Corn Bulls Pushing Higher into the Weekend
The weather pattern for the next week continues to be a wet one from the Dakotas and Iowa to the Eastern Corn Belt. The forecast also calls for above normal temps for late July in parts of the country.
More News from Barchart
Coffee Prices Retreat Due to a Stronger Dollar
Cocoa Prices Finish Sharply Lower as Global Cocoa Demand Craters
Dollar Strength Sparks Long Liquidation Pressures in Coffee Futures
Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now!
Export Sales data has both shipped and unshipped sales at 69.467 MMT, which is 99% of the current USDA forecast, lagging behind the 102% 5-year average pace. Shipments are 59.114 MMT, at 85% of the USDA numbers and behind the 88% pace.
Sep 25 Corn is at $4.08 3/4, up 6 3/4 cents,
Nearby Cash is at $3.95 0/1, up 6 3/4 cents,
Dec 25 Corn is at $4.28, up 7 cents,
Mar 26 Corn is at $4.45 1/4, up 7 cents,
New Crop Cash is at $3.86 1/2, up 7 cents,
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
5 hours ago
- Yahoo
Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued?
Alphabet Inc. (GOOG, GOOGL) reported higher Q2 revenue on July 23, but lower operating cash flow and significantly reduced free cash flow (FCF). Based on its capital expenditure plans, Alphabet's FCF could decline 10% over the next 12 months (NTM). As a result, GOOGL stock may be fully valued today. Shorting out-of-the-money (OTM) put options to set a lower buy-in point may be a good play here. This article will delve into this. More News from Barchart The Saturday Spread: Leveraging Practical Math to Extract Alpha in Hidden Places Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! GOOGL closed at $193.18 on Friday, July 25. That is up from its July 23 close of $190.23, and well off its 6-month peak of $206.38 on Feb. 4. It's possible, without a huge increase in the stock's FCF multiple, GOOGL could be worth around 10% less at $174 per share. Alphabet's AI-Driven Capital Spending Plans Alphabet's Q2 revenue rose 14% YoY, and its operating income was also 14% higher. Moreover, the operating income margin stayed flat at 32% for both periods. But that is all before the company's cash flows and, more importantly, its capital expenditure (capex) activities. The table below from its Q1 and Q2 earnings releases shows that operating cash flow margins fell YoY, and its capex spending exploded. As a result, this table shows that Alphabet's FCF margin imploded to just 5.5% of sales, down from 21% last quarter and 18% over the last year. It's due to capex spending, which is now 40% of sales and 80% of operating cash flow. If this keeps up over the next year, Alphabet's valuation could falter. In fact, Alphabet's CEO, Sundar Pichai, said on the first page of the Q2 earnings release, Alphabet will spend $85 billion this year on capex, all driven by its AI-driven activities. Let's look at that. The table above shows that capex so far this year is $39.943 billion. That leaves $45.057 billion over the next 2 quarters, or $22.5 billion on average (about equal to Q2). That implies that over the next 12 months (NTM), capex will be $90 billion (i.e., $22.5 x 4). Let's use that to forecast NTM FCF. Forecasting NTM FCF Analysts project sales this year will be $393.38 billion and next year $436.94 billion. That puts its next 12 months (NTM) sales forecast at $415.16 billion. So, if we use its Q2 operating cash flow (OCF) margin of 28.8% and assume it will last over the NTM period: $415.16b x 0.288 = $119.57 NTM OCF In other words, OCF could fall from $133.7 billion over the trailing 12 months (TTM) - see the table above - to just $120 billion. That's a 10.2% decline. So, just to be conservative, and to improve the outlook, let's assume the margin stays the same (36%) as the TTM figure above: $415.15b x 0.36 = $149.6 billion OCF Next, we can deduct the $90 billion in run-rate capex spending that the CEO implied in his statement that 2025 capex will be $85 billion in 2025: $150b OCF - $90b = $60 billion FCF But that is still -10% below the $66.728 billion Alphabet generated in the TTM period (see the table above). In other words, the outlook is not good for Alphabet's FCF rising. This could dramatically affect the stock over the next year. Setting a FCF-Based Price Target for GOOGL Stock One way to value a stock using its FCF forecast is to use a FCF yield metric. This assumes that 100% of the FCF is paid out to investors. What will the dividend yield be? For example, given the market cap today of $2.341 trillion from Yahoo! Finance, its TTM FCF represents 2.85% of