariff

What to watch: copper holding above ~$5.50/lb with the US COMEX tariff premium intact, Grasberg hitting its 65%-then-80% ramp targets, and the Indonesian IUPK license extension (applied for in June 2026) getting formally approved — that combination pushes fair value toward the high-$70s and the Street's $72+ target; the risk to respect is copper mean-reverting toward $4.50 or below, which pulls earnings and the stock down together (fair value ~$40), or a slip in the Indonesian ramp. Because Freeport is a price-taker on two commodities, the realized copper price and Grasberg tonnage are the two lines to watch every quarter

Also on YouTube: @ChargedAlpha

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

Tractor Supply Company (TSCO) Q2 2026 — Tractor Supply (TSCO) reported Q2 2026 and missed: net sales rose 2.3% to $4.54B, but comparable-store sales fell 1.5% (transaction count -1.7%, ticket +0.2%), and adjusted diluted EPS of $0.81 (flat YoY) came in below the Street's ~$0.85. GAAP EPS dropped 14.9% to $0.69, dragged by a $65.8M Petsense restructuring charge (closing ~75 stores) plus $9.5M of VIP Petcare acquisition costs. Operating income fell 19.2% to $467.1M (-5.1% adjusted to $548.3M); net income fell 16.1% to $360.7M. Gross margin actually expanded to 37.1% (37.2% adjusted) on tariff benefits and cost discipline, but SG&A deleveraged to 26.8% of sales. Management blamed an unusually adverse May (comps were positive in April and June), cut its FY2026 outlook (net sales +2.5% to +3.5%, comps -1% to flat, adjusted EPS $1.90-$2.00), and withdrew the long-term framework from its December 2024 Investor Day (a new one comes with Q4). The company still returned $260.9M in Q2 ($135.3M buybacks at ~$34.92 avg + $125.6M dividends) and opened 28 Tractor Supply and 3 Petsense stores (2,672 total). The stock has been cut roughly in half over the past year to ~$31, leaving it near ~16x forward earnings — a decade-low multiple — with a ~3.1% dividend raised 16 straight years. Our owner-earnings / DCF pegs fair value near $35 — about 13% above the price, in line with the Street's ~$37 average. Our call: HOLD, 3/5.

Tractor Supply — the largest rural lifestyle retailer in America, an 88-year-old franchise built on needs-based demand like animal feed and farm essentials — has quietly been cut in half, from ~$63 to ~$31. The reason: growth stalled. In Q2 2026 the company missed, with comparable-store sales falling 1.5% and adjusted EPS of $0.81 landing below the ~$0.85 Street estimate, then cut full-year guidance and withdrew the long-term framework it laid out just 18 months ago. Management blames an unusually adverse May (comps were positive in April and June), but transaction count fell 1.7% — a real demand signal, not just weather. A $65.8M charge to close ~75 underperforming Petsense stores dragged GAAP EPS to $0.69. Yet the franchise looks intact: sales still grew 2.3% on new stores, gross margin expanded, free cash flow remains solid, and the company returned $261M to shareholders while raising its dividend for a 16th straight year (~3.1% yield). At ~16x forward earnings — a decade-low multiple — the stock is genuinely cheap versus its own history. Our owner-earnings / DCF work lands fair value near $35, about 13% above the ~$31 price and in line with the Street's ~$37 average (which analysts have been cutting). Our call: HOLD, 3/5 — a quality franchise on sale, but only a thin margin of safety until comps inflect. Not financial advice.

THE CALL: HOLD (3/5, A DURABLE RURAL-RETAIL FRANCHISE AT A DECADE-LOW MULTIPLE — BUT ONLY A THIN MARGIN OF SAFETY UNTIL COMPS TURN) — base-case value ~$35 vs ~$31 today.

KEY METRICS:

- Net sales $4.54B (+2.3% YoY); comparable-store sales -1.5% (transaction count -1.7%, ticket +0.2%)

- GAAP diluted EPS $0.69 (-14.9% YoY); adjusted diluted EPS $0.81 (flat YoY) — below Street ~$0.85

- Net income $360.7M (-16.1%); adjusted net income $423.5M

- Operating income $467.1M (-19.2%); adjusted operating income $548.3M (-5.1%); adj op margin 12.1%

- Gross margin 37.1% (+11 bps YoY); adjusted 37.2% — tariff benefits + cost discipline

- SG&A (incl D&A/impairment) 26.8% of sales (up from 23.9%) — deleverage + one-time charges

- Petsense restructuring/impairment charge $65.8M (closing ~75 stores) + VIP Petcare acquisition costs $9.5M

- Comps positive in April and June; unusually adverse May weather drove the quarterly decline

- Cut FY2026 outlook: net sales +2.5% to +3.5%, comps -1% to flat, adjusted EPS $1.90-$2.00

- Withdrew Dec-2024 Investor Day long-term framework; updated framework to come with Q4 2026

- Capital returns Q2: $135.3M buybacks (3.9M shares @ ~$34.92) + $125.6M dividends = $260.9M

- Opened 28 Tractor Supply + 3 Petsense stores; 2,672 total stores across 49 states; dividend raised 16 straight years (~3.1% yield)

