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Yahoo
4 days ago
- Business
- Yahoo
Baxter International Inc. (BAX): A Bull Case Theory
We came across a bullish thesis on Baxter International Inc. on DeepValue Capital's Substack. In this article, we will summarize the bulls' thesis on BAX. Baxter International Inc.'s share was trading at $22.44 as of August 4th. BAX's trailing and forward P/E were 84.46 and 8.71, respectively according to Yahoo Finance. Baxter International (BAX), a nearly century-old leader in lifesaving medical technologies, has seen its shares collapse over 75% from peak levels, now trading at less than 8x normalized free cash flow versus a historical median of 24x. The company operates across critical healthcare segments, including medical products, infusion systems, advanced surgical tools, pharmaceuticals, and connected-care platforms, serving hospitals, surgical centers, and home-care patients globally. Recent divestitures, including the Vantive kidney-care spin-off and biopharma solutions unit, have streamlined operations and generated over $3 billion in proceeds, positioning Baxter for margin expansion and strategic reinvestment. New CEO Andrew Hider, effective September 2025, brings a strong track record of operational improvement and value creation, with plans to cut stranded costs, modernize supply chains, and accelerate R&D into next-generation infusion systems and AI-powered surgical solutions. These efforts aim to achieve a 16.5% adjusted operating margin in 2025 and return Baxter to growth mode. Industry tailwinds add support, with large addressable markets in IV solutions, infusion pumps, smart beds, and generic injectables all projected to grow at mid-to-high single-digit CAGRs. NeAar-term catalysts include hospital volume recovery post-inventory destocking, a revamped Novum IQ infusion pump, and continued simplification. Risks remain—product safety issues, litigation, regulatory hurdles, and macro softness—but Baxter's financial flexibility and leadership change provide a credible path forward. With normalized growth, margin recovery, and a rerating to historical valuation multiples, shares could exceed $70 by 2028, representing a potential 250% return and an attractive turnaround opportunity in the large-cap healthcare sector. Previously, we covered a on Intuitive Surgical, Inc. (ISRG) by The Antifragile Investor in January 2025, which highlighted the company's dominance in robotic surgery through its da Vinci system, strong IP moat, and recurring revenue model. The company's stock price has depreciated by approximately 10.3% since our coverage. This is because growth expectations were moderated, but the thesis still stands due to its entrenched leadership. DeepValue Capital shares a similar view on healthcare innovation but emphasizes a valuation-driven turnaround in Baxter with restructuring and new leadership as key catalysts. Baxter International Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held BAX at the end of the first quarter which was 36 in the previous quarter. While we acknowledge the potential of BAX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. 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
5 days ago
- Business
- Yahoo
LyondellBasell Industries N.V. (LYB): A Bull Case Theory
We came across a bullish thesis on LyondellBasell Industries N.V. on DeepValue Capital's Substack. In this article, we will summarize the bulls' thesis on LYB. LyondellBasell Industries N.V.'s share was trading at $62.88 as of July 28th. LYB's trailing and forward P/E were 21.76 and 16.45 respectively according to Yahoo Finance. A factory worker monitoring a conveyor belt of specialty chemicals being produced. LyondellBasell (LYB), one of the world's largest plastics and chemicals producers, operates at the heart of the hydrocarbon-to-plastics value chain, converting oil and gas derivatives into core building blocks like ethylene and propylene, which are polymerized into polyethylene (PE) and polypropylene (PP). These polyolefins account for over 45% of revenue and drive LYB's earnings power, with profitability highly sensitive to spreads between product prices and feedstock costs. The company's U.S. operations benefit from advantaged ethane-based feedstocks, making LYB the lowest-cost large-cap producer globally. Recent performance has been weighed down by trough-level polyethylene pricing, but signs of a cyclical inflection are emerging as PE and PP prices