This week, five of the portfolio holdings ranked in the Top Ten.
| Ticker | Account Value |
| BDX | 3,553.76 |
| FMCB | 4,106.00 |
| HTO | 3,068.73 |
| PPG | 3,610.86 |
| SCL | 3,302.08 |
The lowest amount belongs to HTO which last traded at $48.71. Therefore, I will acquire 6 shares on Monday. Below, is the purchase history and average cost calculation.
Nearly ten months have passed since we last invested in HTO; it’s a good time to assess its recent performance in the context of the last 16+ years.
Observations
Stock Price
HTO is in the midst of a three-year price slide, having dropped 42% from its all-time high. Earlier this year it bounced off of the $45 support level like it touched a hot burner, but it seems it is on its way back to that level.
Last week, I noted how $40 seemed to act like a magnet for SCL—and HTO is now showing a similar pattern. It’s fair to question whether these so-called “magnetic” price levels hold any real pull, especially considering how long ago many were established. Often forgotten until price action circles back, they tend to reassert themselves in ways that defy logic.
HTO may continue to drift lower in the short term, but I wouldn’t be surprised to see it rip higher again. Based on current earnings data, there’s little justification for expecting the market’s ever-present hand of irrationality to compress HTO’s earnings potential to the floor—let alone drive it through the pavement. What’s far more plausible is a broader market wake-up call: realizing it’s been showering far too much affection on companies with little substance. You know who they are. Don’t make me name names.
Earnings
Magnitude/Trend
Unlike SCL, HTO is steadily growing earnings. We’ll get to the seasonality shortly, but it is very easy to see the increasing highs and increasing lows in the blue line over the past five plus years.
2025H1 EPS of $1.25 is 22.5% ahead of last year’s first half and certainly its best start to a year ever.
Seasonality
Typically, the quarterly distribution of annual earnings breaks down as follows: 6% in Q1, 27% in Q2, 39% in Q3, and 28% in Q4. The first quarter is historically the most erratic, but 2025Q1 came in at a record high. Nevertheless, given we have only the first two quarters of results as of now, it’s useful to express the earnings in two halves: 33% typically occurs in the first half of the year, and 67% in the second.
With 2025H1 EPS of $1.25, one might reasonably expect full year earnings to land around $3.79. Trading at $48.71, that would be a P/E ratio under 13. And if the price is pulled all the way down to $45, the P/E ratio would fall under 12 – a territory it has not seen since 2014-15. However, ignoring the particulars of implied P/E ratios, CY2025 EPS is highly likely to be the best ever.
Dividends
HTO has maintained an uninterrupted dividend streak for 57 years (identical to SCL as it turns out). Dropping slightly over each of the last five quarters, the payout ratio is at a very comfortable 52%. In short, its steadily rising annual dividends appear well-covered for the foreseeable future.
Thoughts on Investment
Call it contrarian, but when earnings are climbing toward record highs and the price multiple is falling, I see opportunity—not risk. That’s exactly when I’m most comfortable adding to a position.
The trailing 12-month P/E ratio currently sits at 15.37—near the lower end of its historical range, though not quite at the all-time lows in the 11s. Meanwhile, the earnings ratio is pushing toward the upper end of its range, albeit still shy of record highs. This kind of divergence isn’t sustainable forever. In my view, the path of least resistance—my preferred framing of “most likely”—is one where the stock price begins to climb, not the scenario the market seems to be pricing in: a flatline in earnings growth that defies the underlying fundamentals and the observable trend.
It is a great time to add some shares and if we ever do get this position up to a round lot, HTO would be a great stock on which to write covered calls and increase our income from the position.