Month: February 2021

#17 From Wallstreet to Cancun, A Recap of this Weeks Ice Age

Friday, February 19th Closing Price

 

TABLE OF CONTENTS

  1. DISCORD RECAP
  2. MERCHANDISE
  3. EDUCATIONAL LEARNING SEGMENT
  4. UPCOMING WEEK EVENTS & EARNINGS
  5. MONDAY
  6. TUESDAY
  7. WEDNESDAY
  8. THURSDAY
  9. FRIDAY
  10. LAST WEEK’S EARNING

 

“Why wait to do something next week when you can do it right now?” – Frank Mercado

 

DISCORD RECAP (2/16 – 2/19)

We had a number of great trades last week but the winner is definitely $RIOT.

RIOT is a company that is focused on building, supporting and operating Blockchain.

With Bitcoin making new record highs, we thought it would be best to trade those companies that will help Bitcoin succeed.

We bought shares around $60 and option contracts.

Our members made over $3,000 in profits on this trade alone.

JOIN OUR DISCORD

www.tigerwolfcapital.com/discord

EDUCATIONAL LEARNING SEGMENT

Don’t chase the companies that are making every headline, follow the companies that are supporting them.

 

Bitcoin has been a topic of conversation for the past few months.

In the past 3 month, Bitcoin has surged over 200%. Nice return on investment.

 

If you invested $1,000 in Bitcoin you would have $3,085 today.

 

However, if you invested the same $1,000 in $RIOT, a company that engages in the provision of investment services to the blockchain ecosystem as well as manufacturing in-vitro substances, you would have $10,564.

 

UPCOMING WEEK 2/22 – 02/26

EVENTS & TALKS

Monday February 22 2021:

  • Fed Bowman Speech 3:30 PM EST

Tuesday February 23 2021:

  • Fed Chair Powell Testimony 10 AM EST ( Two Day event)

  • Consumer Confidence FEB 10 AM EST

  • S&P/Case-Shiller Home Price YoY DEC 9:00 AM EST – With a reported 10% national price increase, amid a housing shortage it is clear that the price increase may not be slowing down anytime soon.

Wednesday February 24 2021: 

  • New Home Sales MoM JAN 10:00 AM EST – The new homes sold bounced back after a pullback in December, but there continues to be a housing shortage and price volatility hampering prospective buyers.

  • Fed Chair Powell Testimony 10:00 AM EST

  • Fed Brainard Speech 10:30 AM EST

  • Fed Clarida Speech 1:00 PM EST

Thursday February 25 2021:  

  • Durable Goods Orders 8:30 AM EST

  • Initial Jobless Claims 8:30 AM EST

  • GDP Growth Rate QoQ 2nd Est 8:30 AM EST

  • Fed Quarles Speech 11:10 AM EST

  • Fed Williams Speech 3 PM EST

Friday, February 26, 2021: 

  • US Budget Plan FY 2022

  • Personal Spending MoM JAN 8:30 AM EST

 

EARNINGS

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Monday, February 22, 2021

Before Market Open

$RCL – Royal Caribbean has been forced to dock all their ships, and they have to remain running while docked. Royal Caribbean has been burning cash throughout the pandemic, and their business model requires them to have full ships to overcome the cruise costs. Expected EPS of –$5.40 and Revenue of $52.14M, with expected quarterly revenue to decrease by -97%.

Tuesday, February 23, 2021

Before Market Open

$HD – Home Depot has had success throughout the pandemic with people staying at home and committing to DIY projects at home. Home Depot is the largest home improvement retailer, and they offer a wide array of products. Expected EPS of $2.74 and Revenue of $30.45B, with expected quarterly revenue to increase 18%.

$MCY – Macy’s was at one point the world’s largest retailer and since then have fallen from grace and accrued many losses with the growth of online shopping. Along with the fall of retail service due to online shopping, Covid-19 has curbed tons of retail shopping and hurt Macy’s business severely. Expected EPS of $.40 and Revenue of $6.51B, with expected quarterly revenue to decrease by -22%.

After Market Close

$SQ – Square provides financial services as a point of sale system and payment taker. They can receive no-touch payment, their software for collecting payment using a phone, and several other in-house payment options. Square has had a unique 2020 with its various payment options, which has allowed them to be successful. Expected EPS of $.34 and Revenue of $3.1B, with expected quarterly revenue to increase by 136%.

$INTU – Intuit is the leader in DIY taxes and financial management services for small businesses and individual consumers. They own several flagship products: Quickbooks, TurboTax, and Mint. Individuals turn to TurboTax for an easy-to-use and cost-effective way to file taxes. Intuit is reporting its annual and quarterly earnings. Expected EPS for Q2 is $.13, and revenue is $1.57B, and quarterly revenue is expected to decrease by -7.4%, while annual revenue is expected to increase by 16.2%.

Wednesday, February 24, 2021

Before Market Open

$LOW – Lowe’s, the tertiary home improvement company, operates a very similar business model to Home Depot as they are substitutes for each other. Consumers are spending more money on DIY projects and home improvement, which can be reflected in their earnings. They have an expected EPS of $1.36 and Revenues of $19.33B, with expected quarterly revenue to increase by 20%.

$JMIA – “The Amazon of Africa” Jumia provides an e-commerce service that offers a wide variety of services and products across Africa. This stock has recently had a long bullish run and has much promise from investors. Expected EPS of -$.46 and Revenue of $50M, we can expect Revenue for Jumia to increase in the future.

After Market Close

$NVDA – Nvidia is one of the leaders in the semiconductor industry and provides chips to several companies across several sectors. They offer microchips to data centers, electric vehicles, artificial intelligence, and a GPU platform. Expected EPS of $3.26 and Revenue of $4.83B, with expected quarterly revenue to increase by 55%.

$BKNG – Booking is one of the leading online hospitality services providers and has been struck throughout Covid-19. Booking derives revenue from agents accommodating trips and merchant revenue from users to services. Expected EPS of -$4.43 and Revenue of $1.17B, with expected quarterly revenue to decrease by -65%.

Thursday, February 25, 2021

Before Market Open

$PLUG – A company we have kept a strong focus on in the last two months and many of their sales. Plug is one of the leaders in the alternative energy/hydrogen fuel cell, and moving forward, demand for their products will begin to increase exponentially. They have an expected EPS of –$.09 and Revenue of $83.34M, with expected quarterly revenue to decrease by 9%.

$DPZ – Domino’s Pizza is the second-largest pizza chain globally; they have made the entire process of delivery much more efficient. Domino’s serves competitive-priced pizza, easy order access, and efficient service by new technology. They have an expected EPS of $3.85 and Revenue of $1.38B, with expected quarterly revenue to increase by 20%.

$BBY – Best Buy is a leading retailer of technology products and services. While people are continuing to work from home, they rely on Best Buy for new products and Geek Squad services to fix their existing tech products. They have an expected EPS of $3.64 and Revenue of $17.20B, with expected quarterly revenue to increase by 13.2%.

$MRNA – Moderna is one of the three pharmaceutical companies that could produce and manufacture a feasible Covid-19 Vaccine to be distributed throughout the world. Soon, Moderna will continue to generate extraordinary revenues after spending absurd amounts on R & D. They have an expected EPS of -$.17 and Revenue of $326.58M, with an expected quarterly revenue increase of 2,223.6%.

After Market Close

$CRM – Salesforce performs on-demand CRM applications that allow customers to manage and share all of their sales, support, and marketing. Salesforce offers a unique platform that enables companies to share, exchange, and install applications with a few simple clicks. They have an expected EPS of $.81 and Revenue of $5.68B, with an expected quarterly revenue increase of 17%.

$BYND – Beyond Meat is an ever-expanding meat alternative that is becoming highly popular with partnerships with global conglomerate companies. They offer various products that can serve any vegan or non-meat consumer taste. They have an expected EPS of –$.20 and Revenue of $104.48M, with an expected quarterly revenue increase of 6%.

$NKLA – Nikole Corporation manufactures electric vehicles and offers battery-electric and hydrogen fuel-cell electric vehicles. They have an Expected EPS of -$.33 and Revenue of $.06M.

$FSLR – First Solar designs and manufactures solar modules with a semiconductor film that can keep these products at a low cost. First, Solar wants to reduce the cost of Solar to combat and become a substitute for traditional energy sources. Expected EPS of $1.31 and Revenue of $713.59, with expected quarterly revenue to decrease -49%.

$DELL – Dell technology provides information technology solutions, and their operating segments consist of Client Solutions, Enterprise Solutions, and Dell Software group. Dell sells desktops to commercial and retail clients and data storage for clients. Expected EPS of $2.35 and Revenue of $23.99B, with expected quarterly revenue to remain the same.

Friday, February 26, 2021

Before Market Open

$DKNG – DraftKings is a direct competitor to Penn Gaming, and we have kept a strong focus on Penn. DraftKings promotes an exclusively online sports book/casino, and they have seen extended user growth over the last six months. Expected EPS of -$.55 and Revenue of $229.70M.

MARKET LAST WEEK (2/16 – 2/19)

MONDAY (2/16)

Image result for facebook logo

Mark Zuckerberg at a security conference said the social-media platform is in between a newspaper and a telecommunications company in terms of responsibility for the content and should be regulated as such. With all the recent news about Twitter shutting down accounts, and censorship being an undertone in the news, Zuckerberg confirms the heavy responsibility they bear with the most extensive user base. Its users drive Facebook’s content, and therefore they should have the role of a telecommunications company, while on the other side, they are broadcasting user content. They lie in a difficult position where regulators on both sides are looking to increase Facebook rules and be responsible to everyone.

TUESDAY (2/17)

A massive cold front has moved across the continental United States, and there have been rolling blackouts in many of the Middle American states. The supply of crude oil has fallen, which has sent the US Crude oil prices above $60 a barrel. The cold has halted production, threatening to reduce gasoline and diesel supply throughout the country. Frigid weather is expected to remain throughout the middle of the week, and Covid-19 vaccinations have faced possible disruption. Some Covid-19 vaccines rely on extremely cold temperatures, which require electricity. Without it, the Covid-19 vaccine becomes useless, and this will cause lots of money wasted.

Beijing is exploring whether China can limit the export of rare earth materials to the US Department of Defense, crucial to manufacturing Lockheed Martin’s F-35 and other sophisticated weaponry. China controls about 80% of the global supply of these rare earth materials and can severely restrict the production of defense materials. Boeing, Lockheed Martin, and Raytheon will be severely hurt by China limiting these rare Earth materials.

WEDNESDAY (2/18)

Image result for bitcoin logo

Bitcoin began a big rally Wednesday, eclipsing the $50K mark for the first time. Several companies such as Mastercard, Bank of New York, and Tesla started investing in Bitcoin. Tesla invested $1.5B in Bitcoin as an alternative cash position and began receiving Bitcoin payments for their cars. This is massive momentum for the cryptocurrency as more institutions develop trust in the alternative asset. MicroStrategy offered $900M of debt to develop a Bitcoin position, and Jack Dorsey from Square started taking Bitcoin as payment.

The Treasury yield increased by 1.3% after hitting a new high on Friday, while the 30-year gained eight basis points. With increased vaccinations and the economy beginning to restart, Janet Yellen, alongside Jerome Powell, wants to keep Nominal Yields low with such high debt levels in the marketplace.

THURSDAY (2/19)

Unemployment claims rose to 814K showing signs that the economy is beginning to worsen after continued positive trends over the last several weeks of decreasing unemployment claims. An upward claim of 55K from the week prior, Marianne Wanamaker, a labor economist from the University of Tennessee, is quoted saying, “Things are not as stalled as they were in January, but we don’t have any momentum.”

In light of the GameStop stock saga craziness, several key players will have a hearing on Capitol Hill. Vlad Tenev Robinhood CEO, Melvin Capital Gabe Plotkin, Reddit Steve Huffman, and Citadel’s Kenneth Griffin and Keith Gill. Lawmakers will get their chance to ask the executives in a hearing focused on “short-selling, online trading platforms, gamification, and their impact on capital markets and retail investors.” Several House Committee members on Financial services worked tentatively to expose any fraudulent acts that developed from the GameStop stock price boom.

FRIDAY (2/20)

This week may have felt like a month for many residents in Texas. With the large snowstorm that covered the state and left many without working utilities, the situation was dire for some. Although Texas was able to restore electricity services to most of the state Friday morning, with Federal aid, government officials are hoping to safely treat water soon as well. This would be a massive stride to restoring many Texan’s safe drinking water, as damaged pipes have led to “boil water” advisories across the state.

    Another area that may be expecting a federal aid boost soon is the EV sector. New legislation proposed would grant companies such as GM and Tesla another round of federal tax credits. With new EVs being unveiled by the manufacturer from foreign competitors such as Audi, BMW, and Polestar, access to federal tax incentives could help Tesla and GM continue to lead the American EV market. While not entirely waiting to see if the new bill would pass, Tesla lowered its pricing system on its base model cars in hopes of encouraging those who may have been on the fence about their decision to buy a new Tesla or not. The EU is pushing heavily to transition to emission-free vehicles; we will have to wait and see if the US will join them in creating aggressive incentives and tax rebates to expand interest in switching from conventional ICE vehicles.

REVIEW OF LAST WEEK’S EARNINGS (2/16 – 2/19)

Tuesday (2/16)
(Before Market Open)

 

$PLTR – Planatir Technologies

Palantir Technologies is a data-driven company that provides the best user experience by building platforms to integrate, manage, and secure data. Palantir’s business has grown significantly throughout 2020, with Stay-At-Home orders and businesses needing to have data packaged in one place.

  • Revenue growth of 47% in 2020, to $1.09B

  • Q4 Revenue increased by 40% to $322M

  • 17% Adjusted operating margin

  • 21 deals signed in Q4, each worth $5M

  • Palantir generated $610M from Government customers, which totaled 56% of revenue

  • 77% of Revenue Growth derived from Government contracts

  • 2019 Customer Concentration was 67% of revenue, and decreased to 61% in 2020

Takeaway:

Palantir is showing extremely healthy earnings, and this should continue with the growth of Data and demand for places to store and use this data in one place.

 

$CVS –  CVS Health

CVS Health had experienced an extraordinary year amid the Global Pandemic with their healthcare services, pharmaceutical services, and cosmetic business bolstering.

  • 2020 Total Revenue increased to $268M, up 4.6% YoY

  • 2020 EPS of $7.50 and Q4 $1.30

  • Full Year Cash Flow from operation of $15.9B

  • 4.6% revenue growth for Q4 YoY

  • Operating income increased 16% YoY

Takeaway:

CVS has steadily increased sales throughout 2020, and every business segment has grown YoY. We will continue to watch for news with CVS on implementing the Covid-19 vaccine and the profits they derive from it.

 

$AN –  Autonation

Autonation is the world’s largest car dealer, and their earnings will provide useful insight into consumer disposable income.

  • Q4 Revenue of $5.8B an increase of 5%

  • Gross Profit totaled $984M, an increase of 11% YoY

  • Operating income $309.4M increase 31% YoY

  • EPS of $1.73, down -1% YoY

  • Q4 Common Stock repurchased 4.7M for a purchase price of $302M

Takeaway:

These earnings show that consumers are spending their disposable income, and with interest rates being at an all-time low, consumers are willing to take out loans right now.

