Company Overview - Littelfuse is a global provider of circuit protection and power management solutions, serving critical applications in transportation, electronics, and industrial markets [5] - The company generates revenue through sales of proprietary hardware components and systems to distributors, OEMs, and industrial customers globally [8] - Littelfuse's strategy focuses on innovation and reliability, positioning it as a trusted supplier in high-growth and mission-critical sectors [5] Financial Performance - Littelfuse reported a revenue growth of 9% to approximately $2.39 billion last year, with significant expansion in electronics and industrial end markets [10] - Adjusted earnings per share increased by 34%, although a large non-cash impairment charge resulted in reported losses, masking improving operating performance [10] - The stock price of Littelfuse is currently $320.65, reflecting a 52% increase over the past year, significantly outperforming the S&P 500, which rose about 15% in the same period [7] Recent Transactions - On February 17, 2026, Dean Investment Associates sold 14,929 shares of Littelfuse, valued at an estimated $3.80 million based on quarterly average pricing [2] - Following this transaction, Dean Investment Associates holds 26,921 shares of Littelfuse, worth $6.81 million, with the position's value decreasing by $4.03 million due to share sales and price changes [2][6] - Littelfuse now represents 0.97% of Dean Investment Associates' 13F reportable assets under management [7] Market Position and Outlook - Littelfuse is characterized as a steady industrial technology company linked to electrification, autos, and power systems, making its sub-1% weighting notable against other sectors [9] - The stock has increased by 22% year to date, indicating a positive market response despite previous losses, with better-than-expected results attributed to growth in renewables and data centers [11]

Group 1: Oil Market Impact - The Iran war has significantly affected oil prices, with Brent crude rising 84% this year to $112 per 42-gallon barrel and light sweet crude increasing 72% to $98 a barrel [1][5] - U.S. gasoline prices have surged to $3.93 a gallon, marking a 38% increase [1] Group 2: Technology Sector Decline - Software stocks, including major players like Microsoft and Salesforce, have experienced a decline due to excessive spending on data centers for artificial intelligence [2] - All Magnificent 7 stocks (Apple, Amazon, Google, Meta, Microsoft, Nvidia, and Tesla) are down this year, with Microsoft down 31% from its peak and Nvidia off nearly 19% [2] Group 3: Market Performance and Economic Indicators - The S&P 500 has fallen 5.83% over four consecutive weeks, while the Dow and Nasdaq have also seen significant declines of 8.2% and 5.4%, respectively [7] - The 10-year Treasury yield has increased by 11% to 4.37%, and the 30-year mortgage rate has risen from 5.99% to 6.53% [8] Group 4: Sector Performance - The energy sector has been the best-performing S&P 500 sector, up nearly 32% in less than three months, with Chevron also gaining more than 32% [9] - Technology stocks are down 8.5% year-to-date, while consumer discretionary stocks and financials have declined by 10.6% and 10.8%, respectively [9]

Core Insights - Elon Musk, who leads both Tesla and SpaceX, announced that a new facility will be established to supply chips for Tesla vehicles and SpaceX satellites [1] Company Summary - The facility will focus on producing chips specifically for Tesla's automotive needs and SpaceX's satellite operations [1]

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Core Viewpoint - Rivian and Uber are facing profitability concerns and slowing growth expectations, leading to significant stock declines for both companies [1][2]. Company Performance - Rivian's stock has decreased over 33% from its December 52-week high and is down approximately 24.3% year to date [1]. - Uber's stock has fallen about 9% this year and around 22% since its earnings report on November 4 [1]. - Both companies are underperforming compared to the S&P 500, which has declined about 5% year to date [1]. Partnership Announcement - On March 19, Rivian and Uber announced a significant robotaxi partnership, with Uber planning to invest up to $1.25 billion in Rivian [3]. - The partnership aims to deploy up to 50,000 fully autonomous R2 vehicles on Uber's platform, launching in San Francisco and Miami in 2028, with potential expansion to 25 cities by 2031 [3][4]. Financial Results - Rivian reported an adjusted loss of 54 cents per share for the fourth quarter, which was narrower than the expected 68-cent loss, with revenue reaching $1.29 billion, surpassing estimates of $1.26 billion [5]. - For the full year 2025, Rivian's revenue rose 8% to approximately $5.4 billion, and the company reported its first annual gross profit of $144 million, primarily from its software and services segment [6]. - Rivian's automotive business incurred losses of $432 million, and the company is expected to remain unprofitable as it ramps up production of its lower-cost R2 vehicle [6]. Future Expectations - Rivian has revised its expectations, stating it no longer anticipates adjusted EBITDA to turn positive by 2027 due to increased R&D spending related to its autonomous driving roadmap [7]. - The company now expects an adjusted EBITDA loss between $2.1 billion and $1.8 billion in 2026 [9].

