JUN.24 Trans-Pacific Dynamic Equity Allocation Research Report

Thank you for accessing the JUN.24 TPDEARR Squad! Please use the analysis in this report wisely and in conjunction with the JUN.24 TPDEARR Articles.

Investing is inherently risky.

Only you can fully understand your timeline, your risk tolerance, and your goals.

Now please, go get rich and be free.

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JUN.24 Squad

The following equity assets make up the JUN.24 Squad for the JUN.24 TPDEARR issue:

1. Symbotic – (NASDAQ:SYM)
2. Waste Management – (NYSE:WM)
3. China Everbright Environment Group Ltd – (HKEX:00257)
4. PT Indah Kiat Pulp & Paper Tbk – (JK:INKP)
5. First Trust NASDAQ Cybersecurity ETF – (NASDAQ:CIBR)

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Strategy and Future Disposition of JUN.24 Squad

The JUN.24 Squad is a collection of equity assets suggested as a micro-portfolio for investors for an intermediate-term investing horizon of 4-6 quarters. Investors who take up positions in the JUN.24 Squad by purchasing equity shares on the open market can look to hold their positions until around Q2 2025 – Q4 2025, before realizing their gains and recognizing a lower, long-term capital gains taxation. Strategizing how to deposition each Squad is an important aspect of realizing gains and calculating the proper taxation and profit. Investors are highly encouraged to coordinate the timing of sale of equity assets in a Squad with the timelines of other Squads that they may deploy, in order to ensure a consistency of realizable equity revenue, as well as to minimize unnecessary taxation on capital gains. Further analysis for the JUN.24 research report is distributed across the JUN.24 articles on this website. We find that this collection of equity assets in the JUN.24 Squad represents a potential micro-portfolio of highly enticing investments with independently substantiated geopolitical and macroeconomic evidence.

Investors should consult with their financial advisor before allocating capital.

Taking positions allocating USD$100,000 across these assets in proportion to individual measures of risk tolerance, and sufficient diversification efforts, puts an investor in a strong position to realize returns over the intermediate-term horizon of 12-18 months. The assets are selected specifically for this timeframe in order to maximize both the tax benefits of longer-term holding, as well as the sanity of the investor. A longer holding period nullifies the impact of daily volatility and allows broader market impacts and trends to hold greater relevance in asset selection.

The research and analysis in this issue are provided to you in order to contribute to a more comprehensive understanding of the myriad economic, geographic, and environmental factors involved in investments in the trans-Pacific economy. Please read all of the free JUN.24 articles to engage with the breadth of all information being analyzed this quarter. Each asset is further detailed below:

1. Symbotic – (NASDAQ:SYM)

Symbotic: the warehouse automator we’ve all been waiting for. Leveraging A.I. to power robotics, data management, and logistics, Symbotic is prime-positioned in a nexus of emerging technological forefronts. Virtually all market competition is now aware of the advantages afforded to firms who can effectively deploy A.I. in their operations, and Symbotic is one of the leading purveyors of that ability.

Based out of Wilmington, MA, Symbotic boasts of helping major corporations “increase efficiency, accuracy, and agility of warehouse and distribution operations” through its “A.I.-powered software” and “intelligent robotics”. Flexible. Scalable. End-to-end. The company seeks to Gigafactory-ize anyone willing and able to adapt their operations for the future, particularly food/grocery and retail/apparel firms with very high inventories and turnovers—who can most benefit from the machinization of repetitive physical workloads with high item variety.

Robot vision and sensing, a cornerstone of automation procedures, is a central pillar of Symbiotic’s focus, and also an extremely high-value industry in its own right (do semiconductor chips ring a bell?) Geopolitical concern with the semiconductor industry has its own risks, but also underscores the criticality of the particular supply chains that fuel companies like Symbiotic; we read this as a strong support for performance in the intermediate term.

