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Welcome
Welcome to this week's edition! We apply fundamental price-valuation methods together with our proprietary efficiency formulas to evaluate how well each stock works for capital. Using AI as a tool we deliver clear, fact-checked insights into companies across sectors. Each issue highlights valuation ranges, risk profiles, and efficiency ratings so you can navigate the market with discipline and precision.
What You'll Get Every Week
Macro Trends: A simple overview of the economy and how it could impact stocks.
How to Understand Our Efficiency Score: An easy guide to our stock rating system.
Stock Evaluations: Clear breakdowns of 4-5 stocks, with stats, background, what might make them go up, and what to do.
Quick Portfolio Overview: A table summing up the stocks for quick checks.
Macro Trends
The U.S. economy demonstrates resilience as we approach the end of 2025, with consistent growth and moderating pressures in key areas. The yield curve remains positively sloped, indicating diminished recession concerns: the 2-year Treasury yield stands at approximately 3.50%, the 10-year at 4.25%, and the 30-year around 4.70%. This slope suggests investors expect steady economic expansion, benefiting long-term investments like stocks in growth sectors. The Federal Reserve implemented a 0.25% rate cut on October 29, 2025, adjusting the target range to 3.75%-4.00%, the second cut this year, to bolster employment amid a softening job market. Credit spreads are stable, with the high-yield option-adjusted spread (OAS) at 3.05% and investment-grade BBB spreads around 1.0%, reflecting low default risks and supportive conditions for corporate borrowing.
GDP growth accelerated to an annualized 4.0% in Q3 2025, driven by robust consumer spending and business investments. Unemployment rose slightly to 4.3% in August 2025, remaining near historical lows but indicating a cooling labor market that could ease wage pressures. Inflation, measured by the CPI, increased to 3.0% annually in September 2025, above the Fed's 2% target but stable. Recent developments include new reciprocal tariffs with China, announced around November, aimed at reducing the trade deficit but potentially increasing costs for importers. These tariffs have boosted U.S. tariff revenues to $28 billion in June 2025, tripling previous levels, though their impact on overall trade balances remains uncertain. Overall, lower rates favor debt-laden companies in tech and healthcare, while strong GDP supports cyclicals; however, tariffs may squeeze margins in manufacturing and materials sectors.
How to Understand Our Efficiency Score
Our Efficiency Score shows how well a stock's price matches its real value, using math like future cash predictions and comparisons to similar companies. Scores go from 0-10:
Score Range | Rating | What It Means |
|---|---|---|
9.0-10.0 | Exceptional | Great deal; lots of potential with little risk. |
7.0-8.9 | Solid | Good balance; worth holding long-term. |
5.0-6.9 | Fair | Okay for now; need good news to improve. |
3.0-4.9 | Weak | Not great; more risks than rewards. |
0-2.9 | Poor | Stay away; too expensive or troubled. |
Stock Evaluations
Amcor (AMCR): Global Packaging Powerhouse with Dividend Appeal
Key Stats
TTM P/E: ~27.4x
Dividend Yield: ~6.2% ($0.52 annual)
Net Debt: ~$14B
Efficiency Score (Equity): Fair (6.6) Efficiency Score (LEAP): Fair (5.4)
The Story Amcor operates as a major player in the packaging industry, supplying containers for food, beverages, and healthcare products across global markets. In its inaugural full quarter following the Berry acquisition, adjusted EBIT surged 85% year-over-year to $687 million, accompanied by a margin expansion to 12.0%. Although volumes declined by about 2%, strategic pricing adjustments and $38 million in synergies mitigated the impact. With projected free cash flow of $1.8–$1.9 billion for FY26 and a consistent dividend payout, Amcor provides defensive stability. Challenges include elevated debt levels and fluctuations in raw material costs, yet ongoing integration efforts position it favorably for sustained performance.
What Could Spark a Rise
Faster realization of synergies from the Berry merger, aligning with annual targets.
