Raphael Stevens

Hasbro has fended off a challenge from an activist investor that wanted to shake up its board and spin off the company’s lucrative division that includes Dungeons & Dragons.
On Wednesday, the Rhode Island-based toymaker said its shareholders voted to reelect its 13 directors by a “substantial margin,” according to preliminary vote tallies.
The proxy battle was sparked by Alta Fox Capital Management, which owns a 2.5% stake in the company worth around $325 million.

A Dungeons & Dragons classic dragon hand painted by Alan Cooley, 27, of Huntington Station, New York, at Main Street Game Cafe in Huntington on November 26, 2019.
Newsday LLC | Newsday | Getty Images

Hasbro has fended off a board challenge from an activist investor that wanted to shake up its board and spin off the toymaker’s lucrative division that includes Dungeons & Dragons.
On Wednesday, the Rhode Island-based company said its shareholders voted to reelect its 13 directors by a “substantial margin,” according to preliminary vote tallies.

“As the vote indicates, our highly skilled and recently refreshed board possesses experience and expertise directly relevant to overseeing Hasbro’s world-class portfolio of assets across multiple play and entertainment categories,” the company said in a statement Wednesday.
The proxy battle was sparked by Alta Fox Capital Management, which owns a 2.5% stake in the company worth around $325 million. Alta Fox nominated five directors to the company’s board in February, but narrowed the slate down to one ahead of Wednesday’s vote.
Alta Fox wanted to do away with Hasbro’s current “brand blueprint” strategy and suggested spinning off the company’s Wizards of the Coast and digital gaming business as part of a broader push to boost profitability in the company’s consumer products and entertainment divisions.
“After five consecutive years of underperformance relative to the S&P 500 and an even longer period of questionable corporate governance, Alta Fox believed targeted boardroom change was necessary at the onset of a new chief executive officer’s tenure,” Connor Haley, managing partner of Alta Fox, said in a statement Wednesday.
“We ran a campaign based on the facts: absolute and relative underperformance, numerous capital allocation blunders under long-serving incumbents, and extremely poor disclosure reflective of an insular culture,” he said. “While we are disappointed in the outcome at today’s annual meeting, we agree with Institutional Shareholders Services, Inc. that ‘all shareholders likely benefited from the campaign.'”

Alta Fox told shareholders in February that the spinoff would increase Hasbro’s share value by $100. The toy giant refuted that claim, saying that separating Wizards of the Coast from its core business would be detrimental to both the division and the company as a whole.
Hasbro’s strategy uses storytelling to drive toy sales. Under the late CEO Brian Goldner, the company successfully expanded beyond its core business into television, movies and digital gaming.
It uses toy brands like Transformers and My Little Pony to fuel movies and television shows, which then propel toy sales. The company is currently producing a Dungeons & Dragons movie and television show through eOne. It has also used these brands for publishing, apparel and accessories.
Hasbro shares were off less than 1% at the close of trading Wednesday.

