Market Overview - Wall Street ended the first day of July 2025 on a mixed note, with the S&P 500 and Nasdaq falling while the Dow Jones Industrial Average gained slightly [1] - The contrasting movements in the major stock indices were influenced by opposing forces, including a feud between President Trump and Tesla CEO Elon Musk, and the U.S. Senate's passage of Trump's tax bill aimed at stimulating economic growth [2] Investment Opportunities - Amid market uncertainty, there is a potential opportunity to invest in low-leverage stocks that are not expensive and can provide a protective shield during turbulent times [3] - Suggested low-leverage stocks include Novartis (NVS), Alamo Group (ALG), ArcelorMittal (MT), Bilibili (BILI), and Sterling Infrastructure, Inc. (STRL) [3][10] Low-Leverage Stocks - Low-leverage stocks are characterized by a lower debt-to-equity ratio, indicating reduced financial risk and improved solvency [7][8] - Investing in low-leverage stocks is recommended to avoid significant losses during economic downturns [6][7] Company Highlights - **Novartis (NVS)**: Recently completed the acquisition of Regulus Therapeutics, enhancing its drug portfolio. The Zacks Consensus Estimate for NVS's 2025 sales suggests a 7.3% improvement from 2024, with a long-term earnings growth rate of 7.9% [15][16] - **Alamo Group (ALG)**: Completed the acquisition of Ring-O-Matic, expanding its product offerings. The Zacks Consensus Estimate for ALG's 2025 earnings indicates a 7.2% year-over-year improvement [17][18] - **ArcelorMittal (MT)**: Signed an agreement to sell operations in Bosnia and Herzegovina, allowing a focus on higher-growth areas. The company has a long-term earnings growth rate of 49.8% [19] - **Bilibili (BILI)**: Reported a 24% year-over-year revenue increase and a 58% improvement in gross profit for Q1 2025. The Zacks Consensus Estimate for its 2025 sales indicates a 12.1% improvement from 2024 [20][21] - **Sterling Infrastructure (STRL)**: Announced the acquisition of CEC Facilities Group, enhancing its service portfolio in high-growth markets. The company has a long-term earnings growth rate of 15% [22][23]

KKR agreed to acquire Australian agriculture infrastructure company ProTen from Aware Super, in another Asia-Pacific deal by the US private equity firm https://t.co/rkTNj0IlwR ...

Core Insights - The MSCI "2025 General Partner Survey" indicates that as capital becomes increasingly constrained, private equity, private credit, and infrastructure fund managers find it more challenging to meet the rising expectations of institutional investors [1] Fundraising Challenges - 60% of small General Partners (GPs) and 46% of large GPs identify fundraising difficulties as one of their top two challenges [1] - 30% of surveyed GPs attribute fundraising difficulties to a harsh market environment [1] Investment Opportunities - Over half of GPs believe that finding attractive investment opportunities has become increasingly difficult [1] - 47% of respondents cite declining deal quality as the primary reason for not securing suitable transactions [1] - 60% of respondents indicate that the diversification of regions and industries complicates due diligence processes [1] Data and Performance Management - One-third of GPs report a lack of access to reliable private asset data [1] - 26% of surveyed GPs express the need for better standardization, data integration, and customization in performance management [1] - Many GPs still rely on fragmented and manual data infrastructures, limiting business scalability [1] Investor Expectations and Reporting - 68% of large GPs and 52% of small GPs list managing investor expectations and reporting requirements as one of their top five challenges [1] - Key pressure points include: - Customized reporting: 41% of large GPs and 33% of small GPs highlight challenges arising from differing requirements across clients and jurisdictions [1] - Benchmarking difficulties: 40% of large GPs find it hard to select appropriate benchmarks, while 57% of small GPs face issues with the accuracy and credibility of reporting data [1] - Timely information transparency: 18% of large GPs and 17% of small GPs report difficulties in achieving timely updates and disclosures [1]

Key Takeaways Stocks making new highs tend to make even higher highs. Both PM and STRL shares have benefited from strong quarterly results. Both companies' near-term outlooks allude to further gains. When stocks are cruising near all-time or 52-week highs, it reflects considerable bullishness with trends where buyers are in control. Stocks making new highs tend to make even higher highs, particularly when analysts' positive earnings estimate revisions are present.   That’s been precisely the case for Phil ...

