Sample Stock Research

Trish Regan is one of America’s most recognized financial journalists and digital media hosts. An award-winning reporter, author, television personality, and speaker, Trish is a leading economic and political thought leader who helps viewers to better understand the most critical issues facing the economy and American business today. With extraordinary access to newsmakers and industry sources, as well as a knack for anticipating opportunities and risks in investing, Trish leverages her knowledge of how the mainstream media works to enable subscribers to best understand the information moving markets.

Trish is the Co-Founder and Executive Editor of 76research. She is also the founder, owner, and host of the daily livestreamed Trish Regan Show with more than 16 million views per month. Prior to founding 76research with longtime friend Rob Hordon, Trish anchored some of the most highly rated financial programs at America’s most noted financial networks including CNBC, Bloomberg, and most recently, Fox Business News.

Throughout her career, Trish has interviewed numerous heads of state, including multiple U.S. Presidents, foreign leaders, Fortune 500 CEOs and other institutional, charitable, and government leaders.

Trish credits her start in journalism to her fifth grade position as school correspondent for her local New Hampshire newspaper. But, while Trish showed an early interest in reporting and writing, it wasn’t until years later that she chose to make journalism her career. In fact, she originally intended to pursue a career in finance and worked as an analyst in emerging debt markets at Goldman Sachs while a student at Columbia University. Fluent in Spanish, Trish focused primarily on Latin American sovereign debt markets including Argentina, Mexico, Venezuela, and Brazil, but when Bloomberg Television offered her an opportunity to work as a correspondent, she made the jump into financial media.

Beginning at Bloomberg in 2000, Trish was on the front lines as the dot-com bubble burst. She covered its aftermath from Silicon Valley and San Francisco as a correspondent at MarketWatch before moving back to New York to work as a correspondent for CBS News. In 2006, Trish returned to her financial roots as an anchor on CNBC’s top-rated daily markets program The Call where she reported on the 2008 financial crisis in real time. While an anchor at CNBC, Trish also reported business news for NBC's Nightly News and The Today Show. In addition, she produced and hosted the two most highly rated documentaries in CNBC's history – Marijuana Inc and Marijuana USA, which investigated a massive and fast-developing underground industry. Trish predicted that industry would soon become mainstream in her book Joint Ventures: Inside America's Almost Legal Marijuana Industry, published by Wiley & Co. in 2010.

In 2011, Trish went back to Bloomberg Television to anchor the network's afternoon market close coverage as host of Street Smart with Trish Regan. While at Bloomberg, Trish was the network's main political anchor for all political television coverage of the 2012 election, including both the Republican and Democrat conventions and the election itself. From 2013 through 2016, Trish also worked as a front-page economic columnist for USA Today, writing on the biggest trends in business, markets and the economy.

In 2015, Trish left Bloomberg Television to join Fox News and Fox Business as the anchor of her new program The Intelligence Report with Trish Regan during FBN’s market hours. She would later move to an evening program and become the only woman in cable TV at that time to host a primetime show. Trish Regan Primetime grew 8pm ratings to a level never before seen at Fox Business.

While at Fox, Trish Regan also anchored two Republican Presidential debates – making history as part of the first all-woman team, with colleague Sandra Smith, to anchor a Presidential debate. She also appeared as an economic and markets contributor to all Fox News programming and was also a guest anchor on Cavuto, Fox and Friends, The Five, and primetime programming. In addition, Trish anchored all primetime coverage of the 2016 Democrat and Republican conventions for Fox Business and was a co-host alongside Neil Cavuto, Maria Bartiromo, Lou Dobbs and Stuart Varney for the network's main political events. Trish left Fox in 2020 and began work on the creation of her own digital media enterprise which debuted in August 2020. Her focus now is her own program and 76research, although she still appears regularly on other platforms both in cable news and in digital media.

Trish graduated with honors from Phillips Exeter Academy before going on to study opera at New England Conservatory and graduate cum laude with a degree in history from Columbia University. While at Exeter, Trish was the first-place winner of the Harvard Musical Association’s Competition for Excellence in Music, becoming the first singer to win the top prize since the organization was founded in 1837. She later studied opera and German at The American Institute for Musical Studies in Graz, Austria. Her operatic singing skills enabled her to represent her home state as Miss New Hampshire in The Miss America Pageant, where she won the talent competition and the first B. Wayne Award for the contestant with the most promise in the performing arts.

