Friday, February 12th Closing Price
TABLE OF CONTENTS
- DISCORD RECAP
- STOCKS ON OUR RADAR
- LAST WEEK’S EARNINGS
- UPCOMING EARNINGS
“Remember that failure is an event, not a person.” – Zig Ziglar
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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)
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)
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.
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.
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.
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.
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)
(After Market Close)
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
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%
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
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.
(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
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%
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 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:
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)
$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.
$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, 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.
$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.
(Before Market Open)
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.
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 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.
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.
(Before Market Open)
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%
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 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
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.
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:
Pre-Tax Net Present Value of the Misma Gold Project:
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
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
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