Core Insights - Gold and silver prices reached all-time highs following warnings from Fed Chair Jerome Powell about threats to the central bank's independence from the Trump administration [1][7] - Gold futures increased by 2% to over $4,600 per troy ounce, while silver surpassed $84 per ounce, driven by Powell's comments and a weakening US dollar [2][7] Market Dynamics - The surge in precious metals is attributed to safe haven demand amid geopolitical tensions and instability, as highlighted by Robin Brooks from the Brookings Institution [3][4] - Recent geopolitical events, including the US capturing Venezuelan leader Nicolás Maduro, have further fueled demand for gold and silver [4] Central Bank Activity - Foreign central banks have been purchasing gold at unprecedented rates, now holding more bullion than US Treasuries for the first time since 1996, indicating a shift in investment strategies [5] - Gold is increasingly viewed as a safeguard against geopolitical disorder rather than just a hedge against inflation or dollar weakness [5] Silver Market Trends - Silver has outperformed gold recently, with restrictions on silver exports from China contributing to a supply deficit amid rising industrial demand [6] - Analysts caution that while silver prices are climbing, there is an increasing risk of a sharp correction as prices reach new highs [6]

Core Viewpoint - The U.S. manufacturing sector is facing a "blue-collar crisis," with a significant shortage of skilled labor necessary for reshoring operations, which poses a strategic risk to various industries and the overall economy [3][4]. Group 1: Manufacturing and Labor Dynamics - Historically, manufacturing and skilled trades have been essential to the U.S. economy, providing steady productivity and growth [1]. - The shift towards globalization has led corporations to rely heavily on outsourcing to cut costs, influenced by a cultural narrative promoting non-industrial college degrees [2]. - Recent political pressures are pushing American corporations to reshore manufacturing, but there is a critical lack of skilled labor to operate these facilities [3]. Group 2: Industry Challenges - Ford's CEO, Jim Farley, emphasizes the urgent need for skilled labor in the automotive sector, particularly as companies transition to electric vehicles and advanced manufacturing technologies [6]. - The Bureau of Labor Statistics reports a steady decline in domestic manufacturing employment since 2022, with approximately 400,000 unfilled vacancies in American factories as of November [7]. - Farley suggests that even an additional 500,000 skilled workers may not suffice to meet the industry's needs [7].

Core Insights - Quanta Services, Inc. (PWR) is trading at a premium with a forward 12-month P/E ratio of 35.18, compared to the industry average of 23.96 and the broader construction sector's valuation of 19.87 [1][2] Valuation and Growth Drivers - The premium valuation of PWR is supported by increased exposure to secular power demand, lower execution risks, margin improvement efforts, and a self-perform model [2][8] - Quanta's record backlog of $39.2 billion in Q3 2025, up from $33.96 billion a year ago, indicates strong demand visibility and positions the company well for future growth [11][8] - The favorable public infrastructure spending environment and declining Federal interest rates enhance Quanta's growth prospects [2] Competitive Landscape - Quanta operates in a highly competitive environment, facing notable competition from EMCOR Group, MasTec, and MYR Group, which have forward P/E ratios of 23.72, 28.65, and 28.32, respectively [3] Operational Efficiency - Quanta self-performs 80-85% of its work, providing greater control over costs, schedules, and quality, which mitigates risks associated with subcontracting [12] - The company has achieved margin improvements, with operating margins increasing to 5.5% from 5.2% year-over-year, and gross margins expanding by 50 basis points to 14.8% [13] Financial Performance - Quanta generated $563 million in operating cash flow and $438 million in free cash flow in Q3 2025, with year-to-date free cash flow reaching $726.3 million [14] - The company expects free cash flow for 2025 to be between $1.3 billion and $1.7 billion, following a reported $1.55 billion in 2024 [14] Return on Equity - Quanta's trailing 12-month return on equity (ROE) stands at 20.5%, significantly exceeding the industry's average, indicating strong efficiency in generating shareholder returns [15] Earnings Estimates - Earnings estimates for PWR have trended upward, with projected year-over-year growth of 18.1% for 2025 and 16.9% for 2026 [16] Challenges - Execution risks remain elevated due to the increasing size and complexity of infrastructure projects, which may lead to delays and regulatory challenges [19][20] - The availability of skilled labor and wage inflation are ongoing challenges that could impact operational efficiency [18][20]

