RJ Hamster
The Night Owl Newsletter for November 19th
Unsubscribe Forget AI, This Will Be the Next Big Tech Breakthrough (From Brownstone Research)onsemi Places a $6 Billion Bet on Its Own StockWritten by Jeffrey Neal JohnsonIn a market environment where many companies are signaling caution, onsemi (NASDAQ: ON) has made a decisive statement of confidence. The semiconductor sector firm announced on Nov. 18 that its board has authorized a new, upsized $6 billion share repurchase program. The news immediately resonated with investors, sending the stock up more than 2.5% in after-hours trading.This bold capital allocation move, especially in the face of a cyclical downturn, provides a clear window into management’s optimistic view of the company’s long-term value and strategic direction.onsemi’s Shareholder-Focused Strategic PlaySet to begin on Jan. 1, 2026, the new three-year share repurchase program is a significant escalation of onsemi’s commitment to returning capital to its shareholders. The $6 billion authorization is double the size of the company’s previous $3 billion program.This move is backed by a solid track record: under the prior plan, onsemi spent approximately 100% of its 2025 free cash flow on buybacks, demonstrating a clear, disciplined capital return policy.For investors, a buyback of this magnitude is a powerful bullish signal for several key reasons:Boosts Earnings Per Share (EPS): By repurchasing shares, onsemi reduces its total share count, thereby increasing earnings per share (EPS), a critical metric that heavily influences stock valuation.Signals Undervaluation: A large-scale buyback is management’s most direct way of stating that it believes onsemi’s stock price is trading below its intrinsic value. With a market capitalization of $18.33 billion, the $6 billion authorization represents the potential to repurchase over 30% of the company’s shares, a substantial bet on its own future. Creates Shareholder Value: While the company navigates the current market, the buyback provides an immediate and ongoing support mechanism for the stock price.The Financial Strength Fueling the Buybackonsemi’s decision to launch such a substantial buyback is supported by a solid financial foundation and a clear strategy focused on high-demand, long-term growth markets. The company’s third-quarter 2025 financial results, which reflected the broader industry slowdown with a 12% year-over-year (YOY) decline in revenue, still surpassed analyst expectations.The report contained key indicators of stabilization. Revenue came in at $1.55 billion with a GAAP EPS of $0.63, beating consensus estimates on both fronts. More importantly, onsemi’s core markets showed sequential signs of life.The Automotive segment grew 7% and the Industrial segment grew 5% quarter-over-quarter, suggesting the cyclical bottom may be forming. onsemi’s balance sheet underscores its ability to make such a bold move, with approximately $2.9 billion in cash and short-term investments and total liquidity of around $4 billion.This underlying financial stability is reinforced by the company’s strategic positioning in markets driven by powerful secular trends:Automotive and Industrial: onsemi is a leader in intelligent power and sensing solutions for electric vehicles and advanced driver-assistance systems (ADAS). Its silicon carbide (SiC) products are critical for making EVs more efficient, and its sensors are essential for vehicle safety and automation.AI Data Centers: The company is making significant inroads into the rapidly expanding artificial intelligence market. AI-related revenue has doubled YOY, on pace to reach $250 million in 2025. The recent acquisition of Vcore Power Technology IP is set to accelerate the company’s roadmap for power management solutions in next-generation AI data centers.Investing in Management’s ConfidenceThe announcement of a $6 billion share repurchase program is a strategic declaration from onsemi’s leadership.It signals a deep-seated confidence in the company’s operational execution, its strong position in key growth markets, and its ability to generate substantial cash flow in the years ahead.Even as the semiconductor industry faces cyclical headwinds, onsemi is making calculated investments in future-ready technologies such as Vertical GaN and SiC, while delivering immediate value through capital returns.For investors, the buyback provides a tangible commitment to enhancing shareholder value and a strong vote of confidence in the company’s long-term trajectory. READ THIS STORY ONLINEAI Continues to Surge—Here Are 2 Stocks Still Under $15 (Ad)Markets are volatile—but AI keeps rising.A new report reveals two under-the-radar AI stocks under $15 that could thrive in 2025’s uncertain market. These picks are backed by key trends most investors are missing.DOWNLOAD YOUR FREE REPORT: 2 AI STOCKS UNDER $15 FOR 2025HIMS Has Been a Roller Coaster Ride. Should Investors Hop On?Written by Jordan ChusslerMost of the health care sector’s headlines are dominated by Big Pharma giants. Legacy companies, including AbbVie (NYSE: ABBV), Eli Lilly (NYSE: LLY), Pfizer (NYSE: PFE), and Merck (NYSE: MRK)—and their lineup of game-changing drugs—receive the lion’s share of attention. But one newcomer is making a splash, and investors