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The Wax Report - Week Ending 09/30/2016

|Includes: Kennametal Inc. (KMT), RPM, SGC, TECD

The feebly managed Wax Ink Portfolio was up 0.6% for the week.

By comparison, the Dow was up 0.3%, the Nasdaq was up 0.1%, the S&P 500 was up 0.3%, the Russell 2000 was down 0.3%, and the Volatility Index, commonly known as the VIX, was up 8.1%.

Year to date, the Wax Ink portfolio is down 15.2% on a per share held basis, the Dow is up 5.1%, the Nasdaq is up 6.1%, the S&P 500 is up 6.1%, the Russell 2000 is up 10.2%, and the VIX is lower by 27.0%.

Portfolio Summary
The portfolio breakdown is roughly 55% cash, 45% equities, and 0% bonds. The current cash value on a per share basis is $28.94 and the current equity value on a per share basis is $23.47 making the average per share price $52.41. The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $30.92 and the average market valuation of all equities held in the Wax Ink Portfolio is $30.01, making the current portfolio equilibrium factor (2.97%).

Hydrocarbon Prices
Two numbers often watched by oil traders are Crude Spread (Brent Crude less WTI Crude) as well as the Gulf Coast Crack Spread (two barrels of gasoline + one barrel of heating oil - three barrels of crude oil) / 3). These numbers are now apart of The Wax Report.

WTI Crude ended the week at $48.24, up 8.5%, while Brent Crude ended the week at $49.06, up 6.9%, creating a crude price spread of $0.82, a change of (41.8%) for the week. Distillate RBOB Gasoline ended the week at $1.4631, up 6.3%, and Heating Oil ended the week at $1.5383, up 9.3%, moving the Gulf Coast 3:2:1 Crack Spread to $14.26, up 3.5% for the week. Natural Gas ended the week at $2.90, down 2.0%.

Year to date WTI Crude is higher by 30.2%, Brent Crude is higher by 31.6%, Natural Gas is higher by 23.9%, RBOB Gasoline is higher by 15.1%, Heating Oil is higher by 36.6%, and the Gulf Coast 3:2:1 Crack Spread is lower by 0.4%.

Treasury and Bond Yields
The 5 Year Treasury ended the week at 1.12, down 1.8%, while the 10 Year Treasury ended the week at 1.58, down 1.3%. The 5 Year AAA Municipal Bond ended the week at 0.82, up 3.8%, and the 10 Year AAA Municipal Bond ended the week at 1.50, up 6.4%. Lastly, the 5 Year AAA Corporate closed the week at 1.29, up 2.4%, with the 10 Year AAA Corporate ending the week down 0.5% at $2.21.

Year to date the 5 Year Treasury is down 35.6%, the 10 Year Treasury is down 29.8%, the 5 Year AAA Muni is down 33.9%, the 10 year AAA Muni is down 29.9%, the 5 Year AAA Corporate is down 32.1%, and the 10 Year AAA Corporate is down 24.3%.

Baseline Valuation Estimates and Worksheets
Baseline Valuation Estimates are initial valuations which Accredited Investors, after completing their own due diligence, can either increase or decrease in accordance with their individual risk tolerance or investing philosophy.

Financial data used in the creation of each Baseline Valuation Estimate is the most recent SEC 10-K ANNUAL financial data as reported to the U.S. Securities and Exchange Commission.

Archived worksheets may be downloaded by going to the Worksheets page at the site and selecting an industry which will move you to all of the worksheets I have updated for the selected industry.

Worksheets
Worksheets were either created or updated during the week for the following companies.

Kennametal, Inc. (NYSE: KMT) - FYE 06/2016
Superior Uniform Group, Inc. (NYSE: SGC) - FYE 12/2015
RPM International, Inc. (NYSE: RPM) - FYE 05/2016
Hawkins, Inc. (Nasdaq: HKWN) - FYE 03/2016
Tech Data Corporation (NASDAQ: TECD) - FYE 01/2016

Baseline Valuation Estimates
Baseline valuation estimates are determined through fundamental analysis of the listed company's financial information. Because these valuations are never exact, what is presented here is a baseline valuation range. Baseline valuation estimates were either created or updated during the week for the following companies:

Kennametal, Inc. - $24-$32
Superior Uniform Group, Inc. - $24-$32
RPM International, Inc. - $35-$37
Hawkins, Inc. - $28-$36
Tech Data Corporation - $79-$85

Growth Only Valuation Estimates
Growth only valuations are determined utilizing current pricing levels, year over year earnings growth, dividend yield, the current PE ratio, and an earnings growth estimate. Because growth only valuations are EXTREMELY volatile, what is presented here is a single growth only valuation estimate. Growth only valuation estimates were either created or updated during the week for the following companies:

Kennametal, Inc. - $26
Superior Uniform Group, Inc. - $20
RPM International, Inc. - $61
Hawkins, Inc. - $43
Tech Data Corporation - $82

Investment Summaries
Investment summaries are determined based on fundamental valuation of the underlying equity AND a minimum hold of 60 months (5 years). Investment summaries were issued during the week for the following companies:

Kennametal, Inc. - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed for investment consideration at this time (NYSEARCA:HOLD)

Superior Uniform Group, Inc. - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed for investment consideration at this time

RPM International, Inc. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

Hawkins, Inc. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

Tech Data Corporation - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed for investment consideration at this time

Have a great week.

Wax

Wax Ink is a baseline equity valuation company not licensed or registered with any government agency
Copyright © 2016 Wax Ink

Supporting Documents

  1. Wax_Ink_Portfolio_-_093016.pdf

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.