Billionaire Steve Cohen Invests $19M In Cybin For Psychedelics R&D, Blake Mycoskie"s $100M Pledge Update

Billionaire hedge fund and NY Mets owner, Steve Cohen amped up his support for psychedelics R&D through a new investment of nearly $19 million in beneficially owned shares of Cybin Inc. (NYSE: CYBN). read more.....»»

Category: blogSource: benzingaSep 18th, 2023

Bill Gates Stock Portfolio: August 2023 Update

In this piece, we will take a look at the August updates of Bill Gates’ stock portfolio. If you want to skip out an introduction to the well known technology billionaire, then head on over to Bill Gates Stock Portfolio Latest 2023 Update: Top 5 Stocks. Bill Gates really needs no introduction. His company, Microsoft […] In this piece, we will take a look at the August updates of Bill Gates’ stock portfolio. If you want to skip out an introduction to the well known technology billionaire, then head on over to Bill Gates Stock Portfolio Latest 2023 Update: Top 5 Stocks. Bill Gates really needs no introduction. His company, Microsoft Corporation (NASDAQ:MSFT) is one of the biggest technology companies in the world and one that sits at the heart of the computing revolution that has taken the planet by storm. Mr. Gates’ story is one of a typical Silicon Valley entrepreneur. He attended the illustrious Harvard University for his undergraduate education, but sensing an opportunity in the computing market, dropped out and set up Microsoft in 1976. During the first decade of its existence, Microsoft would compete with Apple Inc (NASDAQ:AAPL) to take the personal computing crown and these years would signify the different approaches to a product that Gates and his rival Steve Jobs would take. While Jobs would stress the need to control the entire user experience through his product and pair the Macintosh operating system with the Mac computer, Gates would instead focus on developing software that could be used on any computer. As history shows, Gates won this war, and Microsoft is currently the world’s largest computer operating system company. Apple, however, came back with the smartphone as it became the first company to capture a large market with the iPhone. After working at Microsoft for nearly four decades, Gates left the firm in 2014. However, due to his stature in the industry and his active approach towards charity, he is still a regular feature of news pieces despite nearly ten years having passed since his retirement. The Microsoft billionaire, who is worth $116 billion as of August 2023, donates to charitable causes and invests primarily through his Bill and Melinda Gates Foundation. Apart from the foundation, he also invests through his family office called Cascade Investment. If you’re interested in his family office’s investments, then check out Bill Gates’ Most Recent Portfolio: Top 15 Stock Picks. Mr. Gates’ foundation is also one of the biggest charities in the world, and estimates suggest that through it, he has donated more than $50 billion to a variety of charitable causes over the past two decades. His friendship with another well-known charitable billionaire, Warren Buffett of Berkshire Hathaway, is also well known and so is Mr. Buffett’s influence on Mr. Gates’ investment philosophy. As opposed to Gates, who is a technology billionaire, Mr. Buffett is an old school investor who finds value in a variety of sectors such as energy and finance. These choices often hedge investment losses in a market downturn in growth stocks such as the one we witnessed last year, and Mr. Buffett has also influenced the Bill and Melinda Gates Foundation’s investments by quite a bit. Like his friend, Mr. Gates has also pledged to give away nearly all of his wealth once he passes away. These days the billionaire is busy being a celebrity and focusing on his interests. In August, he interviewed Khan Academy’s founder Sal Khan as part of his Unconfuse Me podcast where the pair discussed a variety of topics. For those out of the loop, Khan Academy is the world’s premier online education platform that is made of countless free courses to make sure that children all over the world can access education for free. During the talk, Gates shared his experience around ChatGPT’s early days and how OpenAI stunned him when it demonstrated its software to him. The Microsoft founder linked the demo to the time he was at Xerox PARC in the 1970s, which is a big claim if you’re in the loop about computing history. If you’re not, then consider the fact that the graphical user interface (GUI) developed by Xerox PARC is the precursor to the modern computing operating systems that we use today. It had a simple point and click interface, which had left both Mr. Gates and Mr. Jobs stunned when they first saw it – an understandable reaction considering how the software would become the backbone of the computer. Therefore, comparing the OpenAI demo with the Xerox demo is no short claim and it underscores the impact that Mr. Gates believes that OpenAI might have on the world. During his talk with Sal Khan, Mr. Gates recalled the two demonstrations and shared: In June, they kept showing me this thing, and I was like, “Yeah, it’s kind of an idiot savant. I don’t think it’s practical. Why don’t you see if it can do the AP Biology exam. And I’m not going to pay any attention until you can get a 5.” And I thought, “Okay, that’ll give me three years to work on HIV and malaria.” And then it was so bizarre because Sam Altman and Greg Brockman in late August said, “Hey, we want to come show you this thing.” It was early September when there were like thirty people at my house. And I’ve said it’s the most stunning demo I’ve ever seen in my life. I mean, right up there with seeing the Xerox PARC graphics user interface that set the agenda for Microsoft for about fifteen years. This demo was so surprising to me, the emergent depth that as they scaled up the training set, its fluency, and you have to say understanding, that computers could not read in the sense humans do, and it couldn’t write in the sense humans do. And now, with lots of footnotes about hallucination and things like that, but I’m still personally in a state of shock at wow, it is so good, and okay, therefore, let’s see where we can put it to good use. So, with these details in mind, let’s take a look at the August update for Bill Gates’ stock portfolio. The top three Bill Gates stock picks are Berkshire Hathaway Inc. (NYSE:BRK-A), Microsoft Corporation (NASDAQ:MSFT), and Canadian National Railway Company (NYSE:CNI). Our Methodology To compile our list of stocks for the August update to Bill Gates’ stock portfolio, we used the Bill and Melinda Gates Foundation’s Q2 2023 SEC filings and picked top ten stocks from the portfolio. While not included in this list, the fund bought a new stake worth $96 million in Anheuser-Busch InBev SA/NV (NYSE:BUD) during the time period covered. Bill Gates Stock Portfolio: August 2023 Update: Top 10 Stocks 10. FedEx Corporation (NYSE:FDX) Bill & Melinda Gates Foundation’s Q2 2023 Stake: $380 million  FedEx Corporation (NYSE:FDX) is a courier and logistics services provider. The firm’s stock has performed remarkably well on the stock market this year since it is up by nearly 50% year to date. Mr. Gates’ foundation owned a $380 million stake in the company as of June 2023, making it the largest hedge fund investor. During the same time period, 62 of the 910 hedge funds polled by Insider Monkey had bought FedEx Corporation (NYSE:FDX)’s shares. Out of these, the firm’s second largest shareholder is Ken Griffin’s Citadel Investment Group with a $333 million stake. Along with Microsoft Corporation (NASDAQ:MSFT), Berkshire Hathaway Inc. (NYSE:BRK-A), and Canadian National Railway Company (NYSE:CNI), FedEx Corporation (NYSE:FDX) is part of Bill Gates’ August stock portfolio update. 9. Walmart Inc. (NYSE:WMT) Bill & Melinda Gates Foundation’s Q2 2023 Stake: $474 million  Walmart Inc. (NYSE:WMT) is the biggest brick and mortar retailer in the world. Its highly anticipated second quarter earnings were a positive bunch of figures, as the firm beat analyst EPS estimates and also increased its full year revenue growth guidance to a high end of 4.5%. During Q2 2023, 81 of the 910 hedge funds part of Insider Monkey’s database had held a stake in the retailer. Walmart Inc. (NYSE:WMT)’s largest hedge fund investor is Ken Fisher’s Fisher Asset Management since it owns 8.8 million shares that are worth $1.3 billion. 8. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) Bill & Melinda Gates Foundation’s Q2 2023 Stake: $517 million  Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the Mexican franchise of Coca-Cola. It produces and sells a variety of Coca-Cola’s products. The firm’s second quarter earnings saw it report $1.32 in earnings per share, which was seven cents higher than the analyst estimates. By the end of this year’s second quarter, the Bill & Melinda Gates Foundation had held a hefty $517 million stake in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), making it the largest hedge fund shareholder. Along with the firm, ten of the 910 hedge funds part of Insider Monkey’s research had also invested in the company. 7. Ecolab Inc. (NYSE:ECL) Bill & Melinda Gates Foundation’s Q2 2023 Stake: $974 million  Ecolab Inc. (NYSE:ECL) is an industrial water treatment and pest control products and services provider. Despite a general lag in the industrial sector, it reported an 8% sales growth and 21% operating income growth over the year during its second quarter. After digging through 910 hedge fund portfolios for their June quarter of 2023 shareholdings, Insider Monkey discovered that 56 had invested in the company. Ecolab Inc. (NYSE:ECL)’s biggest investor in our database is the Bill & Melinda Gates Foundation Trust with a stake worth $974 million. 6. Deere & Company (NYSE:DE) Bill & Melinda Gates Foundation’s Q2 2023 Stake: $1.5 billion  Deere & Company (NYSE:DE) is another industrial company that sells tractors, crawlers, and other machines. Mr. Gates’ foundation is Deere & Company (NYSE:DE)’s biggest shareholder since it owns 3.9 million shares that are worth $1.5 billion. As a whole, 56 of the 910 hedge funds part of Insider Monkey’s Q2 2023 database had invested in the company. Berkshire Hathaway Inc. (NYSE:BRK-A), Deere & Company (NYSE:DE), Microsoft Corporation (NASDAQ:MSFT), and Canadian National Railway Company (NYSE:CNI) are some stocks that the Bill Gates Foundation invested in during 2023’s second quarter.   Click to continue reading and see Bill Gates Stock Portfolio Latest 2023 Update: Top 5 Stocks.     Suggested Articles: Goldman Sachs Tech Stocks: Top 12 Stock Picks 15 Fastest Growing Fintech Companies In 2023 10 Healthcare Stocks with Insider Buying Disclosure: None. Bill Gates Stock Portfolio: August 2023 Update is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyAug 18th, 2023

Warren Buffet Net Worth: From Paperboy to Billionaire

Warren Buffett is an American business magnate with a net worth of $116.4 billion. Known as the Oracle of Omaha, ... Read more Warren Buffett is an American business magnate with a net worth of $116.4 billion. Known as the Oracle of Omaha, Buffett is regarded as the most successful investor in the 20th and 21st centuries. The Self-Made Billionaire Warren Buffett maintains that money cannot buy happiness. He has donated billions to various courses using his charity organization, the Buffet Foundation. Are you eager to learn how Warren Buffett built his massive wealth to become the fifth-richest person in the world? Early Life and Education Warren Buffett was born in Omaha, Nebraska, on August 30, 1930. He was the third child and only son of Howard Buffett and Leila Buffett. His father was a politician and businessman. He served four terms as the United States representative for Nebraska. He was also a renowned philanthropist who believed in giving back to society. Warren Buffett’s interest in building wealth started in childhood. He sold soft drinks to make money. At 14, he purchased a 40-acre land and rented it to make a profit. Warren Buffett attended Rose Hill Elementary School. The family moved to Washington, D.C., when his father became a Congressman. Buffett joined Alice Deal Junior High School and attended Woodrow Wilson High School. He graduated in 1947. After high school, Buffett wanted to go straight to business. But his father advised against it and pushed him to join the University of Pennsylvania. He left the university after two years and enrolled at the University of Nebraska. Buffett enrolled at Columbia University, where his journey to his 11-figure fortune began. In Colombia, Buffett studied under Benjamin Graham, the famous “father of value investing.” After graduation, Graham refused to hire Buffett, saying he had no future on Wall Street. Buffett returned to Omaha and worked at his father’s brokerage business. Personal Life Warren Buffett married Susan Thompson in 1952. The couple had three children, Susan Alice Buffett, Howard Graham Buffett, and Peter Andrew Buffett. Susan Thompson died of cancer in 2004, and Buffett remarried in 2006. Buffett and his second wife, Astrid Menks, were longtime companions. They started seeing each other in 1978. They wedded in 2006 in Warren Buffett’s daughter’s home in Omaha. Warren Buffett had several affairs during his marriage to Susan Thompson. He reportedly had a flirtatious relationship with the late Katherine Graham. This was after Berkshire Hathaway bought shares in her company, the Washington Post. Net Worth Over the Years By Age Though he was born into a stable family, Warren Buffett had to work his way up to become the fifth-richest person in the world. His father was not very supportive of his enormous dreams. He even supported the idea that Buffett did not stand a chance on Wall Street. Throughout his life, Buffett has earned above median household income. He filed his first federal tax returns in 1944, at 14. The IRS required all American citizens with an annual income of $500 to file their tax returns. Young Buffett had made $592.50 that year. The legendary investor did not become a billionaire until after his 50th birthday. DecadeNet worthIn his 20s$140,000In his 30s$25 millionIn his 40s$67 millionIn his 50s$3.8 billionIn his 60s$16.5 billionIn his 70s$35.7 billionIn his 80s and 90s$116.4 billion as of July 2023 How Does Warren Buffett Invest? Warren Buffett started his journey to massive wealth with only $9,800. He has built his massive net worth from his investment prowess. The billionaire philanthropist takes advantage of every investment opportunity. Buffett pumps millions of dollars into opportunities that show potential long-term growth. So, how does Warren Buffet invest? Buffett is an elite investor who learned from the best investors. He studied under Benjamin Graham and worked in his father’s brokerage firm. His investment portfolio spans from real estate to startup companies. Stocks Buffett’s bold investment decisions have played a huge role in the growth rate of his huge fortune. His investment portfolio includes the stock market, real estate, and startups. Buy and hold is his common, long-term investment strategy. The CEO of Berkshire Hathaway Inc. buys strong businesses that show growth potential and holds them for the longest time. He says his favorite holding period is forever, and he does not mind when stocks tumble occasionally. He treats such as investment opportunities to buy more shares. Despite having a disciplined investment philosophy, Buffet is an active stock trader. He buys and sells stocks using his investment firm, Berkshire Hathaway Inc. The giant investment firm is headquartered in Omaha, Nebraska. It was established in the 1800s as a textile business. It has become a holding company comprising various firms in different industries. Businesses under Berkshire Hathaway include GEICO. GEICO is one of the biggest insurance companies in the United States. During the first quarter of the year, Berkshire sold shares worth $13.2 billion and bought only $2.8 billion. In line with his contrarian investing, Buffet bought 333,856 Apple shares in the final quarter of 2022. Apple Inc. is the Largest Holding company in Berkshire Hathaway by market value. Besides Apple, Berkshire Hathaway bought shares in Louisiana Pacific and Paramount Global. While making these share purchases, Buffet reduced his stakes at Taiwan Semiconductor. While making these recent buys, Berkshire maintained their longest-holding stocks. The company has held stock in holding companies such as the Bank of America, Coca-Cola, and American Express since 2001 Q1. Take a Look at This Is How Warren Buffett Made $85 Billion: Real Estate Real estate has played a huge role in Warren Buffet’s massive wealth. He has invested in real estate since the 1990s. According to Forbes, Buffett’s real estate investment is worth $12.7 billion as of 2018. One of his most successful investments in the industry is a house he acquired for $150,000 in 1971 in California. Its current value is $11 million. Startups Buffett is famous for making bold investments and holding them for the longest time. This approach to investing has been one of Buffett’s success secrets since the beginning. He buys early-stage ventures that show potential for growth and holds for the longest time. Recently, the American business magnate has turned to financial technology companies. One of the startups that caught the eye of Warren Buffet is Brazil’s Nubank. Buffett gave a fat cheque of $500 million to this fast-growing FinTech that is trending in the Latin American market. This investment placed Nubank on the same level as major fintech companies such as Lufax. Other notable FinTech companies that Warren Buffet has bankrolled include Brazil’s StoneCo Ltd. His $143 million investment in this company made it the 39th largest holding in the Berkshire Hathaway. Cars Despite his billionaire status, Warren Buffett is a frugal person. He does not own luxury cars or a yacht. Buffett used his 2006 Cadillac DTS for eight years before upgrading to the 2014 XTS. The investing legend also invests in the automobile industry. He has a 53-million stake in GM, Caddilac’s parent company. Though he prefers investing in American motor makers, he also holds shares in a Chinese electric vehicle manufacturer, BYD. Planes and Aviation While Warren Buffet does not own expensive luxury vehicles or yachts, he has the largest fleet of private jets. He bought his first used jet, which he upgraded with a brand new one in 1989. He added Executive Jets Asia (EJA) and NetJets to his fleet in 1998. The three purchases cost $850,000, $6.7 million, and $725 million, respectively. Warren Buffett has always criticized CEOs who own private jets. Buffett said his planes are essential business tools to defend his expensive fleet of jets. Warren Buffet holds stocks in various aviation companies. These companies include Delta Air Lines, American Airlines, United Airlines, and Southwest Airlines. In 2020, Buffet said he had invested at least $7 billion in these aviation companies. These investments show Buffett believes in the aviation industry’s long-term growth potential. Gold and Silver While many affluent people love to invest in precious metals, Buffett is different. The man believes in value investing. He does not invest in gold, yet he has over $1 billion in silver. While many think he hates gold, it simply comes down to value. Warren Buffett believes that gold has nothing to offer beyond its rarity. Silver is applicable in various industries, making it a worthwhile investment than gold. Charities Warren Buffett plans on giving all his fortune to charity. Buffet issued lifetime pledge letters in 2006, committing to give Berkshire B shares to the Bill & Melinda Gates Foundation. In the following years, the self-made billionaire Warren Buffett has given billions of dollars to charity. FAQs Does Warren Buffett Own a Jet? Warren Buffett owns the largest fleet of private jets. To defend his philosophy of simple living, the billionaire investor calls his jets necessary business tools. Is Warren Buffett Self-made? Warren Buffett is a self-made billionaire who claims his great success is thanks to one simple rule; living a good life. Buffet told a group of high school students during his 2017 documentary, Becoming Warren Buffett, that becoming a good person means you will also become successful. What is Warren Buffett’s Famous Quote? One classic Warren Buffett quote about investment is, “The first rule of investment is don’t lose. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are.” Conclusion Warren Buffett has built immense wealth over the years. He is famous for his astute investments and unlimited giving. His pledge letters show that he is not stopping in his line of charity giving. The self-made billionaire has amassed his massive net worth by relying on the simple rule of value investing......»»

Category: blogSource: valuewalkAug 11th, 2023

Futures Dip Ahead Of Fed"s "Last Rate Hike" As Dow Braces For 13 Straight Gains

Futures Dip Ahead Of Fed's "Last Rate Hike" As Dow Braces For 13 Straight Gains US futures are lower as we enter the "last hike" day, with European stocks slumping after ugly results from LVMH (which tumbled 4.5%) and Asian markets also closing in the red as investors brace for more tightening from the Federal Reserve, even as results from some of the biggest European and American companies hinted at slowing economy and declining earnings. As of 7:30am ET, S&P eminis dropped 0.1% at 4,589 while Nasdaq futures were down 0.3%, pressured by disappointing results from some top constituents. The market is pricing in just a 0.76% move after today's FOMC, the lowest implied move on a Fed day since at least 2021. Meanwhile, solid earnings from Boeing have propelled the Dow higher: the Dow Jones Industrial Average has risen 12 days straight — the longest winning run in over six years — and a 13th day of gains will extend the record to the longest since 1987. Treasury yields were 1-2bps lower; the USD was weaker and commodities are mixed with base metals leading and Ags lagging. Today, focus will be Fed’s decision at 2pm ET and Powell’s Press Conference at 2.30pm ET. A 25bp hike is fully priced in, with consensus expecting (i) little meaningful changes to the post-meeting statement and (ii) Powell pointing to the June dots as the best guide as to the forward direction of policy (our full preview is here). In premarket trading, Microsoft fell 4%, having posted tepid sales growth and amid missed Azure growth guidance while Snap sank 19%. Analysts, however, note that the unit’s deceleration is starting to moderate and they were positive about demand for the company’s new artificial intelligence-powered products and services. Chipmakers also mostly lost ground, after a subpar outlook from Texas Instruments, the biggest maker of analog semiconductors, indicated a demand slump for key types of electronics. On the other end, GOOGL jumped 7% after posting forecast-beating revenue. Meta rose ahead of its own report later Wednesday. Overall, tech earnings so far are still largely in line with expectation. Here are the most notable premarket movers: Boeing rose 3% after reporting $2.58 billion in free cash flow in the second quarter, surprising investors as a flurry of jet deliveries and customer deposits helped overcome the financial strain from supplier glitches. Dish Network jumps as much as 15% in premarket trading on Wednesday after Bloomberg News reported that the company said it will start selling its premium wireless service on later this week. PacWest jumped as much as 39% following news that it’s being bought by smaller rival Banc of California in a rescue deal aimed at boosting confidence in the lenders. Banc of California rose as much as 16%. Snap shares are sinking 19% after the social media company reported its second-quarter results and gave a revenue outlook that was weaker than expected. Analysts note that the company is still contending with weakness in its ads business as it looks to invest in new AI tools. Teladoc rises 6.1% after the virtual healthcare provider raised the bottom end of its revenue forecast range for the full year, with analysts saying that the firm’s control over costs is bearing fruit even as it faces a tough backdrop. Texas Instruments shares drop 3.5% after the chipmaker provided a forecast for the third quarter that left analysts disappointed, with some saying it overshadowed the second-quarter beat. Wells Fargo shares gain 2.6% in premarket trading after the lender announced plans to repurchase as much as $30 billion of its shares and boosted its dividend. Piper Sandler saw the authorization of the buyback as an “important show of strength” relating to the capital position of Wells Fargo, though Citi didn’t see any incremental information in the news. Here is a summary of the most notable earnings reports: Alphabet Inc (GOOGL) Q2 2023 (USD): EPS 1.44 (exp. 1.34), Revenue 74.60bln (exp. 72.82bln). +6.9% in pre-market trade Microsoft Corp (MSFT) Q4 2023 (USD): EPS 2.69 (exp. 2.55), Revenue 56.2bln (exp. 55.47bln); soft Q1 guidance. -4.1% in pre-market trade Snap Inc (SNAP) Q2 2023 (USD): Adj. EPS -0.02 (exp. -0.04), Revenue 1.07bln (exp. 1.05bln) -18% in pre-market trade Texas Instruments Inc (TXN) Q2 2023 (USD): EPS 1.87 (exp. 1.76), Revenue 4.53bln (exp. 4.36bln) -3.8% in pre-market trade Visa Inc (V) Q3 2023 (USD): EPS 2.16 (exp. 2.12), Revenue 8.1bln (exp. 8.06bln) -0.3% in pre-market trade X Corp (formerly Twitter) is offering incentives on certain ad formats within the US and UK, via WSJ citing emails; additionally, has warned brands that verified status could be lost if certain spending thresholds are not met. Fahad Kamal, chief investment officer at SG Kleinwort Hambros Bank, noted that Wednesday’s market pullback comes after a broad stretch of gains, with the S&P 500 less than 5% off record highs. “The bigger picture is that this quarter is probably the low point for earnings, this year will end up positive both in Europe and US,” he said, while cautioning of risks from “the effect of central bank policy tightening.” “We are going to see some deceleration in corporate earnings, deceleration in economic growth, softening of demand, all of this will have a higher impact on equities,” Aarthi Chandrasekaran, director of investments at Shuaa Asset Management said on Bloomberg TV. Still, “the US economy is weakening but it’s not weakening enough to price in a full rate cut next year,” she said. Still, despite some disappointments, roughly 80% of US companies have thus far beaten profit estimates, as have half of European names. This is largely due to a steady trimming of expectations before the season kicked off. Later on Wednesday, the Fed is expected to raise rates by 25 basis points, and swap contracts are factoring some additional rate increases by year-end as well. The expected Fed rate increase would be 11th since March 2022, cycle in which rates were raised at each scheduled meeting until last month’s, when policy makers said a pause was warranted to assess the impact of their cumulative actions on the economy and banking system. The European Central Bank should also deliver a quarter-point increase on Thursday. With those hikes baked in, investors will focus on signals on how much more policy tightening might be warranted (full preview here). European stocks are lower and set to snap a six-session win streak after a flurry of corporate earnings dented investor sentiment. The Stoxx 600 is down 0.5%, led lower by the luxury-goods sector as LVMH tumbled as much as 4.5% after Europe’s biggest company provided further evidence of a slowdown in spending by US wealthy consumers.  Miners are also under pressure after Rio Tinto cut its dividend following a fall in first-half profit. Here are the most notable European movers: Rolls-Royce shares rose as much as 25% to their highest level since March 2020 after the engine maker boosted its adjusted operating profit guidance for the year as its turnaround begins to bear fruit BAT shares gained as much as 3.4% after the tobacco company reaffirmed its forecast for the year, which was in line with last month’s update and reassured investors given the tough backdrop Stellantis shares rise as much as 2.9% after the carmaker reported first-half results that analysts say were strong and above consensus across the board RWE shares climbed as much as 3%, the most since April, after it boosted its adjusted Ebitda guidance for the full year. Morgan Stanley says the increase will likely trigger significant EPS upgrades Just EatTakeaway shares rally as much as 10% after the online food delivery company’s adjusted Ebitda for the first half beat estimates. Analysts praised the strong performance in its European markets Verallia gains as much as 11%, most in more than a year, after the French maker of glass bottles raised its earnings guidance. Citi says consensus earnings estimates should increase by double-digits Worldline shares rise as much as 6% after the payments company reported a second-quarter revenue and margins beat, with analysts noting the strength in the key Merchant Services business LVMH shares fell over 4.5% at the start of trading in Paris after the French luxury behemoth reported second-quarter revenue that provided further evidence of a slowdown in spending by wealthy US consumers Hexagon shares fall as much as 8.4% after the Swedish industrial software group’s free cash flow and Ebit came in below analyst expectations Lloyds falls as much as 5.2% after the UK lender booked additional loan-loss impairments. The bank’s upgraded loan margins were likely already in consensus estimates, analysts say Danone falls as much as 3.4%, most since May 9, after reporting like-for-like sales for the second quarter that beat the average estimate, with analysts saying more progress may be needed in 2H Porsche shares fell as much as 2.5% after the German luxury sports-car maker reported first-half sales that missed estimates. The results raise concerns about automotive pricing, according to Morgan Stanley Earlier in the session, Asia’s key stock gauge snapped a two-day wining run as investors trimmed their positions ahead of the Federal Reserve’s monetary policy outcome, while Chinese stocks declined after Tuesday’s rally. The MSCI Asia Pacific Index declined as much as 0.3% with markets in Japan, South Korea and Hong Kong leading the losses. Stocks in Australia extended gains after consumer prices rose at a slower than expected pace for the three months ended June, fueling bets for a continued pause by the Reserve Bank next week. The Fed is poised to hike interest rates by another 25 basis points, with investors keeping an eye on commentary by Chairman Jerome Powell. Asian stocks have, on average, reacted positively after a rate hike in 10 of the previous instances, data compiled by Bloomberg showed. Stocks in Asia have generally held their gains this month, buoyed by the receding odds of a recession in the US as well as China’s pivot toward a more friendly approach to the private sector and pledge of support for the economy. Chinese stocks in Hong Kong fell after Tuesday’s surge as investors await more concrete policy decisions by Beijing following the politburo meeting. Policymakers have signaled that they intend to ease monetary policies and boost property markets. “It is really important that in the coming days and weeks, we see continued strong messages coming from different parts of the government,” Winnie Wu, China equity strategist at BofA Securities told Bloomberg Television in an interview. Japan's Nikkei 225 swung between gains and losses with the mood indecisive as softer Services PPI data from Japan added to the second-guessing surrounding this week’s BoJ meeting. ASX 200 outperformed with gains led by the mining industry and the top-weighted financials sector, while participants also reflected on the mostly softer-than-expected inflation data which showed headline CPI Q/Q was at its slowest pace of increase since 2021. Key stock gauges in India snapped a two-day losing run to outpace most regional peers Wednesday, boosted by gains in index heavyweights Reliance Industries, ITC, and Larsen & Toubro. The S&P BSE Sensex rose 0.5% to 66,707.20 in Mumbai, while the NSE Nifty 50 Index advanced by the same magnitude. Larsen & Toubro closed at record high after better-than-expected first quarter earnings and announcing a $1.2 billion buyback plan. The infrastructure company’s results gave boost to stocks of its peers as well with BSE Capital Goods index rising 1.6%. Reliance Industries, which contributed the most to the Sensex’s gain, rose 1.6% after Financial Times reported that QIA is mulling investment in company’s retail unit. Out of 31 shares in the Sensex index, 19 rose and 11 fell, while 1 was unchanged In FX, the Bloomberg Dollar Spot Index was little changed. The euro rose as much as 0.2% against the US dollar to 1.1078, halting a six-day streak of declines. It also rose as much as 0.2% against the pound to 0.8586. The pound was little changed against the US dollar at around $1.29, while it weakened slightly against the euro. The Australian dollar declined as much as 0.9% to 0.6731 before trimming that drop after slower-than-expected inflation in the last quarter strengthened bets for the Reserve Bank to pause again next week. USD/JPY fell 0.5% to 140.24, heading for a third day of declines. One-week risk-reversals for dollar-yen, a gauge of the expected direction, fell to the lowest level since early March. The Aussie is the worst performer among the G-10s, falling 0.4% versus the greenback after Australian CPI slowed more than expected. The yen is the strongest. Treasuries edged higher and yields are mixed as short- dated Treasury yields edged lower and 10-year yields were little changed to begin the US session focused on a Fed rate decision at 2pm New York time. Yields are within 1bp of closing levels from Tuesday, when most tenors traded at their highest levels in more than a week as expectations for another rate increase this year after July edged higher. Euro-area yields rose across the curve. The Treasury supply cycle pauses for Fed decision, is set to conclude Thursday with $35b 7-year auction. A 25bp increase in the fed funds band to 5.25%-5.5% is fully priced into swap contracts, along with about half of an additional 25bp hike by year-end.   In commodities, crude futures decline with WTI falling 0.7% to trade near $79.10. Spot gold rises 0.3%. Bitcoin is relatively contained and resides well within, but at the lower-end, of Monday's $28842 to $30342 range. Thus far, specific drivers have been a touch limited with markets generally focused on the upcoming FOMC meeting and Powell's presser. Looking to the day ahead now, the main highlight will be the Fed’s policy decision and Chair Powell’s press conference. Otherwise, data releases include US new home sales for June and the Euro Area M3 money supply for June. Finally, today’s earnings releases include Meta, Coca-Cola, Union Pacific, Boeing and AT&T. Market Snapshot S&P 500 futures little changed at 4,595.00 MXAP up 0.1% to 168.69 MXAPJ little changed at 533.11 Nikkei little changed at 32,668.34 Topix down 0.1% to 2,283.09 Hang Seng Index down 0.4% to 19,365.14 Shanghai Composite down 0.3% to 3,223.03 Sensex up 0.7% to 66,797.58 Australia S&P/ASX 200 up 0.8% to 7,402.01 Kospi down 1.7% to 2,592.36 STOXX Europe 600 down 0.5% to 465.75 German 10Y yield little changed at 2.44% Euro up 0.1% to $1.1068 Brent Futures down 0.6% to $83.17/bbl Gold spot up 0.3% to $1,971.80 U.S. Dollar Index down 0.19% to 101.16 Top Overnight News Australian inflation slowed more than expected in the second quarter thanks to falls in the cost of domestic holidays and petrol, suggesting less pressure for another hike in interest rates and sending the local dollar sharply lower. RTRS Japan’s services PPI in June cools by more than anticipated, coming in at +1.2% (down from +1.7% in May and below the Street’s +1.5% forecast). BBG Ant plans to break off some non-core operations as it prepares to revive a Hong Kong IPO, people familiar said. It may strip out blockchain, database management services and overseas units when it applies for a financial holding license in China. An IPO attempt may come after 2024, Bloomberg Intelligence said. BBG Deutsche Bank's fixed-income traders outperformed their Wall Street peers in the second quarter, with CFO James von Moltke noting there was no concentrated or unusual gain. The lender gave slightly more positive 2023 revenue guidance, but higher-than-expected expenses overshadowed results. BBG Labour leader Sir Keir Starmer has said NatWest was “wrong” in its treatment of Nigel Farage and that its chief executive “had to resign” after its private bank Coutts refused the former Brexit party leader a bank account. Alison Rose stepped down on Wednesday after admitting to the inaccurate briefing of a BBC journalist about the closure of Farage’s account, a decision that Sir Keir described as “fairly straightforward” in an interview on BBC Radio 5 Live. FT Joe Lewis, the billionaire real estate investor and owner of Tottenham Hotspur football club, has been charged over multiple alleged instances of insider trading, US prosecutors said on Tuesday. The 86-year-old, who is one of Britain’s richest men, is accused of tipping off employees, associates, friends and romantic interests with non-public information about companies in which he had invested, and lending some of them hundreds of thousands of dollars to trade on the knowledge. FT We expect a hike today to 5.25-5.5% to be the last of the cycle. But on a probability-weighted basis, our Fed views remain more hawkish than market pricing. This reflects both our lower probability of recession and our expectations that the threshold for rate cuts will be fairly high and that cuts will be gradual. We expect cuts to start in 2024Q2, to proceed at 25bp per quarter, and to end with the funds rate at 3-3.25%, above the FOMC’s 2.5% longer run dot. GIR Gov. Ron DeSantis of Florida is sharply cutting the size of his presidential campaign staff, reducing by more than one-third a payroll that had swelled to more than 90 people in his first two months as a candidate, according to four people with knowledge of the decision. NYT BANC (Banc of California) after the close said it will purchase PACW (PacWest), a deal that was first reported on by the WSJ during trading on Tuesday (PacWest stockholders will receive 0.6569 of a share of Banc of California). WSJ A More detailed look at global markets courtesy of Newsquawk APAC stocks traded mixed with most bourses lacking firm direction heading into the looming major central bank policy decisions beginning with the FOMC later today. ASX 200 outperformed with gains led by the mining industry and the top-weighted financials sector, while participants also reflected on the mostly softer-than-expected inflation data which showed headline CPI Q/Q was at its slowest pace of increase since 2021.Nikkei 225 swung between gains and losses with the mood indecisive as softer Services PPI data from Japan added to the second-guessing surrounding this week’s BoJ meeting. Hang Seng and Shanghai Comp were weaker after the prior day’s stimulus boost lost steam but with downside limited owing to wide expectations for further support measures and after the PBoC upped its liquidity efforts, while China also replaced the head of its central bank amid the increasing challenges facing its economy. Top Asian news US Secretary of State Blinken said he expects to work well with new Chinese Foreign Minister Wang Yi, while it was separately reported that Japanese Chief Cabinet Secretary Matsuno said he wants to closely communicate on various levels with China including with Foreign Minister Wang Yi. Japan maintains its overall view on the economy and says it is "recovering moderately"; Japan raises its view on business sentiment in July for the first time in 7 months. Japanese Gov't official, citing BoJ's Ueda, says market sentiment continues to improve. Adds, long-term yield rate remains stable under YCC. USD/JPY is slightly volatile partly due to rate differentials. To maintain an accommodative monetary environment for firms. China is said to be mulling easing proposed rules that require foreign office equipment makers operating in the country to transfer key product technology to China, according to Nikkei sources. European bourses are primarily in the red but with some more mixed performance, Euro Stoxx 50 -1.0%; action which comes after numerous key earnings incl. LVMH, -4.4% which is weighing on the Euro Stoxx 50 & CAC 40 -1.4%. Sectors are largely reflective of the corporate updates, Consumer Products & Services lags given LVMH while Basic Resources slip after earnings/production updates from Rio Tinto and Fresnillo. While the Banking sector is torn between two-way corporate updates and an ongoing NatWest story. Stateside, futures are slightly mixed but yet to differ markedly from near-unchanged levels, ES -0.1%, ahead of the FOMC  and further corporate heavyweights after digesting the likes of MSFT and GOOGL after-hours on Tuesday. Top European news London Mayor Khan urged the UK government to provide more funding to finance a more generous scrapping scheme for older cars affected by his plan to widen the Ultra Low Emission Zone to the entire capital, according to FT. FX DXY slips ahead of the Fed, but also amidst Yen strength pre-BoJ and a Euro bounce on the eve of ECB. Index fades within 101.430-080 range, as USD/JPY retreats towards 140.00 from 141.00+ peak and EUR/USD eyes the top of an expiry range spanning 1.1100-1.1000. Aussie undermined by sub-forecast CPI data and higher probability of RBA pause next week, AUD/USD softer between 0.6793-29 parameters, but supported by 21 and 200 DMAs. Loonie lags awaiting BoC minutes as crude recoils, USD/CAD closer to the top of 1.3202-1.3169 bounds. PBoC set USD/CNY mid-point at 7.1295 vs exp. 7.1341 (prev. 7.1406) Fixed Income Bonds meander either side of par pre-FOMC and with eyes on the ECB and BoJ thereafter. Bunds marginally underperform within a 133.67-26 range and absorbing 7 year German supply. Gilts also mostly adrift between 96.62-29 parameters and T-note afloat having peaked peaked at 111-29 and troughed just above Tuesday's 111-19+ low. Commodities WTI and Brent futures are subdued intraday after rising to fresh multi-month highs on Tuesday amid further stimulative pledges by China alongside potential supply concerns, ahead of the FOMC. Spot gold is modestly firmer amid the softer Dollar with the yellow metal back above its 100 DMA (USD 1,964.25/oz today) as all eyes turn to the Federal Reserve’s decision and Chair Powell’s press conference. Base metals are mostly softer and take a breather from the recent China-induced gains, with 3M LME copper just dipping under USD 8,600/t from a recent peak near USD 8,700/t. US Energy Inventory Data (bbls): Crude +1.3mln (exp. -2.0mln), Gasoline -1.0mln (exp. -2.0mln), Distillate +1.6mln (exp. -0.1mln), Cushing -2.3mln. China's state planner NDRC is to increase prices of retail gasoline and retail diesel by CNY 275/t and CNY 260t respectively from July 27th. Geopolitics Chinese Defense Ministry said China and Russia will soon hold their third joint naval patrol in the western and northern parts of the Pacific Ocean which is not aimed at any third party or related to global or regional situations, according to Global Times. India "open" to Chinese investment despite border clashes, official says, according to FT. US Event Calendar 07:00: July MBA Mortgage Applications -1.8%, prior 1.1% 10:00: June New Home Sales MoM, est. -5.0%, prior 12.2% 10:00: June New Home Sales, est. 725,000, prior 763,000 14:00: July FOMC Rate Decision DB's Jim Reid concludes the overnight wrap Markets put in another resilient performance over the last 24 hours, as all eyes turn to the Fed’s latest decision today. The positive mood was supported by another strong round of US data, which included the Conference Board’s consumer confidence index hitting a 2-year high. That offered a fresh boost to risk assets, with the S&P 500 (+0.28%) rising to its highest level in 15 months yesterday, Brent Crude oil prices closing above $83/bbl for the first time since April, and US HY credit spreads reaching their tightest level in 15 months too. In addition, there was a significant milestone for the Dow Jones (+0.08%), which recorded a 12th consecutive gain for the first time since 2017. If we get a 13th today that would be the longest run since 1987, so one to watch out for. When it comes to the Fed today, they’re widely expected to hike rates by 25bps. That’s in line with market pricing, which sees a 97% chance of a hike, as well as the overwhelming consensus of economists. In turn, that would take the target range for the federal funds rate up to 5.25%-5.50%, marking its highest level since 2001. But since a hike today is almost fully priced in, the bigger question for markets will be if the statement and the press conference signal anything about the likelihood of further rate hikes ahead. In their preview of today’s meeting (link here), our US economists think that there’s limited downside from Chair Powell delivering a hawkish-leaning message. Even after the very positive CPI print, he’s likely to emphasise that further evidence is needed to be confident that inflation will be tamed. Furthermore, the FOMC themselves signalled in their June dot plot that two further hikes were their baseline by year-end, implying one more after today. Remember as well that there are still two jobs reports and CPI reports ahead of the next meeting – as well as the Jackson Hole gathering – so our economists think Powell is unlikely to provide strong guidance about the outcomes of upcoming meetings. When it comes to market pricing, fed funds futures are currently pricing just a 44% chance of a second hike after today’s. In other words, the central expectation is that this will be the last hike of the current cycle. But it’s worth remembering that we’ve been here before. In fact, after the two most recent hikes in March and May, market pricing by the close that day was that the Fed were most likely done hiking. So they’ve shown themselves willing to adjust in recent months, particularly as the ramifications from the regional bank crisis weren’t as bad as many feared at the time. Ahead of the Fed, there was a fresh selloff for sovereign bonds thanks to another round of resilient data. Firstly, we had the Conference Board’s latest consumer confidence reading, which hit a 2-year high of 117.0 (vs. 112.0 expected). Second, housing inflation was more resilient than expected in May, with the S&P CoreLogic Case-Shiller index up by +0.99% over the month (vs. +0.70% expected). In fact, that’s the fastest monthly house price growth in a year, which is adding to the signs that housing inflation has now bottomed out and if anything is accelerating again. That backdrop meant that yields on 10yr Treasuries rose by a modest +1.2bps to 3.88%, a two-week high. The sell-off was driven by rising real rates, while the 10yr breakeven (-1.2bps) retreated slightly after hitting hit a post-SVB high on Monday. And over in Europe it was much the same story, with yields on 10yr bunds (+0.5bps), OATs (+0.7bps) and BTPs (+3.5bps) all seeing a moderate increase. For equities, yesterday brought another resilient performance, with the S&P 500 (+0.28%) hitting another 15-month high. We also had a 12th consecutive daily increase for the Dow Jones (+0.08%) for the first time since February 2017, and if we get a 13th gain today, that would be the longest run of gains since January 1987. Tech stocks were the main outperformer, with the NASDAQ (+0.61%) and the FANG+ index (+0.93%) seeing larger gains. Meanwhile in Europe, the STOXX 600 (+0.48%) advanced for a 6th day running for the first time since January. After the US close, we received earnings releases from Microsoft and Alphabet, which both beat earnings estimates but received contrasting reactions. Microsoft was trading lower in after-hours trading (-3.7%) after reporting slowing growth in cloud computing. Conversely, Alphabet saw a positive reaction (+6.1%) amid revenue outperformance boosted by its search business. Elsewhere overnight, US equity futures are flat ahead of the Fed’s rate decision, with those on the S&P 500 up +0.01%. There were some interesting other developments back in Europe yesterday, since we got the ECB’s latest Bank Lending Survey for Q2. That had evidence for both sides of the hard vs soft landing debate. On the downside, it showed the sharpest decline in demand for loans by enterprises in the survey’s history since 2003. The share of rejected corporate loans also rose. But on the upside, the pace of tightening in credit standards moderated, and banks expected credit conditions to improve closer to neutral settings in Q3. The release comes ahead of tomorrow’s ECB policy decision, where another 25bp hike is widely expected. However, markets have continued to downgrade the chances of a second hike after tomorrow’s decision, with the probability now at 75% this morning, having been 88% at the end of last week. That also followed the release of the Ifo’s business climate indicator from Germany, which showed a larger-than-expected decline in July. The main reading came in at an 8-month low of 87.3 (vs. 88.0 expected), and the current assessment component fell to 91.3 (vs. 93.0 expected), which is the lowest since February 2021. Asian equity markets are mostly losing ground this morning after yesterday’s rally. Across the region, the Hang Seng (-0.79%) is the biggest underperformer, with the KOSPI (-0.70%), the Shanghai Composite (-0.35%) and the CSI 300 (-0.34%) also edging lower. Otherwise, the Nikkei (-0.03%) is struggling to gain traction, but the S&P/ASX 200 (+0.88%) has seen a strong outperformance after Australia’s inflation eased for the second straight quarter. In terms of that release from Australia, CPI only rose by a quarterly +0.8% in Q2, which was beneath the +1.0% reading expected by the consensus. The trimmed mean also came in beneath expectations, with just a +0.9% increase rather than the +1.1% gain expected. In turn, markets are pricing in a growing chance that the RBA will keep rates on hold at its next meeting, with the chance of an August hike down from 44% to 16%. Australian government bonds are also outperforming this morning, with their 10yr yield down -3.4bps to 3.99%. There wasn’t much in the way of other data yesterday. However, we did get the IMF’s latest economic forecasts, which upgraded their 2023 global growth projection for this year to 3.0%, up two-tenths from April. The upgrades were fairly broad-based across countries, with Germany being the only G7 member to see a downgrade to this year’s projections, with the IMF now expecting a -0.3% contraction in 2023. To the day ahead now, and the main highlight will be the Fed’s policy decision and Chair Powell’s press conference. Otherwise, data releases include US new home sales for June and the Euro Area M3 money supply for June. Finally, today’s earnings releases include Meta, Coca-Cola, Union Pacific, Boeing and AT&T. Tyler Durden Wed, 07/26/2023 - 07:57.....»»

