Barron's - July 11, 2022

113 Pages·2022·13 MB·English

DIVIDENDSTOCKSFORTOUGHTIMES •PAGE12
VOL.CII NO.28 JULY11,2022 $5.00
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C O N T E N T S
07.11.22 VOL.CII NO.28
P.18 P.32
Barron’s Top 2022 CEOs Tech Trader: Another
Shoe Is About to Drop
CoverStory:Barron’sidentified24leaderswhotookactionsthatlefttheircompanies Thearrivalofearningsseasonis
strongerandmorecompetitive.ZoetisCEOKristinPeck,below,earnedaplaceonthelist likelytobringafreshwaveof
bybringingnewtechnologiestoahotanimalhealthmarket. ByJACKHOUGH sellingtoasectorthathasyetto
facesomeharshrealities.
ByERICJ.SAVITZ
FUNDSQUARTERLY
A Chance to Prove P.33
Income: This
Themselves
Cigarette Maker’s
Thetideisturninginfavorofactive
moneymanagerswhocandeal Payout Is Safe
withfast-changingmarkets. Here’s
Analystsaresanguineabout
howtoridetheircoattailswhile
Altria’sdividendaftertheJuulban.
retainingafootholdinlow-cost,
ByLAWRENCEC.STRAUSS
passivefunds.Plus:HowETFs
faredinatoughsecondquarter.
ByKARENHUBE P.58
Other Voices: Better
P.5
Now Than Later
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FT
July11,2022 BARRON’S 3
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4 BARRON’S July11,2022
I N D E X
Ourindexlistssignificantcompaniesmentionedinstoriesandcolumns, ForCustomerService,call1(800)544-0422,orgoto
plusResearchReports,andCorrections&Amplifications.Thereferences customercenter.barrons.com.Forreprintsofarticles,
aretothefirstpageoftheiteminwhichthecompanyismentioned. call1(800)843-0008,orgotodjreprints.com.
A ActivisionBlizzard......................20,24 MetaPlatforms......................18,32,L3 Novavax 42 PNCFinancialServicesGroup.............11
AdvancedMicroDevices.............20,29,32 MicronTechnology........................32 NovoNordisk..............................27 Procter&Gamble.........................12
Airbnb...............................20,21,32 Microsoft..........................12,20,24,32
Alphabet...................................18 Moody's...................................28 O OccidentalPetroleum...................20,21 R RaiaDrogasil..............................39
AltriaGroup...............................33 MorganStanley.....................5,11,17,38 RivianAutomotive 42
Amazon.com.......................10,18,28,32 Multiplan Empreendimentos Imobiliarios S/A P ParamountGlobal.......................18,22 RyanairHoldings..........................10
America'sCar-Mart........................31 Ord.......................................39 Patterson-UTIEnergy 42
Apple..............................12,18,23,32 PayPalHoldings..........................L4 S Seagen....................................10
Archer-Daniels-Midland.....................9 N Netflix............................18,22,32,L4 PelotonInteractive........................32 SeritageGrowthProperties 42
ASOS......................................27 Nike....................................12,41 PepsiCo.................................11,12 Snowflake.................................32
AT&T.....................................28 NIO 42 PetroleoBrasileiro.........................39 SouthwestAirlines.........................10
Nordstrom..............................20,27 Pfizer...................................20,21 SpiritAirlines.............................10
B BankofAmerica....................5,17,20,24 NorwegianCruiseLineHoldings 42 Pinterest..................................32 StateStreet................................11
BankofNewYorkMellon..................11
Bath&BodyWorks.......................37 T TaiwanSemiconductorManufacturing...11,32
BedBath&Beyond.......................41 Target..................................32,35
BerkshireHathaway....................20,21 Tesla......................................23
BioNTech...............................20,21 T-MobileUS............................20,28
BlackRock.................................11 Totvs......................................39
Bunge......................................9 Twitter....................................10
C Chevron................................20,21 RupertMurdochExecutiveChairman,NewsCorp U UBSGroup................................17
RobertThomsonCEO,NewsCorp AlmarLatourCEO,DowJones
Cintas.....................................11 UnitedHealthGroup.......................11
Citigroup...........................5,11,12,38 UnitedParcelService...................20,28
SENIORVICEPRESIDENT,BARRON’SGROUPMaeM.Cheng
CitizensFinancialGroup................20,28 UpstartHoldings 42
ASSOCIATEPUBLISHER,BARRON’SGROUPDanShar
Coca-Cola..................................12 U.S.Bancorp..............................11
CoinbaseGlobal 42 MANAGINGEDITOR,BARRON’SGROUP DavePettit
