Core Insights - The U.S. economy is experiencing persistent inflation and slowing job growth, leading the Federal Reserve to cut interest rates for the third time this year, while tariffs and supply-chain issues are impacting economic growth [1] - Retail investors are finding it challenging to interpret market signals and achieve solid returns in the current environment [1] Stock Selection Strategy - Traditional stock-picking methods focusing on sales growth are recommended, as sales growth offers a more reliable evaluation compared to earnings metrics [2][3] - Companies such as Vertiv Holdings Co (VRT), RenaissanceRe Holdings Ltd. (RNR), Ameren Corporation (AEE), Canadian Natural Resources Limited (CNQ), and FedEx Corporation (FDX) are highlighted for their strong sales growth and solid cash flow positions [2][10] Importance of Sales Growth - Sales growth is a clear indicator of a company's business momentum, reflecting genuine demand and market position [3] - Consistent sales growth can predict future earnings improvement and shareholder value creation [3][4] - Revenue trends are valuable both absolutely and relatively, supporting predictable cash flows and enabling management to reinvest in operations [4] Screening Criteria for Stocks - Stocks are shortlisted based on criteria including 5-Year Historical Sales Growth greater than industry average and Cash Flow exceeding $500 million [5] - Additional factors include a Price-to-Sales (P/S) ratio lower than the industry average, positive sales estimate revisions, high operating margins, and Return on Equity (ROE) above 5% [6][7][8] Highlighted Stocks - Vertiv (VRT) is expected to have a sales growth rate of 27.5% for 2025 and holds a Zacks Rank 1 [10][11] - Ameren (AEE) is projected to grow sales by 17.7% in 2025 and has a Zacks Rank 2 [10][13] - Canadian Natural Resources (CNQ) anticipates a sales growth of 5.9% for 2025, also holding a Zacks Rank 2 [10][14] - FedEx (FDX) expects a sales increase of 4.6% in fiscal 2026, with a Zacks Rank 2 [10][15] - RenaissanceRe (RNR) has a lower expected sales growth of 3.4% for 2025 but maintains a Zacks Rank 1 [10][12]

Core Insights - Nick Gennari has been appointed to GXP-Storage's Board of Directors, bringing with him three decades of experience in supply-chain and regulated material management [1] Company Summary - GXP-Storage enhances its leadership team with the addition of Nick Gennari, who has extensive expertise in supply-chain management [1]

Market Overview - Broader equity markets experienced a four-day winning streak as the likelihood of a Federal Reserve rate cut increased to approximately 89%, up from 67% a month ago [1] - The surge in the 10-year Treasury yield raised skepticism, impacting the short-term market rally following the release of key economic data [1] Economic Indicators - The core personal consumption expenditures price index for September showed an annual increase of 2.8%, slightly below the expected 2.9% [2] - U.S. consumer sentiment improved in December, with the Consumer Sentiment Index rising to 53.3 from 51 in November [2] Investment Strategy - Investors are advised to focus on "cash cow" stocks with high returns, emphasizing the importance of attractive efficiency ratios like return on equity (ROE) [2] - High ROE indicates effective reinvestment of cash at a high rate of return, helping to identify financially healthy companies [3][4] Screening Parameters - Stocks were shortlisted based on criteria including cash flow greater than $1 billion and ROE exceeding industry averages [5] - Additional metrics included price/cash flow lower than industry averages and return on assets (ROA) greater than industry averages [6] Stock Picks - Selected stocks with high ROE and strong cash flow include TE Connectivity (TEL), ZTO Express (ZTO), Pilgrim's Pride Corporation (PPC), Assurant, Inc. (AIZ), and Host Hotels & Resorts, Inc. (HST) [7] - These stocks also exhibit solid earnings surprises, strong growth outlooks, and favorable valuation metrics [7] Company Profiles - **TE Connectivity**: A global technology company focused on connectivity and sensor solutions across various industries, with a long-term earnings growth expectation of 12.3% and a trailing four-quarter earnings surprise of 6.5% [8][9] - **ZTO Express**: A leading express delivery service in China with a long-term earnings growth expectation of 1.7% and a Zacks Rank of 1 [10][11] - **Pilgrim's Pride**: Engaged in the production and distribution of chicken products, with a trailing four-quarter earnings surprise of 10.4% and a Zacks Rank of 2 [11][12] - **Assurant**: Provides risk management solutions in housing and lifestyle markets, with a trailing four-quarter earnings surprise of 22.7% and a Zacks Rank of 2 [12][13] - **Host Hotels**: A leading lodging REIT focused on luxury and upper-upscale hotels, with a trailing four-quarter earnings surprise of 11% and a Zacks Rank of 2 [14][15]