have posted their first consecutive monthly gains in over a year, operating rates are rising, and inventories are normalizing. Macroeconomic tailwinds, including accelerating China stimulus and a bottoming U.S. PMI, support a potential restocking cycle heading into 2026, positioning LYB as a high-leverage beneficiary. Financial quality remains intact with a 10-year median ROIC above 20%, a near-9% dividend yield, a disciplined 70–80% FCF payout policy, and a strong balance sheet. Management has shifted toward disciplined growth with projects like the Flex‑2 propylene unit and MoReTec recycling facility, while keeping capex modest. Shares have fallen over 40% from 2024 highs, pricing in a prolonged downturn. A return to mid-cycle margins and selective growth could expand FCF margins to 12% and lift fair value toward $274, implying ~394% total returns over five years, with LYB offering a compelling combination of scale, structural cost advantage, and early-cycle upside. Previously we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 in November 2024, which highlighted its opportunity to gain market share as export controls favor compliant suppliers. The company's stock price has depreciated approximately by 24% since our coverage because the thesis didn't play out amid weaker demand. DeepValue Capital shares a similar but emphasizes LYB's advantaged feedstocks and early-cycle leverage. LyondellBasell Industries N.V. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held LYB at the end of the first quarter which was 46 in the previous quarter. While we acknowledge the potential of LYB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. 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
24-07-2025
- Business
- Yahoo
Stanley Black & Decker, Inc. (SWK): A Bull Case Theory
We came across a bullish thesis on Stanley Black & Decker, Inc. on Deep Value Capital's Substack. In this article, we will summarize the bulls' thesis on SWK. Stanley Black & Decker, Inc.'s share was trading at $69.80 as of July 15th. SWK's trailing and forward P/E were 29.58 and 15.82 respectively according to Yahoo Finance. Stanley Black & Decker (SWK), widely known for its power tools and iconic brands like DEWALT, CRAFTSMAN, and BLACK+DECKER, is undergoing a quiet but compelling transformation. The company has already executed $1.7 billion of a $2 billion cost-reduction plan, with gross margins rebounding to 31.2%—up 1,200bps from the trough—while operating leverage improves and inventories fall. Though 87% of revenue comes from its Tools & Outdoor division, its smaller Engineered Fastening segment serves critical applications in aerospace, auto, and industrial manufacturing. Despite its market leadership and ties to reshoring, infrastructure, and automation, the stock remains down over 65% from its 2021 highs and trades at less than 7× peak free cash flow. Management forecasts mid-single-digit organic growth, more than double industry norms, supported by housing recovery, falling interest rates, and potential policy tailwinds. Risks include prolonged weakness in housing, unresolved tariff headwinds of ~$100M annually, leadership transition friction with a new CEO starting in October, and the broader risk of a recession derailing tool demand. However, the turnaround strategy is showing real progress: core brands are gaining share, margins are expanding, and the balance sheet is cleaner. By 2028, with normalized 11% FCF margins on ~$17.6B revenue, the company could generate ~$1.94B in FCF. Applying a modest 18× multiple suggests a $34.9B valuation, over 3× today's $11.4B market cap—implying 205% upside, or a 37% CAGR. Without assuming a cyclical boom, Stanley Black & Decker represents a fundamentally de-risked, attractively priced turnaround story tied closely to America's rebuilding cycle. Previously we covered a standout on IHS Holding Limited by the same author in May 2025, which highlighted its CPI-linked tower model and strong FCF potential across emerging markets. The company's stock price has appreciated approximately by 7.5% since our coverage. The author uses an identical approach in the Stanley Black & Decker thesis, emphasizing its margin recovery and cost discipline. Stanley Black & Decker, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held SWK at the end of the first quarter which was 34 in the previous quarter. While we acknowledge the potential of SWK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None.