What to watch: comparable-store sales inflecting positive in the second half would confirm that May's weakness was weather rather than a structural demand slowdown, and a credible new long-term financial framework at the Q4 2026 print would restore confidence — either could re-rate the stock back toward the mid-to-high $30s; the risk to respect is comps staying negative into 2027, which would signal a genuine rural-consumer slowdown rather than a one-quarter blip, so watch the monthly comp trend and transaction-count trajectory every quarter, they are the single best gauge of whether the growth engine is restarting or stalling

Also on YouTube: @ChargedAlpha

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

Summit Therapeutics Inc. (SMMT) Q2 2026 — Summit Therapeutics (SMMT) reported Q2 2026 after the close on July 23, 2026. GAAP net loss was $215.7M, or $(0.28)/share (last year's $(0.76) was inflated by a huge one-time stock-comp charge); the cleaner adjusted loss was $(0.19), a slight miss vs the ~$(0.17) estimate. Adjusted R&D jumped to $133.6M (+68% YoY) as the Phase III program scales; adjusted G&A was $18.2M. The company closed the quarter with $690.7M in cash and investments (up from $598.7M at Q1), after raising $230.8M via its ATM in Q2 plus $68.4M after quarter-end — but flagged going concern (resources insufficient for the next 12 months) and set up a new $380M ATM facility with JPMorgan. Six-month operating cash burn was $263.4M. The science broke Summit's way: the pivotal HARMONi trial's updated overall-survival analysis showed a hazard ratio of 0.76 in the full ITT population AND in both Western and Asian subgroups (Western median follow-up 23.2mo), answering the key geographic-translatability doubt; and Akeso's HARMONi-6 became the first Phase III to beat an approved PD-1 inhibitor head-to-head on OS (HR 0.66, p=0.0017) in 1L squamous NSCLC. Lead asset ivonescimab (PD-1/VEGF bispecific; Summit holds ex-China rights, Akeso licensor) has an FDA PDUFA date of November 14, 2026 in EGFR-mutated NSCLC post-TKI; HARMONi-3 (1L NSCLC) enrollment is complete with the squamous PFS readout due 2H 2026. The stock fell ~9% to ~$13.66 (near a 52-week low; 52-wk range $12.55–$30.98) on the going-concern/dilution overhang, a market cap ~$10.6B. Because SMMT is pre-revenue in its territories, we value it on a risk-adjusted sum-of-parts / reverse-DCF: net cash + probability-weighted rNPV of the ivonescimab programs lands a base fair value near $16 (~15–20% above the price), below the Street's ~$26 average target and $15–$38 range. Our call: HOLD, 3/5 — genuinely de-risking data and a hard November catalyst, but a single-asset, cash-burning, dilutive binary. Not financial advice.

Summit Therapeutics is one of the most polarizing stories in biotech: a clinical-stage oncology company with no approved product and no revenue in the West, burning ~$140M a quarter, that the market still values near $10 billion. Why? Its lead drug, ivonescimab — a next-generation PD-1/VEGF bispecific antibody licensed from China's Akeso — may be best-in-class in lung cancer. In Q2 2026 the science broke Summit's way: the pivotal HARMONi trial showed an identical overall-survival benefit (hazard ratio 0.76) in Western and Asian patients as the data matured, and the HARMONi-6 study became the first Phase III ever to beat an approved PD-1 inhibitor head-to-head on survival (HR 0.66). An FDA decision is due November 14, 2026, and the big front-line HARMONi-3 readout is coming in the second half of the year. Yet the stock fell ~9% to ~$13.66 on the print — because the same report carried a going-concern warning and a new $380M stock-sale facility, meaning ongoing dilution. We value this pre-revenue, single-asset story on a risk-adjusted sum-of-parts and reverse-DCF: net cash plus the probability-weighted value of the pipeline lands our fair value near $16, only modestly above the price and below the Street's ~$26 average. Our call: HOLD, 3/5 — own it small for the optionality and the November catalyst, but respect that it's a binary that can halve on a bad print. Not financial advice.

THE CALL: HOLD (3/5, DE-RISKING SCIENCE AND A HARD NOVEMBER CATALYST — BUT A SINGLE-ASSET, CASH-BURNING, DILUTIVE BINARY) — base-case value ~$16 vs ~$13.66 today.

KEY METRICS:

- GAAP net loss $215.7M, or $(0.28)/share (prior-year $(0.76) was inflated by one-time stock comp)

- Adjusted (non-GAAP) net loss $147.0M, or $(0.19)/share — slight miss vs ~$(0.17) est

- Adjusted R&D $133.6M (+68% YoY, GAAP $157.7M); adjusted G&A $18.2M (GAAP $62.8M)

- Cash & investments $690.7M at quarter-end (up from $598.7M at Q1 2026); equity $630.0M

- Raised $230.8M via ATM in Q2 + $68.4M post-quarter; 6-mo operating cash burn $263.4M

- Flagged GOING CONCERN; established a new $380M ATM facility with JPMorgan

- HARMONi updated OS: hazard ratio 0.76 in full ITT AND in both Western and Asian subgroups

- HARMONi-6 (Akeso, 1L squamous NSCLC): OS HR 0.66 (p=0.0017) — first Phase III to beat a PD-1 head-to-head

- Ivonescimab FDA PDUFA date November 14, 2026 (EGFR-mutated NSCLC post-TKI); BLA accepted Jan 2026

- HARMONi-3 (1L NSCLC) enrollment complete; squamous PFS readout expected 2H 2026

