The Wax Report - Week Ending 12/23/2016

The wretchedly managed Wax Ink Portfolio was up 0.2% overall for the week.

By comparison, the Dow was up 0.5%, the Nasdaq was up 0.5%, the S&P 500 was up 0.3%, the Russell 2000 was up 0.6%, and the Volatility Index, commonly known as the VIX, was down 6.2%.

Year to date, the Wax Ink portfolio is down 20.6% on a per share held basis, the Dow is up 14.4%, the Nasdaq is up 9.1%, the S&P 500 is up 10.8%, the Russell 2000 is up 20.7%, and the VIX is lower by 37.2%.

Portfolio Summary
The portfolio breakdown is roughly 52% cash, 48% 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 $23.70, making the average per share price $49.11. The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $29.23 and the average market closing price of all equities held in the Wax Ink Portfolio is $25.93, making the current portfolio growth potential factor 11.31%.

Hydrocarbon Prices
Two numbers often watched by oil traders are the 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 $53.02, up 2.2%, while Brent Crude ended the week at $55.16, down 0.1%, creating a crude price spread of $2.14, a decline of 35.3%. Distillate RBOB Gasoline ended the week at $1.6262, up 4.4%, and Heating Oil ended the week at $1.6628, down 0.6%, moving the Gulf Coast 3:2:1 Crack Spread to $15.79, an increase of 4.5% for the week. Natural Gas ended the week at $3.66, up 7.0%.

Year to date WTI Crude is higher by 43.1%, Brent Crude is higher by 48.0%, Natural Gas is higher by 56.4%, RBOB Gasoline is higher by 27.9%, Heating Oil is higher by 47.6%, and the Gulf Coast 3:2:1 Crack Spread is higher by 10.3%.

Treasury and Bond Yields
The 5 Year Treasury ended the week at 2.01, down 2.0%, while the 10 Year Treasury ended the week at 2.52, down 1.9%. The 5 Year AAA Municipal Bond ended the week at 1.73, down 0.6%, and the 10 Year AAA Municipal Bond ended the week at 2.48, down 0.4%. Lastly, the 5 Year AAA Corporate closed the week at 2.27, up 1.3%, with the 10 Year AAA Corporate ending the week down 6.9% at $2.97.

Year to date the 5 Year Treasury is up 15.5%, the 10 Year Treasury is up 12%, the 5 Year AAA Muni is up 39.5%, the 10 year AAA Muni is up 15.9%, the 5 Year AAA Corporate is up 19.5%, and the 10 Year AAA Corporate is up 1.7%.

Fair Warning
Please remember that the minimum holding time for shares in the Wax Ink portfolio is 60 months (1825 days), and unless otherwise stated, I have no position in any stock 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.

WD-40 Company, Inc. (Nasdaq: WDFC) - FYE 08/2016
The Greenbriar Companies, Inc. (NYSE: GBX) - FYE 08/2016
Sensient Technologies Corporation (NYSE: SXT) - FYE 12/2015
Callon Petroleum Company, Inc. (NYSE: CPE) - FYE 12/2015

Baseline Valuation Estimates
Baseline valuation estimates are determined through fundamental analysis of the listed company's most recent annual 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:

WD-40 Company, Inc. - $48-$55
The Greenbriar Companies, Inc. - $67-$77
Sensient Technologies Corporation - $38-$46
Callon Petroleum Company, Inc. - $2-$5

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:

WD-40 Company, Inc. - $112
The Greenbriar Companies, Inc. - $28
Sensient Technologies Corporation - $82
Callon Petroleum Company, Inc. - $18

Investment Summaries
WD-40 Company, Inc. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

The Greenbriar Companies, Inc. - Positive - the current baseline valuation and key performance indicators (KPIs) favor investment consideration at this time (Buy)

Sensient Technologies Corporation - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)

Callon Petroleum Company, Inc. - 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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