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The AI Equity Update
Issue #9 | 9/28/25
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 snapshot of the big economic picture and how it might affect stocks.
How to Understand Our Efficiency Score: A quick guide to our rating system.
Stock Evaluations: In-depth looks at 4-5 stocks, with key stats, stories, and action plans.
Quick Portfolio Overview: A summary table for easy reference.
Important Legal Notices and Disclaimers: The fine print to keep things real.
Macro Trends
The U.S. economy shows mixed signals as we head into Q4 2025. The yield curve is steepening, with the 10-year Treasury yield at 4.18%, the 2-year at 3.64%, and the 30-year at 4.765%. This positive spread suggests improving growth expectations, but it comes amid concerns over lingering inflation.
The Federal Reserve cut rates by 25 basis points in September 2025, responding to a softening labor market. This could boost borrowing and spending, helping growth stocks and cyclicals. However, inflation remains sticky at 2.9% for August 2025, above the Fed's 2% target, with core inflation at 3.1%. Unemployment ticked up to 4.3% in August, signaling slower hiring.
GDP growth looks strong, revised to 3.8% for Q2 2025, with Q3 estimates at 3.9%. But projections for 2025 overall are cooling to around 1.8%, per OECD. Credit spreads are tight—high-yield at 2.76% and BBB at 0.94%—indicating low default risks but limited room for further tightening.
On the policy front, new tariffs announced by President Trump, including 100% on pharmaceuticals, 25% on heavy trucks, and up to 50% on furniture and cabinets starting October 1, could hit importers. The U.S. goods trade deficit narrowed to $85.5 billion in August but totals $921 billion for the first eight months, pressuring domestic manufacturers.
Overall, rate cuts support equities, but slowing growth could weigh on sectors like consumer goods and industrials. Focus on resilient companies with strong cash flows.
How to Understand Our Efficiency Score
Our Efficiency Score measures a stock's overall appeal based on liquidity, catalysts, and risk factors. It's scored out of 10 and helps you gauge if a stock is worth your time. Higher scores mean better efficiency for buying, holding, or trading. We adapt it from detailed analysis to keep things straightforward.
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
United Rentals (URI): Equipment Rental Leader
Key Stats
Current Price: $947.27
P/E Ratio (TTM): 24.45
Net Debt: ~$13.9 billion (including leases)
Efficiency Score: Equity: 3/10 (Weak); LEAP: 3/10 (Weak)
The Story United Rentals is the largest equipment rental company in North America, serving construction, industrial, and specialty markets. Q2 2025 revenue hit $3.94 billion, up year-over-year, with strong specialty rentals growth. Operating income was $1.81 billion for H1, but margins compressed due to labor and depreciation costs. The company raised 2025 guidance and buybacks to $1.9 billion. Strengths: Scale and flexible fleet; weaknesses: Cyclical exposure and used equipment price normalization.
What Could Spark a Rise
Persistently lower interest rates boosting construction demand.
Successful tuck-in acquisitions and specialty margin improvements.
Strong cash flow supporting higher buybacks.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $405 | Buy | Long calls | 5% |
$405–$455 | Accumulate | Covered calls | 4% |
$455–$500 | Hold | None | 3% |
$500–$550 | Trim/Hedge | Collars | 2% |
≥ $550 | Reduce/Avoid | Put spreads | 1% |
Fair Value: $405–$550 (mid $477). From current price of $947.27, potential upside to mid is -49.6%, in reduce zone.
TotalEnergies SE (TTE): Integrated Energy Major
Key Stats
Current Price: $62.47
Dividend Yield: ~6.5%
Net Debt: ~$42.7 billion
Efficiency Score: Equity: 6.6/10 (Fair); LEAP: 5.9/10 (Neutral)
The Story TotalEnergies is a French-based integrated oil and gas company with operations in exploration, refining, LNG, and renewables. Q2 2025 adjusted net income was $3.58 billion, down due to lower commodity prices, but LNG and refining segments performed well. The company repurchased $1.7 billion in shares and offers a strong dividend. Strengths: Diversified portfolio and buybacks; weaknesses: Commodity volatility and FX exposure.
