Todd Sullivan's ValuePlays

Durable Goods Remain Near Highs

Davidson — Wed, 06 May 2026 18:39:14 +0000

Durable Goods Orders continue impressive strength holding near record highs even with drop in Aircraft as Motor Vehicles/Parts and mfg Machinery revised higher. Both Motor Vehicles/Parts and mfg Machinery posted record highs as tariff policies result in factory builds on US soil after a period strong reshoring activity post-COVID. Economic trends favor industrials and related issues. The Light Weight Vehicle cycle at 16Mil SAAR remains below prior growth periods in which 17.5-18Mil SAAR was routine at far lower population levels. I expect at some point that we are likely to see month reporting near 20Mil SAAR. Toyota, the #2 Brand in the US, remains in very tight supply at less than 30days of inventory to sales as many others still have 2024 year vehicles on their lots.

My favorite in this space remains Cooper-Standard(CPS) priced 0.19x Pr/Sales with a 2yr expectation of 1.0x valuation once investors reprice CPS’s fundamentals. However, 2.0x 3-4yrs out dependent on management’s M&A activity is possible.

Subs: Buying Opportunity

ToddSullivan — Wed, 06 May 2026 16:04:11 +0000

PRIM is on sale now after the quarterly miss. I have no concerns there is something bigger at play here as investment and backlog keep growing.

Results:

Primoris Services Corporation (NYSE:PRIM) reported its first-quarter 2026 financial results on May 5, 2026, significantly missing analyst expectations on both the top and bottom lines. The disappointing results, driven primarily by weakness in the Energy segment, led to a sharp stock price decline of approximately 29% to 31% following the announcement.

Q1 2026 Financial Highlights

Revenue: $1.56 billion, a 5.4% decrease year-over-year, missing analyst estimates of $1.73 billion.

Adjusted EPS: $0.59 per share, falling well short of the consensus estimate of $0.84 to $0.87.

Net Income: Dropped to $17.4 million ($0.32 per diluted share) from $44.2 million ($0.81 per share) in the prior-year period.

Adjusted EBITDA: $60.5 million, down nearly 40% from $99.4 million in Q1 2025.

Gross Margin: Compressed to 8.6% from 10.4% last year.

Segment Performance

Utilities Segment: Remained a bright spot, with revenue growing 12.3% to $632.9 million, driven by strong demand in power delivery and gas operations.

Strategic Developments & Outlook

Major Acquisition: On May 1, 2026, Primoris completed the $399.5 million all-cash acquisition of PayneCrest Electric, Inc., aimed at expanding its capabilities in data center and industrial markets.

Backlog: Total backlog remained healthy at $11.64 billion, providing some future visibility despite the quarterly miss.

Full-Year 2026 Guidance: The company updated its full-year guidance to reflect the PayneCrest acquisition, now expecting adjusted EPS in the range of $4.80 to $5.00.

Dividend: The board declared a quarterly cash dividend of $0.08 per share, payable on July 15, 2026.

Subs: Williams Keeps Rolling….

ToddSullivan — Wed, 06 May 2026 16:00:23 +0000

The tailwinds for both KMI and WMB keep mounting and this is very good and will be for some time.

Results:

Williams Companies Inc (NYSE:WMB) reported record first-quarter 2026 earnings on May 4, 2026, delivering a significant beat on adjusted earnings per share (EPS) despite missing revenue estimates.

Q1 2026 Financial Highlights

Adjusted EPS: $0.73, comfortably beating the analyst consensus estimate of $0.63.

GAAP Net Income: $864 million ($0.70 per diluted share), a 25% increase from $691 million in Q1 2025.

Adjusted EBITDA: A record $2.254 billion, up 13% year-over-year.

Revenue: $3.03 billion, slightly missing expectations of roughly $3.2 billion to $3.3 billion.

Dividend: The company continues to pay an annualized dividend of $2.10 per share ($0.525 per quarter), supported by a robust dividend coverage ratio of 2.76x.

Strategic Moves: Data Center Focus

Williams unveiled an ambitious expansion into the data center power market, highlighting its “Power Innovation” strategy.

Project NEO: A major new project involving a 682-megawatt “behind-the-meter” power solution with a 12.5-year contract, representing an estimated $2.3 billion investment.

Other Projects: The company also announced the Atlas (data center backup gas supply) and Silver Spur (pipeline expansion) projects.