WATCH LIVEWATCH IN THE APP More

Target (TGT) warned Monday profits may take a hit in the near term as the big-box chain looks to shed excess inventory. It’s a step other retailers will likely need to follow, analysts say, thus dragging down their stock prices. But not every retailer will take same hit. Some even stand to benefit from the inventory glut. One projected winner: TJX Companies (TJX). In fact, we think the discount retailer is the stock to own if you’re looking for a way to bet on a wave of aggressive markdowns from retailers. The Club does not own the parent of TJ Maxx, Marshalls and HomeGoods, although we’ve held discussions about adding the stock to our bullpen . Our retailers right now are Walmart (WMT) and Costco Wholesale (COST). However, Target’s announcement Monday is a significant event with implications for the retail industry and consumer spending more broadly. We recognize members may be looking for ways to invest in light of the news, and for that reason, we wanted to share our thinking on TJX and our current retail positions. Why TJX? TJX is what’s considered an off-price retailer, along with the likes of Ross Stores (ROST) and Burlington (BURL). This is not a comprehensive investment case for TJX, and there’s more analysis examining TJX’s balance sheet and financial reports that must be done before feeling confident enough to buy a stock. However, we are always on the hunt for new ideas that benefit from the constantly evolving economic landscape, and we think TJX is well-positioned thanks to a few different reasons. One big reason is that persistently high inflation is squeezing consumers. Food and gas spending is essential, so people may actively seek out bargains on other purchases like apparel or home décor. That benefits TJX. On TJX’s most recent earnings call, held May 18, CFO Scott Goldenberg said the company’s research suggests “customers’ perception of our value gap with other retailers remains strong,” which is notable as there are questions about how well discretionary spending will hold up. Even if the overall pie gets smaller, it’s possible TJX holds up better than other players. Another reason to like TJX is what Target warned about — inventory piling up in categories that consumers are spending less money on. While Target’s excess stuff might not end up on the racks of TJ Maxx directly, Target is hardly alone in amassing a glut of inventory . In a note to clients Monday, Morgan Stanley analysts said their research finds softline retailers, which sell things like clothes and shoes, are “already over-inventoried.” They warned that “markdowns [and] margin pressure may get worse from here.” That could benefit TJX as other companies look to get rid of merchandise. Here’s how TJ Maxx describes its approach to merchandising, according to the “How We Do It” section on its website: “We take advantage of a wide variety of opportunities, which can include department store cancellations, a manufacturer making up too much product, or a closeout deal when a vendor wants to clear merchandise at the end of a season. These are just some of the ways we bring you tremendous value.” As for how that strategy applies to the current moment, Goldenberg painted a favorable picture on the aforementioned May 18 call. “I want to emphasize that in-store inventories are where we want them to be as we look at more normalized comparisons to pre-pandemic levels,” the CFO said. “We still have plenty to open buy for the second quarter and second half of the year. We remain well positioned to take advantage of excellent deals we are seeing in the marketplace and flow fresh merchandise to our stores and online throughout the year.” Put another way, TJX sees promising opportunities where others see near-term challenges. What the Street is saying We’re not alone in our retail view. In a note to clients Tuesday, analysts at Citigroup highlighted a list of companies that they believe Target’s disclosure is “most bad” for: Macy’s (M), Gap (GPS), Levi Strauss (LEVI), Carter’s (CRI), Children’s Place (PLCE), Kohl’s (KSS), Hanesbrands (HBI). The analysts, led by Paul Lejuez, hold a positive view on off-price retailers, especially TJX, for the rest of 2022. In the very near term, they said Target’s decision to get promotional in categories like apparel and home goods is not great news for off-price retailers since consumers may just go directly Target to see what’s on sale. However, Citi wrote, Target’s plan to remove excess inventory and cancel orders is “is the type of disruption that typically leads to a favorable buying environment for off-price.” That speaks to the CFO comments we referenced above. “We believe off-pricers (particularly TJX) are well-positioned for 2022 to capitalize on the confluence of impressive supply of goods at favorable pricing and more consumers trading down to find value,” the Citi analysts wrote. Shares of TJX are down about 18% year to date, trading around $61.65 on Wednesday. The average price target on the stock is around $75 per share, according to analyst estimates compiled by FactSet. Just over 80% of analysts consider the stock a buy or have an overweight rating, according to FactSet. TGT’s implications for Club stocks Let’s turn our focus to the retail stocks we do own: Walmart and Costco. Of the two, Walmart is the one that’s most similar to Target, so we will explain our thinking on it in more detail than Costco. But briefly on Costco: Costco is a wholesaler that relies on a membership model, which provides a significant boost to the company’s bottom line. It’s just a different type of company than Target. Plus, Target’s lowered outlook was mostly about profitability in its second quarter because of the markdowns. In its May earnings report, Costco did not see the same degree of margin pressure that both Walmart and Target felt in their recent quarters. Walmart, like Target, did suffer from excess inventory in its first quarter, which the company reported May 17. At a high level, this makes the Bentonville, Arkansas-based chain exposed to the same forces that prompted Target’s decision to more aggressively right-size its inventories. There are now questions about whether Walmart will be forced to issue a similar announcement to Target. When you drill down further, though, it’s possible Walmart’s exposure is at a somewhat lower magnitude because of the companies’ different sales mixes. According to Bank of America analysts, general merchandise accounted for about 54% of Target’s sales in calendar year 2021, compared with 32% for Walmart in the U.S. This difference in sales mix is one explanation why Walmart also has lower margins than Target to begin with — 5% operating margin in fiscal 2022 versus Target’s 8.5%. Additionally, Walmart already dramatically revised its earnings expectations in May, saying it now expects earnings per share to decline about 1% this year compared to its prior forecast of a mid-single-digit increase. Target, by contrast, just did not provide a full-year earnings outlook when it reported first-quarter results in May. To be clear, we’re not saying Walmart is operating in an ideal environment right now. Far from it. It’s a tough landscape for retailers including Walmart, but we are saying there are ample reasons why Walmart may not issue a revision to its margin guidance like Target had to do. (Jim Cramer’s Charitable Trust is long WMT and COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