Rebound in volumes driven by strengthening demand in consumer sectors.
Enhanced dividend payouts bolstered by robust free cash flow generation.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $8.42 | Buy aggressively | Long Jan 2027 $10 calls | 5% |
$8.42–$9.41 | Accumulate on dips | Covered calls for income | 4% |
$9.41–$10.39 | Hold | Neutral; monitor spreads | 3% |
$10.39–$11.39 | Trim positions | Protective puts | 2% |
≥ $11.39 | Reduce or avoid | Sell calls | 1% |
Fair Value: $9.16–$10.64 (upside potential: ~18% from current $8.37)
AbbVie (ABBV): Pharma Giant Transitioning Beyond Humira
Key Stats
Forward P/E (FY26): 15.3x
Dividend Yield: ~3.2% ($6.92 annual)
Net Debt: $63B
Efficiency Score (Equity): Fair (6.8) Efficiency Score (LEAP): Fair (5.8)
The Story AbbVie specializes in immunology, neuroscience, and aesthetics pharmaceuticals. Third-quarter 2025 revenue reached $15.8 billion, propelled by impressive growth in Skyrizi (+47%) and Rinvoq (+35%), which counterbalanced a 56% decline in Humira sales due to patent expiration. Adjusted EPS stood at $1.86, with full-year guidance of $10.61–$10.65. Despite charges for acquired in-process R&D and an equity deficit, the firm generated $13.8 billion in operating cash flow over nine months. Key strengths lie in its evolving product pipeline; drawbacks include substantial debt and subdued aesthetics performance. AbbVie is effectively navigating its post-Humira phase.
What Could Spark a Rise
Sustained growth in successor immunology therapies such as Skyrizi and Rinvoq.
Effective assimilation of acquisitions to minimize earnings volatility.
Dividend enhancements supported by reliable free cash flow.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $180 | Strong Buy | Long Jan 2027 $200 calls | 8% |
$180–$200 | Accumulate | Bull call spreads | 6% |
$200–$240 | Hold / Neutral | Covered calls | 5% |
$240–$270 | Trim | Protective collars | 4% |
≥ $270 | Reduce / Avoid | Sell puts for entry | 3% |
Fair Value: $225–$245 (upside potential: ~7% from current $219.16)
American International Group (AIG): Insurance Turnaround with Underwriting Strength
Key Stats
TTM P/E: ~13.8x
Dividend Yield: ~2.3% ($1.80 annual)
Beta: 0.89 (shrunk)
Efficiency Score (Equity): Fair (6.7) Efficiency Score (LEAP): Fair (5.8)
The Story AIG delivers property-casualty insurance, life insurance, and financial services. In Q3 2025, adjusted after-tax income per share was $2.20, with general insurance underwriting income rising 81% to $793 million and a combined ratio of 86.8%. Catastrophe losses were contained at $100 million, aided by $180 million in favorable prior-year developments. The balance sheet exhibits strong liquidity, though investment income faced some headwinds. Strengths encompass disciplined underwriting; risks involve catastrophe exposure and market cycles. AIG presents a balanced risk-reward profile.
What Could Spark a Rise
Maintenance of favorable combined ratios and reserve developments.
Mitigation of catastrophe losses via enhanced reinsurance strategies.