Category: blogSource: zerohedgeJul 26th, 2023

Futures Extend Gains Into Fed"s Pause Announcement

Futures Extend Gains Into Fed's Pause Announcement US equity futures are higher - again - with markets positioned for Jerome Powell to announce a hawkish, yet bullish pause, in the Fed's rate hiking campaign at 2pm today. S&P futures rose 0.15% as of 7:45am ET following the S&P 500’s fourth consecutive increase — the longest winning stretch since early April - which approached the 4,400 mark, the highest level in over a year. Small caps/Russell outperformed (in line with what we said last night) as bond yields reverse an earlier drop into Fed Day, while the USD is again weaker pre-mkt. Commodities are rallying led by Energy and Metals, WTI oil rises back over $70 and base metals are up 4% - 7% MTD on hopes of Chinese stimulus. In Europe, a rally in miners helped push the Stoxx 600 benchmark to the highest in three weeks. In premarket trading, Google parent Alphabet slipped as the European Union accused the unit of abusing its dominance over advertising technology. Advanced Micro Devices shares gained 1.6% in premarket trading after the chipmaker showed off its planned line of artificial intelligence processors. The shares had drifted lower during the presentation in San Francisco, closing down 3.6%, but analysts responded positively to the event. Meanwhile, Tesla was set to extend gains for a record 14th consecutive session, after already adding $240 billion during its winning streak, as the world’s most valuable automaker shows no sign of stopping. Here are some other notable premarket movers: Nikola leads fellow electric- vehicle stocks higher in premarket trading as the cohort looks set to extend Tuesday’s gains. NextDecade rose as much as 17% in US premarket trading after TotalEnergies agreed to buy a 17.5% stake in the company, which is developing a terminal to export liquefied natural gas in Texas. RadNet dropped 8% in postmarket trading Tuesday after the network of outpatient imaging centers offered $175 million shares via Jefferies and Raymond James. MicroVision shares slumped 14% postmarket after the company filed a shelf registration for potential sale of common and preferred shares and warrants. Iteris shares dropped 14% in extended trading, after the engineering services company reported adjusted fourth quarter Ebitda below expectations. It also gave a full-year revenue forecast. Global investors rejoiced at Tuesday’s CPI data which showed the 11th consecutive month of slowing inflation as confirmation that the FOMC will hold rates in the 5%-5.25% range. Swap traders put the odds of an increase at only 10%, while still seeing the potential for a July move, given that inflation is still more than twice the central bank’s goal. Indeed, as noted earlier, the Fed is poised to pause the hiking cycle for the first time in 15 months, in a rate decision that will land at 2:00 p.m. (see our full FOMC preview post is here).  Fed Chair Jerome Powell has signaled that he’d prefer to wait to evaluate the impact of past hikes on the economy, as well as the recent banking turmoil. The Fed’s likely to keep options open to hike again. Meanwhile, Ken Griffin’s hedge fund Citadel is bracing for a US recession by ramping up high yield credit trades. He expects the Fed to raise interest rates one more time this year and then pause for an extended period. “A hawkish skip is the most likely scenario for today’s FOMC,” said Evelyne Gomez-Liechti and Helen Rodriguez, strategists at Mizuho International. “We expect Powell will follow up with a relatively hawkish tone in the press conference in order to prevent a dovish market reaction, stressing that inflation is still too high and the Fed will be resolute in returning inflation to target.” Meanwhile, CNBC is reporting that CFOs have told regional Fed presidents to halt the hiking cycle and not just skipping a meeting or two. Expectations of a pause have pushed the VIX back below 15, against an average of 23 for the past year, underscoring support for risk assets. In another sign of the calm prevailing in equity markets, it’s now almost 80 trading days since the S&P 500 declined by 2% or more. European stocks gained as miners rallied for a second day, while investors awaited the Federal Reserve’s policy decision for clues on the path of interest-rate hikes. The Stoxx Europe 600 Index was up 0.6% and on course to rise for a third straight session with miners gaining 1.8% as optimism around stimulus in China kept iron ore prices near a two-month high. Barclays strategists upgraded their rating on the sector to overweight, saying bets on the stimulus would boost cyclical sectors in the second half. Autos and real estate stocks also rose, while tech and travel & leisure underperformed. Shell shares recovered early declines as the energy giant said it would increase its dividend by 15% and boost natural gas production. Casino Guichard-Perrachon SA jumped after billionaire Xavier Niel and two partners approached the grocer with a €1.1 billion-euro ($1.2 billion) rescue plan. Logitech International SA dropped after it said Chief Executive Officer Bracken Darrell would leave the company. Here are the most notable European movers: Grifols shares surge as much as 12%. The Spanish pharmaceutical firm expects to get $1.5b upon “satisfactory closing” of Shanghai RAAS deal, according to regulatory filing Shell shares turned positive after falling as much as 0.5%, with brokers highlighting the oil major’s capex reduction plan as positive, tempering the effect of a smaller-than-expected dividend increase Colruyt shares jump as much as 11% after the Belgian retailer reported better-than-expected full-year results. The outlook suggests “significant” upgrades to consensus earnings estimates, MS says Games Workshop shares advance as much as 6.2% after the maker of the Warhammer series of games showed an “impressive” improvement in revenue growth in 2H, Jefferies says DoValue gains as much as 8.6% after the loan management servicer said Fortress and Bain Capital signed a shareholders’ agreement related to corporate governance. Equita said the move is positive Entain shares fall as much as 11% after the gambling operator raised about £600m through a stock offering to fund the acquisition of Poland sports-betting operator STS Boliden shares fall as much as 9.1%, the most since October, after the Swedish mining firm cut its guidance following a large fire at the Ronnskar copper smelter in northern Sweden Victrex shares drop as much as 11% to the lowest since June 2016 after the UK-based chemicals company gave a full-year earnings outlook that missed analyst estimates Robert Walters shares drop as much as 20% and drag down other recruitment stocks in the UK and Europe after the firm said its FY profit is set to be “significantly” below expectations CompuGroup Medical drops as much as 6.5% as Morgan Stanley cuts to underweight, giving the stock its only negative analyst rating. The broker sees better risk/reward elsewhere within its coverage Earlier in the session, APAC stocks were mixed with the region's bourses tentative ahead of the FOMC policy announcement. Hang Seng and Shanghai Comp. were kept afloat after the PBoC cut rates for its Standing Lending Facility by 10bps and the NDRC issued a notice on lowering costs this year with VAT to be exempted and reduced for small businesses until year-end. China was also said to be weighing broad stimulus with property support and rate cuts, although the gains in Chinese stocks were limited amid ongoing growth concerns and following softer-than-expected loans and financing data. ASX 200 was led by strength in the commodity-related sectors after China’s support pledges and PBoC cuts. Nikkei 225 extended its advances as automakers and other exporters benefitted from recent currency moves and amid broad consensus for the BoJ to maintain its ultra-easy policy later this week Indian stock markets rose for a third session, supported by gains in metal and commodities firms. The S&P BSE Sensex rose 0.1% to 63,228.51 in Mumbai, while the NSE Nifty 50 Index advanced 0.2%. Reliance Industries contributed the most to the Sensex’s gain, increasing 1.2%. Key stock gauges in India traded near their all-time highs, after gaining more than 9% since March, helped by the strength of India’s domestic economy and purchases by foreigners.        “India’s growth cycle is here to stay,” Morgan Stanley equity strategist Ridham Desai said in an interview with Bloomberg Television. “A lot of factors have combined together, like political, social, and economic, and it does seem like a sweet spot.”  In FX, the Bloomberg dollar index held near a one-month low, dropping another 0.1% on Wednesday  on speculation the Federal Reserve will skip an interest-rate hike at a policy meeting ending Wednesday. “Although US bond yields are now back up near late-May highs, that hasn’t helped the US dollar,” Australia & New Zealand Banking Group Ltd. analysts Miles Workman and David Croy wrote in a research note. While US CPI data has cemented bets on a Fed pause, “it also suggests we’ll see more tightening later, and that’ll ultimately slow the US economy,” they said. Kiwi underpinned around 0.6150 vs Greenback and 1.1000 against Aussie after better than expected NZ current account data, AUD/USD relatively bid near 0.6800 with support via strength in iron ore. Sterling retains 1.2600+ status vs Dollar as UK GDP matches consensus and Euro probes 1.0800 where mega option expiry interest resides. Yen takes advantage of softer US Treasury yields to rebound through 140.00. Lira regains poise as Turkish President gives new Finance Minister and CBRT Governor go ahead to revert to orthodox policies ahead of next week's CBRT. In rates, Treasuries are marginally cheaper across the curve after Tuesday's sharp post-CPI drop, led by German bonds, where 10s trade cheaper by around 4bp vs Treasuries. Treasuries bull steepened slightly in muted price action ahead of the FOMC rate decision when policymakers are expected to pause tightening for the first time this cycle. Money markets assign 15% odds on a quarter-point increase later and maintain an 80% probability of such a hike at next month’s outcome. Yields are cheaper by around 1bp across the Treasuries curve with 10-year around 3.81% and spreads within 1bp of Tuesday session close. In commodities, crude futures advance with WTI rising 0.9% to trade near $70.00. Spot gold adds 0.4% to around $1,951. Bitcoin gains 0.3% Looking the day ahead now, and the main highlight will be the Federal Reserve policy decision, along with Chair Powell’s press conference. Data releases will include the US PPI reading for May, as well as UK GDP and Euro Area industrial production for April. Market Snapshot S&P 500 futures up 0.2% to 4,381.25 MXAP up 0.4% to 168.02 MXAPJ down 0.2% to 526.61 Nikkei up 1.5% to 33,502.42 Topix up 1.3% to 2,294.53 Hang Seng Index down 0.6% to 19,408.42 Shanghai Composite down 0.1% to 3,228.99 Sensex up 0.2% to 63,253.81 Australia S&P/ASX 200 up 0.3% to 7,161.75 Kospi down 0.7% to 2,619.08 STOXX Europe 600 up 0.3% to 464.84 German 10Y yield little changed at 2.43% Euro little changed at $1.0797 Brent Futures up 1.3% to $75.23/bbl Gold spot up 0.4% to $1,950.56 U.S. Dollar Index down 0.13% to 103.21 Top Overnight News China’s foreign minister tells Blinken in a phone call that the US should “show respect” to Beijing and stop undermining the country’s sovereignty, security, and development (Blinken is supposed to visit China this weekend, although the trip hasn’t been confirmed). SCMP   Senior Chinese officials are holding urgent meetings with economists and business leaders on how to supercharge the economy, people familiar said. In response, execs are calling on the government to adopt a more market-oriented, rather than planning-led approach, to growth. BBG Citadel’s Ken Griffin expresses optimism about the growth outlook in China (“They’re very clearly putting economic growth back at the top of their priority list”). FT India’s wholesale price index for May sinks to -3.48% Y/Y, down from -0.92% in April and below the Street’s -2.5% forecast. RTRS Generative AI could boost the global economy by up to $4.4T annually by enhancing worker productivity according to a new McKinsey report. NYT Biden coming under growing pressure to support an accelerated timeline for bringing Ukraine into NATO. NYT The FOMC is likely to pause today and let the haze clear before it considers another rate hike. The Fed leadership has signaled that it sees pausing as the prudent course because uncertainty about both the lagged effects of the rate hikes it has already delivered and the impact of tighter bank credit increases the risk of accidentally overtightening. We expect the median dot to show one additional hike to a new peak of 5.25-5.5%, in line with our own forecast. GIR Global oil demand is nearing its peak and will slow sharply in the next few years as high prices and Russia's war in Ukraine speed the transition from fossil fuels, the IEA said. In the near term, oil markets may tighten "significantly" as China's consumption rebounds from the pandemic. In the US, crude and fuel inventories rose last week. BBG Money-market funds are already scooping up the Treasury’s growing bill issuance now that the government has suspended the debt ceiling until 2025 and the Federal Reserve is nearing the end of its rate-hiking cycle. BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks were somewhat mixed with the region's bourses mostly tentative ahead of the FOMC policy  announcement. ASX 200 was led by strength in the commodity-related sectors after China’s support pledges and PBoC cuts. Nikkei 225 extended its advances as automakers and other exporters benefitted from recent currency moves and amid broad consensus for the BoJ to maintain its ultra-easy policy later this week. Hang Seng and Shanghai Comp. were kept afloat after the PBoC cut rates for its Standing Lending Facility by 10bps and the NDRC issued a notice on lowering costs this year with VAT to be exempted and reduced for small businesses until year-end. China was also said to be weighing broad stimulus with property support and rate cuts, although the gains in Chinese stocks were limited amid ongoing growth concerns and following softer-than-expected loans and financing data. Top Asian News Chinese Foreign Minister Qin Gang held a call with US Secretary of State Blinken and said the US should stop interfering with China's internal affairs and should respect China's concerns such as the Taiwan issue, while he added the US should stop hurting China under the excuse of competition and hopes the US will meet China halfway, effectively manage differences and promote communication and cooperation, according to state media. Japanese PM Kishida is reportedly considering dissolving the Lower House of Parliament on the same day if the opposition submits a no-confidence vote on Friday, according to Fuji TV. European bourses are firmer across the board, Euro Stoxx 50 +0.7%, having shrugged off the tepid open after a busy stock-specific pre-market though fresh macro drivers remain light. Sectors are similarly supported with Real Estate leading after marked UK-related pressure on Tuesday while Autos and Banks benefit from a Barclays note and yields/BBVA's ATI sale respectively. Travel & Leisure bucks the trend after a downbeat update from Entain. Stateside, futures are edging higher and moving in tandem with the above as the ES attains a firmer hold above 4400 pre-FOMC; newsquawk preview available here. EU Antitrust Chief Vestager to hold a news conference at 11:45BST/06:45ET, expected to be on Alphabet's (GOOGL) Google. Shell (SHEL LN) announces a 15% dividend/shr increase from Q2 2023; Capital Spending reduced to USD 22-25bln/year for 2024 & 2025; Buybacks of at least USD 5.5bln for H2 2023. Airbus (AIR FP) raises 20 year delivery forecast to 40.85k (prev. 39.45k); sees 17.1k aircraft replacements in the next 20 years (prev. 15.4k). Top European News Turkish President Erdogan says he has accepted steps that the CBRT and Finance Minister Simsek will take. French Finance Minister Le Maire vowed to put France's finances back on track with spending cuts, according to FT. Downing Street has ordered banks to protect struggling homeowners from increasing mortgage costs as markets speculate over the possibility of the Bank Rate rising to as high as 6%, according to The Telegraph. German Economy Ministry says economic data points to moderate recovery over further course of the year; "economic recession" in sense of more sustained downturn is not currently expected FX Buck on the backfoot approaching Fed, with DXY heavy on the 103.000 handle awaiting guidance after a widely expected FOMC pause. Kiwi underpinned around 0.6150 vs Greenback and 1.1000 against Aussie after better than expected NZ current account data, AUD/USD relatively bid near 0.6800 with support via strength in iron ore. Sterling retains 1.2600+ status vs Dollar as UK GDP matches consensus and Euro probes 1.0800 where mega option expiry interest resides. Yen takes advantage of softer US Treasury yields to rebound through 140.00. Lira regains poise as Turkish President gives new Finance Minister and CBRT Governor go ahead to revert to orthodox policies ahead of next week's CBRT. PBoC set USD/CNY mid-point at 7.1566 vs exp. 7.1550 (prev. 7.1498) Fixed Income US Treasuries retain bid ahead of PPI data and FOMC as T-note hovers closer to top of tight 113-00/112-24 range. Bunds remain heavy between 133.71-33 parameters after less than rousing finale for German 2033 benchmark. Gilts claw back post-UK labour data losses within 94.65-21 bounds as monthly GDP metrics match consensus. Commodities Crude continues to consolidate with WTI Jul’23 and Brent Aug’23 inching above the USD 70.00/bbl and USD 75.00/bbl handles, specific drivers light. Spot gold is incrementally firmer and at the top-end of the sessions range which is yet to see it gain any real traction above the USD 1950/oz mark as the broader risk tone remains robust and serves to offset any USD-driven upside. Base metals are somewhat mixed, though this is seemingly more a function of yesterday’s pronounced gains for the complex earlier in the week. US Energy Inventory Data (bbls): Crude +1.0mln (exp. -0.5mln), Gasoline +2.1mln (exp. +0.3mln), Distillate +1.4mln (exp. +1.2mln), Cushing +1.5mln. IEA Monthly Oil Market Report: oil demand is set to increase by 2.4mln BPD in 2023 to a record of 102.3mln BPD (vs. May view of 102mln BPD). Click here for more. Geopolitics Russia urged for a transparent investigation into the Nord Stream blasts after reports that the US warned Ukraine not to attack Nord Stream, according to Reuters. White House said US President Biden met with the NATO chief and they underscored their shared desire to welcome Sweden to the alliance ASAP, while they also discussed the need for allies to build on the 2014 Wales summit defence investment pledge. German National Security Strategy Document says China remains a partner without which cannot solve the many global challenges; China is increasingly pressuring regional stability and disrespecting human rights. Germany aims to spend 2% of GDP on defence on average over several years. UN Nuclear Chief to visit Zaporizhzhia nuclear power plant on Thursday, one day later than planned, according to IFAX citing an official. Turkish President Erdogan says constitutional amendments in Sweden are not enough to address Turkey's concerns, the police should not allow such protests; adds, Sweden should not expect "anything different" from Turkey at the Nato summit. Crypto Binance and SEC are reportedly not far apart on a deal to avoid a full asset freeze, according to Bloomberg. Binance CEO Zhao denies rumours of selling Bitcoin to bolster BNB, according to Cointelegraph. US Event Calendar 07:00: June MBA Mortgage Applications 7.2%, prior -1.4% 08:30: May PPI Final Demand MoM, est. -0.1%, prior 0.2% 08:30: May PPI Final Demand YoY, est. 1.5%, prior 2.3% 08:30: May PPI Ex Food and Energy MoM, est. 0.2%, prior 0.2% 08:30: May PPI Ex Food and Energy YoY, est. 2.9%, prior 3.2% 14:00: June FOMC Rate Decision DB's Jim Reid concludes the overnight wrap Investor risk appetite has remained pretty strong over the last 24 hours, with the S&P 500 (+0.69%) hitting a fresh one-year high and posting a 4th consecutive advance. That follows the US CPI print for May, which was broadly in line with consensus and means that the Fed are now widely expected to keep rates on hold today after 10 consecutive increases. This optimism was evident across multiple asset classes, with oil prices rising and credit spreads tightening as well. But the flip side of all this positivity has been growing scepticism that central banks will cut rates at all this year, which led to a sovereign bond selloff as investors priced in higher rates for longer. At the extreme end of this was the UK with 2yr notes soaring +26bps, comfortably past the Liz Truss related mini peak in October last year and to the highest since summer 2008. 2yr US yields rose +8.9bps and closed near the top of a +21bps range yesterday with a big lurch lower to c.4.49% after CPI but then trading above 4.70% late in the session before closing at 4.666%, a post-SVB high. This focus on the front end makes tonight’s dot plot from the Fed one of the most important events today, since it’ll provide a big steer on how far the FOMC want to keep pushing rates. Market pricing is currently pointing towards just one more rate hike in July, so any indication there’ll be more (or less) than that could lead to a big reaction. When it comes to the Fed today, the overwhelming consensus is that they’ll stay on hold, keeping the target range for the fed funds rate between 5% to 5.25%. In fact, futures are now pricing just a 12.6% chance of a hike at this meeting, so by this point anything other than a hold would be a big surprise. There had been some sense that a bad CPI print yesterday might lead to a further hike, but in reality, monthly headline CPI came in at just +0.1% as expected. In turn, that took the year-on-year rate down to just +4.0% (vs. +4.1% expected), which is the slowest inflation has been in 26 months. The main problem for the Fed is that core CPI has still been stubbornly persistent, with yesterday seeing another +0.4% monthly rise (0.44% unrounded so a strong +0.4%). That’s the 6th consecutive month where core CPI has been at least +0.4%, and it meant that the year-on-year rate only fell back to +5.3% (vs. +5.2% expected). So whether you look at a 1m, 3m, 6m or even 12m horizon, core CPI has still been running at an annualised pace of more than 5%. That persistence means that investors still think that today will only mark a “skip” on rate hikes rather than a pause, with futures pointing to a 72% chance of a hike by next month’s meeting in July. If you were looking for hope, rents should ease in the months ahead if the models the likes of which we mentioned in CoTD here yesterday prove correct. This rates sell-off was driven by real rates, with the 2yr real TIPS yield (+8.7bps) hitting a post-GFC high of 2.527%. 10yr nominal yields saw a similar strong move higher to the front end, with a +7.8bps rise to 3.813%. This morning in Asia, we've edged back down to 3.80% as we go to press. With all this in mind, our US economists think that the Fed’s statement will see a hawkish adjustment, and will note the potential for more tightening at “coming meetings”. They also think the dot plot will show a further hike pencilled in for this year. And at the press conference, they think there’s little downside from Chair Powell delivering a hawkish message, considering the resilient data recently, easing financial conditions, and a desire to prevent near-term rate cuts being priced. See there full preview here for more details. Whilst attention will be on the Fed today, there were some interesting headlines out of the UK yesterday as we mentioned at the top, where investors priced another full 25bp rate hike from the BoE after the latest employment data showed a very tight labour market. In particular, wage growth excluding bonuses was up by +7.2% (vs. +6.9% expected), whilst the unemployment rate fell back to 3.8% over the three months to April (vs. +4.0% expected). And with that data in hand, markets are now pricing in more than five 25bp hikes by the December meeting, which if realised would take the Bank Rate up to 5.75% from its current 4.5%. Indeed, it’s worth noting that investors are even placing some weight on the prospect they might go as far as 6%. As someone with a 1.4% 5-year fixed mortgage that rolls off in January 2025, I’m going from fairly relaxed to starting to take some serious refinancing risk notice!! Those numbers led to a massive selloff in gilts, with the 2yr yield (+26.1bps) hitting a post-2008 high of 4.90%, and the 10yr yield (+9.6bps) reaching its highest level since Liz Truss was PM back in October. Another effect was it left the 2s10s yield curve at its most inverted since 2007, although to be fair, the UK 2s10s has been a less reliable recession indicator than its US counterpart. We heard some brief comments from BoE Governor Bailey as well yesterday, who acknowledged that inflation was “taking a lot longer than expected” to come down. Their next meeting is a week tomorrow, and whilst a 25bp hike is fully priced, investors are still placing a 13% chance that it might be a larger 50bp move. When it came to equities, there was no sign of any let-up in the latest rally, and the S&P 500 (+0.69%) continued to power forward. In fact, as it stands the index is on track for its 5th consecutive weekly advance, which is the first time that’s happened since late-2021. The big tech stocks again rose, with the FANG+ index gain (+0.89%) taking its YTD rally up to a massive +72.07%. That said, the equity rally was broader as small-cap stocks outperformed, with the Russell 2000 index up +1.23%, while the rate-sensitive utilities (-0.06%) and Telecom (-0.55%) stocks dragged on the broad equity rally. Back in Europe, the picture was similarly buoyant, and the STOXX 600 posted a +0.55% advance. Growing risk appetite also meant there was a continued tightening in sovereign bond spreads, with the gap between Italian and German 10yr yields falling to another one-year low of 163bps. However, yields themselves mostly rose across the continent, with those on 10yr bunds (+3.5bps), OATs (+3.1bps) moving higher, while BTPs (-0.2bps) were virtually unchanged. Asian equity markets are mostly trading higher this morning with the Nikkei (+0.87%) leading gains across the region and continuing to extend its three-decade highs. Meanwhile Chinese equities are also in the green with the CSI (+0.40%), the Shanghai Composite (+0.23%) and the Hang Seng (+0.10%) holding on to their gains. Elsewhere, the KOSPI (-0.47%) is the only major index trading in the red. US stock futures are little changed with those on the S&P 500 (-0.04%) and NASDAQ 100 (-0.02%) trading almost flat. Early morning data showed that the unemployment rate in South Korea unexpectedly dropped to 2.5% in May, a level last seen in August 2022 (v/s 2.7% expected) from 2.6% in April. Although the data focus was on the CPI print yesterday, there were some interesting findings in the NFIB’s small business optimism index from the US. One notable warning was that the percentage of firms reporting an easing in credit conditions fell back to a net -10%, which is the lowest that’s been since 2012. Otherwise, the overall small business optimism index did rise to 89.4 (vs. 88.5 expected), but that’s still the second-worst reading of the last decade, having only seen a slight improvement on the previous month. Meanwhile in Germany, the ZEW survey showed a rebound in the expectations component to -8.5 (vs. -13.5 expected), ending three consecutive months of declines. However, the current situation fell back to a 5-month low of -56.5 (vs. -40.2 expected). To the day ahead now, and the main highlight will be the Federal Reserve policy decision, along with Chair Powell’s press conference. Data releases will include the US PPI reading for May, as well as UK GDP and Euro Area industrial production for April. Tyler Durden Wed, 06/14/2023 - 08:19.....»»

