Core Viewpoint - The U.S. Federal Reserve has cut interest rates by 25 basis points, which may benefit small-cap investors, prompting a recommendation to consider the VictoryShares Small Cap Free Cash Flow ETF (SFLO) for broader exposure beyond the Russell 2000 Index [1]. Group 1: Investment Opportunity - SFLO provides exposure to high free cash flow (FCF) yielding small-cap companies, which can help investors identify true value within the small-cap sector [2]. - The ETF targets companies with attractive growth prospects that can sustain cash flow operations after capital expenditures [5]. - SFLO's methodology focuses on expected FCF, combining trailing and forward-looking cash flow projections, which may enhance investment decisions [5]. Group 2: Sector Exposure - SFLO's rules-based approach may favor sectors that could benefit from further rate cuts, such as energy and consumer discretionary, with significant tilts towards these sectors compared to the Russell 2000 Value Index [6]. - As of September 30, SFLO has a 22.98% allocation to the energy sector and 16.57% to the health care sector, compared to 6.88% and 9.28% in the Russell 2000 Value Index, respectively [6]. Group 3: Index Methodology - The Victory U.S. Small Cap Free Cash Flow Index selects high-quality companies based on profitability screens and strong FCF yield, rebalancing and reconstituting quarterly [10]. - The index calculates FCF yield by dividing expected free cash flow by enterprise value, providing a comprehensive measure of a company's value [10].

Core Insights - The S&P 500 has reached multiple record highs, leading to investor concerns about whether valuations have peaked and if it is the right time to invest new capital [1] - Victory Capital emphasizes the importance of free cash flow (FCF) as a metric to identify high-quality businesses in elevated-valuation markets [1][2] Free Cash Flow ETFs - Victory Capital has launched a suite of ETFs focused on FCF, including the flagship VictoryShares Free Cash Flow ETF (VFLO), which tracks the Victory U.S. Large Cap Free Cash Flow Index [2] - The VFLO Index targets high-quality, large-cap companies with attractive valuations and solid growth prospects [2][12] Valuation Risks - Current market conditions present valuation risks, with stock prices showing a disconnect from fundamental metrics [3] - Investors are encouraged to mitigate valuation risks by investing in stocks with high free cash flow [3] Growth Factor and FCF - Research indicates that combining growth with FCF can enhance investment effectiveness [4] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [3][4] International Opportunities - With the dollar's weakness and other macroeconomic factors, investors are increasingly looking at international equities [5] - Victory Capital has introduced the VictoryShares International Free Cash Flow ETF (IFLO) and the VictoryShares International Free Cash Flow Growth ETF (GRIN) to expand access to high-quality, high FCF companies globally [5][6] Diversification Strategy - The suite of FCF ETFs allows investors to build a diversified portfolio, including small-cap exposure through the VictoryShares Small Cap Free Cash Flow ETF (SFLO) [6] - Research supports the appeal of FCF across various regions and asset classes, promoting a diversified investment approach based on FCF [7]

Core Insights - Palo Alto Networks (PANW) stock is currently undervalued, trading at $185.13, which is 17% below its price target of $212 per share, despite strong financial performance in fiscal Q1 2026 [1][3] Financial Performance - For fiscal Q1 2026, PANW reported a revenue increase of 15.67% to $2.474 billion and an adjusted free cash flow (FCF) rise of 16.85% to $1.713 billion [3] - The trailing 12-month (TTM) adjusted FCF margin reached a new high of 39.3%, surpassing the previous quarter's margin of 38% [4][5] - The company anticipates maintaining an adjusted FCF margin between 38% and 39% for the fiscal year, indicating strong recurring revenue capabilities [6] Revenue and FCF Projections - Analysts project PANW's revenue for the fiscal year ending July 31 to be $10.53 billion, with an expected increase to $11.93 billion for the following fiscal year [7] - Based on these projections, the next 12 months (NTM) revenue is estimated at $10.88 billion, with potential adjusted FCF reaching $4.3 billion if the margin is assumed at 39.5% [7]

Core Insights - The article discusses the investment strategy of Michael Wiggins De Oliveira, who focuses on buying undervalued companies during pivotal moments in their business narratives, particularly in the tech and energy sectors [1] - Michael manages a concentrated portfolio of approximately 15 to 20 stocks, with an average holding period of 18 months, aiming for significant profitability over the next year [1] - The investment group led by Michael, Deep Value Returns, offers insights through its portfolio, timely stock updates, weekly webinars, and community support for investors [1] Company and Industry Summary - Michael Wiggins De Oliveira is recognized as an inflection investor, emphasizing the importance of timing in investment decisions, especially in the context of the Great Energy Transition, which includes uranium [1] - The investment approach is characterized by a focus on value stocks, leveraging over 10 years of experience in analyzing companies within the tech and energy sectors [1] - The community aspect of Deep Value Returns fosters engagement among both new and experienced investors, providing a platform for shared insights and advice [1]

