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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 - 9/24/2021

by Hodges Investment Team, on Sep 24, 2021 3:51:00 PM

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

#1 TEXAS RELOS CONTINUE: Corporate relocations to Texas in 2021 are up 34% according to data from As more businesses seek out favorable tax and regulatory environments, the Lone Star State has attracted 147 relocations over the past five years from the Fortune 1000 list.    

#2 BOXBOARD PRICES: Boxboard prices have continued to improve in September, reflecting rising production costs, steady demand, and supply tightness. CRB (uncoated 100% recycled paperboard) prices are up to $40/ton to just under $1,100/ton, which should bode well for the profits of boxboard producers in the current quarter.

#3 GOT CASH FLOW? A recent study published by Empirical Research Partners demonstrated that large-capitalization stocks of companies in the top-quartile of free cash flow margins tend to outperform over the long run, outperforming by 6% annually over the past five years.  

#4 DIGITAL AD MARKET: According to eMarketer, the digital ad market for mobile apps is expected to grow double digits over the next several years from an estimated $189 billion in 2020 to $283 billion by 2024. Such growth creates investment opportunities for new disruptive platforms that capitalize on the migration away from traditional media.        

#5 SMALL-CAP FLOWS: After seeing strong capital inflows during the first six months of 2021, the small-cap ETF (IWM) has experienced meaningful liquidations over the past couple of months. We view the recent reversal in capital flow as a compelling constrain indication that the selling in small-caps could be nearing capitulation.  

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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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