Market Overview - The stock market is reaching new all-time highs, driven by increased spending in the artificial intelligence sector as investors aim to capitalize on potential gains [1] - Historical data indicates that buying stocks at or near all-time highs can be beneficial, with the S&P 500 averaging a 12-month price return of 9.1% after reaching such highs [2] Stock Performance - Approximately 200 S&P 500 stocks are currently underperforming, suggesting that investors should focus on stocks that are also achieving new peaks [3] - A screening method has been developed to identify Zacks Rank 1 (Strong Buy) stocks with upward price momentum, trading within 20% of their 52-week highs [5] Featured Stock: PHINIA Inc. - PHINIA Inc. (PHIN) is highlighted as a strong buy, specializing in premium fuel systems and electrical systems for the automotive industry [6][8] - The company is expanding its portfolio through the acquisition of Electromagnet Invest AB for approximately $47 million, aimed at enhancing its capabilities in alternative fuel systems [10] Financial Performance - PHINIA exceeded Q2 earnings per share (EPS) estimates by 28% and has seen upward revisions in its EPS estimates for Q3 and FY25, earning a Zacks Rank 1 [11] - The stock has appreciated 130% over the past two years, significantly outperforming its sector and the S&P 500 [12]

Group 1 - PHINIA's leadership, including President and CEO Brady Ericson and CFO Chris Gropp, is focused on growth outlook, market development, and capital allocation strategy [1] - The company is viewed positively by auto analysts, with a strong portfolio and balance sheet, indicating opportunities for business improvement and valuation enhancement [2] - Automotive sector contributes 27% to PHINIA's total revenues, with expectations of a decline over time, while the aftermarket segment is thriving [3]

Summary of PHINIA FY Conference Call - September 11, 2025 Company Overview - **Company**: PHINIA (NYSE:PHIN) - **Industry**: Automotive and Aerospace Components Key Points and Arguments Market Position and Revenue Diversification - PHINIA's revenue from the automotive sector is currently 27% and is expected to decline over time, with a strong performance in the aftermarket segment [5][6] - The company emphasizes its diversified business model, which includes regional and customer diversity, mitigating risks from specific market downturns [6][7] - Aftermarket business constitutes 34% of total revenues, providing stable cash flow during downturns in original equipment manufacturing (OEM) [22] New Market Opportunities - PHINIA is entering new markets such as aerospace and off-highway applications, leveraging existing manufacturing capabilities without significant new capital expenditures [9][10] - The total addressable market for aerospace and off-highway applications is estimated to be as large as the commercial vehicle business globally, indicating substantial growth potential [14][15] - The company anticipates that new markets will contribute mid to high single digits to total revenue by the end of the decade [14] Capital Allocation Strategy - PHINIA has been actively buying back shares, having repurchased close to 20% of its shares since spinning off, as it believes its stock is undervalued [19][20] - The company plans to maintain a conservative capital allocation strategy, focusing on organic growth while remaining open to acquisitions if they align with valuation metrics [20][37] - Free cash flow generation is expected to improve in the second half of the year, with a target of $160 million [37] Industry Trends and Challenges - The commercial vehicle market is currently facing challenges, with low build rates and freight demand impacting growth [33][34] - The company does not foresee a significant pre-buy before the 2027 emissions regulations, indicating a cautious outlook for the near term [35] - PHINIA's engineering spend is primarily focused on application engineering, allowing for flexibility in adapting existing technologies to new markets [17] Technological Advancements - PHINIA is focusing on multi-fuel technology for fuel injectors, adapting to various fuel types as the market evolves [59][62] - The company is investing in AI and automation to enhance production efficiencies and reduce costs, with a focus on targeted projects that deliver value [43][44] Future Outlook - The transition to hydrogen and other alternative fuels is expected to take decades, with meaningful revenue contributions anticipated in the 2030s [80] - PHINIA is optimistic about the long-term viability of combustion engines, projecting their continued relevance in transportation for the foreseeable future [62] Competitive Landscape - The company identifies peers such as Allison Transmission, Timken, and Donaldson Company as relevant comparables in the industrial and aftermarket space [97][102] Additional Important Insights - PHINIA's aftermarket segment is seen as a stabilizing force during market volatility, with a strong brand reputation aiding growth [22][23] - The company is strategically positioned to adapt to changing market demands, including shifts towards cleaner fuels and technologies [86][88] - PHINIA's entry into aerospace is driven by both market demand and its existing technological capabilities, indicating a proactive approach to growth [93][94]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Phinia (PHIN) - Phinia currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [2][3] - The stock has shown a price increase of 0.21% over the past week, while the Zacks Automotive - Original Equipment industry remained flat during the same period [5] - Over the past quarter, Phinia's shares have increased by 37.45%, and by 27.17% over the last year, significantly outperforming the S&P 500, which moved 8.64% and 21.49% respectively [6] Trading Volume - Phinia's average 20-day trading volume is 377,793 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, three earnings estimates for Phinia have been revised upwards, increasing the consensus estimate from $4.17 to $4.56 [9] - For the next fiscal year, three estimates have also moved upwards with no downward revisions, indicating positive sentiment [9] Conclusion - Given the strong performance metrics and positive earnings outlook, Phinia is positioned as a solid momentum pick with a 1 (Strong Buy) rating and a Momentum Score of B [11]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Phinia (PHIN) Stock Analysis - Phinia (PHIN) has shown a four-week price change of 11.6%, indicating growing investor interest [4] - Over the past 12 weeks, PHIN's stock has gained 37.5%, with a beta of 1.53, suggesting it moves 53% more than the market [5] - PHIN has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to PHIN earning a Zacks Rank 1 (Strong Buy), as increased analyst interest typically drives stock prices higher [7] - PHIN is trading at a Price-to-Sales ratio of 0.68, suggesting it is undervalued, as investors pay only 68 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides PHIN, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 strategies tailored to help investors find winning stock picks [9]