 

$ECL – Ecolab

Ecolab is a leader in sanitization for the hospitality and healthcare industry.

  • Q4 earnings show massive improvements in QoQ from Q3

  • Sales were down -6% YoY, $3.06B Sales for Q$

  • Diluted EPS from operations $1.04, -23% YoY

  • Operating Income $416M, -20% YoY

  • Cash Flow from operations of $650M and $523M FCF

Takeaway:

Ecolab shows the signs of an economy rebounding while still facing some harsh winter conditions, with restaurants beginning to re-open.

Wednesday (2/17)

(Before Market Open)

$SHOP – Shopify

Shopify is a cloud-based platform that has thrived throughout the pandemic, with consumers purchasing more goods online than ever before.

  • Q4 Revenue Growth of 94% YoY, Total Revenue was $977M

  • Full-Year 2020 Revenue Growth of 86%

  • Gross Merchandise Volume exceeded $41B for Q4 and $120B for 2020

  • Subscription Solutions revenue was $280M, up 53% YoY

  • Monthly Recurring Revenue was $82.6M

Takeaway:

Shopify has continued to grow massively with the unprecedented growth of online sales, and the demand for users to track their packages minute by minute has increased significantly.

 

$HLT – Hilton

Hilton is one of the largest hotel chains globally, and Covid-19 has stunted hotel use and caused massive losses across the board.

  • Diluted EPS was -$.80 for Q4 and -$2.56 for 2020

  • Net loss was $225M for Q4 and $720M for 2020

  • Revenue for 2020 $1.6B, and Q4 of $384M

  • Issued $1.9B in Senior Notes in Decembers

Takeaway:

These earnings show how hard Covid-19 is still hitting the hospitality industry as Hilton is losing hundreds of millions of dollars throughout 2020.

 

$TSEM –  Tower

Tower produces analog semiconductor chips that are growing in demand with the increased need for data storage and growth of Electric Vehicles that require these chips.

  • Q4 Revenue of $345M, 11% Growth QoQ, and 13% Growth YoY

  • Organic revenue growth of 20% QoQ and 17% YoY

  • Revenue for 2020 of $1.26B, Operating Profit for Q4 $33M

  • EBITDA for Q4 was $96M; Cash Flow was $73M

Takeaway:

Demand for the semiconductor industry is at an all-time high, and Tower Semiconductor supplies that demand. Looking forward, Tower will need to increase its production capacity to provide this supply for the market.

(After Market Close)

$TWLO – Twilio 

A cloud-based communication platform that allows developers to make and receive text messages, phone calls, and web service APIs. Twilio is experiencing growth to unprecedented levels, with companies using their platform on a more frequent basis.

  • Q4 revenue of $548.1m, YoY Growth 65%

  • Full-year revenue of $1.76B, 55% YoY

  • Loss from operations of $185.3M for Q4, in comparison to $93.8M in 2019

  • EPS of $.04 in Q4, and a net loss of -$3.35 

  • Loss from operations of $429M for 2020, compared to $369.8M for 2019

Takeaway:

Twilio is growing revenue, while at the same time increasing costs. We will have to continue to look into their Earnings to see if they can decrease expenses moving forward.

$BIDU- Baidu 

Baidu is a leading AI company from China that works on AI cloud solutions, produced a strong Q4 earnings report. With the growth in demand for AI involvement, from cloud work to autonomous driving, Baidu stands to continue to benefit.

Baidu reported the following

  • Baidu Core non-marketing revenue grew 52% year over year in Q4

  • Baidu AI cloud differentiating with AI solutions grew 67%year over year in Q4

  • Baidu’s revenue reached US$16.4 billion

Takeaway:

Technology is becoming more integrated into everyday life with every passing month. With Bixby or Siri in most phones, computer chips in cars, and even smart light bulbs, for the most part, our society is pushing towards autonomy through “smart” devices for convenience. That will require increased AI involvement and production, which may provide Baidu with the avenue to continue to thrive.

Thursday (2/18)

(Before Market Open)

$WMT – Walmart

Walmart is a retail giant, with big box stores carrying items ranging from camping gear to fresh produce, aiming to be close to a one-stop-shop for all customers’ needs.

While failing to reach most analysts’ expectations for Q4 earnings, they still produced a solid Q4.

Walmart reported the following:

  • adjusted earnings came out at $1.39 per share, $1.51 expected

  • Raising wages at/above $15 an hour average

  • Online sales rose 69% in the quarter

  • Sales at US stores increased 8.6%

Takeaways:

Walmart always benefits during the holiday season with their large selection of products that end up shopping lists, from food to electronics. While the stimulus bill provided consumers with a small boost in purchasing power. Moving into the new quarter, growth may not expand as much as last year but can be expected to remain consistent as demand for household items is not likely to reduce.

 

$WM – Waste Management

One of North America’s largest waste disposal companies, with arguably the most recognizable logo in their sector. Everyone benefits from their services, which explains how when most companies struggled during the pandemic they were able to continue producing similar financial reports as the previous year.

They reported the following

  • in the fourth quarter of 2020, revenue increased $185 million in the Company’s collection and disposal business

  • Collection and disposal yield was 2.3% in the fourth quarter of 2020 compared to 3.2% in the fourth quarter of 2019

  • For the full year, total Company volumes declined 4.5% in 2020 compared to growth of 2.3% in 2019

Takeaways:

With a relatively flat 2020 vs 2019 Waste management can expect to recover some of the minor losses experienced with the majority of business reopening. Which can add volume back to their revenue streams, that may have been lost during the extended quarantine lockdowns.

 

$MAR – Marriott

One of largest and most recognizable hotel brands across the globe, released a weak Q4 earnings report, but as with the entire hospitality sector it was expected.

Marriott reported the following

  • Fourth quarter adjusted diluted EPS totaled $0.12, compared to fourth quarter 2019 adjusted diluted EPS of $1.51

  • Fourth quarter reported net loss totaled $164 million

  • Adjusted EBITDA totaled $317 million in the 2020 fourth quarter, compared to fourth quarter 2019 adjusted EBITDA of $901 million

  • The company added nearly 63,000 rooms globally during 2020, including more than

  • 28,000 rooms in international markets and a total of roughly 8,100 conversion rooms

Takeaways:

Everyone expected brands such as Marriott to continue to struggle as tourism was way down. They reported large losses compared to 2019, but with the vaccine rollout underway the hospitality sector is hoping to get a boost in business again by the end of the year.

(After Market Close)

$Roku – Roku  

Now a days it seems impossible to find smart TVs that are not Roku compatible. As a company they provide streaming services for TV shows, movies and sports across all of their compatible products, which included 38% of the sold smart TV’s in 2020.

Roku reported the following

  •  Total net revenue grew 58% YoY to $1,778 million

  • Platform revenue increased 71% YoY to $1,268 million

  • Gross profit was up 63% YoY to $808 million

  • Streaming hours increased by 20.9 billion hours YoY to a record 58.7 billion

  • In 2020, 38% of all smart TVs sold in the U.S. were Roku TV models

Takeaways:

It should come as no surprise more people were streaming entertainment more during 2019, with everyone confined to their homes during the pandemic, streams were a popular choice to pass the time. Now that more people are leaving their homes again, it will be interesting to see how they adjust and maintain part if not all of those increased streaming hours moving forward.

$AMAT – Applied materials

A leader in their sector, they produce  engineering solutions for the semiconductor, flat panel display and solar photovoltaic (PV) industries. With solar energy becoming more and more popular, their products are vital in producing efficient panels.

AMAT reported the following.

  • Record quarterly revenue of $5.16 billion, up 24 percent year over year

  • Quarterly GAAP EPS of $1.22 and record non-GAAP EPS of $1.39, up 27 percent and 42 percent year over year

  • Generated $1.42 billion in cash from operations

  • paid dividends of $201 million to shareholders

  • the company recorded gross margin of 45.5 percent,operating income of $1.28 billion or 24.9 percent of net sales for Q1

Takeaways:

Although they may not be the first tech company that comes to mind when compared to those in FAANG, applied materials is for all intents and purposes a tech engineering company. Providing the hardware that powers race car sensors to solar panels, they are positioned to continue to grow as demand for their products is not expected to slow down at all. Everyday items including cars, continue to become more advanced and companies will continue to require hardware that can keep up, so for 2021 we can watch to see just how high their ceiling can be.

$DBX – Dropbox

For all of us who have been students or worked in an office, chances are, you have used dropbox at one point. A leader in digital file storage and cloud solutions they produced a strong Q4 to close out their fiscal year.

Dropbox reported the following

  •  Total revenue was $504.1 million, an increase of 13% from the same period last year

  • Fourth Quarter Revenue of $504.1 Million

  • Net Cash Provided by Operating Activities of $170.7 Millionand Free Cash Flow of $158.4 Million

  • Paying users ended at 15.48 million, as compared to 14.31 million for the same period last year. Average revenue per paying user was $130.17, as compared to $125.00 for the same period last year

  • Cash, cash equivalents and short-term investments ended at $1.121 billion.

Takeaways:

With remote work becoming a new normal in our workforce, digital file storage and transfers become paramount in maintaining cohesion between company departments when everyone is no longer in the same building. As companies decide remote work can continue to be a viable solution, Dropbox may continue to show the same revenue growth in 2021 as it did in 2020.

#16 $1.9 Trillion Stimulus Package

Friday, February 12th Closing Price

TABLE OF CONTENTS
  1. MERCHANDISE
  2. DISCORD RECAP
  3. STOCKS ON OUR RADAR
  4. MONDAY
  5. TUESDAY
  6. WEDNESDAY
  7. THURSDAY
  8. FRIDAY
  9. LAST WEEK’S EARNINGS
  10. UPCOMING EARNINGS

“Remember that failure is an event, not a person.” – Zig Ziglar

JOIN OUR DISCORD

DISCORD RECAP (2/8 – 2/12)

Last week, a mixed week with the team, had a 65% win rate with a 40% expected return.

Our biggest losses came from Tesla, Citibank, DoorDash, and Apple.

Our biggest winners came from Paypal, Aphria, and Cronos

EDUCATIONAL LEARNING SEGMENT

Welcome, change. Embrace change. Seek change.

 

STOCKS ON OUR RADAR (2/16- 2/19)

$LAZR 

Luminar Technologies, Inc. operates as a vehicle sensor and software company for passenger vehicles and trucks. The company operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment designs, manufactures, and sells lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors. The company was founded in 2012 and is headquartered in Orlando, Florida.

With all the hype surrounding the car sales industry and the electric vehicle industry, we believe that LAZR one way or the other will benefit from the positive momentum.

Stock is currently trading at around $37.78 (as of Friday February 12th, 2021 close)

We believe shares will begin to trade higher to around low $40or high $47 in the near future.

Join our discord to see how we trade this monster

MARKET LAST WEEK (2/1 – 2/5)

MONDAY (2/8)

Tesla has managed to make history and headlines yet again. Tesla disclosed that they had invested $1.5 Billion in popular cryptocurrency Bitcoin. Tesla announced that they would be accepting Bitcoin as payment in the near future. As they stated in their 10-K filing, they may or may not liquidate said bitcoin upon receipt of payment. This change represents a significant backing for the currency and fuels rumors of major institutions gravitating towards Bitcoin acceptance. News of Tesla’s purchase sent Bitcoin price skyrocketing up 20% past the $42,000 market and had Tesla shares up 3% pre-market.

TUESDAY (2/9)

The Senate voted on Tuesday to proceed with the second impeachment of Donald Trump, after what was a long day of arguing over whether it was constitutional to try the former president. All 50 Democrats and 6 Republicans decided to proceed with the impeachment that began on Wednesday. Sixty-seven votes would be needed to convict Trump, and only a few Republicans have committed to saying they would likely vote guilty.

Following two crazy weeks of trading and proving that their platform has some serious firepower, Reddit has doubled its valuation to $6B with a $250M funding round. The CEO Steve Huffman said the company plans to use the new funding to invest in video, advertising, and consumer products. They are looking to enter the international markets, which can be a massive move to grow their user base to all-time high levels.

WEDNESDAY (2/10)

Facebook is building their audio-chat product to rival the famous new app Clubhouse. Clubhouse is an invitation-only audio-chat social networking app launched in 2020 by software developers Alpha Exploration Co. They are abuzz with good news after their $100 million valuationvaluations last year was demolished by a $1 Billion valuation due in part to $100 millionin fundraising in January. Mark Zuckerberg, Facebook’s Chief Executive Officer, hosted a room in Clubhouse this past Sunday to discuss virtual reality’s merits and future. If this happens, this will be the latest move by Facebook to copy a competitor’s popular feature. They successfully copied Instagram’s stories and reels feature and created Facebook rRooms in an attempt to appeal to Zoom’s customer base. The legal hoops they’ll need to jump through to createmake their version have have not beenyet to be  addressed yet.

THURSDAY (2/11)

AstraZeneca recently announced that they are fixing problems with manufacturing its Covid-19 vaccine and expects to double monthly production to 200M doses. AstraZeneca and Oxford University are working to create new versions of the vaccine to combat the latest variants of Covid-19 from South Africa and Brazil.

Labor Reports came out, and they are reporting a decline in unemployment claims from the beginning January peak. This sign shows employers are increasing payroll, and states have begun to open again. Early January unemployment claims exceeded 900k, and the recent report showed a decrease to 730K, while still high, this is a positive sign. This recent dropoff is credited to the remaining more states that were closed, beginning the process to re-open and bounce back. Some legislatures believe that the unemployment numbers are inflated and that some people claim unemployment while going backreturning to their job.

FRIDAY (2/12)

After a long week, the Senate impeachment trial entered its last phases, with senators expected to vote Saturday evening. With several senators meeting with Trump’s defense team, such as Cruz and Graham, it does not appear likely the Democrats will receive enough bipartisan support to convict former president Trump.

In EV news, investors favorite or most hated brand, depending on your views, Tesla. Recently announced the expected battery size for their upcoming EV semi-truck. WhileAt the same time, promising models with ranges between 300 to 500 miles per charge, the batteries revealed by Elon Musk were surprisingly smaller than many expected. A model S contains a 100Kwhbattery pack, while the 300-mile range semis are expected to have 500Kwh battery packs. At the same time, they face criticism for electric semi-trucks’ practicality, with the Federal government encouraging carmakers to push EVs. Tesla stands to lead the market in a new direction once again, and with the first deliveries set to take place this year, we can expect Tesla to continue to rise in the market.

REVIEW OF LAST WEEK’S EARNINGS (2/1 – 2/5)

Monday (2/8) 
(After Market Close)

Chegg

Chegg had their earnings announcement Monday, where they announced that they outperformed every metric and expectation for the past year and raised their guidance for 2021 as well. The pandemic’s effects increased the need for remote learning and subsequently the demand for Chegg services.