Core Insights - Mergers and acquisitions (M&A) activity has shown notable fluctuations post-COVID, but there are signs of recovery in the market, with Sterling Infrastructure (STRL) making significant moves recently [1][7] Company Acquisition - Sterling Infrastructure announced the acquisition of Texas-based CEC Facilities Group, LLC for a total of $505 million, which includes $450 million in cash and $55 million in STRL stock [2] - The CEO of STRL, Joe Cutillo, emphasized that the combination of CEC's electrical services and Sterling's civil infrastructure services will enhance project timelines and customer value [2] - Following the acquisition announcement, STRL shares increased significantly, rising over 30% year-to-date and outperforming the S&P 500 [2] Strategic Focus - CEC will be integrated into Sterling's E-Infrastructure Solutions segment, aimed at enhancing its capabilities in data centers amid the growing AI market [4] - The E-Infrastructure Solutions segment provides advanced site development services for various sectors, including manufacturing and power generation [4] Financial Impact - The acquisition is expected to be immediately accretive to STRL's earnings, with contributions anticipated to begin in 2025 [5] - Prior to the acquisition news, STRL was already in a strong position, holding a Zacks Rank 2 (Buy), with rising EPS expectations [5]

Core Insights - Investors prioritize businesses that consistently generate profits, with net profit margin being a crucial metric for assessing profitability and operational effectiveness [1][2] Summary by Sections Net Profit Margin - Net profit margin is calculated as Net Profit divided by Sales multiplied by 100, indicating a company's efficiency in converting sales into actual profits [2] - A higher net profit margin reflects better operational strength and cost management, which is essential for rewarding stakeholders and attracting talent [2] Pros and Cons - Net profit margin provides clarity on a company's business model, including pricing policy and manufacturing efficiency, making it a preferred metric for investors [3] - Limitations include significant variations across industries and complications arising from different accounting treatments, particularly for non-cash expenses [3][4] Winning Strategy - A healthy net profit margin and solid earnings per share (EPS) growth are key elements sought in a business model [5] Screening Parameters - Criteria for screening include a net margin of at least 0%, positive percentage change in EPS, and a high broker rating indicating bullishness on the stock [6][7] Company Highlights - Great Lakes Dredge & Dock Corporation (GLDD) is the largest provider of dredging services in the U.S., with a Zacks Rank of 1 and a VGM Score of A, and its 2025 earnings estimate has been revised upward by $0.27 to $0.96 per share [9][10] - Interface, Inc. (TILE) is the world's largest manufacturer of modular carpets, holding a Zacks Rank of 2 and a VGM Score of A, with its 2025 earnings estimate revised to $1.58 per share [10][11] - Catalyst Pharmaceuticals, Inc. (CPRX) focuses on therapies for rare diseases, carrying a Zacks Rank of 2 and a VGM Score of A, with a recent upward revision of its 2025 earnings estimate to $2.25 per share [11][12] - Sterling Infrastructure, Inc. (STRL) operates in E-Infrastructure and Building Solutions, holding a Zacks Rank of 2 and a VGM Score of B, with its 2025 earnings estimate revised upward by $0.11 to $8.56 per share [13][14]

Investment Rating - The report indicates a mixed investment outlook for the industry, with industrial production rated at 0, fixed asset investment at -1, and retail sales at +2 [2]. Core Insights - The report highlights that China's industrial production and fixed asset investment missed market expectations, while retail sales showed significant growth, indicating a divergence in economic performance across sectors [1][17]. - The report emphasizes the importance of government policy in stimulating domestic demand, particularly through consumer goods trade-in programs, amidst ongoing deflationary pressures and a prolonged downturn in the property market [1][17]. Summary by Sections Industrial Production - Industrial production (IP) growth moderated to 5.8% year-on-year in May from 6.1% in April, primarily due to slowing export growth linked to increased US tariffs [8][11]. - Sequentially, IP is estimated to have contracted by 0.1% month-on-month non-annualized in May [8]. - Key sectors such as electrical machinery and chemical manufacturing experienced slower output growth, overshadowing gains in automobile production [8][11]. Fixed Asset Investment - Fixed asset investment (FAI) growth slowed to 2.9% year-on-year in May from 3.6% in April, driven mainly by declines in infrastructure and property investments [10][11]. - Manufacturing investment growth remained robust at 7.8% year-on-year in May, contrasting with the overall slowdown in FAI [10]. Retail Sales - Retail sales growth surged to 6.4% year-on-year in May, significantly above market consensus, driven by strong sales in home appliances and communication equipment [11][12]. - The growth in online and offline goods sales improved, with notable increases in restaurant sales revenue as well [11]. - The report cautions that the recent retail sales improvement may not be sustainable due to potential payback effects and funding shortages in consumer goods trade-in programs [1][11]. Property Market - Property-related activity remained weak, with property sales declining by 3.3% year-on-year in volume and 5.9% in value terms in May [13]. - New home starts and completions also showed significant year-on-year declines, indicating ongoing challenges in the real estate sector [13]. Labor Market - The nationwide unemployment rate edged down to 5.0% in May from 5.1% in April, reflecting seasonal patterns, while the unemployment rate for migrant workers increased slightly [14][17]. - Youth unemployment rates showed some moderation but are expected to rise amid the upcoming college graduation season [14][17].