looking for growth opportunities in the health space should be paying attention. Founded in November 2017, Hims & Hers Health (NYSE: HIMS) went public in January 2021. By the end of 2024, the consumer-focused health platform was able to post its first year of profitability, with net income of $126 million. While that figure pales in comparison to mega-cap giants like Pfizer, it demonstrates a level of discipline rarely seen among companies that are less than five years removed from their IPOs. That, combined with operations at the confluence of several high-demand industries, makes Hims & Hers Health an intriguing buy-and-hold prospect. A Turbulent Year for Shareholders Fundamentally, the young company’s debt management has been exemplary. That has been accentuated by a nearly 244% increase in net cash from operating activities from 2023 to 2024. When Hims & Hers Health reported Q3 financials on Nov. 3, it missed on earnings by just 3 cents and beat on revenue, with $598.98 million representing a 49.2% year-over-year increase.In his comments, CEO and cofounder Andrew Dudum highlighted that “At the end of the quarter, subscribers using personalized solutions grew 50% year-over-year, helping drive nearly 50% in year-over-year revenue growth.” Most notably, the company’s debt-to-equity ratio of 1.67 and its forward price-to-earnings (P/E) ratio of 52.79—a marked improvement of its trailing 12-month P/E of 67.33—suggests that earnings next year should grow by more than 79% from 29 cents per share to 52 cents per share. Since 2021, Hims & Hers Health has averaged annual earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of 37.14%, revenue growth of 77.85%, and earnings per share (EPS) growth of 169.63%.Despite these robust fundamentals, 2025 required a strong stomach for shareholders in HIMS. The stock’s performance has been nothing short of a roller coaster ride this year, featuring both meteoric rises and dramatic crashes in rapid succession. From Jan 2. to Feb. 19, HIMS gained nearly 173% before giving more than 63% back by April 22. By May 19, it had gained nearly 146% before plunging 36% lower by June 25. At the end of July, it had regained 60%, and at the time of writing, the stock is down another 45% from that high.HIMS Is at the Center of Multiple High-Growth Industries Still, since going public, the stock is up almost 139%. Hims & Hers Health has shown exceptionally strong growth while its management has produced balance sheets that are nothing short of admirable. The company’s accessible, direct-to-consumer telehealth model has positioned it at the intersection of multiple high-growth industries.According to market consultancy firm Grand View Research, the sexual health supplement market is projected to enjoy a compound annual growth rate (CAGR) of 10.4% from 2024 through 2030.The hair thinning market’s projected CAGR during the same period is 10.85%, while the telehealth market is expected to grow by a CAGR of 24.68%. Perhaps most notably, Hims & Hers Health also offers compounded GLP-1 injections, which contain the same ingredients as Novo Nordisk’s (NYSE: NVO) Ozempic and Wegovy. The GLP-1 weight loss market during that forecast period is projected to be 18.54%. Additionally, Dudum noted in the company’s Q3 earnings call that Hims & Hers Health is in ongoing discussions with Novo Nordisk to distribute both injection and oral formulations of Wegovy on the Hims & Hers platform, pending FDA approval.Here’s What Wall Street Thinks of HIMSTen of the 15 analysts covering Hims & Hers Health rate it a Hold, and the stock carries a consensus Reduce rating. Still, 15 analysts’ average 12-month price target is $45.27, which suggests potential upside performance of 24.51%. However, the current level of short interest may give prospective investors pause. That stands at a significant 37.54% of the company’s float. But for those who are considering HIMS as a long-term investment, institutional ownership—which remains strong at nearly 64%—provides a vote of confidence.Underscoring the smart money’s bullish stance on Hims & Hers Health, over the past 12 months, 425 institutional buyers have injected $2.31 billion in inflows, compared to just 194 institutional sellers pulling out $1.17 billion. READ THIS STORY ONLINEForget AI, This Will Be the Next Big Tech Breakthrough (Ad)After picking Nvidia in 2016, before it jumped 27,000%… Jeff Brown is back with what he believes will be the biggest paradigm shift ever. Yes, even bigger than AI. And he found one Seattle company that’s at the center of this new $100 trillion revolution. Click here to get the name of this company, completely free of charge… CLICK HERE FOR THE DETAILS.End the Year Strong With These 3 Comeback ChampionsWritten by Nathan ReiffAs cracks have started to show in the S&P 500 in the past several weeks—following an impressive rally since the tariff-linked plunge in early April—investors might turn to companies bucking the trend. A handful of firms have seen volatility throughout the year but are poised to end 2025 on a high note. Companies like Delta Air Lines Inc. (NYSE: DAL), Diamondback Energy Inc. (NASDAQ: FANG), and HEICO Corp. (NYSE: HEI) represent three different share price trajectories throughout the year, but each has a disciplined strategy