Symbotic is a relatively new company, with only ~3 years of public history, but already has a 20 USD$Billion market capitalization. Other related firms have valuations in the USD$Trillions, so there is a lot of room to grow along with very large industry-related partners. SYM has seen its level of fixed assets raise over 4-fold in the past three years, indicating strong expansion of its core operations, which have extended lifetimes. The company has quickly raised its revenue to over USD$1Billion in a few short years, but appears to be still undervalued as it hasn’t yet made its way into profitability. Once the aggregate notices the opportunity, and that Symbotic isn’t going anywhere, market sentiment about the company is likely to grow. The company has raised its gross margin to >16% for the past two fiscal years and the vast majority of fundamental measures are all trending in the right direction.

Over the intermediate term, Symbotic has excellent growth prospects.

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2. Waste Management – (NYSE:WM)

The big player in the North American waste arena, Waste Management is a very strong market competitor. The fundamental demand for services is hard-linked to population distributions, and North America remains a very, very high-demand destination for people all around the world.

The reason we find WM more compelling than some of its competitors is due to its industry-leading position (in North America) in assets: the company has 26,000 trucks (the largest collection and transfer fleet in the waste industry), hundreds of transfer stations, 97 recycling plants and hundreds of active and beneficial-use landfill sites. Though it may also be disgusting to the sensibility, these assets are not nearly worthless. WM’s Renewable Energy business a leading developer, operator, and owner of landfill gas-to-energy facilities in the US and Canada; the business is even profitable (according to the most recent 10-Q), and provides renewable energy and renewable natural gas to its natural gas fleet. As technologies continue to develop, WM has the waste-assets to be able to experiment and innovate aplenty.

WM is an establishment player, covering more than half the entire US when combined with the next largest competitor. Active acquisitioning is a feature of WM’s playbook, and thousands of strategic expansions have helped craft the firm into one of the largest and most effective waste management companies in the world.

Another indicator of performance strength is WM’s positive correlation to adverse weather events, such as wildfires and flooding. These mega waste-producing phenomena are temporary boons for an already steady market of trash accumulation, and the company remains poised to mobilize its assets to capitalize on these events as they transpire across North America.

Don’t be afraid that the company’s stock price is regularly reaching new highs; WM is a great company with resources to adapt, a mountain of functional assets, and an almost immovable customer base—a great addition to the JUN.24 TPDEARR Squad for performance over the next year.

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3. China Everbright Environment Group Ltd – (HKEX:00257)

Increasingly on the world stage, major Chinese companies like China Everbright Environment Group must increasingly strive to achieve the kind of standards that the global community will recognize. Managing municipal waste is a hallmark of advanced urban development, and China has a lot of waste to manage, so a lot is on the line and it’s no easy task for the incumbent players, especially ones like Everbright Environment which are traded on the Hong Kong stock exchange and exposed to a wider variety of investor stakeholders. Nonetheless, the supply of work is firm.

Everbright Environment is a subsidiary of the China Everbright Group, an enormous conglomerate covering industrials, travel, financial products, insurance, pharmaceuticals and healthcare, technology, and more. Environmental energy is at the core of Everbright Environment, which has 592 environmental projects and 191 waste-to-energy facilities across 225 cities throughout China, Vietnam, Mauritius, Germany and Poland. It is the world’s largest waste-to-energy owner and operator, and also has operations in water treatment, “greentech” and equipment manufacturing.

Numbers describing Chinese companies are notoriously difficult to verify so it can sometimes be counterproductive to compare them to verifiable Western counterparts in the same arena. That having been said, Chinese President Xi Jinping regularly stresses the desire to build a Beautiful China moving forward, and the calls have grown in frequency over the past few years as environmental concerns, quite literally, heat up. China is already a world leader in many eco-sustainable efforts and cherishes managing this leadership on the world stage; large firms all across the vast country are being pressured from many angles to clean up their operations, and some good results are already appearing. Everbright Environment boasts of holding over 1,700 patents and is constantly striving to find innovative advantages.

Everbright Environment, particularly through its waste management operations across Asia, has an opportunity to be not just a helpful environmental steward, but a household name due to its proximity connections to everyday citizens. As urbanization continues to advance across China, Everbright Environment is a strong contender in the intermediate term; new urban markets are constantly opening up across Asia.

Investors can also purchase access to Everbright equity OTC.