Core Viewpoint - Nvidia, Inc. (NVDA) stock is considered undervalued by at least 22%, with a strong free cash flow (FCF) margin of 39% and a 2.0% FCF yield valuation metric [1] Financial Performance - For the quarter ended July 27, 2025, Nvidia generated $13.45 billion in free cash flow on $46.743 billion in revenue, resulting in a quarterly FCF margin of 28.8% [3] - Over the past three quarters, Nvidia's FCF margins were 59.43% (Q1), 39.54% (Q4 2024), and 47.93% (Q3 2024) [3] - The trailing 12 months (TTM) FCF margin averaged 43.9% [4] Future Projections - Assuming a conservative FCF margin of 39% for the next 12 months, projected revenue for the year ending January 2027 is $287.24 billion, leading to an estimated FCF of $112.02 billion [4] - If Nvidia maintains a similar FCF margin of 29% in the upcoming Q3 earnings release, the TTM margin would adjust to 39.15% [4] Valuation Metrics - Using a conservative FCF yield metric of 2.0%, if Nvidia were to pay out 100% of its projected $112 billion in FCF next year as a dividend, the theoretical dividend yield would be 2.0% [6] - Nvidia's TTM FCF is reported at $72 billion, with a current market cap of $4.581 trillion [5]

Business Overview - Chord Energy is a premier Williston Basin operator focused on enhancing free cash flow generation[1,9] - The company has a large acreage position in the Williston Basin, with over 1.3 million net acres and approximately 278 thousand barrels of oil equivalent per day (MBoepd) production, with oil accounting for approximately 56% of production[18] - Chord Energy has a diversified commodity mix with 56% oil, 26% gas, and 18% NGL[15] Financial Performance and Capital Allocation - Chord Energy has returned over $5 billion to shareholders since 2021[20,25] - The company maintains a strong balance sheet with approximately 0.6x leverage[20,26,71] - Chord Energy's capital expenditure for 2025 is projected to be approximately $1.365 billion[131] - The company's free cash flow for 2025 is estimated to be approximately $840 million[131] Operational Efficiency and Improvements - Chord Energy is focused on continuous improvement, driving a projected 20% free cash flow growth in FY25 from controllable items[35] - The company is implementing a 4-mile lateral program, which is expected to improve returns with 90%-100% EUR increase and $8-$12 per barrel lower breakeven compared to 2-mile analogs[52] - Chord Energy is targeting over 80% long-lateral inventory across its acreage[33,116] Marketing and Infrastructure - The company anticipates $30-$50 million in annual free cash flow savings from marketing optimization starting in 2026[43,49] - Chord Energy is involved in gas takeaway projects, including LNG Canada and TC Energy Bison Xpress, which are expected to improve pricing[45] Strategic Acquisitions and Divestitures - Chord Energy closed the XTO asset acquisition in October 2025 for $550 million, adding 48,000 net acres in the Williston core[25,75,76] - Since the Enerplus merger close in May 2024, Chord Energy has reduced its fully diluted shares outstanding by approximately 11%[62,64]

Core Insights - Dividends are a significant factor for investors when purchasing stocks, providing steady cash flow and compounding returns, but high dividend yields may indicate underlying risks [1] - Sustainable dividends require strong financial fundamentals, with no single metric guaranteeing stability [1] Free Cash Flow (FCF) - FCF represents the cash available after a company has maintained its operations and capital assets, crucial for paying dividends and settling obligations [3] - A company with strong FCF can comfortably fund dividends, reinvest in growth, and reduce debts without financial strain; for example, Sheng Siong generated positive FCF of S$78.9 million, or S$0.052 per share, for the first half of 2025, declaring an unchanged interim dividend of S$0.032 [4][5] Balance Sheet Strength - A strong balance sheet is essential for sustainable dividends, with the gearing ratio indicating a company's debt relative to its assets; a lower ratio suggests better resilience [6] - CapitaLand Integrated Commercial Trust (CICT) has a gearing ratio of approximately 38%, below the Monetary Authority of Singapore's ceiling of 50%, and announced a dividend of S$0.0562 per share for the first half of 2025, an increase from the previous year [7][8] Payout Ratio - The payout ratio measures the percentage of earnings paid out as dividends, with a range of 35% to 65% generally indicating sustainability; excessively high ratios, especially over 100%, signal potential risks [10][11] - Companies like DBS Group Holdings Ltd, Singapore Telecommunications Limited, and Keppel Ltd have payout ratios of 56.3%, 71.1%, and 66.5%, respectively, allowing them to reward shareholders while retaining capital for growth [11][12] Conclusion - Investing in companies with sustainable dividends can provide passive income, but it is essential to assess the underlying financial health through FCF, balance sheet strength, and payout ratios [13][15]

