The Wax Report - Week Ending 03/31/2017
The soon to be ubiquitous Wax Ink Portfolio was up 1.0% for the week.
By comparison, the Dow was up 0.3%, the Nasdaq was up 1.4%, the S&P 500 was up 0.8%, the Russell 2000 was up 2.3%, and the Volatility Index, commonly known as the VIX, was down 4.6%.
Year to date (there are only 286 days remaining until Zanzibar Revolution Day), the Wax Ink portfolio is down 0.6%, while the Dow is up 4.6%, the Nasdaq is up 9.8%, the S&P 500 is up 5.5%, the Russell 2000 is up 2.1%, and the VIX is lower by 11.9%.
Portfolio Summary
The portfolio breakdown is roughly 53% cash, 47% equities, and 0% bonds. The current value of portfolio cash on a per share basis is $25.41 and the current value of portfolio equities on a per share basis is $23.07, making the average per share price $48.48.
The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $26.54 and the average market closing price of all equities held in the Wax Ink Portfolio is $25.84, making the current portfolio growth potential factor 2.6%.
Hydrocarbon Prices
WTI Crude ended the week at $50.60, up 5.5%, while Brent Crude ended the week at $53.53, 5.4%, creating a crude price spread of $2.93, an increase of 3.5%. Distillate RBOB Gasoline ended the week at $1.7030, up 6.1%, and Heating Oil ended the week at $1.5746, up 5.1%, moving the Gulf Coast 3:2:1 Crack Spread (two barrels of gasoline + one barrel of heating oil - three barrels of crude oil) / 3) to $19.13, an increase of 6.7% for the week. Henry Hub Natural Gas ended the week at $3.19, up 3.6%.
Year to date WTI Crude is lower by 5.8%, Brent Crude is lower by 5.8%, the WTI/Brent Crude Spread is lower by 5.5%, Henry Hub Natural Gas is lower by 14.2%, RBOB Gasoline is higher by 1.9%, Heating Oil is lower by 8.9%, and the Gulf Coast 3:2:1 Crack Spread is higher by 10.8%.
Treasury and Bond Yields
The 5 Year Treasury ended the week at 1.89, down 1.6%, while the 10 Year Treasury ended the week at 2.37, down 0.8%. The 5 Year AAA Municipal Bond ended the week at 1.25, down 10.1%, and the 10 Year AAA Municipal Bond ended the week at 2.07, down 4.6%. Lastly, the 5 Year AAA Corporate closed the week at 2.01, down 2.0%, with the 10 Year AAA Corporate ending the week down 1.0% at 2.84.
Year to date the 5 Year Treasury is unchanged, the 10 Year Treasury is down 2.1%, the 5 Year AAA Muni is down 29.0%, the 10 year AAA Muni is down 19.1%, the 5 Year AAA Corporate is down 2.4%, and the 10 Year AAA Corporate is down 6.3%.
Fair Warning
I am a deep value, long-term buy and hold investor with a minimum holding time for shares in the Wax Ink portfolio of 60 months (1825 days).
Disclosure
Wax Ink has no position in any companies mentioned in this report.
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.
The Mosaic Company (NYSE: MOS) - FYE 12/2016
Kraton Performance Polymers, Inc. (NYSE: KRA) - FYE 12/2016
Olin Corporation (NYSE: OLN) - FYE 12/2016
Quaker Chemical Corporation (NYSE: KWR) - FYE 12/2016
Baseline Valuation Estimates
Baseline Valuation Estimates
Baseline valuation estimates are determined through fundamental analysis of the listed company's most recent annual financial information and are intended as a starting point for continued due diligence. Baseline valuation estimates were either created or updated during the week for the following companies:
The Mosaic Company - $25
Kraton Performance Polymers, Inc. - $32
Olin Corporation - $14
Quaker Chemical Corporation - $65
Current Growth Estimates
Current growth estimates are determined utilizing current pricing levels, year over year earnings growth, dividend yield, the current PE ratio, and an earnings growth estimate. Because current growth estimates are EXTREMELY volatile, what is presented here is a single current growth estimate. Current growth estimates were either created or updated during the week for the following companies:
The Mosaic Company - $28
Kraton Performance Polymers, Inc. - $628
Olin Corporation - $34
Quaker Chemical Corporation - $130
Current Momentum Estimates
Current Momentum estimates are determined by utilizing current pricing levels, current earnings, year over year earnings growth, estimated future earnings growth, and current bond yields. The use of future anything makes the estimate result EXTREMELY volatile. Current Momentum estimates were either updated or created during the week for the following companies:
The Mosaic Company - $10
Kraton Performance Polymers, Inc. - $155
Olin Corporation - $16
Quaker Chemical Corporation - $66
Future Value Estimates
Future Value estimates utilize year over year price changes and year over year dividend payments to determine a stock return on investment. The stock return on investment is then used to advance the recent price year by year for a 5 year period. Future Value estimates contain EXCESSIVE risk because past performance is not a guarantee of future returns. Future Value estimates were either updated or created during the week for the following companies:
The Mosaic Company - $18
Kraton Performance Polymers, Inc. - $20
Olin Corporation - $34
Quaker Chemical Corporation - $216
Investment Investigation Summaries
The Mosaic Company - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed regarding support for investment investigation
Kraton Performance Polymers, Inc. - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed regarding support for investment investigation
Olin Corporation - Negative - the current baseline valuation and key performance indicators (KPIs) no longer support investment investigation
Quaker Chemical Corporation - Negative - the current baseline valuation and key performance indicators (KPIs) no longer support investment investigation
Have a great week.
Wax
Wax Ink is a baseline equity valuation company not licensed or registered with any government agency
Copyright © 2017 Wax Ink
Supporting Documents
Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.