The clearance rack at T.J. Maxx clothing store in Annapolis, Maryland, on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to grow.
Jim Watson | AFP | Getty Images More

Parents, law enforcement and one student on Wednesday described the mass shootings in Uvalde, Texas, and Buffalo, New York.
Kimberly Rubio broke down in tears as she described her 10-year-old daughter Lexi, who was killed in Uvalde.
“We don’t want you to think of Lexi as just a number. She was intelligent, compassionate and athletic,” said Rubio, who called for tighter gun laws.
Robb Elementary student survivor Miah Cerrillo, 11, told lawmakers she covered herself in a friend’s blood to survive the attack.

Gun control advocacy groups rally with Democratic members of Congress during of a news conference on the grounds of the U.S. Capitol on Thursday, May 26, 2022 in Washington, DC.
Kent Nishimura | Los Angeles Times | Getty Images

Kimberly Rubio broke down in tears as she described her 10-year-old daughter Lexi to a room full of lawmakers who are weighing tighter gun laws following the massacre in Uvalde, Texas, that took Lexi’s life along with 18 of her classmates and two teachers.
“We don’t want you to think of Lexi as just a number. She was intelligent, compassionate and athletic. She was quiet, shy unless she had a point to make,” Rubio said Wednesday, crying next to her husband Felix at a hearing before the House Oversight and Reform Committee.

Parents, law enforcement and one of Lexi’s classmates who survived that May 24 mass shooting testified before Congress about the Texas massacre as well as one in Buffalo, New York, last month that left a combined 31 Americans dead and horrified the nation as the latest examples of mass shootings carried out by lone teenage gunmen.
“We understand that for some reason, to some people — to people with money, to people who fund political campaigns — that guns are more important than children,” Rubio continued. “Somewhere out there, there is a mom listening to our testimony thinking, ‘I can’t even imagine their pain,’ not knowing that our reality will someday be hers. Unless we act now.”
Robb Elementary student survivor Miah Cerrillo, 11, told lawmakers she covered herself in a friend’s blood and played dead during the May 24 shooting in Uvalde.
He “shot my teacher. Told my teacher, ‘Good night,’ and shot her in the head. And then he shot some of my classmates and the whiteboard,” Cerrillo said in a recorded question-and-answer sequence submitted as testimony. “He shot my friend who was next to me, and I thought he was going to come back to the room, so I got a little blood and I put it all over me.”
Asked if she feels safe at school, Cerrillo shook her head no. Pressed why not, she replied: “Because I don’t want it to happen again.”

Zeneta Everhart, mother of 20-year-old survivor Zaire Goodman, detailed the injuries suffered by her son on May 14, when an 18-year-old gunman carried out a racist rampage at a supermarket in Buffalo.
“To the lawmakers who feel that we do not need stricter gun laws: Let me paint a picture for you,” Everhart said in her testimony. “My son Zaire has a hole in the right side of his neck, two on his back and another on his left leg caused by an exploding bullet” from an AR-15 assault rifle.
“I want you to picture that exact scenario for one of your children,” she continued. “This should not be your story or mine.”

