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Pay for a rival with your own shares, and the market tends to dock you for it on day one. Read on and you will see why that reflex has handed you a better entry than Friday offered.
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Energy
Alliance Resource Partners’ 9x Valuation Overlooks a 61% Royalty Earnings Jump
Alliance Resource Partners (NASDAQ: ARLP) reported a 46.8% increase in third-quarter net income to $139.6 million as revenue rose 5.5% to $603 million. Adjusted EBITDA advanced 26.3% to $233.9 million, supported by lower coal production costs and record oil and gas royalty activity.
At about $26.88 per unit, Alliance trades at a market value near $3.46 billion and around nine times forward earnings and 5.6 times trailing EBITDA. Trailing free cash flow of roughly $392 million implies a yield above 11%, while its $2.40 annualized cash distribution yields nearly 9%.
Royalties are becoming a more important part of the business. Oil and gas royalty EBITDA climbed 61.4% to $43.6 million, helped by recent mineral-interest acquisitions.
If you focus only on coal pricing, you may overlook this growing earnings source. Its $223.5 million in acquisitions expanded the royalty base beyond legacy holdings.
Lower Costs Reinforce Cash Generation
Adjusted coal operating expense per ton fell 13.1% year over year, while coal segment EBITDA increased 18.6%. Distributable cash flow reached $136.8 million, covering the quarterly distribution 1.76 times. Alliance also has 31.7 million tons of coal committed and priced for 2027, providing visibility into future sales.
Commodity Exposure Still Sets the Risk
Appalachian coal selling prices fell 25.1%, and debt and finance leases totaled approximately $680 million. Quarterly profit also benefited from digital-asset revaluation and acquisition-related gains that may not recur.
Your margin of safety depends on recurring cash flow holding up if coal prices weaken further.
Materials
Cemex’s $723 Million Cash Flow Record Challenges Its 6.8x EBITDA Valuation
Cemex (NYSE: CX) reported a 55% increase in third-quarter net profit to $407 million as revenue rose 8% to $4.59 billion. Operating EBITDA climbed 12% to $990 million, marking a fifth consecutive quarter of double-digit growth, while its margin expanded 80 basis points to 21.6%.
At roughly $10.19 per American depositary share, Cemex carries an estimated $14.8 billion equity value and trades at about 6.8 times trailing EBITDA, down from 8.12 times at 2025 year-end.
The roughly 17% multiple compression contrasts with record third-quarter free cash flow from operations of $723 million, up 34%.
Mexico supplies the clearest overlooked strength. Regional EBITDA increased 30% to $480 million on 7% cement volume growth, while efficiency measures lifted margins. At a 17% lower EBITDA multiple than at year-end, you are paying less for operations showing measurable improvement.
Efficiency Gains Strengthen Cash Generation
Project Cutting Edge is helping Cemex lift margins through pricing, lower energy costs, and tighter operations. Free cash flow from operations reached $1.4 billion for the first nine months, up 194%, while management identified more than $200 million in completed or announced asset-sale proceeds. Net debt eased to $5.42 billion from $5.59 billion.
U.S. Weakness Tests the Recovery
The U.S. business remained a weak spot: EBITDA fell 4% to $259 million despite rising volumes, pressured by higher materials costs and an unplanned outage.
Construction cycles and debt remain constraints, while proceeds from asset disposals should not be mistaken for recurring operating gains. Sustained cash conversion, rather than one record quarter, must support your investment case.
NVIDIA's Founder Says Farmers Should Absolutely Use AI
“If I were a farmer, I would absolutely use AI.”
That’s Jensen Huang, founder and CEO of NVIDIA.
He’s pointing to one of AI’s biggest untapped opportunities: farming.
DIT AgTech is already putting AI to work with 500+ units deployed and 370,000 head on-platform.