Category: blogSource: zerohedgeJun 14th, 2023

10 Construction Stocks Billionaires Are Loading Up On

In this article, we discuss 10 construction stocks that billionaires are buying. If you want to see more stocks in this selection, check out 5 Construction Stocks Billionaires Are Loading Up On. According to Oxford Economics, global construction output is anticipated to experience a growth of 1.9% in 2023. The primary driving force behind this […] In this article, we discuss 10 construction stocks that billionaires are buying. If you want to see more stocks in this selection, check out 5 Construction Stocks Billionaires Are Loading Up On. According to Oxford Economics, global construction output is anticipated to experience a growth of 1.9% in 2023. The primary driving force behind this expansion is expected to be the Asia-Pacific region, which is predicted to observe a construction output growth of 6.4%. Meanwhile, the Americas and Europe are set to experience a contraction in construction output growth of 3.9% and 1.1%, respectively. Over the next 15 years, it is estimated that construction work worth $4.7 trillion will be performed, resulting in a total of $13.9 trillion in construction activity in 2037. This prediction assumes an average annual growth rate of 2.78% during the period. The long-term expansion in the construction industry is expected to be driven by the growing economic activities in China, India, and the United States. However, in the short term, the construction industry in developed economies is facing a challenging outlook due to high levels of economic uncertainty. There is a strong probability of an economic recession due to high commodity prices and rising interest rates, which have adversely impacted the growth outlook for this year. The tighter monetary policy has limited the buying power of households, leading to a reduction in demand for new buildings for housing facilities. To combat inflation, the US Federal Reserve has raised benchmark interest rates ten times since March 2022. The increase in benchmark interest rates resulted in monthly mortgage payments observing a year-over-year (YoY) increase of 38% for a median-price new home in the US, assuming a down payment of 20%. The higher cost of a mortgage has resulted in the demand for mortgages plummeting to a 26-year low, according to the Mortgage Bankers Association. Experts believe that the residential construction market will remain depressed as the Federal Reserve is expected to increase benchmark interest rates further. Opportunities for Growth It is important to note that the construction industry does not face an entirely gloomy outlook. There is a significant backlog of construction work due to supply chain disruptions over the last year, presenting an opportunity for the industry to work on delayed projects and achieve growth. The conflict between Russia and Ukraine, along with the 2023 earthquakes in Turkey and Syria, is also expected to result in a reconstruction effort of $1 trillion in the next 15 years. In addition, the growing demand for data centres by leading technology companies like Alphabet Inc. (NASDAQ:GOOGL),, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META) is driving large-scale construction projects. Furthermore, public investment in infrastructure projects is also expected to drive growth in the construction industry. Governments are trying to boost their economies following the COVID-19 lockdowns by taking major infrastructure initiatives. For instance, the Federal Highway Administration (FHWA) revealed in January 2023 that it intends to invest $2.1 trillion to improve the bridge infrastructure across the US. The rising investment is likely to present opportunities for construction companies, resulting in a positive impact on some of the best construction stocks such as Caterpillar Inc. (NYSE:CAT), Builders FirstSource, Inc. (NYSE:BLDR), and Lennar Corporation (NYSE:LEN). The move towards sustainability has emerged as a key theme in the construction industry, driven by the global goal of achieving net-zero emissions by 2050. The Inflation Reduction Act (IRA) introduced by the US Federal Government in August 2022 intends to divert $500 billion in federal spending towards cutting down carbon emissions by executing projects that enhance the transition towards cleaner energy and promote sustainable construction. According to the International Energy Agency (IEA), the construction industry is responsible for using 36% of global energy and contributes 40% to the global carbon emissions. Major production facilities related to the construction industry still use conventional fuel sources for energy, and the global cement sub-industry is alone responsible for 8% of global carbon emissions. These figures emphasize the construction industry’s significant role in carbon emissions and its potential for environmental improvement. The public sector, including government agencies and institutions, plays a vital role in driving sustainability initiatives within the construction industry. An example of this is the National Highways in the UK, which has announced that it intends to cut construction activity-related carbon emissions in half by the end of this decade. Photo by scott-blake on Unsplash Our Methodology We used Insider Monkey’s database of billionaire-owned stocks to shortlist the construction stocks that attracted the highest number of billionaire investors during Q1 2023. The best construction stocks have been ranked in ascending order of the number of billionaires holding a stake in them. We have also included information regarding the total number of hedge fund investors in these companies as of the first quarter of the year. 10 Construction Stocks Billionaires Are Loading Up On 10. Terex Corporation (NYSE:TEX) Number of Billionaire Investors: 11 Dollar Value of Billionaire Holdings: $76,652,750 Number of Hedge Fund Holders: 28 Terex Corporation (NYSE:TEX) is a Westport, Connecticut-based manufacturer of machinery and equipment for the construction industry. The product range of the company includes cranes, aerial work platforms including boom lifts, scissor lifts, telehandlers, material handlers, and compact construction equipment. On May 3, Stanley Elliot at Stifel increased the price target on Terex Corporation (NYSE:TEX) from $62 to $64 and reiterated a Buy rating on the stock following the company’s Q1 2023 results. The analyst appreciated Terex Corporation’s (NYSE:TEX) better-than-expected Q1 2022 results as they reflected strong plan execution by the company in a tough macroeconomic environment. Terex Corporation’s (NYSE:TEX) strong business fundamentals make it one of the best construction stocks to purchase. 9. Martin Marietta Materials, Inc. (NYSE:MLM) Number of Billionaire Investors: 11 Dollar Value of Billionaire Holdings: $153,626,665 Number of Hedge Fund Holders: 47 Martin Marietta Materials, Inc. (NYSE:MLM) is a Raleigh, North Carolina-based company that specializes in the production and distribution of construction materials. It is one of the largest suppliers of aggregates, asphalt, ready-mixed concrete, and cement in the US. The company is at ninth position on our list of the best construction stocks attracting billionaires. In a report issued to investors on May 10, an analyst at DA Davidson increased the price target on Martin Marietta Materials, Inc. (NYSE:MLM) from $450 to $465 and reiterated a Buy rating on the stock. The analyst highlighted that the Q1 2023 results were solid and shared that the organization has a constructive view of its end markets. The financial services firm anticipates significant momentum in the infrastructure-based construction markets. Here’s what TimesSquare Capital Management said about Martin Marietta Materials, Inc. (NYSE:MLM) in its Q4 2022 investor letter: “Martin Marietta Materials, Inc. (NYSE:MLM), a supplier of aggregates to the construction industry, edged forward by 5%. Its third quarter results were in line with Street estimates. Pricing for aggregates and cement were higher than expected while volumes were strong. While management lowered near-term guidance, they gave a positive outlook for 2023 with further aggregate pricing improvement and flattish volumes. Demand is projected to be higher in public infrastructure and commercial activities, though weak within the single-family residential segment.” 8. PACCAR Inc (NASDAQ:PCAR) Number of Billionaire Investors: 11 Dollar Value of Billionaire Holdings: $663,793,837 Number of Hedge Fund Holders: 33 PACCAR Inc (NASDAQ:PCAR) is a Bellevue, Washington-based company that focuses on the design, manufacture, and distribution of heavy-duty trucks, engines, and related parts for the construction industry. In an investor update issued on May 9, David Raso at Evercore ISI highlighted that the broader weakness in the North American construction industry is more factored into PACCAR Inc (NASDAQ:PCAR) as opposed to its competitors. The analyst recommended going long on PACCAR Inc (NASDAQ:PCAR) as the company has strong business fundamentals, making it one of the best construction stocks. Here’s what Madison Investments said about PACCAR Inc (NASDAQ:PCAR) in its Q1 2023 investor letter: “Heavy duty truck manufacturer PACCAR Inc (NASDAQ:PCAR) has quietly been one of our best performers over the past year. It, too, has surprised us to some extent, with the resiliency that it’s showing in a slowing trucking market. We think there’s a decent chance that weakness in its end markets will eventually catch up with PACCAR, but we believe the stock is cheap, and its steady parts business will act as a moderate stabilizer in such a scenario.” As of Q1 2023, 33 hedge funds held a stake in PACCAR Inc (NASDAQ:PCAR). 7. ChampionX Corporation (NASDAQ:CHX) Number of Billionaire Investors: 12 Dollar Value of Billionaire Holdings: $64,908,021 Number of Hedge Fund Holders: 25 ChampionX Corporation (NASDAQ:CHX) is a Sugar Land, Texas-based provider of speciality chemicals and services that offers solutions for water management and treatment relevant to oil and gas drilling sites. The company also provides industrial cleaning solutions applicable to certain construction sites. Experts think ChampionX Corporation (NASDAQ:CHX) has been able to transfer the rising costs to the end customer, allowing it to protect its margins. Gates Capital Management was the biggest hedge fund investor in ChampionX Corporation (NASDAQ:CHX) as of Q1 2023, with a stake of $130.6 million. Alger Capital made the following comments on one of the best construction stocks in its Q4 2022 investor letter: “ChampionX Corporation (NASDAQ:CHX) provides equipment and services that assist in the drilling. completion and production phases of well drilling. The company also provides production and reservoir chemicals, along with highly engineered equipment and technologies, such as artificial lift and drill bit inserts, for the oil and gas industry. Notably, ChampionX has a global footprint and favorable product mix, where its chemicals and artificial lift businesses are tied to the production phase of the life of a well. We believe this produces lower earnings variability and potentially stronger operating results. Shares outperformed during the quarter as the company reported strong fiscal third quarter results and gave better-than-expected fourth quarter guidance. Moreover, the company expanded its capital return program by committing to return 60% of its free cash flow (FCF) to shareholders through opportunistic buybacks. Management also raised its share buyback authorization program from $250m to $750m over next 2 to 3 years. We believe the company is well positioned to deliver strong revenue growth, driven by their production focused Performance Chemicals business, which may lead to margin improvement and FCF generation.” 6. Toll Brothers, Inc. (NYSE:TOL) Number of Billionaire Investors: 12 Dollar Value of Billionaire Holdings: $284,726,153 Number of Hedge Fund Holders: 37 Toll Brothers, Inc. (NYSE:TOL) is a Fort Washington, Pennsylvania-based company that has the distinction of being one of the biggest home construction companies in the US. The company specializes in building luxury homes and operates in multiple states across the country. On May 31, Joe Ahlersmeyer at Deutsche Bank commenced coverage of Toll Brothers, Inc. (NYSE:TOL) stock with a Buy rating and a target price of $94. Ahlersmeyer initiated coverage on nine homebuilder stocks as investors question whether these stocks will experience a period of consolidation following their 40% to 80% rally from their lows in October 2022. The analyst believes that the demand outlook for the industry will continue to improve, making Toll Brothers, Inc. (NYSE:TOL) an appealing stock in terms of valuation. Baron Funds shared its stance on Toll Brothers, Inc. (NYSE:TOL) in its Q4 2022 investor letter. Here’s what the firm said: “Toll Brothers, Inc. (NYSE:TOL) is the leading luxury homebuilder in the U.S. with a capable management team as well as a large and valuable owned land portfolio. Toll Brothers is more insulated than its peers from elevated mortgage rates because 20% of the buyers of Toll homes pay 100% in cash. At its year-end 2022 price of only $49.92/share, the company is valued at only 0.83 times our estimate of 2023 tangible book value of $60/share. Historically, Toll Brothers’ shares have been valued, on average, at 1.4 times book value and a peak multiple of approximately 2.0 times tangible book value. If the shares recover in the next few years and trade only to the company’s long-term average multiple of 1.4 times book value, Toll Brothers’ share price would increase 82% to $91 per share.” In addition to Toll Brothers, Inc. (NYSE:TOL), Caterpillar Inc. (NYSE:CAT), Builders FirstSource, Inc. (NYSE:BLDR), and Lennar Corporation (NYSE:LEN) are among the best construction stocks billionaires are investing in as of Q1 2023.   Click to continue reading and see the 5 Construction Stocks Billionaires Are Loading Up On.   Suggested Articles: 10 Chinese Stocks Billionaires Are Loading Up On 10 Oil Stocks Billionaires Are Loading Up On 15 Best Healthcare Stocks To Buy Now Disclosure: None. 10 Construction Stocks Billionaires Are Loading Up On is posted on Insider Monkey......»»

Category: topSource: insidermonkeyJun 5th, 2023

Amazon"s pledge to become "Earth"s Best Employer" is failing.

In today's edition: Jeff Bezos' megayacht sets sail, Google's internal mandate for its ChatGPT competitor, and more. It's Throw it Back Thursday, reader. I'm Diamond Naga Siu, and I'm just trying to make it to the weekend.I get a lot of satisfaction out of what I do, but I'd love to work for the world's best employer. What does that even mean, though? What would the best employer in the world look like? What would make them so great?While we ponder these imponderables, I can tell you that it's probably not Amazon — despite its flashy 2021 pledge to become "Earth's Best Employer." My colleague Eugene Kim reports that company insiders have taken issue with just how far Amazon is from that goal.We've got that and more below for today's tech news.If this was forwarded to you, sign up here. Download Insider's app here.Michael M. Santiago/Getty Images : iStock : Robyn Phelps/Insider1. Amazon is fumbling its "Earth's Best Employer" pledge. This is one of the company's most ambitious projects, aimed at turning around its notoriously toxic workplace culture. Yet nearly two years later, employees — including top executives — lack clarity about the undertaking.Employees have repeatedly asked Amazon execs to provide clarity on the pledge. But their responses were often evasive and inconsistent. CEO Andy Jassy even once admitted that the definition of Earth's Best Employer is "subjective."Many employees said a lack of transparency at the company is especially counterproductive to the goal. They pointed to how layoffs in January were conducted. Many found out via email with no prior warning or one-on-one chat. And the restructuring plan wasn't revealed until the media had already covered it.My colleague Eugene Kim talked with more than 20 current and former Amazon employees about the lofty pledge. Spoiler alert: he found that there's a lot of work to do.This is what they said about Earth's not-Best Employer.In other news:Pablo Martinez Monsivais/AP; SEBASTIEN BOZON/AFP via Getty Images2. Watch Jeff Bezos' $500 million megayacht set sail. The 417-foot vessel hit open water for the first time. It's the same boat that caused uproar for nearly having to dismantle a historic bridge for it to pass. Check out the Bezos boat in action here.3. Google's leaked guidelines on how to train its ChatGPT competitor. Googlers were told to not let the chatbot talk like it is a human. Read the full guidelines here. (Bonus: Read CEO Sundar Pichai's leaked company-wide email. He asked all Googlers to spend two to four hours testing the chatbot.)4. "I tried Amazon's prescription service for generic meds." RxPass covers 80+ health conditions for a flat, $5 monthly fee. My colleague Yeji Jesse Lee tried the service but probably won't use it again due to how difficult the setup was. More on her experience here.5. No Role Modelz: Elon Musk thinks CEOs and politicians should be more like him. The billionaire said that other public figures should also run their own social media accounts. He said the current method of corporate press releases and ghostwritten Twitter posts sounds like "propaganda." More on his model behavior here.6. Tesla workers say the company tracks their keystrokes. Employees in New York say their keystrokes are monitored to ensure they're actively working, per Bloomberg. They emailed Elon Musk on Tuesday to inform him they were campaigning for a union. Find out more.7. An ex-Amazon manager says they quit over unfair performance ratings. Their boss encouraged them to quit after they defended a high-performing employee from getting the lowest performance rating. They told Insider how company politics ended their time at Amazon.8. Safety first: Mark Zuckerberg loves security. The Meta CEO's personal security allowance just got a $4 million increase — up from $10 million last year. Last year, the company shelled out $25 million for his personal security. More on the safety issue here.Odds and ends:2021 Hyundai Elantra.Hyundai9. Kia and Hyundai are tired of people stealing their cars. A viral TikTok challenge taught people how to steal certain Kia and Hyundai models. The Korean carmakers finally rolled out a free anti-theft software update for the targeted models. Check out their solution here.10. Then leave: These Walmart stores are shutting down. The retailer annually shuts down a few stores for underperformance. Insider compiled the ones it's shuttering across five states, including Illinois, Florida, and Wisconsin. Get the full list here.What we're watching today:It's the second day of the European Blockchain Convention.Quarterly earnings for DoorDash, Dropbox, WeWork, and other companies. Keep up with earnings here.The US Postal Service is hosting a stamp ceremony for a Women's Soccer commemorative Forever stamp. It coincides with the start of the SheBelieves Cup.Happy birthday, The Weeknd. Save Your Tears for another day.Curated by Diamond Naga Siu in San Diego. (Feedback or tips? Email or tweet @diamondnagasiu) Edited by Matt Weinberger (tweet @gamoid) in San Francisco and Hallam Bullock (tweet @hallam_bullock) + Nathan Rennolds (tweet @ncrennolds) in London.Read the original article on Business Insider.....»»

Category: worldSource: nytFeb 16th, 2023

David Tepper Initiated Buying These 10 Stocks for the Rest of 2022

In this article, we discuss the 10 stocks David Tepper is buying for the rest of 2022. To skip the details of David Tepper’s achievements, investment philosophy, and information about Appaloosa Management, go directly to David Tepper Initiated Buying These 5 Stocks for the Rest of 2022. David Tepper is an American billionaire and a […] In this article, we discuss the 10 stocks David Tepper is buying for the rest of 2022. To skip the details of David Tepper’s achievements, investment philosophy, and information about Appaloosa Management, go directly to David Tepper Initiated Buying These 5 Stocks for the Rest of 2022. David Tepper is an American billionaire and a hedge fund manager. He owns the NFL team, the Carolina Panthers, and Charlotte FC in Major League Soccer. Achievements David Tepper is one of the world’s most notable hedge fund managers. In 2010, the New York Magazine considered him an “object of a certain amount of hero worship inside the industry,” while being called “a golden god” by one investor. In 2012, Tepper’s hedge fund made $2.2 billion, and according to Institutional Investors Alpha, it was the biggest pay-check for a hedge fund manager. Furthermore, he earned the third position in Forbes 25 highest-earning hedge fund managers and traders in 2018. The path to David Tepper’s success was paved in 1987 when the whole stock market crashed worse than the Great Depression in 1929. Tepper predicted the crash, shorted his entire portfolio, and was the only trader at Goldman Sachs to make money instead of losing it. Appaloosa Management and Investment Philosophy Appaloosa Management was founded by David Tepper and Jack Walton with $7 million of Tepper’s money and another $50 million of outside capital. As of 2019, the fund has returned at an annualized rate of 25% since its inception. At the inception of the fund, it specialized in distressed bonds. The fund now invests in public equity and fixed income markets, focusing on “equities and debt of distressed companies, bonds, exchange warrants, options, futures, notes, and junk bonds.” Tepper’s strategy has been fruitful since he started his own firm. In the early 90s, during the Latin America crisis, he bought several bank debts before the recovery and made a 30% return in 1996. In 1998, David Tepper lost $80 million he had invested in Russian Bonds when Russia defaulted and he called it “the biggest screw of my career”. However, Tepper made 61% against his 29% loss by betting again on Russian bonds as they became severely undervalued. Tepper explained the investment strategy of Appaloosa Management in the following words: “We’re value-oriented and performance-based like a lot of funds. But I think what differentiates us is that we’re not afraid of the downside of different situations when we’ve done the analysis. Some other people are very afraid of losing money, which keeps them from making money.” As of Q2 2022, Appaloosa Management has $1.593 billion in managed 13F securities, excluding distressed debt and fixed income equities. In the June quarter, the fund made 8 new stock purchases and sold out 12. Moreover, the firm increased its stake in 4 stocks and reduced positions in 16. Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:META), and, Inc. (NASDAQ:AMZN) are some of the most notable names in Appaloosa Management’s portfolio. Our Methodology The stocks on the list were taken from Appaloosa Management’s Q2 2022 13F portfolio. Eight of the stocks on the list were added to the firm’s portfolio in Q2 2022, while the firm increased its positions by a significant margin in the other two. For better understanding, the analyst ratings and hedge fund sentiment around the stocks have also been added. The hedge fund sentiment was taken from Insider Monkey’s database of 895 elite hedge funds. David Tepper Initiated Buying These Stocks for the Rest of 2022 10. The Walt Disney Company (NYSE:DIS) Number of Hedge Fund Holders: 109 The Walt Disney Company (NYSE:DIS) is an American mass media and entertainment giant headquartered in California. Appaloosa Management added the company to its portfolio in Q2 2022 with 50,000 shares worth $4.72 million at an average share price of $118.35. The company represents 0.29% of the fund’s portfolio. In late August, The Walt Disney Company (NYSE:DIS) got the broadcasting rights of all International Cricket Council from 2024-2027. According to an anonymous ICC Board member, the company is paying approximately $3 billion for the rights. For the Indian Premier League 2023-2027 cycle alone, the media rights were sold for Indian Rs. 570.5 million per match for TV and Rs. 500 million for the digital platforms. Furthermore, The Walt Disney Company (NYSE:DIS) won the cricket rights in Australia and EPL rights in 10 countries. On August 11, Credit Suisse analyst Douglas Mitchelson maintained an Outperform rating on The Walt Disney Company (NYSE:DIS) shares and lowered the price target to $157 from $170. The price target revision came after the company’s June quarter results, mainly because of the low streaming value. Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:META), and, Inc. (NASDAQ:AMZN) are some of the most notable names in David Tepper’s portfolio, along with The Walt Disney Company (NYSE:DIS).  Here is what Oakmark Fund had to say about The Walt Disney Company (NYSE:DIS) in its Q2 2022 investor letter: “Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.” 9. MPLX LP (NYSE:MPLX) Number of Hedge Fund Holders: 7 MPLX LP (NYSE:MPLX) is a mid-stream oil and gas company headquartered in Ohio, United States. On July 27, US Capital Advisors analyst James Carreker downgraded the company shares to Hold from Overweight with a $34 price target. MPLX LP (NYSE:MPLX) has a dividend yield of 8.5% as of September 12. On July 26, the company declared a quarterly dividend of $0.705, paid out on August 12 to the shareholders of record on August 5. Moreover, the company announced an additional $1 billion repurchase program on August 2. The repurchase program has no expiration date. As of the second quarter of 2022, Schonfeld Strategic Advisors was the most significant stakeholder of MPLX LP (NYSE:MPLX), with 450,000 shares worth $13.118 million. Appaloosa Management increased its stake in the company by 60% to 192,325 shares, valued at $5.6 million in the quarter. 8. Caesars Entertainment, Inc. (NASDAQ:CZR) Number of Hedge Fund Holders: 59 Caesars Entertainment, Inc. (NYSE:CZR) is a Nevada-based hotel and casino operator with over 50 properties. The company was added to the Appaloosa Management portfolio in Q2 with 150,000 shares worth $5.745 billion, representing 0.36% of the firm’s portfolio. After its pandemic-induced downfall and over-time debt load, Wall Street analysts have recently become bullish on Caesars Entertainment, Inc. (NYSE:CZR). On August 3, B Riley financial analyst David Bain reaffirmed his Buy rating on the stock with a $102 price target, down from $128, and added that the stock is “woefully undervalued.” Similarly, Cowen analyst Lance Vitanza kept an Outperform rating on the company stock and told the investors that the remainder of the year seems reasonably optimistic for the company. According to the Insider Monkey database, 73 hedge funds held stakes in Caesars Entertainment, Inc. (NYSE:CZR) in Q2 2022, compared to 72 in the previous quarter. HG Vora Capital Management was the most prominent stakeholder in the second quarter and increased its position in the company by 186% to 5 million shares worth $191.5 million. Here is what Carillon Tower Advisers had to say about Caesars Entertainment, Inc. (NYSE:CZR) in its Q4 2021 investor letter: “Caesars Entertainment, a diversified casino-entertainment, and resort company, underperformed in the period as its quarterly earnings update was viewed as disappointing by investors. The firm highlighted a number of one-time headwinds that ultimately weighed on margins, as well as some negative impacts brought on by the surge in COVID cases. Despite this, we believe that the sizeable overall margin improvements Caesars has realized coming out of the pandemic will ultimately prove sustainable in the long run.” 7. Netflix, Inc. (NASDAQ:NFLX) Number of Hedge Fund Holders: 95 Netflix, Inc. (NASDAQ:NFLX) is an American subscription model streaming service and production company. The company offers TV series, documentaries, feature films, and mobile games on its platforms. Appaloosa Management initiated its investment in the company with 50,000 shares worth $8.74 million in Q2 2022.  In early July, Netflix, Inc. (NASDAQ:NFLX) announced its partnership with Microsoft for an ad-supported subscription plan. The company added that with the new program, it will also keep the ads-free basic, standard, and premium plans. Previously, the company was opposed to adding advertisements to the platform. On September 7, Jefferies analyst Andrew Uerkwitz reiterated a Hold rating on Netflix, Inc. (NASDAQ:NFLX) and lowered the price target to $230 from $243. Uerkwitz lowered his price target owing to the company’s U.S. password sharing policy, the planned ad-supported tier, and market conditions. The analyst added that the company’s September quarter is essential and he “wouldn’t step in front of it”. Here is what Oakmark Funds had to say about Netflix, Inc. (NASDAQ:NFLX) in its Q2 2022 investor letter: “Netflix‘s stock price was down considerably after providing a weaker than expected outlook for both subscriber growth and profit margins. After meeting with management and scrutinizing our investment thesis, we lowered our estimate of business value to account for the company’s softer near-term guidance. However, we believe the decline in the company’s share price more than adjusts for this. Indeed, Netflix now trades for a discount to the S&P 500 Index on next year’s GAAP earnings despite our view that the company remains a much better than average business run by a highly accomplished management team. We believe the company’s lead in streaming remains intact, and we expect terminal operating margins to be substantially higher than they are today. Furthermore, we are encouraged by Netflix’s potential to enhance revenue growth through advertising, the monetization of password sharing and further penetrating international markets.” 6. Alibaba Group Holding Limited (NYSE:BABA) Number of Hedge Fund Holders: 106 Alibaba Group Holding Limited (NYSE:BABA) is a Chinese e-commerce, retail, internet, and technology company. In Q2 2022, Appaloosa Management added the company to its portfolio with 100,000 shares worth $11.368 million, accounting for 0.71% of the fund’s holdings. The pandemic negatively affected the Chinese markets, including Alibaba Group Holding Limited (NYSE:BABA). Until 2020, the ROCE of the company was above 100% at an average of 143%, which is now down to 63%. Moreover, the net earnings decreased by 43% from the beginning of the year. However, the company keeps afloat and has a strong balance sheet. The company generated $21 billion of operating cash in trailing-twelve months as of September, with debt interest expenses of $500 million. The long-term debt is $20 billion, while the company’s cash position stands at $69 billion. Even with a significant drop, Alibaba Group Holding Limited (NYSE:BABA)’s ROCE remains number three among the most prominent and best-performing publicly traded tech stocks. On August 8, Deutsche Bank analyst Leo Chiang reaffirmed a Buy rating on Alibaba Group Holding Limited (NYSE:BABA) shares and raised the price target to $160 from $155. Chiang sees the current company valuation as “defensive” and faster than expected macro recovery could lead to upside potential. Just like Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:META), and, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA) is also one of the most notable names in David Tepper’s portfolio. Here is what Alger Capital said about Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2022 investor letter: “Alibaba Group Holding Limited (NYSE:BABA) is a leading e-commerce and cloud computing company in China. It also serves the big data analytics, digital media and entertainment markets. Alibaba’s shares have previously suffered from concerns about heightened regulatory oversight of the Chinese internet sector by the Chinese Communist Party. additionally, many investors became concerned about the potential for U.S. exchange listed Chinese ADRs to be delisted if they failed to meet U.S financial reporting standards by 2024. The shares have since outperformed in response to statements by the Chinese government supporting stable markets and overseas listings. The Chinese government also stated that its intensified regulatory efforts aimed at tech companies may end soon. Alibaba’s first quarter earnings and revenues exceeded estimates as determined by a consensus of analysts at financial services firms and provided by FactSet. The quarterly results benefited from better direct sales and increasing marketing efficiency.”       Click to continue reading and see David Tepper Initiated Buying These 5 Stocks for the Rest of 2022.   Suggested articles: 9 Biggest EV Charging Companies Best Cheap Dividend Kings To Buy Top 8 Stock Picks of Jeff Ubben’s Inclusive Capital   Disclosure. None. David Tepper Initiated Buying These 10 Stocks for the Rest of 2022 is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 15th, 2022

4 REITs to Consider as Economic Growth Projections Move North

REITs' business usually buoys up on a stepped-up economy and a resilient job market, and therefore investing in WELL, AVB, EPRT and SBAC seems prudent. Are you fretting too much about your investments in the REITs because of the Federal Reserve’s recent decision to keep the benchmark interest rate steady at a 22-year high of 5.25-5.50% and indicating for keeping the rates high for a longer period? Then, it’s time to think again and focus on Welltower WELL, AvalonBay Communities AVB, SBA Communications Corporation SBAC and Essential Properties Realty Trust EPRT.This is because although the Fed has indicated through its dot plots that there will be fewer rate cuts next year, its latest Summary of Economic Projections paints a brighter picture for economic growth and the labor market.Members have revised economic growth projections north, with the gross domestic product now expected to increase 2.1% this year, more than double June's 1% estimate, indicating that a recession is not expected in the immediate future. Further, the GDP projection for 2024 moved up to 1.5% from 1.1%.Also, the labor market is likely to exhibit resiliency than what was previously expected, with officials estimating the unemployment rate for the current year to be 3.8%, down from the prior projection of 4.1%. Further, the expected inflation rate, as measured by the core personal consumption expenditure price index, decreased to 3.7%, down by 0.2 percentage points from June.Now with economic activity “expanding at a solid pace”, as characterized by the committee, REITs stand to gain. This is because with the REIT sector offering the real estate structure for several economic activities, be it real or virtual, there are pockets of strength, even in a high-rate environment. REITs’ business usually buoys up on a stepped-up economy and a resilient job market because a fatter purse gives tenants more power to demand real estate space.What’s more encouraging is REITs’ characteristic of providing natural protection against inflation. Particularly, both rents and real estate values have a tendency to move north with prices increasing, thereby aiding dividend growth. The majority of leases are tied to inflation, which leads to rent increases as inflation goes up. Therefore, even during the inflationary period, investments in the REIT industry can offer a steady stream of income.Moreover, REITs are effectively managing challenges posed by stricter credit conditions and the persistent high-interest-rate environment with typical low-leverage policies and focusing on fixed-rate and unsecured debt. Solid balance sheets remain a major reason for investors to stay invested in REITs, even amid the capital and mortgage market’s turmoil in the current real estate investment environment.Per the data from Nareit’s Total REIT Industry Tracker Series (T-Tracker) for the second quarter of 2023, leverage ratios remained modest with debt-to-market assets below 35%, while the percentage of total debt at a fixed rate was 91%. Moreover, the percentage of the total debt that was unsecured was 79%, offering REITs a competitive edge.Stock PicksWelltower partners with top senior housing operators, post-acute care providers and health systems and invests in the real estate infrastructure, encompassing senior housing, post-acute care communities and outpatient medical facilities in key growth markets across the United States, Canada and the UK.Welltower is well-poised to benefit from its diversified portfolio of healthcare real estate assets. Given the continued strength of its senior housing operating portfolio, aided by favorable demographic trends, healthy demand-supply fundamentals, and robust and accretive capital deployment activity, the company recently amped up its current-year normalized funds from operations (FFO) per share guidance to $3.51-$3.60 from $3.48-$3.59. We expect the metric to exhibit year-over-year growth of 14.9% in 2023. Furthermore, WELL’s portfolio-restructuring efforts and solid balance sheet augur well.Welltower currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2023 FFO per share has been revised 1.4% north over the past two months to $3.55. It also suggests a 6% increase year over year.AvalonBay’s premier portfolio of multi-family apartment communities in the high-barrier-to-entry regions of the United States is well-poised to benefit from the healthy demand for residential properties. Its portfolio diversification efforts and focus on expanding into the suburban markets are likely to aid in generating stable rental revenues over time.We estimate year-over-year growth of 5.3% in total revenues in 2023. This residential REIT is also banking on technology and scale to drive margin expansion. Further, its encouraging development pipeline and solid balance sheet augur well for long-term growth.Per its recent operating update, AvalonBay reported a 5.3% increase in same-store residential rental revenues for the two months ended Aug 31, 2023 compared with the prior-year period. This is roughly 40 basis points higher than the company’s most recent expectation on Jul 31, 2023. This demonstrates its adaptability in the face of market shifts.Analysts seem bullish on this Zacks Rank #2 stock. The estimate revision trend for 2023 FFO per share indicates a favorable outlook for the company as it has increased three cents upward over the past month to $10.57. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.SBA Communications' global footprint of extensive wireless communication assets is poised to benefit from increased capital spending by wireless carriers to expand their networks amid accelerated 4G and 5G network deployment efforts.Its long-term leases with its tenants assure stable cash flows. For 2023, we expect a 7.1% year-over-year increase in site-leasing revenues.  Also, the company’s strategic buyouts and portfolio expansion efforts to capitalize on the secular trends of the industry are encouraging.SBA Communications currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2023 FFO per share has been revised four cents north over the past month to $12.90. It also suggests a 5.4% increase year over year.Essential Properties owns, acquires and manages mainly single-tenant properties, which are net leased to service-oriented and experience-based businesses on a long-term basis. The company serves casual dining, car washes, automotive services, medical services, convenience stores, equipment rental, entertainment, early childhood education and health and fitness sectors.With a portfolio comprising 1,742 freestanding net lease properties with a weighted average lease term of 14 years and a weighted average rent coverage ratio of 4.1 as of Jun 30, 2023, EPRT is well-poised to benefit from the solid fundamentals of the retail real estate market. As of Jun 30, 2023, the company’s portfolio was 99.9% leased, and this reflects the solid demand for the company’s properties.Essential Properties currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2023 FFO per share has been revised 1.2% upward over the past week to $1.66. It also suggests an 8.5% increase year over year.Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AvalonBay Communities, Inc. (AVB): Free Stock Analysis Report SBA Communications Corporation (SBAC): Free Stock Analysis Report Welltower Inc. (WELL): Free Stock Analysis Report Essential Properties Realty Trust, Inc. (EPRT): Free Stock Analysis ReportTo read this article on click here.Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2023

