SNCY

Private Equity Myths: The allure of private equity is often overstated; successful investments rely on buying small, undervalued companies with debt, not on any magical strategy.

Key Traits for Success: High-performing companies in private equity share traits such as paying down debt, improving asset turnover, and strong profitability, which align with deep value investing principles.

Public Market Opportunities: Individual investors can replicate private equity strategies in public markets by targeting smaller companies with improving fundamentals and favorable valuations, without the associated fees and restrictions.

Candidate Companies: Five companies—Sun Country Airlines, Heritage Insurance, Malibu Boats, Core Molding Technologies, and John Wiley & Sons—exemplify the characteristics of private equity replication candidates, offering potential for significant returns through operational improvements and financial leverage.

Airline Stock Resilience: Despite the recent government shutdown causing disruptions, airline stocks have shown resilience, with LATAM Airlines Group and International Consolidated Airlines Group being notable outperformers, achieving significant year-to-date gains.

Domestic Airline Prospects: SkyWest has received a buy rating due to positive earnings estimate revisions, while United Airlines and Delta Air Lines are also showing promising EPS growth, although they currently hold a hold rating.

Stocks to Avoid: Six airline stocks are rated as sell, with Alaska Air Group and Sun Country Airlines identified as strong sell candidates due to weaker earnings revision trends.

Emerging Market Opportunities: The demand for data is driving growth in the semiconductor market, with a specific under-the-radar chipmaker poised to benefit from this trend, focusing on products not offered by major players like NVIDIA.