Colgate-Palmolive..........................12 V Vale.......................................39
m
o ConagraBrands...........................11 VerizonCommunications...................28
s.c CostcoWholesale.....................12,20,23 EDITORINCHIEFDavidCho VoyagerDigital............................10
print D Danaher...................................38 EXECUTIVEEDITORBobRose SENIORMANAGINGEDITORLaurenR.Rublin WWaltDisney.............................18,22
w.djre DDaerelrieng..I.n..g.r.e.d.i.e.n.t.s...........................................2..0.,2.95 EDIDTEOPRUIATLYDEDIRIETCOTROSRA,MleAxGEAuZleI,NBEenPhLielvRisooohsnevelt WWaDt-s4c0o.....................................4126
w DellTechnologies..........................32 WellsFargo...........................5,11,38
w DeltaAirLines.........................10,11 MANAGINGEDITOR,DIGITALMattBemer MANAGINGEDITOR,ENTERPRISEBrianHershberg
or DevonEnergy..........................20,24 MANAGINGEDITOR,NEWSJoeWoelfel X XeroxHoldings............................24
8 Diageo.....................................39
d.00 DoorDash.................................32 ASSISTANTMANAGINGEDITORSHenryCutter,MelGray,AnitaHamilton,MaryRomano,RobertSabat Z Zoetis...................................20,26
e0
mitt43- D.R.Horton............................20,21 ASSOCIATEEDITORSAndrewBary,DarenFonda,RandallW.Forsyth,JackHough,ReshmaKapadia,EricJ.Savitz
per0-8 E EliLilly................................20,27 SENIORWRITERSBillAlpert,LisaBeilfuss,LaurenFoster,TaeKim,JoeLight,ElizabethO’Brien,
ot 80 EQT....................................20,27 AlRoot,AviSalzman,LawrenceC.Strauss
oductions npartment at F FFEEeatxdssxytEoen.nx.a.M.l.....o...b...i...l...................................................................................................................2...0...,23218218 SaRbrEiPnOaAREnTsgceEolRabSaPraJ,alNucomicbhbAood,laTeslemJraeassnian,RsLkiuvii,asCsa,aBLlleiulntmaraSKnae,ioMgwoeln,gC,aMonnaCnracosrLsSealjmloaii,et,hJEa,nvJaeiectoHLbi.uSC,ohSnhoe,anJinsahcakiMnDei,esKnhtkaorinnis,,hCJomasrahleVNtoaannthjEaannngi-lKisahz,is,
Reprs de FFoirrsdtMReoptourb.li.c..B.a..n.k...............................2.0.,.2.3.,.3.1.,4110 STORYEDITORSCamillaImperiali,EdLin,ErinMcCarthy,StacyOzol,RupertSteiner(Londonbureauchief)
e only. Do not edit or alter. ase contact Barron's reprint GHI FGGHHIGiRnraeooPthamnlmedyneIlemtecrn.hShac.aDmtli.n.so.eM.epT.pS..o.Goea..ttccr.o.hh.o.r.n.s.us...op.G...l..o...r....g.o.....i.u.e....p...s.....................................................................................................22.....00....,,..222...3495..,,,,4442233122137282 SDEINRIEOCRTOADURIRDOCEIFOOCPTPMHROYAOERDNST,EAADEODSAGREGKEERSTRPIRMCADGUHPIiNMTcRHDYh&EeIYatDCRVteeTISElIGSOLJaCI.IUDrüRTBTiAEtOnSAuzLAaRrhLRSSlFøiMoPnKEfibntAagDreukhiNDIrselTatAitIlmniOCsGGnteRoI,IeLTYNRninMAeunGincLeoaEhPzllPtyDlaHtyRsDrPI,OdOTNEeRTODRtSiEeOcIRUerSkGsEsCEZNcHoDEAiongDRIaeRTnlISlCSORoazHR,EmRaREoCSt,obhRTSbHemOueDraRetarlatCrNinCeyTughCeLsiehhatlemaisnlvemgea,zaSC,ncNlhairicfeofMlecSKileveenr
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cial unt, pl J JJoPhMnsoornga&nCJohhansseo.n....................................5.,1.1.,.1.2.,1127 STATISTICSMANAGERMichaelT.Kokoszka STATISTICIANDarrenChima
meronte JustEatTakeaway.com ...................10 [e-mail][e-mail],CWUSaTrdOSM.EMRcSGEuRiVnIeCssE800-544-0422
personal non-comeprint or license c LMK LMKKKoKorawahrRflaet'st's.hH...o..e.n..i.n...D..z...i...g.....i..t....a....l......H.......o.....l..d....i....n....g......s............................................................22..00..,,4342224173 Aofmtehreicaadsv,eNrteisweBHUianYrda.e'Soswvrarr.ehdkoorsoq,rtnudiluN’sebseai.nsrYoir.scgt.rePra1ipiorpns0utst:rp0bitaom1al3din2sr6eat1hrm.sa1wetBtdaeieAtarrh:ivk:rnooerSoouBnnGefnteaunD’sLserdyorpeoOrwoeaeanfcdsB’rJsi,tdeoahA$rrnilesev2peLess2esAssurH3mambtc.nhhejEieEdesarcinAscnirtttiiagosgitDrseonhea,s.,tftefNhWUntidloeeinoaitwstEaBtooetparAYolsipiraoc.rlaLliiroBtckcceTnaa,oc’dbrsenHNrl,pmteo.e2Ytn&arn.0’aasnt1n0tAueo(0UsaBf0SccSdtua3rShvPrirp6neidSEste.r,st0TptPicstu4soeeMRbh4prrilod-o’iisec7Au.d,sa0loidNCct0oriadohbf)Aleniesw(cIrGSo.chapopSOicEocpeNcnshMyeolty1raa,mi0gErgMpeph7euNAata7bepnvT-l0diaia8ce1iia0bddl0atJ3y2ibbaao9D0lytnec).oCsPkfowerhufoliObfJacm-olonaistnpdthtaheedeedeserdrve,&AeseMdrsvCtveiAesoedre.rya,tmeinMIsnndeinvocne.gontlatdoDshnaphiedryeaer.mlcEwmltdcuioatoishrti,nloti1pnsrni2rgtaooi1tltpo1uabeftnfAeeridcvpaeerPeocsnupsc.ubterReaolpigecdotaeguaft.ucntieholAcadenelrl
or o r Merck ....................................10
FT
July11,2022 BARRON’S 5
U P & D O W N W A L L S T R E E T
OnestrategistsaystheFedmightsoonpauseits
tightening.Ifso,andthere’snorecession,headds,
“Wecouldbesettingupforaprettygoodrally.”
