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 quick look at the overall economy and how it affects stocks.
How to Understand Our Efficiency Score: A simple guide to our ratings for stocks and options based on risk and reward.
Stock Evaluations: Detailed but easy reviews of 4-5 stocks, with key numbers, background, what might make them go up, and what to do.
Quick Portfolio Overview: A table that sums up the stocks for quick comparison.
Macro Trends (Snapshot)
GDP Growth: The economy grew at a 3.3% yearly rate in Q2 2025 (a measure of all goods and services made).
Unemployment: 4.3% in August 2025; fewer jobs are being added.
Inflation (CPI): Prices rose 2.9% from last year in August 2025.
Fed Funds (Target Range): 4.25%–4.50%. There is a consensus that the Federal Reserve will cut rates by 0.25% soon.
10-Year Treasury: About 4.0% in mid-September (this is the yield on a 10-year government bond, showing long-term borrowing costs).
High-Yield OAS: About 2.8% in early September (OAS means Option-Adjusted Spread, extra yield for riskier bonds).
Trade Deficit: $78.3 billion in July 2025 (more imports than exports).
Takeaway: Possible lower interest rates could help stock prices. But rising prices and taxes on imports (tariffs) might raise costs for companies. Safe stocks with steady money coming in, like phone companies or health firms, seem good. Stocks that change with the economy might struggle if trade slows. Note on tariffs: Taxes on electric cars from China are now 100%, and some computer chips are 50% in 2025. Some rules on Chinese goods last until November 29, 2025.
How to Understand Our Efficiency Score
Our Efficiency Score shows how well a stock or option balances possible gains, risks, ease of buying/selling, and costs like fees. It's on a scale from 0 to 10.
Score Range | Rating | What It Means |
|---|---|---|
0–4 | Weak | Risks are bigger than rewards; stay away or use little. |
5–6 | Fair | Okay balance but can be better; good for main investments. |
7–8 | Good | Strong setup; nice for short-term moves. |
9–10 | Excellent | Best kind; put more money here. |
Stock Evaluations
Rogers Communications Inc. (RCI) — Reliable Phone Company with Steady Payouts
Key Stats (Q2 2025):
Revenue: C$5.216 billion (about $3.77 billion USD), with service revenue up 2% year-over-year.
Free Cash Flow: C$925 million, up 39% from last year.
Net Leverage: 3.6x, improved from 4.5x at end of 2024.
Dividend Yield: About 4% with C$0.50 quarterly payout.
Efficiency Score: Equity: Fair (6.3/10); LEAP: Neutral (5.5/10)
The Story: Rogers is a major Canadian telecom firm providing wireless, cable internet, and media services to millions. In Q2 2025, it saw modest growth in core services, boosted by events like NHL playoffs in its media segment, while wireless margins stayed high at 65%. The company has focused on cutting debt, dropping its debt ratio significantly through strong cash flows, which supports its reliable dividend. However, it faces ongoing challenges from tough competition, regulatory caps on pricing, and high spending on network upgrades to stay ahead. For US investors, currency swings between CAD and USD add another layer of variability, but Rogers' scale in a stable market makes it a defensive pick amid economic uncertainty.
What Could Spark a Rise
Accelerating debt reduction below 3.6x, unlocking capital for higher dividends or share repurchases.
Gains in average revenue per user and reduced customer churn through enhanced network quality and bundling offers.
Positive regulatory decisions that ease pricing pressures and support market stability.
Action Plan
Price Range | What to Do with Stock | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $30 | Buy | Cash-secured puts / covered calls | 5% |
$30–$33 | Accumulate (buy more) | Covered calls for income | 5% |
$33–$37 | Hold / Neutral | Collars for protection | 5% |
$37–$40 | Trim / Hedge (sell some) | Sell covered calls | 5% |
≥ $40 | Reduce / Avoid | Protective puts | 5% |
Fair Value: $31–$39; from current $35.79, that means -13% to +9% possible change.