What Could Spark a Rise
Higher Brent oil and LNG prices boosting realizations.
Successful asset sales and LNG project deliveries.
Continued share buybacks amid strong cash flows.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $80 | Buy | Long calls | 5% |
$80–$90 | Accumulate | Covered calls | 4% |
$90–$100 | Hold | None | 3% |
$100–$110 | Trim/Hedge | Collars | 2% |
≥ $110 | Reduce/Avoid | Put spreads | 1% |
Fair Value: $88–$98 (mid $93). From current price of $62.47, potential upside to mid is +48.9%, in buy zone.
Beacon Financial Corporation (BBT): Regional Banking Player
Key Stats
Current Price: $24.20
P/E Ratio (TTM): 10.2
Dividend Yield: ~2.8%
Efficiency Score: Equity: 6.5/10 (Fair); LEAP: N/A
The Story Beacon Financial Corporation (formed from the merger of Berkshire Hills Bancorp and Brookline Bancorp) is a regional bank offering commercial, retail, and wealth services in the Northeast U.S. Q2 2025 net income was $30.4 million, with EPS of $0.66, up year-over-year. Assets dipped to $12.03 billion, but the merger enhances scale. Strengths: Strong earnings growth and capital buffers; weaknesses: Deposit outflows and integration risks.
What Could Spark a Rise
Successful merger integration driving synergies.
Improving net interest margins from rate cuts.
Stable credit quality in a softening economy.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $22 | Buy | Long calls | 5% |
$22–$25 | Accumulate | Covered calls | 4% |
$25–$27 | Hold | None | 3% |
$27–$30 | Trim/Hedge | Collars | 2% |
≥ $30 | Reduce/Avoid | Put spreads | 1% |
Fair Value: $24–$29 (mid $26). From current price of $24.20, potential upside to mid is +7.4%, in accumulate zone.
United Overseas Bank Limited (UOVEY): ASEAN Banking Giant
Key Stats
Current Price: $53.36
Dividend Yield: ~4.95%
CET1 Ratio: 15.3%
Efficiency Score: Equity: 7.2/10 (Strong); LEAP: N/A
The Story United Overseas Bank is a leading Singapore-based bank with a strong ASEAN presence, focusing on retail, corporate, and wealth management. 1H 2025 net profit was S$2.83 billion, down slightly due to higher provisions, but capital remains robust. The Citi consumer acquisition expands its footprint. Strengths: Strong liquidity and dividends; weaknesses: NIM pressure from rates.
What Could Spark a Rise
NIM stabilization from Fed rate path.
Growth in ASEAN markets post-acquisitions.
Continued buybacks and special dividends.
Action Plan
Price Range | What to Do with Stocks | Options Idea | Max Portfolio Weight |
|---|---|---|---|
≤ $65 | Buy | Long calls | 5% |
$65–$75 | Accumulate | Covered calls | 4% |
$75–$80 | Hold | None | 3% |
$80–$90 | Trim/Hedge | Collars | 2% |
≥ $90 | Reduce/Avoid | Put spreads | 1% |
Fair Value: $70–$86 (mid $78). From current price of $53.36, potential upside to mid is +46.2%, in buy zone.
Quick Portfolio Overview
Ticker | Current Price | Fair Value Range | Efficiency Score | Recommendation |
|---|---|---|---|---|
URI | $947.27 | $405–$550 | Equity: 3/10 (Weak); LEAP: 3/10 (Weak) | Reduce/Avoid |
TTE | $62.47 | $88–$98 | Equity: 6.6/10 (Fair); LEAP: 5.9/10 (Neutral) | Buy |
BBT | $24.20 | $24–$29 | Equity: 6.5/10 (Fair); LEAP: N/A | Accumulate |
UOVEY | $53.36 | $70–$86 | Equity: 7.2/10 (Strong); LEAP: N/A | Buy |
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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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