Expansion Milestones: Management noted the commissioning of the Aristotle pipeline in Ohio and progress on the Southeast Supply Enhancement (SESE) project on the Transco system.

2026 Full-Year Guidance

Following the strong Q1 results, management adjusted its outlook for the remainder of the year:

Adjusted EBITDA: Now tracking toward the upper half of the original guidance range of $8.05 billion to $8.35 billion.

Growth CapEx: Raised to a midpoint of $7.3 billion (up from previous lower estimates) to support the new power innovation projects.

Leverage: Expected to move modestly to 4.1x temporarily due to high investment, before returning to a target range of 3.5x to 4.0x.

Subs: Still Cheap

ToddSullivan — Wed, 06 May 2026 15:55:57 +0000

A current yield of 12% has to be reconciled. The cannabis fear around this to k is depressing the value despite results consistently holding up. The diversification into Life Sciences is a good one as it will give the market something else to look at that isbns cannabis. I do not see any large dividend cut which is what bears have been predicting for a year now.

When we do not get one, the stock ought to reprice so that the REIT’s yields approached others in the industry. that means significantly higher prices…

Results:

Innovative Industrial Properties (NYSE:IIPR) reported its first-quarter 2026 earnings on May 4, 2026, delivering a mixed performance that featured a revenue beat but a miss on GAAP earnings per share (EPS).Following the report, the stock surged over 14% as investors focused on stabilizing tenant occupancy and a significant revenue outperformance relative to analyst expectations.

Q1 2026 Financial Highlights

Revenue: $69.0 million, exceeding consensus estimates of $65.34 million. While down 3.8% year-over-year due to past tenant defaults, revenue grew 3.5% sequentially from Q4 2025.

AFFO (Adjusted Funds From Operations): $1.88 per share, which was flat compared to the previous quarter but slightly above the consensus estimate of $1.87.

Net Income: $30.2 million, or $1.02 per diluted share, missing the analyst estimate of $1.07.

Dividend: The board declared a quarterly dividend of $1.90 per share ($7.60 annualized).

Operational and Strategic Updates

Portfolio Health: The operating portfolio was 97.8% leased as of March 31, 2026. The company has been active in backfilling properties, executing leases for approximately 389,000 square feet year-to-date with operators such as Curaleaf and Grown Rogue.

Litigation & Settlements: IIP resolved pending litigation with PharmaCann, collecting settlement payments and arranging for the turnover of properties in New York, Pennsylvania, and Ohio by late May 2026.

Strategic Investments: The company has funded $150 million of its strategic investment in IQHQ, a life sciences real estate firm, as it seeks to diversify its portfolio beyond cannabis.

Capital Position: Total liquidity stands at $176.6 million against a conservative 13% debt-to-total-gross-assets rati0. Management is currently exploring refinancing options for $291.2 million in notes maturing in May 2026.

PMI Holds Steady

Davidson — Tue, 05 May 2026 18:35:17 +0000

The Manufacturing PMI for April holds at March levels. In addition, the 10yr minus 3mo Treasury spread has widened to 0.72% for which there is long-term interpretation of debt capital shifting into equity capital. The shift into positive territory for the 10yr minus 3mo Treasury had a brief excursion in 2024 but then retreated till the current run broke above 0.0% in Sept 2025. It certainly appears that the moves in the PMI and the 10yr minus 3mo Treasury are correlated. Both, are market psychology indicators as is the SP500.

We are in a Momentum driven market. My long-term analysis suggests $8,000 for the SP500 by Dec 2026 and potential for $10,000 by 2028 based on current governance policies.

Subs: Early Redemption

ToddSullivan — Mon, 04 May 2026 15:46:53 +0000

Key Implications

Redemption Date: May 28, 2026. On and after this date, the warrants cease to exist. Holders have no further rights except to receive the redemption payment.
Redemption Payment: 0.011826 Shares per Warrant (a very small fraction of one share).
- No fractional shares are issued — everything is rounded down to the nearest whole share.
- At the pre-notice share price of $10.46, this redemption is worth roughly $0.124 per warrant (0.011826 × 10.46).
Exercise Deadline (if you want to exercise instead): You must exercise before 5:00 PM Toronto time on the business day immediately before May 28, 2026.
- Exercise price = US$11.50 per Share.
- Given the current share price (~$10.46), exercising would mean paying $11.50 for a share worth ~$10.46 — a loss of about $1.04 per share. Most holders will likely not exercise.