Summary of PHINIA (PHIN) 2025 Conference Call Company Overview - PHINIA is a diversified company with approximately $3.4 billion in revenue, specializing in precision machining, fluid management, and electrical components and systems [2] - The company generates about 34% of its revenue from the aftermarket, which includes services, components, and training facilities [2] Core Technology and Differentiation - PHINIA's product offerings include fuel injection systems, fluid management, selective catalytic reduction, and ignition systems, especially after the acquisition of SCM [2] - The company invests around $200 million, or nearly 6% of sales, in R&D, with customers contributing about $100 million annually for calibration and software support, resulting in a net R&D expenditure of approximately 3% [3] Industry Challenges and Innovations - Fuel injection systems are complex, requiring high precision manufacturing in clean room environments, with tolerances as tight as half a micron and pressures reaching 3,000 bar (approximately 45,000 PSI) [5][6] - The company is adapting to challenges posed by fuel quality, including the introduction of biofuels and contaminants [6] Competitive Landscape - The competitive landscape is narrowing, with PHINIA and Bosch being the two major players in the market, while smaller competitors are exiting [9] - PHINIA sees significant opportunities in off-highway and aerospace industries, where competitors are not investing as heavily in R&D [9] Market Demand Trends - The commercial vehicle off-highway business has declined from a peak, while light vehicle markets are softening, though there are signs of recovery in Europe and Asia [18] - The aftermarket segment remains strong, with growth driven by price increases and an aging vehicle fleet [20][21] Aftermarket Growth Drivers - The average age of vehicles is around 12-13 years, contributing to a 4% to 6% growth in the aftermarket, driven by price increases and new product lines [20][22] Off-Highway Applications - PHINIA is focusing on marine, industrial, agricultural, construction, and aerospace applications, which present significant growth opportunities due to new emissions regulations and alternative fuels [23] - The company has introduced cost-effective solutions for diesel and gasoline direct injection in off-highway applications [24][25] Non-Mobility Applications - PHINIA is leveraging its existing technology and manufacturing capabilities to expand into non-mobility applications, including stationary power and aerospace [29][30] Hydrogen Opportunities - The company sees potential in hydrogen combustion for commercial vehicles, although significant revenue contributions are not expected until the 2030s [31][32] Cultural and Structural Changes Post-Spinout - Since spinning out from Aptiv, PHINIA has been working on cultural and structural improvements, including consolidating ERP systems to enhance operational efficiency [14][15][16] Future Outlook - The company is optimistic about its growth trajectory, particularly in the aftermarket and off-highway segments, while continuing to invest in R&D and new technologies [18][19]

