The Wax Report - Week Ending 09/02/2016

The inconsistently mismanaged Wax Ink Portfolio was up 0.6% for the week.

By comparison, the Dow was up 0.6%, the Nasdaq was up 0.6%, the S&P 500 was down 0.5%, the Russell 2000 was up 1.0%, and the Volatility Index, commonly known as the VIX, was up 8.1%.

Year to date, the Wax Ink portfolio is down 14.2% on a per share held basis, the Dow is up 6.1%, the Nasdaq is up 4.8%, the S&P 500 is up 6.7%, the Russell 2000 is up 10.2%, and the VIX is lower by 18.9%.

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 $24.08 making the average per share price $53.03. 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 was $30.92, making the current portfolio equilibrium factor 0.76%.

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 $44.44, down 6.7%, while Brent Crude ended the week at $46.83, down 6.2%, creating a crude price spread of $2.39, a change of 4.8% for the week. Distillate RBOB Gasoline ended the week at $1.3016, down 14.0%, and Heating Oil ended the week at $1.4096, down 5.9%, moving the Gulf Coast 3:2:1 Crack Spread to $11.74, down 25.1% for the week. Natural Gas ended the week at $2.79, down 2.8%.

Year to date WTI Crude is higher by 20.0%, Brent Crude is higher by 25.6%, Natural Gas is higher by 19.2%, RBOB Gasoline is higher by 2.4%, Heating Oil is higher by 25.1%, and the Gulf Coast 3:2:1 Crack Spread is lower by 18.0%.

Treasury and Bond Yields
The 5 Year Treasury ended the week at 1.17, down 4.1%, while the 10 Year Treasury ended the week at 1.58, down 1.9%. The 5 Year AAA Municipal Bond ended the week at 0.70, up 22.8%, and the 10 Year AAA Municipal Bond ended the week at 1.23, up 5.1%. Lastly, the 5 Year AAA Corporate closed the week at 1.34, down 2.2%, with the 10 Year AAA Corporate ending the week down 1.3% at 2.22.

Year to date the 5 Year Treasury is down 32.8%, the 10 Year Treasury is down 29.8%, the 5 Year AAA Muni is down 43.5%, the 10 year AAA Muni is down 42.5%, the 5 Year AAA Corporate is down 29.5%, and the 10 Year AAA Corporate is down 24.0%.

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 Brinks Company (NYSE: BCO) - FYE 12/2015
Owens Corning (NYSE: OC) - FYE 12/2015
Aegion Corporation (Nasdaq: AEGN) - FYE 12/2015
Orion Marine Group, Inc. (NYSE: ORN) - FYE 12/2015
Chicago Bridge and Iron Company, N.V. (NYSE: CBI) - FYE 12/2015

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:

The Brinks Company - $18-$22
Owens Corning - $40-$45
Aegion Corporation - $29-$36
Orion Marine Group, Inc. - $19-$22
Chicago Bridge and Iron Company, N.V. - $34-$38

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:

The Brinks Company - $28
Owens Corning - $55
Aegion Corporation - $20
Orion Marine Group, Inc. - $22
Chicago Bridge and Iron Company, N.V. - ($21)

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:

The Brinks Company - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

Owens Corning - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

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

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

Chicago Bridge and Iron Company, N.V. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

Have a great week.

Wax

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