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Core Viewpoint - The article discusses the significant milestone achieved by China's leading new energy vehicle manufacturers, namely NIO, Li Auto, and Xpeng, as they all reported profitability for the first time in 2025, marking a turning point in the industry [4][5][6]. Group 1: Profitability of New Energy Vehicle Manufacturers - Xpeng Motors reported a net profit of 380 million yuan in Q4 2025, indicating a major shift in its financial performance [4][13]. - The three leading companies, NIO, Li Auto, and Xpeng, have different paths to profitability, with Li Auto delivering 406,343 vehicles, Xpeng 429,445 vehicles, and NIO 326,028 vehicles in 2025 [9][10]. - Xpeng's revenue reached 76.72 billion yuan, with a year-on-year growth of 87.7%, while NIO and Li Auto reported revenues of 87.49 billion yuan and 112.3 billion yuan, respectively [9]. Group 2: Strategies and Market Positioning - Li Auto is characterized as the "efficiency faction," focusing on cost control and high product margins, which allowed it to achieve self-sustainability first [10]. - NIO represents the "steadfast faction," investing heavily in the high-end electric market and battery swapping systems, ultimately reaching breakeven in 2025 [10]. - Xpeng is identified as the "technology faction," emphasizing smart driving technology and achieving significant growth in deliveries and gross margin [10][11]. Group 3: Future Challenges and Market Dynamics - The article emphasizes that achieving profitability is just the beginning, as the market competition is expected to intensify in 2026 with traditional automakers and new entrants like Huawei and Xiaomi [12]. - Maintaining growth post-profitability is crucial, as the industry faces ongoing price wars and the need for continuous innovation [12][28]. - Xpeng's cash reserves of 47.66 billion yuan as of December 31, 2025, provide a strong foundation for navigating future challenges and sustaining operations without external financing [22][25].

Summary of Conference Call Notes Industry Overview - The focus is on the automotive supply industry, particularly in the context of recent geopolitical tensions and their impact on market dynamics [1][2][3]. Key Points Market Performance - Suppliers have experienced a decline of **-17%** over the past month, compared to the S&P 500's decline of **-3%** [2]. - Since the onset of the Iran conflict, suppliers are down **-10%**, while the S&P 500 has decreased by **-4%** [2]. - Current supplier levels are near those of November 2025, indicating a significant drop from previous highs [2]. Geopolitical Impact - The ongoing conflict has introduced additional risks to the 2026 outlook, particularly concerning rising costs and supply chain pressures [2]. - S&P Global has reduced its global Light Vehicle Production (LVP) forecast for 2026 by **-0.7%** (approximately **685k units**), with **35%** of this reduction attributed to the Middle East/Africa region, where US suppliers have minimal exposure [2]. Mid-term Outlook - Despite the challenges, there are reasons to be cautiously optimistic about individual companies within the sector [3]. - The mid-term backdrop remains mixed, with production expected to plateau and limited volume growth anticipated [1]. Company-Specific Insights - **APTV**: Limited downside is expected, presenting a positive risk/reward scenario [5]. - **ADNT**: Faces challenges due to lower-quality perception but could rebound if market conditions improve [5]. - **BWA**: Has potential growth avenues through TurboCell, which is generating market interest [5]. - **DAN**: Strong cash generation and capital returns are noted, with an upcoming analyst day expected to provide further insights [5]. - **DCH**: Recent sell-off attributed to guidance confusion and higher leverage risks, but future free cash flow potential is promising [5]. - **LEA**: Anticipated updates on Q1 2026 performance could provide reassurance to investors [5]. - **MGA**: Expected continued margin performance from repriced contracts, with potential for further capital returns beyond 2026 [5]. - **VC**: While consensus estimates for Q1 2026 may be high, an analyst day in June could yield positive updates [5]. Valuation Metrics - The report includes various valuation metrics for US automakers and suppliers, indicating a range of price targets and expected returns [12]. - For example, General Motors (GM) has a target price of **$102**, representing a **42%** upside from its current price of **$72.40** [12]. Stock Performance Trends - Recent stock performance trends indicate a mixed outlook, with some companies showing resilience while others struggle under current market conditions [13][14][15]. - Over the past week, several stocks have seen declines, with notable drops for Ford (F) and General Motors (GM) [14]. Conclusion - The automotive supply industry is navigating a complex landscape marked by geopolitical tensions and market volatility. While challenges persist, there are opportunities for selective investment in companies with strong fundamentals and potential for recovery [1][3][5].