- Sold non-core antibiotic ridinilazole to Biossil for $0.5M upfront + up to $104.5M milestones + royalties

- Stock ~$13.66 (near 52-wk low; range $12.55–$30.98), market cap ~$10.6B; ~778M weighted shares

- Valuation: risk-adjusted SOTP/reverse-DCF fair value ~$16 vs Street ~$26 avg ($15–$38 range)

What to watch: an FDA approval on the November 14 PDUFA date would open the first real revenue path and ease the funding pressure, and a clean win in the front-line HARMONi-3 trial (squamous PFS readout due 2H 2026) would unlock the multi-billion-dollar 1L NSCLC market and justify a materially higher valuation and a more bullish call; the risks to respect are a complete response letter from the FDA, a HARMONi-3 miss, or dilution accelerating faster than the data improves — in any of those the stock drifts back toward its cash-plus-optionality floor, so watch the readouts and the cash burn every quarter, because this is a single-asset binary that can halve on a bad print

Also on YouTube: @ChargedAlpha

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

Edwards Lifesciences Corporation (EW) Q2 2026 — Edwards Lifesciences (EW) reported Q2 2026 with a clean beat-and-raise: sales grew 13.6% to $1.74B (+12.5% constant currency) and adjusted EPS was $0.78, up ~16% YoY and above consensus. (GAAP EPS was $0.42, depressed by a one-time discrete tax hit from Pillar Two global-minimum-tax rules and a California R&D-credit change — the adjusted figure is the real earnings power.) The core TAVR aortic-valve franchise did $1.26B (+11.3%; +10.5% cc), Surgical was $284M (+6.5%), and the standout was TMTT (transcatheter mitral & tricuspid) at $195.9M, up 47.3% as the PASCAL and EVOQUE platforms scale. Gross margin was 77.5% (adj 77.6%) and adjusted operating margin 30.0%. The balance sheet is a fortress: ~$2.9B cash vs ~$0.6B debt (~$2.3B net cash), ~$1.5B buyback authorization, no dividend. Management RAISED full-year guidance: sales growth to 10-11% (from 9-11%), implying ~$6.6-6.9B in sales, TAVR growth to 8-9%, and TMTT to $760-780M, while reaffirming adjusted EPS of $2.95-3.05 (+17% at midpoint); Q3 guide is $1.63-1.71B sales and $0.71-0.77 EPS. Despite all that, the stock sits near 52-week lows around $83 (52-wk range ~$72-96). Our owner-earnings / DCF pegs fair value near $92 — roughly 11% above the price and a touch below the Street's bullish ~$100 average (32 buys / 16 holds). Our call: BUY, 4/5.

Edwards Lifesciences is a rare thing — a best-in-class medical-device franchise that just beat earnings, raised full-year guidance the same day, and then watched its stock slip toward 52-week lows. Edwards is the world leader in structural heart: the replacement heart valves and repair clips doctors thread up through an artery instead of opening your chest. Q2 2026 sales grew ~14% to $1.74B, adjusted EPS beat at $0.78 (+16%), and the brand-new mitral & tricuspid business (TMTT) grew 47% to $196M — a new multibillion-dollar market Edwards is building almost from scratch. The core TAVR aortic franchise ($1.26B, +11%) is maturing but still dominant, and the balance sheet is a fortress with ~$2.3B net cash and an active buyback. The overhangs are real — TAVR's deceleration, a September CMS national-coverage decision, and a fair-not-cheap ~27x forward multiple that leaves only a modest margin of safety. But our owner-earnings / DCF lands fair value near $92 versus a ~$83 price, and Wall Street is even more bullish at ~$100 (32 buys / 16 holds). A high-quality compounder on sale after a boredom-driven pullback. Our call: BUY, 4/5 — scale in, not back up the truck. Not financial advice.

THE CALL: BUY (4/5, A STRUCTURAL-HEART COMPOUNDER ON SALE — BEAT, RAISED, AND TRADING AT A DOUBLE-DIGIT DISCOUNT TO FAIR VALUE) — base-case value ~$92 vs ~$83 today.

KEY METRICS:

- Adjusted EPS $0.78 (+~16% YoY), beat consensus; GAAP EPS $0.42 (depressed by a discrete Pillar Two / California R&D-credit tax hit)

- Revenue $1.74B (+13.6% YoY reported; +12.5% constant currency)

- TAVR (aortic) sales $1.26B (+11.3%; +10.5% cc) — ~72% of revenue, SAPIEN platform #1 globally

- TMTT (mitral/tricuspid) sales $195.9M (+47.3%; +44.8% cc) — PASCAL & EVOQUE scaling

- Surgical sales $284M (+6.5%; +5.0% cc) on durable RESILIA tissue

- Gross margin 77.5% (adj 77.6%); adjusted operating margin 30.0% (GAAP 29.5%)

- SG&A $561M (32.2% of sales); R&D $279M (16.0% of sales)

- Balance sheet: ~$2.9B cash, ~$0.6B debt (~$2.3B net cash); ~$1.5B buyback authorization; no dividend

- RAISED FY26 sales growth guide to 10-11% (from 9-11%) -> ~$6.6-6.9B; TAVR growth 8-9%; TMTT $760-780M