Stock Prospects Rise Capexchange-tradedfund(ticker:IJR) looksecure.
isdown18%thisyear,andupjust20% WellsFargoanalystMichaelMayo
sincethestartof2018,againsta45% recentlycutearningsestimatesand
gainintheS&P500inthatstretch. pricetargetsformostofthebigbanks,
As Jobs Stay Strong, TheETFyieldsnearly2%. buthereiteratedabullishview.He
Bankstockshavefalteredonreces- citedrisingnetinterestincome,con-
sionfears,withindustryleadersJP- trolledexpenses,andbalance-sheet
MorganChase(JPM)andBankof strength.Hisfavoriteamongthe
Commodities Weaken America(BAC)downmorethan25% giants:BankofAmerica.
thisyear.Fourofthesixlargestbanks E
reportearningsthiscomingweek— nergystocksareonsale,after
Citigroup(C),MorganStanley(MS), asharpselloffsinceoiland
JPMorgan,andWellsFargo(WFC). natural-gaspricespeakedin
T
GoldmanSachsGroup(GS)and earlyJune.
BankofAmericafollowonJuly18. Oilisdown18%fromitshigh,to
heeconomylooks 27-28.“IftheFedisgoingtotakea Theearningsaren’texpectedtobe $102abarrel,whilegashasfallenby
resilient,andinfla- pauseandtheeconomyisnotgoing greatbecauseofweakinvestmentbank- athird,toabout$6permillionBritish
tioniscoming intorecession,wecouldbesetting ing,adropinmortgagefees,andgener- thermalunits.
down.Thatcombi- upforaprettygoodrally,”hetells allytoughcomparisonswith2021. TheEnergySelectSectorSPDR
nationcouldmean Barron’s.TheS&P500hasabelow- Stockbuybacksaredown,thanksto ETF(XLE),dominatedbyExxon
asolidsecondhalf averagevaluation,andsmall-caps higherratesthatarehittingbankbond Mobil(XOM)andChevron(CVX),
oftheyearfor haveanextremelylowvaluation.” portfoliosandreducingcapital.Butall hasdropped23%,to$71,andthemore
m
stocksafteratoughfirstsixmonths TheS&Pisvaluedat17timespro- oftheseissuesprobablyarediscounted volatileSPDRS&POil&GasExplo-
o
c
s. inwhichtheS&P500indexfell20%. jectedoperatingearningsfor2022and inthebanks’depressedstockprices. ration&ProductionETF(XOP)isoff
print TheJuneemploymentreportre- ByAndrewBary under16timesfor2023.Its2022earn- TheBigSixtradeatjustsevento11 30%,to$119.
e leasedonFridayofferedsomesupport ingsyield—profitsdividedbythecur- timesprojected2022profits.Bankof “Investorsareconcernedabout
w.djr fortheupbeatscenario.Payrollsrose rentindexlevel—isnearly6%,double America,WellsFargo,andGoldman whatwillhappentoenergydemand
w byanet372,000positions,versusthe the10-yearTreasuryyield.TheS&P changehandsnearbookvalue,which ifwegointoadeeprecession,”says
w
or consensusestimateof250,000,while SmallCap600isvaluedatjust12times oftenhasprovedtobeafloorunder- MarkStoeckle,manageroftheAd-
8 wagesgrew5.1%fromthelevelayear estimated2022operatingearnings. neaththeirstocks.Turnaroundcan- amsNaturalResourcesclosed-end
ed.000 earlier,againsta5.3%increaseinMay. ManyinvestorsstickwithS&P500 didateCitigroupfetchesjusthalfof fund(PEO).“Butthey’reunderesti-
mitt43- Thejoblessrateheldsteadyat3.6%. indexfundsanddon’tbotherwith bookvalue.Mostyield3%ormore matingtheunderinvestmentinthe
per0-8 TheFederalReserveisexpected small-caps,butsmallerstocksare aftersomerecentdividendincreases, sectoroverthepastfiveyears.”