RTX Corporation (RTX) — Defense Company with Some Challenges
Key Stats (Q2 2025):
Net Sales: $21.6 billion, up 9.4% year-over-year.
GAAP EPS: $1.22 per share.
Dividend Yield: About 1.7% with $0.63 quarterly payout.
Efficiency Score: Equity: Weak (3.2/10); LEAP: Weak (2.9/10)
The Story: RTX, a key player in aerospace and defense, operates through segments like Collins Aerospace for avionics, Pratt & Whitney for engines, and Raytheon for missiles and systems. Q2 2025 delivered robust sales growth from higher demand in commercial aviation and defense contracts, but profitability was tempered by ongoing issues with Pratt & Whitney's engine fleet, including costly fixes, and a hefty $42 billion debt load. The company's diverse backlog provides stability from government deals, yet supply chain disruptions and geopolitical tensions add risks. Trading at a premium, RTX's valuation assumes strong future cash flows, but persistent high rates could pressure margins if execution falters.
What Could Spark a Rise
Key milestones in resolving Pratt & Whitney engine issues, enhancing margins and contract wins.
Improved cash flow from major programs and efficient working capital management.
Interest rate reductions alleviating debt burdens and supporting valuation multiples.
Action Plan
Price Range | What to Do with Stock | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $80 | Buy | Long-dated calls (only if big drop) | 7% |
$80–$90 | Accumulate | Covered calls | 7% |
$90–$100 | Hold / Neutral | Collars | 7% |
$100–$110 | Trim / Hedge | Sell calls | 7% |
≥ $110 | Reduce / Avoid | Protective puts | 7% |
Fair Value: $85–$100; current $155.85 suggests downside (due to high current price).
Sonic Healthcare (SKHHY ADR) — Worldwide Health Testing Company with Steady Cash
Key Stats (FY25):
Revenue: A$9.65 billion (about $6.3 billion USD), up 8% year-over-year.
EBITDA: A$1.73 billion (about $1.1 billion USD), up 8%.
Dividend Yield: About 4.7% with A$1.07 annual payout.
Efficiency Score: Equity: Good (6.7/10); LEAP: N/A (No U.S. options)
The Story: Sonic Healthcare is a global leader in medical diagnostics, running labs and imaging services across Australia, Europe, and the US. In FY25, revenue and EBITDA both rose 8%, fueled by acquisitions in Europe and growth in radiology, offsetting the fade in COVID-related testing. The company's strong cash conversion supports ongoing investments and a solid dividend, with manageable net debt. Its defensive nature—steady demand for health tests regardless of economy—provides resilience, but pressures from wage inflation, reimbursement changes by insurers, and integration risks from deals could impact margins. Trading below fair value, Sonic offers compounding potential as operations stabilize.
What Could Spark a Rise
Realized cost synergies from recent European acquisitions, lifting profit margins.
Return to pre-COVID testing volumes and expanded imaging services driving organic growth.
Favorable currency movements strengthening USD-reported earnings for ADR holders.
Action Plan
Price Range | What to Do with Stock | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $15 | Buy | None (no US options) | 6% |
$15–$17 | Accumulate | None (no US options) | 6% |
$17–$19 | Hold / Neutral | — | 6% |
$19–$20 | Trim / Hedge | — | 6% |
≥ $20 | Reduce / Avoid | — | 6% |
Fair Value: $15.77–$20.37; current $14.91 means +6% to +37% possible.
Sylvamo Corporation (SLVM) — Paper Company That Goes Up and Down with Economy
Key Stats (Q2 2025):
Net Sales: $794 million.
Net Income: $15 million, down due to maintenance.
Dividend Yield: About 4.2% with $0.45 quarterly payout.