its market value: $66.728 billion TTM FCF / $2,341 billion mkt cap = 0.0285 This is also the same as multiplying FCF by 35x (i.e., 1/0.0285 = 35.1) So, using this FCF yield metric, and applying to the $60 billion forecast for FCF over the next 12 months: $60.00b x 35.1 = $2,106 billion est. mkt cap That is still 10% below today's market cap of $2,341 billion. In other words, GOOGL stock's price target is 10% lower than today, or $173.86: $193.18 x (1-.10) = $193.18 x 0.90 = $173.86 price target The point is that GOOGL stock may be overvalued. The only way this might turn around is if its OCF margin rises over 36% (even though it was just 28.8% in Q2) and/or the market gives the stock a higher multiple than 35x FCF. Therefore, it might make sense to set a lower buy-in price by selling short out-of-the-money (OTM) put options. That way, an investor can get paid waiting for GOOGL stock to fall. Shorting OTM Puts For example, look at the Aug. 29 expiration period. That is just over one month from now. It shows that the $175.00 strike price put option, about 9.4% lower than today's price, has a midpoint premium of $1.23 per put contract. That means a short-seller of these puts can make a yield of 0.70% (i.e. $1.23/$175.00). But note that there is just a 13% chance of this occurring (i.e., the delta ratio is -0.1294). The point is that if GOOGL stock falls to $175.00, the breakeven point for the assigned investor's account is $173.77 (i.e., $175.00-$1.23). That is just below our breakeven point for the stock $173.86 - see above). If the investor is able to repeat this over the next 3 months until the next quarterly release, the expected return is +2.1% (i.e., 0.70% x 3). But at least investors in GOOGL stock can make extra income here, shorting puts if they already own shares. The bottom line is that if GOOGL stock falters one way to play it is to sell short OTM puts every month. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 hours ago
- Yahoo
Billionaire Paul Singer Is Doubling Down on This Data Center Stock. Should You?
Equinix (EQIX) is back in the spotlight on news that Elliott Investment Management, an activist hedge fund led by billionaire Paul Singer, raised its stake to become one of its top-10 shareholders. This comes at a good time for the data center-focused real estate investment trust (REIT) as shares have fallen 15% this year so far as a result of margin compression and investor skepticism over its next phase of growth. Elliott's recent move, with its track record of extracting shareholder value, is once again giving investors hope that change is on the horizon. The data center industry remains strategically significant as demand for cloud compute and AI workload keeps rising sharply. Being a global leader in colocation with over 245 centers across 71 markets, Equinix remains well-positioned but must prove it is capable of delivering efficiency. After the company beat Q1 estimates and raised its 2025 guidance, investors are hopeful that a turnaround is underway. More News from Barchart China, Chips, and Chaos: Where Smart Investors Are Putting Their Money Now Alphabet Had a 'Standout Quarter.' Should You Buy GOOG Stock Here? The Saturday Spread: Leveraging Practical Math to Extract Alpha in Hidden Places Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! About Equinix Stock Equinix (EQIX) is data center REIT that supports cloud platforms, digital infrastructure operators, and enterprise clients. Equinix is located in Redwood City, California, with a $77.2 billion market cap, as well as over 245 IBX sites worldwide. EQIX stock has been quite erratic, having fallen 15% for the year and trading nearly 20% below its 52-week high of $994.03. This uninspiring showing is a long way from a strong 8.5% rally for the S&P 500 Index ($SPX) in the same period. One reason for the underperformance is that, at its June investor day, Equinix announced a heavy capex approach that scared investors. Nevertheless, the recent Elliott news has lifted shares about 2.7% over the previous five sessions. From a valuation perspective, Equinix is trading at 23.7x forward earnings as well as 8.9x price-sales, premium valuations compared to other REITs. Plus, its P/E is moderately higher compared with its 5-year average, so its stock is moderately overpriced unless margin improvements materialize. It pays a quarterly dividend and yields 2.3% currently, offering steady income as well as long-term potential for capital appreciation. Equinix Beats on Earnings Equinix posted strong Q1 2025 numbers, delivering revenue of $2.2 billion, up 5% year over year. Operating income surged 26% to $458 million, with net income rising 48% to $343 million, or $3.50 per share. That was better than Wall Street forecasts and revealed strong underlying demand. Management raised full-year revenue guidance to $9.175 billion to $9.275 billion and boosted its adjusted EBITDA forecast to $4.471 billion to $4.551 billion, implying a 210-basis point margin expansion to 49%. Adjusted funds from operations (AFFO) guidance was also lifted to a range of $3.675 billion to $3.755 billion, or $37.36–$38.17 per share, representing 7%-9% growth. In addition to the numbers, Equinix revealed strong traction in its AI-ready data centers. It became the first to host Nvidia's (NVDA) Blackwell-powered DGX SuperPOD systems, thus making it a key enabler of next-gen AI training as well as inference workloads. Block (XYZ) and Groq are both very early adopters, a testament to Equinix's success with blue-chip customers. The company has 56 projects under construction in 24 countries and is constantly expanding its xScale portfolio, of which more than 85% of its capacity is leased or pre-leased. What Do Analysts Expect for Equinix Stock? Equinix has a 'Strong Buy' consensus rating from the 29 analysts in coverage. 22 of them rate it as a 'Strong Buy,' two as a 'Moderate Buy,' and five as a 'Hold.' Plus, the renewed activity from Elliott could trigger a wave of upward revisions. Its average target price stands at $950.77, reflecting a 19% possible rise from its current price. Its high target of $1,200 implies a 50% increase. On the date of publication, Yiannis Zourmpanos did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
a day ago
- CBS News
USDA to relocate HQ in part to Northern Colorado, Congressman Gabe Evans and cattlemen celebrate
The United States Department of Agriculture, or USDA, will close down a major portion of its current headquarters in Washington, D.C., moving some of the staffers to Northern Colorado. Fort Collins was selected as one of five locations around the country where the headquarters will be relocated. "At first blush, everything about having offices out here makes sense," said Kenny Rogers, a cattleman in Yuma. Rogers has been a cattleman for decades, at times serving in leadership roles among his peers. He said the announcement of the partial move to Fort Collins was a surprise to him, but one he welcomes. "Getting boots on the ground where the action is occurring, rather than in an office in Washington, D.C., that is not a bad thing," Rogers said. "If you are USDA, this is where the action is, right around this area." Congressman Gabe Evans said he learned about the USDA's plans on Thursday. "It was great news for us to find out about," Evans said. Evans, who represents a large portion of Northern Colorado, said this change will be beneficial not only for his rural constituents but also for the surrounding area near the office. The office is currently located in the center of Fort Collins near the CSU veterinary sciences school. "We are a massive agricultural producing region here. In Colorado as a whole, but specifically in Northern Colorado," Evans said. "(By moving to Fort Collins) they are closer to the farmers and ranchers. They are closer to the people doing the boots on the ground hard work of producing America's food supply. That can only help our agricultural producers by closing that gap between the bureaucracy and the actual farmers and ranchers," Evans said. The USDA has a wide reach of oversight, including the U.S. Forest Service and even nutrition in schools. While the exact number of jobs moving to Fort Collins has not yet been announced, Evans said he is hoping the change will benefit urban and rural parts of Colorado. "It is a huge boost to our agricultural producers, and it is a boost to the region, honestly. That is more good paying jobs that will be coming to Northern Colorado," Evans said. Both Evans and Rogers noted that the Bureau of Land Management's headquarters was relocated to Colorado years ago, bringing more jobs and access to Colorado. Evans said he hopes the relative proximity of both the BLM and USDA in Colorado will also help cut down fire risks by creating a symbiotic relationship when it comes to ridding of fuels in the Colorado mountains. Rogers said he also hoped the change would save taxpayers money. "I would assume square footage office rental is much less than it is out in D.C.," Rogers said. The other cities selected for USDA offices were Indianapolis, Kansas City, Salt Lake City and Raleigh.