ot 80 toraiseshort-terminterestratesby worthalook,giventhelargevaluation withCitigroupabove4%.Absentan Withsupplyconstrained,heseesoil
ductions nartment at ttthhoriaseerma-qnoungaethrot,eflri2fs.t2ion5f%gaipttsoebr2ce.5en%ncth.amgeaprkoirnatte gap.TheiSharesCoreS&PSmall- economicmeltdown,thosepayouts hwtroaoldrdseitns-cgaarasobeuosnvcdeen$$a819r0,ioya.iTeblahdresreA3l%,dea,vmaennsdfiunnad
op Themarketsstillanticipateanother changedhandsrecentlyat13%below
Reprs de onepercentagepointofratehikesby itsnetassetvalue.Theindustryshould
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cial usnt, ple ipsedrcoewnntabgyepmooinrettfrhoamnaitqsuJuanrteerhiogfha. CagEgOreWssiavrerleynaBccuuffmetutlcaotentOincuciedsetnotal
mernte TheS&P500isup6%fromitsJune sharesandnowownsnearlyanearly
mco slow,includingagainof2%thispast 19%stakeintheenergycompany,
personal non-coeprint or license Raedle/GettyImagewosthtnereJaeFiFktmree.igddKPiasemyatyuaaiilgftnsthdteehtrneeex,tvhecLesehenwieuemptefharpienuolovlsldiyeettmsGilttemesrcnotheutinganphtne,tgwseeansdy.-s whdgaueoileTnrdttehhuodepaB3Bbbe%eorerukttktsthesh$irhsi1tri1phrebe’aassinblptluituwohyrneesce.hshkOeaa,cscvttecooesidr;$seil6ptans2utt.esraltrlyoe,hcdaks
or o r Joeingafteritsnextmeeting,onJuly Employershavebeentryingtorecruitworkersthroughjobfairs,likethisonelastmonthinSunrise,Fla. speculationthatBuffettmayhave
FT
6 BARRON’S July11,2022
Up&DownWallStreet(continued)
finallyfoundhislong-sought“elephant” Buffett’sinvestmentsthisyear,plusthe
50 of the Highest andbuytheremaining81%ofOccidental. benefitofhighershort-termratesonBerk-
Atapossiblepriceof$75to$80ashare, shire’shugecashholdings,couldliftits
thatwouldcostabout$60billion.At$75, annualprofitsbynearly$5billion,offa
Occidentalwouldbevaluedatjust7.5 projectedbasethisyeararound$29billion
timesprojected2022earnings.Berkshire, inafter-taxearnings.AfullOccidental
Dividend Stocks whichdidn’trespondtoarequestforcom- purchasecouldboostearningsby$10bil-
ment,issittingonmorethan$100billion lion,assumingthatoilandgaspricesdon’t
incash. radicallyfall.
BuffettknowsOccidentalwell,having F
purchased$10billionofattractivelypriced reeport-McMoRan(FCX)and
in the U.S.
8%preferredstockin2019whenthecom- RioTinto(RIO)minecopperand
panyneededmoneyquicklytooutbid ironore.Buttheirstockscould
ChevronforAnadarkoPetroleum.He turnouttobegolden.Theydis-
lovesU.S.companies,andOxygetsabout countadeeprecessionbutdon’treflectthe
80%ofitsenergyproductionofoverone hugeimprovementintheminingindus-
millionbarrelsadayfromtheU.S. try’sbalancesheetssincethelastcommod-
Buffettpotentiallycouldcombineall itydownturnin2016.
orpartsofOccidentalwithhisBerkshire At$29,sharesoftopglobalcopper
HathawayEnergyunit,whichownsU.S. minerFreeport-McMoRanare44%below
SuperDividend® electricutilitiesandnatural-gaspipelines. theirMarchpeak,ascopperhasslid25%,
IncreasinglyvaluableBHE,oneofthena- toabout$3.60apound.Freeportnow
U.S. ETF tion’slargestrenewable-powergenerators, tradesforseventimes2022’sprojected
couldbeworth$75billion.Berkshireitself earningsandninetimes2023’s—withnext
DIV isnowvaluedat$615billion. year’sestimatereflectingexpectedlower
Gasstockshavebeenparticularlyhard copperprices.Thestockyields2%—
m hitrecently.IndustryleaderEQT(EQT),the includingitsbaseandvariabledividends.
o
s.c country’slargestproducer,isdownmore FreeportandRioTintoaretoppicks
nt than30%fromitsJunehigh,to$34.How- ofJefferiesanalystChrisLaFemina.“The
epri ever,gasdemandismorerecession-resistant market,inthepastmonth,hasgonefrom
djr thanoilbecauseofitsuseforelectricpower pricinginastagflationwherecommodities
w.
w andheating.Andthenthere’sthelong-term wouldbestrongtoadeflationarydown-
w
or bullcase,keyedoffgrowingworldwide turn,”hesays.
8 demandforliquefiednaturalgas. LaFeminaismoreupbeatoncommodity
d.00 Thereisnobiggergasboosterthan demand,notingthattheeconomicsitua-
e0
mitt43- EQT’sCEO,TobyRice,whoadvocatesfora tioninChina—thedominantconsumerof
per0-8 1 [phone] quadruplinginU.S.LNGcapacityby2030. industrialcommodities—hasimprovedin
oductions not partment at 80 GLOBALXETFS.COM IefvlarfaeortsrghmisleiayostRtnrhugeiapsrnpeslaiepoacnve.eneHirEnesediuet,ciraaUaostlpi.lpvSseoe.’tswnhocaneeutrcutrohgrreeaeannllp-etgtloraiama-sngteipcaotoos.nu”rctl“Gosdtnha-se tctphhyeeecrFslspirepcaeaeceslcotpittmmoiyvr,peotba,,nunhftothiaerts.shi“b,neTfesrchetoaanemtnrarecseaetssr,tboohiallpvlalhaesisdnicce,cu”aerthir-sisnetkhsisnefnaoegyetrsts.