Core Insights - Tesla, Inc. generated $3.9 billion in free cash flow (FCF) in Q3, which is over 14% of its sales, indicating strong financial performance [1][6] - The stock could be undervalued by over 15%, with a potential price target of $502 per share if FCF remains robust in the upcoming year [1][3] - Tesla's revenue increased by 11.6% year-over-year to over $28 billion, driven by a surge in orders before the expiration of a significant tax subsidy [4][6] Financial Performance - In Q3, Tesla's FCF was $3.99 billion, representing 14.2% of its $28.1 billion in sales [6] - The trailing 12-month FCF was $6.834 billion, which is 7.15% of total revenue of $95.633 billion [6] - Year-to-date (YTD), the FCF margin stands at 6.85%, with projections suggesting a conservative estimate of 3.425% for Q4 [7] Future Projections - Analysts forecast an average revenue of $110.32 billion for 2026, reflecting a 15.6% increase from the current year's estimates [5] - Based on these forecasts, FCF for 2026 could rise to approximately $5.74 billion, assuming a 6% FCF margin [8]

Core Insights - Longleaf Partners Fund reported a return of -0.33% in Q3 2025, underperforming the S&P 500's 8.12% and Russell 1000 Value's 5.33% returns, expressing dissatisfaction with the portfolio's flat performance [1] - The fund focuses on investments in real assets and brands that generate growing free cash flow (FCF) per share, anticipating an increase in its ~10x FCF multiple to the mid-teens as management implements margin improvement strategies and share repurchases [1] Company Specifics - CNX Resources Corporation (NYSE:CNX) is highlighted as a key investment, with a one-month return of 1.58% and a 52-week loss of 10.47%, closing at $32.74 per share with a market capitalization of $4.63 billion on October 23, 2025 [2] - The fund expects CNX Resources to trade at a premium FCF multiple of 10-15x as its hedges mature and share repurchases continue, projecting that the stock price could exceed $50 per share due to higher-than-expected FCF per share from its low-cost approach [3] Market Position - CNX Resources is not among the 30 most popular stocks among hedge funds, with 33 hedge fund portfolios holding the stock at the end of Q2 2025, down from 36 in the previous quarter [4] - While acknowledging CNX Resources' potential, the analysis suggests that certain AI stocks may offer greater upside potential and lower downside risk [4]

Group 1 - Longleaf Partners Fund reported a return of -0.33% in Q3 2025, underperforming the S&P 500's 8.12% and Russell 1000 Value's 5.33% [1] - The fund focuses on investments in real assets and brands that generate growing free cash flow (FCF) per share, with an expectation that the FCF multiple could rise from ~10x to the mid-teens [1] - The fund's management is implementing strategies to improve margins and increase share repurchases [1] Group 2 - Fidelity National Information Services Inc. (NYSE:FIS) was highlighted as a stock in the Longleaf Partners Fund's Q3 2025 investor letter, with a one-month return of 7.20% but a 52-week loss of 23.24% [2] - As of October 23, 2025, FIS stock closed at $67.53 per share, with a market capitalization of $35.788 billion [2] - FIS's Capital Markets segment grew by 5%, which was below expectations, and management noted skepticism in the market despite a rebound in volumes [3] Group 3 - FIS's margins were slightly lower than expected due to an acquisition with lower margins, which is anticipated to improve as integration progresses [3] - The upcoming purchase of Global Payment's Issuer Solutions business and the sale of FIS's remaining Worldpay stake are expected to enhance economic predictability and increase FCF conversion [3] - FIS's management has increased its 2025 stock repurchase plan by $100 million to $1.3 billion, citing that the share price is perceived as too low [3] Group 4 - FIS is not among the 30 most popular stocks among hedge funds, with 49 hedge fund portfolios holding the stock at the end of Q2 2025, down from 56 in the previous quarter [4] - While FIS is recognized for its investment potential, certain AI stocks are believed to offer greater upside potential and less downside risk [4]