How to Preserve Your Wealth According to Bill Gates’ Portfolio

In this article, we will be taking a look at how to preserve your wealth by observing Bill Gates’ Portfolio. To delve deeper into these insights, you can directly review the 5 Sectors to Invest In to Preserve Your Wealth According to Bill Gates’ Portfolio. Focusing on simple business models that generate dependable cash flows is […] In this article, we will be taking a look at how to preserve your wealth by observing Bill Gates’ Portfolio. To delve deeper into these insights, you can directly review the 5 Sectors to Invest In to Preserve Your Wealth According to Bill Gates’ Portfolio. Focusing on simple business models that generate dependable cash flows is a strategy that has allowed Bill Gates to amass and preserve wealth over the years. The Harvard University dropout has become a force to reckon with in the investment world despite being known for his escapades with Microsoft. Microsoft Corporation (NASDAQ:MSFT), the company Gates helped found, sits at the heart of the computing revolution and is a vital source of the billionaire investor and philanthropist’s wealth. Founded in 1976, Microsoft would find itself in stiff competition against Apple in the initial years in the race to take the personal computing crown. Facing stiff competition from Steve Jobs, who sought to control the entire user experience through the Macintosh operating system, Gates focused on developing an operating system that would be used on any computer. His efforts and focus would pay years later as Microsoft ended up becoming the world’s largest computer operating system in the world. Microsoft’s control of the computer operating system has made it a trillion-dollar company. Likewise, the company accounts for the biggest share of Mr. Gates’ wealth as he still holds about 1.3% of stakes in the software giant. Microsoft’s growth is a dream come true for Bill Gates, who has always insisted on focusing on what you are obsessed with the most. In a 2016 television interview with Charlie Rose, Gates remarked, “The thing you do obsessively between age 13 and 18, that’s the thing you have the most chance of being world-class at.” Gates has always been obsessed with coding, forcing him to drop out of Harvard and form what will become a force to reckon with in the computing world. After nearly four decades, Gates would leave the company he helped found and charter another path as an investor and philanthropist. With a net worth of more than $110 billion, Gates is nowadays more interested in giving his money away rather than acquiring more. Along with his now ex-wife, Melinda Gates, he has donated more than $30 billion in stock from Microsoft through the Bill & Melinda Gates Foundation. Despite his philanthropy work, Gates is also a big investor in betting on various stocks, a drive influenced by his solid relationship with billionaire investor Warren Buffett. When asked what he was obsessed with as a teenager by CNBC, Gates is quoted as saying, “Well, I was pretty interested in investments,” This might explain how he turned out to be one of the biggest and most successful investors despite being a tech guru. His foundation holds vast portfolio investments in various stocks and startups. Buffett is believed to have a strong influence on Gates’ investment philosophy. A majority of Mr. Gates’ financial assets are held by Cascade Investments L.L.C., an institute he founded that accounts for the biggest share of his holdings. The investment portfolio is well diversified, with holdings in various industries ranging from tech to industrial, real estate, and consumer discretionary. The diversified nature of Mr. Gates’ holdings is depicted by billions worth of holdings in Microsoft, giving him tremendous exposure in the tech industry. He also owns holdings in Four Seasons hotels in Mexico and stakes in branded Entertainment Network for exposure in the advertising sector. The billionaire investor has also sought to preserve his real estate wealth, having invested a significant amount of money into buying real estate assets. The investor is also big in transportation with Canadian National Railway Corporation investments. He is also the chair of Nuclear Reactor Designs Company, affirming his interest in the energy sector. Gates also funds initiatives in clean energy education and healthcare. Gates’ wealth is spread out over several sectors as part of his diversification strategy. The diversification strategy focuses on capital preservation rather than rapid appreciation. The investment strategy has seen him invest nearly 60% of his wealth in stocks in various industries, the highest of any family office portfolio in North America. Our Methodology Bill Gates made much of his wealth through his close ties with Microsoft Corporation (NASDAQ:MSFT). However, after leaving the company, he has ventured into the investment world in the race to preserve and grow his wealth. Diversification has turned out to be the billionaire investor’s important strategy in the race to preserve wealth. We have compiled some of the biggest segments the billionaire investors has turned to safeguard his wealth. The sectors are arranged according to their weighting in the billionaire and philanthropic investor’s portfolio during the second quarter of 2023. How to Preserve Your Wealth According to Bill Gates’ Portfolio 9. Communication Services Sector Weighting in Q2 2023: 0.26% Communication Service is a market segment made up of companies that provide communication services using fiber line networks or those that leverage wireless networks. The segment also includes companies that provide internet services such as access navigational and internet-related software and services. Some of the best communication services companies include those that have been around for years and pay attractive dividends. It also includes early-stage startups that are years away from showing profits. Nevertheless, companies are often susceptible to deteriorating economic conditions. During economic contractions, spending on communications or advertising often takes a hit, affecting the company’s performance. Madison Square Garden Sports Corp. (NYSE:MSGS) is a diversified sports company that owns and operates several professional sports franchises, such as the New York Knicks (N.B.A.), the New York Rangers (N.H.L.), and the New York Liberty (WNBA). It also owns and operates sports venues, such as Madison Square Garden and the Hulu Theater, as well as media networks, such as M.S.G. Network and M.S.G. Plus. Gates has a stake in Madison Square Garden Sports Corp. (NYSE:MSGS) through his Bill & Melinda Gates Foundation Trust. As of June 30, 2023, the trust held 592,410 shares of MSGS, valued at $111.40 million. This represents 0.3% of the trust’s portfolio. Gates has been investing in MSGS since 2021 when he bought 278,147 shares. He apparently sees MSGS as a long-term investment that can benefit from the popularity and growth of sports entertainment and media. MSGS does not pay a dividend to its shareholders, as it reinvests its earnings into its business operations and growth initiatives. The company’s stock price has increased by 19% over the past 12 months, outperforming the S&P 500 index by 5.11%. 8. Real estate Sector Weighting in Q2 2023: 0.28% The real estate sector comprises companies that own and operate commercial and residential properties. It also includes real estate investment trusts that operate properties and collect rent. Investors highly seek the segment as it provides stable income and tax advantages depending on the investment type. REIT stocks are some of the best owing to their generous yields as they distribute up to 90% of their net income to shareholders. Real Estate has always been one of the best options for Bill Gates in preserving wealth. The billionaire invests in sprawling estates, including his Seattle home, an ocean lodge boasting over 66,000 square feet. He also owns properties in Wellington, Florida, snapping a four-bedroom mansion and horse ranch for $8.7 million. He also bought adjacent parcels for a total of $35.87 million. Bill Gates owns a significant stake in Crown Castle International Corp. (NYSE:CCI), a real estate investment trust that owns and operates communication infrastructure in the U.S. Crown Castle is one of the largest providers of cell towers, fiber networks, and small cell nodes that are essential for the deployment of 5G technology. As of the second quarter of 2023, the Bill and Melinda Gates Foundation Trust held over 1.42 million shares in Crown Castle, valued at $161.80 million. This represents 0.38% of the trust’s portfolio. Gates has been investing in Crown Castle since 2014 when he bought 5.3 million shares for about $375 million. He has maintained his position since then despite the fluctuations in the stock price and the dividend yield. One of the companies that Bill Gates invests in to protect and grow his wealth is Crown Castle, a leader in communication infrastructure in the U.S. Crown Castle owns and rents out over 40,000 cell towers and 85,000 miles of fiber optic cables that support small cells and fiber solutions. The company boasts a juicy 5.5% forward yield, which affirms why it is in the portfolio. 7. Consumer Cyclical Sector Weighting in Q2 2023: 0.46% Consumer Cyclical is a market segment dominated by companies that produce non-essential commodities. Also known as the consumer discretionary segment, it encompasses businesses and companies that sell dispensable goods and services like designer clothing, automobiles, eateries, and entertainment. Such companies are billed as cyclical as their performance highly depends on the economy’s health or prevailing economic situation. Consumer discretionary plays tend to outperform whenever the economy is booming with increased consumer spending. They also underperform during depressed economic situations. The segment has performed well over the past three years owing to increased consumer spending on solid economic conditions. Gates has a small exposure in the consumer cyclical segment with investments in Coupang, Inc. (NYSE:CPNG), an online shopping platform in South Korea. He has also invested in Carvana Co. (NYSE:CVNA), a company that operates an e-commerce platform for buying and selling used cars. Vroom, an end-to-end e-commerce platform for buying and selling cars, is also part of the portfolio. He has also invested in On Holding AG (NYSE:ONON). 6. Healthcare Sector Weighting in Q2 2023: 1.04% The healthcare segment consists of businesses that offer medical care, produce medical devices or drugs, and provide medical insurance. It is one of the largest and most complex in the U.S. economy, accounting for 18% of the total gross domestic product. Spending in the segment is expected to hit record highs of $12 trillion by 2040. Bill Gates has always been a big investor in the healthcare sector. He is on record insisting that initiatives to fight malaria, AIDS, and other diseases in poor countries will always be America’s best investment for saving lives. In 2019, Gates reiterated that his best investment was the $10 billion invested through the Bill & Melinda Gates Foundation into organizations to increase access to vaccines and medicines for people worldwide. He invested the amounts into the Global Alliance for Vaccines and Immunization, the Global Fund to Fight Tuberculosis and Malaria, AIDS, and the Global Polio Eradication Initiative. Currently, he is invested in Schrödinger, Inc. (NASDAQ:SDGR), a company that develops a physics-based computational platform to discover novel molecules for drug development. The company leverages artificial intelligence technology to discover novel molecules with optimal drug development profiles. Schrödinger, Inc. stock was added to the hedge fund’s portfolio during the first quarter of 2020 when Gates bought 6.98 million shares. Another healthcare stock in Gates’ portfolio includes Danaher Corporation (NYSE: D.H.R.). His hedge fund first invested in the company in the fourth quarter of 2022. The hedge fund still holds 373,000 shares of the company, worth more than $89.52 million. Click to continue reading and see 5 Sectors to Invest In to Preserve Your Wealth According to Bill Gates’ Portfolio. Suggested articles: 17 Best Low Risk Investments in 2023 10 NASDAQ Stocks with Biggest Upside 15 Penny Stocks with Biggest Upside Disclosure: None. How to Preserve Your Wealth According to Bill Gates’ Portfolio is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 21st, 2023

Futures, Global Stocks Tumble As Markets Reel After Fed"s Hawkish Pause

Futures, Global Stocks Tumble As Markets Reel After Fed's Hawkish Pause Futures are sharply lower, extending yesterday's steep losses after the Fed’s hawkish pause. The Fed wasn't alone in keeping rates unchanged: it was followed by both the SNB and BOE, both of which surprised markets by not raising rates and sending the franc and sterling sliding. On the other hand, the inflation-ridden Riksbank and Norges both hiked, telling investors to expect more such moves. Hyperinflating basket case Turkey hiked by 500bps, in line with expectations. As of 7:45am, S&P futures tumbled 0.7% to 4,415, while Nasdaq 100 futures were down 1% briefly dipping below the key 15,000 level. Most Treasury yields climbed apart from two-year rates, which edged lower. The Bloomberg Dollar Spot Index traded near the day’s highs, pressuring most other Group-of-10 currencies. Brent crude fell for a third-straight day, trading below $93. Gold slid and Bitcoin declined 1%. Today’s macro data focus is on Jobless Claims, Existing Home Sales, Leading Index, and Philly Fed. In premarket trading, Splunk was set to open sharply higher after Cisco announced it would purchase the company for $157/share (it closed just below $120). Broadcom slumped after a report by The Information that Google has discussed dropping the company as an AI chips supplier as early as 2027. FedEx shares rise as much as 5.4% after the courier raised the lower end of its fiscal 2024 adjusted EPS forecast, thanks to cost cutting, strong pricing and customers who switched to the courier from its main rival on concern over a potential strike, and prompting analysts to hike their price targets on the stock. Analysts were positive on the company’s cost reduction progress and highlighted the strong performance at its Ground unit and said that guidance is still conservative. Here are the other notable premarket movers: ARM Holdings shares fall 2.3%, with the chip designer nearing its $51 IPO price, as rising bond yields put pressure on growth stocks, with tech peers down too. Broadcom shares drop as much as 4.6%, following a report from The Information that Google executives “extensively” discussed dropping the semiconductor maker as an AI chips supplier as early as 2027, citing a person familiar with the matter. CrowdStrike shares rise as much as 3.4%, as analysts hike their price targets on the stock following the Fal.Con cybersecurity conference and investor briefing, at which it set out new targets. Analysts said the company’s margin outlook was especially strong, and new products such should help boost growth. Film and entertainment stocks rise, after Hollywood Studios and writers came a step closer to reaching a deal to end months of strikes. Warner Bros (WBD US) +3.1% and Paramount (PARA US) +3%. The Fed on Wednesday held its target range, while updated quarterly projections showed most officials favored another rate hike in 2023. Policymakers also see less easing next year, with the median forecast for the federal funds rate at 5.1% by year-end, up from 4.6% when projections were last updated in June. “People did expect a hawkish hold from the Fed, but it’s the extent of the hawkishness that surprised,” said Lee Hardman, a strategist at MUFG Bank Ltd. “We thought they may take one cut out of next year’s forecasts — instead they took two out. So it was much more hawkish than markets were pricing in.” Some non-Fed headlines came from BAC’s CFO who says, “It’s difficult to see a US recession when the consumer is spending 4% more year-over year.”  Axios reported that the US Chamber of Commerce’s Small Business Index, a confidence indicator, has reached its highest level since COVID struck US markets in early 2020. The survey includes 751 business, each that have fewer than 500 people; 71% say they expect revenue to increase next year. Spoiler alert: it won't. Europe's Stoxx 600 Index declined 1% but was off session lows, with all sectors in the red, as traders digested the Fed’s higher-for-longer message. Travel and leisure stocks fell the most, while miners and industrial stocks also underperformed. Swiss equities were higher after the SNB unexpectedly paused rate hikes, while the BOE is due to announce its rate decision later Shares in UK banks and home builders rose as traders slashed their bets on further rate hikes with UBS saying the BOE hiking cycle is now over. The central bank held its key rate at 5.25%, ending a series of 14 successive hikes since December 2021, after a surprise drop in August inflation this week. “Inflation has fallen a lot in recent months and we think it will continue to do so,” BOE Governor Andrew Bailey said in a written statement. “That’s welcome news. But there is no room for complacency. We need to be sure inflation returns to normal and we will continue to take the decisions necessary to do just that.” A day after the Federal Reserve’s meeting, Europe had its own frenetic flurry of central bank decisions. Before the BOE, Swiss National Bank surprised investors by holding interest rates, causing the franc’s steepest drop since May against the euro. Sweden’s Riksbank increased its key rate as expected and said more hikes were possible, while Norway’s central bank said more tightening may come in December after raising rates to the highest in more than 14 years. Here are Europe's top movers: Merck shares gain as much as 2.2% after Citi raised its recommendation on the German biotech group to buy, predicting performance in the firm’s Life Science and Semiconductor segments will recover in the near future. JD Sports shares rise as much as 8.6% after reporting results that Peel Hunt analysts said reflected a “surprisingly strong” performance in the US following recent guidance cuts from peers Foot Locker and Dick’s Sporting Goods. Next shares gain as much as 2.5% after the UK retailer boosted its pretax profit outlook for the full year, following other guidance raises in August and June. The third guidance update in three months is impressive, with the sales outlook suggesting resilience in the first half, Jefferies said. Safilo shares rise as much as 8.1%, the most intraday since August 2022, after the Italian eyewear company said it’s launching its Carrera Smart Glasses with’s Alexa technology, according to a statement late on Wednesday. Valneva shares rise as much as 4.7% after the French pharmaceutical firm reported better-than-expected first-half earnings. Van Lanschot Kempen sees a “strong set” of figures with beats across the board. CVS Group shares gain as much as 4.4% after the veterinary services firm reports better-than-expected profit. The stock plummeted earlier this month as UK antitrust regulators announced a probe of the sector. Delivery Hero rises as much as 2%, adding to Wednesday’s 7.1% gain, as the food delivery company confirmed that it’s mulling a sale of some businesses in Southeast Asia. Analysts said a potential deal could boost the company’s balance sheet and profit by shaking off some unprofitable operations that are currently involved in intensive competition. Ocado shares drop as much as 9.3% after being downgraded to underperform from neutral at BNP Paribas Exane, which cited the British online grocer’s share price rally in recent months. SSP Group shares fall as much as 8.7% after the food services company gave a trading update saying it expects full-year EPS toward the lower end of its guidance range. Analysts at Goodbody and Shore Capital noted the FX headwinds apparent in the update, but were encouraged by the opportunity from new business. Engcon shares drop as much as 8.9% after an editorial column on Swedish retail-trading website recommended its users sell the Swedish industrial firm’s shares, citing a high valuation and slowing growth prospects. Quadient shares fall as much as 8.7% after the French postal- and document-services company reported first-half results that Oddo said were slightly below estimates. Earlier in the session, Asian stocks fell the most in nearly a month after the Fed signaled that interest rates will remain higher for longer amid renewed economic strength, while Chinese equities slumped on persistent pessimism. The MSCI Asia Pacific Index dropped as much as 1.4%, set for a fourth day of losses, led by health-care and technology shares. Most markets in the region were down, with South Korea’s Kospi Index slumping more than 1% as large-cap chip and battery stocks dragged. The Fed left its benchmark interest rate unchanged as expected, while indicating that borrowing costs will likely stay higher for longer after one more hike this year. The message triggered overnight losses in Wall Street, gains in Treasury yields and strength in the dollar. Hang Seng and Shanghai Comp declined alongside the downbeat mood across regional peers, although the losses in the mainland were initially cushioned following the Chinese Cabinet’s pledge to speed up the development of the advanced manufacturing sector and amid resilience in developers after Guangzhou adjust purchase rules for several districts. Japan's Nikkei 225 retreated below the 33,000 level as Japanese yields climbed to decade highs and with the BoJ kickstarting its 2-day policy meeting. Australia's ASX 200 was lower with the top-weighted financial industry leading the broad declines. India’s benchmark stocks gauge dropped for a third consecutive session to its two-week low as US Federal Reserve’s signal to keep interest rates higher for longer spooked equities in Asia. The S&P BSE Sensex fell 0.9% to 66,230.24 in Mumbai, its lowest close since Sept. 6. The NSE Nifty 50 Index declined 0.8% to 19,742.35. ICICI Bank contributed the most to the Sensex’s decline, decreasing 2.8%. Out of 30 shares in the Sensex index, 6 rose and 20 fell, while 4 were unchanged. In FX, the dollar gained against most major currencies, aside from the yen, which traded around 148 per dollar after weakening on Wednesday to the lowest level since November. EUR/CHF rises as much as 0.8% to 0.9656, the biggest daily jump since June EUR/SEK drops as much as 0.9% to 11.7687; it rose earlier to 11.9381 after the Riskbank announced a quarter-point interest rate increase EUR/NOK drops as much as 0.4% to 11.4573 before halving losses; Wednesday’s low is 11.4560 GBP/USD falls as much as 0.4% to 1.2265, after the BOE unexpectedly ended its hiking cycle With most central banks out of the way, attention now turns to Friday's BOJ announcement. There are heightened prospects of official support for the Japanese currency, said John Vail, chief global strategist for Nikko Asset Management Co. in Tokyo. “Japan’s Ministry of Finance is likely to intervene in large fashion at 150 per dollar because it is hard to tolerate more inflationary pressure.” The value of the yen has slumped to the lowest on record, as measured against a broad basket of its peers and adjusted for inflation, according to data from the Bank for International Settlements. This underscores the pressure to address yen weakness at the Bank of Japan, which is where this week’s series of central bank policy meetings wraps up on Friday. In rates, treasury yields were broadly higher after the rate on the two-year note, which is more sensitive to imminent Fed moves, hit the highest since 2006 on Wednesday. After resuming post-Fed selloff in early Asia session, front-end of the Treasuries curve trades richer on the day into early US, outperforming belly and long-end as steepening move extends.  US yields richer by 2bp across front-end of the curve while belly out to long-end trades cheaper by 1.5bp to 4bp on the day; 10-year yields around 4.45% the highest level since 2007, underperforming bunds and gilts by 1.5bp and 5bp in the sector. Gilts were supported after Bank of England keeps rates unchanged. Long-end Treasury yields also reach new cycle highs, joining rest of the curve after Wednesday’s Fed decision. Dollar IG issuance slate includes IBK 5Y; issuance paused Wednesday for the Fed decision and is expected to remain quiet for Thursday. US economic data slate includes 2Q current account balance, September Philadelphia Fed business outlook and weekly initial jobless claims (8:30am), August existing home sales and leading index (10am); no Fed speakers scheduled. In commodities, oil’s breakneck rally is taking a breather as a smaller-than-expected drop in US crude stockpiles bolstered technical resistance to further gains; crude futures declined with WTI falling 1% to trade near $88.80. Spot gold drops 0.4%. To the day ahead, and we’ll get the Bank of England’s latest policy decision, and also hear remarks from the ECB’s Schnabel and Lane. Otherwise, data releases include the US weekly initial jobless claims, existing home sales for August, the Conference Board’s leading index for August, and the Philadelphia Fed’s business outlook for September. In the Euro Area, we’ll get the preliminary consumer confidence reading for September, whilst in the UK there’s the public finances for August. Market Snapshot S&P 500 futures down 0.4% to 4,430.50 Brent Futures down 1.3% to $92.35/bbl Gold spot down 0.2% to $1,926.07 U.S. Dollar Index up 0.13% to 105.46 STOXX Europe 600 down 0.7% to 457.60 MXAP down 1.5% to 159.24 MXAPJ down 1.6% to 492.56 Nikkei down 1.4% to 32,571.03 Topix down 0.9% to 2,383.41 Hang Seng Index down 1.3% to 17,655.41 Shanghai Composite down 0.8% to 3,084.70 Sensex down 0.9% to 66,197.17 Australia S&P/ASX 200 down 1.4% to 7,065.23 Kospi down 1.7% to 2,514.97 German 10Y yield little changed at 2.73% Euro little changed at $1.0657 Brent Futures down 1.3% to $92.35/bbl Top Overnight News Japan may be nearing a point where it can declare victory in its battle against deflation, paving the way for further BOJ policy normalization. Nikkei   As China's stock market struggles to recover, regulators have started to probe some hedge funds and brokerages on quantitative trading strategies amid a growing outcry against a sector able to profit from share price falls and volatility. RTRS Natural gas prices sink in Europe as Chevron seems close to resolving a strike in Australia while flows recover in Norway. BBG Norway’s central bank hikes rates by 25bp to 4.25%, as expected, and provides hawkish forward guidance by signaling another increase in Dec (most assumed today’s hike would be the last one). Switzerland’s SNB surprises markets by leaving rates unchanged (economists were anticipating a 25bp hike). BBG Poland looks to downplay remarks from its PM about no longer supplying weapons to Ukraine, insisting that the country remains a committed to helping Kyiv achieve victory. FT Google has talked “extensively” about dropping Broadcom as its AI chip supplier as soon as 2027 as the internet giant looks to cut costs and utilize proprietary silicon (in addition, Google is working to replace Broadcom with Marvell for network interface chips). The Information House Republicans reported major progress charting a path forward on a partisan bill to avert a government shutdown and a Department of Defense spending bill — two measures that suffered public setbacks just a day before — after Speaker Kevin McCarthy (R-Calif.) hashed out a new framework for a GOP-only stopgap proposal in a House Republican conference meeting that lasted more than two hours on Wednesday. The Hill AMZN is abandoning plans to impose a new fee on merchants that don’t use its shipping services amid increased regulatory/antitrust scrutiny on the company from the gov’t. BBG FDX reported very strong FQ1 earnings, with EPS of 4.55 (vs. the Street 3.73), thanks to aggressive cost cutting, and the full-year EPS outlook was increased (although by less than the Q1 beat). RTRS A more detailed look at global markets courtesy of Newquawk Asia-Pac stocks were pressured in the aftermath of the FOMC’s hawkish pause. ASX 200 was lower with the top-weighted financial industry leading the broad declines. Nikkei 225 retreated below the 33,000 level as Japanese yields climbed to decade highs and with the BoJ kickstarting its 2-day policy meeting. Hang Seng and Shanghai Comp declined alongside the downbeat mood across regional peers, although the losses in the mainland were initially cushioned following the Chinese Cabinet’s pledge to speed up the development of the advanced manufacturing sector and amid resilience in developers after Guangzhou adjust purchase rules for several districts. Top Asian News Japanese PM Kishida said he will instruct people to pull together the pillars of an economic package early next week, while they will include measures to counter inflation and social measures to counter declining population, according to Reuters. Chinese Commerce Ministry says some firms have obtained export licenses for gallium and germanium; willing to seek a basket of solutions for the Australian wine dispute. China's 2023 nat gas demand seen at 396.4BCM, +8% Y, via CNOOC; LNG imports 70.79mln/T, +10.9% YY. Nat gas demand from China seen peaking in 2040 at 700BCM. European bourses are pressured as the region reacts to Wednesday's FOMC where a hawkish hold was delivered, Euro Stoxx 50 -1.1%. Action which continues the tone of APAC trade but with the region conscious of a Chinese cabinet pledge around manufacturing and also beginning to look ahead to Friday's BoJ. Sectors are primarily in the red with the exception of Retail post-earnings from JD Sports and Next which reside towards  the top of the Stoxx 600; Travel/Leisure and Basic Resources lag, latter on benchmark activity and numerous price target cuts. US futures are lower across the board but with action slightly more contained when compared to European peers, ES -0.4%, NQ -0.6%; today's docket has a handful of data points before Friday's Fed speak resumption with Cook, Daly & Kashkari. Google (GOOG) reportedly wants to ditch Broadcom (AVGO) as its TPU sever chip supplier to reduce AI costs, according to The Information; Since last year has been working to replace Broadcom with Marvell Technology (MRVL). Pre-market: GOOG -0.7%, AVGO -5.2%, MRVL +3.5% Top European News Sunak Gambles on Voters Focusing More on Costs Than Climate Next Raises Guidance Again as Wage Gains Boost Shoppers SNB Surprises With Rate Pause as Tightening Tames Inflation Riksbank Hikes Swedish Rate With Door Kept Open to Act Again Norway Raises Rate Again and Signals Another Move in December Swiss Stocks Outshine Peers as SNB Pauses; Fed Weighs on Region FX The Fed revives Greenback fortunes via more hawkish dot plots, DXY firmly back above 105.000 within a 105.400-680 range. Franc collapses as SNB defies expectations for a 25bp hike and bases new forecasts on steady 1.75% rate, EUR/CHF and USD/CHF spike circa 100 pips to 0.9677 and 0.9078 respectively. Pound flounders in the dark about BoE prospects for midday as markets remain split between pause and 1/4 point rate rise, Cable sub-1.2300 from just over 1.2350 at best. Yen and Euro pare declines vs. Dollar ahead of 148.50 and 1.0600, with EUR/USD propped up by a Fib and option expiries. Norwegian Crown underpinned around 11.5000 vs. Euro after hawkish Norges Bank hike, Swedish Krona choppy on either side of 11.9000 as Riksbank reaches a peak and hedges 25% FX reserves. PBoC set USD/CNY mid-point at 7.1730 vs exp. 7.3052 (prev. 7.1732) The European Commission has sent a letter to Poland listing 11 questions to determine the scope of the visa-for-bribes scandal and the EU security impact, via Politico; the letter warns that Poland could be violating EU law Fixed Income Bonds off worst levels, but still heavy in wake of hawkish FOMC and through slew of other Central Bank pronouncements. Bunds below par between 129.69-23 parameters, Gilts sub-96.00 within 96.41-95.81 range and T-note nearer base of 108-16/25+ bounds pre-BoE, IJC, Philly Fed and ECB speakers Commodities Crude benchmarks are softer intraday given broader risk sentiment post-Fed, WTI below USD 89.00/bbl and Brent down to a test of USD 92.00/bbl respectively at worst; currently off these lows. Dutch TTF pressured as Offshore Alliance members at Woodside have overwhelmingly voted to endorse a deal with the company. Spot gold is under modest pressure as the USD remains bid with base metals similarly pressured on the broader risk tone. Saudi Crown Prince MBS responded that output reductions are purely based on supply and demand to the market when asked about criticism that oil output cuts help Russia. Australian industrial arbitrator said Chevron (CVX) and unions are on the precipice of achieving the first enterprise agreements for LNG facilities and discussions have resulted in widespread agreement on the majority of provisions of proposals. The arbitrator made recommendations on pay and working conditions for Chevron and unions to consider but noted that a failure to settle all outstanding issues would result in the agreed provisions simply evaporating, while parties are required to advise the commission of their acceptance or rejection of recommendations by 09:00 Sydney time on Friday. Offshore Alliance members at Woodside (WDS AT) have overwhelmingly voted to endorse a deal with the company while members at Chevron (CVX) will meet tonight to consider a recommendation made by the Fair Work Commission, according to a statement. Natural Gas Pipeline Co. declared a force majeure on the M&M line near compressor station 158 located in Dewey County, Oklahoma. Russia is mulling an additional tax on exports for some commodities including metals, according to sources cited by Reuters. Geopolitics Russian Foreign Ministry said NATO drills near Russian borders are increasingly provocative and aggressive in nature, as well increase risks of incidents, according to RIA. Saudi Arabia said solving the Palestinian issue is critical to a deal with Israel, according to FT. In relevant news, Saudi Crown Prince MBS said he is prepared to work with whoever is leading Israel if there is a breakthrough in negotiations for normalisation with Israel, while he had also commented that Saudis will get a nuclear weapon if Iran does first, according to AFP and Fox News. Iranian President Raisi said Iran has no problem with IAEA inspections of its nuclear sites. Qatar held separate bilateral meetings with the US and Iran this week, touching on nuclear and drone issues, according to sources cited by Reuters. Kuwait's PM said the Iraqi ruling on regulating navigation in Khor Abdullah Waterway includes historical fallacies and Iraq needs to take concrete, decisive and urgent measures to address the ruling, according to Reuters. Nagorno-Karabakh ethnic Armenians say Azerbaijani forces have violated the ceasefire; Azerbaijan denies its forces violated the ceasefire. US Event Calendar 08:30: Sept. Initial Jobless Claims, est. 225,000, prior 220,000 08:30: Sept. Continuing Claims, est. 1.69m, prior 1.69m 08:30: Sept. Philadelphia Fed Business Outl, est. -1.0, prior 12.0 08:30: 2Q Current Account Balance, est. -$220b, prior -$219.3b 10:00: Aug. Existing Home Sales MoM, est. 0.7%, prior -2.2% 10:00: Aug. Leading Index, est. -0.5%, prior -0.4% DB's Jim Reid concludes the overnight wrap As widely expected, the FOMC kept the fed funds rate on hold yesterday, but this pause was accompanied by clear hawkish undertones and both bonds and equities sold off notably in the aftermath. 10yr US yields are at 4.43% as I type this morning, +12bps above where they were prior to the meeting. The starting point for the hawkishness came from the updated dot plot in the new Summary of Economic Projections. The end-2023 median dot was unchanged at 5.6%, but the median dot for 2024 moved 50bps higher to 5.1% (our US economists had expected 2024 to move up by 25bps). So the median FOMC member is pencilling in only two rate cuts in 2024, after one more hike this year. Interestingly, the newly published projections for 2026 showed the median dot at 2.9%, still above the long-term projection of 2.5%, so pointing to a persistently "tight" policy stance. The higher 2024-25 dot plot came as the SEP moved further towards a soft landing view, lowering unemployment projections for both 2024 and 2025 by 0.4pp to 4.1%. That would be only a slight uptick from the latest 3.8% level. In the press conference Powell actually said that he “would not” have a soft landing as a baseline expectation, though later adding that soft landing is a primary objective for the FOMC. A little bit of a confusing message but overall, Powell reinforced a higher-for-longer message. Echoing the dot plot, he noted that the neutral rate may have risen and it was “certainly possible that the neutral this moment is higher than (the long-run rate)”. He also downplayed the prospects of cuts, saying that the FOMC was “never intending to send a signal” about timing of rate cuts with its dot plot and that “there’s so much uncertainty around” this. Powell’s comments did see some moderation of the near-term tightening bias. He noted several times that the Fed is now in a position to “proceed carefully”. The prepared remarks struck a softer tone on labour market tightness and Powell highlighted that the last three inflation prints were “very good” readings, though not yet enough for the Fed to be confident they have reached a “sufficiently restrictive” stance. Our US economists note that with the FOMC end-2023 projections being likely too high on inflation and too low on unemployment, these set a relatively low bar for skipping the final projected hike. Correspondingly, our economists continue to expect no further rate increases – see the reaction note here for their full take. So overall, the Fed sent a clear message that they think rates will stay high for longer, and the markets took this on board. Fed fund futures saw the chances of another hike by the end of the year move up to 54% from 45% the day before, with the peak rate now priced for January 2024 (with a 58% chance of a hike by then). Fed funds pricing for end-24 rose by +13.3bps on the day, and 20bps from its earlier intra-day lows, to a new cycle high of 4.76% (this is still more than 30bps below the Fed’s new median dot). My CoTD yesterday looked the implications of this pricing. Although it reflects the market pricing in a soft landing, the high levels probably increase the risk of a hard one. See the short note here. In the bond market, the 2yr Treasury yield had been trading a few bps lower prior to the Fed decision but spiked by nearly 10bps in its immediate aftermath and closed +8.5bps up on the day at 5.18%, the highest level since 2006. The 10yr yield was up by +4.9bps to 4.41%, a new post-2007 high and is above 4.43% as I type. Meanwhile, the 10yr real yield closed above 2% for the first time since early 2009 (+6.6bps to 2.05%). Equities also lost ground in response to the Fed’s hawkish signal. The S&P 500 was down -0.94% by the close, with the decline coming during and after Powell’s press conference. Tech stocks lagged, with the NASDAQ down -1.53% and the Magnificent Seven mega caps down -2.20%. In FX, the dollar index gained about half a percent following the Fed event, closing up +0.19% on the day after trading lower earlier on. This morning in Asia, the trend continues with the dollar index rising another +0.2% and to fresh 14-year highs. The Yen has drifted to the lowest level since last November since the FOMC with this being an interesting set up ahead of the BoJ tomorrow morning. Equity markets across Asia are also tumbling this morning with the KOSPI (-1.44%) leading losses followed by the Hang Seng (-1.21%), the Nikkei (-1.14%), the Shanghai Composite (-0.58%) and the CSI (-0.52%). S&P 500 (-0.25%) and NASDAQ 100 (-0.35%) futures are also moving lower again as the FOMC message continues to reverberate. With the Fed out of the way, attention will now turn to the Bank of England, who are announcing their latest policy decision at 12:00 London time. Up until yesterday morning, it had been widely expected that the BoE would deliver another 25bp hike. But we then got a strong downside surprise from the August CPI print, where headline inflation unexpectedly fell to +6.7% (vs. +7.0% expected). So markets are now only pricing in a 46% chance of a rate hike today, and it’s very finely balanced as we approach the decision. Our own UK economist at DB has also changed his call following the CPI data (link here), and now thinks that the BoE will skip a rate hike at this meeting. He thinks that the CPI print offers the MPC more optionality to pause, and there were also positive signs beyond the headline number. For instance, core CPI fell to +6.2% (vs. +6.8% expected), whilst the closely-watched services CPI rate fell to +6.8% as well. However, he still sees this decision as finely balanced, with the big miss in inflation and weaker growth momentum now in stark contrast to elevated wage growth. The growing chance of a pause has been evident among gilts as well, with 10yr yields experiencing a sharp decline of -13.0bps yesterday. In addition, the 2yr yield (-16.2bps) closed at a 3-month low of 4.82%. Elsewhere in Europe, markets put in a strong performance ahead of the Fed’s decision, with the STOXX 600 (+0.91%) recovering from its rough start to the week. That was echoed across the major indices, with the DAX (+0.75%), the CAC 40 (+0.67%) and the FTSE 100 (+0.93%) posting solid gains of their own. It was the same story on the bond side too, as yields on 10yr bunds (-3.6bps), OATs (-4.4bps) and BTPs (-6.6bps) moved off their highs from the previous day. All before the FOMC of course. Looking at yesterday’s other data, German PPI continued to plunge, with the latest reading for August at -12.6% (vs. -12.5% expected). That’s the fastest decline in recorded data back to 1948, although that is down from a record peak one year earlier of almost +46%. To the day ahead, and we’ll get the Bank of England’s latest policy decision, and also hear remarks from the ECB’s Schnabel and Lane. Otherwise, data releases include the US weekly initial jobless claims, existing home sales for August, the Conference Board’s leading index for August, and the Philadelphia Fed’s business outlook for September. In the Euro Area, we’ll get the preliminary consumer confidence reading for September, whilst in the UK there’s the public finances for August. Tyler Durden Thu, 09/21/2023 - 08:13.....»»