𝘐𝘯 𝘮𝘢𝘬𝘪𝘯𝘨 𝘢𝘯 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯, 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘮𝘶𝘴𝘵 𝘳𝘦𝘭𝘺 𝘰𝘯 𝘵𝘩𝘦𝘪𝘳 𝘰𝘸𝘯 𝘦𝘹𝘢𝘮𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘪𝘴𝘴𝘶𝘦𝘳 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘵𝘦𝘳𝘮𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘪𝘯𝘤𝘭𝘶𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘮𝘦𝘳𝘪𝘵𝘴 𝘢𝘯𝘥 𝘳𝘪𝘴𝘬𝘴 𝘪𝘯𝘷𝘰𝘭𝘷𝘦𝘥. 𝘋𝘐𝘛 𝘈𝘨𝘛𝘦𝘤𝘩 𝘩𝘢𝘴 𝘧𝘪𝘭𝘦𝘥 𝘢 𝘍𝘰𝘳𝘮 𝘊 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘚𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘢𝘯𝘥 𝘌𝘹𝘤𝘩𝘢𝘯𝘨𝘦 𝘊𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯 𝘪𝘯 𝘤𝘰𝘯𝘯𝘦𝘤𝘵𝘪𝘰𝘯 𝘸𝘪𝘵𝘩 𝘪𝘵𝘴 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘢 𝘤𝘰𝘱𝘺 𝘰𝘧 𝘸𝘩𝘪𝘤𝘩 𝘮𝘢𝘺 𝘣𝘦 𝘰𝘣𝘵𝘢𝘪𝘯𝘦𝘥 𝘩𝘦𝘳𝘦: https://bit.ly/4bzuWCi
REIT
Easterly’s 98%-Leased Government Portfolio Carries a 7.4x FFO Price Tag
Easterly Government Properties (NYSE: DEA) reported third-quarter revenue of $93.6 million, up 8.7%, while net income rose to $5.7 million from $1.2 million. Core funds from operations increased to $38 million, or $0.78 per share, and management introduced 2027 Core FFO guidance of $3.09 to $3.17 per share.
At approximately $23.15, Easterly has a market value near $1.21 billion and trades at roughly 7.4 times the midpoint of next year's Core FFO outlook. Its $1.80 annualized dividend yields about 7.8%, offering an income component alongside the discounted earnings multiple.
The company's 106-property portfolio was 98% leased at quarter-end, primarily to federal agencies and related tenants. With nearly all properties occupied, the vacancy risk you assume differs from that of an office landlord dependent on finding new corporate tenants.
Government Leases Reinforce Rental Visibility
Easterly secured a new 15-year lease for its USCIS property in Lincoln, including 10 firm years, and extended an FAA-related lease in Chicago.
Quarterly cash available for distribution rose to $32.8 million from $29.3 million, while management lifted the lower end of its 2026 Core FFO guidance to $3.08 per share.
Debt Still Limits the Discount's Appeal
Total debt stood near $1.68 billion, with a weighted average borrowing rate of 4.6% and an average maturity of only 3.8 years. Federal office consolidation and refinancing costs could pressure returns, while 2027 guidance suggests limited growth.
Even government-backed occupancy cannot fully protect your income if borrowing expenses rise or leases are reduced.
Actionable Picks This Week
EQT Corporation (NYSE: EQT)
EQT is the country's largest natural gas producer, pulling gas out of Appalachia and selling it to utilities, LNG exporters, and, increasingly, the people building data centers.
It agreed to buy Range Resources in an all-stock deal that lifts combined enterprise value past $50 billion, hands Range holders about 27% of the result, and targets $325 million of annual savings within two years with a stated pathway above $600 million.
The market then did what it usually does to a company paying with its own shares, marking EQT down while bidding Range up, which is worth a moment, because the acreage didn't get any worse between Friday afternoon and this morning.
EQT has already signed a 10-year supply agreement for a planned West Virginia power plant and an LNG offtake deal starting in 2028, and it raised its base dividend earlier this month.
