Core Viewpoint - HG Vora Capital Management has completely liquidated its stake in Six Flags Entertainment, selling 2,175,000 shares valued at approximately $49.42 million, indicating a lack of confidence in the company's future performance [2][5]. Company Overview - Six Flags Entertainment operates amusement and water parks across North America, with a diversified presence in 17 states, Canada, and Mexico, leveraging well-known intellectual properties to attract visitors [4][7]. - The company employs around 5,000 people and is headquartered in Charlotte, North Carolina [7]. Financial Performance - As of February 17, 2026, Six Flags' stock price was $15.55, with a market capitalization of $1.58 billion and a trailing twelve months (TTM) revenue of $3.10 billion. However, the company reported a net income loss of $1.60 billion for the same period, which included a $1.5 billion non-cash impairment charge [3][5]. - Six Flags' stock has decreased by 60% over the past year, reflecting significant challenges faced by the company [5]. Investment Insights - HG Vora had previously increased its holdings in Six Flags, but the decision to divest indicates a strategic shift in response to the company's ongoing struggles and poor stock performance [5][8]. - CEO John Reilly acknowledged the company's underperformance in 2025 but expressed optimism about future improvements through investments in park infrastructure, new attractions, and enhanced services [6][8].

Core Viewpoint - Marathon Petroleum's strong midstream income supports its dividend even if refining margins decline, with significant cash returns to shareholders expected to continue [1][2]. Financial Performance - In the fourth quarter, Marathon Petroleum reported adjusted earnings of $4.07 per share, exceeding analyst expectations, driven by refining margins capturing 114% of the benchmark crack spread, an increase from 96% in the previous quarter [1]. - Cash from operations reached $2.7 billion, nearly 60% higher than the previous year [1]. Shareholder Returns - The company returned $4.5 billion to shareholders through share repurchases and dividends during the year, with expectations for stronger cash returns moving forward [2]. Cash Flow Model - Marathon operates on a two-pronged cash flow model, with its midstream subsidiary MPLX LP generating fee-based income from pipelines and processing plants [3]. - MPLX distributions to Marathon are projected to exceed $3.5 billion annually over the next two years, up from $2.8 billion [6]. Refining Segment - The refining segment processes over 3 million barrels per day, with a refining margin of $18.65 per barrel in the fourth quarter, a 44% year-over-year increase [4]. - The refining segment accounts for approximately half of the company's adjusted EBITDA [8]. Market Outlook - Management anticipates tight global refining supply and steady distillate demand through 2026, with regional refinery closures tightening the domestic market [8]. - The stock is currently valued at around $200 per share, with a 1.9% dividend yield, and is considered fairly valued given its midstream stability [9].

Core Viewpoint - Microsoft is experiencing a significant stock decline, with shares dropping over 25% from their peak, marking the second-worst drawdown in the last decade [1][2]. Group 1: Reasons for Decline - Microsoft is facing challenges due to its heavy reliance on OpenAI, which contributes $281 billion to Azure's $625 billion cloud computing backlog [4]. - OpenAI is under pressure from competition and financial scrutiny, needing to raise $100 billion to stabilize its operations while Microsoft plans to invest $120 billion in AI infrastructure this year [5]. - The software industry, particularly legacy products like Windows, is experiencing a sell-off, adding to the pressure on Microsoft [6]. Group 2: Investor Concerns - The uncertainty surrounding Microsoft's stock price makes it difficult to predict how low it may fall, prompting investors to assess the likelihood of worst-case scenarios [7]. - Microsoft is developing its own AI models to reduce dependence on OpenAI, which is also taking steps to counter competition by launching new AI products and acquiring relevant technologies [8]. - The stickiness of Microsoft's software is highlighted by a significant global outage caused by a cybersecurity issue, indicating that companies are unlikely to replace essential software with unproven AI solutions [9][10]. Group 3: Market Outlook - As Microsoft's valuation decreases, the associated risks diminish, potentially increasing upside for investors; the stock is currently trading at less than 25 times earnings, close to its lowest P/E ratio in a decade [11]. - There is a belief that Microsoft stock could trade higher in a year if the company's fundamentals remain strong [11].

Core Viewpoint - The Schwab U.S. Dividend Equity ETF (SCHD) has experienced significant outperformance in early 2026, driven by a surge in crude oil prices, which has positively impacted its energy stock holdings [2][15]. Group 1: ETF Performance - The Schwab U.S. Dividend Equity ETF has a current income yield of 3.5% over the last 12 months and has delivered robust returns historically [1]. - Despite a lackluster performance in the previous year with only a 0.4% return, the ETF surged nearly 15% in early 2026, significantly outperforming the S&P 500's less than 1% rise [2][5]. Group 2: Sector Exposure - The ETF tracks the Dow Jones U.S. Dividend 100 Index, focusing on 100 top dividend stocks, with a high sector weighting in energy stocks at 19.9% as of the end of last year [4][5]. - The high exposure to energy stocks negatively impacted the ETF's returns last year due to falling oil prices [5]. Group 3: Oil Market Influence - Crude oil prices have rallied sharply in 2026, with Brent oil prices increasing by 15% to over $70 a barrel, influenced by potential supply disruptions in Venezuela and Iran [7]. - The rise in crude prices has benefited the ETF, particularly as two of its top holdings are major oil companies, Chevron and ConocoPhillips, which have seen significant stock price increases this year [8][15]. Group 4: Dividend Growth - Chevron has increased its dividend by 4%, marking 39 consecutive years of growth, with a compound annual growth rate of 6% over the last five years, significantly higher than the S&P 500's 5% [11]. - ConocoPhillips has a current dividend yield of 2.9% and increased its dividend by 8% late last year, aiming for dividend growth within the top 25% of S&P 500 companies [13][14]. - Both companies are expected to continue increasing their dividends, with Chevron projecting over 10% annualized growth in free cash flow through 2030 and ConocoPhillips anticipating an additional $7 billion in annual free cash flow by 2029 [14].