Investment Rating - The report indicates a mixed investment rating across various asset classes, with oil at 64.7%, gold at 7.0%, and US stocks at -3.5% YTD [1]. Core Insights - The report emphasizes that significant geopolitical events lead to new asset leadership and market shifts, suggesting a transition from "Japanification" to inflationary "LatAmification" [1]. - It highlights the broadening of the commodity bull market from gold to metals and energy, influenced by geopolitical factors [2]. - The report suggests that the current economic environment is characterized by over-leveraged US stocks and a shift towards contrarian consumer stocks, as populist policies gain traction [2]. Summary by Sections Market Performance - Year-to-date performance shows significant declines in various asset classes, with bitcoin down 19.9% and US stocks down 3.5% [1]. - The report notes a substantial inflow of $62.2 billion into stocks, with $47.1 billion specifically into US equities, marking the largest inflow since December 2025 [7][11]. Investment Themes - Key investment themes for the 2020s include a commodity bull market, reshoring of manufacturing, and a focus on contrarian consumer stocks [2]. - The report identifies a shift in consumer sentiment towards populist socialism, which may influence stock pricing and market dynamics [2]. Flows and Allocations - Private clients are currently holding 63.7% in stocks, the lowest since June 2025, while bond allocations have increased to 18.3% [9]. - The report indicates that there have been significant outflows from gold and high-yield bonds, with $4.5 billion and $5.2 billion outflows respectively [11][39]. Economic Indicators - The BofA Bull & Bear Indicator has decreased to 8.4, indicating a bearish sentiment in the market, particularly in high-yield bonds and emerging market debt [9][10]. - The report suggests that the current economic landscape is influenced by political factors, including low approval ratings for the current administration, which may lead to a de-escalation in conflicts [10].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Chinese equity market, specifically the performance of A-shares and H-shares, as well as macroeconomic indicators affecting these markets [1][21]. Core Insights and Arguments - **Market Correction**: The MXCN and CSI300 indices corrected by 2.2% and 2.6% respectively during the week [1]. - **Presidential Visit Delay**: President Trump announced a delay in his state visit to China, which may impact market sentiment [1]. - **Economic Data**: January-February activity data showed improvement, with Industrial Production (IP) up 6.3% year-over-year, Fixed Asset Investment (FAI) up 1.8% year-to-date, and Retail Sales up 2.8% year-over-year [1]. - **Earnings Forecasts**: 28% of the China universe and 48% of the MSCI China universe have reported earnings so far, with CY25 earnings expected to rise by 4% for China and decline by 10% for MSCI China [21]. - **A-shares vs H-shares**: A-shares are expected to outperform H-shares, with earnings growth forecasted at +11% for A-shares in 4Q25 compared to -5% for H-shares [10][21]. - **Earnings Revisions**: The earnings growth forecast for A-shares has been raised from 8% to 10% for 2025 [1]. Additional Important Insights - **Sector Performance**: In the A-share market, Energy and New China sectors outperformed, while Materials lagged significantly [6]. - **Investment Flows**: Southbound Connect saw US$0.8 billion in outflows this week, indicating a cautious sentiment among investors [1]. - **Credit Extension**: Total credit extension in China surprised to the upside, suggesting a potential easing of monetary policy [1]. - **Property Market**: The decline in primary property prices across 70 cities narrowed in February, indicating stabilization in the real estate sector [1]. - **Regulatory Environment**: There are indications that regulators may discourage offshore IPO applications, which could impact market dynamics [7]. Earnings Announcements and Performance - **Major Companies Reporting**: Key companies such as Alibaba, Tencent, and Li Ning reported mixed results, with varying impacts on their stock prices post-announcement [23]. - **Profit Alerts**: The report includes a summary of potential earnings surprises by sector, highlighting sectors like Div Financials and Utilities for positive surprises, while Property and Software are expected to face challenges [14]. Conclusion - The Chinese equity market is experiencing a correction, but underlying economic indicators show signs of improvement. A-shares are expected to outperform H-shares, and sector-specific dynamics will play a crucial role in shaping investment strategies moving forward.