Category: blogSource: zerohedgeSep 21st, 2023

AutoZone, Inc. (NYSE:AZO) Q4 2023 Earnings Call Transcript

AutoZone, Inc. (NYSE:AZO) Q4 2023 Earnings Call Transcript September 19, 2023 AutoZone, Inc. beats earnings expectations. Reported EPS is $46.46, expectations were $45.12. Operator: Greetings, and welcome to AutoZone’s Fourth Quarter 2023 Fiscal Earnings Release Conference Call. At this time, all participants are in a listen-only mode and a question-and-answer session will follow the formal […] AutoZone, Inc. (NYSE:AZO) Q4 2023 Earnings Call Transcript September 19, 2023 AutoZone, Inc. beats earnings expectations. Reported EPS is $46.46, expectations were $45.12. Operator: Greetings, and welcome to AutoZone’s Fourth Quarter 2023 Fiscal Earnings Release Conference Call. At this time, all participants are in a listen-only mode and a question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. We will now play our Safe Harbor statements. Unidentified Company Representative: Before we begin, please note that today’s call includes forward-looking statements that are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance. Please refer to this morning’s press release and the company’s most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission for a discussion of important risks and uncertainties that could cause actual results to differ materially from expectations. Forward-looking statements speak only as of the date made, and the company undertakes no obligations to update such statements. Today’s call will also include certain non-GAAP measures. A reconciliation of non-GAAP to GAAP financial measures can be found in our press release. Operator: It is now my pleasure to turn the floor over to your host, Mr. Bill Rhodes, CEO, Chairman and President. Sir, the floor is yours. Copyright: zenstock / 123RF Stock Photo Bill Rhodes: Good morning. And thank you for joining us today for AutoZone’s 2023 fourth quarter conference call. With me today are Phil Danielle, our CEO-Elect; Jamere Jackson, Chief Financial Officer and Brian Campbell, Vice President, Treasurer, Investor Relations and Tax. Regarding the fourth quarter, hope you’ve had an opportunity to read our press release and learn about the quarter’s results. If not, the press release, along with slides complementing our comments today are available on our website,, under the investor relations link. Please click on quarterly earnings conference calls to see them. As we begin, we want to thank our AutoZoners for their incredible contributions during fiscal 2023 that resulted in our solid performance. As our pledge states they continued putting our customers first, which resulted in total sales growth of 7.4% for the fiscal year, while earnings per share increased 12.9%. It’s important to remember that these results build on the phenomenal three year performance from the pandemic years of 2020 to 2022. Candidly, Phil, Jamere, Tom Newbern, and I felt at some point we would see our sales per store migrate closer to pre-pandemic levels. That hasn’t happened. And at this stage, we do not expect it will. To put it in perspective, our domestic average weekly sales per store are 33% higher than in 2019, growing from $35,600 a week to $47,300 a week. This level of growth and sales also drove enormous growth in operating profit, where this year’s $3.474 billion was 61% above 2019, when adjusted for the 2,019, 53 week. That is remarkable growth, especially for a 44-year old enterprise. We could not have achieved this success without exceptional efforts across the entire organization. We have several updates for you this morning. First, I’m sure you’ve noticed the new table in our press release. We are now presenting our same store sales results for domestic, international and total company. We’re also reporting our international same store sales, which includes both Mexico and Brazil, on both an actual and constant currency basis. Why the change? The answer is International is becoming a larger and larger part of our business, and we are investing a sizable amount of our growth capital in those countries. As we evaluate important growth metrics, we think it is important to assess it in total. As we know this is a change we are committed to providing you with each component individually for at least five quarters, as our objective is to enhance your visibility. Next, our domestic same store sales were 1.7% this quarter compared to 1.9% last quarter, and about half of our fiscal 2023 growth of 3.1%. Our performance in retail was respectable and generally in line with our expectations. But as was well documented last quarter, our commercial sales performance in the second half of our fiscal year declined meaningfully and to us unacceptably. We ended with 3.9% growth in domestic commercial sales. Our performance in both retail and commercial in the first half of the quarter was disappointing, but during this period we experienced very mild weather. As we reached the second half of the quarter, and temperatures escalated materially, so did our sales. Specifically for the first eight weeks of the quarter our retail comps were flat, but increased 3.4% in the second half. Commercial experienced a similar trajectory, ending particularly strong in the last four weeks of the quarter, up over 7%. Regarding regional results, we saw a material performance gap between the Northeast and Midwestern markets versus the rest of the country. The total comp difference was well over 300 basis points and over 450 basis points for commercial. We attribute this to the lack of winter weather and snowfall in the latter part of last winter in that region. This has led to lower growth trends in undercar categories. Both those are things that “happened to us, not what we did to enhance and improve our performance.” Last quarter, we highlighted that we were not executing at our peak levels. We have made many changes since then, and are pleased with the improvements in execution we are seeing. We aren’t there yet. But we’re on a really good path. We also recently completed another strategic review of our commercial business. We have validated our direction and have some exciting new enhancements that we will be testing over the next few quarters. We also made significant improvements in the information technology that we use to operate our commercial business, and we opened many more commercial programs, reaching 90% domestic penetration for the first time in our history. Even more encouraging is how strong those new openings are starting and how many — many weeks — or they’re just a few weeks old. Ultimately we will operate in a favorable and unfavorable macro and weather environment. We want to share our perspectives with you so you can understand our performance. But ultimately, it is our actions that will determine our long term success. And we’re encouraged by the actions we’re taking. Finally, our strategy supporting our store operations and commercial teams includes several other key elements. Global new store growth, where we disappointingly didn’t achieve our goals in FY23, more on that later; continued growth with our hubs and in particular, mega hubs, where we are nearing the halfway point of our ultimate goal of having 200 mega hubs and 300 hubs. It’s important to reinforce the continued, very strong performance of these stores, especially the mega hubs, and particularly in commercial; reconfiguring our global supply chain to efficiently process the enhanced sales we have achieved and expect to achieve over the next decade, while optimizing our processes for handling more direct import products from many countries, and more challenging slow turning parts assortments that are critical to our success; and finally continuing to lean in hard on technology improvements to make our AutoZoners more knowledgeable, efficient and effective. I’ve given you the high level sound bites on the quarter’s results. Now I’d like to introduce Phil Daniele to give more in-depth color on the quarter. Phil? Philip Daniele: Thanks, Bill. And good morning, everyone. I’m honored to be participating in my first earnings release conference call. I will start by reviewing our Q4 overall same store sales, DIY versus DIFM trends, our sales cadence over the 16 weeks of the quarter, and merchandise categories that drove our performance as well as any regional disparities. We will also share how inflation is affecting our costs and retails and how we think inflation will impact our business in FY24. Our domestic same store sales were 1.7% this quarter, on top of last year’s exceptionally strong 6.2% growth. I do want to reiterate what Bill said a moment ago, our execution improved materially over the quarter. And that execution, which is a hallmark of our success will ultimately deliver better results as we move forward. Our domestic commercial business grew 3.9%. Despite lower than anticipated, we believe we grew share and set another fourth quarter record with $1.5 billion in sales. For the full year, we generated nearly $4.6 billion up 8.7% from last year. Domestic commercial sales represented 30% of our domestic auto parts sales, which is identical to last year. Our commercial sales growth continues to be driven by the key initiatives we have been working on for the last several years, improved satellite store availability, material improvements and hub and mega hub coverage, in addition to aggressive growth in the number of those types of stores. We continue to strengthen the Duralast brand with an intense focus on high quality products. And we continue to deliver technological enhancements to make us easier to do business with. We are also operating more efficiently with improvements in delivery time and enhanced sales force effectiveness. In Q4, we opened 156 net new commercial programs, opening the majority of them late in the quarter, which had minimal impact on sales, but positions us well for FY24 and beyond. With these moves, we now have commercial in over 90% of our domestic stores. We continue to see tremendous opportunity for commercial sales growth in FY24 and beyond. We’re also very proud of our performance in domestic DIY. We had a positive 1.4% comp this quarter on top of last year’s comp of 1.1%. Additionally for the year, we delivered 1.8% DIY on top of a 2.9% DIY comp last fiscal year, and 11.2% comp in FY21. These results are very solid considering the outsized growth we saw during the pandemic. The fact that we continue to retain the vast majority of the share we built during the pandemic, and our recent performance gives us continued conviction about the sustainability into FY24. Now let’s focus on the sales cadence. Over the quarter, which spanned 16 weeks, early May through the end of August, as Bill mentioned, our same store sales were flat over the first weeks, but increased to 3.4% over the last eight weeks. We were encouraged by the trends we saw as the quarter ended. Regarding weather, in May and June we experienced cooler and wetter weather trends across the country which negatively impacted our sales trends. By July however, it became very hot across much of the country, and it remained very hot through August. The heat and the associated rebound in sales helped us partially overcome a relatively mild winter, particularly in the Midwest and the Northeast, where weather sensitive hard part categories underperformed our expectation. We anticipate that the summer heat will give us some positive momentum as we head into fall. As a reminder, historically extreme weather, either hot or cold drives parts failures and accelerated maintenance. Regarding the quarter’s traffic versus ticket growth, in retail, our traffic was down 0.8% while our ticket was up 2%. Our transaction count improved as the quarter went along, and in fact, turned positive over the last eight weeks of the quarter. However, the average ticket being up only 2% was the weakest quarterly increase we’ve seen since FY 2000, as we lapped significantly higher inflation a year ago, where the ticket was up 8%. Regarding commercial trends, we continue to see traffic and ticket growth, but our commercial ticket growth, just like retail, has shown a marked deceleration compared to recent history as hyperinflation begins to abate. For perspective, our ticket growth was 11% in Q4 last year, versus roughly 2% this year. As expected, some of our commercial customers are experiencing trade down and lower car count as the consumer comes under economic pressure. In order to continue to grow our comps in ’24 we will have to continue to increase share of wallet with our customers. The share data we see continues to encourage us that we are gaining share in the industry despite the macro trends, but recently, not in line with our aspirations, which we intend to change. During the quarter there were some geographic regions that did perform differently than others as there always are. This quarter we saw a material 315 basis point difference between the Northeast and the Midwest compared to the balance of the country, with the Northeast and the Midwest performing lower. As the Northeast in the Midwest experienced a very mild, mild winter, with below average snowfall, we’ve seen less weather sensitive hard parts in this part of the country. Headed into the first quarter of the new fiscal year, we are not anticipating that weather will have a significant impact on sales. Regarding our merchandise categories in the retail business, our sales floor categories outperformed our hard part categories. And our hard part business was essentially flat for the quarter. As I said previously, weather sensitive hard parts were clearly impacted by the milder winter weather, particularly in the Midwest and the Northeast. Let me also address inflation in pricing. This quarter, we saw low single-digit inflation and as a result, our ticket average was up roughly 2%. We believe inflation for the first quarter will be similar to the fourth quarter as the industry is migrating back to pre-pandemic inflation levels and lapping high inflation from a year ago. I want to reiterate that our industry has been very disciplined about pricing for decades, and we expect that to continue. Historically, as costs have increased the industry has increased pricing commensurately to maintain margins. It is also notable that following periods of higher inflation, our industry historically has not reduced pricing to reflect lower cost and we believe we have entered one of those periods. For the first quarter of 2024 we expect our DIY sales to be resilient and our commercial trends to improve. We will, as always, be transparent about what we are seeing and provide color on our markets and outlook as trends emerge. Before handing the call to Jamere, I’d like to highlight and give some color on a few of our key business priorities for the new fiscal year. First, we continue to focus on our supply chain with two initiatives that are in flight to drive improved availability. One is our expanded hub and mega hub rollouts. And secondly, we are making good progress on transforming our supply chain. Our strategy is focused on leveraging the entire network to carry more inventory closer to the customer to drive sales growth with speed to customer and expanded availability. Additionally, we plan on continuing to grow our Mexican and Brazilian businesses. With 804 stores open internationally or 12% of our store base these businesses had impressive performance last fiscal year and should continue to grow in 2024. We are leveraging many of the learnings we have in the U.S. to refine our offerings in Mexico and Brazil. Now I’d like to turn the call over to Jamere Jackson. Jamere Jackson: Thanks, Phil. And good morning everyone. As both Bill and Phil had previously discussed we had a solid fourth quarter, stacked on top of an impressive fourth quarter last year. 6.4% total company sales growth, 1.7% domestic comp, a 14.9% international comp on a constant currency basis, a 10.8% increase in EBIT, and a 14.7% increase in EPS. In addition, our results for the entire fiscal year were very strong as total sales grew 7.4% and EPS grew 12.9%. We continue to deliver great results and the efforts of our AutoZoners in our stores and distribution centers have continued to enable us to grow our business and our earnings in a meaningful way. To start this morning, let me take a few minutes to elaborate on the specifics in our P&L for Q4. For the quarter total sales were just under $5.7 billion, up 6.4%. For the year our total sales were $17.5 billion, up 7.4% versus last fiscal year. I continue to marvel at the strength of our business since FY19. Our sales are up an amazing 47% or nearly $5.6 billion since 2019. Let me give a little more color on sales and our growth initiatives starting with our domestic commercial business. For the fourth quarter our domestic DIFM sales increased 3.9% to $1.5 billion and up 25.9% on a two year stack basis. Sales to our domestic DIFM customers represented 26% of our total company sales and 30% of our domestic auto parts sales. Our average weekly sales per program were approximately $16,700, down 1.8%. Now it’s important to point out that our sales per program productivity was impacted materially by the late in quarter openings of approximately 120 new programs. While these openings depressed the point in time productivity metric, we’re encouraged by the growth prospects of these programs and their early contribution to our commercial business. These openings are part of our efforts to open more stores with commercial in response to the tremendous opportunity to grow our market share. Our commercial acceleration initiatives are delivering the expected results, as we grow share by winning new business, and increasing our share of wallet with existing customers. We now have our commercial program and approximately 90% of our domestic stores, which leverages our DIY infrastructure. And we’re building our business with national, regional and local accounts. This quarter we opened 156 net new programs, finishing with 5,682 total programs. As I’ve said since the outset of the year, commercial growth led the way in FY23, and we feel good about our prospects heading into the New Year. For FY23, our commercial sales were $4.6 billion, up 8.7% versus last year, and up 37% from two years ago. Importantly, we have a lot of runway in front of us, and we expect to deliver on our goal of becoming a faster growing business. To support our commercial growth we now have 98 mega hub locations with 13 new stores opened in Q4. While I mentioned a moment ago, the commercial weekly sales per program average was $16,700 per program, the 98 mega hubs averaged significantly higher sales and are growing much faster than the balance of the commercial footprint. In fact, our commercial mega hub business grew twice as fast as our overall commercial business in Q4. As a reminder, our mega hubs typically carry over 100,000 SKUs and drive tremendous sales lift inside the store box as well as serve as an expanded assortment source for other stores. The expansion of coverage and parts availability continues to deliver a meaningful sales lift to both our commercial and DIY business. These assets are performing well individually, and the fulfillment capability for the surrounding AutoZone stores is giving our customers access to thousands of additional parts and lifting the entire network. We have an objective to reach 200 mega hubs supplemented by 300 regular hubs in the near term. Our AutoZoners and our customers are excited and we’re determined to build on our strong momentum. On the domestic retail side of our business, our DIY comp was up 1.4% for the quarter. For FY23 our DIY crop grew 1.8% and 4.7% on a two year stack basis. The business continues to be remarkably resilient as we’ve managed to deliver positive comp growth through the cycle. As Bill mentioned, we saw traffic down slightly and 2% ticket growth. As we move forward, we would expect to see slightly declining traffic counts offset by low to mid-single digit ticket growth, in line with the long term historical trends for the business driven by changes in technology and the durability of new parts. Importantly, our DIY business has continued to strengthen competitively behind our growth initiatives. In addition, the market is experiencing a growing and ageing car part and a challenging new and used car sales market for our customers which continues to provide a tailwind for our business. These dynamics, ticket growth, growth initiatives and macro car part tailwind have driven a positive comp. We’re forecasting a consistent and resilient DIY business environment for FY24. Now I’ll say a few words regarding our international business. As you may have noticed, we changed our disclosure on our international business, and we will continue to do so going forward. With 12% of our total store base outside of the U.S., the current revenue contribution and the growth prospects moving forward, we simply have to share more about international. We continue to be pleased with the progress we’re making in Mexico and Brazil. During the quarter, we opened 27 new stores in Mexico to finish with 740 stores, and 17 new stores in Brazil ending with 100. Our same store sales grew 34.1% on a reported basis and 14.9% on a constant currency basis. We remain committed to Mexico and Brazil, and given our success in these markets, we will accelerate the store opening pace going forward. By 2028, after a robust strategic review of the market and ultimate store comp potential, we revised our strategy and anticipate opening as many as 200 stores annually in these markets in a disciplined fashion, making this an attractive and meaningful contributor to AutoZone’s future growth. Now let me spend a few minutes on the rest of the P&L and gross margin. For the quarter our gross margin was 52.7%, up 118 basis points, driven primarily by a non-cash $30 million LIFO. credit this quarter. For Q4 last year, we had a $15 million LIFO charge. Excluding LIFO from both years, we had a 37 basis point improvement in gross margin. I will point out that we now have $59 million in LIFO charges yet to be reversed through our P&L and we expect these to largely reverse over FY24. We’re currently modeling $15 million in LIFO credits in Q1 as inflation continues to abate, and we turn our inventory. And as I’ve said previously, once we credit back the $59 million through the P&L, we will not take any more credits and we will begin to rebuild our unrecorded LIFO reserve. Moving to operating expenses, our expenses were up 7.6% versus last year’s Q4 as SG&A as a percentage of sales deleveraged 34 basis points. The accelerated growth in SG&A has been purposeful as we continue to invest in an accelerated pace in IT and payroll to underpin our growth initiatives. These investments will pay dividends in customer experience, speed and productivity. We are committed to being disciplined on SG&A growth as we move forward, and we will manage expenses in line with sales growth over time. Moving to the rest of the P&L, EBIT for the quarter was $1.2 billion, up 10.8% versus the prior year, driven by our positive same store sales growth and gross margin improvements including the LIFO year-over-year benefit. EBIT for FY23 was just under $3.5 billion up 6.2% versus the prior year, also driven by strong top line growth. Interest expense for the quarter was $108.7 million, up 70% from Q4 a year ago as our debt outstanding at the end of the quarter was $7.7 billion versus $6.1 billion at Q4 and last year. We’re planning interest in the $88 million range for the first quarter of FY24 versus $57.7 million in this past year’s first quarter. Higher debt levels and borrowing rates across the curve are driving this increase. For the quarter, our tax rate was 22.4% and up from last year’s fourth quarter of 22.1%. This quarter’s rate benefited 22 basis points from stock options exercised while last year had benefited 70 basis points. For the first quarter of FY24 we suggest investors model us at approximately 23.4% before any assumption on credits due to stock option exercises. Moving to net income and EPS, net income for the quarter was $865 million, up 6.8% versus last year. Our diluted share count of 18.6 million was 6.9% lower than last year’s fourth quarter. The combination of higher net income and lower share count drove earnings per share for the quarter to $46.46, up 14.7% for the quarter. For FY23 net income was $2.5 million, up 4.1% and earnings per share was $132.36, up 12.9%. Now let me talk about our free cash flow for Q4. For the fourth quarter we generated $1.1 billion of operating cash and $701 million in free cash flow. For the year we generated $2.1 billion in free cash. We expect to continue being an incredibly strong cash flow generator going forward, and we remain committed to returning meaningful amounts of cash to our shareholders. Regarding our balance sheet, our liquidity position remains very strong. And our leverage ratios remain below our historic norms. Our inventory per store was down 0.6% versus Q4 last year while total inventory increased 2.2% over the same period last year driven by new store growth. Net inventory, defined as merchandise inventory less accounts payable on a per store basis was a negative $201,000 versus negative $240,000 last year, and negative $215,000 last quarter. As a result, accounts payable, as a percent of gross inventory finished the quarter at 124.9% versus last year’s Q4 of 129.5%. Lastly, I’ll spend a moment on capital allocation and our share repurchase program. We repurchased $1 billion of AutoZone stock in the quarter, and at quarter end we had just over $1.8 billion remaining under our share buyback authorization. The strong earnings, balance sheet and powerful free cash we generated this year has allowed us to buy back 8% of the shares outstanding since the beginning of the fiscal year. We have bought back over 100% of the then outstanding shares of stock since our buyback inception in 1998, while investing in our existing assets and growing our business. We remain committed to this disciplined capital allocation approach that will enable us to invest in the business and return meaningful amounts to cash to shareholders. We finished Q4 2.3 times EBITDAR, which is below our historical objective of 2.5 times EBITDAR. However, we remain committed to our leverage objectives, and we expect to return to the 2.5 times target in FY24. To wrap up, we remain committed to driving long term shareholder value by investing in our growth initiatives, driving robust earnings and cash and returning excess cash to our shareholders. Our strategy continues to work. We’re growing our market share and improving our competitive position in a disciplined way. As we look forward to FY24, we’re bullish on our growth prospects behind a resilient DIY business, a fast growing international business and a domestic commercial business that is continuing to grow share. I continue to have tremendous confidence in our ability to drive significant and ongoing value for our shareholders driven by a high degree of confidence in our strategy, and our exceptional team of AutoZoners. One last housekeeping point, I’d like to remind you that in FY24, we will have a 53rd week in our financial results. This extra week will be added to our Q4 results. As a result, our fiscal year will now end August 31, 2024. In order to model that extra week, I encourage you to look at our financial breakouts of both our fiscal 2019 and 2,013 fourth quarters, which were the last two years we had the extra week and we show breakouts of the full P&L accordingly. And now I’ll turn it back to Bill. Bill Rhodes: Thank you, Jamere. As we start a new fiscal year, I’d like to take a moment to discuss our operating theme for the New Year, live the pledge. I know this sounds like a very consistent theme for AutoZone. In fact, it was the theme we used in my first full year as CEO in 2006. I’m asked frequently, what differentiates AutoZone from others. My answer goes back to the same point over and over, the culture. I, our Board and our leadership team believe we can never emphasize the culture enough. The culture is defined by helping solve our customers’ challenges and optimizing the performance of their vehicles. It’s based on a team-based approach recognizing everyone’s contributions and performance and putting team goals ahead of personal goals. It sets the standard at exceptional performance, not mediocrity. It’s about the AutoZone family. Calling yourself a family comes with great responsibility. And it is so much more. The pledge and our values summarize our operating strategies succinctly. As we’ve accelerated our top line since the onset of the pandemic, our competitive positioning has also materially improved. Our efforts for 2024 will be focused on execution. We have a lot of projects in flight, and we did get them completed. Supply chain improvements will remain a key focus in FY24. We will continue with our additions of mega hub and hub stores, new distribution centers and international store growth. As you noticed our international teams posted same store sales comps on a constant currency basis of 14.9%, much higher than our domestic comp. International has been strong for a few years now. This morning, I’m excited to share after an extensive strategic review of the ultimate number of locations we can have in the U.S., Mexico and Brazil. We are announcing our plans for a much more aggressive global store development plan. Over the last five years we’ve averaged 140 domestic store openings and 50 international openings for a total of roughly 190 new stores a year in the Americas. We plan on accelerating this pace and aspire to open as many as 500 stores five years from now. So by FY28 we are modeling 500 store openings with the split being 300 in the U.S., 200 internationally. FY24 we will remain around 200, but we will ramp from there. You may be asking why this change of strategy and why now? The answer is our profitability per store is materially higher since the beginning of the pandemic. We continue to find new trade areas even in our more mature U.S. markets. Our growth in commercial has materially changed the economics on a per-store basis. We believe this is just the beginning on commercial, and our ROIC, one of the most important metrics we track is over 50%. Also our international markets are immature. So we continue to see expansion opportunities in Mexico and Brazil, along with putting a toehold at some point in other new markets. I want to stress that we will be diligent and disciplined. We have a long track record of performance with high returns and strong cash flow generation. We have no plans on changing that strategy and approach, where we believe in evolution over revolution. We believe in continuous improvement and we believe in test and learn. We have been, and remain anchored on our capital allocation strategy. While I spent time talking about our store development strategies for the future, that is not the key focus for us in FY24. The number one focus will be on growing share in our domestic commercial business. We believe we have a solid plan in place for growth over the next 12 months. We know our focus on parts availability and better customer service will lead to sales growth. We’re excited as we start 2020. This time of year, I always enjoy reflecting on the past. Our team achieved some impressive milestones this year, $17.5 billion in sales, racing past the $17 billion milestone. DIY comps are 1.8%, most impressively 15.9% on a three year basis. Commercial sales are now $4.6 billion. I personally distinctly remember a goal of $1 billion not that long ago. Average weekly sales domestically of $47,600, equating to just under $2.5 million per store annually. Our Mexico and all data [ph] teams both broke multiple records, and Brazil is poised for significant growth in store count, and getting to profitability breakeven on the path to substantial profitability in the future. We bought back 3.7 billion in AutoZone stock, the second highest ever, only behind last year’s 4.4 billion. And our team has grown our EBIT by 61% in four years. That’s remarkable. But we can’t rest on our laurels. And we aren’t without our challenges. That’s for sure. As I’ve said on several occasions, we have to exit pandemic mode. We had to get back to taking care of the customer. And this requires as close to flawless execution as possible. We have to make sure every store is staffed right, every hour of every day, our processes need to function correctly, always. We have to meet our store opening goals and timelines. Simply put, we have to remain the execution machine that we have always been. On June 26, we announced our leadership transition plan. And yesterday we announced the next evolution of AutoZone’s senior most leadership team. I’ve had the honor and privilege of being part of this team for nearly 29 years now. And it has been one of the most rewarding experiences of my life. We, as part of that leadership transition plan, announced that I would step away from the President and CEO roles, but remain Executive Chairman in January. As a Board we’ve been contemplating this transition for many, many years, and began a very robust well-defined disciplined process nearly three years ago. Our goal was to identify a successor and ensure that successor had a fabulous team with them. I think we’ve accomplished that goal. The company will be in fantastic hands with Phil Danielle leading it. He loves this business, is a car fanatic, and has been here for 30 years, and in the industry for nearly 40 years. With Jamere Jackson leading the finance and store development teams and Tom Newbern now serving as our Chief Operating Officer, in addition to the balance of our talented executive team, our company is in terrific hands. While it will be bittersweet for me, I’m excited that Phil and the Board have asked me to continue to be very involved for the foreseeable future. Ultimately, I know Phil, Jamere, Tom and I all know, this is a team sport and ultimately it’s not about the senior most leaders in this organization. It’s about in our case, the pledge, our values, and most importantly, our culture, which at its core is all about having the best most passionate AutoZoners taking care of customers, and the organization prioritizing AutoZoners and their development, or we say — as we say, caring about others. Yesterday, we announced another organization changes with the promotion, Bill Hackney to Executive Vice President, Merchandising, Marketing and Supply Chain. I congratulate Bill, a 38 year AutoZoner who knows this business exceptionally well and has always been a top performer. We also announced that three terrific long term leaders will be retiring around the end of the calendar year. I thank and congratulate Grant McGee, Charlie Pleas and Al Saltiel, for their partnership, leadership and friendship for all these years. They leave AutoZone a massively better organization than they found it many years ago. So changes in the air, frankly, it always is. It’s amazing to me to see how much our leadership has changed over my near 30 year tenure at AutoZone. To me, that’s why the culture. It’s why the culture is so important in this organization. With a phenomenal culture, it’s not about individuals. It’s about the team. It’s about the goals, and it’s about performance. As we begin this transition, Phil and I both shared that not only do we both feel we embody the culture, both of us believe we are products of this culture. We’ve learned extraordinary lessons from our three decades at AutoZone. Most importantly, always put the customer first, execution wins. People want to play on winning teams and be recognized for their performance. Details matter. Listen to those closest to the customer, and so much more. Phil and I, both continue to say, and it may sound like a cliché, but we believe it. AutoZone’s best days lie ahead of us. Now we’d like to open up the call for questions. Operator: Thank you. At this time, we will be conducting a question-and-answer session [Operator Instructions]. Thank you. Our first question is coming from Bret Jordan with Jefferies. Your line is live. See also 15 Most Globalized Cities in the World and 20 Countries that Use Crypto and Bitcoin the Most. Q&A Session Follow Autozone Inc (NYSE:AZO) Follow Autozone Inc (NYSE:AZO) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Bret Jordan: Hey, good morning, guys. Bill Rhodes: Good morning, Bret. Philip Daniele: Hey, Bret. Bret Jordan: You called out market share gain in the commercial space in the fourth quarter. Then you said, not in line with your aspirations. But then also said that pricing is rational. What do you think is happening in the space? Are there peers that are showing relatively better in-stocks? Or really was it just your regional footprint and exposure to some of those softer markets that made the difference? Bill Rhodes: It’s a terrific question, Bret. And there’s a lot of different elements as you would expect. Again, we are not satisfied with our commercial growth at this level. And we’re going to change that, and we’re encouraged about the direction that we’re heading. I think part of it Bret is a comparison versus last year. You mentioned in-stocks. Last year, 18 months ago, we got very aggressive with some key categories and a lot of merchandise, when frankly a lot of our less sophisticated competitors were not in great in-stock positions. As we’re beginning to lap that significant outsized growth last year, that’s certainly a challenge for us. And we’re beginning to get past that point in time. We also mentioned that we’ve had some challenges in the Midwest and Northeast, particularly with under cart categories, and particularly in commercial where we just didn’t have that winner that we so desperately want and need. And we’ve suffered in those under cart categories. Bret Jordan: Okay, great. And a big picture question, I guess on the international. When you look at the, obviously different vehicle demographic and economy, but how do you see the underlying growth rates in the DIY and the DIFM segments in Brazil and Mexico, sort of on a longer term basis? Bill Rhodes: That’s a great question. We’ve been in Mexico for nearly 25 years now. There’s just not great data there, Bret. And so you don’t have the terrific kind of information that we get from the Auto Care Association. So we don’t have great data down there. We’re working to try to see if we can get some better data. But what we know is we’ve been in Mexico now, as I said, almost 25 years and we continue to grow significantly and think that we have a lot of growth left in front of us, not just in new stores but on same store sales. There are still categories where we are massively under penetrated, there are still categories we don’t participate in at all. And as we learn more about that business, we’re continuing to grow. Same things happened in Brazil. We’re just much earlier in Brazil. Bret Jordan: But fair to think an older car base that drives a better underlying growth than U.S. Bill Rhodes: I think in Mexico, clearly the car basis is older, and there’s a lot of U.S. cars, there’s also a lot of Mexico manufactured vehicles. Brazil is very different in that the size of the vehicles and in particularly, the engine sizes in Brazil are massively smaller. I mean, if you have a two liter engine in Brazil, that’s a big car. Many of them are 1.4 liters and the like. So we still got a lot to learn in Brazil. But we’re excited about where we are. We believe we see a path to great success, but we’re still losing money there. We got to fix that over the next couple of years. Bret Jordan: Great. Thank you. Bill Rhodes: Thank you. Operator: Thank you. Our next question is coming from Simeon Gutman with Morgan Stanley. Your line is live. Simeon Gutman : Good morning, everyone, and congratulations to the retirees and promotees. My first question is, I may have missed, is double digits still the goal for commercial? And if so what’s the — how should we think about the timeframe to getting there? Bill Rhodes: Absolutely is still the goal. Keep in mind, we still have pretty low share in that, 4.5% range or so. So we’re under share. And we think there’s still tremendous opportunity for us to gain share. Like we said, we’re not happy with our performance in the Q4 timeframe. We do feel like we’re exiting the quarter at a higher rate, and we believe will continue to improve from this point forward. But we’re not back to where we want to be. But we do see line of sight to getting back to that double digit growth over time. Simeon Gutman : And then maybe the follow up, the way you’ve built the business in commercial, it’s been methodical, and you’ve had some periods of faster growth. But it’s been cumulative. And my question is now that you’re focused on it, again, how do we get comfortable with timing that, prescriptively, your business really accelerates, call it in the next few quarters versus why not take the year to get some of the traction from the things that you’re working on? Bill Rhodes: Well, like I said, we talked, in Q3 or Q4 that our execution in the commercial arena wasn’t where we expected it to be. And we’ve been working on that. We saw that performance and the execution levels improve as we worked through Q4. We’re not finished yet. We’ll frankly, never be finished. Execution is a long term strategy. But we continue to get better. And we think we continue to improve our business model. Like we said, we’ve opened up more hubs, more mega hubs. We continue to strengthen our store side assortments. And we’re also continuing to leverage the technology enhancements that we’ve made over the last couple of years. And those will continue to mature. And we’re not standing still. That technology enhancements will continue as we move through this next year. Simeon Gutman : Thank you. Good luck. Operator: Thank you. Our next question is coming from Seth Sigman with Barclays. Your line is live......»»