Efficiency Score: Equity: Good (6.6/10); LEAP: Neutral–Fair (5.9/10)
The Story: Sylvamo produces uncoated paper for printing and writing, operating mills in Europe, Latin America, and North America. Q2 2025 results were hit by lower volumes after closing a mill, price drops in Europe, and high maintenance costs across five sites, leading to depressed earnings. However, with no major outages planned for Q3, margins are expected to rebound, supported by a resilient balance sheet with net debt at 2.4x EBITDA. As a cyclical business, Sylvamo benefits from demand swings but faces risks from volatile input costs like pulp and energy, plus currency fluctuations. Its focus on optimization positions it for recovery if market conditions improve.
What Could Spark a Rise
Sequential profit gains in Q3 from avoided maintenance shutdowns.
Improved spreads between paper prices and input costs like pulp.
Successful portfolio adjustments post-mill closures enhancing efficiency.
Action Plan
Price Range | What to Do with Stock | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $41 | Buy | Long calls / call spreads | 4% |
$41–$46 | Accumulate | Covered calls | 4% |
$46–$50 | Hold / Neutral | Collars | 4% |
$50–$55 | Trim / Hedge | Sell calls | 4% |
≥ $55 | Reduce / Avoid | Protective puts | 4% |
Fair Value: $45–$50; current $43.30 means +4% to +15% upside.
Portillo’s Inc. (PTLO) — Fast Food Chain with Growth Plans
Key Stats (Q2 2025):
Revenue: $188.5 million USD, up 3.6% year-over-year.
Net Income: $10.0 million USD, up from $8.5 million last year.
No Dividend: Yield 0%.
Efficiency Score: Equity: Fair (6.2/10); LEAP: Neutral (5.0/10)
The Story: Portillo’s specializes in Chicago-style fast-casual food like hot dogs and beef sandwiches, with 94 locations as of Q2 2025. Revenue grew modestly on 0.7% same-restaurant sales, driven by price hikes offsetting fewer visits, while new openings added to the top line. Operating income dipped slightly due to higher commodity and labor costs, but net income rose thanks to better efficiencies. With plans for 12 new stores in growth markets like Atlanta and a focus on Sunbelt expansion, Portillo’s aims for 5-7% revenue growth in FY25. However, net debt around $300 million and a tax receivable agreement liability pose balance sheet risks, and the market prices it for minimal long-term growth despite the expansion push.
What Could Spark a Rise
Strong performance from new openings and entries into markets like Atlanta, accelerating revenue.
Reversal in traffic declines through menu innovations and promotions, boosting same-store sales.
Effective management of input inflation, improving margins and cash flow.
Action Plan
Price Range | What to Do with Stock | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $6 | Buy | Long calls / call spreads | 5% |
$6–$7 | Accumulate | Covered calls | 5% |
$7–$8 | Hold / Neutral | Collars | 5% |
$8–$9 | Trim / Hedge | Sell calls | 5% |
≥ $9 | Reduce / Avoid | Protective puts | 5% |
Fair Value: $6.80–$8.32; from current $6.13, +11% to +36%.
Quick Portfolio Overview (as of Sep 14, 2025)
Stock | Ticker | Current Price | Fair Value | Upside Potential | Efficiency (Equity) | Efficiency (LEAP) |
|---|---|---|---|---|---|---|
Rogers Communications Inc. | RCI | $35.79 | $31–$39 | −13% to +9% | Fair (6.3/10) | Neutral (5.5/10) |
RTX Corporation | RTX | $155.85 | $85–$100 | −45% to −36% | Weak (3.2/10) | Weak (2.9/10) |
Sonic Healthcare (ADR) | SKHHY | $14.91 | $15.77–$20.37 | +6% to +37% | Good (6.7/10) | N/A (No U.S. options) |
Sylvamo Corporation | SLVM | $43.30 | $45–$50 | +4% to +15% | Good (6.6/10) | Neutral–Fair (5.9/10) |
Portillo’s Inc. | PTLO | $6.13 | $6.80–$8.32 | +11% to +36% | Fair (6.2/10) | Neutral (5.0/10) |
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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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