The deal still needs regulatory and shareholder approval and isn't expected to close until the first quarter of 2027, while third-quarter results arrive tomorrow after the close, though the call set for the following morning has been canceled.
Aptiv (NYSE: APTV)
Aptiv builds the nervous system of a modern car: the advanced safety systems, the computing platforms, the software and the electrical architecture tying all of it together.
The chart looks dreadful, partly because the market uses it as a proxy for every wobble in electric vehicle demand, and partly because the wiring business was spun off in April, making any comparison against its own history awkward rather than instructive.
Shares touched a fresh 52-week low on Friday and sit below both their 50- and 200-day moving averages, and yet the company’s own full-year guidance puts the stock at under 8 times adjusted earnings.
It beat on earnings last quarter even with revenue landing slightly light, and most of the analysts covering it are positive, with an average target roughly 50% above the recent price despite a run of recent trims.
Third-quarter results land on November 3 before the open; key things to watch are the margin trend and any color on program wins outside Detroit.
GXO Logistics (NYSE: GXO)
GXO runs warehouses for other companies, the contract logistics business that picks, packs and ships the orders you place without ever getting its name on the box.
It signs multi-year deals with large customers, so revenue holds up better than a stock down double digits over the past year would suggest, and this morning it expanded its humanoid robot program into two more sites after the first one shifted more than 100,000 totes.
Be clear about the valuation, because close to 15 times forward earnings is not a bargain-bin multiple and there is no dividend to collect while you wait.
What stands out is the agreement on the other side of the ledger, since all 14 analysts in the current rating sample have it at Buy, with none at Hold or Sell, and the average target sits roughly 40% above the recent price. Third quarter results arrive on November 3 after the close.
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Fast Movers to Watch
Matador Resources (NYSE: MTDR) drills for oil and gas in the Permian and owns the midstream infrastructure alongside it, so it earns on the barrels and then again on moving them.
The interesting part is who has been buying, because the chief executive picked up shares in late August and the finance chief reported a purchase the next day, held through his retirement account.
Wells Fargo has had it at Overweight since early September and kept that rating when it trimmed its target in mid-October. Of the analysts covering it, 18 are positive with none at Sell, the average target sits roughly 16% above Friday’s close, and third-quarter results land on November 3 after the close.Sonoco Products (NYSE: SON) makes the packaging your groceries and household goods turn up in, from metal cans and plastic containers to the paperboard wrapped around them, a thoroughly dull business that keeps producing cash.
It recently traded under 9 times forward earnings while paying a dividend above 4%, so you are being paid properly to wait rather than asked to hope. Not one of the analysts covering it rates the stock Sell.
The upside to the average target is the thinnest on today’s list, sitting in the mid teens, so treat this as slow and steady rather than a sprint.Fidelity National Information Services (NYSE: FIS) supplies the software running banking and payments behind the scenes, the sort of plumbing you never think about until the day it breaks.
The stock has fallen hard this year, and the market is pricing the core franchise like a melting ice cube, even as it keeps throwing off cash. The average target implies something above 20% from Friday’s close, though 12 of the 21 analysts in the current sample sit at Hold, so the case here rests on the valuation rather than on anyone’s conviction.
Third-quarter results were pushed back a day and now arrive on November 4 before the open.
Would you rather value stocks finally outperform growth stocks starting next year, or keep underperforming for another decade as they largely have recently?
Everything Else
Bank of America reiterated its Buy rating on Micron, expecting memory supply to stay tight through 2027 and 2028.
SK Hynix ended its review of a US listing for the Solidigm unit while it evaluates other funding and shareholder value options.
SanDisk reports fiscal first-quarter results on Thursday after the close, with estimates sitting near the top of guidance.
Cadence Design Systems reports third-quarter results after the close, with the call scheduled for 5pm Eastern.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any stocks you want me to check out.
Best Regards,
—Noah Zelvis
Undervalued Edge