Chegg reported the following:

  • 4.4 Million new Chegg Subscribers, up 74% YoY

  • $206 Million in revenue, up 64% YoY

  • 67% YoY growth for 2020

  • 72% gross margin

  • Acquired Mathway

Takeaways:

Chegg’s leadership lauded 2020 as their best year as a company by any metric exceeding their expectations for revenuerevenue expectations, adjusted EBITDA, and all other keycritical operating metrics. Chegg also scores highest in unaided awareness by college students, with 87% having heard of a Chegg service. 92% of their customers believe Chegg has helped them get better grades. As a software company built to scale online, they handled the pandemic flawlessly. With their stellar current standing/ positioning, we have no reason to expect less than stellar growth.

KKR & Co Inc.,

a global leading investment firm that manages multiple investment classes, reported their earnings, and the results were undoubtedly strong and bode well for their future.

KKR & Co Inc reported the following:

  • $2.01 Billion in revenue

  • $1.47 Billion in net income (GAAP)

  • 15% increase in earnings YoY

  • Dividend earnings (DE) of $0.49 vs. project $0.41

  • Private equity portfolio up 32%

Takeaways:

KKR & Co announced a profit during their fourth-quarter earnings call that more than doubled their previous year’s fourth-quarter earnings per share. Company revenue grew just shy of 90%, which is phenomenal in and of itself. Real estate, infrastructure, and leveraged credit funds were all profitable during the quarter, boding well for KKR & Co Inc’s future.

Simon Property Group reported their earnings after-market Monday. Simon Property Group is among those companies adversely impacted by the pandemic. They narrowly missed fourth-quarter revenue and EPS projections. Despite this, share value rose nearly 4% following their earnings call.

Simon Property Group

SPG reported their earnings after-market Monday. Simon Property Group is among those companies adversely impacted by the pandemic. They narrowly missed fourth-quarter revenue and EPS projections. Despite this, share value rose nearly 4% following their earnings call.

SPG reported the following:

  • $1.13 Billion in revenue, down 24.2% YoY

  • Q4 EPS OF $0.86

  • $2.3 Billion in operating cash flow

  • An acquired majority stake in Taubman Realty Group

Takeaways:

Despite the challenging year due to the pandemic, Simon Property Group is positioned to do well long term. Without a fundamental shift in the way consumers purchase, they will weather the storm pandemic or otherwise. Foot traffic in retail stores has returned and higher than pre-pandemic levels in some areas. Simon Property Group projects an EPS of $4.60-$4.85 with analysts projections at $3.90. The common consensus being 2021 will be a positive year of growth for SPG.

Tuesday (2/9)
(Before Market Open)

Canopy Growth Corporation

Canopy Growth Corporation had their earnings call Tuesday morning that was exciting. Canopy outlined a strategy and is executing it in perfect accordance. They regained the leading market share for the Canadian recreational market and have lured several first-time clients in their practical marketing approaches, including adding Martha Stewart CBD gummies to improve customer reach.

CGC reported the following:

  • Record quarter revenue of $153 million, 23% growth YoY

  • Net revenue $99 million

  • $135 million free cash flow

  • R&D expenses of $55 million

Takeaways:

Canopy Growth Corporation is building strong momentum in developing a winning record in its core markets. They have also seen tangible improvements in their commercial and supply chain. Canopy is also accelerating its U.S growth strategy because they expect significant cannabis reform with the new administration. Canopy is firmly on the path of profitability, with record numbers coming in and their R&D numbers showing their commitment to growth.

S & P Global

S & P Global reported their earnings, and all indicators showcase the company in a flattering light. Last year was a culmination of the framework of their executive strategy. This development was seen when they reported that all four of their business contributed to its overall revenue growth.

SPGI reported the following:

  • $7.4 Billion organic revenue, 10% growth

  • 23% adjusted diluted EPS

  • $3.3 Billion in free cash flow

  • $1.8 Billion in share repurchase and dividends

  • Operating profit up 18%

Takeaways: 

S & P Global had a phenomenal year and quarter. Their business grew in step with operating margin, which is a tall order. They believe they can carry this forward as their positive outlook is reflected in their adjusted guidance for 2021. Despite this, they neglected to issue full-year guidance due to their upcoming merger with HIS Markit. Although it occurs in the second half of the year, they find it difficult to project the full impact.

Fidelity

Fidelity had a great year and quarter, as we heard in their earnings calls. They beat expectations in every way, although some questions are still left after their report. Fidelity reported that all three business segments ended the year with record annual sales, an impressive feat objectively but even more so with the pandemic in mind.

Fidelity reported the following:

  • $12.6 Billion in revenue

  • $3.5 Billion in new sales for banking solutions

  • Adjusted EPS of $1.62

  • Over $3 Billion in free cash flow, 50% increase YoY

Takeaways:

Fidelity has lived up to investors’ expectations and believes they will do so again, as seen in their guidance for 2021. Their accelerating revenue growth and expanded margins have issued guidance and have received upgraded numbers that leadership believes make them an attractive long-term value for shareholders.

(After Market Close)

Twitter

$TWTR – Twitter announced Q4 and full-year results that show extremely healthy signs for the company moving forward. Twitter has faced severe backlash and lots of support over the last tumultuous month.

  • YoY Total Revenue Growth of 28%$1.29B

  • Average Monetizable Daily Active Usage (mDAU) Growth of 27% to 192M in Q4

  • 2020 revenue $3.72B, an increase of 7% YoY

  • 2020 Costs and expenses totaled $3.69B – an increase of19%

  • Resulted in operating income of $27M – 1% operating margin

  • Net loss of $1.14B, net margin of -31%, and Diluted EPS -$1.44

Twitter released strong earnings and heavy user growth on their platform, a healthy sign for their platform moving forward. Looking forward, we need to see Twitter be able to cut its costs and expenses to become more profitable. In Q4 of 2020, Twitter gained 40 million users compared to the previous year.

Cisco

$CSCO – Cisco offers business products and solutions to Small and Large Businesses and is a service provider to companies worldwide. With extended stay-at-home orders, offices becoming more virtual, Cisco’s services are in high demand.

  • Total product order growth of 1%

  • Dividend increased by 3%

  • Q2 Revenues of $12B – no change YoY

  • GAAP EPS of $.60, decreased -12%

  • Net Income of $2.5B- decreased by 12%

Cisco sees growth in almost all business segments, especially in their web-scale business. Their Webex portfolio has serious revenue strength with stay-at-home orders, and Cisco achieved $3.6B in software revenue with 76% sold as a subscription. They have an ideal base moving forward, and revenue should grow steadily.

Lyft

$LYFT – Lyft, a ride-sharing company, has been heavily affected by the Global Pandemic, and their earnings have reflected that. Lyft has had to develop creative ways to eliminate extra costs and grow its revenue in any way possible.

  • Lyft reported Q4 revenue of $569.9M – compared to $1,071M in Q4 2019 (-44% YoY)

  • Quarterly revenue increase of 14% from $499.7M in Q3

  • Net Loss for Q4 was $458.2M compared to a net loss of $356M in Q4 2019

  • Adjusted Net loss for Q4 2020 was $185.3M compared to $121.4M Q4 2019

  • Revenue of $2.4B versus $3.6B in 2019

  • Net loss of $1.8B versus a net loss of $2.6B in 2019

  • Revenue per Active Rider increased by 19% in 2020

Lyft successfully cut an extraordinary amount of costs and expenses, so their net loss was a lot less harsh than others. Moving forward, Lyft should have a strong revenue bounce back after the country becomes vaccinated from Covid-19.

General Motors

$GM – General Motors is continuously looking to innovate and push the envelope with every new car model they release. They are heavily focused on taking over the Electric Vehicle industry and providing a lot of competition to other Electric Vehicle companies.

  • Full-yearThe full-year income of $6.4B and EBIT adjusted of $9.7B

  • EPS diluted of $4.33 and adjusted of $4.90

  • Full-year EBIT adjusted margin of 7.9%

  • Q4 EPS of $1.93 and EPS Diluted Adj of $1.93

  • Q4 Income of $2.8B and EBIT of $3.7M

  • Q4 Adj Margin of 9.9%

  • Q4 Operating Cash Flow of $5.2B and FCF of $3.4B

General Motors posted substantial revenues throughout the year even when Disposable Income is meager, and no one is driving their car. This is a positive sign moving forward that people are choosing GM for their vehicle even when they have low disposable income.

Wednesday (2/2)

(Before Market Open)

UAA

UAA, home to elite athletes across multiple sports, but perhaps none more recognizable than Tom Brady and Steph Curry. For Q4, they produced a reliable report, but they did experience some setbacks. Like most retailers, they continue to see an increase in e-commerce sales but failed to maintain revenue at previous levels, falling short 3% overall.

UAA reported the following

  • Wholesale revenue decreased 12% to $662 million, and direct-to-consumer revenue increased 11% to $655 million, driven by 25% growth in eCommerce.

  • North America revenue fell 6% to $924 million, and international revenue increased 7% to $448 million.

  • Apparel revenue decreased 4% to $931 million.

  • Footwear revenue declined 7% to $241 million.

  • Accessories revenue increased 32% to $145 million.

Takeaways:

Under Armour is a staple in sportswear, with household star power wearing their products. Although given the decrease of in-store shopping, and the continued expansions of online sales, there is a shift in their revenue streams. Their earnings should come as no surprise to those following the retail sector since last summer. We would not be surprised if they continue to expand their online presence and push more towards direct to consumer, a strategy Nike inc. has been adopting.

(After Market Close)

Uber

Uber showed some progress in Q4 from Q3, but that did not prevent the final year revenue from continuing to bleed compared to the previous year. When most of the world stopped moving around as much to preventavoid the spread of COVID-19, a yearly decrease in ride-sharing revenue was expected. While ride-sharing bookings took a hit, they succeeded in expanding their food delivery services comparatively, with most indoor dining transitioning to food delivery.

UBER reported the following.

  • Delivery Gross Bookings grew 130% YoY.

  • Gross Bookings grew 16% quarter-over-quarter

  • Revenue of $3.2 billion grew 13% quarter-over-quarter (down 16% year-over-year)

  • Unrestricted cash, cash equivalents, and short-term investments were $6.8 billion at the end of the fourth quarter.

  • Delivery Revenue grew 19% QoQ and 224% YoY while Mobility Revenue increased 8% QoQ and declined 52% YoY.

Takeaways:
With the numbers Uber reported, they showed an ability to adjust and switch focus from primarily ride sharing to food delivery. With a 52% rideshare revenue decrease compared to the previous year, it was vital to keep them from becoming another pandemic victim. Suppose they can continue to build their Uber Eats brand and regain some of the lost rideshare business. In that case, they will be in substantially better financial standing moving into the later quarters of the fiscal year. With mass vaccinations on the horizon, travel and ride-sharing may recover some of their lost customers.

Thursday (2/3)

(Before Market Open)

Pepsi

Pepsi produced a Q4 report that beat analysts’ expectations, with shares earning 1.38% more than predicted. While most known for their soft drinks that compete with the Coca-Cola brand, Pepsi also includes Quaker oats and Frito Lay chips under their umbrella. Together, Pepsi grew their revenue again in Q4, keeping up with the fiscal year’s previous three earnings reports.

Pepsi reported the following.

  • Net revenue growth Q4 8.8%

  • Net revenue growth YoY 4.8%

  • Frito-Lay North America operating profit decreased 4%,

  • Quaker Foods North America operating profit grew 17%

  • PepsiCo Beverages North America operating profit rose 19%

Takeaways: 

Pepsi shares were down 7.1% during the fiscal year, but they exceeded expectations this quarter. With revenue and profit increasing as a whole, we can look to Pepsi to regain some of its lost market value in the new year. With the wide variety of staples in kitchen pantries, Pepsi can continue to see theirits revenue expansion and perhaps continue to marginalize any losses from the Frito lay brand losses.

(After Market Close)

Disney

Disney produced a relatively positive 2021 Q1 earnings call given the media giant’s exposure to the pandemic with park closures. Disney+ has continued its hot streak adding more subscribers to its base and producing well-received shows such as The Mandalorian and WandaVision. With more exclusive content on the horizon, Disney hopes to compete with Netflix in the market space.

Disney reported the following.

  • Disney plus subscribers rose to $94.9M.

  • Reported revenue was $16.25B vs. $15.92B expected and $20.86B YoY

  • Disney plus to be raised by $1 starting in March, to 7.99%

  • Disney parks reported a loss of 119M vs. 530M expected

Takeaways:

Disney may not have the market base in subscribers to match Netflix yet, but are hoping to continue drawing in new customers with large amounts of original and exclusive content. With the parks losing less revenue than expected and proper reopenings scheduled to begin for the rest of the Disney parks, we can look forward to a strong rebound year for the happiest corporation on earth.

Kraft Heinz Company: 

Kraft Heinz company finished 2020 strong with numbers exceeding expected growth in Q4. The company is one that benefited from the pandemic, with increased consumer demand for KHC food products.

  • 2020 Q4 adjusted EPS of $0.80 (surpassed the expectation of$0.74 

  • BottomThe bottom line increased 11.1% YoY.

  • Net sales increased 6.2% YoY.

Takeaways:

Looking forward, KHC expects to continue to exceed earnings expectations. With the pandemic reaching 2021, consumer demand remains higher than usual, resulting in better sales. Additionally, the company signed an agreement to sell its nuts business to Hormel Foods Corporation HRL, which is expected to conclude in mid-2021. This cash transaction is worth $3.35 billion, another significant step for Kraft Heinz Company.

Kingston Resources Limited:

2020 was a big year for Kingston Resources, listed as “an ASX listed exploration and development company advancing the 3.6Moz Misma Gold Project in PNG and the Livingstone Gold Project in Australia.”

Their capital structure is as follows:

  • Share Price – US$0.20 

  • Issued Shares – 282M 

  • Market Cap – US$55.8M 

  • Enterprise Value – US$43M 

  • Cash (as of 31 Dec 2020) – US$12.9M

Pre-Tax Net Present Value of the Misma Gold Project:

  • $822M and 33% IRR at US$1,600/oz gold price

Takeaways: 

Kingston Resources believes it is “positioned for growth in 2021 after delivering [Pre-Feasibility Study on 3.6M oz Misma Gold Project, raising $13M and appointing respected industry leader Mick Wilkes as chairman.” They hope to become a significant new gold producer in the Asia-Pacific Region and continue their Australian efforts.

UPCOMING WEEK 2/15 – 02/19

EARNINGS

Tuesday, February 9, 2021

Before Market Open

$PLTR – Palantir creates unique software to help companies store their data isin safe and accessible places. It allows organizations to have their data stored on one platform and bring the data to the right places. Palantir builds platforms to integrate, manage, and secure data for fully interactive human-driven, machine-assisted analysis. Expected $EPS of $.05 and Revenue of $300M.

$CVS– CVS is a one-stop solution for pharmaceutical needs, retail, and hospitality goods. Recently, CVS has been able to perform Covid-19 testing through their drive-through pharmacy, and they offer several goods to combat Covid-19. They have had lots of success throughout Covid-19 by offering PPE products and various other cleaning solutions. Expected EPS of $1.49 and Revenue of $68.67B, with expected quarterly revenue to increase by 2.7%.