Group 1: Manufacturing Investment and Economic Drivers - A combination of policy incentives and sustained demand for semiconductors and components related to the data center boom is expected to drive manufacturing investment growth in the upcoming year [1] - The Trump administration's AI Action Plan aims to facilitate the construction of data centers and semiconductor fabrication sites by removing regulatory barriers and expediting permits [8] - The National Defense Authorization Act has approved billions for defense-related manufacturing and emerging technologies, indicating strong government support for the sector [9] Group 2: Tariff Impact and Legal Uncertainty - Ongoing tariff uncertainty has led to decreased U.S. manufacturing activity, reaching its lowest point in December 2025, as reported by the Institute for Supply Management [5] - The U.S. Supreme Court is set to make a decision regarding the legality of tariffs imposed under the International Emergency Economic Powers Act, which could significantly impact manufacturers [3][2] - Manufacturers have been forced to raise prices, modify operations, and implement layoffs due to the pressures of tariffs and trade uncertainty [4] Group 3: Workforce Development and Skills Gap - The manufacturing industry faces a significant talent skills gap, with projections indicating a need for up to 3.8 million new workers by 2033 [17] - The Department of Labor is investing millions into state workforce development programs focused on advanced manufacturing, with $98 million recently announced for education and training [15] - Companies like GE Aerospace Foundation and others are committing funds to training programs aimed at increasing the number of skilled workers in the U.S. [16] Group 4: Technological Advancements and AI Adoption - U.S. manufacturers are increasingly turning to artificial intelligence to reduce costs and enhance production efficiency amid ongoing trade uncertainties [6][19] - The adoption of agentic AI is expected to generate up to $650 billion in additional revenue across industries by 2030, with automation potentially yielding up to 50% in cost savings [22] - A survey indicates that about 22% of manufacturers plan to utilize physical AI by 2027, highlighting a trend towards advanced robotics in manufacturing [23] Group 5: Mergers and Acquisitions Activity - Two-thirds of U.S. business leaders are planning to engage in more mergers and acquisitions in the coming year, driven by interest rate cuts and lower taxes [12] - Despite uncertainties from tariffs and government actions, dealmakers are adapting to the "new normal" and proceeding with M&A activities [13]

Financial Performance and Growth - The company's Utilities segment revenue reached $2.658 billion in TTM Q3 2025[9], while the Energy segment revenue was $4.931 billion in TTM Q3 2025[12, 19] - The company's backlog for Utilities was $6.593 billion in Q3 2025[15], and for Energy was $4.470 billion in Q3 2025[20] - The company targets a gross profit growth of 9% to 12%[38, 84] - The company projects full year 2025 Adjusted EBITDA to be between $510 million and $530 million[88, 98] - The company anticipates full year 2025 Adjusted EPS to be in the range of $5.35 to $5.55 per diluted share[88, 96] Strategic Focus and Market Positioning - The company is focused on high-growth markets like Renewables and Power Delivery[38, 41] - The company aims to grow solar revenue from $1.3 billion in 2023 to $2.9 billion in TTM Q3 2025[63] - The company is targeting an operating cash flow margin of 4% to 5% by 2026[84] - The company is aiming for a Net Debt / Adjusted EBITDA target of 1.5x[68, 84] Contract and Customer Base - Reimbursable contracts account for 51% of revenue, while fixed-price contracts account for 49% in TTM Q3 2025[25] - The company derives 41% of its revenue from its top 10 customers[33]

Core Insights - Enbridge Inc. (ENB) is a leading midstream energy company in North America, transporting approximately 20% of the total natural gas consumed in the United States and heavily investing in natural gas infrastructure projects [1][7] Group 1: Demand Drivers - The demand for natural gas is driven by factors such as reshoring, LNG development, data centers, and the transition from coal to gas for power generation [2] - Data centers require significant electricity, contributing to rapid growth in gas demand, while the shift from coal to gas further increases this demand [2] Group 2: Company Performance - ENB continues to generate stable earnings from its utility and storage businesses and is committed to supporting the development of North America's LNG capacity through investments in natural gas infrastructure [3] - ENB's shares have increased by 11.9% over the past year, outperforming the industry average of 8.3% [6] Group 3: Valuation Metrics - ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 15.16X, which is above the broader industry average of 13.87X [9] - The Zacks Consensus Estimate for ENB's 2025 earnings has not seen any revisions over the past 30 days, indicating stability in earnings expectations [10]