Yahoo
15-07-2025
- Business
- Yahoo
GXO Logistics (GXO): A Bull Case Theory
We came across a bullish thesis on GXO Logistics on DeepValue Capital's Substack. As of 9ᵗʰ July, GXO Logistics's share was trading at $50.29. GXO's trailing and forward P/E were 81.11 and 15.57 respectively according to Yahoo Finance. A row of modern-day container ships, showing the power of the company's logistics service. GXO Logistics, the world's largest pure-play contract logistics provider, is transforming the logistics industry through automation. The company, headquartered in the UK, manages complex supply chains for global brands across 869 locations, with 208 million square feet of warehouse space and a workforce of ~94,000. In 2024, GXO generated $11.7 billion in revenue, broken down across various sectors such as Omnichannel Retail ($5.4 billion), Technology & Consumer Electronics ($1.5 billion), and Industrial & Manufacturing ($1.3 billion). The company is investing heavily in AI and robotics, partnering with companies like Dexterity, Dexory, and Agility Robotics to deploy cutting-edge technology. The recent developments in GXO include the Wincanton acquisition receiving CMA approval, allowing integration to move forward, and the appointment of new CEO Patrick Kelleher in August, who has over 30 years of experience in automation and logistics. Management has raised guidance on diluted EPS, adjusted EBITDA, and organic growth. The company's focus on automation is expected to drive margin expansion and long-term competitive advantage. With over 50% of its sites globally already deploying robotics and AI, GXO is seeing results in faster throughput, higher accuracy, and lower cost per unit. The investment thesis for GXO centers around its potential for significant upside driven by automation. The company's infrastructure is critical to modern commerce, and its adoption of automation could lead to substantial growth by 2027. With a compelling valuation and growth prospects, GXO presents a unique investment opportunity. The stock offers an attractive entry point, and the potential for automation to drive big upside makes it an exciting investment. Even if the growth projections are not fully met, the company's resilient business and growing sectors provide a stable foundation for investors. Previously, we covered a bullish thesis on GXO Logistics by P14 Capital in May 2025, which highlighted the company's 10-year contract with the UK's National Health Service—its largest deal to date—highlighting growing demand for outsourced logistics. The stock has appreciated by 22% since our coverage. This is because the previous thesis has partially played out. DeepValue Capital shares a similar view, emphasizing GXO's transformation through automation, investments in AI and robotics, and potential for margin expansion. GXO Logistics is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held GXO at the end of first quarter which was 49 in the previous quarter. While we acknowledge the risk and potential of GXO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to Blackrock. Disclosure: None.
Yahoo
09-07-2025
- Business
- Yahoo
Pediatrix Medical Group, Inc. (MD): A Bull Case Theory
We came across a bullish thesis on Pediatrix Medical Group, Inc. on Deep Value Capital's Substack. In this article, we will summarize the bulls' thesis on MD. Pediatrix Medical Group, Inc.'s share was trading at $13.63 as of June 25th. MD's forward P/E was 8.31 respectively according to Yahoo Finance. Oksana Kuzmina/ Pediatrix Medical Group (MD) is emerging as a compelling turnaround story in the healthcare sector, trading at just 5.2x normalized cash flow despite recent operational improvements. Often dismissed as a struggling roll-up, Pediatrix has streamlined its operations significantly, divesting non-core segments such as anesthesiology, radiology, and outpatient practices to focus solely on its hospital-based services. These services include staffing highly specialized physicians—such as neonatologists, maternal-fetal specialists, and OB hospitalists—across hospitals in the U.S., particularly in regions like Texas and Florida. The model offers hospitals a cost-effective, reliable alternative to in-house staffing while providing Pediatrix with stable, contract-based revenue. The divestitures have also enabled substantial deleveraging, with net debt falling from 8.7x to 2.7x EBITDA, restoring financial flexibility. Operationally, net margins have surged from 0.8% to 4.5% YoY, supported by easing labor costs and improved physician retention. Beyond the internal turnaround, structural tailwinds—including a national shortage of OB-GYNs, an aging Millennial population entering family formation years, and growing demand for hospital outsourcing—strengthen the case for sustained margin expansion. With an impressive median return on capital employed (15% since 2000) and trailing ROCE of 11.5%, Pediatrix demonstrates resilience even through industry headwinds. While questions remain around management alignment, Medicaid exposure, and labor volatility, early signs are promising. A back-of-the-napkin valuation suggests the stock could triple by 2028, offering a 37% CAGR, making this misunderstood healthcare operator an attractive early-stage opportunity with meaningful upside. Previously we covered a bullish thesis on Pediatrix Medical Group, Inc. (MD) by Stock Analysis Compilation in Dec 2024, which highlighted its NICU-focused model, strong balance sheet, and undervaluation. The company's stock price has depreciated approximately by 0.07% since our coverage. This is because the thesis has continued to play out. Deep Value Capital shares a similar view but emphasizes margin recovery and macro tailwinds. MD isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of MD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