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alter. eprint ofcEoQalT. shareslookattractive;itsway- 2te0r1m6.r“eFcroeveeproyritnisthleevgelroabgaeldetcoonaolomnyg,”erh-e
ot edit or Barron's r Isbnteovecpksatsyiniangrgeinoovufottelmvneossrpereistchku,alainntcitvhlueed,yhinciggahnt-hsreiuspkppoinosvrsteibaslntemdleomnssatsyo.frTephdreiunsceceipctoahmle.ipHraidgnihvieidysieecnladdnisng br“eIetsl’osuwlati-rnmegaalirlnykesethxhacrietpdinlgygehssitwgohirlyel,rr”ofRrlleiecoefcfatiesnlhls2f0Blo2aw3r,.- olcoobopskepsrevsre-trisno.tnTeghn,esoimvweuineltlgeiycteotratirhccevoegphrpoicewlretoshuaotnlfodok
e only. Do nase contact CoeffraesretcoftupollnpyatcyhoienngsstidodicevkirdptehrniecdeFsuoanftdtah’nseyisnetvimceosemt,mwpeahnnictiehoscbaojenucdldtitvhheeasvF,eruianskdm’fsaaptceetrorifaroslr,amcdhavanercrgseee.s rioinnovncger’rsiet.ad,“bi2Ibe5nlc%eeaeiunfdsrveeteoers-itdcgmaohsetahnn-btfoelowotptwepEroyQjrioetTbuldtnor.ifaItyetd’.xse”psaHln[aaeit’ns]- rcaeolsnpoSephiwesararoebtnhsleeeoopfgfRortewhieoeenTrlee.isanTtdthomina,teag’tscgawollo.phbpyaelrsiormomnine-eocrraetlhlparto-
cial usnt, ple faonudnedxipnetnhseeFsubnedf’osrfeuilnlovresstuinmgm.Tahryisparnodspaedcdtuitsio,nwahliicnhfoarrmeaatvioanilacbalnebaet refeArfrtienrgat2o0p%ropjeucltlebdac2k0f2r3omfreaerceacsohrdflhowig.h dTuhceeyrfse,tacrhefdivoewtnimtoes$t5h9ef2ro0m22$e8a5rnininMgsaerscthi-.
mernte globalxetfs.com.Readtheprospectuscarefullybeforeinvesting. inlateMarch,Berkshirestockalsolooks mateandseventimesnextyear’s.Andthe
mco appealing,changinghandsaround1.3times companyhasnetcashonitsbalancesheet.
cose SharesofETFsareboughtandsoldatmarketprice(notNAV) bookvalue—belowitsaverage1.4times “Rioistradingataglobalfinancial-crisis
ersonal non-print or licen acDonismdtrmaibrieusstniiooonntsiCnwod.iivllidreudaullcyereredteuernmse.dDfisrotrmibuthteedFbuyndS.EBIrInovkeesratmgeents vvcwaaaelllleuuskaeB,tsiieoitrgsnknCsoiflhvaiciesrarsen’tAshtlieynstptuorancisnkdtsefwiricvsavetsaayttleerusaaedr.wsiLn.haAgattenaBtdlausbftofeotkt vdevaeelnundaityfiioiernlod,n”s-LtoaaryFeienpmgriicinneasthsfaaeyllhsfi.ugHhrte-hsseienre.gslBeitdsidgiivtsi,-
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or o r $422,000,andtheClassB,at$281. email:[email protected]
FT
July11,2022 BARRON’S 7
$400MM
in loans purchased in one month
by community banks
BHG Bank Network • Monthly Snapshot
263 Bankspurchased 385 Banks reviewed
loansontheBHG loans daily on
LoanHub theBHGLoanHub
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ot 80
ctions nment at
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op
Reprs de
alter. eprint
ot edit or Barron's r CONTACT:ChaseCorless • [email protected] • BHGLoanHub.com/400MM
only. Do ne contact Bspuailndibnugsoinnetsws,ocdonescuamdeesr,oafnindnSoBvAat7io(an),ltohaenBs,HcGolBleacntkioNnestewrvoirckeos,ffreisrksmafaunllasgueimteeonftpsreorgvricaemss,athnadt
se eas point-of-salefinancing.Todate,over1,450bankpartnershavetrustedinthisprogramasaproven
cial unt, pl sourceofinterestincomeanddiversificationfortheirbank.
mernte
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ersonal non-print or licen
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FT
8 BARRON’S July11,2022
youwereaglobalenergycompanywith
operationsinScotlandandtechnologists
What if →
inIndia?Youandyourcustomersareall
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Reprs de cloud platform at
alter. eprint ibm.com/cloud-simplicity
ot edit or Barron's r
only. Do ne contact
e as
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cial unt, pl
mernte
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ersonal non-print or licen IABcMurarnendttlhisetIoBfMIBlMogtoraadreemtraadrkesmisaarkvsaiolafbInleteornnaibtmion.caolmBu/tsriandeesmsMarakc.h©inCeospCyorirgphotrIaBtiMonC,orerpg.is2te0r2e2dinmanyjurisdictionsworldwide.OtherproductandservicenamesmightbetrademarksofIBMorothercompanies.