U.S. Representative Carolyn Maloney (D-NY) speaks during a House Committee on Oversight and Reform hearing on gun violence on Capitol Hill in Washington, U.S. June 8, 2022.
Andrew Harnik | Reuters

Other witnesses included Uvalde pediatrician Dr. Roy Guerrero, New York City Mayor Eric Adams, Buffalo Police Commissioner Joseph Gramaglia and Amy Swearer of The Heritage Foundation, a conservative think tank.
Gramaglia praised retired Buffalo police officer Aaron Salter Jr., who shot — but was unable to stop — the 18-year-old gunman who used an AR-15 to kill 10 people in a predominantly Black neighborhood in Buffalo. Salter was among those shot to death.
“It is often said that a good guy with a gun will stop a bad guy with a gun. Aaron was the good guy and was no match for what he went up against: A legal AR-15 with multiple high-capacity magazines” the Buffalo police commissioner told lawmakers.
“Assault weapons like the AR-15 are known for three things,” he continued, “how many rounds they fire, the speed at which they fire those rounds and body counts.”
Swearer, a legal fellow at The Heritage Foundation, represented views supported by many Republicans, who in general oppose new laws that would make it far more difficult to own assault rifles or high-capacity magazines.
She said the vast majority of mass shooters are 21 or older, criticizing what she categorized as an erroneous, knee-jerk reaction among Democrats to push for sweeping regulations after each mass shooting.
“Semi-automatic rifles are the type of firearm least often used to commit acts of gun violence,” Swearer said. “The context in which mass shootings occur renders magazine limits effectively useless at saving lives. Eighteen to 20-year-olds are legal adults otherwise endowed with all of the rights and duties of citizenship including the right to keep and bear arms.”
The hearing comes just hours before the broader chamber is expected to vote on a suite of stricter gun laws collectively known as the Protecting Our Kids Act.
The Democratic House will seek to pass legislation Wednesday afternoon that raises the age at which a person could purchase an assault rifle to 21 from 18, outlaw the sale of large-capacity magazines and create new rules for storing firearms at homes.
Even if House Democrats are able to muscle that bill through the chamber, the move would be symbolic since Senate Republicans are united against it.

Miguel Cerrillo, the father of Miah Cerrillo, a fourth-grade Robb Elementary School student who survived the May 24 school shooting in Uvalde, Texas, takes notes as victims’ parents and survivors of Uvalde and Buffalo shootings testify before a House Oversight Committee hearing on “The Urgent Need to Address the Gun Violence Epidemic,” on Capitol Hill in Washington, U.S., June 8, 2022.
Jonathan Ernst | Reuters