Core Viewpoint - Deutsche Bank maintains a "Hold" rating for DHL Group while raising the price target from EUR 42 to EUR 48, indicating a positive outlook for the company despite the rating [1][6] Financial Performance - DHL Group is effectively managing economic challenges by improving earnings through efficiency, automation, and AI, which enhances margins and strengthens its market position [2][6] - The stock currently offers a shareholder yield exceeding 7%, supported by strong free cash flow, share buybacks, and a dividend yield over 4%, making it attractive for income-seeking investors [3][6] Market Position - DHL Group is expanding into high-margin sectors like cold-chain logistics, which supports its competitive edge [2][6] - The company is increasing its out-of-home delivery points, which could further boost its market presence [3] Stock Performance - The stock is priced at $53.08, marking a 1.07% increase, with a 52-week range of $33.89 to $53.21, indicating strong recovery and growth potential [4] - DHL Group has a market cap of approximately $61.49 billion, reflecting its significant size in the market [4] Investor Interest - The trading volume for DHL Group is 988 shares on the OTC exchange, suggesting moderate investor interest [5]

Core Insights - FedEx Corporation has a market capitalization of $65 billion and operates globally in transportation, e-commerce, and business services through its Federal Express and FedEx Freight segments [1] - The company is recognized as a large-cap stock, having established itself as a leader in express delivery and supply chain management [2] Stock Performance - FedEx shares have decreased by 9.4% from their 52-week high of $302.02, but have increased by 18.5% over the past three months, outperforming the Nasdaq Composite's 7.7% gain during the same period [3] - Year-to-date, FedEx stock is down 2.7%, significantly trailing the Nasdaq's 21% gain, and has declined 9.6% over the past 52 weeks compared to the Nasdaq's 22.6% return [4] Financial Results - Following the Q1 2026 results released on September 18, FedEx shares rose by 2.3% due to strong year-over-year earnings growth, with adjusted operating income reaching $1.30 billion and adjusted EPS at $3.83, driven by robust U.S. domestic package revenue and cost reductions [5] - The company projects a revenue growth of 4% - 6% and an adjusted EPS of $17.20 - $19 for fiscal 2026, excluding certain costs [5] Strategic Developments - FedEx completed $500 million in share repurchases during the quarter and is progressing towards the planned spin-off of FedEx Freight in June 2026 [6] - In contrast, United Parcel Service (UPS) has seen a decline of 24.3% year-to-date and 29.6% over the past 52 weeks, indicating FedEx's relative strength in the market [6] Analyst Sentiment - Despite recent stock underperformance, analysts maintain a moderately optimistic outlook on FedEx, with a consensus rating of "Moderate Buy" from 30 analysts, and the stock is currently trading above the mean price target of $268.52 [7]