- Reaffirmed FY26 adjusted EPS $2.95-3.05 (+17% at midpoint); Q3 guide sales $1.63-1.71B, adj EPS $0.71-0.77

- Catalysts ahead: CMS TAVR national-coverage decision memo (September); PASCAL tricuspid U.S. approval & next-gen PASCAL Capture Clarity (Q4); PROGRESS & CLASP IITR data at TCT

- Valuation: ~27x forward earnings; stock ~$83 near 52-week low (range ~$72-96); our DCF fair value ~$92; Street ~$100 avg

What to watch: continued 40%+ growth in the TMTT mitral/tricuspid franchise, a smooth ramp of the next-generation PASCAL and SAPIEN M3 launches, and a favorable September CMS national-coverage decision would confirm the growth-engine thesis and push fair value above $92 toward the Street's ~$100; the risk to respect is TMTT adoption stalling, an aortic-valve price war, or an adverse CMS ruling — at a premium multiple on a maturing core, a growth stumble is what re-rates the stock, so watch the TMTT growth rate and the CMS memo every quarter

Also on YouTube: @ChargedAlpha

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

Tootsie Roll Industries (TR) Q2 2026 — Tootsie Roll Industries (TR) reported a soft Q2 2026 (quarter ended June 30): net sales slipped ~1% to $151.9M, but net earnings fell 24% to $13.3M and EPS dropped to $0.18 from $0.23 a year ago. Management blamed a sales-timing shift from Q2 into Q3 and, more importantly, a margin squeeze from sharply higher cocoa and chocolate costs plus elevated energy, freight and packaging. First-half sales were $301.4M (+1%) with earnings of $31.0M (EPS $0.41 vs $0.47). The story with Tootsie Roll is the fortress balance sheet: ~$113M cash plus ~$483M of investments (~$596M total) against just ~$14M of debt — roughly $8/share of net cash and investments. The catch is the price: at ~$37.52 the stock trades ~27x earnings for a business that isn't growing and whose profit just fell. Because TR is a low-beta (0.4), bond-like name, we ran a blended owner-earnings DCF at a generous 6-8% discount and still land near $29 fair value — about 23% below the price. TR is essentially uncovered by Wall Street, so we anchor on our own model. Our call: HOLD.

Tootsie Roll is one of the most beloved, most conservative companies on the market — a century-old candy maker (Tootsie Rolls, Tootsie Pops, Junior Mints, Dots, Andes, Charms Blow Pops) with essentially no debt and nearly $600M of cash and investments, run for decades by the Gordon family, who control a majority of the vote. The stock is so steady its beta is just 0.4 — it trades more like a bond than a stock. But Q2 2026 was soft: net sales dipped ~1% to $151.9M while net earnings fell 24% to $13.3M (EPS $0.18 vs $0.23) as record-high cocoa costs and elevated energy, freight and packaging squeezed margins. Management expects cocoa relief in the back half of 2026 into 2027. The real debate isn't quality — it's price. At ~$37.52 you're paying ~27x earnings for a no-growth business, and even crediting the fortress balance sheet and using a low, bond-like 6-8% discount rate, our blended owner-earnings DCF lands near $29 — about 23% below the price. With almost no active sell-side coverage (the only 'targets' online are algorithmic screens ranging absurdly from ~$29 to ~$92), we trust our own work. A magnificent, unbreakable little business — but priced for perfection. Our contrarian, honest call: HOLD, 2/5. Not financial advice.

THE CALL: HOLD (2/5, A FORTRESS BALANCE SHEET AT A PREMIUM PRICE — QUALITY YES, MARGIN OF SAFETY NO) — base-case value ~$29 vs ~$37.52 today.

KEY METRICS:

- Q2 2026 net sales $151.9M (-1% YoY vs $153.2M)

- Q2 2026 net earnings $13.3M (-24% YoY vs $17.5M)

- Q2 2026 EPS $0.18 vs $0.23 (-22%); effective tax rate 26.9% vs 33.1%

- First-half 2026 net sales $301.4M (+1%); H1 net earnings $31.0M vs $35.6M; H1 EPS $0.41 vs $0.47

- Margin squeeze from record-high cocoa/chocolate costs plus elevated energy, freight and resin packaging

- Sales-timing shift moved some seasonal sales from Q2 into Q3 vs the prior year

- Balance sheet: ~$113M cash + ~$57M short-term + ~$426M long-term investments (~$596M total)

- Total debt only ~$14M; current ratio ~3.6x; ~$582M net cash & investments (~$8/share)

- FY2025 revenue $732.5M, net income $100.1M, EPS $1.37, gross margin ~35.5%; FY2025 FCF ~$96M

- Gordon family controls a majority of the vote; almost no active Wall Street coverage; low beta ~0.4

- Valuation: ~27x trailing earnings; our blended owner-earnings DCF (6-8% discount) fair value ~$29 vs ~$37.52

What to watch: a sustained rollover in cocoa and chocolate costs that restores gross margin into 2027, or a corporate action from the Gordon family (a sale of the company or a large return of the ~$600M cash pile), would materially change the math; absent those, the key risk is simply time — a premium ~27x multiple on a no-growth business whose earnings are falling can quietly compress toward our ~$29 fair value, so we'd only get constructive in the low $30s and below

