Five interesting things that Hodges Capital research analysts discovered this week...

#1 RISING RENT: The cost of renting a single-family home in Dallas was up almost 15% in the latest survey by researchers at CoreLogic. The median Dallas-area rent for a house was nearly $1,900. Nationwide single-family home rental rates were 11.5% higher than in November 2020.

#2 BLANK CHECK BOOM: According to Grant’s Interest Rate Observer, 613 special purpose acquisition companies raised $163 billion last year, double the 2020 figure, which had itself exceeded all prior fundraising years combined. The Wall Street Journal noted that half of the completed SPAC deals over the last two years have subsequently lost at least 40% from the typical $10 per share starting price.

#3 WALL OF WORRY: Research conducted by KeyBank Capital Markets indicates that the average equity prices for the homebuilders declined 32% in 19 monetary tightening cycles since 1969.    

#4 DAIRY WOES: The U.S. has seen per capita fluid milk consumption decline for 70 years. The decline has accelerated in the past decade, but plant-based milk has not been the leading cause. The decline in dairy milk volumes has been 10x greater than the growth in plant-based milk volume gains in recent years. – Hedgeye Risk Management

#5 DISRUPTION: “We view ourselves in the middle of a race to revolutionize payments in the trucking industry, and we will invest heavily to ensure our success in reach in the finish line first. Our team has a significant economic incentive to maintain and grow profits in the near term. But if we did that to the exclusion of what we view as a generational opportunity, we would not be working in the long-term best interests of our team or our shareholders.” - Aaron Graft, Founder, and CEO of Triumph Bancorp

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This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.

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