$AN – AutoNation is America’s Largest Automotive Retailer, Autonation provides almost all car brands, and they offer a diverse range of automotive repair and maintenance services. They seek to deliver a consistently superior customer experience with a large selection of inventory, transparent sales and service processes, and competitive pricing. Looking into Autonation can provide us with an insight into Durable Goods being purchased and insight into how the economy is recovering from Covid-19. Expected EPS of $2.40 and Revenue of $5.61B, with expected quarterly revenue to increase by 1.1%.

$ECL – Ecolab is a leader in cleaning, sanitizing, food safety, and infection control products and services. Ecolab delivers comprehensive services to the foodservice and hospitality markets. An increase in revenue may show that the hospitality industry is bouncing back, and economies are beginning to re-open. Expected EPS of $1.23 and Revenue of $3.10B, with expected quarterly revenue to decrease by -19%.

Wednesday, February 10th, 2021

Before Market Open

$SHOP – Shopify is a cloud-based commerce platform, they provide merchants with a platform to design, set up, and manage their stores through Web, mobile, social media, and pop-up shops. They offer a full end to the end product, providing live updates from the moment they ship to the product being delivered. Expected EPS of $2.17 and Revenue of $906.82M, with expected quarterly revenue to increase by 80%.

$HLT –  Hilton Worldwide offers a hospitality service; they are engaged in the ownership, leasing, management, development, and franchising of hotels and resorts. They offer a variety of hotels, from ultra-luxury to moderately priced, and a wide array of consumers can stay at their hotels. Looking into Hilton can indicate how the economy is recovering and what hospitality can look for in the next few quarters. Expected EPS of $.04 and Revenue of $1.06B, with expected quarterly revenue to decrease by -55%.

$TSEM –  Tower Semiconductor is a company of interest due to the high demand for Semiconductors, and this can help us have predictions looking forward. Expected EPS of $.22 and Revenue of $340M, and a quarterly revenue increase of 11.2%.

After Market Close

$TWLO –  Twilio is a cloud communication platform that allows developers to build, scale, and operate real-time communications within software applications. ItsIts Programmable Communications Cloud software enables developers to embed voice, messaging, video, and authentication capabilities. They have an expected EPS of -$.01and Revenue of $454.64M, with an expected quarterly revenue increase of 37%.

$BIDU – Baidu is a Chinese-language Internet search provider and is based in Beijing, the People’s Republic of China. The company offers a Chinese language search platform and conducts its operations principally through Baidu Online Network. Expected EPS of $3.06 and Revenue of $4.46B, with an expected quarterly revenue increase of 7.5%.

Thursday, February 11th, 2021

Before Market Open

$WMT – Walmart is of the world’s largest retailers that offer superstores and discount grocery stores. Recently, Walmart has boosted their online, delivery, and pickup sales, which has boosted revenue. Expected EPS of $1.59 and Revenue of $146.42B, with an expected quarterly revenue increase of 3.4%.

$WM – Waste Management is a garbage disposal solution company that serves municipal, commercial, and institutional customers in the United States and Canada. Being stuck at home has caused many people to have tons of waste; this is good for Waste Management as their business relies on trash. Expected EPS of $1.07 and Revenue of $3.98B, and expected quarterly revenue increase of 3.5%.

$MAR – Marriott is the world’s largest hotel company that owns and operates resorts and hotels worldwide. Much like Hilton, Marriot ownsholds a wide array of hotels that can serve a large group of consumers for many different price points. Expected EPS of $.10 and Revenue of $2.42B, with expected quarterly revenue decrease of -55%.

After Market Close

$ROKU – Roku is involved with one of the premier streaming platforms for providing entertainment to the television. Roku has several products, including (Roku 1-4), Streaming Stick, and accessories such as cables, remote controls, power adapters, and headphones. Expected EPS of $.03 and Revenue of $615.84M, with expected quarterly revenue to increase by 50%.

$AMAT – Applied Materials is one of the largest semiconductor companies in the market space. Applied Materials is the leader in engineering solutions to produce virtually every new chip and advanced display globally. Applied Materials offer diverse, flexible service solutions and increase equipment efficiency while lowering cost per wafer. Expected EPS of $1.31 and Revenue of $4.95B, with expected quarterly revenue to increase by 19%, and expected Annual Revenue to increase by 15%.

$DBX – Dropbox is a service company that offers a platform that enables users to store and share files, photos, videos, songs, and spreadsheets. Businesses have heavily used this service throughout the Global Pandemic, and revenue should reflect that. Expected EPS of $.28 and Revenue of $498.12M, with expected quarterly revenue to increase by 11.7%.

EVENTS & TALKS

ECONOMIC CALENDAR

Tuesday, February 23, 2021: S&P/Case-Shiller Home Price YoY DEC 9:00 AM EST

Wednesday, February 24, 2021: New Home Sales MoM JAN 10:00 AM EST
Thursday, February 25, 2021:     Pending Home Sales YoY JAN 10:00 AM EST
Friday, February 26, 2021: Personal Spending MoM JAN 8:30 AM EST

#15 I’m so tired of Earnings

Friday, February 5th Closing Price


TABLE OF CONTENTS

  1. MERCHANDISE
  2. DISCORD RECAP
  3. EDUCATIONAL LEARNING SEGMENT
  4. MONDAY
  5. TUESDAY
  6. WEDNESDAY
  7. THURSDAY
  8. FRIDAY
  9. STOCKS ON OUR RADAR
  10. LAST WEEK’S EARNINGS
  11. UPCOMING EARNINGS
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DISCORD RECAP (2/1 – 2/5)

Last week started off great, but we slipped up on Friday.

We had a total of 15 trades, with of those trades being profitable and 6 of them losing trades.

Majority of our losing trades came on Friday.

We sure hope you caught Zoom last week.

Last week we told everyone that Zoom was gearing up for a quick move for the upside.

Went from trading at $385 to now trading $420.

We will keep watching to see if this will continue to move higher.

EDUCATIONAL LEARNING SEGMENT

Welcome, change. Embrace change. Seek change.

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MARKET LAST WEEK (2/1 – 2/5)

MONDAY (2/1)

Tesla is in line to receive a multi-billion dollar subsidy from the German government and Brandenburg state government. This funding comes with the stipulation that a battery cell factor is set up near Berlin. This is an area of focus and needed improvement for Tesla. During their earnings call, Tesla highlighted battery cells as the biggest constraint to scaling electric vehicle production. This hindrance hasn’t made investors wary. Ark Invest analysts Sam Korus and Tasha Teeney cited Tesla’s plans to produce 100 gigawatt-hours of batteries and their efficiency in troubleshooting previously as positive signs.

TUESDAY (2/2)

In a significant announcement, Jeff Bezos, the richest man on Earth, announced that he is taking a step back from being Chief Executive Officer of Amazon. This is a major announcement, as Amazon is the largest company on the planet, with a hand in almost every industry. Bezos announced that he is stepping down during their earnings reports and that Andy Jassy, the head of the company’s cloud division, will take the helm. He quotes the CEO position as “a deep responsibility, and it’s consuming.” He wants to focus on passion projects and philanthropic ventures. Bezos’s other projects include the Washington Post and his private space company Blue Origin (BORGN), Day One fund, and the Bezos Earth Fund.

Robinhood had to secure billions of dollars of cash to bolster its finances after the unprecedented trading events with $GME and several other stocks last week. Clearinghouses asked the brokerage to put up over $3B that would cause solvency issues, and Robinhood had been able to lower the bill to $700M due to certain stock trading limitations. This cash draw was structured as convertible debt, and this can be somewhat expensive moving forward.

WEDNESDAY (2/3)

U.S. Treasury Secretary Janet Yellen has requested the presence of American financial regulators to discuss the high volatility seen in the markets over the past couple of weeks. Members of the Federal Reserve Board, the Federal Reserve Bank of New York, and officials from the Security and Exchange Commission (SEC) have all been called for this meeting. Although GameStop and other fan-favorite commodities have generally calmed since then, the more considerable concern of integrity in the market still exists. Secretary Yellen has expressed a desire to ensure “recent activities are consistent with investor protection and fair and efficient markets.”

THURSDAY (2/4)

The electric vehicle industry has had some noise surrounding it Thursday, with a chip shortage hitting the industry hard. Demand for Electric vehicles has been too high across the United States and China, which has caused a massive shortage of the chips needed for these vehicles. Recently, a report has come out about Apple that they are potentially inking a deal with Hyundai-Kia to manufacture an Apple-branded autonomous vehicle. The car would potentially go into production by 2024 and is expected to be driverless. Amazon has begun to purchase trucks for its Los Angeles deliveries, and it is planning to expand to more net-zero carbon emission cities by 2040. Currently, Ford, Toyota, and Stellantis have already idled some factories due to the shortage of semiconductors, and General Motors is joining them in taking production offline.

(Outside the news- we will begin to look into buying semiconductors for Electric vehicles)

FRIDAY (2/5)

Friday being the end of the workweek, always leaves us with a bundle of news to wake up to. In this case, Congress worked an overnight session to announce they voted to pass the legislation needed to move forward on President Biden’s $1.9 trillion stimulus package. The vote was 51-50 settled by Vice President Harris and was announced at 5 am. This will be another economic pump the Federal government will be attempting to keep the economy up and help the American people who need assistance with unemployment from the pandemic still causing financial hardship.

While later in the evening, another bombshell landed from Fox News. In the wake of a pending lawsuit against the media giants, they decided to cancel the Lou Dobbs show. He has been a longtime show host for Fox and a polarizing media figure. Many have celebrated his departure from Fox, and the show host’s abrupt release has saddened some. However, people may individually feel about the decision. It can provide a glimpse into potentially the future of media talk shows where strong divisive comments may no longer be tolerated from on-air personalities if they can lead to costly legal action.

STOCKS ON OUR RADAR (2/8- 2/12)

Alibaba $BABA

Forming an inverted head and shoulder on the 2 hour time frame.

This is a bullish pattern indicating that stock price may go up.

Currently we are trading at $265 but we can see $BABA go up towards $305 in the near future.

Definitely keep an eye on this one.

REVIEW OF LAST WEEK’S EARNINGS (2/1 – 2/5)
Tuesday (2/1)
(Before Market Open)

United Postal Service ($UPS)

United Postal Service reported phenomenal earnings numbers for the quarter and the year as a whole, ending with a peak holiday performance. UPS saw their small and medium-sized business volume grow by almost a third to finish the year.

UPS reported the following:

  • Consolidated revenue $24.9 Billion, up 21% from last year

  • $2.9 Billion in operating profit, up 26% from last year*

  • EPS of $8.23, an increase of 9.3%

  • The operating margin expanded to 11.5%

Takeaways:

UPS generated record revenue of $84.6 billion for the year, with growth in all three segments. This was their highest quarterly operating profit in the company’s history. As their leadership has indicated, UPS’s strong fourth-quarter results provide a glimpse into their strategic process and the new levels of success they may see shortly.

Alibaba

Despite all the recent drama surrounding Chinese based E-commerce giant Alibaba, they reported substantial earnings numbers with significant sales growth. This wasn’t enough to stop shares dropping more than 3% on Tuesday.

Alibaba reported the following:

  • $34.2 Billion in revenue, up 37% YoY

  • Adjusted EBITDA of $9.7 Billion, up 21% YoY

  • Cloud revenue grew 50%, first profitable quarter

  • Consolidated newly acquired Sun Art

Takeaways:

Alibaba has commenced a share repurchase program and, as it stands, successfully navigated a problematic year in regard to the pandemic and their legal woes with stringent standards put in place by Chinese regulators. While these have been valid concerns for wary investors, the growth across so many sectors this quarter bodes well for their future.

Pfizer ($PFE)

Pfizer has developed one of the leading Covid-19 Vaccines and has distributed 65M doses and 29M doses to the U.S. Government. They aim to have 200M doses delivered in the U.S. by the end of May.

  • Revenues of $11.7B

  • Net income $594M

  • Cost of Sales $2.9B up 31%

  • R & D expenses increased by $3.1B – 24%

  • Diluted EPS Reported $.10 and Adjusted EPS of $.42

  • Adjusted 2020 Diluted EPS of $3.20

  • Paid $8.4B in Dividends

  • Forecasted Revenue of $15B for 2021

We can begin to see the results from the implementation of the Covid-19 vaccine throughout 2021 and lower R&D costs for Pfizer moving forward.

British Petroleum ($BP)

British Petroleum reported Q4 and full-year results; the CEO stated that demand for the entire industry was down, and their earnings reflected that.

  • Full-year loss of $20B compared to $4B profit in 2019

  • Q4 operating profit $1.4B with a $.5B loss the quarter before

  • Operating Cash Flow of $2.4B for Q4

  • BP divested from Petrochemicals, and it generated $4.2B

  • Net debt was $39B for the year

  • A dividend of $5.25 per share was announced

BP’s products will still have deficient demand in the first half of 2021, with road and air travel still down. BP will be closely watching the results of the COVID-19 vaccination as this has a significant effect on the demand for travel across the globe.

ExxonMobil

ExxonMobil has reported yet another abysmal earnings report, with this week making the fourth consecutive quarter in the red. While Exxon managed to beat expectations for EPS, they failed to meet them for revenue. This further highlighted the effect the pandemic has had on this industry leader.

Exxon reported the following:

  • $20.1 Billion loss

  • EPS of $0.03

  • $46.5 Billion in revenue

  • Earnings of $100 Million

Takeaways:

ExxonMobil is struggling immensely to recover from the impact of the pandemic, with shares down 27% over the past year. A viable path forward for them is contingent upon successfully vaccinating the public and a healthy economy. While there are reportedly talks of a merger with Chevron, ExxonMobil has declined to comment on the matter.

(After Market Close)

Amazon ($AMZN)

Amazon had an earnings call that was full of surprises. Amazon had their highest revenue earning a quarter of all time, and this managed not to be the headline of the event. CFO Brian Olsavsky announced that Jeff Bezos would be stepping down as CEO and transitioning to an executive chair role. Bezos is succeeded by Andy Jassy, formerly the CEO of Amazon Web Services (AWS) since its inception in 2003.

Amazon reported the following:

  • $125.56 Billion in sales

  • EPS of $14.09

  • $12.7 Billion cloud-computing revenue, up 28%

  • $6.87 Billion in operating income, up 77% on the quarter

Takeaways:

Amazon has performed beyond even their wildest expectations. They are the clear industry leader in E-Commerce and cloud services when there is no better time. They adjusted to the pandemic skillfully and were well-positioned to benefit due to the nature of their services. Amazon will find it difficult to beat the record numbers they just produced as lockdown restrictions ease and consumer spending begins to disperse.

Alphabet, the parent company of Google, had a great earnings call that sent share prices skyrocketing just shy of 8% on Tuesday. The highlight of their earnings call was the strong growth seen in their core advertising business, partially to new advertising methods.