Also on YouTube: @ChargedAlpha

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

Comcast Corporation (CMCSA) Q2 2026 — Comcast (CMCSA) reported Q2 2026 with a soft headline that was mostly optics: revenue of $29.94B (-1.2% YoY, but +4.7% pro forma after the Versant and German-Sky separations), adjusted EPS of $1.04 (-16.7%, versus a prior-year quarter that included a $9.4B Hulu gain), and adjusted EBITDA of $8.90B (-13.4%; -5.3% pro forma). The number that matters held up: free cash flow rose 2.3% to $4.60B. Under the hood the quarter was better than it looked — a record 448,000 wireless line net adds (total lines 10.2M), Business Services revenue +3.7% at a 56.7% margin, and Peacock's first-ever quarterly profit ($189M EBITDA, a $290M YoY swing, 48M paid subs). The soft spots were real too: 167,000 broadband and 280,000 video customer losses, and softer theme-park profit. Management also announced a tax-free spinoff of NBCUniversal and Sky and paused buybacks to fund it. The stock has been crushed to ~$22 (near a 52-week low, down ~33% from the highs), leaving it at ~5x earnings, a ~15% free-cash-flow yield, and a covered ~6% dividend (18 straight years of raises). Our owner-earnings / DCF pegs fair value near $32 — about 45% above the price and above the Street's ~$28 average, which analysts have been cutting. Our call: BUY, 4/5.

Comcast is one of the most hated blue chips in the market — a cash machine so out of favor it trades at barely five times earnings, yields almost 6%, and throws off a ~15% free-cash-flow yield. The bear case is real: its crown-jewel broadband business keeps losing customers to fixed-wireless and SpaceX's Starlink, and the stock has been cut by a third to around $22. But Q2 2026 had far more going on than the ugly headline. On a comparable, pro forma basis revenue actually grew 4.7%, free cash flow rose to $4.6B, wireless posted a record 448,000 net line adds, Peacock turned its first-ever quarterly profit, and management announced a tax-free spinoff of NBCUniversal and Sky. Add it up and you have a $12B+ free-cash-flow machine on sale, paying a covered ~6% dividend (18 straight years of increases) while you wait for a value-unlock catalyst. The overhangs are genuine — ~$83B of net debt, a paused buyback, and secular broadband erosion — but at ~5x earnings a lot of bad news is already priced in. Our owner-earnings / DCF work lands fair value near $32 — roughly 45% above the ~$22 price, and above the Street's cautious ~$28 average. Our call: BUY, 4/5. Not financial advice.

THE CALL: BUY (4/5, CHEAP, HATED, AND CATALYZED — A $12B CASH MACHINE ON SALE WITH A SPINOFF THE MARKET ISN'T PAYING FOR) — base-case value ~$32 vs ~$22 today.

KEY METRICS:

- Adjusted EPS $1.04 (-16.7% YoY); GAAP EPS $0.99 (-66.9% — prior year had a $9.4B Hulu gain)

- Revenue $29.94B (-1.2% YoY reported; +4.7% pro forma ex-Versant / German Sky)

- Adjusted EBITDA $8.90B (-13.4% reported; -5.3% pro forma)

- Free cash flow $4.60B (+2.3% YoY); operating cash flow $8.09B; capex $2.90B

- Domestic wireless net line adds 448,000 — best quarter on record; total lines 10.2M (7% penetration)

- Domestic broadband net losses -167K (improved 34K YoY); video net losses -280K

- Business Services Connectivity revenue +3.7% to $2.7B; EBITDA +5.0% to $1.5B; 56.7% margin

- Peacock first-ever quarterly profit: EBITDA $189M (+$290M YoY); 48M paid subs (+2M)

- Studios EBITDA +$141M YoY (Super Mario Galaxy Movie >$1B box office; Obsession >$400M)

- Announced tax-free spinoff of NBCUniversal and Sky; PAUSED share buyback to fund separation

- Returned $2.1B to shareholders ($1.2B dividends + $0.9B buybacks); ~$83B net debt

- Valuation: ~5x earnings, ~15% FCF yield, covered ~6% dividend (18 yrs of raises); stock ~$22 near 52-wk low

What to watch: broadband subscriber losses narrowing, continued wireless and Business Services momentum, and a clean completion of the NBCUniversal/Sky spinoff would confirm the value-unlock thesis and justify a re-rating toward the low-to-mid $30s and beyond; the risk to respect is an acceleration of broadband share loss to fixed-wireless and Starlink, or a messy, value-destroying separation — so watch the broadband net-add line every quarter, it is the single best gauge of whether the ice cube is stabilizing or melting faster

Also on YouTube: @ChargedAlpha

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

SLB (Schlumberger) (SLB) Q2 2026 — SLB (Schlumberger) reported Q2 2026 and the stock jumped ~10-11%: adjusted EPS of $0.55 beat the ~$0.51 estimate on revenue of $8.97B (+5% YoY, +3% sequentially), with broad-based international offshore growth (Latin America, Europe & Africa, Asia) more than offsetting a 13% sequential drop in the disrupted Middle East. But this was a beat on a DOWN year: adjusted EPS still fell ~26% YoY, adjusted EBITDA margin compressed ~284 bps to 21.2%, net income slipped to $786M, and stripping out the ChampionX acquisition revenue actually fell ~5% YoY. The bright spot is Digital — up 18% YoY at a 35% EBITDA margin, now including a new Data Center Solutions business selling infrastructure to AI hyperscalers. Free cash flow was $716M ($4.5B TTM, ~5.8% yield); net debt ~$8.7B (~1.1x EBITDA); dividend ~2.2%. After a ~66% run off the low to ~$52 (near the 52-week high ~$59), our owner-earnings / DCF pegs fair value near $49 — a touch below the price. Our call: HOLD, 3/5, and we are MORE CAUTIOUS than the Street's ~$61 Buy target.