Category: topSource: insidermonkeySep 21st, 2023

: Psychedelic stock jumps as Steve Cohen’s Point72 snaps up shares

Shares of Cybin Inc., CYBN a developer of psychedelic therapies, finished 38.5% higher on Monday after billionaire investor and New York Mets owner Steve Cohen’s hedge fund Point72 disclosed that it had bought nearly 19 million shares of the company for an 8.1% stake. The filing was disclosed Friday and first noted on social media. It comes roughly three months after the foundation that Cohen runs with his wife, Alexandra, awarded a $5 million grant to the Multidisciplinary Association for Psychedelic Studies, or MAPS. The foundation has donated more than $31 million to psychedelic projects, according to its website. Cybin is researching the effects of psychedelics on things like anxiety and depression. Neither Cybin nor Point72 immediately responded to a request for comment. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit for more information on this news......»»

Category: topSource: marketwatchSep 18th, 2023

IRS Hiring Another 3,700 Tax Enforcers, Watchdog Warns Those Earning Under $400,000 Could Be Targeted

IRS Hiring Another 3,700 Tax Enforcers, Watchdog Warns Those Earning Under $400,000 Could Be Targeted Authored by Tom Ozimek via The Epoch Times (emphasis ours), IRS hiring 3,700+ tax enforcers to audit higher earners but a watchdog worries about audits for those under $400,000 due to unclear "high-income" definition. The Internal Revenue Service (IRS) is looking to hire over 3,700 additional tax enforcers as it ramps up its audit crackdown of higher-earning taxpayers, though a watchdog warns that Americans making less than $400,000 could get caught in the dragnet because the agency doesn't have a clear definition of "high-income." The IRS said on Sept. 15 that it had opened over 3,700 positions nationwide to assist  with "expanded enforcement work" that focuses on complex partnerships, large corporations, and high-income earners. The compliance positions will be open in more than 250 locations across the United States and are part of a "sweeping, historic" tax enforcement crackdown that leverages cutting-edge technology, including artificial intelligence, to catch tax evaders more effectively. The hiring will be for higher-graded revenue agents, with the IRS calling on people in the financial services industry—such as tax accountants, forensic accountants, auditors, and controllers—to apply. The IRS is flush with cash from a recent congressionally-mandated infusion of $60 billion in new funding, with some of the money already having bolstered the tax agency's ranks substantially. Recent reports indicate that hiring is up around 13 percent over the past year, allowing the IRS to hit a decade-high of nearly 90,000 staffers. But while the recent batch of new hires was focused on taxpayer service positions, the newly announced hiring thrust is looking to give the IRS more enforcement muscle. "This next wave of hiring will help the IRS add key talent like tax accountants to help reverse a decade-long decline of audits for the wealthy as well as complex partnerships and corporations," IRS Commissioner Danny Werfel said in a statement. "These new employees will be focused on higher-income and complex tax areas like partnerships, not average taxpayers making less than $400,000," Mr. Werfel added. But Mr. Werfel's pledge not to target Americans earning under $400,000 rings hollow, given a recent watchdog report that called into question the ability of the IRS to make good on this pledge because it either lacks a clear definition of "high-income" or uses outdated tax examination activity codes that put the threshold for high earners at $200,000. No Clear Definition of 'High-Income' The Treasury Inspector General for Tax Administration (TIGTA), which is the watchdog overseeing the IRS, recently carried out a review to assess the IRS's strategy to train employees hired to audit high earners and big businesses that underreport income. The watchdog report includes scathing criticism of the IRS for lacking a clear definition of "high-income" earners—despite the very same watchdog asking the IRS to look into developing a better definition years ago. "The IRS does not have a unified or updated definition for individual high-income taxpayers," the watchdog said in the report, which notes that the IRS uses different definitions of "high-income" depending on context as various IRS programs address different compliance issues across different parts of the filing population. TIGTA faulted the IRS for still not having a clear definition of “high-income” for tax compliance even though the watchdog recommended in 2015 that the IRS reevaluate the appropriate income thresholds for its high-income and high-wealth strategy. "The high-income terminology is being used loosely inside the IRS with no common understanding of what the term means,” the watchdog said. The watchdog said that in response to its recommendation to the IRS nearly a decade ago to reevaluate its income thresholds, the IRS "made no changes," citing "internal data analysis results and resource constraints." Also, the IRS continues to rely on old tax examination activity codes adopted half a century ago with the Tax Reform Act of 1976, which used a $200,000 threshold to measure high-income returns. "This amount is equivalent to more than $1 million in 2023, but the IRS still uses $200,000 as the default high-income threshold," the watchdog said, adding that the $200,000 threshold is "no longer a reasonable standard for high earners given inflation since 2005." Generally, the IRS uses the examination activity codes to plan the number of tax-related examinations, although since 2019, its Large Business and International (LB&I) division has been using a modified planning method based on resource allocation. More Details One of the watchdog's recommendations was for the IRS to establish a definition for high-income taxpayers for examination compliance purposes and that, “at a minimum, the IRS should accept the Treasury secretary’s $400,000 directive as the new high-income floor on which IRS leadership can focus enforcement efforts.” The IRS disagreed with the watchdog's recommendation. It asserted in a statement included in the report that a "static and overly proscriptive" definition of high-income taxpayers for audit purposes "would serve to deprive the IRS of the agility to address emerging issues and trends." The watchdog commented on the IRS' pushback, saying that the definition need not be "static" and income thresholds should be adjusted based on economic and complexity factors—otherwise there's a risk that the agency will break its pledge not to audit more Americans earnings less than $400,000. "When the high-income thresholds are set too low, the result can be higher numbers of inefficient examinations," the watchdog said. "When the definition is too low, the base of taxpayers earning those incomes is wider so that the IRS does many more audits in that category in order to achieve desired audit coverage." The watchdog said that, under the circumstances of a lack of a clear definition of "high-income," the IRS would not only be conducting more audits on lower-earning Americans (contrary to its pledge not to), but it would also be less effective at its stated goal of closing the tax gap. The watchdog also said that the IRS's lack of action in response to the TIGTA recommendation in 2015 to reevaluate its income thresholds means that the IRS is in a difficult position if it hopes to meet its pledge not to raise audit rates above historical norms for Americans earning less than $400,000. "Because $400,000 will be an important threshold, the IRS needs to update the examination activities codes for individual tax returns," the watchdog recommended. Currently, "there is no way to identify the complete population of taxpayers that meet the criterion of $400,000 or more specified by the current Treasury Secretary," the watchdog added. The IRS partially agreed with the watchdog's recommendation to refine its examination activity. "The IRS agreed to identify the best method to identify and track high-income examinations as part of the work being undertaken to implement the Treasury Secretary's directive to not increase audit rates for households making less than $400,000 and small businesses," the IRS said in a statement included in the report. But the watchdog responded by saying this isn't good enough. "The IRS's partial agreement and planned corrective action will not satisfy the intent of our recommendation, and additional actions are needed," TIGTA said in a comment. "The IRS should establish examination activity codes for additional TPI increments, which will help the IRS identify noncompliance at different income levels," the watchdog added. TPI stands for "taxpayer profile increment." Asked for comment on the watchdog's rejection of the IRS's response to its recommendation, the IRS simply pointed to its original response included in the report. Tyler Durden Sat, 09/16/2023 - 16:20.....»»

Category: smallbizSource: nytSep 16th, 2023

23 Best Hedge Funds of All Time

In this article, we will be taking a look at the 23 best hedge funds of all time. To see more of these hedge funds, you can go directly to see the 5 Best Hedge Funds of All Time. Hedge funds play an essential role in the global financial markets. In addition to providing much-needed liquidity, […] In this article, we will be taking a look at the 23 best hedge funds of all time. To see more of these hedge funds, you can go directly to see the 5 Best Hedge Funds of All Time. Hedge funds play an essential role in the global financial markets. In addition to providing much-needed liquidity, they are closely followed as they provide insights into the direction the market is likely to move. They are the ultimate asset class of the affluent investors managing over $4 trillion in assets. There are over 30,000 hedge funds globally, all leveraging different strategies and investing in different asset classes and sectors in the race to unlock value in the market. While some focus on stock investments, others are known to bet big on commodities, with others specializing in forex or fixed-income assets. Some of the biggest hedge funds in the world are best known for engineering activist campaigns targeting companies that they feel are undervalued and mismanaged. By buying significant stakes in such companies, the hedge funds engineer campaigns not limited to management or board changes in the effort of unlocking and maximizing shareholder value. Hedge funds aim to outperform traditional investment vehicles like mutual funds by taking long and short positions in various asset classes that yield profits regardless of what the broader markets are doing. The strategies revolve around taking positions in stocks, bonds, commodities, currency derivatives, and alternative assets. Currently, hedge funds hold a record exposure to the seven tech stocks by market capitalization. The largest seven US stocks account for 20% of the total net market value hedge funds hold. This has always been the case in the past, given that tech companies boast of solid high growth rates. For instance, hedge funds posted their worst performance in 2022 since 2018, dragged down by equities. Portfolio managers struggled to place bets amid market turmoil. Consequently, hedge funds fell by an average of 4.25%. Hedge funds that invest primarily in equities were down by 10.73% but still managed to beat the S&P 500, which was down by 19%. Event-driven hedge funds that bet on mergers and restructurings were down by 5.04%, with cryptocurrency hedge funds tanking by an average of 55% amid the implosion experienced in the sector. Macro hedge funds that trade a broad range of assets from bonds to currencies to rates stocks and commodities were a bright spot, posting average gains of 9.31%. The US plays host to the most number of hedge funds, being the epicenter of the global financial sector. Likewise, more than 60% of investment managers tasked with managing and generating returns in hedge funds can be found in the US. Source:pexels George Soros of Soros Fund Management, Paul Singer of Elliot Management, and Ray Dalio of Bridgewater are some of the biggest names shaping hedge fund landscapes. Their names are also known beyond the financial realm, often mentioned in the media owing to their actions in philanthropy politics, among other things. The top hedge fund managers of all time have made over $600 billion in net fees from their investors since inception. Unknown to most people is that hedge funds are limited to accredited investors or large institutional clients. This is because they are subject to less regulatory oversight compared to traditional investment vehicles like mutual funds. They tend to generate higher alpha than traditional investment vehicles on their ability to take on much more investing risk due to strategic choice and the use of leverage. Our Methodology We have shortlisted some of the biggest hedge funds investing in an array of assets in the global financial sector. The sheer size of the funds means they are some of the best, going by the impressive gains they have generated since inception. The hedge funds are ranked based on the net gains since inception. Best Hedge Funds of All Time 23. Steinhardt Partners Founded: 1967   Net Gains Since Inception: $14.8 Billion Founded in 1967 by Michael Steinhardt, Steinhardt Partners was one of the most successful and influential hedge funds in history. While working at the hedge fund, Steinhardt performed better than his peers by earning an average annual return of over 30% higher than every market benchmark.  In his book No Bull: My Life In and Out of Markets, he details some of the strategists that drove the hedge funds’ success, including the ability to spot when to trade against the prevailing market trend. Part of the strategy included conducting in-depth research and analytical work while also making smart judgments. Nevertheless, the hedge fund faced some controversies and was investigated in the 1990’s for allegedly manipulating the treasuries market. The hedge fund shut its doors in 1995. 22. Tudor Investment Corp Founded: 1980   Net Gains Since Inception: $27 Billion Based in Connecticut, Tudor Investment Corporation is an American investment firm founded in 1980 by Paul Tudor Jones. The hedge fund manages fixed income, currency equity, and commodity assets. The hedge fund shot to the limelight in 1987 as Jones accurately predicted the stock Markey crash, with its short positions gaining 62% as the Dow Jones Industrial Average plunged 22%. In 2022, the hedge fund diversified its holdings with cryptocurrency investments to protect against rising inflation. 21. Third Point Founded: 1995   Net Gains Since Inception: $26 Billion Third Point is a New York-based hedge fund founded in 1995 by Daniel Loeb. The hedge fund deploys an opportunistic event-driven approach to finding investments in select strategies while managing individual security and market risks. The hedge fund under the stewardship of Daniel Loeb also engages in activist investment. It takes out stakes in companies it feels are undervalued and pursues strategic alternatives aimed at unlocking and maximizing value. For instance, the firm seeks changes at Bath & Body Works and board changes. 20. Icahn Capital LP Founded: 1987   Net Gains Since Inception: $27.9 Billion Incorporated in 1987, Icahn Enterprise is a conglomerate that also serves as billionaire investor Carl Icahn’s hedge fund. The hedge fund specializes in taking large stakes in companies that the activist investor believes will appreciate from changes in corporate policy. Icahn is known to take large positions in companies using the hedge fund and then pressure management to pursue strategic alternatives in the race to unlock shareholder value. Part of the changes that the activist investor often pushes for include sell of business units and the whole business. In addition, the activist investor pushes for board seats to direct the companies’ directions. Since 2011, the hedge fund no longer manages money from outside clients. However, investors can invest in Icahn Enterprises stock that trades in the market. The conglomerate has found itself in trouble in the recent past when old rival Bill Ackman called out its high valuation. The stock tumbled by over 25% in May following a scathing attack from short-seller Hindenburg Research. The short seller alleged that Icahn was overstating the value of the firm’s private asset portfolio. 19. Brevan Howard Founded: 2002   Net asset gains since inception: $28.1 Billion Brevan Howard is an alternative asset management firm that was established in 2002. It focuses on global macro and digital assets. The hedge fund manages assets on behalf of institutional investors worldwide, including sovereign wealth funds corporate, and public pension plans.  The hedge fund is best known for employing traders from major investment banks, portfolio managers, and advanced quantitative analysts. Likewise, it boasts of a high turnover as traders are often cut if they don’t perform up to the company’s standards. Early in the year, the Macro hedge fund grounded some of its traders after hitting maximum losses after the collapse of the Silicon Valley Bank.  Despite the high staff turnover, the fund has delivered impressive results. Two of its most significant funds delivered double-digit gains in 2022 even as the overall market turned bearish. The $10 billion Brevan Howard Master Fund was up 20%, and the $12 billion Alpha Strategies fund gained 28%. Both funds are managed by traders specializing in different strategies, from rates, currencies, and credit to commodities. 18. Sculptor Capital Founded: 1994   Net Gains Since Inception: $29.9 Billion Sculptor Capital was established in 1994 by Daniel S. Och with an initial investment capital of $100 million. The hedge fund manages a portfolio worth $4.5 trillion, spanning various industries, including technology, utilities, services, and financials. The hedge fund provides products across multi-strategy credit and real estate. Its investment strategy benefits from collaboration among investment teams. Sovereign wealth and corporations, public pensions, and high net-worth individuals are some of the most prominent investors in the hedge fund. 17. Tiger Management Founded: 1980   Net Gains Since Inception: $30 Billion Tiger Management is a hedge fund that was founded in 1980. It makes investments in both public and private companies. It mostly invests in internet, software, consumer, and financial technology companies. Julian Robertson founded the hedge fund with $8 million in capital, and by 1996, its assets under management had ballooned to $7.2 billion in value. It was the second largest hedge fund in the world in 1997, with 10.5 billion in assets under management in 1997 as its holdings grew to $22 billion by 1998. As of 2022, the hedge fund managed close to $55 billion in assets. 16. Lone Pine Capital Founded: 1997   Net Gains Since Inception: $31.3 Billion Founded in 1997, Lone Pine Capital is a research-driven fundamental equity hedge fund. It mostly invests in equities and equity-related securities. It has provided its services to pooled investment vehicles, pensions, and profit-sharing plans. The hedge fund is the brainchild of Stephen Mandel, who previously worked for Julian Robertson. It is a research-driven fund that takes a look at companies’ balance sheets to gauge their strength. It also conducts research into its operations and markets before investing. 15. Appaloosa Management LP Founded: 1993   Net Gains Since Inception: $32.3 Billion Established in 1993, Appaloosa Management LP is an American hedge fund founded by David Tepper and Jack Walton. The fund invests in public equity and fixed-income markets, focusing on undiversified concentrated investment positions. Its clientele base includes high-net-worth individual’s pension and profit-sharing plans. Foreign governments, foundation universities, and corporations also invest in the hedge fund. The hedge fund had one of its best years in 2001, as it gained 67%. 14. Caxton Associates LP Founded: 1983   Net Gains Since Inception: $33 Billion Caxton Associates LP is a global macro hedge fund founded in 1983 by Bruce Kovner. The hedge fund blends rigorous assessment of macroeconomics market technical and individual company analysis to deliver absolute returns. Despite experiencing client redemptions totaling 27% of assets under amendment at the height of the financial crisis between 2008 and 2009, the hedge fund posted a 13% gain. In 2010, the edge fund returned $12.8 billion to clients while managing $6 billion. The fund shut down its gates to new money in 2020 after making a record 40% during the pandemic. 13. Farallon Capital  Founded: 1986   Net Gains Since Inception: $33.1 Billion Established in 1986, Farallon Capital is a hedge fund that invests in public and private assets worldwide. It leverages various investment strategies developed through critical thinking and rigorous bottom-up fundamental analysis. The hedge fund is driven by its commitment to deliver superior risk-adjusted returns to investors. Some of its notable investment strategies include long/short equity, merger arbitrage, risk arbitrage, real estate, and direct investments. Additionally, the hedge fund engages in proxy battles as part of its activist plays in the race to unlock shareholder value. The hedge fund is in the process of waging a proxy fight at biotech company Exelixis. 12. Baupost Group Founded: 1982   Net Gains Since Inception: $33.2 Billion Seth Klarman’s Baupost Group is a big hedge fund. He started working with his professor, Bill Poorvu, after finishing Harvard Business School. Poorvu and his partners made the name Baupost from their names. Klarman’s name was not in it. Baupost Group is a hedge fund that emphasizes risk management and only goes long. It is also alleged that the hedge fund does not use leverage in its investments except in real estate. The hedge fund has delivered an average annual return of 20% since its inception, making it one of the best-performing. However, the hedge fund had its worst performance in 2020 at the height of the pandemic; it returned just under 5%. The hedge fund manager also made less than 10% compared to an 11% average return in the industry. 11. Viking Global Founded: 1999   Net Gains Since Inception: $35 Billion Founded in 1999, Viking Global is a global investment firm that employs a fundamentally driven investment approach to pursue opportunities. The hedge fund celebrated its first public equity strategy with $520 million in capital in 1999. Currently, the hedge fund has three portfolio managers, five analysts, and two traders. The hedge fund invests globally with a long-term fundamental research-based perspective driven by its pursuit of excellence. It also strives to deliver operational excellence and high-risk adjusted returns. 10. Davidson Kempner Founded: 1983   Net Gains Since Inception: $40 Billion Davidson Kempner is a global institutional investment management firm with over 40 years of experience. Founded in 1983 by M.H. Davidson, the hedge fund specializes in fundamental investing with a multi-strategy approach. As of last year, it was ranked as the eighth-largest hedge fund, employing over 500 employees. It has made a name for itself with its fundamental method of investing with an event-driven focus. It primarily invests in various credit and equity strategies and real estate assets. 9. AQR Capital Management Founded: 1998   Net Gains Since Inception: Over $40 Billion AQR Capital Management is a firm that manages investments and aims to achieve client goals. Founded in 1998 by Cliff Asness and David Kabiller, the hedge fund offers a variety of quantitatively driven alternative and traditional investment vehicles. It also deploys a research-based systematic and consistent approach to portfolio construction. The disciplined approach has allowed the hedge fund to identify long-term, repeatable sources of solid returns while investing in equities, commodities, and other assets. 8. Elliott Management Founded: 1977   Net Gains Since Inception: $42.1 Billion Created as Elliott Associates in 1977, Elliot Management is one of the oldest hedge funds that strive to protect and grow client capital. Paul Singer created the hedge fund with $1.3 million from friends and family. In its early years, the hedge fund focused on convertible arbitrage. It has since transitioned into a multi-strategy hedge fund. It mostly focuses on equities, private equity private, credit distressed securities, real estate, and commodities. The hedge fund employs nearly 555 people, nearly half dedicated to portfolio management, analysis trading, and research. Elliot Management mostly focuses on opportunistic trading and operational and counterparty risk management. 7. Soros Fund Management Founded: 1970   Net Gains Since Inception: $43.9 Billion Soros Fund Management, founded in 1970 by the famous investor George Soros, became one of the largest and most successful hedge funds. In 2010, it was one of the most profitable funds, averaging gains of 20% annually. Currently, the hedge fund is the primary adviser of Quantum Group of funds that deals in international investments. It primarily invests in public equity and fixed income with big investments in transportation, energy, retail, financial, and other industries. The fund currently manages close to $23 billion in assets under management having generated more than $30 billion in profit for investors over the decades. 6. Renaissance Technologies  Founded: 1982   Net Gains Since Inception: $45 Billion Renaissance Technologies is one of the best hedge funds founded in 1982 by James Simons. The hedge fund focuses on a specific type of trading that uses mathematical and statistical methods to analyze the market and make decisions. The Medallion hedge fund holds the best track record for returning more than 66% annualized before fees and 39% after expenses over 30 years. Because of the fund’s success, Simons has often been regarded as one of the best money managers on earth. In 1994, the hedge fund returned over 70% and returned over 98% in 2000. Since its inception, the hedge fund has only lost money in a single year in 1989. In 2008, when the S&P 500 lost 37%, the hedge fund returned a gain of 82% net of fees. Click to continue reading and see 5 Best Hedge Funds of All Time. Suggested articles: 10 Best Performing Asia Pacific ETFs in 2023 15 Worst Performing Growth Stocks in 2023 12 Best Utilities ETFs to Buy Disclosure: None. 23 Best Hedge Funds of All Time is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 16th, 2023

Prenetics Announces Second Quarter 2023 Financial Results

HONG KONG, Sept. 15, 2023 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ:PRE) ("Prenetics" or the "Company"), a leading genomics-driven health sciences company, today announced financial results for the second quarter ended June 30, 2023, along with recent business updates. Second Quarter 2023 Financial Highlights Revenue from continuing operations of US$5.7 million Adjusted EBITDA from continuing operations of US$(5.3) million Cash and other short-term assets1 of US$214.5 million as of June 30, 2023 First Half 2023 Financial Highlights Revenue from continuing operations of US$11.6 million Adjusted EBITDA from continuing operations of US$(15.1) million "We've always maintained that 2023 would be a transformative year for Prenetics, and our recent strides underscore that belief. We've channelled significant investments into areas where we see not just potential, but a clear path to dominance. Our collaboration with Prof. Dennis Lo, particularly in the realm of early cancer detection, stands as a testament to our commitment and vision. Today, our future business strategy is crystallized into three distinct yet interconnected units: prevention, early cancer detection, and targeted therapy. I am both extremely excited and optimistic about the trajectory we're on, and I believe that the best is yet to come for Prenetics," said Danny Yeung, Chief Executive Officer and Co-Founder of Prenetics. ______________________________ 1 Represents current assets, including cash and cash equivalents totaling US$177.2 million, financial assets at fair value through profit or loss of US$13.6 million, and trade receivables of US$5.6 million, amongst other accounting line items under current assets. Recent Highlights Completed transaction with Prof. Dennis Lo for Insighta as a 50/50 Joint Venture for Multi-Cancer Early Detection in July 2023. Prenetics provided US$100m in consideration, with US$80m in cash and US$20m of shares in Prenetics. Initial clinical trial data is promising. A large multi-country overseas clinical trial is set to begin in early 2024. ACT Genomics is expected to launch a 500-gene panel and a 100-gene panel comprehensive genomic profiling "liquid" biopsy test by the fourth quarter of 2023. ACT Genomics product development work continues for a Minimal Residual Disease (MRD) test is expected to be rolled out by Q2 2024. Multiple distribution and partnership deals are being discussed for Southeast Asia and in the Middle East. More details will be shared once available. Significant improvement in operational efficiency and cost optimization, reducing adjusted EBITDA from continuing operations from a loss of US$(9.8) million in the first quarter of 2023 to US$(5.3) million in the current quarter with further reductions expected in the second half of 2023. About Prenetics Prenetics (NASDAQ:PRE), a leading genomics-driven health sciences company, is revolutionizing prevention, early detection, and treatment. Our prevention arm, CircleDNA, uses whole exome sequencing to offer the world's most comprehensive consumer DNA test. Insighta, our US$200 million joint venture with renowned scientist Prof. Dennis Lo, underscores our unwavering commitment to saving lives through pioneering multi-cancer early detection technologies. Insighta plans to introduce Presight for lung and liver cancers in 2025, and to expand with Presight One for 10+ cancers in 2027. Lastly, ACT Genomics, our treatment unit, is the first Asia-based company to achieve FDA clearance for comprehensive genomic profiling of solid tumors via ACTOnco. Each of Prenetics' units synergistically enhances our global impact on health, truly embodying our commitment to 'enhancing life through science'. To learn more about Prenetics, please visit Investor Relations Contact: Forward-Looking StatementsThis press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, objectives of management for future operations of the Company, and growth opportunities are forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties, therefore they should not be relied upon as being necessarily indicative of future results. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: the Company's ability to further develop and grow its business, including new products and services; its ability to execute on its new business strategy in genomics, precision oncology, and specifically, early detection for cancer; the results of case control studies and/or clinical trials; and its ability to identify and execute on M&A opportunities, especially in precision oncology. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties described in the "Risk Factors" section of the Company's most recent registration statement on Form F-1 and the prospectus therein, and the other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law. Basis of Presentation Unaudited Financial Information and Non-IFRS Financial Measures has been provided in the financial statements tables included at the end of this press release. An explanation of these measures is also included below under the heading "Unaudited Financial Information and Non-IFRS Financial Measures." Unaudited Financial Information and Non-IFRS Financial Measures To supplement Prenetics' consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"), the Company is providing non-IFRS measures, adjusted EBITDA from continuing operations, adjusted gross profit from continuing operations and adjusted (loss)/profit attributable to equity shareholders of Prenetics. These non-IFRS financial measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-IFRS financial measures are useful to investors in evaluating the Company's ongoing operating results and trends. Management is excluding from some or all of its non-IFRS results (1) Employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) finance income and exchange gain or loss, net, and (4) certain items that may not be indicative of our business, results of operations, or outlook, including but not limited to non-cash and/ or non-recurring items. These non-IFRS financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on an IFRS basis as well as a non-IFRS basis and also by providing IFRS measures in the Company's public disclosures. In addition, other companies, including companies in the same industry, may not use the same non-IFRS measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-IFRS measures as comparative measures. Because of these limitations, the Company's non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the non-IFRS reconciliations provided in the tables captioned "Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)", "Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)" and "Reconciliation of (loss)/profit attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)" set forth at the end of this document.   PRENETICS GLOBAL LIMITED Unaudited consolidated statements of financial position (Expressed in United States dollars unless otherwise indicated)               June 30,   March 31,   December 31,   2023   2023   2022   $   $   $ Assets           Property, plant and equipment 10,031,570   11,809,757   13,102,546 Intangible assets 14,101,566   14,463,400   14,785,875 Goodwill 33,800,276   33,800,276   33,800,276 Interests in associates 559,193   677,339   788,472 Deferred tax assets 7,631   7,626   243,449 Deferred expenses 7,097,641   5,119,170   6,307,834 Other non-current assets 741,816   1,064,194   1,292,462 Non-current assets 66,339,693   66,941,762   70,320,914             Deferred expenses 8,588,431   4,547,611   4,577,255 Inventories 3,768,880   3,420,013   4,534,072 Trade receivables 5,636,969   5,718,516   41,691,913 Deposits, prepayments and other receivables 5,594,273   6,488,436   6,889,114 Amount due from an associate 138,781   181,942   - Financial assets at fair value through profit or loss 13,593,201   17,537,608   17,537,608 Short-term deposits -   19,872,581   19,920,160 Cash and cash equivalents 177,179,297   166,335,875   146,660,195 Current assets 214,499,832   224,102,582   241,810,317 Total assets 280,839,525   291,044,344   312,131,231             Liabilities           Deferred tax liabilities 2,694,720   2,924,369   3,185,440 Warrant liabilities 1,822,139   2,314,609   3,574,885 Lease liabilities 3,255,461   3,627,663   3,763,230 Other non-current liabilities 823,082   830,562   949,701 Non-current liabilities 8,595,402   9,697,203   11,473,256             Trade payables 4,226,392   7,505,724   7,291,133 Accrued expenses and other current liabilities 19,349,105   6,460,445   15,611,421 Contract liabilities 3,703,874   4,917,268   5,674,290 Lease liabilities 2,779,193   2,779,426   2,882,933 Liabilities for puttable financial instrument2 13,435,228   17,459,600   17,138,905 Tax payable 8,534,527   8,692,193   8,596,433 Current liabilities 52,028,319   47,814,656   57,195,115 Total liabilities 60,623,721   57,511,859   68,668,371             Equity           Share capital3 15,791   15,882   13,698 Reserves 215,291,050   228,232,194   237,050,429 Total equity attributable to equity shareholders of the Company 215,306,841   228,248,076   237,064,127 Non-controlling interests 4,908,963   5,284,409   6,398,733 Total equity 220,215,804   233,532,485   243,462,860 Total equity and liabilities 280,839,525   291,044,344   312,131,231 _________________________________ 2 In connection with the acquisition of ACT Genomics, the remaining shareholders of ACT Genomics - representing 25.61% of the fully diluted shareholding of ACT Genomics that Prenetics does not own - were granted put options which allow these remaining shareholders to put their remaining shares to Prenetics under certain conditions. The liabilities arising from such put option are recorded as liabilities for puttable financial instrument, and are valued at the present value of the exercise price of the put option. 3 Represents number of authorized and issued shares as follows:   June 30,   March 31,   December 31,   2023   2023   2022             Number of authorized shares of $0.0001 each 500,000,000   500,000,000   500,000,000             Number of issued shares 157,905,434   158,820,280   136,983,110     PRENETICS GLOBAL LIMITED Unaudited consolidated statements of profit or loss and other comprehensive income (Expressed in United States dollars unless otherwise indicated)           For the six months ended   June 30,     June 30,     2023     2022     $   $       (Restated) Continuing operations       Revenue 11,600,319     8,291,318   Direct costs (6,988,941 )   (5,524,587 ) Gross profit 4,611,378     2,766,731   Other income and other net gain/(losses) 2,629,405     (585,463 ) Selling and distribution expenses4 (4,672,953 )   (2,454,979 ) Research and development expenses4 (6,177,592 )   (3,941,463 ) Administrative and other operating expenses4 (23,158,344 )   (36,608,463 ) Loss from operations (26,768,106 )   (40,823,637 ) Fair value loss on financial assets at fair value through profit or loss (3,944,407 )   (1,659,343 ) Share-based payments on listing5 -     (89,546,601 ) Fair value loss on preference shares liabilities -     (60,091,353 ) Fair value gain/(loss) on warrant liabilities 1,752,746     (1,539,577 ) Share of losses of associates (225,284 )   -   Other finance costs (108,358 )   (3,883,002 ) Loss before taxation (29,293,409.....»»