Electronic Arts ($EA) 

EA just released their Q3 earnings this past week, and with next-gen consoles in high demand, EA launched a variety of the games for the new platforms. With video games being an at-home activity outside of e-sport tournaments, they produced a strong Q3 report. Games such as the sims 4 produced a record number of users in December 2020, and FIFA ultimate team was operating with 6 million daily users. With such high volume and in game microtransaction increasingly common, it is no surprise that EA was able to repurchase 2.5 million shares in December alone.

EA reported the following

  • Net cash provided by operating activities was $1.124 billion for the quarter

  • a record $2.061 billion for the trailing twelve months

  • EA repurchased 2.5 million shares for $326 million during the quarter

  • EA paid a cash dividend of $0.17 per share during the quarter

Takeaway: EA produced a strong quarter that led to large share buybacks and records profits. With e-sports and streams becoming increasingly popular and a fan favorite NCAA Football being announced as returning to shelves, I cannot imagine Q4 will break from their positive trend that has solidified over the past three fiscal quarters.

Alphabet

Alphabet reported the following:

  • $56.90 Billion in revenue, EPS of $22.30 

  • Advertising revenue of $46.2 Billion, up 22% from the year-ago quarter

  • $6.89 Billion in YouTube ads, up 46% YoY

  • Cloud business Lost $1.24 Billion in operating income for the quarter, $5.61 Billion for the year

  • Acquired Fitbit

Takeaways:

Alphabet earnings were up 45% from a year ago, and they far outperformed standard metrics. Google’s loss of operating income for their cloud business shows they are still in investment mode. Google Clouds revenue grew 47% year over year. Alphabet is poised to see continued success as their rebound in the advertising business indicates.

Chipotle

Chipotle Mexican Grill reported their numbers in their earnings call, where they announced they failed to meet earnings expectations but did meet revenue projections. Chipotle recovered from the pandemic well thanks to its solid digital footprint, which was represented in digital orders and delivery. Shares hit an all-time high during trading Tuesday.

Chipotle reported the following:

  • $1.61 Billion in revenue

  • $190.0 Million in net income

  • Digital sales increased 177%

  • EPS of $3.48

Takeaways: 

While Chipotle was among those initially struck by the pandemic, they have rebounded very well, as evidenced by their strong digital sales growth. We can expect further sales growth with restrictions in place from the pandemic easing and broader spread of the vaccine. CFO Jack Hartung has indicated that they still plan to follow through with their stock buyback in Q1 or Q2, pending the economic outlook.

Wednesday (2/2)
(Before Market Open)

Sony

Sony is reporting Q3 earnings, and their company is positioned for success with their Gaming, Music, Pictures, and Electronic products segments. Sony released the much-anticipated PS5 that sells out within minutes of being released.

  • $28B in Sales for Q3, 9% increase YoY

  • $3B in operating income -20% YoY

  • $4.5B Income before Taxes -54% YoY

  • $8.4B in sales for Gaming, $2.5B in Music, $1.8B in Pictures, $6.2B Electronic Products, $4B in Financial Services

Due to continued stay-at-home orders and a record level of user engagement, Sony has been able to reach a record amount of sales. Sony needs to be able to produce PS5’s at the same level or increased level with more efficiency.

Enterprise Product Partners ($EPD)

Enterprise Product Partners is natural gas, crude oil, and petrochemical company.

Currently, demand for EPD’s product line is down, much like the rest of the energy industry with the decreased global travel.

  • $3.8B Net Income or $1.7 EPS on Diluted Basis, compared to $4.6B – $2.09B EPS

  • Net Cash Flow for 2020 as $5.9B, in comparison to $6.5B in 2019

  • Operating income for Q4 was $708M, and $5B for the year

  • Net Income of $366M, for the year $3.8B

  • Revenue of $7B for Q4 and $27B for 2020

While revenue and profits for the year may be down for the year, EPD is due for a strong rebound in 2021, with vaccine rollout and travel rebounding in Q3.

Spotify ($SPOT)

SPOT released a relatively stable earnings report for their Q4 earnings call, although it did not prevent a small sell-off from occurring. Following the music-streaming services report, shares fell about 30$ in price, leading to a loss in value of 5.25 billion. Although earnings sell-off aside, with many well-known podcasts available and various music, they beat analysts’ expectations of new paid subscribers reaching 11 million new additions, exceeding expectations by 2 million. It should be noted that shares rallied at near-market closing should lead to rather mixed-feelings for investors.

SPOT reported the following

  • Free Cash Flow of €74 million

  • total MAUs grew 27% Y/Y to 345 million in the quarter

  • Premium Subscribers grew 24% Y/Y to 155 million in the quarter

  • Total revenue of €2,168 million increased 17% Y/Y in Q4

  • Premium, average revenue per user of €4.26 in Q4 was down 8% Y/Y

Takeaways:

Spot provided much good news for current and potential investors showing that user interactions and subscriptions are rising. However, the report did include some negative metrics, such as paid subscription revenue being down 8%. A minor loss in revenue is not the end of the world for tech companies, as we have witnessed in our current market. With that said, investors will be looking forward to their continued progress in 2021 as they expand their subscriber base with podcasts and music that appeal to new markets.

(After Market Close)

PayPal ($PYPL)

PYPL reported another strong quarter to close out their fiscal year. Q1-Q3 were all good earning quarters for Paypal, and Q4 did not break the trend, leading to shares increasing 3% in after-hours trading. With the world continuing to shop online at higher rates because of the pandemic, Paypal has benefitted from the transition all year long.

PayPal reported the following

  • PayPal added 16 million new accounts in the fourth quarter

  • 39% jump in total payment volume

  • $6.12 billion in revenue

  • the company expects that total payment volumes will grow in the high 20% range in 2021

Takeaways:

Online shopping has significantly expanded as businesses adapted to the pandemic shutting down brick and mortar locations. In this transition, merchants and customers alike grew their use of PayPal to buy and sell products. Even American Express has partnered with PayPal to provide clients incentives to shop through them. With the world continuing to move away from in-store purchases, we can expect PayPal to continue to shine this year.

Grubhub ($GRUB)

GRUB reported a massive 4th quarter earnings result. I think it is safe to say we are all familiar with food delivery apps; they indulge us when we want food but don’t or can’t get it ourselves. Compared to 2019, food orders skyrocketed in 2020, and with people staying home more, it comes as no surprise.

Grubhub reported the following.

  • The company reported revenues of $504 million

  • 48% year-over-year increase from $341 million in the same period last year

  • Gross Food Sales grew 52% year-over-year to $2.4B

  • Active Diners: 31.4 million, a 39% year-over-year increase from 22.6 million Active Diners in the fourth quarter of 2019

  • Daily Average Grubs (DAGs): 658,100 a 31% year-over-year increase from 502,600 DAGs in the fourth quarter of 2019

Takeaways:

I will be the first to admit that I spend more time ordering food delivery apps than I should. Although with the numbers Grubhub has posted, at least I know I am not the only one. Truthfully, with more restaurants expanding food delivery offerings, we can see the market values for Grub and similar companies continuing to grow.

Peloton

PTON, the exercise choice of President Biden, albeit modified for security reasons. Although we all remember their questionable TV ads last year, it was not enough to dull their luster to the exercising masses. Peloton reported a 128% revenue increase in Q2. A reported 124% subscriber increase fueled Their monstrous earnings. They are adding massive amounts of new customers, but just as important, retaining a vast majority of existing customers.

  • PTO N reported the following

  • Q2 total revenue grew 128% to $1,064.8 million

  • Q2 Average Net Monthly Connected Fitness Churn was 0.76%; Q2 12-month retention rate was 92%

  • Q2 ending Connected Fitness Subscriptions grew 134% to approximately 1.67 million 

  •  paid Digital Subscriptions grew 472% to approximately 625,000; total Members grew to over 4.4 million

Takeaways:

Peloton has gathered a large amount of steam, and if they can retain the majority of the consumers for the foreseeable future, shareholders will be pleased with the company. I am not sure if over 100% growth every quarter is sustainable, but if they can do it again in Q3 2021, then I won’t be able to doubt them in Q4 of continuing their bull run.

Thursday (2/3)
(Before Market Open)

Penn Gaming

Penn Gaming reported earnings that were off the mark but provided keen insight into their growth moving forward. Casino companies are still being hurt by Covid guidelines, but Penn has provided a positive outlook with the Barstool Sportsbook being implemented in more states.

  • Q4 Revenue of $1.03B

  • Net Income of $12.7M

  • EBITDAR of $365.4M, EBITDA of $255.9M

  • Cash Balance of $1.9B, pay down of $115M – with a net debt decreased to $578M

  • Northeast segment 45.8%, South segment -24%, West segment – 7.7%, Midwest segment -18.3%

We can begin to look for continuation of the positive trend for the Barstool Sportsbook and My choice iCasino Gaming segments while in-person Gambling has been stalled until the vaccine rollout.

Clorox (CLX) 

Clorox reported strong earnings pre-market on Thursday, beating analyst expectations and topping revenue forecasts. Clorox earnings report followed major competitor Proctor&Gamble’s reporting, which also exceeded expectations. However, Clorox outperformed P&G significantly.

The company reported the following:

  • Earnings per share of $2.03, even though analyst expectations were around $1.77 EPS

  • Revenue of $1.84B with analyst expectations closer to revenue of $1.75B

  • Shares up 1% from the beginning of the year, underperforming the S&500, which is up 1.97%

Takeaway: Clorox is expected to continue doing well throughout the year, as consumer habits regarding cleaning and sanitation have increased during the COVID-19 pandemic. We can expect the share price to continue to rise with the stimulated economy improvements throughout the next few months.

Quest Diagnostics (DGX)

Quest beat earnings in their reporting pre-market on Thursday. The company is outperforming the S&P500, with shares up 11.33% since the beginning of the year.

  • Revenues: $3B (+55.4% Y/Y), beats by $80M

  • Net income: $579M (+129%);

  • Earnings per share of $4.21; non-GAAP EPS: $4.48 (+168%) beating analyst expectations of eps $3.98

  • Full-year cash provided by operations of $2B (+61.3%)

Takeaway:

While shares were down 1.5% pre-market on Thursday, the company’s expectations for Q1 of 2021 included net revenues between $4.85B and $5.15B; EPS between $5.07 and $6.07.

(After Market Close)

Snapchat (Snap)

Snap reported earnings post-market on Thursday. The stock price fell 10% in after-hours trading, despite beating Wall Street’s expectations on earnings, revenue, and user growth.

The company reported:

  • Adjusted earnings per share of 9 cents vs. analyst expectations of 7 cents per share

  • Revenue of $911 million vs. analyst forecasting of $857.4 million 

  • Global daily active users (DAUs): 265 million vs. 257.79 million expected

  • The average revenue per user (ARPU): $3.44 vs. expert expectations of $3.34

Takeaway: The company reported Q1 2021 expectations that came in much lower than analyst expectations, stating that IOS 14’s updated privacy policies (to take effect later this quarter) may hinder revenue growth.

Pinterest (PINS)

Pinterest beat their earnings after reporting for 2020 Q4 post-market on Thursday. The stock increased 11.7% in pre-market trading on Friday after the report. CFO and Head of Business Operations, Todd Morgenfeld, said, “Q4 capped a remarkable year of growth for Pinterest…As we start 2021, we’ll be building on this momentum.”

They reported:

  • Diluted EPS of $0.43, which came in ahead of analysts’ estimates of $0.32 

  • Revenue in the fourth quarter grew by 76% year-over-year to $706 million, beating consensus estimates of $645.6M

  • The company’s global monthly active users (MAUs) grew 37% year-over-year to 459M

Takeaway:

With many analysts giving the stock a HOLD rating, the company is looking towards continued growth in Q1. Despite the uncertainties due to the COVID-19 pandemic, the company expects Q1 growth in the low 70% range year-over-year.

T-Mobile

T-Mobile managed to beat yearly and quarterly earnings, as reported Thursday. With most companies struggling to meet Wall Street’s 2020 predictions, T-Mobile concluded 2020 to be its “best year ever.” With 5g addition, T-Mobile is becoming the obvious choice for many customers because they offer lower costs than competitors. Their continued growth makes T-Mobile a force to be reckoned with, as they anticipate seeing even more impressive numbers in the coming year.

  • Ended the quarter and fiscal year with 102.1 million customers

  • Yearly non-GAAP EPS were $2.65 per share

  • Yearly revenue came to $68.4B

  • Q4 earnings were $750 million

  • Q4 EPS were $0.60 per share

Takeaways:

T-Mobile CEO, Mike Sievert, said about 2020 earnings, “these results show that we’re pulling way ahead of the pack on what matters – overall 5G network performance – and executing to stay ahead.” Beating earnings predictions this past year has been no small feat, but T-Mobile has managed to become the industry leader in customer growth and profitability through difficult circumstances. If they keep it up, 2021 should be no different.

Gilead Sciences 

Gilead Sciences had a disappointing year for investors, with shares falling 10%, up until Q4, that is. Following market close on Thursday, the company reported $7.3B in revenue, matching Wall Street’s estimate and beating the prior year’s numbers by 26%. Additionally, their yearly earnings increased by $1.5B year-over-year, the key to their growth being a COVID-19 drug.

  • $5 billion total shareholder return in 2020, representing ~67% of Free Cash Flow

  • Product Sales increased 10% to $24.4B

  • Diluted EPS of $0.10; Non-GAAP Diluted EPS of $7.09

  • Q4 net income of $1.6 billion (GAAP)

  • Q4 EPS of $1.23 (GAAP)

Takeaways:

While Gilead struggled in 2020, Q4 was a bright spot for shareholders. The best news of the Q4 update arguable being the 2021 guidance from Gilead Sciences. They expect a full-year 2021 revenue between $23.7 billion and $25.1 billion. Additionally, Gilead is looking for adjusted earnings per share (EPS) between $6.75 and $7.45 in 2021. The drugs that Gilead anticipates to be the catalyst of their growth are Biktarvy, Veklury, and Trodelvy.

UPCOMING WEEK 1/25 – 01/29

EARNINGS

Monday, Feb 8, 2021
After Market Close

$CHGG – Chegg is a service that provides students with a full end to end experience of giving answers to questions they may have. Students have increasingly used this platform to provide solutions from experts to questions they get, whether homework or tests. Expected EPS of $.49 and Revenue of $189.68M, with expected quarterly revenue to increase by 51.1%.

$KKR – KKR is an investment firm that operates under the private equity, energy, infrastructure, real estate, credit strategies, and hedge funds. Expected EPS of $.44, and Revenue of $545.9M, with expected quarterly revenue to decrease by -48.6%.

$SPG – Simon Property Group is the global leader in the ownership of premier shopping malls, dining, and mixed-use destinations. Their properties span across the globe, and SPG has been hurt immensely by Covid-19, with retailers being shut down for months. Expected EPS of $2.24 and Revenue of $1.14B, with expected quarterly revenue to decrease by -23.4%.

Tuesday, February 9, 2021

Before Market Open

$CGC – Canopy growth company is a marijuana company that is expected to increase its sales exponentially throughout the next four years with the change in administration. Cannabis as an industry will be growing exponentially, and $CGC is expected to follow the trend right along with it. Canopy will be reporting its quarterly and annual earnings on Tuesday. The expected EPS for the quarter is -$.1, and revenue is $115.75M, with expected quarterly revenue to increase by 23.4%.