SLB — the company formerly known as Schlumberger — is the world's largest oilfield services firm, the technology backbone the entire energy industry runs on across ~100 countries. Q2 2026 sent the stock up ~10%: adjusted EPS of $0.55 beat the ~$0.51 estimate on $8.97B of revenue (+5% YoY, +3% sequentially), as broad-based international offshore activity offset a 13% sequential slump in the conflict-disrupted Middle East. But read the fine print — this was a beat on a DOWN year: adjusted EPS still fell ~26% YoY, EBITDA margin compressed to 21.2%, and net income slipped; strip out the ChampionX acquisition and revenue actually fell ~5%. The exciting piece is Digital: +18% YoY at a 35% EBITDA margin, now including a new Data Center Solutions business pointing SLB at the AI data-center boom. Cash is solid — $716M FCF in the quarter, ~$4.5B TTM (~5.8% yield), a ~2.2% dividend plus buybacks, ~$8.7B net debt (~1.1x EBITDA). Management sees a foundation for growth into 2027 on offshore, Digital, and a Middle East recovery. The catch: it's a cyclical business whose earnings peaked in 2024, and after a ~66% run off the low to ~$52 (near the ~$59 high) it trades ~23x forward earnings with no obvious margin of safety. Our owner-earnings / DCF lands fair value near $49 — a touch below the price. Our call: HOLD, 3/5 — best-in-class, but fully priced after the pop, and we are more cautious than the Street's ~$61 Buy. Not financial advice.

THE CALL: HOLD (3/5, BEST-IN-CLASS, BUT FULLY PRICED AFTER THE POP — A BEAT ON A DOWN YEAR) — base-case value ~$49 vs ~$52 today.

KEY METRICS:

- Adjusted EPS $0.55 beat ~$0.51 estimate; GAAP EPS $0.52 (+4% seq, -30% YoY); adjusted EPS -26% YoY

- Revenue $8.97B (+5% YoY, +3% sequentially); ex-ChampionX revenue -5% YoY

- Adjusted EBITDA $1.90B; adjusted EBITDA margin 21.2% (-284 bps YoY, +83 bps seq)

- Net income $786M (+5% seq, -22% YoY); stock popped ~10-11% on the print

- Digital revenue $697M (+18% YoY) at a 34.7% EBITDA margin; new Data Center Solutions for AI hyperscalers

- Production Systems $3.77B (+29% YoY, ChampionX); Well Construction $2.74B (-7%); Reservoir Performance $1.56B (-8%)

- International $6.67B (+3% seq, -3% YoY); North America $2.24B (+4% seq); Middle East -13% sequentially on conflict disruption

- Free cash flow $716M in Q2; ~$4.5B TTM (~5.8% FCF yield); ChampionX added ~$870M of revenue

- Net debt ~$8.7B (~1.1x trailing EBITDA); dividend yield ~2.2% plus buybacks

- Valuation: ~23x forward earnings, ~66% run off the ~$32 low to ~$52 (52-wk high ~$59); earnings still below 2024 peak

What to watch: a durable, multi-year up-cycle would justify chasing it toward the Street's target: a Middle East recovery, firmer oil prices lifting customer budgets, more offshore/deepwater sanctioning, and Digital plus Data Center Solutions scaling into real numbers; the risk to respect is the cycle rolling over — falling oil prices and customer capex cuts, which at a full ~23x multiple with earnings already declining could re-rate the stock quickly, so watch oil, the Middle East, and the Digital growth rate every quarter

Also on YouTube: @ChargedAlpha

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

RELX PLC (RELX) H1 2026 — RELX PLC (NYSE: RELX), the information-and-analytics owner of LexisNexis, Elsevier and its Risk data business, reported strong first-half 2026 results (six months to June 30, reported in GBP): revenue of £4,871m (+7% underlying), adjusted operating profit up 9% to £1,727m as the group margin expanded to 35.5%, adjusted EPS of 68.6p (+11% constant currency), a 7% dividend hike to 20.9p, and £1.75bn of a £2.25bn buyback completed in the half at 98% cash conversion. Crucially, the two divisions the market feared AI would gut both accelerated: Legal (LexisNexis) +10% underlying and STM (Elsevier) +6%, with Risk +8%. Yet the ADR has fallen ~38% over 12 months — from ~$53 to ~$34.41 — as the multiple de-rated from ~31x to ~18x forward earnings on AI-disruption fears sparked by new legal/research AI tools. Our owner-earnings DCF (in £, converted at GBP/USD ~1.34, 1 ADS = 1 ordinary share) lands fair value near £35/share, about $47 per ADR, roughly 35% above the price. Our call: BUY 4/5 — a premium compounder de-rated on a fear its own results refute, aligned with a Strong Buy Street. The honest swing factor is long-run AI durability. Not financial advice.