Summary of ZTO Express Conference Call Company Overview - **Company**: ZTO Express (ZTO.N) - **Industry**: Transportation & Infrastructure in Hong Kong/China Key Points and Arguments Market Share and Competition - ZTO has gained market share in Q4 2025, achieving low-teens year-over-year volume growth quarter-to-date, outperforming the industry due to a decrease in low-value parcels in the market [4][12] - Management believes that market competition has improved, with leading players resuming share gains, which was a positive surprise compared to expectations of stable market shares due to customer lock-up [2][4] - ZTO is not participating in aggressive pricing competition, which is deemed irrational for smaller players with thin margins and weak balance sheets [5][12] Financial Performance - 3Q25 net profit exceeded expectations due to tax credits, while gross profit and operating profit missed estimates [3] - Adjusted EBITDA was in line with expectations, and excluding tax benefits, unit profit increased quarter-over-quarter [3] - The 2025 volume outlook was slightly lowered due to a slowdown in market volume growth [3] Earnings Forecasts and Price Target - EPS forecasts for 2025-2027 have been raised by 3%, 6%, and 4% respectively, reflecting the 3Q25 results and healthier average selling price dynamics [6][15] - The weighted average cost of capital (WACC) assumption was slightly lowered to 13.2% from 13.3% due to a decrease in the cost of debt [6][16] - The price target has been increased by 5% to US$25.00, implying a 13x 2026 estimated P/E, which is below the domestic peer average of 16x [6][16] Shareholder Returns and Capital Expenditure - ZTO expects higher absolute shareholder returns year-over-year, assuming no irrational competition [14] - Capital expenditure guidance for 2025 is approximately Rmb5.5-6 billion, expected to decline to Rmb5 billion in 2026 [14] Risks and Opportunities - Risks still exist, but the company is optimistic about achieving both market share gain and profit growth in 2026 [5][29] - The retail business handles over 9 million daily parcels, representing 8-9% of total volume, with management targeting a higher retail parcel mix in 2026 [13] - Potential mergers and acquisitions are being considered as a growth option [14] Valuation and Investment Thesis - ZTO is viewed as a long-term winner in the industry, with attractive risk-reward dynamics, trading at 11x 2026 estimated P/E and a forward free cash flow yield of 7-8% compared to a peer average of 1% [7][29] - The company’s market leadership in volume and unit profitability supports a positive outlook, with a moderate probability of achieving both market share gain and profit growth [24][29] Additional Important Information - The effective tax rate is expected to be 18%, with a significant reduction in tax expenses noted [17] - The company’s market cap is currently Rmb107,605 million, with an average daily trading value of US$10 million [9] - The stock price closed at US$18.97 on November 19, 2025, indicating a 32% upside to the new price target [9] This summary encapsulates the key insights from the ZTO Express conference call, highlighting the company's performance, market dynamics, and future outlook.

Group 1: Middle East Tensions - Hezbollah's leadership is considering a response to a recent Israeli airstrike in Beirut that resulted in five fatalities and 25 injuries, raising concerns about potential escalation in Lebanon [3] - Israeli Defense Minister Israel Katz reaffirmed the country's commitment to act decisively against any threats to its residents [3] Group 2: Holiday Shipping Challenges - UPS and FedEx are facing challenges in securing sufficient freighters due to the FAA's emergency directive grounding all McDonnell Douglas MD-11 aircraft following a fatal crash that killed 14 people [4] - The grounding of MD-11s, which make up a small portion of both companies' fleets, could lead to delays during the critical holiday delivery season, prompting both companies to implement contingency plans [4] Group 3: Japan's Semiconductor Strategy - Japan is introducing a cybersecurity mandate as a condition for companies receiving subsidies for semiconductor plants, part of a strategy to strengthen its domestic chip industry [5] - The Japanese government has proposed $65 billion in subsidies over multiple years to attract chipmakers and has set conditions for long-term production commitments and technology protection [5] Group 4: U.S. Political Developments - Former President Donald Trump is preparing to designate the Muslim Brotherhood as a foreign terrorist organization, emphasizing the use of "the strongest and most powerful terms" for the designation [6] - This move follows previous attempts by the Trump administration and state-level actions to classify the Muslim Brotherhood as a terrorist organization [7]