Trish's journalism awards have included multiple Emmy nominations for her documentary and investigative reporting. Trish was also recognized with a George Polk nomination for her long-form reporting covering the aftermath of Hurricane Katrina with a team from CNBC. While at MarketWatch in San Francisco, Trish was named SF’s Society for Professional Journalists most promising broadcast journalist.

Trish Regan was born and raised in New Hampshire. She now makes her home outside New York City with her husband and three young children.

A successful fund manager and stock picker, Rob Hordon has extensive experience investing across asset classes, sectors, geographies and strategies. With consistent emphasis on ways to preserve and grow assets and manage risk, Rob has offered guidance to thousands of financial advisors and wealth management professionals in the United States and abroad over the course of a multi-decade Wall Street career.

76research co-founder Rob Hordon at a luncheon

Rob’s professional investment career began in the late 1990s as an associate in the Equity Research department of Credit Suisse First Boston, where he covered wireless telecommunications stocks at the dawn of the mobile phone era. As a recent college graduate, Rob had a front row seat at one of the epicenters of the tech bubble. He witnessed for the first time the stock market’s potential to deliver immense value creation through innovation but also its characteristic tendency towards excess.

Rob went on to obtain his MBA from Columbia Business School, where he focused on security analysis and through his course work learned from some of the top investment practitioners in the country. Upon graduation from Columbia, he took an analyst role in the Risk Arbitrage department of a firm then called Arnhold and S. Bleichroeder Advisers, which would later be renamed First Eagle Investment Management.

76research co-founder Rob Hordon

For approximately seven years, Rob worked as a member of a small team that ran a hedge fund strategy focused on identifying mispriced long-short opportunities among companies involved in merger and acquisition activity. Just prior to the 2008 financial crisis, he transitioned over to First Eagle’s Global Value team under the auspices of the legendary international investor Jean-Marie Eveillard.

76research co-founder Rob Hordon on a boat

As an analyst on the team, Rob was responsible for initiating and covering several billion dollars of public equity investments across a wide range of industry sectors and countries. This move also reunited him with renowned Columbia Business School economist and author Bruce Greenwald, who had recently joined as Director of Research. As colleagues and mentors, Bruce and Jean-Marie would become the two most formative influences on Rob's investment career.

In 2011, Rob proposed and worked with the team to develop a new multi-asset investment strategy built around the same long-term value-oriented investment philosophy pioneered by Jean-Marie. As co-portfolio manager of the First Eagle Global Income Builder Fund, Rob was directly responsible for over a billion dollars of assets under management with a particular focus on dividend-paying stocks and credit instruments. Rob and his partner later re-created and managed this strategy at a London-based boutique investment firm, J O Hambro Capital Management, beginning in 2017.

In 2023, Rob teamed up with his longtime friend Trish Regan to form 76research, where he is Co-Founder and Chief Investment Strategist. This entrepreneurial venture merges his passion for investing, research and writing with his desire to help others benefit from the long-term wealth creation potential of the stock market.

Rob Hordon Princeton University ID

The son of an economics professor and elementary school teacher, Rob is a proud husband and father of three whose interests include history, philosophy, sailing and world travel. He was born in New York City and grew up in northern New Jersey, where he attended local public schools.

Rob Hordon is a Chartered Financial Analyst. In addition to his MBA from Columbia Business School, he received his Bachelor’s degree in Politics from Princeton University and was awarded a Certificate in Political Theory. His senior thesis, entitled Justice without Truth: Contingency in American Moral Thought, explores how the philosophical tradition of American Pragmatism offers a roadmap out of the moral and political abyss of postmodern relativism.


Sample Stock Research

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In the June 2023 pilot issue of the newsletter, we recommended SAMPLE STOCK (XYZ) as our focus investment.

