Hi Folks me again. It’s a big one this week! Happy Chinese New Year for everyone celebrating it on Tuesday, the year of the Tiger no less!
We’ve been all holding our collective chins in recent weeks with some musings from the painted porch of stoicism. In the week of Chinese new year we get an excuse to pop back to Ancient China circa 550BCE to see what our old friend Confucius has to say. Over to you buddy -
2022 is making last year look like we were bowling with the bumpers up only we didn’t know it was on east mode. We’re all looking at the seas of red mistakes in our portfolio, gaps in our research or black spots in life - now might be the time to pause and think ‘would carrying on be making another mistake’? The investing journey is a long one and wether you’re taking your first steps or have callused feet from a lengthy trek, 5 minutes to re focus is likely well spent. Adjusting your future decision could be the right course, radical action isn’t always required to get back on course. Selling a position that no longer fits your goals might not be wise but diverting future funds might be the change you need.
Let’s see what the last week of January has to offer then shall we.
= Earnings Report / Trading Statement
= Ex-Dividend date
= Dividend payment
= Macro / Market Wide
= If it sounds like I’m talking up my own stock then trust your instincts - I am!
TPT Topps Tiles 3.1p
AON AON 51c
HAS Hasbro Games 68c
NRG NRG Energy 35c
Eurozone Q4 GDP released
There really isn’t much going on today
UU United Utilities 14.5p
UK Nationwide House price index
Eurozone unemployment rate
US manufacturing PMI released
Alphabet - GOOG
Cloud growth is an important metric, given the high margin high growth forward progress will be of high importance when Sundar Pichai drop the Q4 results on Tuesday. If you use the companies chrome browser the way you’re followed around and served adverts is changing from to the far less catchy Federated Learning of Cohorts, or FLoC. Will this move affect the dominance and margins google holds dear? Looking forward investors will be keen to see how much future capital is needed for cash hungry pair of Waymo (Self driving cars) & Calico (Fighting ageing with biotech)
The search giant is undervalued by a huge 47% (Simply Wall Street) so a good set of results could see it rise from the 8% slip this year and onwards to only the 3rd ever $2Trillion company.
Baba - BABA
I don’t know what numbers Baba could report that would stop the market from taking every opportunity to kick the Chinese e commerce giant while it’s down. After a well published spat with the ruling elites the former darling of the NASDAQ has dropped 56% for the last 12 months and now boasts a frankly insane P/E of 15.
The Q3 report due today will show how Alibaba performed during the important Christmas holiday shopping season and the very important Single’s Day.
Every way you look at Alibaba is undervalued from a technical stand point, but this would be like predicting a football result for the team sheets without realising that the one team is allowed to change the size of their goal. All the while President Xi has his whistle in this lips nobody knows if or when he’ll blow full time on Alibaba ambitions.
AMD - AMD
The 2022 rebalancing has hit some companies worse than other but you could argue that AMD have taken more than their share of the pain. Down 30% this month its clear the market is not easily pleased, given management raised forecast growth from 37% to 65% last year, with Intel and TSM have both be clobbered. To take on the former of these two rivals AMD is spending $35bn (of newly created stock) to buy Xilinx and got approval form Chinese regulators on Friday. When the deal completes later this
Other notable earnings this week that I didn’t write about include Bean slingers Starbucks, Car part assemblers General Motors, Defintly not hiding any Nazi gold UBS, Lootbox lovers EA, The oily Exxon & Elon firing Paypal.
WKP Workspace Group 7p
MTO MITIE Group 0.4p
BVIC Britvic 17.7p
VLO Valero Energy 98c
US employment numbers
The company formerly known as as Facebook made a splash at October presentation, shifting the business focus and rebranding itself ‘Meta’. Repurposing the company and making the meta verse at the heart of everything they plan to do will require a large and sustained investment to execute. To help investors out earnings calls from now on will be split into two reporting entities. Facebook Reality Labs (Metaverse) and Facebook Family of Apps (Facebook, WhatsApp, Instagram) this should make it easier to judge the social media business without the metaverse investments clouding the water.
The have signalled that investment in FRL for 2021 alone will dent operating profits to the tune of $10 billion, with this number set to grow over the next few years. Investors are going to have to buy into this vision with profitability not envisioned until the end of the decade.