Category: earningsSource: benzingaSep 15th, 2023

Insider Today: Apple"s new iPhone is here

Apple showed off the newest versions of its iPhone and Apple Watch while CEO Tim Cook showed off his acting chops. Apple This post originally appeared in the Insider Today newsletter. You can sign up for Insider's daily newsletter here. Hey there! To the Milwaukee bar-goers banking on the Jets losing to get a free bar tab only to be let down, welcome to the club. Take it from a Jets fan: Even when they win, they still manage to disappoint.In today's big story, we're looking at Apple's big event that gave us our first look at the new iPhones and Apple Watches. What's on deck: Markets: A billionaire beef over who is the rightful "Bond King."Tech: Some of the best bits from Elon Musk's new biography.Business: Why the West has struggled to keep up with housing demand.But first, I need a new phone.If this was forwarded to you, sign up here.Justin Sullivan/Getty ImagesThe big storyA new iPhone eraAre you ready for some new Apple products?It's September, which means Apple is unveiling some new stuff. The tech giant's launch events are a chance for it to show off new devices with the help of some flashy visuals. This year's edition included a skit about Apple's pledge to reach zero carbon emissions by 2030, featuring Academy Award winner Octavia Spencer as "Mother Nature." Apple CEO Tim Cook, who also appeared in the scene, even won over some fans online with his acting chops.But the show's real stars were the new versions of Apple's iPhone and Apple Watch. Apple is sunsetting its ring/silent switch, a staple of the phone since its original iteration. Instead, the iPhone 15 Pro includes a new "action button." The iPhone 15 Pro and Pro Max are also the first iPhones made from titanium. Meanwhile, the new Apple Watch has some tricks up its sleeve. Dubbed the "double tap," users can do a myriad of things on their Apple Watch by simply tapping their index finger to their thumb. According to Apple, it's possible thanks to a new algo triggered by "changes in blood flow when the index finger and thumb perform a double tap," which is a great example of how tech is equally terrifying and incredible.Insider's Sarah Jackson, Jordan Hart, and Lakshmi Varanasi have a rundown on the biggest news from the event. But if you were hoping a new iPhone will send Apple's stock soaring, think again. Shares slumped about 1.7% on Tuesday by market close, extending a tough September for the tech giant. To be sure, Apple's stock usually doesn't immediately rise from a new iPhone announcement. Prior to Tuesday's event, Apple's shares fell an average of 0.2% on days a new iPhone was announced, according to Barron's. New iPhones eventually pay off. Historically, Apple's share price has enjoyed double-digit returns, on average, six months after the release date. The new iPhones and Apple Watches are set to be available September 22. But all bets are off this year, as Apple remains caught in the rising tensions between the US and China. According to multiple reports, several state agencies and companies in China ordered staff to stop bringing Apple devices to their offices. Early Wednesday, China said it issued no such ban, but did warn of "security incidents related to Apple's phones."3 things in marketsBefore the opening bell:US futures fall early Wednesday ahead of the new inflation report. It comes after a difficult Tuesday for tech stocks.Gary Coronado/Getty ImagesMost investors believe US consumers are going to cut spending next year. The majority of the 526 investors polled by Bloomberg predict personal consumption will decrease in early 2024. Some even believe it could happen as early as this year, as household savings have consistently fallen for the past 23 months.Jamie Dimon sounds off. The JPMorgan CEO raised concerns about the impact a recession and additional interest-rate hikes would have on consumers and businesses. And he looked to a longtime business associate — Warren Buffett — to make some of his points. Here are eight of his best quotes from a recent interview.Wall Street billionaires are fighting over nicknames. Pimco cofounder Bill Gross, who is also known as the Bond King, took umbrage with the fact DoubleLine's Jeffrey Gundlach shares the same moniker. "Pimco had $2 trillion, ok? DoubleLine's got like $55 billion. Come on — that's no kingdom, that's like Latvia or Estonia," Gross said during a recent interview.3 things in techAnna Moneymaker/Getty Images (R); Thomas Trutschel/Getty Images (L)Google CEO isn't worried about falling behind on AI. Sundar Pichai said in an interview that he's "very comfortable" about Google's position. But a few months ago, the company internally issued a code red over the rise in ChatGPT's popularity.Catch up on the buzzy Elon Musk biography. From learning hypnosis as a child to whispering about being the "alpha" in a relationship, Walter Isaacson covers a lot in the Musk biography. Follow along for the highlights.Read the leaked, internal email that Google lawyers sent to employees. Google's top lawyer Kent Walker sent the memo to employees, asking them to "please refrain from speculating or commenting on this (or any legal case), internally or externally." The government sued Google in 2020, accusing it of illegally maintaining a monopoly in search. And the trial begins this week.3 things in businessChelsea Jia Feng/InsiderThe American West paradox. Housing prices in western US states like Colorado and Arizona are soaring. They appear to have ample empty land to build more homes on. But the West has a potent concoction of barriers: legal and cultural hostility to dense housing, mixed in with environmental protection.The next frontier of creator-fan relationships: group chats. Patreon doesn't think subscriptions are enough. "We often say that creators have never felt further from their fans, and fans have never felt further from each other," Patreon's community product lead told Insider. Now, top fans could have the opportunity to be in group chats with their favorite creators.The top high-paying, fast-growing jobs for the next decade. Insider's analysis examined roles that pay fairly well and are projected to grow in the 10-year period after 2022. Software developers and financial managers led the pack, each with a six-figure median annual wage.In other newsAmazon launched a new product that gives discounts for cross-border transportation, automated inventory replenishment, and other services.Testing out the new, divisive Walmart shopping cart.The now-imploded FTX is looking into taking back millions spent on partnerships with celebs like Naomi Osaka and Shaquille O'Neal.Scientists can't figure out the mysterious lights in the sky right before a devastating earthquake hit Morocco.The FDA ruled that a decongestant in common cold drugs like Sudafed, Allegra, and Dayquil doesn't work.What's happening todayThe third season of "The Morning Show" is released on Apple TV+. The drama (which is about an early morning television show) stars Jennifer Aniston and Reese Witherspoon.Beep beep: Media days for the North American International Auto Show kick off today. Also known as the Detroit Auto Show, it's one of the largest auto shows in the world. Cadillac, Jeep, and GMC are scheduled to meet with the press today.Earnings today: Cracker Barrel and other companies.Hamilton's Urban Steakhouse and Bourbon Bar/YelpFor your bookmarksSteak by stateThe best steakhouse in every state. Yelp chose the best in each state based on customer reviews, and they cover a variety of meats: whiskey steak, garlic beef, elk quesadilla, and more.The Insider Today team: Dan DeFrancesco, senior editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York.Read the original article on Business Insider.....»»

Category: dealsSource: nytSep 13th, 2023

Hedge Fund and Insider Trading News: Said Haidar, Ken Griffin, Boaz Weinstein, Man Group, Burke & Herbert Bank & Trust Co (BHRB), Moderna, Inc. (MRNA), and More

Haidar’s Hedge Fund Losses Worsen to 48% After Decline in August (Bloomberg) Said Haidar’s macro hedge fund suffered a further 15.7% slump in August, extending the worst-ever phase of trading losses since it started more than two decades ago. The Haidar Jupiter fund is now down 48% for this year, according to an investor update […] Haidar’s Hedge Fund Losses Worsen to 48% After Decline in August (Bloomberg) Said Haidar’s macro hedge fund suffered a further 15.7% slump in August, extending the worst-ever phase of trading losses since it started more than two decades ago. The Haidar Jupiter fund is now down 48% for this year, according to an investor update seen by Bloomberg. The hedge fund managed $1.6 billion at the end of July. Citadel Posts Double-Digit Returns (Institutional Investor) Ken Griffin’s multistrat fund continues to be one of the top performers in the category. Citadel posted solid results for August and continued to lead major multistrategy funds for the year. The hedge fund giant led by Ken Griffin is one of the only funds in the strategy that has posted double-digit performance gains this year, although all of the other funds made money in August. Liontrust, GAM Bled €2bn from Funds During Failed Takeover (Financial News) Morningstar figures show investors pulled billions of euros from the two groups’ funds during takeover talks. Liontrust and GAM bled more than €2bn from their European funds over the three months in which the London-headquartered asset manager was trying to acquire the struggling Swiss firm. According to data from Morningstar, UK-listed Liontrust suffered net outflows of €1.6bn over three months to the end of July. It tabled its £96m offer for GAM in May. Image by Sergei Tokmakov Terms.Law from Pixabay Man Group Completes Varagon Acquisition (Hedge Week) Man Group has completed its previously announced acquisition of Varagon Capital Partners, a US middle market private credit manager with $11.8bn of assets under management and $15.4bn of total client commitments, having received all necessary regulatory approvals. Founded in 2014, Varagon has completed $24.5bn of financings to over 300 companies and 138 sponsors. The firm focuses on senior secured loans with multiple covenants to cash generative, high-performing sponsor-backed companies in non-cyclical industries, and typically serves as a lead or co-lead lender, with origination capabilities that support enhanced terms and differentiated returns for investors. Hedge Fund Billionaire John Paulson Sued for Securities Fraud by Puerto Rico Partner (Bloomberg) John Paulson was sued by his longtime business partner in Puerto Rico, who alleges the hedge fund billionaire made fraudulent claims to convince him to invest $17 million in a luxury automobile dealership on the island. Fahad Ghaffar filed suit Wednesday in federal court in Puerto Rico, asking for more than $50 million in damages from Paulson. Ghaffar claims Paulson told him in February 2022 that he would be investing his money in a convertible note that would eventually give him 50% ownership in the dealership, F40, which a Paulson family trust had just bought for $103 million. One Year In, Danske’s GAO Marches Forward (Hedge Nordic) Stockholm (HedgeNordic) – The success of a hedge fund’s launch often plays a crucial role in shaping its future. Danske Bank Asset Management’s Global Alternative Opportunities (GAO) had an impressive inaugural year launching in August of 2022. Despite debuting just ahead of the worst September for equity markets since 2002, Danske Invest Global Alternative Opportunities (GAO) has generated a cumulative return of 6.1 percent......»»

Category: topSource: insidermonkeySep 7th, 2023

Long Term Returns of Jeff Smith’s Activist Targets

In this article, we discuss long-term returns of Jeff Smith’s activist targets. If you want to see more stocks in this selection, check out Long Term Returns of Jeff Smith’s 5 Activist Targets. Once dubbed as one of the most feared men in corporate America, Jeff Smith is one of the most respected personalities when it […] In this article, we discuss long-term returns of Jeff Smith’s activist targets. If you want to see more stocks in this selection, check out Long Term Returns of Jeff Smith’s 5 Activist Targets. Once dubbed as one of the most feared men in corporate America, Jeff Smith is one of the most respected personalities when it comes to activist investment. He has been making waves since forming Starboard Value in 2002 and helping steer the hedge fund to becoming one of the biggest and most followed. The hedge fund has overseen more than 100 activist campaigns tailored to maximizing shareholder value. Smith has risen to become one of the most revered activist investors thanks to his keen eye for detecting unrealized company potential. His strategy is simple as it involves building stakes in undervalued companies and pushing for management changes, sale of units, or company improvement in capital utilization in the race to unlock value. In most cases, the activist investor collaborates with management to get them to perform better and focus on core business instead of launching a proxy battle. Smith’s impressive record is depicted by the fact that 80% of Starboard Activist campaigns are profitable. The hedge fund also delivered average annualized returns of over 15% through 2014 from inception. Therefore, following the activist investor’s plays on Wall Street usually pays out. The hedge fund has registered 37% portfolio gains since 2013 and delivered a 3.82% average return over the past three years. The economics graduate from the Wharton School of the University of Pennsylvania is best remembered for steering a campaign that resulted in the ousting of the entire board of Darden Restaurants. Before ousting the board, the activist investor had filed hundreds of documents showcasing how management could improve earnings and garner more value from corporate assets. Within the short period of ousting the entire Darden’s board, the new management achieved a $100 million annualized cost savings. In the next two years, the activist investor would play a pivotal role, resulting in a 40% increase in the company’s market value. Smith also sought to turn around the fortunes of struggling Pizza chain Papa John’s, taking a stake in the company and becoming the chairman in 2019. He was given two seats on the board. The company’s stock jumped by 9.9% as investors remained optimistic about the activist investor’s ability to reinvigorate the pizza chain delivery fortunes, The billionaire investor has also run campaigns in eBay where he pushed to have the company divest some units and return the proceeds to investors through buybacks and dividends. The campaigns suggest that activist campaigns tend to have positive long-term returns after interventions, considering that eBay shares rallied by more than 90% following the transaction. Jeffrey Smith has also taken up activist stakes in software company Salesforce, Inc. (NYSE:CRM) and has seen his stakes surge by over 70%. During the pandemic, he actively called for drastic changes at Kohl’s and Mercury Systems in the race to unlock value. Our Methodology  Smith has had one of the longest and most successful careers as an activist investor and portfolio manager at Starboard Value. Having overseen over 100 campaigns with an 80% success rate, he ranks higher in pursuing strategic alternatives that can maximize shareholder value. We have prepared a list of some of the most significant campaigns he led based on SEC filings. We have also computed the long-term profits they generated compared to the S&P 500 earnings. The campaigns are ranked in chronological order. Long Term Returns of Jeff Smith’s Activist Targets 25. Darden Restaurants, Inc. (NYSE:DRI) Activist Investment: 2013   Long Term Returns: 200%   S&P 500 Gain: 150% Darden Restaurants, Inc. (NYSE:DRI) operates full-service restaurants in the US and Canada through its subsidiaries. It operates under Olive Garden, Longhorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, and The Capital Grille brands. The restaurant chain rose to prominence in 2013 when activist investor Starboard Value acquired stakes and triggered one of the fiercest and most successful activist campaigns. Smith accomplished something that no one had ever achieved on Wall Street, taking complete control of the company while owning less than an 8.5% stake. He went on to replace the entire board of directors and assume the role of chairman. After handpicking the board, he chose the CEO and embarked on a successful run of transforming the company’s fortune. Under his tenure, the restaurant chain implemented operational improvements, divested non-core assets, and reduced costs by over $100 million while returning value to shareholders. What followed was Darden Restaurants, Inc. (NYSE:DRI) stock appreciating by over 300%, emerging as one of the most successful activist campaigns by Starboard value. 24. LSB Industries, Inc. (NYSE:LXU)  Activist Investment: 2014   Long-term returns: -80%   S&P 500 Gain: 57% LSB Industries, Inc. (NYSE:LXU) is a company that manufactures, markets, and sells chemical products. It specializes in providing nitrogen-based fertilizer and urea ammonia nitrate for fertilizer and fertilizer blends. Starboard Value first got involved with the company in 2014, purchasing 9.9% of outstanding shares. The activist investor started pushing for changes such as operational efficiency, selling non-core assets, and enhancing its corporate governance. The company sought to avert a proxy fight by agreeing to split its climate control and chemical businesses in 2015. It also agreed to expand its board, among other concessions. Starboard agreed to vote its entire share in favor of the board of director’s recommendation. LSB Industries, Inc. (NYSE:LXU) faced many challenges, including rising costs, declining demand, and operational issues. The company must also complete the site expansion project at the El Dorado facility. Starboard sold its entire stake in the company in 2020 and is believed to have incurred a $100 million loss. 23. Insperity, Inc. (NYSE:NSP) Activist Investment: 2015   Long-term returns: 80%   S&P 500 Gain: 95% Insperity, Inc. (NYSE:NSP) helps small and medium-sized businesses perform better by providing them with human resource and business solutions. In 2015, Starboard Value disclosed a 13.2% stake in the company, insisting that the company was deeply undervalued while there were several opportunities with the potential of creating significant shareholder value. The activist investor urged the company to consider several options to improve performance by reducing corporate expenses, improving capital allocation governance, and exploring all available alternatives to maximize shareholder value. Starboard Value also told CEO Paul Arvada to consider selling some of Insperity, Inc. (NYSE:NSP)’s private jets and consider selling the company. Mr. Smith insisted that selling two of the company’s corporate jets would generate $92 million in profits. The activism campaign has yielded some fruits, as Insperity’s share price exploded by more than 250% between 2017 and 2021. The hedge fund generates a profit of about $500M from the investment. 22. The Brink’s Company (NYSE:BCO) Activist Investment: 2015   Long-term returns: 50%   S&P 500 Gain: 41% The Brink’s Company (NYSE:BCO) provides secure transportation, cash management, and other security-related services. It offers armored vehicle transportation of valuables and automated teller machine management services. Starboard Value confirmed a 9% stake in the count in July 2015 and increased to 12.4% by year-end. With the investment, the activist investor started advocating for changes, key among them urging The Brink’s Company (NYSE:BCO) to improve its route logistics operations. The company reached an agreement with the activist investor that resulted in the addition of three new dissident board members. After that, the Brink’s Company (NYSE:BCO) came under pressure to take necessary steps to improve its business and share price failure, which would be to push for a sale of a significant division. The company succeeded in several strategic and operational initiatives that improved profitability and competitiveness. Consequently, its share price increased by more than 250% between 2016 and 2021. The activist investor is believed to have made a profit of about $400 million from the investment 21. Perrigo Company plc (NYSE:PRGO)  Activist Investment: 2015   Long-Term Returns: -80%   S&P 500 Gain: 48% Perrigo Company plc (NYSE:PRGO) provides over-the-counter health and wellness solutions to enhance individual well-being. The company operates through Consumer Self-Care Americas and Consumer Self-Care International segments. Smith first bought stakes in the company in 2015. In 2016, the activist investor called out management for a lack of focus and execution that had left its core over-the-counter business undervalued. The investor took issue with how the company’s stock had fallen since its attempted takeover of EpiPen maker Mylan. Nevertheless, he remained confident about the company’s strong business and many valuable assets. The activist investor played a key role in shaking up the company’s board and pressing it to conduct a strategic review of its generic business. In 2017, the activist investor would secure three seats on the board to help play a key role in plotting its future. Investment in Perrigo Company turned out differently than expected, as the stock imploded by 80% between 2016 and 2020, resulting in a loss of about -$200 million for the activist investor. 20. Box, Inc. (NYSE:BOX)  Activist Investment: 2015   Long Term Returns: 40%   S&P 500 Gain: 97% Box, Inc. (NYSE:BOX) provides a cloud-based content management platform, allowing organizations of all sizes to conveniently access and distribute their content across any device, from any location. Smith and his Starboard Value hedge fund confirmed a significant position in the company in 2017. The expectation was high that the activist investor would launch an M&A-focused campaign. In 2021, the activist investor started a campaign to nominate directors to the board, reiterating that the company had fallen short of meeting profitable growth expectations. The investor with a 7.7% stake also reiterated that the company needed to capitalize on the work-from-home trend during the pandemic as many of its cloud computing peers. Proxy filings also indicated that the company had been trying for seven months to get CEO Aaron Levie removed from his leadership role. The activist investor also urged management to boost margins and seek a potential buyer. The company would bow to pressure and agree to make board changes after an agreement with the activist investors in a bid to end a proxy contest. 19. Marvell Technology, Inc. (NASDAQ:MRVL) Activist Investment: 2016   Long-term returns: 300%   S&P 500 Gain: 43% Marvell Technology, Inc. (NASDAQ:MRVL) is a company that provides data infrastructure semiconductor solutions spanning the data center business. Activist investor Starboard confirmed a 7% stake in the company in 2016. With the announcement, the activist investor started a campaign to have the company cut costs and exit its mobile wireless business. The push came after the semiconductor company had announced plans to slash about 17% of its workforce and trim mobile business to focus on automotive technologies and the Internet of Things. In addition, the company reached an agreement that saw it reshuffle its board, bringing new directors into the fold following calls for changes by the activist investor. Peter Feld, a Starboard managing member, and Rick Hill, a former CEO and director at Novellus Systems Inc., joined the board. CEO Sehat Sutardja was also forced to step down. The major management changes made the impression that the company was to become a proper acquisition target. However, that was not the case, as the company rejected some offers deemed relatively low. Instead, the activist investor pushed for significant improvement in operating performance, revenue growth, and profitability. Marvell Technology, Inc. (NASDAQ:MRVL) did rally by more than 200% between 2016 and 2020, resulting in long-term returns of about $1B for the activist investor. 18. ComScore, Inc. (NASDAQ:SCOR) Activist Investment: 2016   Long-Term Returns: -90%   S&P 500 Gain: 45% ComScore, Inc. (NASDAQ:SCOR) provides information and analytics on how audiences, consumers, and advertisers interact with various media platforms. The company offers ratings and planning products and services. Activist investor Starboard Value first bought stakes in the company in 2016, owning more than 5% of the company’s stakes. The hedge fund would kick start a proxy contest 2017 urging the company to hold an annual meeting to elect directors. The company was under immense pressure after revealing insufficient public disclosures about its performance. It was also struggling with financial troubles. The investment in ComScore, Inc. (NASDAQ:SCOR) was a disaster, as the stock price imploded by more than 90% between 2016 and 2020. Smith sold most of the stakes in 2020, having made a loss in the range of $100M. 17. Stewart Information Services Corporation (NYSE:STC) Activist Investment: 2016   Long-term returns: 80%   S&P 500 Gain: 30% Stewart Information Services Corporation (NYSE:STC) is a company that provides title insurance and real estate transaction-related services. Its Title Segment searches, examines, closes, and insures the condition of the title to real property. Starboard Value took out stakes in the company in 2016 and increased to 9.5%, making it one of the largest shareholders. The activist investor started pushing for changes in the company to improve operational efficiency and enhance corporate governance. In October of the same year, the company struck a deal and agreed to allow the activist investor to nominate three members to its board. The three board seats put the hedge fund in a position to steer Stewart Information Services Corporation (NYSE:STC) into improving its corporate governance structure to benefit all shareholders. His efforts paid off as the stock appreciated by 25% between 2018 and 2020, with the company improving its profitability and competitiveness. By December 2020, Starboard had amassed a profit of $around $100 million on the stock. 16. Inc. (NYSE:CARS) Activist Investment: 2018   Long Term Returns: 140%   S&P 500 Gain: 50% Inc. (NYSE:CARS) operates a digital marketplace for the automotive industry. Its platform helps connect car shoppers with sellers by enabling car dealers and manufacturers to connect with shoppers. Starboard Value first bought stakes in the company in 2018, terming the company as undervalued. Nevertheless, the activist investor would call on the company to improve its performance and consider selling itself or making management changes as one of the ways of unlocking value. In March, the two parties reached an agreement that saw the activist investor allocate three board seats. In return, Inc. (NYSE:CARS) was expected to announce revenue and margin targets over the next three years. The activist investment paid off as stock soared by more than 300% between 2020 and 2021, and the company started paying dividends and buying back profits. The investor is believed to have made a profit of $300 million from the investment when it exited in 2021. 15. eBay Inc. (NASDAQ:EBAY)  Activist Investment: 2018   Long Term Returns: 160%   S&P 500 Gain: 38.5% eBay Inc. (NASDAQ:EBAY) is an internet company that operates a marketplace platform that connects buyers and sellers. The platform includes an online marketplace,, and eBay suite for mobile apps. The e-commerce giant was targeted in 2018 after Starboard Value built a significant position in the stock, with Elliot Management also confirming a $1.4 billion stake. With the investments, the activist investors urged the company to consider a spinoff of StubHub and a portfolio of other classified properties to unlock more shareholder value. eBay Inc. (NASDAQ:EBAY) would bow to pressure and sold the StubHub unit for $4 billion and its classified units for $9.2 billion. A good chunk of the money was returned to shareholders through buybacks and dividends. In 2020, the activist investor trimmed its stakes in the e-commerce company by 70% after pushing for the auction of non-core businesses. 14. Papa John’s International, Inc. (NASDAQ:PZZA) Activist Investment: 2019   Long-term returns: 156%   S&P 500 Gain: 14% Papa John’s International, Inc. (NASDAQ:PZZA) is a company that operates and franchises pizza delivery and carryout restaurants under the Papa John’s trademark. Activist investor Starboard Value started building a position in the company in 2019 and advocated for management changes in the race to unlock value. Papa John’s International, Inc. (NASDAQ:PZZA) jumped by 9.9% after it emerged hedge fund Starboard Value was taking a $250 million investment in the company. In addition to the investment, the hedge fund CEO Jeffrey Smith became the Pizza chain chairman. The $250 million investment marked the start of a new battle between Papa John’s and former CEO John Schnatter, who was seeking to regain control of the pizza delivery company. In 2019, Papa John’s International, Inc. (NASDAQ:PZZA)’s sought to sell it but abandoned the plans after failing to receive offers that met its expectations. The activist investor helped steer the company to make significant progress on customers’ experience financial performance, share price performance, and corporate governance. The company ended up announcing a $425 million share repurchase program in 2020 and bought a significant chuck of shares owned by the activist investor. Smith stepped down as board chairman in March 2023, having sold most of the stakes in 2021. Long-term returns in the stock topped $300 million, and the company’s stock has soared more than 150% between 2019 and 2021. 13. Pediatrix Medical Group, Inc. (NYSE:MD)  Activist Investment: 2019   Long-Term Returns: 40%   S&P 500 Gain: 74% Pediatrix Medical Group, Inc. (NYSE:MD) is a healthcare company providing newborn maternal-fetal, cardiology, and other pediatric care services. It also offers neonatal care services; Starboard Value acquired 9.9% stakes in the company in 2019 and started a proxy contest in the race to unlock value. The hedge fund started by nominating a majority of directors at Mednax. It also started pushing for the company to sell all or part of itself as one of the ways of unlocking value. Amid the swirling activist pressure, Pediatrix Medical Group, Inc. (NYSE:MD) started taking steps to refocus its business and flatten its organizational structure. It also sold its management’s services business MedData to Frazier Healthcare Partners. In 2020, Pediatrix Medical Group, Inc. (NYSE:MD)’s founder, chief executive officer, and several board members were ousted after Starboard Value started pressing for changes. The management changes came as the activist investor pushed to sell the company’s Radiology solutions business. 12. Acacia Research Corporation (NASDAQ:ACTG) Activist Investment: 2019   Long Term Returns: 140%   S&P 500 Gain: 73% Acacia Research Corporation (NASDAQ:ACTG) is a company that invests in intellectual property and related absolute return assets. The company engages in the licensing and enforcement of patented technologies. Activists Investor Starboard Value first disclosed stakes in the company in 2019, insisting it intended to engage in discussions with the management and board on various matters, including business operations, strategy governance, and capitalization. The activist investor provided the company with a $35 million Investment, thereafter acquiring 350,000 shares of Series A convertible preferred stock. As of the end of 2022, the investor had acquired 5 million shares for an 11.50% stake, which rose to 20 million shares or 34.2% stake as of 2023. In 2022, Acacia Research Corporation (NASDAQ:ACTG) reached an agreement with the activist investor and agreed to streamline its capital structure and further strengthen its financial position. The company also confirmed that the CEO, Clifford Press, is to resign as CEO and board position, having overseen the company’s transformation. 11. Commvault Systems, Inc. (NASDAQ:CVLT) Activist Investment: 2019   Long Term Returns: 12.4%   S&P 500 Gain: 47% Commvault Systems, Inc. (NASDAQ:CVLT) is a company that provides a data protection platform that helps customers secure, defend, and recover data. It offers Commvault backup and Recovery, a backup and recovery solution. The company was targeted in 2019 by Starboard Value, which insisted that the company was highly undervalued. The activist investor built a 9.3% stake in Commvault Systems, Inc. (NASDAQ:CVLT), with portfolio Manager Smith insisting on the need to seek operational changes in the race to unlock maximum shareholder value in the company. Tussle would ensue that would only be settled after the data management software maker agreed to give the activist investor three seats on the board to end a two-month-long proxy contest. With the board seats, the activist investor reiterated that its focus was to help Commvault Systems, Inc. (NASDAQ:CVLT) perform better. 10. Merit Medical Systems, Inc. (NASDAQ:MMSI)   Activist Investment: 2020   Long-Term Returns: 26.5%   S&P 500 Gain: 45% Merit Medical Systems, Inc. (NASDAQ:MMSI) stands as a prominent producer of exclusive disposable medical devices utilized in interventional diagnostic and therapeutic processes. Activist investor Starboard Value started building a position in the company in 2020 and announced plans to meet with management and discuss ways to improve performance. The activist investor built a 9% stake in Merit Medical Systems, Inc. (NASDAQ:MMSI), insisting its shares were highly undervalued while at their lowest level in three years. In May 2020, the company reached an agreement with Starboard Value pursuant to the company nominating three new independent directors. 9. ACI Worldwide, Inc. (NASDAQ:ACIW) Activist Investment: 2020   Long Term Returns: 29.1%   S&P 500 Gain: 37.80% ACI Worldwide, Inc. (NASDAQ:ACIW) is a software company that provides real-time patent solutions to corporations. Its mission-critical real-time payment solutions enable corporations to process and manage digital payments and power Omni commerce payments. Activist investor Starboard Value confirmed a 9% stake in the software company in 2020 while reiterating that there are operational and strategic opportunities to create value. The investment came after ACI Worldwide, Inc. (NASDAQ:ACIW)’s shares had lost 17% in value and were undervalued based on the hedge fund valuation. The activist investor reiterated that ACI Worldwide, Inc. (NASDAQ:ACIW) had underperformed its peers, including FireEye and Commvault Systems. Starboard Value said it may propose various changes that could include board changes or a strategic review aimed at turning around the company’s fortunes. 8. Green Dot Corporation (NYSE:GDOT) Activist Investment: 2020   Long Term Returns: 47.4%   S&P 500 Gain: 45% Green Dot Corporation (NYSE:GDOT) is a financial technology company that provides financial services to consumers and businesses in the United States. The company functions via three divisions: Consumer Services Business, Business Services, and Money Movement Services. Starboard Value reported a significant position in the company in 2020 amid a leadership change. Known for operational or corporate governance changes, the activist investor approved the appointment of Daniel R. Henry as the CEO in March. The endorsement resulted in Green Dot Corporation (NYSE:GDOT)’s shares jumping 13% “We believe that Mr. Henry has the requisite skill set and industry experience to lead the transformation at Green Dot and focus on reinvigorating growth and improving profitability,” Starboard Value LP said. 7. eHealth, Inc. (NASDAQ:EHTH)  Activist Investment: 2021   Long Term Returns: 16.4%   S&P 500 Gain: 27.6% eHealth, Inc. (NASDAQ:EHTH) operates a health insurance marketplace that provides consumer engagement medication and health insurance enrollment solutions. Its Medicare segment offers the sale of Medicare-related health insurance plans. The family and small business segment is involved in marketing health insurance plans tailored for individual families and small businesses. In April 2020, Starboard Value revealed ownership of a 9.8% share in eHealth, an internet-based health insurance marketplace. The investment firm advocated for alterations within the company’s board, approach, and financial performance. By June 2020, Starboard Value and eHealth came to an agreement, resulting in modifications. This agreement led to the appointment of two fresh directors to the board, one of whom was Scott Flanders, the CEO of eHealth. In 2021, Starboard Value snapped up stakes in the company, reiterating that eHealth, Inc. (NASDAQ:EHTH)’s stock was undervalued. The activist investor opened the discussion with management and the board as it sought to pursue strategic alternatives to unlock value. A proxy battle would ensue in early 2021, with Starboard Value pushing for four slots on the company’s board. The health insurance company tried to sidestep the proxy contest by giving the activist investor one board seat two months after the investor nominated four directors. 6. Huntsman Corporation (NYSE:HUN) Activist Investment: 2021   Long Term Returns: 23.1%   S&P 500 Gain: 27.6% Huntsman Corporation (NYSE:HUN) is a company that manufactures and sells diversified organic chemical products. It operates under three segments: Polyurethanes, Performance Products, and Advanced Materials. The company attracted interest from activist investor Starboard Value in 2021 with an 8% stake. With the investment, the activist investor started agitating for changes at the chemical producer, insisting it needed to shake up to improve its performance. The challenge started with the activist investment firm pushing for four seats on the specialty chemical board. Activist investor Smith wrote a letter touting Huntsman Corporation (NYSE:HUN)’s CEO record of overpromising and under-delivering, which had led to investor skepticism. The CEO hit back, insisting that the activist investor was more concerned with installing its handpicked candidates to the board instead of allowing the management team to create shareholder value. Starboard Value would fail in its attempt to replace four directors, resulting in shares of the specialty company tumbling. The defeat marked the second loss of shareholder value for the activist investor in less than a year. Click to continue reading and see Long Term Returns of Jeff Smith’s 5 Activist Targets. Suggested articles: 12 Best High Risk Penny Stocks to Buy Now 20 Countries With Lowest Rate of Economic Growth in 5 Years 12 Undervalued Wide Moat Stocks To Invest In Disclosure: None. Long Term Returns of Jeff Smith’s Activist Targets is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyAug 29th, 2023

The wild life of billionaire Twitter co-founder Jack Dorsey, who is known for eccentricities like eating one meal a day, and taking ice baths