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4. PT Indah Kiat Pulp & Paper Tbk– (INKP:JK)

With the Asia-Pacific region being the fastest growing, and largest overall, market for paper products in the intermediate term, equity in Indah Kiat Pulp and Paper is an excellent entry point into Jakarta, Indonesia-based Asia Pulp and Paper (APP), one of the largest paper product producers in the world. Indah Kiat is a vertically integrated paper producer with a product range including raw pulp, writing and printing paper, industrial use paper and paper waste recovery, packaging and shipping paper products, and more. The firm is a subsidiary of Asia Pulp and Paper, itself an independent subsidiary of the Sinar Mas Group, one of the largest conglomerates in all of Indonesia.

Over the past, APP has had a colorful history. The company saw major operations spring up in China in the early 1990’s, providing invaluable experience that still advantages the company now. The firm struggled through the Asian debt crisis in 2001, as well as devastating attacks by Greenpeace and other activist groups for alleged illegal logging and deforestation through the next decade. Thereafter, though, Sustainability Roadmaps (for 2020 and 2030) have helped guide the company back into the public’s good graces with significant strides forward in forest conservation and eco-sustainable practices, including maintaining conservation space for the endangered Sumatran tiger. The company appears to not only have ceased natural forest destruction, but now boasts enough plantation space to cover all of Indah Kiat’s paper mill inputs.

The firm’s most recent financial filings show strong increases to net sales, net profit, total assets, total equity, net working capital, and ROA, ROE and both gross and net profit margins, along with a healthy reduction in total liabilities. These trends indicate Indah Kiat is handling its finances with a steady hand, which is particularly notable as the company reports that >50% of its products are exported internationally. Straddling the enormous Asian market on one end with a foothold among various major international customers on the other represents exactly the type of trans-Pacific foundation we look for here in the TPDEARR.

Indah Kiat is working hard to achieve its goal of Zero Deforestation while still pursuing its commercial goals, and the firm is actively engaging with stakeholders and the public to do so, including providing a forest monitoring service to avoid shying away from accountability. INKP has endured a lot in its 86 year history and appears poised to capitalize off the strengths it has learned in the process in a rapidly expanding commercial environment for its products.

[For international investors looking to invest in Indonesia Stock Exchange assets, visit their official site to access the list of brokerages through which you may open a trading account online. Keep in mind that you will likely need to provide your passport information and a lump sum deposit, as well as endure a brief waiting period before approval to invest at a brokerage in Indonesia as a foreigner. These safeguards are important for regulation and oversight, and they are a good indicator of increasing vigilance against nefarious actors. Anything less would indicate a less-comprehensive ability to combat corruption and fraud, among countless other financial crimes. ]

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5. First Trust NASDAQ Cybersecurity ETF – (NASDAQ:CIBR)

To really grab onto growth in the cybersecurity market, the First Trust NASDAQ Cybersecurity ETF takes the cake. As the confluential factors of A.I. development, semiconductor development, supercomputer development, and geopolitical shifting play out, cyberspace becomes an increasingly influential and increasingly significant operational space. USD$Trillions have been lost to theft and cybercrime over just the past few years, and companies are starting to shell out for the protection they need.

Though >90% of CIBR holdings are considered “technology” companies, the services those companies address include incorporating advanced machine learning and A.I. into cybersecurity across numerous industries, including retail, cloud networks, financial services, software, industrial infrastructure design, and defense. Lots of the holdings, such as the second-largest holding of Broadcom Inc (AVGO @ 8.86% of portfolio), are regularly making new highs, and this is not unusual for a fledgling industry. The vast majority of firms operating in cybersecurity are less than a decade or two old, and the “material” environment itself is evolving quickly, allowing frequent entry points for new participants.

Domestic and geopolitical concerns about data security, helpfully bolstered by media attention, bring fresh urgency (and capital flow) to cybersecurity relative to other tech sectors. As the financial services sector sits particularly exposed to cybercrimes, macroeconomic forces will not allow the issue to go unaddressed by major resource-intensive institutional interests. Many, many cybersecurity firms are going to see new levels of profitability in the coming years, particularly over the intermediate term 12-18 month period. CIBR will take many slices out of an ever-growing pie.

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