2025-11-16 15:36Summary of Key Points from the Conference Call Industry Overview - The focus on AI investments has overshadowed other potential investment opportunities in various sectors, including semiconductors, power plants, and capital goods [1][2] - Companies not directly benefiting from AI are highlighted as compelling investment options, such as Freeport-McMoRan, which has indirect exposure to AI [1] Core Insights and Arguments - A screening of Buy-rated US stocks not included in AI/power/infrastructure ETFs identified 82 stocks with positive 3-month EPS revisions and trading below a market multiple of 26x, leading to a final list of 16 equities [2] - Savita Subramanian models an 8% return for the S&P over the next 12 months, emphasizing the importance of owning average stocks rather than the index [3] - Risks associated with AI investments include potential declines in middle-income white-collar jobs, which could impair consumer spending [3] - Hyperscalers investing heavily in AI technology may face de-rating if monetization does not meet expectations, as they currently trade at high multiples despite capital-intensive spending [3] Notable Companies and Their Performance - Amcor PLC (AMCR): Recent acquisition of Berry Global is expected to enhance valuation, with EBITDA projected to approach $3.8 billion for F26 [11][12] - AT&T Inc. (T): Strong performance metrics with 405k post-paid phone net additions, projecting a 9% EPS growth in 2026 [15][17] - BGC Group: Dominates the energy derivatives market, with expected growth in volumes due to increased power consumption driven by cloud and AI adoption [18][19] - Church & Dwight (CHD): Positioned to benefit from consumer trade-down trends, with organic sales growth of 3.4% in Q3 [20][21] - Dollar General (DG): Improved execution and a focus on lower price points are expected to boost sales, with a current valuation below the 5-year average [23][27] - Freeport-McMoRan (FCX): Anticipates a restart of the Grasberg mine, with bullish forecasts for copper prices due to supply challenges [32][34] - Henry Schein (HSIC): Transitioning to a higher-margin business model, with a target of 60% operating income from high-growth products by 2027 [38][39] - Progressive Corp (PGR): Strong EPS revisions and expected dividend announcements are anticipated to drive growth [65][67] - Walt Disney Co. (DIS): Growth drivers intact with expectations for double-digit growth in Entertainment operating income [80] Additional Important Insights - The market is currently cautious, providing room for multiple expansions as fundamentals improve across various sectors [14] - Regulatory improvements in Connecticut are expected to enhance Eversource's valuation [28][30] - Viking Holdings is positioned for premium valuation due to its unique brand and superior margins in the cruise industry [76][79] - The overall sentiment indicates a potential for significant investment opportunities outside the AI sector, as companies adapt to changing market dynamics and consumer behaviors [1][2][3]