RELX is one of the great quiet compounders — the FTSE-100 information-and-analytics machine behind LexisNexis (Legal), Elsevier (STM), its high-margin Risk data business and RX Exhibitions. For a decade it traded at a rich ~31x earnings and simply kept grinding higher. Then in early 2026 the narrative flipped: powerful new AI tools (including a legal assistant from Anthropic) sparked fears that generative AI would commoditize legal research and scientific search, and the shares de-rated ~38% — the NYSE ADR falling from ~$53 to ~$34.41, roughly 18x forward earnings versus a ~31x history. But H1 2026 refutes the fear: revenue grew 7% underlying to £4,871m, adjusted operating profit rose 9% to £1,727m (35.5% margin), adjusted EPS +11% at constant currency, and the very businesses AI was supposed to kill accelerated — Legal +10% and STM +6%, with Risk +8%. Cash conversion was 98%, management raised the dividend 7% and completed £1.75bn of buybacks, and reaffirmed full-year guidance. RELX reports in pounds; we value the ADR in dollars (1 ADS = 1 ordinary share, GBP/USD ~1.34). Our owner-earnings DCF lands fair value near £35/share — about $47 per ADR — roughly 35% above today. Our call: BUY, 4/5. A world-class compounder sold off on an AI fear its results contradict, with management buying back stock and a Strong Buy Street (~$46 avg target) beside us. We stop short of 5/5 only because long-run AI durability is a real, unresolved question — but the price already assumes bad things that aren't happening. Not financial advice.

THE CALL: BUY (4/5, A PREMIUM COMPOUNDER, DE-RATED ~38% ON AN AI FEAR ITS OWN RESULTS REFUTE) — base-case value ~$47 vs ~$34.41 today.

What to watch: evidence the AI thesis is wrong in RELX's favor — Legal and STM holding double-digit and mid-single-digit underlying growth, RELX's own AI products (Lexis+ AI, Elsevier research tools) driving new sales, margins still climbing, and buybacks continuing — which would re-rate the multiple back toward its ~31x history; the risk to respect is the opposite: underlying growth in Legal or STM rolling over as generative AI genuinely commoditizes legal research and scientific search, in which case ~18x is fair rather than cheap and the premium never returns

Also on YouTube: @ChargedAlpha

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

Graco Inc. (GGG) Q2 2026 — Graco (GGG), the quiet niche leader in precision fluid-handling equipment, reported record Q2 2026 sales and operating earnings — but a lower-quality beat than the headline suggests. Adjusted EPS of $0.91 topped the ~$0.81 estimate (+17% YoY) and GAAP EPS was $0.87 (+14%), yet revenue of $590.6M rose only 3% and actually MISSED the ~$608M Street estimate. Operating earnings rose 11%, helped by one-time tariff refunds and lower opex; sales growth came 'primarily from acquired operations' (organic ~flat; Industrial organic -3%), and $315M of Q2 buybacks flattered EPS. Under the hood the forward setup improved: organic incoming orders grew mid-single-digit, orders are up across all three segments YTD, and Contractor's Americas organic sales grew for the first time in two years. Segments: Contractor $299.4M (+4%, 30% op margin), Industrial $249.2M (+3%, organic -3%, ~34% op margin), Expansion Markets $41.9M (+3%). The balance sheet is a fortress: ~$460M net cash, TTM FCF ~$630M (~5% FCF yield), a Dividend Aristocrat (25+ yrs of raises). FY guide maintained (low-single-digit organic, mid-single with M&A); Q3 sales guided $580-600M ex the pending Valco Melton deal. The stock has slid ~17% from its $96 high to ~$79.5, below its 200-day. Our owner-earnings DCF lands fair value near $88 (~11% above the price). Our call: HOLD.

Graco is a hundred-year-old Minneapolis compounder most investors have never heard of — the quiet #1 in precision fluid handling, the pumps, sprayers and dispensing systems that move, meter and spray paint, sealants and coatings. Q2 2026 looked like a clean record: adjusted EPS of $0.91 beat the ~$0.81 estimate (+17% YoY), GAAP EPS $0.87 (+14%), and operating earnings hit a record, up 11%. But the quality of the beat is the story. Revenue of $590.6M rose just 3% and actually MISSED the ~$608M Street estimate; sales growth came 'primarily from acquired operations' (organic roughly flat, Industrial organic -3%); the operating-margin expansion leaned on one-time tariff refunds plus lower opex; and $315M of Q2 buybacks shrank the share count and lifted EPS. So the record was powered by M&A, refunds and buybacks more than by booming demand. Underneath, though, the forward setup genuinely improved: organic incoming orders grew mid-single-digit, orders are up across all three segments YTD, Contractor's Americas organic sales grew for the first time in two years, and data-center infrastructure is a new tailwind. Graco is a wonderful business — ~53% gross margins, ~27% operating margins, high ROIC, a ~$460M net-cash fortress balance sheet, ~$630M TTM free cash flow (~5% yield), and a Dividend Aristocrat with 25+ years of raises. And unlike most industrials this quarter, it's not priced for perfection: the stock has slid ~17% from its $96 high to ~$79.5, below its 200-day, at ~24x earnings (below its ~28-30x history). Management repurchased $315M of stock at ~$79 — leaning in. Our owner-earnings DCF lands fair value near $88 (~11% above the price). Our call: HOLD, 3/5 — a wonderful compounder at a fair, not cheap, price, with a modest margin of safety and organic demand just starting to turn. We're aligned with the Street's Hold (avg target ~$93) and would accumulate on weakness toward the mid-$70s. Not financial advice.