$SPGI – Standard and Poors is the premier rating agency for bonds; they also provide benchmarks, analytics, and data to the capital and commodity markets. Expected EPS of $2.55 and Revenue of $1.75B, with expected quarterly revenue to increase 1%.

$FIS – Fidelity is one of the largest brokerage firms, and after what happened last week with Robinhood explaining they had solvency issues last week. Fidelity focuses on retail traders, payments, asset and wealth management, and several other financial services. Expected EPS of $1.62 and Revenue of $3.36B, with expected quarterly revenue to increase by .5%.

After Market Close

$TWTR – After one of the most contentious and volatile months ever for the social media platform, they had removed the former POTUS and been accused of breaching the first amendment and lost thousands of users because of it. They have an expected EPS of $.29 and Revenue of $1.19B, with expected quarterly revenue to increase by 18%.

$CSCO – is the worldwide leader in Information Technology that seizes the opportunity of tomorrow. Cisco has played an integral role in the stay-at-home orders and connecting employees in meetings when they aren’t together. They also provide solutions to businesses remaining at home with end to end solutions. They have an expected EPS of $.78 and Revenue of $11.92B, with an expected quarterly revenue decrease of -.7%.

$LYFT – Lyft is a ride-sharing platform that has been hit extremely hard from Covid-19 as their primary business is users entering stranger’s cars and taking them places. Usage for the app is low, as people do not want to contract Covid-19 from a stranger. Expected EPS of -$.62 and Revenue of $553.83M, with an expected quarterly revenue decrease of -45.5%.

Wednesday, February 10th, 2021

Before Market Open

$KO – Coca-Cola is the premier soft drink company that has been established for a long time and has horizontally lateralled their business into several other soft drink segments. They have different brands under the umbrella, including Dasani, Fanta, Gold Peak, Honest Tea, Minute Maid, Powerade, Sprite, and Zico coconut water. They have an expected EPS of $.46 and Revenue of $8.65B, with expected quarterly revenue to decrease by -4.6%.

$GM – General Motors is a blue-chip company manufacturing cars for over a hundred years. Recently, General Motors has begun designing and manufacturing Electric Vehicles to combat the Tesla growth and take market share. Expected EPS of $2.20 and Revenue of $35.92B, with expected quarterly revenue to increase by 16.5%.

$UAA –  Under Armour is one of the largest performance apparel brands globally and revolutionized the way athletes across the world dress. Under Armour has much more than apparel under their umbrella, supplying teams with equipment for in-game activities. Expected EPS of -$.07 and Revenue of $1.27B, with a quarterly revenue to decrease by -11.9%.

After Market Close

$UBER – Much like Lyft, their main business derives from people entering into a Stranger’s car and arriving at their destination. Many people have chosen to decline to ride-share in the current climate with Covid-19. Uber has another business segment that has been extremely successful throughout the pandemic, Uber Eats. Uber Eats has been heavily used throughout the pandemic as delivery service use has spiked the last 11 months.

$MGM – MGM resort international, like Penn National and other casino companies, has been bleeding cash throughout the pandemic, and their earnings are expected to reflect that. Unlike Penn National, MGM doesn’t have such a wide following and hasn’t had as much success on the online sports book and iCasino segments. Expected EPS of -$.96 and Revenue of $1.47B, with an expected quarterly revenue decrease of -53.8%.

Thursday, February 11th, 2021

Before Market Open

$PEP – PepsiCo, much like $KO, is one of the leaders in the entire soft drink industry. They own several other brands under their umbrella that include: Frito-Lay, Gatorade, Quaker, Tropicana. A blue-chip company that will be used in any market climate has rebounded effectively throughout Covid-19. Expected EPS of $1.51 and Revenue of $21.99B, with an expected quarterly revenue increase of 6.5%.

$TSN – Tyson food is one of the largest producers of Chicken, Beef, and pork, the second-largest food company in the Fortune 500, and a member of the SP500. The company produces a wide variety of protein-based food products and is the retail and food service leader. Expected EPS of $1.58 and Revenue of $11.08B, with an expected quarterly revenue increase of 2.5%.

$KHC- Kraft Heinz provides numerous amounts of products in the retail food and beverage space, including Heinz Ketchup, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Meyer, Philadelphia, Planters, and Velveeta. Expected EPSof $.74 and Revenue of $6.86B, with an expected quarterly revenue increase of 5%.

$AZN – AstraZeneca is one of the few companies that was able to produce a successful Covid-19 vaccine, and earnings should begin to rebound after all the money spent on R&D to develop the vaccine. Expected EPS of $.53 and Revenue of $6.96B, with expected quarterly revenue of 4.4%.

After Market Close

$DIS – Disney is one of the largest media companies and owns several brands under their broad umbrella of many ventures. Their media networks segment drives 36.8% of their revenue, and that portion has been extremely profitable throughout Covid-19. Direct-to-Consumer & International make up over 28% of the business, including ESPN+ and Disney+, which has recently seen an all-time high in viewers. Expected EPS of $-.47 and Revenue of $15.64B, with an expected quarterly revenue decrease of -25%.

EVENTS & TALKS

ECONOMIC CALENDAR

Tuesday February 09 2021: JOLTs Job Openings DEC 10:00 AM EST

Wednesday February 10 2021: Core Inflation Rate YoY JAN 8:30 AM EST

Wednesday February 10 2021: US Budget Plan FY 2021 12:30 PM EST

Thursday February 11 2021: Initial Jobless Claims 06/FEB 8:30 AM EST

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#14 Retail Traders vs. Wall Street : Round 1

Friday, January 29th Closing Price


TABLE OF CONTENTS

  1. DISCORD RECAP
  2. MERCHANDISE
  3. EDUCATIONAL LEARNING SEGMENT
  4. MONDAY
  5. WEDNESDAY
  6. THURSDAY
  7. FRIDAY
  8. STOCKS ON OUR RADAR
  9. LAST WEEK’S EARNINGS
  10. VIDEO OF THE WEEK
  11. UPCOMING EARNINGS
“May we think of freedom, not as the right to do as we please, but as the opportunity to do what is right” –Peter Marshall
DISCORD RECAP

Solid trading week.

Much volatility due to short squeezes on GameStop, AMC, and other names.

The FOMC meeting last week allowed us to short the market by buying $SPY puts and $VXX calls.

As a trader, volatility can be your best friend. The only way for this to be a great friendship is by understanding it and not trying to undermine it.

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MARKET LAST WEEK (1/25 – 1/29)
Wall Street GIF by Bitcoin & Crypto Creative Marketing

MONDAY (1/25)

GameStop reached record highs today, the latest development in what has been a fascinating struggle between retail, specifically Reddit driven options traders and institutional investors. GameStop’s stock doubled at one point, managing to trade as high as $159.18 a share despite being halted six times by the New York Stock Exchange. This is all despite the fact that GameStop is currently poised to lose money this year and the following, due to their lack of significant online presence and a large decline in sales growth. Citron research and their founder Andrew Left issued a report indicating their less than favorable outlook regarding GameStop’s future before being forced to retract after experiencing a short squeeze driven by retail investors.

Today’s frenzy was a turning point, or at the very least a demonstration of the power that retail investors have in the market. Mad Money host and former hedge fund manager, Jim Cramer, shared his shock with the world going on to state that the “mechanics of the market are breaking down. Arguably, “these people are one group.” This group is none other than the popular Reddit message board “Wall Street Bets.” Their ability to engineer the market since the start of the pandemic supposedly has many scared that we are currently in a bubble. Many institutional investors are looking to keep retail investors out of the market because of it.

TUESDAY (1/26)
In massive news Leon Black, the CEO of Apollo Global Management following a review of his ties to the convicted sex offender Jeffrey Epstein. Apollo is one of the largest private equity groups and is now changing its corporate governance structure. They are removing special voting rights for exclusive partners, and the directors are going to be acting independently.

PepsiCo and Beyond Meat formed a joint venture to promote the plant-based protein and sustainable food system’s growth. Beyond Meat is an innovator in a rapidly growing market segment, and Pepsi wants to jump on the rocket ship. They formed “The Planet Partnership” and will begin to develop innovative snacks, drinks, and new products with global/human health in mind.

WEDNESDAY (1/27)

Jack Ma’s Ant Group has planned a significant restructuring in response to the pressure they have received from Chinese regulators. Ant Group will become a financial holding company overseen by China’s central bank to ensure compliance at officials’ urging. This is a significant development from the payment processor company to avoid sanctions and other headlines that have had investors wary. Ant Group has made an immense effort to brand themselves as an internet technology company, and this revamp will affect their growth and profitability.

Ant Group is also planning to sell their prized US asset EyeVerify. This is due to the tension between the US and China over Chinese technological growth and data access. While this will help them generate necessary funds to cover fines and restructuring costs, it is a blow to their plans as EyeVerify was their first investment in a US company.

THURSDAY (1/28)

A week dominated by Wall Street Bets continued into Thursday with one of the most unprecedented events to ever happen in American Financial Market history. The American Free market, one of our country’s backbones, was tested, and it failed. Robinhood, one of the largest brokers in the United States whose mission is to “Democratize finance for all,” did everything besides that. They had removed 13 of the most volatile stocks on the market and only allowed shareholders to sell their position. This had never happened before as Robinhood strong-armed users forcing the price of Gamestop to go down. There are several theories as to what caused Robinhood and several other brokers to do this. Robinhood makes money on the order flow from retail traders to banks, and as we know, these banks had just been exposed by retail traders from the short squeeze. Some people believe that Robinhood had stopped trading to allow for the Banks they are associated with to recover from their short positions and reposition themselves for future growth. The other theory is that as the stock price of $GME rises, users scooped up deep OTM call options, and Robinhood needed to buy equities to cover themselves. When retail traders were buying up all the shares, and the stock price kept rising, Robinhood wouldn’t be able to cover the derivative positions. Aftermarket close on Thursday, Robinhood had to draw hundreds of millions on their credit lines.

FRIDAY (1/29)
This has been a crazy week in the market from start to finish. The world saw Reddit users inflate multiple stocks’ prices and then get pushback from trading apps. In particular, Robinhood has enforced new rules of buying and selling stocks like GME and now crypto due to the push behind Dogecoin. The situation reached peak insanity when we saw Dave Portnoy, Senator Alexandria Cortez (AOC), and Senator Ted Cruz in agreement that trading apps should not control the free market. With partisanship at all-time highs, seeing politicians from both sides of the aisle speaking up for traders who are not billionaire wall-street firms may lead to consequences for apps like Robinhood or Tasty, where the former is already subject to a class-action lawsuit.

While in the automotive world, another favorite of WallStreetBets Reddit has some bad news for their fans. Tesla announced that the long-awaited Founders Roadster had been delayed again until 2022. Even with a high retail price of over $250,000, it is expected to be too high in demand, mainly as it will rival supercar performance in an EV package with top speeds around 220 mph. This announcement followed Tesla’s previous press release where they had to disclose another Cybertruck delay as well. With a continued shortage of processing chips, Tesla has had to delay production for their first truck yet again. Although long-time followers of the brand know production delays have plagued every model release so far, as Tesla continues to push the envelope for the EV sector. However, consumers may begin to hold them accountable for consistent delays in product delivery with mounting competition in the market at some point. Ford’s new Mache E mustang for the first 200,000 units is eligible for the $7,500 federal tax credit and may provide an attractive alternative to the model 3 and model Y, as it has the comparable range to the long range tesla model at a lower price point.

STOCKS ON OUR RADAR (2/1 – 2/5)

Zoom logo - YouTube

Zoom Video Communications

We are looking to see if $ ZM can stay above the $370 / 372 level.

If we can stay above this, we believe $ ZM will begin to push higher into 375 / 399 / 438.

$ ZM tends to be a quick mover, so be ready to take the opportunity and lock in profits.

REVIEW OF LAST WEEK’S EARNINGS (1/25 – 1/29)
Tuesday (1/26)
(Before Market Open)
3M

The 3M company had a solid quarter to finish off what can undoubtedly be deemed a successful year. Due to their position as an industry leader in worker safety, healthcare, and industry, they reaped the rewards of providing necessary services through the height of the pandemic. They produced and delivered over 2 billion respirators, and that alone accounted for just shy of 4% of total company sales growth.

3M reported the following:

  • $8.6 Billions in net sales, up 5.8% YoY

  • 1.4 Billion in adjusted net income, up 22.4% YoY

  • EPS at $2.38, up 22.1% YoY

  • 21.5% adjusting operating margin

Takeaway:

The 3M company had broad-based growth, improved margins, and robust cash flow in 2020 and is predicting even more success this year, which is significant as many companies have declined to issue guidance, citing the pandemic’s uncertainty. They are forecasting organic sales growth of 3 to 6 percent, improvement in margins and earnings, and strong cash flow generation. 3M company is poised to see continued success especially considering its practically essential status.

General Electric 

General Electric shares jumped more than 2% during trading Tuesday following its earnings report, likely due to their industrial cash flow that far exceeded their projections. Strong free cash flow helped tie up a challenging year, and they are already predicting as much as $4.5 Billion in industrial free cash flow dependent on a recovery in aviation.

General Electric reported the following:

  • $21.9 Billion in revenue

  • $4.4 Billion in free cash flow

  • GAAP – continue EPS of $0.27

  • Adjusted EPD of $0.08

Takeaways:

General Electric reaffirmed its commitment to delivering value for the long term. Their adjusted EPS for the past quarter was low, but they have already projected an adjusted EPS of $0.15-$0.25 for 2021. Although some analysts are far from convinced, citing strong free cash flow for almost all industrial companies has released working capital due to weak sales.

Johnson & Johnson 

Johnson & Johnson released their Q4 earnings and looked very strong moving into the new year. Before releasing their COVID-19 vaccine data to the FDA, they reported $22.5 billion in sales or 8.3% growth in Q4. With the pandemic still in full swing across the country, Johnson & Johnson’s one dose vaccine can prove to be a game-changer as the other two leading vaccines both require two doses to be effective.

Johnson and Johnson reported the following.

  • Adjusted operational growth of 7.3%

  • 2020 Full-Year Sales of $82.6 Billion reflecting growth of 0.6%

  • The company provides 2021 guidance of adjusted operational sales growth of 8.8%* and adjusted active EPS growth of 16.4%

Takeaways: With President Biden’s new administration goal of 150 million vaccinations in 100 days, if Johnson & Johnson can follow through with an effective vaccine proposal to the FDA next month, they can see sales explode going into Q1. In Florida, governor Desantis has publicly stated that if their vaccine can be shown to be effective and approved in February, they will be requesting upwards of 1 million doses to make it the primary vaccine for Florida’s workforce. With that in mind, if they can deliver as promised, we can see Johnson & Johnson make a strong push as they are the leading vaccine in the country with a sharp uptick in quarterly sales.