Core Insights - ZTO Express reported third-quarter 2025 earnings of 43 cents per share, an improvement from the previous year, with total revenues reaching $1.66 billion, also showing year-over-year growth [1][6] Revenue Performance - Revenue from the core express delivery business increased by 11.6% year over year, driven by a 9.8% growth in parcel volume and a 1.7% increase in parcel unit price [2] - Key account revenues surged by 141.2% year over year, attributed to a rise in e-commerce return parcels [2] - Revenue from freight forwarding services declined by 7.4% year over year [2] Gross Profit and Margins - Gross profit decreased by 11.4% compared to the year-ago quarter, with the gross margin rate falling to 24.9% from 31.2% [3][6] Operating Expenses - Total operating expenses amounted to RMB550.9 million (approximately $77.4 million), an increase from RMB493.0 million in the previous year [3] Share Repurchase Program - ZTO's board approved a share repurchase program with an increased aggregate value of $2.0 billion, extended through June 30, 2026; as of September 30, 2025, ZTO had repurchased 52,919,506 ADSs for $1.3 billion, leaving $0.7 billion available under the program [4] Cash Position - ZTO Express ended the third quarter of 2025 with cash and cash equivalents of $1.31 billion, down from $1.85 billion at the end of the previous quarter [7]

Market Overview - The equity market experienced erratic movements, leading to volatility and a potential shift in the rate-cut narrative [1] - NVIDIA's strong quarterly performance initially boosted the market, but concerns about AI firm valuations have emerged [1] - Experts predict that growth in AI firms may not match the significant investments, suggesting a market correction may be imminent [1] Federal Reserve and Economic Indicators - Investors are anxious about the Federal Reserve's decision on lowering the benchmark borrowing rate in its upcoming meeting [2] - The delayed September jobs report indicated the economy added 119,000 jobs, exceeding expectations and reducing rate cut anticipations [2] - A "wait-and-see" approach is prevalent among investors, who are advised to focus on "cash cow" stocks with high returns [2] Investment Strategy - Identifying cash-rich stocks is essential, but it must be supported by strong efficiency ratios like return on equity (ROE) [2] - High ROE indicates effective reinvestment of cash at high returns, distinguishing profitable companies from less efficient ones [3][4] Screening Parameters for Stocks - The primary screening criteria include Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Additional metrics for screening include: - Price/Cash Flow lower than the industry average, indicating better value for cash flow [6] - Return on Assets (ROA) greater than the industry average, reflecting profitability per dollar of assets [6] - 5-Year EPS Historical Growth greater than the industry average, indicating sustained earnings momentum [7] - Zacks Rank of 1 (Strong Buy) or 2 (Buy), suggesting potential outperformance [7] Featured Companies - **TE Connectivity**: A global technology company with a long-term earnings growth expectation of 12.3% and a trailing four-quarter earnings surprise of 6.5%, carrying a Zacks Rank 2 [8][9] - **ZTO Express**: A leading express delivery service in China with a long-term earnings growth expectation of 1.7%, also holding a Zacks Rank 2 [10][11] - **Corning**: Known for its glass technologies, with a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.1%, carrying a Zacks Rank 2 [11][12] - **Assurant**: A global provider of risk management solutions with a trailing four-quarter earnings surprise of 22.7% and a Zacks Rank 2 [12][13] - **VICI Properties**: An experiential real estate investment trust with a long-term earnings growth expectation of 4.2% and a trailing four-quarter earnings surprise of 0.4%, also holding a Zacks Rank 2 [14][15]

Core Viewpoint - ZTO Express (Cayman) Inc. is recognized as one of the leading express delivery companies in China, handling the highest volume of packages in the country [1] Company Overview - ZTO Express operates in the express delivery sector, which is a critical component of China's logistics and e-commerce industries [1] - The company is categorized as a large-cap entity, although it also draws attention from analysts who typically focus on small- to mid-cap companies [1] Market Position - ZTO Express surpasses all competitors in terms of package volume, indicating a strong market presence and operational capacity [1]