For the six month period beginning on the close of business June 22, 2023 (the date of publication) and ending on the close of business December 22, 2023, XYZ shares delivered a total return of 30.5%, relative to 9.3% for the SPDR S&P 500 ETF (SPY). XYZ outperformed 93% of all other S&P 500 constituents in this time frame.

In the June 2023 pilot issue of the newsletter, we recommended Digital Realty Trust (DLR) as our focus investment.

For the six month period beginning on the close of business June 22, 2023 (the date of publication) and ending on the close of business December 22, 2023, DLR shares delivered a total return of 30.5%, relative to 9.3% for the SPDR S&P 500 ETF (SPY) and 11.2% for the iShares U.S. Real Estate ETF (IYR). DLR outperformed 93% of all other S&P 500 constituents in this time frame.

Source: FactSet

The following content is excerpted directly from the June 22, 2023 publication of this report.

Focus Investment: Digital Realty Trust (DLR)

“With five thousand customers worldwide… the data lives within our four walls, and having that proximity for artificial intelligence use cases is needed.” – Andrew Power, CEO, Digital Realty

Elevator pitch: DLR shares have declined substantially over the past 18 months along with most REITs as a victim of higher interest rates, but attention should now shift to its status as a long-term beneficiary of AI trends. With a 5% dividend yield which will likely grow at a mid to high single digit rate for years to come, the shares offer double digit long-term return potential and the possibility of more accelerated upside as investors gain conviction around the AI demand story.

Headquartered in Austin, Texas, Digital Realty (ticker: DLR) is one of the ten largest Real Estate Investment Trusts (REITs) in the United States and is an S&P 500 constituent. While the REIT sector is commonly associated with traditional real estate such as office buildings and shopping malls, over the past couple of decades commercial and technological infrastructure have begun to dominate the combined market capitalization of the group. These include tower companies (who provide the physical infrastructure for mobile networks), logistics companies (warehouses) and data center REITs like DLR.

A data center is essentially an air-conditioned warehouse that houses computer servers. These are energy-intensive, secure facilities where all decentralized computing (storage and processing done outside homes and offices) takes place.

Importantly, not all data centers are created equal. Like with most forms of real estate, location matters a great deal. Just as an office building in midtown Manhattan is worth a lot more per square foot than one in suburban Des Moines, well located data centers command a premium. The main reason is latency. Even though electricity travels at close to the speed of light, physical proximity often matters for real-time computing activities. The most sought after data centers are in areas like Northern Virginia, which has become a hub of decentralized computing. Companies need their servers to be physically close to other servers.

With a market capitalization approaching $30 billion, DLR is one of the largest data center operators in the world. DLR operates over 300 data centers that serve over 5,000 customers globally, with approximately half its revenue derived from North America. DLR’s customer base includes some of the largest hyperscale and cloud computing players in the world, who for both technological and economic reasons, choose to locate their servers in DLR facilities as well as facilities they may build and manage by themselves.

DLR Top Customers

Source: Digital Realty Trust

DLR went public in 2004 and has grown dramatically as the data center industry has evolved, both organically and through acquisition. Notwithstanding the recent pullback in the share price, since the IPO, DLR management has created significant value for shareholders as the stock has substantially outperformed relevant benchmarks. From its October 2004 IPO through May 31, 2023, DLR has delivered a 17% annualized return versus 14% for the QQQ, 9% for the SPY and 7% for the VNQ (Vanguard Real Estate ETF).

DLR vs QQQ, SPY and VNQ ETFs from 2004 IPO through May 31, 2023

Source: Bloomberg

While the long-term return profile is impressive, the performance since the year end 2021 market peak has been dismal, as DLR has significantly lagged each of those index ETFs. From December 2021 through May 2023, DLR has delivered a -39% total return, versus -10% for the SPY, -12% for the QQQ and -28% for the VNQ.

A number of factors have conspired to hurt DLR’s recent performance. Fed tightening is especially bad for REITs, as noted above, as they are not only more dependent on debt financing but often seen as fixed income alternatives. As fixed income prices have declined, this has pressured the REIT sector as a whole. Adding to negative sentiment in REITs is the ongoing calamity in the office sector, which remains a small portion of the market cap of the REIT sector (the largest office REIT, Boston Properties, is not even a top 30 REIT anymore). Investors have nonetheless been skittsh around the REIT sector over the past 18 months, especially with concerns around bank exposure to commercial real estate (which is largely outside of the infrastructure space).