Verizon

Verizon released earnings pre-market on Tuesday. Verizon ended the year on a strong note, with their top and bottom lines beating analyst expectations. Verizon reported the following:

  • $1.11 in earnings per share (EPS), compared with $1.23 in 4Q 2019

  • Operating revenue decline of 0.2 percent from fourth-quarter 2019

  • Net income of $4.7 billion, a decline of 9.6 percent from fourth-quarter 2019, and adjusted EBITDA (non-GAAP) of $11.7 billion, an increase of 5.3 percent from fourth-quarter 2019

  • Total revenue of $23.9 billion, a decrease of 1.2 percent year over year

  • Total revenue of $8.1 billion decreased by 0.3 percent year over year

  • Total wireless service revenue of $16.7 billion, a 2.2 percent increase year over year

Takeaway: Verizon had strong Q4 results for 2020 and headed into 2021 with even higher expectations. With the strong consumer momentum due to 5G, backed by the company’s diligent execution of operational plans, it appears that Verizon is positioned to do very well in Q1.

Lockheed Martin

Lockheed Martin failed to beat analysts’ expectations in their earnings call Tuesday, resulting in shares closing down just shy of 3% on the day. Lockheed Martin did manage to beat its sales forecast. Luckily, strong operating performance and lower overhead helped offset some of the pandemic’s economic effects.

Lockheed Martin reported the following:

  • Net income of $1.79 Billion

  • EPS of $6.38

  • $8.2 Billion in cash generated from operations

  • Sales totaled $17.03 Billion, up 7.3% YoY

Takeaways: 

Lockheed Martin didn’t beat expectations, but they have a few promising aspects of their earnings call. Not only did they hit their sales forecast, but Aeronautics’ net sales also increased 5%, with operating profit up 7%. Leadership was not deterred by their earnings miss as they issued guidance for an EPS of $26.30

(After Market Close)

Advanced Micro Devices

AMD posted full-year earnings along with Q4 earnings Tuesday. With the amount of data continually growing larger, AMD’s semiconductor products’ demand will increase. Along with data increasing, video game systems’ growth reaches astronomical levels, and AMD products are at the helm.

  • Record Revenue of $9.76B up 45% YoY

  • Net Income and EPS doubled from the year prior

  • Operating income of $1.37B, Operating Margin of 14%

  • Net Income $2.49B, and Diluted EPS of $2.06

  • $2.29B in cash, cash equivalents, and short-term investments

  • Quarterly revenue of $3.24B, up 53% YoY

  • Quarterly operating income of $570M, Net Income of $1.76B

$AMD is posting more substantial profits now than ever and decreasing costs simultaneously. This is an extremely healthy sign for a company that they can prosper and increase margins throughout a global pandemic.

Microsoft

After hours Tuesday, Microsoft reported record-breaking earnings and saw share prices rise as much as 4% after. Microsoft has seen its sales driven by success in Azure, their intelligent cloud service, due to the spike in demand for cloud technology throughout the pandemic.

Microsoft reported the following:

  • $43.08 Billion in revenue, for an EPS of $2.03

  • $16 Billion in commercial cloud revenue, up 34% YoY

  • Gaming surpassed $5 Billion in revenue for the first time.

  • Gaming revenue up 51%, beating 22% from the previous quarter.

  • PC revenue of $15.1 Billion$13 above guidance

Takeaways:

Microsoft had a solid quarter with significant growth across all business segments. They managed to beat earnings and remain positive outliers of the pandemic and are poised to continue doing so. They issue guidance higher than previous projections due to their unique position.

Starbucks

Global comparable store sales declined 5%

Opened 278 net new stores in the first quarter of fiscal 2021, yielding 4% year-over-year unit growth, ending the period with 32,938 stores globally

Consolidated net revenues of $6.7 billion declined 5% from the prior year primarily due to the impact of the COVID-19 pandemic

GAAP operating margin of 13.5%, down from 17.2% in the prior year primarily due to the COVID-19 pandemic, mainly sales deleverage, as well as growth in wages and benefits and Americas store portfolio optimization expenses, partially offset by labor efficiency and the impact of pricing in the Americas

Starbucks® Rewards loyalty program 90-day active members in the US increased to 21.8 million, up 15% year-over-year.

Wednesday (1/27)
(Before Market Open)
ATT

ATT hung in there this year, despite the pandemic. While they didn’t reach all of their financial goals and expectations, they weren’t too far off on some. With financial hardships facing many of their customers, they saw the effects as well.

ATT reported the following:

  • Revenue of $171.8 B for the year, -$9.4B YoY

  • Earnings per share were $3.18, adjusted from $3.57 the previous year

  • Revenue $45.7 B for the quarter, -$1.1B Yoy

  • Earnings per share for the quarter were $0.75, adjusted from $0.89 the previous year

Takeaways:

ATT had a great year given the circumstances thanks to three factors; a significant increase in postpaid phone additions, 1+million fiber broadband additions, and HBO Max subscriptions topping 41 million, a number they hadn’t expected to reach yet. However, they also experienced losses overall, not meeting yearly or quarterly goals.

Abbott 

Abbott experienced a year of growth due to its nature, with demand for COVID testing reaching a high Q4. Abbott has a comprehensive portfolio of rapid and lab-based tests that propelled their yearly growth into the triple digits.

Abbott reported the following:

  • Yearly global sales were $34.6B, a 9.8% increase

  • Earnings per share for the year were $3.65, on the upper end of the initial projection

  • Q4 sales were reported at $10.7B, a 28.7% increase

  • GAAP diluted EPS was $1.20, reflecting 103.4% operations growth

  • Q4 global COVID-19 related sales were $2.4 billion, mostly from combined sales of Abbott’s BinaxNOW™, Panbio™, and ID NOW™ rapid testing platforms, totaling $1.9B

Takeaways:

With COVID still in full effect and a threat of a second strain lingering overhead, Abbott anticipates continued growth into 2021. Their sales across all four divisions of their products (diagnostics, medical devices, nutrition, and established pharmaceuticals) are impressive, exceeding $10B in the final quarter of 2020. With a global emphasis on health, moving forward, Abbott is in a prime position to reach its lofty 2021 financial goals.

Blackstone

The leading Private Equity firm has seen its fair share of struggles throughout the pandemic. Blackstone owns several Retail and Hospitality properties that have not seen a significant amount of cash flow since the pandemic began in March of last year.

  • Net Income for Q4 of $1.8B$1.13 EPS

  • Declared a dividend of $.97

  • Realized over $25B in the quarter, $25B into new investments

  • Record $619B AUM

  • The Fee Earning segment grew 15% in Q4, growing 33% for the full year

  • Management fees are up by 35%

  • Earnings grew for the full year by 16% to $3.3B

  • Fund appreciation increased by $31B

Blackstone has been able to position itself throughout the pandemic to have substantial gains and record AUM. This is telling for an extraordinarily profitable and healthy company moving forward.

Boeing

BA faces a swirl of problems throughout the last year, from Covid-19 travel restrictions, to FAA forced groundings of the 737 Max, and commercial airline issues. Boeing relies on demand from Commercial airlines to buy their planes, and for these airlines to purchase new planes, they need people on their aircraft to generate revenue. Boeing reported Q4 earnings and yearly earnings.

  • Revenue of $58.2B for the year, -24% YoY

  • They recorded a loss of -$20.88 per share

  • Operating losses for the year of -$12.7B, and operating margin of -22%

  • Net Loss of -$11.9B

  • Quarterly revenue of $15.3B decreasing YoY by -15%

  • Operating loss of -$8B, and operating margin -52%

  • Net loss of -$8.4B, and loss per share of -$14.65

These earnings are nothing short of atrocious, Boeing for the entirety of 2020, bled cash and lost billions of dollars. They will need several macroeconomic conditions to reverse or improve to stop seeing Net Losses.

(After Market Close)

Apple

A company with enough cash in reserves to have one of the world’s largest GDPs posted quarterly earnings. They continue to develop innovative improvements for their entire product line of iPhones, Macs, iPads, Apple Watches, and AirPods.

  • Quarterly revenues of $111.4B, a gain of 21% YoY

  • Quarterly diluted EPS of $1.68, a 35% increase

  • International sales accounted for 64%

  • Quarter business growth was driven by growth in every product category

  • Drove all-time revenue records in each geographic segment

  • Apple declared a dividend of $.205 per share

Apple is producing healthy growth throughout the Global pandemic, not just in the United States but also throughout the world. This is extremely important as they are growing their business segment larger in every way.

NASDAQ

Nasdaq released earnings post-market on Wednesday. The financial services provider beat earnings, with earnings per share and Q4 revenue topping analyst expectations. The company reported the following:

  • 2020 net revenues were $2,903 million, an increase of 15% over 2019.

  • Fourth-quarter 2020 net revenues were $788 million, an increase of 22% over the fourth quarter of 2019.

  • Annualized Recurring Revenue (ARR) was $1,577 million in the fourth quarter of 2020, an increase of 9% from the prior-year period, and the Solutions segments SaaS revenue increased 11% prior-year period.

  • GAAP earnings per share were $1.34, an increase of 11% compared to $1.21 in the fourth quarter of 2019.

  • Non-GAAP diluted earnings per share of $1.60 increased 24% from $1.29 in the fourth quarter of 2019.

Takeaway: With analysts giving Nasdaq a strong ‘buy’ rating going into 2021 plus Q1 EPS expectations being much higher than Q

Las Vegas Sands

Like many others in the hospitality industry, Las Vegas Sands had a challenging year, experiencing substantial losses across the board. They also faced the loss of their founder, Sheldon G. Adelson, this past month. The LVS team states his vision “will continue to make a positive impact far into the future.”

  • 2020 net loss attributable to Las Vegas Sands was $1.69B, compared to net income of $2.70B in 2019

  • $2.21 per diluted share, compared to $3.50 per diluted share in 2019

  • Q4 net revenue was $1.15 billion, a decrease of 67.3% from 2019 Q4

  • Q4 Operating loss was $211 million, compared to operating income of $934 million in Q4 2019

  • Q4 net loss of 2020 was $376 million, compared to net income of $783 million in Q4 2019

Takeaways:

The future for Las Vegas Sands is unclear. COVID restrictions remain a challenging obstacle for those in the travel and tourism industry. A widespread COVID vaccination could mean good news for the Las Vegas Sands, but as it stands now, vaccination is still in its early stages, and travel is dwindling. As far as large conventions go, it may be quite a time before a comeback is foreseeable.

Facebook

  • Facebook daily active users (DAUs) – DAUs were 1.84 billion on average for December 2020, an increase of 11% year-over-year

  • Facebook monthly active users (MAUs) – MAUs were 2.80 billion as of December 31, 2020, an increase of 12% year-over-year

  • Headcount was 58,604 as of December 31, 2020, an increase of 30% year-over-year

  • Capital expenditures, including principal payments on finance leases, were $4.82 billion and $15.72 billion for the fourth quarter and full year of 2020, respectively

  • In January 2021, the Board of Directors authorized incremental share repurchases of up to an additional $25 billion of our shares of Class A common stock. This authorization is in addition to the previously authorized repurchases of up to $34 billion of our shares of Class A common stock

  • As of the end of 2020, $8.6 billion remained on the previous share repurchase authorization.

Takeaways:

We believe the Facebook business has benefited from two broad economic trends playing out during the pandemic. The first is the ongoing shift towards online commerce. The second is the shift in consumer demand towards products and away from services. We believe these shifts provided a tailwind to their advertising business in the second half of

2020 given our strength in product verticals sold via online commerce and our lower exposure to service verticals like travel. Looking forward, a moderation or reversal in one or both trends could serve as a headwind to advertising revenue growth.

Tesla

  • Total revenue grew 46% YoY in Q4. This was primarily achieved through substantial growth in vehicle deliveries and development in other business parts.

  • At the same time, vehicle average selling price (ASP) declined by 11% YoY as the product mix continued to shift from Model S & Model X to the more affordable Model 3 and Model Y.

  • Operating income improved in Q4 compared to the same period last year to $575M, resulting in a 5.4% operating margin.

  • Half a million vehicles produced and delivered in 2020. Total production grew 71% YoY in Q4, with full deliveries increased 54%.

Takeaways: 

This past year was transformative for Tesla. Despite unforeseen global challenges, they outpaced many trends seen elsewhere in the industry as they significantly increased volumes, profitability, and cash generation. Tesla achieved an industry-leading 6.3% operating margin (despite increased SBC to $1.7B). Teams across the organization, including supply chain, manufacturing, logistics, and delivery, rose to the occasion to ensure strong execution.

Thursday (1/28)
(Before Market Open)
Southwest Airlines (LUV)

Southwest Airlines reported earnings at noon on Thursday. On par with the rest of the travel industry, Q4 2020 was not great for Southwest. The call started with a statement from CEO Gary C. Kelly on their performance where he said: “The COVID-19 pandemic devastated the world, and our heart goes out to all those affected. The airline industry was hit especially hard in 2020, and we incurred our first annual net loss since 1972”.

Southwest reported the following:

  • Fourth-quarter net loss of $908 million, or $1.54 loss per diluted share

  • Excluding special items1, a fourth-quarter net loss of $761 million, or $1.29 loss per diluted share

  • Annual net loss of $3.1 billion, or $5.44 loss per diluted share

  • Excluding special items, an annual net loss of $3.5 billion, or $6.22 loss per diluted share

  • Ended 2020 with the liquidity of $14.3 billion, well more than debt outstanding

Takeaway: With the global pandemic leaving the return of everyday travel as an uncertainty, companies like Southwest are definitely in for an exciting Q1 in 2021. Southwest has had some good news recently, including the official launching of 6 new destinations in 2020, which may help the company bounce back as people can move around more freely again.

McDonalds

During their earnings call Thursday morning, McDonald’s fell short of the expected mark. With their sales increasing compared to 2019, they suffered like most restaurants during the lockdowns from COVID-19. The European market bore most of the brunt of strict lockdowns that contributed to them missing analysts’ earnings expectations in Q4.

With the world beginning the early stages of mass vaccination, McDonald’s is optimistic heading into Q1 of 2021, expecting other sales increases compared to 2020 with indoor dining returning across global markets.

McDonald’s reported the following.

  • Earnings per share: $1.70, adjusted, vs. $1.78 expected

  • fourth-quarter net income of $1.38 billion

  • $5.31 billion vs. $5.37 billion expected revenue for the year

  • US same-store sales jumped 5.5% in Q4

Takeaways: McDonald’s has been pushing promotions with different artists throughout Q4 to increase sales lost during the pandemic. With a 5.5% increase compared to the previous year, it’s safe to say their marketing strategy has worked. Going into Q1, Mcdonald’s expects to continue seeing an increase in their sales along the trend created in Q4 and regain lost revenue from their European markets. With that in mind, I expect them to meet or exceed the Q1 sales and revenue expectations.

American Airlines

Thursday earnings report: American Airlines reported their Q4 earnings on Thursday, and with all the travel restrictions that have continued to be enforced, we knew it was going to be an ugly earnings day. Even with the amount of bailout money they received, American Airlines reported to shareholders that 2020 was the “most challenging in company history,” and with a reported 64% revenue loss in Q4 compared to 2019, it’s not hard to imagine why.

 American Airlines reported the following.