WATCH LIVEWATCH IN THE APP More

Bausch + Lomb (BLCO) reported largely in-line fiscal first-quarter financial results before the opening bell Wednesday. The numbers were not a surprise because B+L reported its first quarter results inside of Bausch Health Companies ‘ (BHC) release in early May. However, Wednesday was still an important event because it marked the first time since its initial public offering that B+L management spoke to the entire analyst community. Before getting into the Bausch + Lomb numbers and commentary, here’s why they matter to us as shareholders of Bausch Health. On Wednesday, both BLCO and BHC shares traded lower as Wall Street seemed unimpressed with what they read and heard. While the Investing Club doesn’t directly own stock in the recent Bausch + Lomb IPO for the Trust, Bausch Health owns about 90% of its former eyecare unit. Smaller-than-expected proceeds of May’s ill-timed B+L offering went to pay down debt at BHC, which plans to further monetize that stake in the future. We’ll go further into BHC’s separation strategy and how it figured into our original investment thesis a little later, but now let’s get to Bausch + Lomb’s quarterly numbers. Sales rose 5% year over year organically to $889 million, largely matching results reported last month in BHC’s own release. Driving the topline was a 4% year over year organic increase to $560 million in Vision Care sales, a 13% rise to $174 million in Surgical sales, and a 3% decline to $155 million in Ophthalmic Pharmaceuticals sales. Adjusted earnings of $0.24 per share came in slightly ahead of estimates. Operating income came in at $54 million, down $31 million versus the year-ago period due to increased what the company described as “investments in Selling, general and administrative (SG & A) expenses and R & D spending, as well as an increase in Cost of goods sold, partially offset by a decrease in amortization of intangible assets and an increase in revenues.” Turning to guidance, management forecasts full-year sales for Bausch + Lomb to come in at $3.75 billion to $3.8 billion, bracketing the $3.79 billion analysts were expecting coming into the print. Additionally, full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to be in the range of $740 million to $780 million, largely matching expectations of $763 million at the midpoint. Why we care On the quarterly release, management reiterated Bausch Health’s intention to complete the spinoff of additional shares of Bausch + Lomb following the expiration of customary lock-ups related to the IPO (125 days from the S1 filing date of April 28, 2022), the achievement of net leverage ratio targets, and provided market conditions are favorable and shareholder and other necessary approvals are granted. Prior to the Bausch + Lomb IPO, management noted that Bausch Health intends to utilize 20% of the BLCO funds to pay off debt at parent BHC. The IPO represented the first 10% and looking forward, it appears that another 8.7% (the difference likely the result of transaction fees) is intended to be monetized for the purposes of paying down debt. Of course, the more BLCO is worth at that time, the greater the impact will be on BHC’s debt levels. The remaining 80% is expected to be distributed to BHC shareholders through a spinoff, which we believe will be the key event to bring out value. So, the value of BLCO is important for two reasons: First it will impact BHC’s ability to reduce debt levels — and second, it will eventually be distributed to BHC shareholders. As it stands now, there are currently 350 million shares of BLCO outstanding. At a share price of $15.66, this amounts to a market cap of $5.48 billion, which again, BHC still owns roughly 90% of. Assuming management monetizes the additional 8.7% at $15.66, they should be able to reduce debt by nearly $477 million. However, we would be surprised to see BHC monetize this last piece at such a low equity value because BLCO currently trades at a significant discount to its peers. On the IPO, which was priced well below the company’s range at $18 per share, BHC got $630 million to pay down debt. If BHC can then distribute the other 80% to shareholders at those levels, it would should mount something akin to a stock dividend to shareholders of just under $4.4 billion. Of course, if BLCO performs well and shares appreciate before then, the debt paydown at BHC would be greater, as would the distribution to shareholders in the form of BLCO shares. Recall, that one key issue plaguing BHC is a roughly $20 billion net debt load on the balance sheet. The monetization of BLCO along with the expected IPO of Solta Medical should provide a material dent to that debt level and allow shares of BHC to trade more so on the merits of its product offerings and less so on the state of its balance sheet. We purchased Bausch Health on the premise that the IPOs of Bausch + Lomb and Solta would free those faster-growing units to thrive as separate companies, untethered to the slower-growing but much larger pharma business, which stays with the parent. Unfortunately, the Bausch + Lomb IPO, which came as the stock market was in the throes of its recent meltdown, and terrible first-quarter Bausch Health earnings have hurt BHC shares and delayed the de-leveraging timeline. Given these poor results and our loss of faith in management’s ability to unlock further value via spinoffs following the completely botched Bausch + Lomb separation, we downgraded shares on May 10 to a 4 rating, designation we have not had a use for until now. As we noted at the time, we usually rate stocks 1 to 3 . The 4 rating served notice that no action will be taken on BHC stock until more information becomes available. Patent cliff Debt isn’t the only concern on shareholders’ minds. The other is the patent cliff for Xifaxan, used to treat irritable bowel syndrome with diarrhea. While this is more of a Bausch Health issue, as Xifaxan is a Salix Pharmaceuticals product and Salix is wholly owned by Bausch Health, it was the topic of the first question on Bausch + Lomb’s earnings call on Wednesday. Remember, investors know what the debt is and can model it, what we don’t have as much clarity on is the outcome of a Xifaxan patent trial that will determine how long it is before generic competition is allowed to come to market. If there is one thing investors hate more than bad news it is uncertainty because again, bad news (or debt) can be modeled effectively, uncertainty on the other hand leaves much more room for error — and as a result causes many to avoid ownership or price in severely adverse outcomes as a way to incorporate some margin of safety. While management reiterated their confidence that the trial will go in their favor, saying their legal team “felt more confident at the end of the trial versus at the start of the trial,” they did not go into much detail as to what happens if it goes the other way. Bottom line, management did note the evaluation of multiple scenarios for planning purposes. While they remain confident of victory, should they lose, it would deal a significant blow to future sales potential. According to Bloomberg Intelligence, a negative outcome for Bausch Health in its case against Norwich Pharmaceutical could move up the entry of a generic version by as much as three to four years — as early as the end of 2024 — and hit future sales by anywhere from $6 billion to $8 billion, assuming about $2 billion of sales per year, with little in the pipeline to offset the blow. This is perhaps the single greatest overhang and risk on the stock and one we are monitoring closely. As a reminder, the trial took place in March 2022 and management expects a decision in early August. Answering a common question Lastly, we want to address Club member questions we received a few times, which is how Bausch Health accounts for its BLCO position when providing financials. Without getting too into the weeds, there are essentially three ways a business can account for its investment in another business: (1) the cost method, (2) the equity method, and (3) the consolidation method. As a rule of thumb, the method used may be determined by ownership percentage. The cost method is largely used for ownership stakes of 20% or less; the equity method is reserved for stakes of 21% to 50%; and the consolidation method is used for those investments that account for over 50%. That said, while the percentage ownership is a good place to start what it really comes down to is the level of control/influence a company has over its investment. For example, if a company owns 40% of another business, but exerts immense control, the consolidation method would likely be more appropriate than the equity method. BHC’s 90% ownership of Bausch + Lomb falls into the consolidation camp. That method works exactly as one might assume — by consolidating the financial statements of the subsidiary into those of the parent. Eliminations are then factored in to adjust for the non-controlling interests and to prevent double counting between the parent and the subsidiary. These eliminations are generally found in the shareholder equity portion on the balance sheet and towards the bottom of the income statement when addressing the allocation of profits. (Jim Cramer’s Charitable Trust is long BHC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Joseph Papa, CEO, Bausch Health
Scott Mlyn | CNBC More