Increased capital returns through share repurchases and dividends as profitability stabilizes.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $70 | Buy | Long Jan 2027 $80 calls | 6% |
$70–$78 | Accumulate | Bull put spreads | 5% |
$78–$86 | Hold / Neutral | Neutral; watch depth | 4% |
$86–$94 | Trim / Hedge | Protective puts | 3% |
≥ $94 | Reduce / Avoid | Sell calls | 2% |
Fair Value: $75–$90 (upside potential: ~7% from current $76.93)
Apogee (APOG): Building Products Firm with Backlog Boost
Key Stats
TTM P/E: ~17.2x
Dividend Yield: ~3.0% ($1.04 annual)
Net Debt: $230.5M
Efficiency Score (Equity): Fair (6.9) Efficiency Score (LEAP): Fair (5.6)
The Story Apogee provides architectural glass, framing systems, and services for commercial construction. Second-quarter FY26 revenue increased 4.6% to $358 million, supported by a record backlog of $792 million. Adjusted EPS was $0.98, though operating margins contracted to 7.5% amid tariffs imposing a $0.40 EPS drag and elevated input costs. FY26 EPS guidance ranges from $3.60–$3.90. Advantages include a substantial backlog and the Project Fortify restructuring initiative; vulnerabilities stem from cyclical industry dynamics and margin compression. Apogee appears undervalued with potential for valuation re-rating.
What Could Spark a Rise
Efficient conversion of the record backlog into revenue as construction activity intensifies.
Margin improvements through cost management and tariff countermeasures.
Continued dividend reliability (over 50 years) appealing to income-oriented investors.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $39 | Buy | Long Jan 2027 $45 calls (if liquid) | 4% |
$40–$44 | Accumulate | Bull call spreads | 3% |
$45–$47 | Hold | Neutral; limited liquidity | 3% |
$48–$51 | Trim | Protective puts | 2% |
≥ $52 | Reduce | Sell calls | 1% |
Fair Value: $42–$52 (upside potential: ~36% from current $34.44)
Microsoft (MSFT): Cloud and AI Leader with Durable Growth
Key Stats
TTM P/E: Mid-30s
Dividend Yield: ~0.5% (~$2.70 annual)
Net Cash: ~$58.8B
Efficiency Score (Equity): Fair (6.9) Efficiency Score (LEAP): Fair (5.8)
The Story Microsoft leads in software, cloud computing via Azure, and productivity solutions. First-quarter FY26 revenue advanced 18% to $77.7 billion, with operating income rising 24% and Azure growth at 40%. The Microsoft Cloud segment achieved $49.1 billion (+26%), offsetting a 2% dip in gaming. Capital expenditures reached $19.4 billion for AI infrastructure, underpinned by $392 billion in remaining performance obligations. Core strengths include AI-driven momentum and a formidable cash position; limitations involve supply bottlenecks and premium valuations. Microsoft is well-equipped for enduring expansion.
What Could Spark a Rise
Accelerated AI revenue from tools like Copilot and Azure adoption.
Resolution of supply constraints to accelerate cloud expansion.
Optimized returns on capital expenditures improving profitability.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $536 | Buy | Long Jan 2027 $600 calls | 10% |
$536–$599 | Accumulate | Bull call spreads | 8% |
$599–$662 | Hold / Neutral | Covered calls | 7% |
$662–$725 | Trim / Hedge | Protective collars | 5% |
≥ $725 | Reduce / Avoid | Sell puts for re-entry | 4% |
Fair Value: $599–$662 (upside potential: ~27% from current $496.82)
Quick Portfolio Overview
Ticker | Efficiency Score (Equity) | Efficiency Score (LEAP) | Fair Value Range | Upside Potential | Dividend Yield |
|---|---|---|---|---|---|
AMCR | Fair (6.6) | Fair (5.4) | $9.16–$10.64 | 18% | 6.2% |
ABBV | Fair (6.8) | Fair (5.8) | $225–$245 | 7% | 3.2% |
AIG | Fair (6.7) | Fair (5.8) | $75–$90 | 7% | 2.3% |
APOG | Fair (6.9) | Fair (5.6) | $42–$52 | 36% | 3.0% |
MSFT | Fair (6.9) | Fair (5.8) | $599–$662 | 27% | 0.5% |
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Important Legal Notices and Disclaimers
The information in this newsletter is for informational purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Past performance is not indicative of future results. All investments involve risk, including the possible loss of capital. You should do your own research and consult with a qualified financial advisor before making any investment decisions. We are not responsible for any losses incurred based on this content.
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