Core Insights - Wall Street experienced a mixed start to 2026, with the S&P 500 rising 0.2%, the Dow Jones Industrial Average increasing by 0.7%, while the Nasdaq fell by 0.3%. The small-cap Russell 2000 index outperformed with a 1.1% gain [2] Small-Cap Stocks Outlook - The early strength in small-cap stocks may signal the potential return of the "January Effect," where smaller companies' stock prices typically rise more in January due to year-end tax-loss selling [3] - Several macroeconomic factors are expected to support small-cap stocks in 2026, beyond the January seasonal pattern [5] Catalysts for Small-Cap Rally - **Favorable Macroeconomic Outlook**: Easing interest rates are anticipated to enhance small-cap stock performance, with Goldman Sachs highlighting compelling opportunities driven by expected rate cuts and accelerating earnings [6] - **Attractive Relative Valuations**: U.S. small caps are trading at a 26% discount to large caps, near historic lows, while international small caps are at an 8% discount despite higher forward earnings growth [7] - **Domestic Economic Advantages**: Small-cap companies benefit more from domestic revenue sources, positioning them favorably amid trends like reshoring and infrastructure development [8] - **AI as a Beneficiary**: Small caps may gain disproportionately from AI-driven productivity improvements, leading to larger percentage earnings growth compared to large caps [9] - **Increased Market Activity**: A rise in mergers and acquisitions (M&A) and a recovering IPO market in 2026 could create significant returns and validate small-cap valuations [10] Investment Strategy: ETFs vs. Individual Stocks - Investors may prefer small-cap ETFs for exposure due to the diversification they offer across over 2,000 companies, mitigating risks associated with individual stocks [11][12] Recommended Small-Cap ETFs - **Vanguard Russell 2000 ETF (VTWO)**: Offers exposure to 1,989 U.S. small-cap stocks, with a 12.2% increase over the past year and net assets of $13.7 billion [14][15] - **iShares Russell 2000 ETF (IWM)**: Provides exposure to 1,959 small public U.S. companies, gaining 12% over the past year with net assets of $74.42 billion [16][17] - **Vanguard Small-Cap ETF (VB)**: Covers 1,331 small-cap companies, with an 8.8% rise over the past year and net assets of $68.9 billion [18][19]

Core Insights - Lovesac is implementing a four-pronged tariff strategy that includes diversifying its supply base and reducing production in China, with a focus on a new made-in-the-U.S.A. product development approach aimed at being better and less expensive [2][7] - The company's gross margin fell in the third fiscal quarter due to rising costs in transportation, tariffs, and warehousing, although margin pressure was somewhat alleviated by price increases and cost-reduction initiatives [3] - The company is expanding delivery options, including a planned "white glove" delivery and assembly service to enhance customer experience and address feedback regarding delivery issues [5] Financial Performance - The gross margin decline was primarily attributed to increased costs, with the company experiencing pressure in smaller and mid-range setups following price increases to offset tariffs [3][4] - La-Z-Boy's tariff strategy includes production adjustments and planned price increases, with 90% of its products made in the U.S., positioning it favorably regarding tariffs [6] Product Development - Lovesac is redesigning the core inserts of its Sactionals line to enable U.S. manufacturing, with plans to start domestic production in summer 2026 [7] - The redesign is part of a broader initiative to drive secular growth, with the CEO indicating more initiatives will be announced in the coming fiscal year [6][7]

Core Insights - A significant trend is emerging where approximately 80% of US companies are expected to bring manufacturing back to the US, indicating a shift towards reshoring and nearshoring practices [1][3] - The concept of "Made in America" is evolving into "Made to Win," suggesting that companies that do not rebuild domestic manufacturing capacity may lose market share [2][3] Manufacturing Outlook - 29% of CEOs have already brought back work to the US, with a larger percentage planning to do so, highlighting a competitive advantage for those who reshore [3] - The return of manufacturing is not solely dependent on Federal Reserve rate cuts; factors such as AI advancements and national security concerns are also driving this trend [5][7] AI and Automation - By 2026, AI is expected to reshape the manufacturing workforce, transitioning from pilot projects to integral operations, which will enhance productivity and favor localized manufacturing [6] - The integration of AI in manufacturing is anticipated to create more automation, further supporting the trend of bringing work back to the US [6] National Security Concerns - Manufacturing is increasingly viewed as a national security issue, with bipartisan support for ensuring domestic capabilities in critical industries [7] - This perspective is consistent across different administrations, emphasizing the importance of self-sufficiency in manufacturing [7] Supply Chain Strategies - Companies are diversifying their global supply chains, moving away from reliance on a single country to ensure resilience against various risks [10][12] - The focus is on establishing operations in multiple locations to maintain supply chain integrity regardless of political or economic changes [10][12] Workforce Dynamics - The narrative around blue-collar jobs is shifting, with high-tech manufacturing roles becoming more attractive to younger generations, particularly in the context of AI integration [13][14] - These high-paying, high-demand jobs are critical for national security and are expected to draw interest from Gen Z workers [14]

Core Viewpoint - Lake Street Capital Markets raised its price target on Velo3D to $18 from $6 while maintaining a Buy rating, highlighting long-term structural tailwinds and improved balance sheet visibility [1] Group 1: Market Dynamics - The firm believes that despite the stock's recent rebound, investors have not missed the opportunity, citing sustained tailwinds such as manufacturing reshoring, America-First policy initiatives, rising defense spending, and a focus on securing domestic supply chains, which create a long growth runway for the company [2] - Velo3D has exposure to reshoring, aerospace and defense spending, and growth metrics that exceed peer averages, indicating meaningful upside potential from current valuation levels [4] Group 2: Management and Strategy - Many institutional investors are familiar with Velo3D by name, but fewer have fully appreciated the changes under the new management team, the revised strategy, or the accelerating momentum in aerospace, defense, and space end markets [3] - Recent financing activity has alleviated prior balance sheet concerns, supporting valuation expansion despite the firm adopting more conservative estimates [3]