"If there is any gain from stock appreciation, then better, but I do not consider any multiple expansion (in fact, by not considering stock appreciation with earnings growth, I implicitly think of multiple contraction)"
why do you mean by that? is that only for modelling, because without stock appreciation, usually there is no gain worth mentioning for the minority shareholders, besides maybe dividends, if any.
That when I think of the return I will get from holding the stock, I am only thinking of the earnings yield at cycle-average. If the stock reprices (usually does), then I sell. Otherwise you will generally collect the yield via dividends. This is usually what cyclical companies do.
Amazing write up thanks!
"If there is any gain from stock appreciation, then better, but I do not consider any multiple expansion (in fact, by not considering stock appreciation with earnings growth, I implicitly think of multiple contraction)"
why do you mean by that? is that only for modelling, because without stock appreciation, usually there is no gain worth mentioning for the minority shareholders, besides maybe dividends, if any.
That when I think of the return I will get from holding the stock, I am only thinking of the earnings yield at cycle-average. If the stock reprices (usually does), then I sell. Otherwise you will generally collect the yield via dividends. This is usually what cyclical companies do.
Sorry for the late reply, I do not get notifications on comments on articles for some reason
Well researched and well written in a concise manner
a Great 👍 article! in which cyclical industries are you invested right know and which are you consisdering that could become investable soon again?
I am currently in meatpacking (JBS, Minerva), chemicals (Orbia, Alpek), financials (Vinci Partners).