and the potential for renewed momentum as 2025 comes to a close.Delta’s Margins, Strong Loyalty Program, and Business Travel Demand Could Fuel ResurgenceLike the broader airline industry, Delta has been in a holding pattern for much of the fall amid an extended government shutdown that hampered travel across the United States. This external factor may have impacted the company’s share price, interrupting a broader recovery that has been ongoing since the stock dipped below $36 in April of this year. Delta’s stalled recovery extends back even farther than the shutdown, though, as shares have hovered more or less in place since August.While Delta beat on EPS in its third-quarter earnings report, it did fall short of analyst expectations on revenue—sales climbed by just 4% year-over-year (YOY). Still, Delta’s operating margins remain strong at 11.2% in the latest period, and the company has experienced strong growth in its premium division in particular.Emerging from the government shutdown and with a holiday bump right around the corner, Delta should see strong demand through the end of the year and, thanks to a growing business travel operation, into the new year as well. Its loyalty program is going strong, aiding in customer retention—all of these factors have contributed to executives calling for sustained double-digit operating margin in the current quarter and free cash flow as high as $4 billion.Delta has a unanimous Buy rating from all 21 analysts reviewing shares. With a price-to-earnings ratio of 7.9, it remains undervalued compared to some other stocks in the transportation space. It’s no surprise, then, that the company is projected to see upside potential of more than 28%, making it a top contender for a year-end comeback.Rising Gas Prices and a Strong Earnings Report Could Initiate Diamondback’s ReturnPermian Basin-focused oil and gas company Diamondback Energy has been sluggish through most of 2025, and in particular since the pullback in early April. Although it has been trading mostly sideways since then, the stock has started to rebound in the last several weeks, climbing by more than 4% in the past month. Catalyzing this momentum was the company’s strong third-quarter earnings report, which saw both earnings per share (EPS) and revenue come in ahead of analyst predictions. The company’s latest financial results also highlight its capital discipline, as it reported a 36% reinvestment rate so far this year.Going forward, Diamondback could see a further boost thanks to rising natural gas prices, which have surged by roughly 21% in just the last quarter. Its exposure to major projects like Competitive Power Ventures should help to fuel demand, and the company’s focus on data center contracts may also yield significant growth, should they materialize in the near term.FANG shares have nearly unanimous support from analysts and upside potential of more than 28%, signaling strong growth is possible in the near future.Acquisitions Could Send HEICO Shares Upward, But Debt Management Is KeyUnlike the other stocks on this list, aerospace components maker HEICO has performed well already this year, with a YTD return of 31%. Zooming in on share price trends since late June, though, reveals that HEI stock has been essentially flat for several months.HEICO has been on an acquisition spree, most recently announcing plans to acquire Axillon Aerospace’s Fuel Containment Business. Between this and a dividend increase in June, the company’s cash position is facing pressure, although operational cash flow has been strong in recent quarters.While the recent acquisitions help to diversify HEICO’s aerospace and defense offerings amid broader industry tailwinds, investors will likely want to see HEICO show that it can manage its mounting debt and keep the cash flowing when it reports earnings in mid-December. Ten out of 17 analysts expect that it can do this successfully, as evidenced by their Buy ratings. HEI shares also have more than 11% in upside potential, according to Wall Street. READ THIS STORY ONLINEWall Street’s Quiet Move Into Digital Currency — 5 Assets to Watch (Ad)A quiet shift is happening across global markets. Bitcoin ETFs are drawing record inflows, Fortune 500 companies are adding crypto to their balance sheets, and regulators are laying the groundwork for broader adoption. That’s why we’ve just released our newest report: “Top 5 Digital Assets Set to Surge Through 2025–2026.” 👉 [ACCESS YOUR FREE REPORT HERE]More StoriesWhat’s on the Thanksgiving Table? A Stock Pick for Every CourseAmazon Just Did This—and It Didn’t End Well Last TimeBitcoin’s surge reveals a hidden opportunity most are missing (Ad)Qualcomm’s Bulls Are Running Out of Room to Be WrongWhy Home Depot’s Pain Could Be a Long-Term Investor’s GainWhy Ford’s Deal With Amazon Is Bigger Than You ThinkMedtronic Stock Finds Its Footing—Now It’s Gaining MomentumThe Night Owl is a financial newsletter that provides in-depth market analysis on stocks of interest to individual investors. Published by MarketBeat and Early Bird Publishing, The Night Owl is delivered around 9:00 PM Eastern Sunday through Thursday. If you give a hoot about the market, The Night Owl is the newsletter for you.  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