Core Insights - Alphabet's financial performance has shown a consistent upward trajectory, contrasting with negative investor narratives about its position in cloud computing and artificial intelligence [3][5]. Financial Performance - Over the past decade, Alphabet's revenue has increased from $75 billion to over $400 billion, achieving a compound annual growth rate (CAGR) of over 18% [7]. - Operating income has risen from $19.4 billion to $129.2 billion, reflecting a 566% increase and a CAGR of close to 21% [7]. - Net income has increased to more than eight times its initial value, with net margins improving by 11 percentage points to 32.8% [7]. - Earnings per share have grown from $1.14 in 2015 to $10.81 last year, indicating a significant improvement in earnings on a per-share basis [7]. Research and Development - Alphabet has increased its research and development spending five-fold over the past decade, while also improving its operating margin by more than six percentage points to 32% [7]. Market Position - As of the latest data, Alphabet's market capitalization stands at $3.8 trillion, with a current stock price of $314.67 [8]. - The company has executed substantial share buybacks, reducing its outstanding share count from approximately 13.7 billion shares to about 12.1 billion [7]. Recent Developments - In 2025, Alphabet reported a 15% increase in revenue and a 32% rise in net income, indicating strong upward momentum [8].

Core Viewpoint - Owens Corning is undervalued at a price-to-earnings ratio of 10x, despite strong cash flow and solid margins, indicating potential for significant upside as housing demand stabilizes [1] Financial Performance - The company maintains a low payout ratio and steady dividends, which supports its financial stability and attractiveness to investors [1] Market Position - Owens Corning is positioned as a leader in the building materials sector, suggesting that it could be a rewarding investment for those willing to wait for market conditions to improve [1]

Core Insights - The nuclear power sector is experiencing a resurgence driven by increasing electricity demand due to the AI boom, with NuScale Power positioned to lead in the small modular reactor (SMR) market [1][5] Company Overview - NuScale Power's stock has fluctuated significantly, rising from approximately $2.50 in late 2023 to a peak of $60, but has recently fallen below $15, raising questions about its investment potential [2] - The company has a market capitalization of $3.8 billion, with a current stock price of $13.47 and a gross margin of 64.95% [3] Technology and Regulatory Approval - NuScale Power has developed a smaller, modular nuclear reactor system that can be manufactured for lower electricity needs and scaled as demand increases, with some designs approved by the Nuclear Regulatory Commission (NRC) [4] Market Demand and Potential - The global electricity demand, driven by AI advancements, could lead to hundreds of billions of dollars in additional spending on electric power, presenting a significant opportunity for NuScale Power [5] Business Challenges - Despite the favorable market conditions, NuScale Power has not secured any contracts for building nuclear reactors, raising concerns about its business viability [7] - The company has only won exploratory deals that generate minimal revenue, and a previous contract in Utah was canceled due to cost overruns [8] - With negligible revenue, high cash burn, and an increasing share count, NuScale Power's stock may not be a viable investment option [9]

Core Insights - Super Micro Computer (SMCI) is experiencing significant growth in AI revenue, with triple-digit percentage increases [1] - Margin compression poses a critical challenge for the company, which could impact stock performance [1] - The potential for the stock price to reach $64 hinges on stabilizing profitability and effective execution [1] - The upcoming quarters are crucial for determining the company's future trajectory [1]

Core Viewpoint - Nvidia has experienced significant stock price appreciation, rising over 750% in the past three years due to its pivotal role in the AI sector [1] - Despite strong business momentum, the stock may not deliver extraordinary returns in the next five years as the market has already priced in high demand [2] Business Performance - Nvidia's revenue for the fiscal third quarter of 2026 reached $57.0 billion, a 62% year-over-year increase, accelerating from a 56% increase in the previous quarter [4] - The data center business, crucial for growth, saw a 66% year-over-year revenue increase to $51.2 billion [5] Industry Trends - Major tech companies are planning substantial capital expenditures, with Amazon projecting $200 billion, Meta Platforms estimating $115 billion to $135 billion, and Alphabet forecasting $175 billion to $185 billion for 2026, indicating ongoing investment in AI [6][7] - These budgets signal that hyperscalers are aggressively expanding capacity, with GPUs remaining essential for this growth [7] Long-term Outlook - The AI hardware market is expected to stabilize after initial capacity expansion, raising questions about Nvidia's future pricing power as customers seek to diversify suppliers [8] - Amazon's internal chip programs, such as Trainium and Graviton, are gaining traction, with a combined annual revenue run rate exceeding $10 billion and growing at a triple-digit rate [9] Stock Valuation - Current stock price is approximately $188, with potential future prices estimated at $303 with 10% annual compounding and $331 with 12% [12] - Nvidia's shares are trading at about 47 times earnings, indicating a premium valuation [12]

The Sahm rule is a measure of labor market deterioration, and it has historically been an accurate recession indicator.The labor market is one of the strongest indicators of overall economic health. When companies are hiring and workers feel secure in their jobs, they both tend to spend more and drive up demand for goods and services. When businesses dial back on hiring plans or lay people off, consumers tend to spend cautiously.Today, the U.S. labor market is at a bit of a middle ground. The unemployment r ...