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Recent Articles
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Chipotle's Long-term Growth Prospects Are Impressive
Feb 6, 2025
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Image Source: Valuentum.
During the fourth quarter of 2024, Chipotle bought back ~$330 million of stock, and as of the end of last year, the company had $1 billion remaining available under share repurchase authorizations. Looking to 2025, management expects full year comparable restaurant sales growth in the low to mid-single digit range and plans for 315-345 new company-owned restaurant openings with over 80% having a Chipotlane. At the end of 2024, Chipotle had 3,746 total restaurants, and the firm is targeting as many as 7,000 restaurants in North America alone. We like Chipotle’s long-term growth potential, and the firm remains a holding in the Best Ideas Newsletter portfolio.
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Alphabet’s Cash Flow Soars in Fourth Quarter
Feb 5, 2025
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Image Source: TradingView.
Google Search and other revenue advanced 12.5% in the quarter on a year-over-year basis, while YouTube ads increased 13.8%. Total Google advertising revenue increased 10.6% in the quarter year-over-year. Total Google Services revenue edged 10.2% higher, while Google Cloud revenue increased 30% from the same period last year. Alphabet ended the quarter with $95.7 billion in total cash and marketable securities and long-term debt of $10.9 billion, good for a robust net cash position. Net cash provided by operating activities soared to $39.1 billion in the quarter versus $18.9 billion in the year-ago period. Free cash flow in the quarter was $24.8 billion, up from $7.9 billion in last year’s quarter. We continue to like Alphabet as a top weighting in the Best Ideas Newsletter portfolio.
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Phillips 66 Outlines Strategic Priorities
Feb 4, 2025
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Image Source: TradingView.
Looking forward to its strategic priorities through 2027, Phillips 66 plans to return greater than 50% of operating cash flow to shareholders, achieve 2% higher than industry average crude utilization, target annual adjusted controllable costs of $5.50 per barrel in Refining, grow Midstream and Chemicals mid-cycle adjusted EBITDA $1 billion in total by 2027, and maintain financial strength and flexibility by reducing total debt to $17 billion. Though the quarterly performance was messy, we continue to like Phillips 66. Shares yield 3.9% at the time of this writing.
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Tesla Remains a Net Cash Rich, Free Cash Flow Generating Powerhouse
Feb 4, 2025
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Image: Tesla continues to attack costs with average cost of goods sold per vehicle reaching an all-time low in the fourth quarter of 2024. Image Source: Tesla.
In the fourth quarter, Model 3/Y production fell 8% on a year-over-year basis, while other models production advanced 25%. Model 3/Y deliveries increased 2%, while other models deliveries advanced 3%. Tesla’s quarterly net cash provided by operating activities increased 10%, to $4.8 billion, while capital spending increased 21%, to $2.8 billion, resulting in free cash flow of $2.03 billion, down 2% on a year-over-year basis. Free cash flow for the full year 2024 was $3.58 billion, down 18% on a year-over-year basis. Tesla ended the calendar year with $36.6 billion in cash, cash equivalents and investments. Though free cash flow faced pressure during 2024, the company remains a net cash rich, free-cash-flow generating powerhouse.
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