Company Overview - Phinia (PHIN) currently holds a Momentum Style Score of B, indicating a positive momentum characteristic [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Price Performance - Over the past week, PHIN shares have increased by 6.27%, outperforming the Zacks Automotive - Original Equipment industry, which rose by 3.21% [5] - In a longer time frame, PHIN's monthly price change is 14.48%, significantly higher than the industry's 1.13% [5] - For the past quarter, shares of Phinia have increased by 29.07%, and over the last year, they have gained 21.52%, while the S&P 500 has moved 9.33% and 17.71% respectively [6] Trading Volume - PHIN's average 20-day trading volume is 469,384 shares, which serves as a useful baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, three earnings estimates for PHIN have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $4.07 to $4.56 [9] - For the next fiscal year, three estimates have also moved upwards without any downward revisions [9] Conclusion - Considering the positive price performance, trading volume, and favorable earnings outlook, PHIN is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Group 1: Company Performance - Hesai Group Sponsored ADR (HSAI) has shown a year-to-date performance increase of approximately 68.7%, significantly outperforming the average return of -8.9% for the Auto-Tires-Trucks sector [4] - The Zacks Consensus Estimate for HSAI's full-year earnings has increased by 7.1% over the past 90 days, indicating improved analyst sentiment and a stronger earnings outlook [3] - HSAI currently holds a Zacks Rank of 2 (Buy), suggesting a favorable position among its peers [3] Group 2: Industry Context - Hesai Group is part of the Automotive - Original Equipment industry, which consists of 50 companies and has an average year-to-date gain of 7.2%, indicating that HSAI is performing better than the industry average [6] - Another stock in the Auto-Tires-Trucks sector, Phinia (PHIN), has also outperformed the sector with a year-to-date return of 16% and holds a Zacks Rank of 1 (Strong Buy) [4][5] - Investors should closely monitor both Hesai Group and Phinia for their potential to maintain solid performance in the Auto-Tires-Trucks sector [7]

Core Viewpoint - PHINIA Inc. (PHIN) is positioned as a potential stock pick due to a recent "golden cross" event, indicating a bullish trend reversal [1][4]. Technical Analysis - A "golden cross" occurs when a short-term moving average (50-day) crosses above a long-term moving average (200-day), suggesting a potential bullish breakout [2]. - The successful formation of a golden cross involves three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and maintaining upward momentum [3]. Performance Metrics - PHIN has increased by 15.5% over the last four weeks, indicating strong upward movement [4]. - The company holds a 1 (Strong Buy) rating on the Zacks Rank, further supporting its bullish outlook [4]. Earnings Outlook - There have been three upward revisions in earnings estimates for the current quarter, with no downward revisions in the past 60 days, enhancing the positive earnings outlook for PHIN [4]. - The Zacks Consensus Estimate for earnings has also increased, reinforcing the bullish sentiment around the stock [4][6].

Core Insights - The U.S. market experienced a slight decline as investors reacted to new earnings reports, economic data, and tariff announcements, particularly regarding semiconductor and pharmaceutical imports [1] - In the current environment characterized by geopolitical risks and policy changes, value investing is highlighted as a favorable strategy, focusing on purchasing undervalued stocks [1] Investment Strategy - Value investing involves buying stocks priced below their intrinsic value, capitalizing on market mispricing to achieve future profits [1] - Earnings yield is a key metric for value investors, calculated as (Annual Earnings per Share/Market Price) x 100, serving as a reverse indicator of the price-to-earnings (P/E) ratio [3] - A high earnings yield suggests a stock may be undervalued, while a low yield indicates potential overvaluation [3] Stock Selection Criteria - An earnings yield greater than 10% is set as a primary screening criterion, supplemented by additional parameters [5] - Estimated EPS growth for the next 12 months must be greater than or equal to the S&P 500, comparing forward EPS estimates with actual EPS [5] - Average daily trading volume over the past 20 days should be at least 100,000, indicating sufficient liquidity [6] - Current stock price must be $5 or higher, and stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) are expected to outperform peers [7] Highlighted Stocks - Barrick Mining Corporation is a leading gold mining company with projected earnings growth of 56% and 24% for 2025 and 2026, respectively, and a Zacks Rank of 1 [8] - Astrana Health, a tech-enabled healthcare provider, anticipates earnings growth of 77% and 49% for 2025 and 2026, respectively, also holding a Zacks Rank of 1 [9][10] - StoneCo Ltd., a fintech company, expects earnings growth of 10.4% and 16% for 2025 and 2026, with a Zacks Rank of 1 [11] - Plains GP Holdings, involved in crude oil transportation and marketing, projects earnings growth of 206% and 24% for 2025 and 2026, respectively, and has a Zacks Rank of 1 [12] - PHINIA Inc., a supplier for the mobility industry, forecasts earnings growth of 14% and 19.5% for 2025 and 2026, respectively, and holds a Zacks Rank of 1 [13]