  • Fourth-quarter net loss of $2.2 billion

  • Fourth-quarter revenue of $4.0 billion, down 64% year over year

  • Ended the fourth quarter with approximately $14.3 billion of total available liquidity

    •  The company expects to end the first quarter of 2021 with approximately $15.0 billion in total available liquidity

  • Full-year net loss of $8.9 billion

  • Incorporated more than $1.3 billion of permanent non-volume, non-fuel efficiency cost-saving measures into the 2021 operating plan.

Takeaways: American Airlines is facing an uphill battle in making Q1 profitable, let alone 2021.

Vaccine rollout has been slower than expected, with travel bans extended by the Biden administration. As we continue to navigate the pandemic, I can not see a sudden and sharp return to standard traveling patterns that would signal a quick recovery for American Airlines

Jetblue

Jetblue, like every major airline the past year, took a financial beating when COVID-19 shutdown non-essential travel. Although they stated that they beat their estimate of how large their losses would be, they came in at 67% Q4 losses compared to the estimation of 70%. The airline industry was expected to continue to report bleeding losses along with their proposed ideas on how to mitigate their liquid cash bleeds to survive into 2021.

Jetblue reported the following

  • Fourth-quarter 2020 revenue declined 67% year over year

  • Reduced fourth quarter 2020 capacity by 47% year over year

  • Adjusted loss per share was ($1.53)

  • GAAP pre-tax loss of ($512) million in the fourth quarter of 2020, compared to a pre-tax income of $220 million in the fourth quarter of 2019

Takeaways:
Jetblue is looking at another challenging year at the start of Q1 in 2021. We would need to see a drastic shift in public health policies that restrict travel and a surge in consumer confidence that travel is once again safe. Without it, we can expect airlines to continue their loss mitigation strategies well into the year with a potential turn around in late Q3 and Q4 with a possible expansion of the vaccinated population. Only then can we expect airlines to expand back towards full routes, and in Jetblue’s case, their push into the European market was delayed due to COVID-19 regulations.

(After Market Close)

VISA

Visa reported a mixed bag of earnings in their most recent report. They saw a surge in e-commerce transactions as the country transitioned to online shopping predominantly during the pandemic. While their data processing and services branches also saw revenue increases, they suffered losses in their international usage markets. Although in investors’ eyes, the good has outweighed the bad, as shares rose upon the earning release with strong growth trends taking precedence over potentially temporary overseas shortfalls.

Visa reported the following

  • Services revenue grew 5% to $2.68 billion

  • international transaction revenue dropped 28% to $1.45 billion

  • Total processed transactions grew 4% to 39.2 billion

  • Payments volume increased 5%

  • Visa’s board of directors recently approved an additional $8 billion in stock buybacks

Takeaway: Visa has shown signs of positive growth during a time of severe economic uncertainty around the globe. Although they have seen losses in some of their markets in the process, they believe this is a temporary blight that can be recouped when European markets become less depressed as the world handles the COVID-19 pandemic. Although they are optimistic about expanding e-commerce sales, a 22% reduction in the European market will take time to recover and begin to grow again. Moving forward, online shopping has become the primary way to shop for a large population, and that will continue to benefit Visa for the foreseeable future.

CAT

Caterpillar reported strong operational performance in their earnings calls pre-market on Friday. The report easily topped analyst expectations, which resulted in higher early stock market action and an aggressive entry point for the day.

  • Fourth-quarter 2020 profit per share of $1.42; adjusted profit per share of $2.12

  • Full-year operating profit margin percentage of 10.9%; adjusted operating profit margin of 11.8%, within 2019 Investor Day target range

  • Returned $3.4 billion to shareholders through dividends and share repurchases in 2020

Takeaway: Management cited lower tax rates as a significant reason for its avoidance of the 44.5% fall in earnings per share. This lower tax rate combined with the company’s expectations of the seasonal increase in dealer inventory and an improvement in operating-cost margin results in a positive outlook for 2021 Q1.

Chevron

Chevron reported a Q4 loss, which came as unexpected news considering the rebound in crude oil prices. Amid the pandemic, the energy sector struggled. They slashed capital spending by 35% compared to 2019 to mitigate the damages, and Chevron cut operating expenses by $1.4B to show capital commitment.

Chevron reported the following:

  • Full-year 2020 loss of $5.5 billion, compared with earnings of $2.9 billion in 2019

  • Full-year 2020 loss of -$2.96 per share – diluted, compared to +$1.54 per share – diluted in 2019.

  • Q4 loss of $665 million, compared with a loss of $6.6 billion in Q4 2019

  •  Q4 loss of $0.33 per share – diluted, compared with a loss of $3.51 per share – diluted in 2019

Takeaways:

Looking forward, Chevron presents an interesting case and far from a compelling argument for growth. There is no real metric for guidance moving forward with difficulty forecasting how the energy sector will rebound from the effects of the pandemic this year. While Chevron has shown commitment in lowering their operating expenses, it just won’t be enough to offset the losses they’re incurring currently.

Friday (1/28)
(Before Market Open)
CAT

Caterpillar reported strong operational performance in their earnings calls pre-market on Friday. The report easily topped analyst expectations, which resulted in higher early stock market action and an aggressive entry point for the day.

  • Fourth-quarter 2020 profit per share of $1.42; adjusted profit per share of $2.12

  • Full-year operating profit margin percentage of 10.9%; adjusted operating profit margin of 11.8%, within 2019 Investor Day target range

  • Returned $3.4 billion to shareholders through dividends and share repurchases in 2020

Takeaway: Management cited lower tax rates as a significant reason for its avoidance of the 44.5% fall in earnings per share. This lower tax rate combined with the company’s expectations of the seasonal increase in dealer inventory and an improvement in operating-cost margin results in a positive outlook for 2021 Q1.

Chevron

Chevron reported a Q4 loss, which came as unexpected news considering the rebound in crude oil prices. Amid the pandemic, the energy sector struggled. They slashed capital spending by 35% compared to 2019 to mitigate the damages, and Chevron cut operating expenses by $1.4B to show capital commitment.

Chevron reported the following:

  • Full-year 2020 loss of $5.5 billion, compared with earnings of $2.9 billion in 2019

  • Full-year 2020 loss of -$2.96 per share – diluted, compared to +$1.54 per share – diluted in 2019.

  • Q4 loss of $665 million, compared with a loss of $6.6 billion in Q4 2019

  •  Q4 loss of $0.33 per share – diluted, compared with a loss of $3.51 per share – diluted in 2019

Takeaways:

Looking forward, Chevron presents an interesting case and far from a compelling argument for growth. There is no real metric for guidance moving forward with difficulty forecasting how the energy sector will rebound from the effects of the pandemic this year. While Chevron has shown commitment in lowering their operating expenses, it just won’t be enough to offset the losses they’re incurring currently.

VIDEO OF THE WEEK
In this week’s video of the week, Dave Portnoy, founder of Barstool Sports, called one of his well-known and typically comedic emergency press conferences. This week’s video was far from light-hearted as he condemned popular brokerage and trading app Robinhood, Citadel, and Steve Cohen amongst others for their hand in delisting retail favorites GameStop, AMC, and Nokia. Dave Portnoy highlighted the disparity in how institutional investors can trade freely and over-leverage themselves. At the same time, brokerages block retail traders citing volatility and claiming that this was in the best interest of retail investors. Portnoy called these actions criminal. While it has become evident that Robinhood had the right to do so according to their signed user agreements, the issue’s morality still raises many questions. Ultimately this week, we saw that the powers that be were victims of their greed. We watched their friends come to their aid in a very questionable way, and we watched retail investors begin to understand the power they have on the market on a national level. Here at tiger-Wolf Capital, we can’t say for sure what we’ll experience next week, but we can be sure not to count out the little guy.
UPCOMING WEEK 1/25 – 01/29

EARNINGS

Tuesday, January 26th, 2021

Before Market Open : 

UPS – UPS has been one of the few companies that had great positioning pre-Covid19. Logistics and shipping companies have been heavily needed throughout the pandemic as we have had stay-at-home orders and online orders have spiked. They have an expected EPS of $2.10 and Revenue of $22.78B, with expected quarterly revenue to increase by 10.8%.

BABA- Alibaba had been heavily in the news cycle the last month, with its founder disappearing and reappearing several weeks later. Alibaba has online and mobile shopping with retail and wholesale trading. They also operate several other marketplaces and online businesses throughout China. Expected EPS of $3.51 and Revenue of $32B, with quarterly revenue expected to increase by 38%.

PFE- Pfizer, one of the leading global pharmaceutical companies, developed and produced one of the Covid-19 vaccines worldwide. Making a global vaccine is expensive, and then implementing it is relatively cheap. They have an expected EPS of $.56 and Revenue of $12.85B, with expected quarterly revenue to increase by 1%.

XOM – Exxon Mobil is the world’s largest energy company that uses crude oil, natural gas, and petroleum to ship, sell, and transport worldwide. Exxon holds the world-leading inventory of natural gas resources and petroleum products’ largest refiners. A large portion of the world isn’t traveling, and the need for Exxon products for the general consumer has decreased, which has a trickle down effect for several industries. Expected EPS of $.03, and Revenue of $48.59B, with expected quarterly revenue to decrease by -27.7%.

BP- In the same industry as Exxon, their main business segments are natural gas, crude oil, and refining petroleum products. They have been hurting right along with Exxon throughout the pandemic. Expected EPS of $.19 and Revenue of $45.31B, with expected revenue to decrease by -37%.

After Market Close

AMZN – Amazon is the premier shipping, online shopping, and logistics company. They have had as dominant a year as any. They work alongside vendors and small businesses to ship their products worldwide. They have an expected EPS of $10.45 and revenue of $120.36B, with expected quarterly revenue to increase by 37.7%.

Alphabet (Google) –  World-leading technology company, with web-based searches, advertisements, mobile operating systems, and software applications. They have an expected EPS of $17.05, with revenue of $44.09B, and expected quarterly revenue to decrease by 5%.

CMG – Chipotle is a fast-paced company that operates with a business plan to pick up and take out. They added a mobile application with delivery in partnership with doordash in a massive announcement. Adding this delivery option to their arsenal of revenue streams was extraordinarily successful and promoted additional growth. They have an expected EPS of $3.84 and Revenue of $1.6B, with expected quarterly revenue to increase by 11.8%.

EA –  The leading interactive global software company, provides games, content, and online services for every gaming platform to use. They have an expected EPS of $3.06 and revenue of $2.37B, with an expected quarterly revenue increase of 48%.

Wednesday, January 20th, 2021

Before Market Open

SPOT- Spotify is a music streaming platform that offers free music and paid subscriptions for ad free music streaming. They have an expected EPS of -$.82 and Revenue of $2.55B, with an expected quarterly revenue increase of 24%.

SNE – Sony corporation develop and manufacture consumer and industrial electronic equipment. They provide audio, video, gaming, display, computer equipment, and they also work in the worldwide music and image-based software markets. They are releasing annual earnings on top of quarterly. They have an expected EPS of $.8 and revenue of $24.49B, with expected quarterly revenue to increase by 8% and annual revenue expected to increase by 1%.

EPD – Enterprise Product Partners is a leading integrated provider of processing and transportation services to producers of Natural Gas Liquids and natural gas liquids consumers. Expected EPS of $.53 and Revenue of $6.7B, with expected revenue to decrease by -16.3%.

After Market Close

PYPL – No longer are people giving each other cash or writing checks; the wave of online transfer payments has begun. Companies are continually using Paypal to send in payments along with outflow payments to their employees. They also own Venmo, which is the premier transfer payment company.

GRUB – Grubhub is one of the food delivery industry leaders, which has been overwhelmingly successful throughout the Global pandemic as more people have ordered in. They have an expected EPS of $.05 and revenue of $494.9M with an expected quarterly revenue increase of 45%.

Thursday, January 21st, 2021

CLX is one of the most used companies throughout the Global pandemic. They provide cleaning products that have been used worldwide for disinfecting various surfaces. Clorox has continued success throughout Covid-19, and market share has grown larger and larger. Expected EPS of $2.14, and Revenue of $1.76B, with expected quarterly revenue to increase by 21.5% and expected annual revenue to increase by 9%.

DGX – Quest Diagnostics leads the charge on fast-acting Covid-19 tests and other healthcare services. Quest was a pioneer in developing fast response and trust-worthy during the health crisis. They have an expected EPS of $4.31 and Revenue of $2.88B, with quarterly revenue expected to increase by 50%. 

PENN – A company we have done extensive research on who has had a rough time during the global pandemic with their Brick-and-Mortar casinos but has seen revenue growth the alternative streams with the Barstool Sportsbook. Who recently expanded from one state (Pennsylvania) to another (Michigan) and began to see larger revenue streams from the online sportsbook. They have an expected EPS of $.43 and Revenue of $1.1B for the quarter, with expected quarterly revenue to decrease by -17.2%. 

Thursday (After Market Close)

SNAP – A tech and social media company that generates revenue from users and ad-revenue. They have an expected EPS of $.09 and Revenue of $46M, with expected quarterly revenue to increase by 50%.

PTON – Peloton is another company positioned before the pandemic to strive ahead during Covid-19. Orders began to skyrocket due to stay-at-home orders and gyms being closed. Peloton has an expected EPS of $.21 and Revenue of $1.02B, with an expected quarterly revenue increase of 118%.

PINS – Pinterest is a user-driven visual discovery engine that allows users to discover ideas for daily activities. They generated revenue by Ads on their platform and continued user growth. They have an expected EPS of $.37 and $645.6M revenue, with an expected quarterly revenue increase of 61.4%.

ATVI – A standalone interactive entertainment company with some of the most successful franchises in their portfolio. Their entertainment network has nearly 500 million users across the globe. They have an expected EPS of $1.29 and Revenue of $2.82B, with expected quarterly revenue to increase by 42%.

GILD – Gilead is a pharmaceutical company, and Pfizer has produced one of the frontier Covid-19 vaccines and is being implemented across the world. Expected EPS of $2.14 and Revenue of $7B, with expected revenue to increase by 19%.

F – Ford is an American car manufacturer who has been designing cars since the beginning. Recently trends have exposed traditional car manufacturers that consumers are moving toward alternative energy and Electric Vehicles (EVs). Noticing this trend, Ford has begun to produce the Mach-E EV that will continue to sell larger into the future. Expected EPS of $.01 and Revenue of $32.89B, with expected revenue to decrease by -17.2%.

TMUS – T-Mobile is a communication services company that recently acquired Sprint to lateral its business strategy into a more cost-efficient method. T-Mobile currently has 44M users and has 70,000 distribution points. Expected EPS $.62 and Revenue of $19.95B, with expected quarterly revenue to increase by 68%.

EVENTS & TALKS

ECONOMIC CALENDAR

Monday 02/01/2021:

  • ISM Purchasing Managers Index – PMI

  • Construction Spending

  • United States Total Vehicle Sales

Tuesday 02/02/2021: 

  • United States ISM Non-Manufacturing PMI

Wednesday 02/03/2021:

  • United States ADP Employment Change

Thursday 02/04/2021: 

  • United States Jobless Claims 4-week Average

Friday 02/05/2021: 

  • Non-farm payroll

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