Daily Brief United States: Natural Gas, Merit Medical Systems, AppFolio Inc A, Borgwarner Inc, CCC Intelligent Solutions Hold, Chevron Corp, Cavco Industries, Hawaiian Electric Inds, Hilton Grand Vacations, CNX Resources and more

• A review of recent events/data impacting our investment themes and outlook
• We highlight a  commodity sector with  a strong risk-reward ratio
• Precious metals have likely just completed Wave B of their correction

• Merit Medical Systems reported a strong performance in the third quarter of 2025, showing substantial growth across various financial indicators.
• The company achieved total revenue of $384.2 million, representing a 13% increase year-over-year on a GAAP basis, and 12.5% on a constant currency basis.
• This robust performance was primarily driven by 7.8% constant currency organic growth, surpassing the previously forecasted 6% high range.

• AppFolio, Inc. has reported its financial results for the third quarter of 2025, showcasing both advancements and challenges as it navigates the property management software industry.
• The company achieved revenue of $249 million, marking a robust 21% increase year-over-year.
• This growth underscores AppFolio’s market strength, driven by their strategic initiatives in expanding new business and enhancing current service offerings, particularly in their Plus and Max premium tiers.

• BorgWarner’s third-quarter results for 2025 reveal a mixed performance, characterized by both encouraging indicators and some ongoing challenges.
• The company’s organic sales growth of just over 2% indicates resilience despite external pressures, including downtime at a major European customer due to a cyber-related issue, which slightly dampened performance.
• Excluding declines in the Commercial Vehicle (CV) battery and Charging Systems segment, organic sales grew approximately 4% year-over-year.

• CCC Intelligent Solutions presented its third quarter results for fiscal 2025, demonstrating a strong financial position with a notable revenue increase and robust performance in expanding AI-driven solutions.
• The company reported a 12% year-over-year revenue growth to $267 million, exceeding guidance estimates.
• This growth was propelled by a 5% contribution from cross-sell and upsell initiatives, 3% from new client acquisitions, and 4% from EvolutionIQ.

• In the second quarter of 2025, Chevron Corporation delivered a robust financial performance, reflecting strategic accomplishments and operational efficiency.
• The company reported earnings of $2.5 billion, equating to $1.45 per share, with adjusted earnings amounting to $3.1 billion or $1.77 per share.
• Several notable factors, including special items and foreign currency effects, impacted the earnings.

• Cavco Industries, Inc. recently reported their second quarter fiscal year 2026 earnings, showcasing both strengths and challenges.
• Positive aspects included a 9.7% year-over-year increase in revenue, driven by a 5.4% increase in homes sold and a 4.4% increase in average revenue per home sold.
• Operating profit spiked by 27% compared to the previous year, indicative of robust operational performance and cost management efficiency.

• Existential Threat from Wildfire Litigation: The company faces monumental challenges following the August 2023 Maui wildfires. A global settlement has been reached in principle, with HEI’s portion being approximately $1.99 billion to resolve tort claims. While this provides a path forward, the financial overhang is severe and will require significant financing, pressuring the balance sheet for years.
• Operational and Financial Restructuring: In response to the crisis, HEI has suspended its dividend, sold non-core assets, and is intensely focused on wildfire mitigation and grid hardening, with a planned investment of $400 million from 2025-2027. Credit rating agencies have downgraded the company to below investment grade, reflecting the heightened risk profile, although recent positive legal developments have led to some upgrades and a more stable outlook.
• Regulated Monopoly with a Cloudy Future: As the provider of electricity to 95% of Hawaii’s population, HEI operates as an essential monopoly. However, its future is contingent on navigating the settlement financing, maintaining regulatory support from the Hawaii Public Utilities Commission for cost recovery and investments, and successfully executing its wildfire safety strategy to prevent future catastrophes.

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• Hilton Grand Vacations (HGV) reported a performance in the third quarter of 2025 that showcased both strategic successes and challenges.
• The company’s contract sales rose impressively by 17% to $907 million, setting a record on a pro forma basis.
• This growth underpinned a noticeable improvement in both real estate profitability and adjusted EBITDA, which reached $302 million, marking near double-digit growth.

• CNX Resources Corporation reported its third-quarter 2025 results, discussing operational and financial metrics, including notable buybacks and strategic acquisitions.
• The company showed robust free cash flow, which facilitated a significant stock repurchase, evidencing a strong belief in its valuation relative to intrinsic worth.
• This buyback was the largest since the fourth quarter of 2022, underscoring the company’s strategic focus on returning value to shareholders.