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or o r
FT
July11,2022 BARRON’S 9
S T R E E T W I S E
TheU.S.biodieselindustryhasabout1.5billion
gallonsofannualoutputtoday.Announced
projectswilladdanother3.3billionby2024.
Attention, Bean Counters. Why Diesel
Fuel Could Rescue Soybean Oil Prices.
B
eansandcornhave soybeansindirectly,becausenearly 1.5billionduringthesecondhalfof soybeansthanBunge,asteadier
caughtmyattention, allsoybeanmealgoestofeedcattle, thisyear,plusonebillionnextyear earningsoutlook,andamuchhigher
andthistimeit’snot pigs,andpoultry.Mostoftheoil, and0.8billionin2024.Eachnew price/earningsratio.JPMratesitat
justbecauseShopRite ontheotherhand,isusedtofeed billiongallonsoffuelwillgobbleup Neutral.I’msayingembarrassingly
putsummer people.Thinkmargarine,salad eightbillionmorepoundsof littleaboutcornhere,I’mstartingto
succotashonsale. dressing,and“vegetable”oil,as feedstock,whichisequalto20% realize.CouldImakeupforitwith
Pricesfor marketersliketocallit. ofcurrentfeedstockproduction, somerendered-fattidbits?
America’stwobiggestcashcropsare BungeandArcherDanielsprocess includingsoybeanoilandanimalfat. Irving,Texas–basedDarling
welloffrecenthighs.Cornisdown soybeans,andintheshortterm, Inotherwords,beansqueezers Ingredientsisnamedforitsfounder,
12%justsincelateJune.Soybeanoil ByJackHough theirsharescantradewiththe willbekeptplentybusy.The notthecutenessofitspursuits.One
hasslipped25%sincemid-May. beans,butlongterm,it’sthecrush industrycouldadd20%tocrushing ofthemiscollectinganimalfatfrom
Meanwhile,sharesofingredient spreadthatmattersmore.Thathas capacityby2025,whichcouldhelp slaughterhousesandconvertingit
m
makersArcher-Daniels-Midland shrunk,butitcouldreflateifsome loosensoybeanmealprices,butoil intosellabletallow,aprocesscalled
o
c
s. (ticker:ADM),Bunge(BG),and marketforcesuddenlypullsdemand pricescouldmorethanmakeupthe rendering.Anotherisrepurposing
print DarlingIngredients(DAR)have forsoybeanmealoroilhigher. difference. yellowgrease,orusedcookingoil.
e beenfallingmuchfasterthanthe Margarine,blessedly,isnota Bungedatesbacktoatrading Bothoftheseproductscompetewith
w.djr market. categorygrower.Buthaveyouseen concernfoundedinAmsterdamby soybeanoilforuseinbiodiesel.
w Thatraisesquestions.What’snext thepriceofdieselfuel? JohannBungetwocenturiesago. SoDarlingisonquitetheearnings
w
or forcropprices?Havethesestocks Itturnsoutthatifyoucombine Today,it’sbasedinSt.Louisandhas ramp.Twoyearsago,itcleared$1.78
8 reachedattractivelevels?Andis vegetableoiloranimalfatwith bigoperationsintheU.S.andBrazil. ashare.Thisyear,itisexpectedby
ed.000 Bungepronouncedlikebungee,the methanolorethanol,youcanmake Profitshaveriddengraininflation WallStreettoearn$5.31ashare,and
mitt43- stretchycord,ordoesitrhymewith diesel.I’mtoldthatthereshouldbe sharplyhigher.In2019,thecompany nextyear,$6.74.Thestockrecently
per0-8 plunge? somesodiumhydroxidepresent, earned$4.58ashare.Thisyear,like soldfor$59andchange.
