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Hodges Friday Fast Five

"In the investment business, you go to school every day, but never graduate." - Don Hodges

Friday Fast Five - 11/12/2021

by Hodges Investment Team, on Nov 12, 2021 9:00:00 AM

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

#1 INFLATION: In October, the U.S. Purchasing Price Index (PPI) increased by 0.6%, indicating that higher prices are continuing well into the final quarter of 2021. While many disruptions to supply chains are expected to moderate in the coming months, our conversations with corporate management teams have suggested that inflation could be stickier than many economists forecast.

#2 GOLF TRENDS: Year to date, the rounds played of golf in the U.S., Japan, and Korea are up between 8-15% through September. In the U.S. specifically, rounds played are up 8% over last year and up over 18% versus 2019 levels, which should bode well for golf-related equipment. Also, golfer engagement levels are high, and trade partners are successfully adapting to golf’s evolving new normal.

#3 SPORTS BETTING MOMENTUM: So far in 2021, 25 state legislatures have introduced legislation to legalize mobile sports betting, five state legislatures have introduced legislation to expand their existing sports betting frameworks, and two states have introduced legislation to legalize sports betting limited to retail locations.

#4 JOBS GALORE: According to Empirical Research partners, labor markets are challenged with 10.0 million job openings and only 7.5 million unemployed people to fill the roles. The gap is even wider when excluding those who are temporarily laid off.

#5 SMALL-CAPS = BIG DISCOUNT: Credit Suisse published a report this week illustrating that Small-Cap stocks now trade at a multiple that is a -5.6X discount to Large-Caps, which is the cheapest they have been in more than a decade. The report also indicated that Small-Caps have historically traded at a 1.3X premium to Large-Caps.

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Hodges Private Client is a program offered through Hodges Capital Management, Inc. (“HCM”). HCM is an Investment Advisory Firm registered with the Securities and Exchange Commission (“SEC”), is a wholly owned subsidiary of Hodges Capital Holdings and serves as investment advisor to the Hodges Funds. HCM is affiliated with First Dallas Securities, Inc, a broker-dealer, and investment advisor registered with the SEC.

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.

All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.

Hodges Friday Fast Five

We aim to help investors separate the news from the noise by providing our perspective. Every Friday the Hodges Private Client research analysts list the five most interesting things they discovered that week. Subscribe to receive the Hodges Friday Fast Five in your inbox every Friday. 

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