The U.S. Interior Department said on Wednesday it will phase out the sale of single-use plastic products in national parks and other public lands by 2032.
Interior Secretary Deb Haaland issued an order to reduce the procurement, sale and distribution of such products and packaging on more than 480 million acres of public lands.
The measure would help to reduce the more than 14 million tons of plastic that end up in the ocean every year.

Trash in the saw grass at the Big Cypress National Preserve Park.
Jeff Greenberg | Universal Images Group | Getty Images

The U.S. Interior Department said on Wednesday it will phase out the sale of single-use plastic products in national parks and other public lands by 2032, in an attempt to mitigate a major contributor to plastic pollution as the country’s recycling rate continues to decline.
Interior Secretary Deb Haaland issued an order to reduce the procurement, sale and distribution of such products and packaging on more than 480 million acres of public lands, and to identify more sustainable alternatives like compostable or biodegradable materials.

The measure would help to reduce the more than 14 million tons of plastic that end up in the ocean every year. Under the order, single-use plastic products refer to items that are disposed of immediately after use, like plastic and polystyrene food and beverage containers, bottles, straws, cups, cutlery and disposable plastic bags.
In 2011, some national parks imposed a ban on plastic water bottle sales in an effort to reduce waste and recycling costs. The restrictions resulted in the removal of up to 2 million water bottles per year before the Trump administration rolled back the ban six years later.