Why is the company doing this?

The warrants were set to expire naturally on June 29, 2026 (just one month later). Since they are out-of-the-money (exercise price > current stock price), they would likely have expired worthless. The company is using a contractual redemption provision (Section 3.4(1) of the Warrant Agency Agreement) to clean up the “overhang” of these warrants early. This is common when warrants are deep out-of-the-money and close to expiry.

What should warrant holders do?

Do nothing → You will automatically receive 0.011826 shares per warrant (rounded down) on or after May 28. This is the default and most logical choice for almost everyone.
Exercise before the deadline → Only makes sense if you are very bullish on the stock rising significantly above $11.50 immediately (unlikely, given the current price).
Sell the warrants on the market (before the redemption date) → If the warrants are still trading (they were recently around $0.17), you might get slightly more than the redemption value by selling them, though liquidity can be thin.

Quick Value Comparison (at ~$10.46 share price)

Redemption value: ~$0.124 per warrant
Recent trading price (as of late April 2026): ~$0.17 (small premium, probably for the tiny chance of a short-term pop or arbitrage).
Intrinsic value if exercised: Negative ~$1.04 (not rational).

Bottom line: This is essentially the company forcing a small consolation payout instead of letting the warrants expire worthless in June. Most holders will simply receive a tiny number of shares (or cash equivalent if their broker handles it that way) and the warrants will be cancelled. Check the full Warrant Agency Agreement on SEDAR+ for exact mechanics if you hold a large number.

THE RELEASE:

LONG BEACH, Calif. and TORONTO, April 28, 2026 (GLOBE NEWSWIRE) — Glass House Brands Inc. (“Glass House”) (CBOE CA: GLAS.A.U) (CBOE CA: GLAS.WT.U) (OTCQX: GLASF) (OTCQX: GHBWF) today announced that it has delivered a notice of redemption, dated April 28, 2026, with respect to the warrants (the “Warrants”) outstanding under the warrant agency agreement, dated May 13, 2019, between the Company and Odyssey Trust Company, as amended (the “Warrant Agency Agreement”).

There are currently 30,664,500 Warrants outstanding, each exercisable for one equity share (each, a “Share”) of the Company at an exercise price of US$11.50 per Share. The outstanding Warrants will be redeemed on May 28, 2026 in accordance with Section 3.4 (1) of the Warrant Agency Agreement at a redemption price of .011826 Shares per Warrant (the “Redemption Shares”). If the Company had not taken any action, the outstanding Warrants would have expired on June 29, 2026.

The last reported sales price of the Shares on the trading day immediately preceding the notice of redemption was $10.46.

No fractional Shares will be issued upon redemption of the Warrants and the number of Shares delivered to each holder of Warrants on the Redemption Date will be rounded down to the nearest whole number.

If a holder of Warrants wishes to exercise its warrants, it must do so in accordance with the terms thereof prior to 5:00 PM (Toronto time) on the business day immediately preceding the Redemption Date.

On and after the Redemption Date, holders of Warrants shall have no further rights except to receive Redemption Shares in accordance with the Warrant Agency Agreement.

A Copy of the Warrant Agency Agreement, including the redemption terms, is available under the Company’s Profile on SEDAR+ at www.sedarplus.ca.

Truck Tonnage Revised Higher

Davidson — Thu, 23 Apr 2026 20:42:53 +0000

The Trucking Tonnage for March makes near term high with February revised higher. What is occurring here is the deportation of undocumented drivers, a shutdown of falsified IDs and certificates and the truck leasing companies that sprung up creating over-capacity during the prior administration exiting the industry. The net effect is to make compliant companies such as JB Hunt(JBHT) more profitable just as Real Retail Sales appears to trend higher.

This general economic trend creates a better climate for the trucking industry, retailers and packaging cos like Packaging Co of Am(PKG) which just reported decent demand. It is also positive for XPO, GXO, RXO which provide services and transport.

Each of these suggestions have strong management teams and have remained suggestions throughout primarily because the timing of these positive changes vs their market psychology is always difficult to predict. I am always in doubt about market psychology timing and sometimes need to reassess my management perspective but if the management proves worthy, then holding is always a good idea till the market psychology finally takes hold.