ot 80 Neither:It’sahard“g”andlong andthattheprocessiscalled lastyear,itcouldtop$12.That’s Now,Iknowwhatyou’rethinking:
ductions nartment at “Asehn”a,drleiJks.Pet.odMuOonvrgegararwneeeji,ugmshttinufruposgmrtahNdeee“duatrtrh”a.el, tmorfaounrseseposuntetttrhiinfeigcmaotanitotsnear.feIwtcyiatghno’otgusgthlaeaslrl.e up1.en3sltisikimmeleyissttbiocoaloalklsytv,pabrluiuctees,dhw,aahrteiccshloahrseeasto Dwmaietrahllio.nuNgtohtthaqesupailtolet.tehIntetaiualsploshierdeaendfdwreoirnmsdffartom
op predicting22%upsideinayear.It’s “Wethinkthesuddendipinsoy- historicallybeenatrough.JPM’s carcassesintoproteins.(IfonlyIhad
Reprs de evenmoresweetonDarling,calling beanoilcouldbetransient,”wrote Palmerreckonsthecompanywill thecolumnspacetodishaboutbone
alter. eprint forBae3fo9r%eIgalaiyn.outthatcase,permit JwPeMeka.nCaolnyssitdTehr:oTmhaesUP.aSl.mbeiordthieisseplast aprsohdaurceein“m20id2c4y.cTleh”eesatronciknggsoeosff$o8r.50 maneaacl.q)uInisiftaicotn,Dofaarlicnogmjpuasntycocmalpleledted
ot edit or Barron's r mtsooeybbteheaaennb-ssrqiweufeeeiesgzthionsfg6i.0nAtprboouduusnhcdtesiloaonnfsdcan ioannfdnaunosnutunryacelhdoausptrapobujoetucttotsd1w.a5yi.bllAilalldirodenaadgnyaoltlohners jhuassAtlorovcwheererr1-0pDetarincmeieenlstsat,ghbeaatesxnepduomisnbuCerreh.itcoago, Vymeaaslr,legiytinhPsartsohltaeensinsdseoxfoptrhoe$su1b.re1eabntiollsimqounee.aelBzuetrs,
e only. Do nase contact ibhonieilg,pthupr-irlpcunerseobdateeibtinwnittoemoefaenbwatolahuasetnteb4d.e8T1a1pnhposeouadunninfddfdsetsroheofenfscee BARRONS.COM/PODCASTS wohfahvJTiPecwhMmoi’osslracoesantssepteorooceiknnastutsohp.neFsstiiedhrseast.th,iaatrnmeysiogcrhoutallld
cial usnt, ple pBreoadnuscatnsdisccoarlnleldiktehbeecirnugshplsapnrteeaddi.n Barron’s Streetwise bcoeuwldroandgm,oitrt,eadslyPbaelmeaerrlpyuotnstith,i“sWe
mernte rotationwitheachother. call.”Ifitdoesn’tworkout,it’shis
mco Groceryshoppersareforgivenfor fault,andifitdoes,Iknewitall
oe
cs assumingthatsoybeansplayaminor InaweeklypodcastbyBarron’s,columnistJackHoughlooks along.
ersonal non-print or licen amcsouguyrricbdche)uaaUlntnu.sSdr.saeedldreravmomeldaean;mitndhetfeoh(rireemtpiomsofoudant)(u.lsyBroeuysobtean taToothritByshoaeiusrrcrWoofnama’vsllpoSSarttnitrrieeeeeeslitst,wtpliekeinseoeinpyogloenua,’pSavpenp.dontetirfveye,nrAdhspepyaloerudPsbohedofcouarlsdet.bsS,euwbsactcrihbieng. ooHwfegSrinreea’gcsionthnoosdRhp,ioutnhrsgtseairagaege’sisgswioaauansrttessiirndifoieUlultkshbreeraliUilsnike.eSs..,
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or o r meateatersgothroughpilesof beforefueltanks. B
FT
10 BARRON’S July11,2022
R E V I E W
31,338.15 462.20 3.10%
DowIndustrials:+240.89 DowGlobalIndex:+7.01 10-yearTreasuryNote:+0.20
A Rally—Sort of HE SAID
Commoditypricesslidagain.Citiecon-
“It’svery,very
omistsforecastthatoilwouldslipto
$65abarrelasgrowthslows.OnTues- difficulttogeta
day,WestTexascrudefell8.2%,to$99
abarrel.ANorwegiannatural-gas recessionwithso
workerstrikeended.Mortgagerates
manyjobopenings.
sankto5.3%,andtheJunejobsincrease
beatexpectations.Thethemeofthe
Arecessionis,in
JuneFederalReservemeetingminutes:
asignificantriskofentrenchedinfla-
reality,morethan
tion.Stocksweremostlyup.Onthe
shortweek,theDowindustrialsslipped anythingelse,a
0.17%,to31,388.15;theS&P500gained
1.94%,to3899.38;andtheNasdaq collapseinthe
Compositerose4.56%,to11,635.31.
labormarkets…”
The Fall of Boris
CreditSuissechiefU.S.
THE ART OF INCREMENTAL REVENUE Afteradrumbeatofscandalsandnar-
equitystrategistJonathanGolub
rowlysurvivingano-confidencevote,
Airlines Lean
UnitedKingdomPrimeMinisterBoris
THE NUMBERS Johnsonquit—thoughwhenhe’llleave,
m andwhowillreplacehim,remainun-
o
s.c In to Upselling $47.5 B clear.ChancelloroftheExchequer
nt RishiSunakandhealthministerSajid
epri Javidtriggeredthedefectionsofover50
djr Amountinvestedbyventure officialsthatsealedJohnson’sfate.“We
w.
w capitalthroughJune15,down cannotlivelikethis,”wroteSunak.
w
8 or Alomckeerdicaatnhsoamreetfroarvyeelianrgs.thDiessspuitmemtheart,aasiriflitnheesyt’docbkeseanre from$70billionlastyear Talking to China
d.00 tradingdownascarriersgrapplewithlaborwoes,airport $114 TreasurySecretaryJanetYellenand
e0 B
mitt43- congestion,recordfuelprices,grumpypassengers,and herteamdiscussedsanctionsandeco-
per0-8 recessionfears.Inthepastmonth,analystshavecutmajor nomicstabilitywithChina’sVicePre- withahomemadegun.