Notorious short seller Jim Chanos added even more fuel to the fire in 2022 when he identified DLR as a short idea. Jim’s premise, which is actually an important controversy that has swirled around data centers for years, is that cloud providers, such as Amazon Web Services and Microsoft Azure, are effectively competing with data center operators and winning share, as enterprises migrate some or all of their data storage and processing from their own servers to those of third party cloud providers.

While this competitive dynamic is real, and requires monitoring, we conclude it is a mistake to formulate the industry as a simple zero-sum game. The overall amount of decentralized computing has grown and will continue to grow at exceptionally high rates. While cloud providers often use their own facilities, they are also major tenants of companies like DLR, who provide access to the servers of corporate customers and even a neutral meeting ground for other cloud providers.

In our view, cloud providers are leaders in an ecosystem in which all participants stand to benefit. As one of the earliest and now largest players in the data center space, DLR has enviable positions in critical metropolitan areas. Its facilities are not becoming obsolete but, to the contrary, valuable in their scarcity.

Chanos’s bearishness comes at a time when DLR is actually demonstrating an ability to achieve positive rent renewals. Data center unit pricing, like other areas of technology, where innovation tends to deflate pricing, has for over a decade sustained mildly lower rent renewals. As of the first quarter 2023, these rent renewals are now trending positively in the mid-single digit range. Demand is currently outstripping supply, data center landlords are renewing expiring leases at levels above built-in inflation escalators…and this is all happening while AI is still in its infancy.

Investors have been penalizing DLR shares because higher interest rates mean higher capital costs. Along with general inflation and electricity supply constraints, capacity additions are now significantly more expensive and difficult to execute, which challenges growth. But while it is indeed more expensive for companies like DLR to add capacity, that is the exact reason why the portfolio they have already amassed is now worth more. In essence, replacement cost is now much higher, making their assets more valuable and strengthening the company’s pricing power.

An interesting side note: DLR shares rallied (albeit from fairly depressed levels) in the immediate aftermath of the May 24, 2023 NVIDIA earnings surprise, which focused on data center chip sales. From 5/24/23 through 5/31/23, DLR shares returned 18%, versus 5% for QQQ, 2% for VNQ and 2% for SPY.

We believe the market is asking itself, how can data centers be a bad investment if the leading supplier of technology used in data centers, NVIDIA, is on a path to become one of the most exceptional investments in stock market history? Yet DLR still remains some 40% below peak levels, with a dividend yield now approaching a hefty 5%.

Speaking of dividends, DLR has since inception grown its dividend every year. The dividend has nearly quintupled since the IPO.

DLR Annual Dividend Trajectory since 2004

Source: Digital Realty Trust

Unlike many AI related stocks, and despite the recent move, DLR’s valuation is still very undemanding, as it is largely still looked at through the prism of what has gone wrong with the economy over the past 18 months. While the dividend appears secure and growing, we think the odds favor multiple expansion rather than multiple compression over both a short and long-term time horizon and find the shares attractive at current levels close to $100.

We will conclude with comments from NVIDIA CEO Jen Huang on the most recent earnings call, which highlights the major transition underway in the data center space:

In the future, it's fairly clear now with generative AI becoming the primary workload of most of the world's data centers generating information, it is very clear now that – and the fact that accelerated computing is so energy efficient that the budget of a data center will shift very dramatically towards accelerated computing and you're seeing that now. We're going through that moment right now as we speak while the world's data center cap ex budget is limited, but at the same time, we're seeing incredible orders to retool the world's data centers. So I think you're seeing the beginning of, call it a 10-year transition, to basically recycle or reclaim the world's data centers and build it out as accelerated computing. You'll have a pretty dramatic shift in the spend of the data center from traditional computing and to accelerated computing with SmartNICs, smart switches, of course GPUs, and the workload is going to be predominantly generative AI.