THE CALL: HOLD (3/5, A WONDERFUL COMPOUNDER AT A FAIR PRICE — A LOW-QUALITY RECORD BEAT WITH A MODEST MARGIN OF SAFETY) — base-case value ~$88 vs ~$79.50 today.

What to watch: evidence the demand recovery is real and durable — organic sales reaccelerating to a sustained mid-single-digit-plus, data-center content scaling across the portfolio, and operating margins holding WITHOUT one-time tariff refunds — which would confirm the order inflection and prompt an upgrade; the risk to respect is that the order turn fizzles while cyclical end-markets (industrial production, construction/housing, autos) stay soft, leaving a fair-not-cheap ~24x multiple with a thin cushion and the stock as dead money

Also on YouTube: @ChargedAlpha

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

Canadian National Railway (CNI) Q2 2026 — Canadian National Railway (CNI on the NYSE, CNR on the TSX) — the only railroad whose network reaches three coasts and one of North America's premier franchises — reported a Q2 2026 beat-and-raise (all figures in Canadian dollars, US GAAP): adjusted diluted EPS of C$2.08 beat the ~C$1.93 estimate (+11% YoY; reported EPS C$2.06, +10%) on revenue of C$4.75B (+11%), operating income of C$1.78B (+9%) and net income of C$1.25B. But the marquee operating ratio ROSE 80 bps to 62.5% (adjusted 62.2%) — the beat came from volume (RTMs +5%) and pricing (freight revenue/RTM +6%, revenue/carload +12% to C$3,236), not efficiency, as diesel prices jumped ~60% (C$5.67 vs C$3.55/gal) and swamped a fuel-efficiency record. Carloads were flat (1.41M). Grain & fertilizers (+18%), petroleum & chemicals (+16%) and automotive (+18%) led; coal was flat. CN RAISED full-year guidance (RTM growth flat to low-single-digit; adjusted EPS growth to mid-to-high single digit), kept ~C$2.8B capex, grew first-half free cash flow 19% to C$1.84B, tripled first-half buybacks to C$1.32B, and raised the dividend to C$0.9150/quarter. Yet on the NYSE line the stock (~US$129, near its US$131.51 52-week high, ~23x forward earnings) sits above our owner-earnings DCF fair value of ~US$118 (C$ cash flows converted at US$0.71/C$) — and above even Wall Street's ~US$119 average target. Our call: HOLD, 3/5. Not financial advice.

Canadian National Railway is one of the widest-moat businesses in North America — a transcontinental railroad whose nearly 19,000-mile network is the only one reaching three coasts (Canada's Atlantic and Pacific, and the U.S. Gulf), moving over 300 million tons a year. A key note up front: CN reports in Canadian dollars, while its NYSE line (CNI) trades in U.S. dollars at ~71 US cents per C$1. Q2 2026 was a genuinely good quarter: adjusted diluted EPS of C$2.08 beat the ~C$1.93 estimate (+11% YoY), revenue rose 11% to C$4.75B, and management RAISED full-year guidance (volume growth flat to low-single-digit; adjusted EPS growth to mid-to-high single digit). But here's the nuance the headlines miss: the marquee operating ratio actually ROSE 80 bps to 62.5% (higher is worse). The beat came from volume (revenue ton-miles +5% on a strong grain crop and booming energy) and pricing (freight revenue/RTM +6%, revenue/carload +12%), NOT efficiency — a ~60% jump in diesel prices swamped a genuine fuel-efficiency record, and carloads were actually flat, so the growth was mix, not more shipments. CN's cash machine impressed: first-half free cash flow +19% to C$1.84B, buybacks tripled to C$1.32B, dividend raised to C$0.9150/quarter. So the debate isn't quality — it's price. The NYSE line has recovered ~43% off its US$90.74 low to ~US$129, near its US$131.51 record, at ~23x forward earnings. Converting CN's C$ owner earnings (a ~C$4.0B normalized base) at US$0.71, our owner-earnings DCF lands fair value near US$118 — below the price, even on the optimistic pricing-and-productivity path. Strikingly, even Wall Street's average target (~US$119) now sits below the stock. Our call: HOLD, 3/5 — a premier franchise with no margin of safety, and hard grain comps looming in Q4. Own it for the quality; add on real weakness toward the US$110s (C$150s). Not financial advice.

THE CALL: HOLD (3/5, A PREMIER FRANCHISE AT A FULL PRICE — A BEAT-AND-RAISE WITH NO MARGIN OF SAFETY) — base-case value ~$118 vs ~$129 today.

What to watch: evidence the growth is broadening beyond grain and energy — sustained, well-served volume gains that aren't just a strong crop — together with the operating ratio grinding back toward the low 60s as diesel prices normalize, which would justify the premium multiple and prompt an upgrade; the risks to respect are the grain tailwind fading into hard fourth-quarter comps (CN laps a record crop and only assumes an average one next season), cross-border tariffs and trade tensions biting freight volumes, and a weak Canadian dollar plus elevated fuel squeezing margins — any of which, near a 52-week high at ~23x forward earnings, could re-rate the stock

Also on YouTube: @ChargedAlpha

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