REIT Performance Overview - The REIT sector experienced a significant decline in April 2025, with an average total return of -6.45%, underperforming the broader market indices such as the Dow Jones Industrial Average (-3.1%), S&P 500 (-0.7%), and NASDAQ (+0.9%) [1] - Year-to-date, the average total return for REITs stands at -9.10%, which is worse than the -7.65% return for the same period in 2024 [12] Performance by Market Capitalization - Microcap REITs underperformed larger peers for the sixth consecutive month, with returns of -8.87% [3] - Large-cap REITs (-2.93%) outperformed mid-caps (-5.45%) and small caps (-8.69%) in April, with large-cap REITs outperforming small caps by 1081 basis points in the first four months of 2025 [3] Property Type Performance - Only 11.11% of REIT property types averaged a positive total return in April, with a 20.17% spread between the best (Data Centers +7.28%) and worst-performing property types (Timber -12.90%) [5][6] - Year-to-date, Office REITs (-24.06%) and Hotel REITs (-22.90%) significantly underperformed, while Health Care (+7.23%), Infrastructure (+6.88%), and Casinos (+6.00%) were the only property types with positive returns [7] Price/FFO Multiples - The average P/FFO for the REIT sector decreased from 13.9x to 13.4x in April, with 83.3% of property types experiencing multiple contraction [8] - Data Centers (26.9x), Multifamily (24.6x), and Infrastructure (18.7x) currently trade at the highest average multiples among REIT property types, while Hotels (5.9x) and Offices (8.2x) have the lowest [9] Individual REIT Performance - Digital Realty Trust (DLR) achieved a strong gain of +12.04% in April, despite a year-to-date return of -8.72% [11] - Wheeler REIT (WHLR) was the worst-performing REIT in April, with a staggering decline of -63.61% for the month and -98.29% year-to-date [11] Dividend Yield Insights - The high dividend yields of the REIT sector are a primary reason for investment, with many REITs trading below their NAV, resulting in attractive yields [15]

Core Viewpoint - First Pacific Company Limited is focused on defensive businesses in Southeast Asia and is set to present at the dbVIC - Deutsche Bank ADR Virtual Investor Conference on May 15, 2025, to engage with investors [1][2]. Company Overview - First Pacific is a Hong Kong-based investment holding company with operations in consumer food products, telecommunications, infrastructure, and mining [6]. - The company is listed on the Hong Kong Stock Exchange and offers shares in the U.S. through American Depositary Receipts (ADR) [6]. Financial Performance - The company has experienced six consecutive years of profit growth, with the last four years achieving record highs [3]. - First Pacific's share price increased by 25% in 2023 and 45% in 2024, with a recurring price-to-earnings (P/E) ratio of 3.6x for FY 2024 [5]. Strategic Focus - First Pacific's strategy emphasizes maximizing shareholder returns through investments in defensive industries that are not significantly affected by changes in foreign trade tariffs [3]. - The company maintains a focus on emerging economies in Southeast Asia and holds majority stakes in its investments to ensure control over cash flows [8]. Key Assets - First Pacific's portfolio includes major companies such as Indofood (largest maker of instant noodles), MPTC (largest privately owned toll road operator), Meralco (largest power company), PLDT (largest telecommunications company), and Maynilad (largest water company) in the Philippines [4]. - The company is also the largest shareholder in Philex Mining, which plans to open a second gold and copper mine in 2026 [4]. Financial Health - First Pacific has low borrowings with an interest coverage ratio of 4x and has maintained investment-grade credit ratings from Moody's and S&P Global for three years [5].

Core Viewpoint - FLINT Corp. reported a significant improvement in Adjusted EBITDAS, achieving $5.1 million, which is a 61% increase compared to the previous year, despite a 6.1% decline in revenues [1][4][7]. Financial Performance - Revenue for Q1 2025 was $137.9 million, down from $146.9 million in Q1 2024, reflecting a decrease of $9.0 million or 6.1% [6][7]. - Gross profit increased to $14.4 million, up 10.7% from $13.0 million in the same quarter last year, with a gross profit margin of 10.4%, compared to 8.9% in Q1 2024 [6][9]. - Adjusted EBITDAS reached $5.1 million, a 60.5% increase from $3.2 million in Q1 2024, with an Adjusted EBITDAS margin of 3.7%, up from 2.2% [6][11]. - SG&A expenses decreased to $9.4 million, down 6.9% from $10.1 million in Q1 2024, maintaining a consistent SG&A margin of 6.8% [6][10]. Liquidity and Capital Resources - As of March 31, 2025, the company's liquidity, including cash and available credit facilities, was $89.1 million, an increase from $77.0 million a year earlier [7][14]. - The company has an asset-based revolving credit facility allowing for maximum borrowings of up to $50.0 million, maturing on April 14, 2027 [13]. Operational Insights - The CEO highlighted the company's commitment to quality execution and scaling the business, noting improved operating results despite decreased revenues [3]. - New contract awards and renewals totaled approximately $78.0 million for Q1 2025, with 74% of the work expected to be completed within the year [7].