Facebook, as it was, missed their earnings target inn Q3 and guided lower than many had expected for Q4. All this talk of VR and meta verse cannot distract from the fact this is an important report, the stock has been on a 17% slide since the rebrand. Q421 v Q420 will show how much the apple privacy focused update to the iPhone will bite. Requiring all users to consent to being tracked it hits at Meta’s ability to lurk in the internet bushes watching what you’re doing.
erm … thanks Mark, haven’t you got a hell scape to be planning?
Who else have we got this week that I didn’t cover … Well Chip maker Qualcomm, Walkman makers Sony, Drugs dealers GSK, Metaverse hipsters Matterport, Red noise makers Ferrari, The Neil Young-less Spotify, new owner of the Athletic NY Times & Moribund New York Knicks owners - Madison Sq Gardens
COST Costco .79c
GAIN Gladstone .12c @Big-g
WFC Wells Fargo .25
European Central Bank rates decision - HOLD expected
Bank of England MPC meeting +0.25% expected
It is being widely predicted that the Bank of England will raise interest rates for the second month in a row, the first time since Frankee topped the charts with F.U.R.B or 2004 if that’s easier.
Inflation is running above 5% which is a long way above the banks stated target of 3%. You’ll find Quantitive tightening (QT) become the phrase on everyone’s lips from this week. The inverse of Quantitative easing (QE) which is pumping money into the system QT take it out by selling the assets the bank had amassed over the last decade.
Amazon - AMZN
After everyones favorite, mid life crisis having ,billionaire Mr Bezos having stepped down as CEO of the internet giant it is all eyes on Mr Andy Jassy. The man who created Amazon Web Services from an idea to the most profitable and fastest growing part of the ‘family’ is in the big chair and he’ll be keen to get the stock moving in his second earnings call. After drop 12% for the last 12 months issues with retaining workers and getting products has been hurting its core business.
These results include Halloween, Thanks-Giving, Black Friday & Christmas so like Alibaba in over in China revenue growth will be hotly anticipated. In the Q3 announcement CEO Andy Jassy foreshadowed a slowing of growth and a rising of costs “In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business … It’ll be expensive for us in the short term, but it’s the right prioritisation for our customers and partners.”
Darling of 2021 who increased the stock price by over 150%, off the back of the F-150 Lighting, has found it far harder in 2022. Cries can be heard from the offices Dearborn, MI … “BUILD MORE F-150 LIGHTNINGS” production has been doubled twice since launch to 100,000 and with Rivian and Tesla delays this is the time for Ford strike. The ‘gas’ F-150 has a 66% customer loyal and if Ford can retain this as they transition across to their electric range It will be no mean feat.
Activision Blizzard - (ATVI)
The take over from Microsoft is by no means a done deal with antitrust lawyers from the US government sniffing around everything that happens in Big Tech. This is the reason that the share price is still trading under the under the $95 offer price. Assurances around future publishing of titles across completing platforms could smooth this through but its clear the market isn’t so sure.
GoPro - (GPRO)
At one point last year Gopro had lost 95.5% of its value from the 2014 highs its saw not long after its market debut. Not to tread on @lewishardings toes here but you can call me intrigued by the action camera maker. More cash than debts, trading at 1.15x revenues & below its 50/200 day averages. Simply Wall St are suggesting a 52% upside to fair value but its all about innovation and future growth, if the company can find something to make people upgrade this could era value stock drew,. It is a big IF and I’m going to be doing more digging. It could also be a nice acquisition target for Canon, Sony or maybe someone else? Any thoughts on who might face a piece?
Other market moving conference calls today include The unofficial Facebook R&D department Snap, The social network for the house proud Pintrest, Horse silhouette fans Ralph Lauren, sweaty men in trunks WWE, fluffy coat maker Canada Goose, Pill pushersEli Lily, Oil Barrons Shell & oddly popular Unilever.
US full unemployment numbers / Average hourly earnings.
Not going to lie, I ran out of time to do any digging on these two. If you’re reading this comment below with the word submarine to show how deep you got. If nobody comments submarine I’ll spend the morning weeping in the corner.
Lets pretend it’s not Monday morning but Friday night instead. You’re home from work a little early but fridge is empty … it can only mean one thing. Take away time! What are you ordering? Top 3 … go!
- Chow Mein
- Egg Fried Rice
- Spring Rolls
- Sweet and Sour
- Crispy Duck
- Chicken Balls
- Prawn Crackers
- Sizzling Beef in Blackbean
- Spicy Soup
- Octopus tentacles in shark tooth broth
- Chips! I don’t like any of that foreign nonsense.