More from CNBC Climate:

The U.S. is one of the world’s largest producers of plastic waste. The country’s recycling rate fell to between 5% and 6% last year, according to estimations in a report from environmental groups Last Beach Clean Up and Beyond Plastics, as some countries stopped taking U.S. waste exports and waste levels reached new highs.
The Interior Department said it produced nearly 80,000 tons of municipal solid waste in fiscal year 2020.
“The Interior Department has an obligation to play a leading role in reducing the impact of plastic waste on our ecosystems and our climate,” Haaland said in a statement.

“Today’s Order will ensure that the Department’s sustainability plans include bold action on phasing out single-use plastic products as we seek to protect our natural environment and the communities around them.”
Environmental groups praised the announcement.
“The Department of Interior’s single-use plastic ban will curb millions of pounds of unnecessary disposable plastic in our national parks and other public lands, where it can end up polluting these special areas,” said Christy Leavitt, plastics campaign director for Oceana, an ocean conservation organization.

WATCH LIVEWATCH IN THE APP More

Tax-loss harvesting — using losses to offset profits — may be attractive when the market dips, but it doesn’t make sense for all portfolios.  
You need to consider the so-called wash sale rule, which doesn’t allow you to rebuy a “substantially identical” investment within the 30-day window before or after the sale.
And if your taxable income is low enough, you may fall into the 0% long-term capital gains bracket, and it may be better to take profits.

valentinrussanov

When the stock market dips, a strategy known as tax-loss harvesting can be a silver lining. But it doesn’t make sense for all portfolios, financial experts say.  
Here’s how tax-loss harvesting works: You can sell declining assets from your brokerage account and use the losses to offset other profits. Once losses exceed gains, you can subtract up to $3,000 per year from regular income. 

Tax-loss harvesting may now be more attractive with the S&P 500 Index down by nearly 14% since January’s all-time high. However, there are scenarios where it’s better to steer clear on this strategy.
More from Personal Finance:Tax planning begins when building your portfolioHere are options for handling unpaid 401(k) loansColleg may cost much less than you think
One popular move involves selling a losing asset and replacing it with something similar to score a tax break while keeping the original portfolio exposure. 
However, this so-called wash sale rule bars that loss if you buy a “substantially identical” investment within the 30-day window before or after the sale, according to the IRS.
It may be better to consider skipping tax-loss harvesting if you can’t find a “good equivalent replacement,” said certified financial planner Matthew Boersen, managing partner of Straight Path Wealth Management in Jenison, Michigan.

Loading chart…

While it may be easier to find alternative exchange-traded funds or mutual funds, selling individual stocks requires you to “sit on the sideline for the next 30 days,” he said.
“The market can move a lot during this time,” said Kristin McKenna, a Boston-based CFP and managing director at Darrow Wealth Management. You may potentially “wipe out the tax benefits of harvesting losses” by choosing another stock, she said.
“It’s important to consider the role of funds in an asset allocation and how selling different securities may impact risk,” McKenna added.

Zero percent capital gains

What’s more, if your income falls below certain thresholds, it’s better to take profits from assets owned for more than one year, known as long-term capital gains, rather than losses, explained Larry Luxenberg, a CFP and founder of Lexington Avenue Capital Management in New City, New York.
If you have taxable income under $41,675 for single filers and $83,350 for married couples filing together in 2022, you’re in the 0% bracket for long-term capital gains.

You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income, which are your earnings minus so-called “above-the-line” deductions.
“You may actually want to take gains if you’re still in the zero capital gains rate,” Luxenberg said.
When you’re in the 0% bracket, you can sell profitable assets, avoid paying long-term capital gains taxes and repurchase the same investments for a so-called “stepped-up basis,” which adjusts the purchase price to the current value, securing lower taxes in the future, he said.