Jack Dorsey is famous for his unusual life of luxury. He's friends with Elon Musk and stepped down as Twitter CEO in 2021 but continues to lead Block. Jack Dorsey has led an interesting life.Joe Raedle/Getty Images Jack Dorsey cofounded Twitter in 2006 and the company made him a billionaire. He stepped down as Twitter CEO in 2021 and supported Elon Musk's takeover of the company.  Dorsey runs the financial services company Block and is famous for his unusual life of luxury. From his friendship with Elon Musk to quashing rumors about sending his beard hair to rapper Azealia Banks, Twitter founder Jack Dorsey leads an interesting life.Dorsey has had a turbulent career in Silicon Valley. After cofounding Twitter on March 21, 2006, he was booted as the company's CEO two years later, but returned in 2015 having set up his second company, Square — which he rebranded as Block in 2021.He led Twitter through the techlash that has engulfed social media companies, testifying before Congress multiple times and later stepping down as CEO of Twitter in 2021, as well as eventually encouraging Musk's Twitter acquisition the following year. Dorsey continues to lead Block, where in April 2022 he changed his title from "CEO" to "Block Head."The tech entrepreneur has provoked his fair share of controversy and criticism over the years and like some other billionaires, he owns a stunning house, dates models, and drives fast cars.Here's what we know about Dorsey's career rise and life outside of work.Rebecca Borison, Madeline Stone, Katie Canales, Bethany Biron, and Isobel Asher Hamilton contributed reporting to an earlier version of this story.Dorsey began programming while attending Bishop DuBourg High School in St. Louis.The Twitter cofounder was coding in high school.VineAt age 15, Dorsey wrote dispatch software that is still used by some taxi companies, according to a biography on Dorsey. When he wasn't checking out specialty electronics stores or running a fantasy football league for his friends, Dorsey frequently attended punk-rock concerts.Jack Dorsey used to have a punk rock hair style.@jackThese days Dorsey doesn't favour the spiky hairdo. Like many of his fellow tech billionaires, Dorsey never graduated college.Jack Dorsey is one of many tech founders to drop out of college.edyson / FlickrHe briefly attended the Missouri University of Science and Technology and transferred to New York University where he before calling it quits in 1999 one semester before graduation to focus on his idea for Twitter, according to the biography. In 2000, Dorsey built a simple prototype that let him update his friends on his life via BlackBerry and email messaging.Jack Dorsey built an early version of his idea for Twitter in 2000.joi / FlickrNobody else really seemed interested, so he put away the idea for a bit, according to a Stanford Blog. About two years later he became a licensed masseur.Getty Images/Bill PuglianoHe got his license in about 2002, before exploding onto the tech scene, the Journal reported. He got a job at a podcasting company called Odeo, where he met his future Twitter cofounders.Jack Dorsey with his Twitter cofounders.TwitterOdeo went out of business in 2006, so Dorsey returned to his messaging idea, and Twitter was born.On March 21, 2006, Dorsey posted the first tweet.Jack Dorsey's sent the first tweet in 2006.Twitter/@jackDorsey kept his Twitter handle simple, "@jack." He hasn't changed it since.Dorsey and his cofounders, Evan Williams and Biz Stone, bought the Twitter domain name for roughly $7,000.Dorsey became CEO of the company when they launched it.Khalid Mohammed / AP ImagesDorsey took out his nose ring to look the part of a CEO. He was 30 years old.A year later, Dorsey was already less hands-on at Twitter.Dorsey took a step back at Twitter shortly after it was launched.Wikimedia CommonsBy 2008, Williams had taken over as CEO, and Dorsey transitioned to chairman of Twitter's board.Dorsey immediately got started on new projects. He invested in Foursquare and launched a payments startup called Square that lets small-business owners accept credit card payments through a smartphone attachment. In 2011, Dorsey got the chance to interview US President Barack Obama in the first Twitter Town Hall.Twitter had its first Town Hall with President Barack Obama in 2011.ReutersDorsey had to remind Obama to keep his replies under 140 characters, Twitter's limit at the time. Twitter went public in November 2013, and within hours Dorsey was a billionaire.Twitter made Dorsey a billionaire.APIn 2014 Forbes pegged Dorsey's net worth at $2.2 billion and it has spiked as high as $12.5 billion in 2021.It was revealed in a 2019 filing that Dorsey earned just $1.40 for his job as Twitter CEO the previous year.The Twitter cofounder didn't take a large salary even when he was CEO.David Becker / GettyThe $1.40 salary actually represented a pay rise for Dorsey, who in previous years had refused any payment at all.He's far from the only Silicon Valley mogul to have taken a measly salary – Mark Zuckerberg makes $1 a year as CEO of Facebook. With his newfound wealth, he bought a BMW 3 Series, but reportedly didn't drive it often.Jack Dorsey owned a BMW Series 3 at one point.Alex Davies / Business Insider"Now he's able to say, like, 'The BMW is the only car I drive, because it's the best automotive engineering on the planet,' or whatever," Twitter cofounder Biz Stone told The New Yorker in 2013. He also reportedly paid $9.9 million for this seaside house on El Camino Del Mar in the exclusive Seacliff neighborhood of San Francisco.Jack Dorsey shelled out millions of dollars for a house in San Francisco.The Real Estalker via Sotheby'sThe house has a view of the Golden Gate Bridge, which Dorsey views as a marvel of design. Jack Dorsey told Kara Swisher in 2018 that Elon Musk is his favorite Twitter user.Elon Musk was a prolific tweeter, even before he bought the company.PewDiePie/YouTubeDorsey said Musk's tweets are, "focused on solving existential problems and sharing his thinking openly."He added that he enjoys all the "ups and downs" that come with Musk's sometimes unpredictable use of the site. Musk himself replied, tweeting his thanks and "Twitter rocks!" followed by a string of random emojis.Both Musk and Dorsey are crypto enthusiasts, and appear to have a friendship of sorts. Dorsey has also engaged with other tech entrepreneurs like Mark Zuckerberg who once served him a goat that the Facebook cofounder had killed himself.Mark Zuckerberg served Jack Dorsey goat.Gene KimDorsey told Rolling Stone about the meal, which took place in 2011. Dorsey said the goat was served cold, and that he personally stuck to salad. Dorsey's eating habits have raised eyebrows over the years.Jack Dorsey says he fasts.Phillip Faraone/Getty Images for WIRED25In 2019, Dorsey appeared on a podcast run by a health guru who previously said that vaccines caused autism. Dorsey said during his interview that he eats one meal a day and fasts all weekend. He said the first time he tried fasting it made him feel like he was hallucinating."It was a weird state to be in. But as I did it the next two times, it just became so apparent to me how much of our days are centered around meals and how — the experience I had was when I was fasting for much longer, how time really slowed down," he said.The comments drew fierce criticism from many who said Dorsey was normalizing eating disorders.In a later interview with Wired, Dorsey said he eats seven meals a week, "just dinner." In the early days of Twitter, Dorsey aspired to be a fashion designer.Jack Dorsey's style has changed over the years.Cindy Ord / Getty Images, Franck MichelDorsey would regularly don leather jackets and slim suits by Prada and Hermès, as well as Dior Homme reverse-collar dress shirts, a sort of stylish take on the popped collar.More recently he favors edgier outfits, including the classic black turtleneck favored by Silicon Valley luminaries like Steve Jobs. He also re-introduced the nose-ring and grew a beard in more recent years.Jack Dorsey has a long beard and nose ring.GettyDorsey seems to care less about looking the part of a traditional executive these days.Singer Azealia Banks claimed to have been sent clippings of Dorsey's beard hair to fashion into a protective amulet, although Dorsey denied this happened.Azealia Banks claims Jack Dorsey sent her clippings from his beard.GettyIn 2016, Banks posted on her now-deleted Twitter account that Dorsey sent her his hair, "in an envelope." Dorsey later told the Huffington Post that the incident never happened. Dorsey has faced his share of controversy over the years. In 2018, a tweet about his vacation in Myanmar provoked an outcry.Jack Dorsey tweeted about his vacation in Myanmar.Shutterstock/Martin M303Dorsey tweeted glowingly about a vacation he took to Myanmar for his birthday in December 2018. "If you're willing to travel a bit, go to Myanmar," he said.This came at the height of the Rohingya crisis, and Dorsey was attacked for his blithe promotion of the country — especially since social media platforms were accused of having been complicit in fuelling hatred towards the Rohingya. Dorsey has said he doesn't care about "looking bad."Jack Dorsey has said he doesn't care how people perceive him.ReutersIn a bizarre Huffington Post interview in 2019, Dorsey was asked whether Donald Trump — an avid tweeter — could be removed from the platform if he called on his followers to murder a journalist. Dorsey gave a vague answer which drew sharp criticism.Following the interview's publication, Dorsey said he doesn't care about "looking bad.""I care about being open about how we're thinking and about what we see," he added.In September 2018, Jack Dorsey was grilled by lawmakers alongside Facebook COO Sheryl Sandberg.Facebook COO Sheryl Sandberg and Jack Dorsey were grilled in a Senate Intelligence Committee.Drew Angerer/Getty ImagesDorsey and Sandberg were asked about election interference on Twitter and Facebook as well as alleged anti-conservative bias in social media companies at the event.During the hearing, Dorsey shared a snapshot of his spiking heart rate on Twitter. He was in the hot seat for several hours and he showed his heart rate peaked at 109 beats per minute. Dorsey testified before Congress once again on October 28, 2020.Jack Dorsey tuned into the hearing with the Senate Committee on Commerce, Science and Transportation.U.S. Senate Committee on Commerce, Science and Transportation/Handout via REUTERSDorsey appeared via videoconference at the Senate hearing on Section 230, a part of US law that protects internet companies from legal liability for user-generated content, as well as giving them broad authority to decide how to moderate their own platforms.In prepared testimony ahead of the hearing, Dorsey said stripping back Section 230 would "collapse how we communicate on the Internet," and suggested ways for tech companies to make their moderation processes more transparent.And during the hearing, Dorsey once again faced accusations of anti-conservative bias.The accusations from Republican lawmakers focused on the way Twitter enforces its policies, particularly the way it has labelled tweets from President Trump compared to other world leaders.Dorsey took the brunt of questions from lawmakers, even though he appeared alongside Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai.He appeared in another hearing a few weeks later with Zuckerberg, facing questions from Republicans who were displeased with how the platforms had dealt with then-President Donald Trump's social media accounts.  When he's not in Washington, Dorsey regularly hops in and out of ice baths and saunas.This is not Dorsey's sauna, but he enjoys regular saunas and ice baths.ShutterstockDorsey said in the "Tales of the Crypt" podcast that he started using ice baths and saunas in the evenings around 2016.He will alternately sit in his barrel sauna for 15 minutes and then switch to an ice bath for three. He repeats this routine three times, before finishing it off with a one-minute ice bath.He also likes to take an icy dip in the mornings to wake him up. Dorsey's dating life has sparked intrigue. In 2018, he was reported to be dating Sports Illustrated model Raven Lyn Corneil.Jack Dorsey (right) reportedly dated Raven Lyn Corneil (left) in 2018.Sports Illustrated Swimsuit / YouTube / GettyPage Six reported in September 2018 that the pair were spotted together at the Harper's Bazaar Icons party during New York Fashion Week. Page Six also reported that Dorsey's exes included actress Lily Cole and ballet dancer Sofiane Sylve. At the end of 2019 Dorsey said he would move to Africa for at least three months in 2020 and he almost lost his role as CEO.Jack Dorsey was almost ousted by an activist investor in 2020.AP Photo/Francois MoriDorsey's announcement followed a tour of Ethiopia, Ghana, Nigeria, and South Africa. "Africa will define the future (especially the bitcoin one!). Not sure where yet, but I'll be living here for 3-6 months mid 2020," he wrote on Twitter.But, then Dorsey came under threat of being ousted as Twitter CEO by activist investor Elliott Management.Both Bloomberg and CNBC reported in late February 2020 that major Twitter investor Elliott Management — led by Paul Singer — was seeking to replace Dorsey. Reasons given included the fact that Dorsey split his time between two firms by acting as CEO to both Twitter and financial tech firm Square, as well as his planned move to Africa.But Dorsey managed to strike a truce with Elliott Management.Jack Dorsey was able to reach a truce with the firm.AP Photo/Jose Luis MaganaTwitter announced on March 9, 2020 that it had reached a deal with Elliott Management which would leave Jack Dorsey in place as CEO.The deal included a $1 billion investment from private equity firm Silver Lake, and partners from both Elliott Management and Silver Lake joined Twitter's board.Patrick Pichette, lead independent director of Twitter's board, said he was "confident we are on the right path with Jack's leadership," but added that a new temporary committee would be formed to instruct the board's evaluation of Twitter's leadership.In July 2020, hackers compromised 130 Twitter accounts in a bitcoin scam.Dorsey had to deal with a major Twitter hack in 2020.TwitterThe accounts of high-profile verified accounts belonging to Bill Gates, Kim Kardashian West, and others were hacked, with attackers tweeting out posts asking users to send payment in bitcoin to fraudulent cryptocurrency addresses.As a solution, Twitter temporarily blocked all verified accounts — those with blue check marks on their profiles — but the damage was done.And Musk said during a July 2020 interview with The New York Times that he personally contacted Dorsey following the hack."Within a few minutes of the post coming up, I immediately got texts from a bunch of people I know, then I immediately called Jack so probably within less than five minutes my account was locked," said Musk. Twitter announced in 2021 that Dorsey had stepped down as CEO.Dorsey stepped down as CEO in 2021.Joe Raedle/Getty ImagesCNBC was the first to report on Dorsey's expected resignation, citing unnamed sources.Twitter confirmed the story the same day, announcing Chief Technology Officer Parag Agrawal would take over as CEO with immediate effect.Dorsey posted on his Twitter account saying: "Not sure anyone has heard but, I resigned from Twitter."In his tweet he included a screenshot of the email he sent to Twitter staff announcing his resignation.—jack⚡️ (@jack) November 29, 2021And in May 2022, his time on the board of directors officially came to an end, an anticipated move that coincides with the company's stockholder's meeting. Two days after Dorsey stepped down as Twitter CEO, Square changed its name to Block.Block's revamped its logo.Block"The name change creates room for further growth," the company said in a statement."Block references the neighborhood blocks where we find our sellers, a blockchain, block parties full of music, obstacles to overcome, a section of code, building blocks, and of course, tungsten cubes," it added.The line about tungsten cubes was an apparent reference to a craze among crypto enthusiasts of paying as much as $3,500 for novelty tungsten cubes.In April 2022, Dorsey changed his official title at Block from CEO to "Block Head."Jack Dorsey changed his title from CEO to "Block Head."BlockThe title change was made official in a regulatory filing with the Securities and Exchange Commission on April 20, 2022."There will be no changes in Mr. Dorsey's roles and responsibilities," the filing said.Block's website was also updated to list his new title as Block Head.Musk tweeted in response to the news using fire emojis to signal his approval for Dorsey's title.—Elon Musk (@elonmusk) April 23, 2022 Musk officially added the title of "Technoking" to his role at Tesla in March 2021.The Block Head is also a big believer in cryptocurrency, frequently posting about its virtues.Jack Dorsey likes to post on social media about crypto.Teresa Kroeger/Getty ImagesIn particular, Dorsey is a fan of Bitcoin, which he described in early 2019 as "resilient" and "principled." He told the "Tales of the Crypt" podcast in March that year that he was maxing out the $10,000 weekly spending limit on Square's Cash App buying up Bitcoin.In October 2020 he slammed Coinbase CEO Brian Armstrong for forbidding employee activism at the company, saying cryptocurrency is itself a form of activism.He's also said he hopes bitcoin can help bring about "world peace" in a panel alongside Musk and Ark Invest CEO Cathie Wood called "The B Word" on July 2021. He said he loves the bitcoin community because it's "weird as hell.""It's the only reason that I have a career — because I learned so much from people like who are building bitcoin today," Dorsey said.   Dorsey said in an April 2022 tweet his "biggest regret" was Twitter shutting down Vine.Dorsey has said he wishes he hadn't shut down Vine.Marco Bello/AFP/Getty ImagesDorsey replied to a Twitter user lamenting Vine's demise saying: "I know. Biggest regret," accompanied by a sad face emoji.Twitter acquired short-form video app Vine in 2012 but shut it down in 2016.In August 2022, Twitter's former head of security, Peiter Zatko, filed a whistleblower complaint with the SEC alleging the company participated in negligent security practices under Dorsey.Ex-Twitter security chief Peiter Zatko.Matt McClain/The Washington Post via Getty ImagesIn his 84-page report and subsequent testimony, Zatko made a number of allegations against the company, including claims it had "egregious deficiencies" around security protocol and that Dorsey experienced a "drastic loss of focus" in his last year as CEO of Twitter. In September 2022, Dorsey was deposed and questioned under oath as part of Elon Musk's legal battle with Twitter and his proposed $44 billion takeover.Dorsey was subpoenaed in Twitter's legal battle with Musk.APMusk's team accused Twitter of misleading investors and intentionally "miscounting" spam accounts, Insider reported. Later that month, private texts revealed Dorsey had tried to get Musk involved with Twitter a year prior to the Tesla CEO's $44 billion proposal.Text messages between Dorsey and Musk were uncovered as part of Twitter's lawsuit against Musk.Dimitrios Kambouris/Getty Images for The Met Museum/Vogue/Joe Raedle/Getty ImagesIn the texts, Dorsey explained why he left the company and said he previously pushed to get Musk involved with Twitter. "A new platform is needed. It can't be a company. That's why I left," Dorsey wrote to Musk, adding he thinks Twitter should be an "open-sourced protocol" and "cant have an advertising model." Dorsey also told Musk he had advocated for the Tesla CEO's addition to the Twitter board a year earlier, but the request was denied, which he said he thought "was completely stupid and backwards."In October 2022, as Musk was finalizing his Twitter deal, Dorsey quietly launched a beta for his new social-media company, Bluesky Social.In 2022, Dorsey launched a Twitter rival.Bluesky SocialThe blockchain-based company's beta launch raked in 30,000 signups in two days. According to Bluesky's website, the company is intended to support "a new foundation for social networking which gives creators independence from platforms, developers the freedom to build, and users a choice in their experience."As of July 2023, the site currently has over one million users, according to Gizmodo.More recently, Dorsey has apologized for some of the things that have taken place at Twitter since Musk took over.Dorsey apologized for the layoffs at Twitter.Jack Dorsey/TwitterAfter Musk ordered mass layoffs at Twitter after taking over in November 2022, Dorsey tweeted an apology: "I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that.""Folks at Twitter past and present are strong and resilient," he wrote on Twitter. "They will always find a way no matter how difficult the moment. I realize many are angry with me."He continued: "I am grateful for, and love, everyone who has ever worked on Twitter. I don't expect that to be mutual in this moment...or ever…and I understand." And despite initially supporting Musk's takeover, Dorsey hasn't always agreed with all of the Tesla CEO's decisions.AP/Getty ImagesLast year, Dorsey criticized Musk's decision to rebrand the social media site's Birdwatch feature to call it Community Notes, dubbing it the "most boring Facebook name ever."In April, the Twitter cofounder openly criticized Musk's leadership in a series of social media posts Friday, writing that "it all went south" and Musk "should have walked away" from the acquisition. Though in July, Dorsey said "running Twitter is hard" after Musk sparked a backlash by announcing "rate limits" on viewing tweets."I don't wish that stress upon anyone," Dorsey tweeted. "I trust that the team is doing their best under the constraints they have, which are immense. It's easy to critique the decisions from afar … which I'm guilty of … but I know the goal is to see Twitter thrive. It will."Dorsey also urged "calm" when Musk rebranded Twitter to X in July.Dorsey has also gotten more involved in politics in recent months.Jack Dorsey endorsed Robert F. Kennedy Jr. in June for his presidential campaign.John Lamparski/Getty ImagesHe endorsed Robert F. Kennedy Jr., who has made misleading claims about the COVID virus, in June for his 2024 presidential campaign.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 29th, 2023

The rise, fall, and latest stumbles of Victoria"s Secret

Victoria's Secret just announced its annual fashion show will return in 2023 after a four-year hiatus. Here's an in-depth look at the lingerie brand. The Victoria's Secret fashion show is set to return in 2023 after a four-year hiatus.Victoria's Secret media relations Victoria's Secret is the largest lingerie retailer in the US, and has been for several decades. After explosive success it had several stumbles but has since overhauled its brand image. The brand is relaunching its Victoria's Secret fashion show in the fall with a live fashion event and movie. Victoria's Secret has been the leading lingerie retailer in the US for several decades. But it's prominence has been shaken up in recent years after the lingerie brand faced sluggish sales, criticism for its lack of model diversity and size inclusivity, scandal for possible ties to Jeffrey Epstein, and an entire brand-image overhaul.The lingerie retail space also started to shift in a new direction — verring from push-up bras and skinny models to sports bras and a more body-positive image. Lingerie competitors, including Aerie, ThirdLove, and Lively, started to attract more interest from consumers and sales at Victoria's Secret began to slip. Then the brand ended its infamous Victoria's Secret fashion show in 2019, following controversial comments about transgender models from the its former marketing chief. But, after launching new marketing campaigns and the VS Collective, a group of female activists and entrepreneurs, the Victoria's Secret fashion show is making a comeback this fall. Here's a look at the rise, fall of Victoria's Secret, and the brand's plan for redemption. Victoria's Secret was founded in 1977 by American businessman Roy Raymond.Roy Raymond (left).Wikimedia CommonsInspired by an uncomfortable trip to a department store to buy underwear for his wife, Raymond set out to create a place where men would feel comfortable shopping for lingerie. He wanted to create a women's underwear shop that was targeted at men.  He named the brand after the Victorian era in England, wanting to evoke the refinement of this period in his lingerie.Victoria's Secret vintage catalog 1982.Victoria's SecretHis vision was summed up by Slate's Naomi Barr in 2013: "Raymond imagined a Victorian boudoir, replete with dark wood, oriental rugs, and silk drapery. He chose the name 'Victoria' to evoke the propriety and respectability associated with the Victorian era; outwardly refined, Victoria's 'secrets' were hidden beneath."He went on to open a handful of Victoria's Secret stores and launched its famous catalog. By 1982, the company was making more than $4 million in annual sales, but according to reports, it was nearing bankruptcy at the time. It was at this point that Les Wexner swooped in.Les Wexner (center).Getty/Astrid Stawiarz / StringerWexner, who founded L Brands (formerly Limited Brands) was already making a name for himself in the retail world as he gradually built up an impressive empire.By June 1982, Limited — which had previously acquired Express and Lane Bryant — was listed on the New York Stock Exchange. One month later, under Wexner's leadership, the company acquired Victoria's Secret's six stores and its catalog for $1 million. Wexner turned Raymond's vision on its head, creating a store that was focused on women rather than men.Wexner wanted to create affordable lingerie that looked luxurious.Nicholas Hunt/GettyHe was closely following the European lingerie market of that time and wanted to bring this aesthetic to the US. So, he set out to create a more affordable version of the European upscale brand "La Perla" — lingerie that looked luxurious and expensive but was affordable.  And it worked. By the early 1990s, Victoria's Secret had become the largest lingerie retailer in the US, with 350 stores nationally and sales topping $1 billion.Victoria's Secret spring lingerie collection in New York Tuesday, February 6, 1996.AP Photo/Adam NadelSource: The TelegraphThe brand began to cement its image over the next few years. In 1995, its famous annual fashion show was born.Ed Razek.AP Photo/Terry GilliamThe show, which was run by Ed Razek (longtime chief marketing officer of L Brands), became an iconic part of the brand's image. Razek and his team were responsible for hand-picking the models to walk the show. Because of this, he became one of the most important people in the modeling world, helping to launch the careers of Gisele Bündchen, Tyra Banks, and Heidi Klum. In 1999, the show aired for the first time online. Time described it as the "internet-breaking moment" of this era after 1.5 million viewers tried to tune in and crashed the site.Model Tyra Banks at Victoria's Secret fashion show Wednesday, Feb. 3, 1999 in New York.AP Photo/Mark LennihanSource: Time Meanwhile, the brand was also launching some of its best-known and most successful products, including its heavily padded Miracle Bra and Body by Victoria.Claudia Schiffer wearing a million dollar diamond Miracle Bra in a five-story display in New York City, 1996.Evan Agostini/Getty ImagesBody by Victoria was a "blockbuster success" and more than doubled the sales volume of any other bra that Victoria's Secret had previously launched, Michael Silverstein wrote in his book, "Trading Up."Around this time (1997), the idea of the Victoria's Secret "Angel" came into play after a commercial featuring Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks ran to promote its "Angels" underwear collection.Victoria's Secret Angels.Victoria's SecretIt was tradition for an Angel to wear a Fantasy Bra" at every runway show starting in 1996. They changed each year.Throughout the '90s and early 2000s, its commercials featured heavily made-up and scantily dressed Angels.A Victoria's Secret ad from 1997.YouTube/Derek DahlsadRazek hired the best photographers and television directors in the world to make commercials for the brand. The runway shows became more lavish. In 2000, model Gisele Bündchen walked the runway in what was then the most expensive item of lingerie ever created, a $15 million diamond-and-ruby-encrusted 'Fantasy Bra.'Gisele Bündchen.AP Photo/Stephen CherninIn 2000, Sharen Jester Turney came on as CEO of Victoria's Secret Direct, heading up its catalog business.Sharen Jester Turney is in the center.AP Photo/Richard DrewAccording to reports at the time, Turney wanted to remove the "hooker looks" in the catalog and made the aesthetic more like Vogue than Playboy.She became CEO of the whole brand in 2006. Under her nine-year tenure, the company thrived; sales increased by 70% to $7.7 billion.Turney with a group of Victoria's Secret models.Dimitrios Kambouris/Getty ImagesSource: Business InsiderTurney abruptly stepped down in 2016 and was succeeded by Wexner as interim CEO.Turney made an abrupt departure.L BrandsWexner made a series of quick and fast changes: killing the catalog, swimwear, and apparel to focus solely on lingerie, the core part of its business.He also split the brand into three — Victoria's Secret Lingerie, Victoria's Secret Beauty, and Pink — and recruited a CEO for each division.Jan Singer became CEO of Victoria's Secret Lingerie in September 2016.Jan Singer.Courtesy of SpanxSinger spent over a decade at Nike and was CEO of Spanx before she joined Victoria's Secret. Between 2015 and 2018, sales began to falter.A Victoria's Secret store in New York.AP Photo/Mary AltafferVictoria's Secret was slow to adjust to a shift from padded and push-up bras toward bralettes and sports bras, missing out on a major fashion trend. More body-positive underwear brands such as Aerie, ThirdLove, and Lively cropped up, taking market share.Aerie.Facebook/AerieVictoria's Secret was accused of failing to adapt to the times.Between 2016 and 2018, its market share in the US dropped from 33% to 24%. Some shoppers complained that the quality of its underwear had slipped.Deals on Victoria's Secret underwear.Business Insider/Mary HanburySource: Business Insider.One of its biggest assets, the teen-centric brand Pink, also began to struggle. Sales slipped, and it resorted to heavy discounting to woo shoppers.Pink.Business Insider/Mary Hanbury"We believe Pink is on the precipice of collapse," Jefferies analyst Randal Konik wrote in a note to investors in March 2018, commenting on the level of promotions in store.Some parents complained that Pink was being brought down by Victoria's Secret's over-sexualized ads.Its annual fashion show drew criticism for being outdated, and viewership slipped.Its 2018 fashion show didn't get quite the fanfare it had gotten in the past.AP ImagesIn November 2018, Razek sent the internet into a frenzy after he made controversial comments about transgender and plus-size models.Razek said in an interview with Vogue that he didn't think the show should feature "transsexuals" because the show is a "fantasy." "It's a 42-minute entertainment special. That's what it is," he said in the interview.Ed Razek speaks to the 2018 Victoria's Secret runway models backstage during the 2018 Victoria's Secret Fashion Show at Pier 94 on November 8, 2018, in New York City.Getty Images/Dia DipasupilRazek made a formal apology online but some of his critics called for him to step down. Read more: People slammed Victoria's Secret after its marketing chief made controversial comments about transgender models, but he didn't resign. This could be why, according to former executives.Less than a week after Razek's comments went viral, Singer resigned.Singer left when the brand was in turmoil.AP Images/ Evan AgostiniSource: Business Insider.Singer was replaced by John Mehas, who took over the role at the start of 2019.Kendall Jenner walks the runway at the 2018 Victoria's Secret fashion show.Agostini/Invision/APMehas had his work cut out for him. Same-store sales at Victoria's Secret were down 3% in 2018, and the retailer was gradually losing market share to new companies. Plus, he had angry shareholders to deal with. In March 2019, activist shareholder Barington Capital sent a letter to Wexner, laying out recommendations to improve growth at Victoria's Secret and called out the company's brand image as being "outdated."Read more: An activist shareholder is urging Victoria's Secret parent to update 'tone-deaf' brand image to boost salesBarington also called out the lack of diversity in its board of directors as being an issue for the brand. At the time, of the 11 board members, nine were men.Wexner and his wife, Abigail, both sat on the board of directors.AP Photo/Jay LaPreteIt seems Victoria's Secret took this criticism to heart. After acknowledging the letter in a statement, it appointed two new female board directors — Sarah E. Nash and Anne Sheehan — and made steps to address the comments about the brand image being outdated. It hired a more body-inclusive model.Hungarian model Barbara Palvin.Charles Sykes/Invision/APWhile she is not a plus-size model, fans praised the company for its decision to take on Hungarian model Barbara Palvin as one of its newest Angels.Instagrammers celebrated a post starring Palvin for being more body-inclusive, as they perceived her to be curvier than some of the brand's other models."This model actually looks healthy..& I'm loving it!" one Instagram user wrote.It also hired its first openly transgender model.Brazilian model Valentina Sampaio.Getty/ Dominique Charriau / ContributorBrazilian transgender model Valentina Sampaio, shared a photograph of herself on Instagram in August 2019, tagging the Victoria's Secret Pink brand along with the hashtags: "campaign," "vspink," and "diversity."A day later, she shared a video of herself with the caption "Never stop dreaming."Her agent later confirmed that she had signed a contract with Victoria's Secret.The same day, Wexner announced that Razek would be resigning in the middle of August in a memo sent out to employees.Les Wexner and Ed Razek pose backstage at the 2016 Fragrance Foundation Awards presented by Hearst Magazines - Show on June 7, 2016, in New York City.Astrid Stawiarz/Getty Images for Fragrance FoundationSource: Business Insider.And on November 21, 2019, the company confirmed that it had officially canceled its runway fashion show that year.Wexner previously told employees in May that Victoria's Secret was "rethinking" the show.Dimitrios Kambouris/Getty ImagesAt the time, L Brands CFO Stuart Burgdoerfer told analysts that the fashion show didn't have a big impact on boosting sales at the brand. While these were potentially positive changes, the brand found itself caught up in a new challenge in the summer of 2019: its CEO and the company being linked to convicted sex offender Jeffrey Epstein.Les Wexner (L) and Jeffrey Epstein (R).Astrid Stawiarz/Stringer and Patrick McMullan/Getty ImagesEpstein managed Wexner's money for several years, and former company executives told the Wall Street Journal that he tried to meddle in Victoria's Secret's business, offering input on which women should be models.Some of Epstein's victims came forward saying that he used his connection to Victoria's Secret to coerce them into sexual acts.L Brands' board of directors announced that it had hired an outside law firm to review its relationship with Epstein, who died by suicide in jail in August 2019.In September, Wexner addressed his ties to Epstein at L Brands' investor meeting. "At some point in your life we are all betrayed by friends," Wexner said. "Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I'm embarrassed I was even close to. But that is in the past."Read more: Former employees reveal what the billionaire head of Victoria's Secret is like as a boss as he faces backlash over his ties to Jeffrey EpsteinIn February 2020, the company announced that Wexner would be stepping down as chairman and CEO of L Brands but would stay on as chairman emeritus and sit on the board of directors. At the same time, it announced that it was selling a 55% stake in Victoria's Secret to private-equity firm Sycamore Partners.Wexner stepped down in 2020.Jay LaPrete/AP ImagesIn a statement to the press announcing the news, Wexner said that Sycamore has "deep experience in the retail industry and a superior track record of success," and that it "will bring a fresh perspective and greater focus to the business." In March 2020, the coronavirus pandemic swept across the US and Victoria's Secret was forced to shutter its stores.Stores close during the COVID-19 pandemic.Victoria's SecretIn April 2020, Sycamore filed a lawsuit to back out of the deal, alleging that Victoria's Secret's actions taken during the pandemic to close stores, cut back on new inventory, and not pay rent for the month of April were in violation of the agreement that the two parties had made in February.L Brands immediately issued a statement saying that a termination of the agreement is "invalid," and that it would "vigorously defend" the lawsuit and "pursue all legal remedies to enforce its contractual rights." On May 4, 2020, L Brands announced that the deal with Sycamore had officially fallen apart.The Sycamore deal falls through.REUTERS/Brendan McDermidL Brands said that it had come to a "mutual agreement" with Sycamore to "terminate" the deal.The company also said that it had reshuffled its management team and would focus on "implementing significant cost reduction actions and performance improvements at Victoria's Secret."This included permanently closing as many as 250 Victoria's Secret and Pink stores in the US and Canada in 2020.  In the second half of 2020, the brand started to recover, boosted by more sales online.Victoria's Secret becomes a standalone company.Mike Kemp/In Pictures via Getty ImagesJefferies analysts described Victoria's Secret's progress as "admirable" after it reported strong fourth-quarter earnings in early 2021. Bloomberg later reported that L Brands had resumed discussions to sell the brand once more and was seeking a much higher valuation in the region of $3 billion.But in May of that year, L Brands put an end to speculation and said that it was no longer looking for a buyer and would split the company in two and spin off Victoria's Secret to become a standalone business.   It then worked hard to execute a turnaround under new leadership.Victoria's Secret updated advertising in its stores.Mike Kemp/In Pictures via Getty ImagesRead more: Victoria's Secret is experiencing a major comeback after years of declining sales — and Wall Street is salivatingIt overhauled its brand image – swapping its Angels for a new group of activists and entrepreneurial women to be the face of the brand.Priyanka Chopra Jonas.Courtesy Dan SchawbelIn 2022, a three-part documentary series on Hulu titled "Victoria's Secret: Angels and Demons" shook up the brand in the eyes of the public.Jeffrey Epstein.Kypros/Getty ImagesThe series delved into Wexner's ties with Jeffrey Epstein and said that questions remained about the nature of their relationship.In the background, the company was continuing with its turnaround effort by launching new ventures such as Happy Nation, a brand that sells first bras and apparel to pre-teen shoppers.Happy Nation.Happy NationIt also began selling Victoria's Secret beauty products and underwear on Amazon. In March 2023, the company said its annual fashion show would return after a four-year hiatus.Victoria's Secret model Kate Grigorieva.Getty ImagesThe company is constantly innovating "in all spheres of the business," a spokesperson for Victoria's Secret told Insider, adding: "This will lead us into new spaces like reclaiming one of our best marketing and entertainment properties to date and turning it on its head to reflect who we are today."Following the announcement about the revived Victoria's Secret fashion show, the lingerie brand said it would drop a movie as well.Victoria's Secret announced it would release a movie alongside its fashion show this year.Courtesy of Victoria's SecretBy fall 2023, the retailer said it would release a "reimagined version" of its Victoria's Secret fashion show in the form of a movie, alongside a live fashion event."This film is the ultimate expression of the Victoria's Secret brand transformation," Raúl Martinez, creative director at Victoria's Secret, said in a statement. "It will be driven by fashion, glamour, and entertainment with a nod to beloved iconography from the past but in a bold, redefined way."But recent Victoria's Secret campaigns have led to continued criticism of the brand.Bella Hadid announced a campaign with Victoria's Secret on her Instagram in July.Lionel Hahn/Getty ImagesIn July, supermodel Bella Hadid announced her participation in a Victoria's Secret campaign on her Instagram, a post that attracted a mixed-bag of responses online. Some online commenters said the campaign was "perpetuating body dysmorphia to young women" while others defended the campaign. Victoria's Secret ired fans for dropping a marketing campaign similar to one from Kim Kardashian's Skims brand.Naomi Campbell in Victoria’s Secret “The Icon” campaign, alongside Tyra Banks in Skims “Icons” campaign from 2022.Mikael Jansson/Victoria’s Secret and Greg Swales/SkimsIn August, Victoria's Secret debuted a campaign that featured Naomi Campbell, Gisele Bündchen, and Adriana Lima, alongside other supermodels from the late '90s and early 2000s as well as newer faces to the modeling scene.The brand also traded in its "Angels " label, though, and named its campaign "The Icon" — similarly titledto a Skims campaign from the year before titled "Icons." The similarities didn't end there: both campaigns included Victoria's Secret models from earlier eras, and both included photos with comparable overexposed lighting and editing styles. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 25th, 2023