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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 - 5/27/2022

by Hodges Investment Team, on May 27, 2022 7:00:00 AM

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

#1 ENERGY EMPLOYMENT: Although oil prices have doubled from a year ago, employment levels for energy companies within the S&P 500 are down by roughly 1/3 from the level experienced in 2019, according to Strategas. Such a reduction in labor could impact the ability of energy companies to increase production quickly.  

#2 HOUSING: Last week, mortgage purchase applications fell to their lowest level since May 2020. As measured by the Redfin Homebuyer Demand Index, the number of homebuyers touring and offering homes posted its most significant annual decline since April 2020.

#3 STEEL DEMAND: The World Steel Association forecast for 2023 steel demand is to grow 2.2% to 1,881.4 million tons. Domestic steel demand is expected to see support from infrastructure projects receiving federal funding and require 100% US-made iron, steel, and construction material. Such infrastructure projects are projected to make up about 10% of domestic steel demand.

#4 EARNINGS GUIDANCE: According to data provided by FactSet, 70% of the S&P 500 companies that have issued EPS guidance for the second quarter of 2022 have issued negative guidance. This is above the 5-year average of 60% and above the 10-year average of 67%.

#5 WHAT’S A WATCH WORTH? As a gauge for luxury discretionary spending, Grant's Interest Rate Observer recently pointed out that 30 frequently transacted Rolexes compiled by have recently demonstrated a pronounced loss of momentum, with average prices slipping to $15,126 this week from just under $16,000 on April 2. That rapid decline is particularly striking considering the pace of appreciation before the reversal: Average used Rolex prices raced higher by 21% from late November through that early Spring high-water mark.


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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