WATCH LIVEWATCH IN THE APP More

Chiquita Brooks-Lasure, head of the Centers for Medicare and Medicaid Services, wants to streamline the process for Americans who transition between Medicaid plans and private health insurance.
Expanding Medicaid coverage for new mothers is a key health equity priority.
Brooks-Lasure says the agency has little recourse to provide access to abortion if Roe v. Wade is overturned, but it could provide more birth control.
Medicare recipients could see lower drug plan premiums in 2023.

Chiquita Brooks-LaSure testifies before the Senate Finance Committee during her nomination hearing to be administrator of the Centers for Medicare & Medicaid Services in Washington on Thursday, April 15, 2021.
Caroline Brehman | CQ-Roll Call, Inc. | Getty Images

In her first year as administrator of the Centers for Medicare and Medicaid Services, Chiquita Brooks-Lasure has overseen the expansion of government health coverage to a record number of Americans under Medicare, Medicaid and private Affordable Care Act exchange plans.
Now, she wants to keep them insured, and expand access to services for women.

“We cover over 150 million people as a result of all of the hard work of the agency really enrolling people in coverage. So, we are a huge payer, and we help dictate coverage in this country … and have a powerful opportunity to advance health equity,” Brooks-Lasure said.
In the year ahead, one of the agency’s biggest challenges will be to create a smooth transition for millions of Medicaid members who could lose coverage when the Covid public health emergency ends. Under the federal health emergency, states have put eligibility redeterminations on hold for the last two years.

Loss of coverage

While the administration is expected to renew the current emergency designation next month, a Kaiser Family Foundation study estimated that between 5 million and 14 million people could be disenrolled when redeterminations resume.  
Brooks-Lasure says health insurers that administer state Medicaid programs will play an important role to help those who lose eligibility to transition to private exchange health plans, or Medicare if they’ve turned 65.  
“We have more plan participation, particularly in Medicaid coverage, than we did, say, 10 years ago. So they are a key component to helping make sure that we — and by we, I also mean the states — move people to whatever type of coverage they are eligible for,” she said.

Even beyond the public health emergency, she wants health coverage to be more consistent across public and private programs.
“Because whether it’s talking about maternal health or you’re in the middle of cancer treatment … you want to stay focused on the condition itself rather than having to worry about what changed in your coverage,” she said.

Birth control

In a new report outlining priorities for the agency, Brooks-Lasure says addressing health disparities is a central pillar of the agency’s mission. It’s been especially focused on improving maternal health coverage; Medicaid programs now cover 40% of births in the U.S. With funding from the American Rescue Plan Act, passed in 2021, the agency is working with states to expand Medicaid coverage for new mothers who are uninsured from 60 days to 12 months.
When it comes to reproductive care, Brooks-Lasure said CMS will also prioritize improving access to contraception in Medicaid and ACA health plans in the year ahead. If the Supreme Court overturns Roe v. Wade, as expected this month, the agency will be limited in its ability to provide access to abortion for women on Medicaid under federal funding rules.
Brooks-Lasure said the agency was focused on areas it has authority over, such as preventative care and contraception. She said CMS is encouraging states to use Medicaid to ensure men and women have access to birth control, “in light of whatever the Supreme Court decision is regarding broader services.”

Medicare premium rollback

One of the biggest decisions CMS issued this year was to limit Medicare coverage for the Alzheimer’s treatment Aduhelm, after mixed data on the drug’s efficacy. However, the move came after actuaries had factored in the expected high cost of the drug into 2022 Medicare premiums. Medicare recipients can expect a rollback in 2023.
“Because coverage is lower, we are going to incorporate that in the premium for next year,” Brooks-Lasure said.
Medicare recipients could also get a break on drug plan premiums with the introduction of several biosimilar versions of AbbVie’s high-priced arthritis treatment Humira over the next year. Humira sales topped $20 billion in 2021. Amgen’s biosimilar version will be the first to go on sale in the U.S., in January.
Brooks-Lasure said CMS actuaries are calculating the potential impact of the transition to Humira biosimilars and are expected to release their analysis in early September, in time for setting 2023 premiums.

WATCH LIVEWATCH IN THE APP More