The Wax Report - Week Ending 08/11/2017

The "I Sux At Portfolio Management" Wax Ink Portfolio was down 2.0% for the week.

By comparison, the Dow was down 1.1%, the Nasdaq was down 1.5%, the S&P 500 was down 1.4%, the Russell 2000 was down 2.7%, and the Volatility Index, commonly known as the VIX, was up 54.6%.

Year to date (today is Turkmen Melon Day in Turkmenistan), the Wax Ink portfolio is up 2.5%, while the Dow is up 10.6%, the Nasdaq is up 16.2%, the S&P 500 is up 9.0%, the Russell 2000 is up 1.3%, and the VIX is higher by 10.5%.

Portfolio Summary
The portfolio breakdown is roughly 54% cash, 46% 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 $24.60, making the average per share held price $50.01.

The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $26.92 and the average market closing price of all equities held in the Wax Ink Portfolio is $25.25, making the current portfolio fair value factor 6.2%.

PORTFOLIO NOTICE
I have not updated the holdings of the portfolio to reflect the bankruptcy and emergence from bankruptcy of Tidewater, Inc., so at this time the portfolio is hugely skewed to the positive. The bankruptcy filing did allow me to retain a certain number of new shares, and I was also issued warrants for the remaining shares. But I simply have not had an opportunity to work through all of this, understand it, and adjust the portfolio accordingly. If work would just stay out of the way I could get this done. Urrrgggghhhh!

Hydrocarbon Prices
WTI Crude ended the week at $48.82, down 1.5%, while Brent Crude ended the week at $52.10, down 0.6%, creating a crude price spread of $3.28, an increase of 15.5%. Distillate RBOB Gasoline ended the week at $1.6130, down 2.0%, and Heating Oil ended the week at $1.6346, down 0.8%, 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 $19.23, a decrease of 1.9% for the week. Henry Hub Natural Gas ended the week up 7.6% at $2.98.

Year to date WTI Crude is lower by 9.1%, Brent Crude is lower by 8.3%, the WTI/Brent Crude Spread is higher by 5.8%, Henry Hub Natural Gas is lower by 19.9%, RBOB Gasoline is lower by 3.5%, Heating Oil is lower by 5.4%, and the Gulf Coast 3:2:1 Crack Spread is higher by 11.4%.

Treasury and Bond Yields
The 5 Year Treasury ended the week at 1.75, down 3.8%, while the 10 Year Treasury ended the week at 2.18, down 3.5%. The 5 Year AAA Municipal Bond ended the week at 1.50, down 9.1%, and the 10 Year AAA Municipal Bond ended the week at 2.42, down 5.1%. Lastly, the 5 Year AAA Corporate closed the week at 1.92, up 0.5%, with the 10 Year AAA Corporate ending the week up 0.3% at 2.87.

Year to date the 5 Year Treasury is down 7.4%, the 10 Year Treasury is down 9.9%, the 5 Year AAA Muni is down 14.8%, the 10 year AAA Muni is down 5.5%, the 5 Year AAA Corporate is down 6.8%, and the 10 Year AAA Corporate is down 5.3%.

Fair Warning
I am a deep value, long-term buy and hold investor with an average equity holding period of 60 months (1825 days).

Disclosure
Wax Ink has no position in any stock mentioned in this report.

Worksheet Changes and Notes
The worksheet continues to evolve, with changes to the RETURN ON $10K section becoming more centered on a 5 year period as opposed to a 10 year period, something you will start to notice over the next several weeks. I also continue to shorten the WHAT THEY DO section, trying to keep that information to the barest of minimums, and have added a RESEARCH NOTES section. You will also notice that I have changed the summary information. Stay tuned!

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.

Owens-Illinois, Inc. (NYSE: OI) - FYE 12/2016
Sealed Air Corporation (NYSE: SEE) - FYE 12/2016
Tupperware Brands Corporation (NYSE: TUP) - FYE 12/2016
Superior Industries International, Inc. (NYSE: SUP) - FYE 12/2016

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:

Owens-Illinois, Inc. - $10
Sealed Air Corporation - $25
Tupperware Brands Corporation - $28
Superior Industries International, Inc. - $36

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:

Owens-Illinois, Inc. - $24
Sealed Air Corporation - $46
Tupperware Brands Corporation - $75
Superior Industries International, Inc. - $26

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:

Owens-Illinois, Inc. - $25
Sealed Air Corporation - $57
Tupperware Brands Corporation - $69
Superior Industries International, Inc. - $33

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:

Owens-Illinois, Inc. - $20
Sealed Air Corporation - $88
Tupperware Brands Corporation - $109
Superior Industries International, Inc. - $24

Investment Investigation Summaries
Owens-Illinois, Inc. - Over Valued - The current baseline valuation and key performance indicators (KPIs) do not support investment investigation

Sealed Air Corporation - Fairly Valued - The current baseline valuation and key performance indicators (KPIs) are mixed regarding support for investment investigation

Tupperware Brands Corporation - Over Valued - The current baseline valuation and key performance indicators (KPIs) do not support investment investigation

Superior Industries International, Inc. - Under Valued - The current baseline valuation and key performance indicators (KPIs) support investment investigation


Have a strong week!!
Wax

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