During earnings season we try to cover 1-2 companies we have discussed in previous podcast|videocast(s). This week, Cooper Standard (CPS) reported results.  We originally initiated this position in May of 2022 ~$5.50.  You can see our original and time-stamped historic commentary in our note last quarter here.I was initially not happy with Cooper Standard’s earnings results.  I was specifically disappointed with the -$31M of free cashflow.Then I took the time to burden myself with the facts.  It turns out that Q1 is consistently a negative free cash flow quarter and has been the case even during the halcyon days when the stock traded to ~$146.I have circled every 1Q FCF result in the chart below and added a table to illustrate the consistent trend:
So of the last 17 First Quarter results, 16 of them had NEGATIVE FREE CASH FLOW.  And in ALL cases where the stock was trading ABOVE $100/share, the negative free cash flow was GREATER THAN the negative free cash flow in Q1 2024.I am NOT saying that to get back to a multi-bagger from here the key is to generate negative free cash flow every Q1 moving forward!  However, I am saying it appears to be a cyclical phenomenon (since inception) for this part of the year – with a tendency to improve in the following three quarters.Now that we see what went wrong, let’s take a look at what went right:

Now onto the shorter term view for the General Market:
In this week’s AAII Sentiment Survey result, Bullish Percent (Video Explanation) rose to 40.8% from 38.5% the previous week. Bearish Percent collapsed to 23.8% from 32.5%. The retail investor is regaining confidence.
The CNN “Fear and Greed” flat-lined from 40 last week to 39 this week.  You can learn how this indicator is calculated and how it works here: (Video Explanation)
The NAAIM (National Association of Active Investment Managers Index) (Video Explanation) ticked up to 61.97% this week from 59.48% equity exposure last week. More By This Author:Powell’s, “Let There Be Light” Stock Market (And Sentiment Results)
More Work To Do? Stock Market (And Sentiment Results)
“All Done Or More To Come?” Stock Market (And Sentiment Results)