ot 80 airlines’earnings-per-shareestimates.Result:Airlines Withdrawalfrom$2.7trillionin mierLiuHe.TheU.S.calledtherare
oductions npartment at c“lyersxatMvtsre.aaRisnn”aycylritmekrmaeovmenendloetarrJaeslmrkleenevgsoer’wonSouatmevh.aeEonyrnthheteaairvrSletyyhttebohouprapearscydeeimlnnl.tgoly.reSuofpodgroraadnead- pidnoagnwsdnreafmtreoicmfesl3altv4oi%n5g.isn4,%AapsinrtihlM2ea0sy2a,0v- tWinalghkaistte“lcHeaanosudtissdeomaisnecdoTsnruusbimdsetpar-nientrigaveetl.a”irmTififhnsea.t- lMTlieohtutneesrttkahtkorBeeTaoatvwiewlsirtatdoseenrraelta,Telar.wcmEciolitonrtnadetirMinngugtshokisaw$Fr4roi4tdebaayil-
Reprs de SouthwesttoStrongBuy,arguinginpartthatits“cur- 46 M Target: Donetsk regulatoryfiling.Aboneofcontention:
ot edit or alter. Barron's reprint 5jGroue%frmncatoobpirfoenpawdioitrsitralokaitntii1e,ve5cer%rosee-vsvffehooenuronuunmuelded.ae.cj.rieoannramcanclebuadlrdfeCrrioiniEetmgrOtsotu,hocaprfansoGpdeutlo,uglrishrndaegyiuaa.spnTgSshSerteeleolpa.ff”tthiewgIernunasrr2hee0a,h0rae9s, NmthuoemvyebedeartrooefanAddemifdfeeirnriecFnaetnbsZriwupahCrooydein Rtanghnueuetdisslltsktayius.aitrWnnnmfeRNoadurjBoctsAoerswsicastia.ttoayrSodrhkinBenoreLwviitugeatrhhnsbaeLaynoycrsscGikyunrcsPgihenrdaDeonroovsp-fiknl,ecde tAPVheanotunselerdabTlssohutisosep.lfL-ebnDitadiecgeakadetlidwoMncitarhiyksdpairntlaomgwsoeasrltsvc,ielcerentsadfiniinr.mg, mberg
e only. Do nase contact wsloowhmAi-cecihrollossintwerle-lisscvosatusrlsatcvchlieakalresrwiSDeeprbesislrthiitataevsAAeaiinhrrldiLitnti5ene0cse%hsan.nsoedleoRgthyyeatnosuauciprcseHeslsol,oldf- 2$022,3themo.st4since12010 bcTarhninengaiGbnuigsntowsiloionvftaopJutehlceyacrotruidngtreys.containing amNontehidlxleoidro,enlsepinigondnsietethrds,r,CaeaeefttelwesrrimeueuskssNshe.reesAetwtpmtuoorlalkbjeo,udrry$eleim2tn0.adA0iennrs,- Goodney/Bloo
mercial usntent, ple i“dnaongwsdnihnbaamvseoicbneeeectnoiznicnorgmea“yttihncaegbfnliinegwhcltapjsorsouedrsnu.Tecyths,”,eslsieakyeasltlrGaimdradmbuoewpd-tsoki, Pseenrspitoivuendcoppripceer,olfoewceosntoimnticwaolly mAkiol2lri1ne-ygiensaearv-HoenlidgahmnladannwdwoPuaansrdkchi,naIglrlg.d,eoIdnzedwneispthen- affril2oe%zdefnso…traCkbreaynipnktrGourbpurtbockhy…eurbAV,mtohayezaUogn.eSr..cDaormimgittooafolk Christopher
mco meaningfulmargingainsforairlinesthatleanintothem.” yearsafterfallingforfiveweeks denceDayparade.Hefled,dressedasa JustEatTakeaway.com.Primemem- n;
cose Airlinesareseekingtoselleverythingfromannual woman,andwasarrestedhourslater. berswillgetaone-yearmembershipin Stei
personal non-eprint or licen soisnuevnbewrgs,aecGyrrsisrp,attihbtioaomntwsiagslfkhlooitrwaserextgehtumreeamsiln,ettsgohirdepoiyeoormumssou:tnosTatlhloeiezxuepwnlogooferiftseaecrciuctnhesgtsesos.fm.lFMigeohrortrdp,eaat-htsae- TdyBooaauilgryrel,iostsntNiegsunn.mctuoobpmeprw/ospdhobecdyraecsBvtasaesrrotrsorna’st IwhrneihteAlebenykdra6ao0fBntel,barOucfklholeirmotms,apefnrrrooiPnmteraispmttsorelabiMfcrfeoiic.knJseaitspootaeuprntwas GtJtohorueburUubnyh.aSulc.abrden.epJcluoievsrrettbreEyidoasttteehhcrahvatsiMScbeee.ea.er.TgncehktneriyWsfoiinranglsltotaSomltkrseseeellt strationbyElias
or o r moreappealingtheupsell.—TeresaRivas ShinzoAbe,67,waskilledbyaman $40billion. Illu
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