United States

• Global wheat trade is imbalanced with few exporters and many importers. This means a few nations’ trade policies affect supply during shortages as they restrict exports to prioritize domestic needs.
• El Niño generally causes wheat production to decline among key exporters as well as most importers. This increases the likelihood of shortages in the wheat export market.
• Currently diminished global wheat inventories increase the likelihood of supply shocks and price surges in global wheat markets.

• Gilead Sciences Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.
• Total product sales, excluding Veklury, displayed significant growth, extending the company’s streak of seven consecutive quarters with year-over-year growth in its base business.
• Despite an anticipated decrease in Veklury sales due to reduced hospitalizations, the total product sales, including Veklury, also showed a substantial year-over-year increase.

• Amazon.com, Inc. delivered positive results and managed an all-around beat last quarter.
• The company has reported revenue of $134.4 billion and operating income of $7.7 billion.
• These are significant contributing causes to AWS’s recent growth and the over twofold increase in revenue over other service providers.

• Paramount Global managed to exceed analyst expectations in terms of revenue and earnings, demonstrating sustained focus on corporate spending containment and good momentum in its D2C sector.
• Affiliate and subscription revenue increased by a healthy 12% in Q2 and again showed how the combination of traditional and streaming led to net growth for the business.
• Paramount’s 47% increase in D2C subscription revenue was mostly attributable to Paramount+, where the company saw subscriber growth, increased ARPU, and lower churn rates.

• Cloudflare, Inc. delivered an all-around beat in the previous quarter.
• The second quarter’s total revenue reached 32% year over year to $308.5 million.
• In the quarter, Cloudflare received 10 million active worker applications, a 250% increase since December and a 490% increase year over year.

• United Parcel Service, Inc. delivered a mixed result in the recent quarter, with revenues below market expectations but managed to surpass the analyst consensus regarding earnings.
• Consolidated revenue for the quarter was $22.1 billion, a 10.9% decrease from the prior year.
• All three segments showed flexibility in the quarter, reducing total expenses by $2.1 billion compared to the same period last year.

• Apple Inc. managed to surpass the revenue and earnings expectations of analysts.
• Apple has reported sales of $81.8 billion, which is higher than the company had anticipated.
• With robust iPhone sales setting new quarterly total revenue highs in countries including India, Indonesia, Mexico, the Philippines, Poland, Saudi Arabia, Turkey, and the United Arab Emirates, Apple saw strong results in emerging markets continue.

• This is our first report on insurance and reinsurance brokerage player, Arthur J Gallagher & Co.
• The company surpassed Wall Street’s revenue and earnings expectations in its latest quarterly result.
• The company posted revenue and organic growth for its risk management and combined brokerage segments.

• Eli Lilly and Company managed to surpass the revenue and earnings expectations of Wall Street.
• Eli Lilly made progress on its ambitious manufacturing plan, advanced its R&D pipeline, and produced positive financial results.
• Furthermore, Eli Lilly announced that commercial production in its Research Triangle Park facility in North Carolina has started supporting its incretin portfolio.

• LyondellBasell Industries delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• O&P Americas EBITDA climbed by $138 million to $679 million during the second quarter.
• Their team anticipates that fluctuating feedstock costs and the emergence of new capacity will cause margins to contract in the third quarter.

• Booking Holdings Inc. managed to exceed analyst expectations in terms of revenue as well as earnings.
• The 268 million hotel nights booked in the second quarter increased by 9% year over year, and the $39.7 billion in gross bookings, the largest quarterly total ever, surged by 15% year over year.
• The positive demand environment caused hotel nights and revenue bookings to surpass the company’s previous projections.

• Dropbox, Inc. delivered a positive result and managed an all-around beat in the last quarter, driven by FormSwift’s revenue growth and some improvement in the company’s SKUs, as the development it observed in late Q1 carried over into Q2.
• In the quarter, the company launched Dropbox AI.
• Furthermore, Dropbox introduced a new activation homepage to simplify admins setting up their teams and becoming familiar with the product.

• Cummins Inc. delivered mixed results in the quarter, with revenues above expectations but below-par earnings.
• Cummins’ organic sales growth rate was 12%, driven by increased pricing and strong end-market demand for its goods globally, with a balance of 19% rise in sales generated by including Meritor.
• Due to the inclusion of Meritor, high demand, and better pricing, the quarter’s revenue increased.

• Air Products and Chemicals’ pricing strength remains unabated, with its volume improving for an impressive ninth consecutive quarter, bolstered by strong on-site performance, and the integration of over 13 new assets.
• Strategically, Air Products & Chemicals underscores two fundamental growth pillars: the robust core industrial gas business and the pioneering low and zero-carbon hydrogen projects.
• The latest quarter results were also commendable, with a 3% volume increase and a 10% rise in merchant price.

• Alnylam Pharmaceuticals, Inc. delivered a disappointing set of results as it was unable to meet the revenue earnings expectations of Wall Street.
• In Q2, the overall net product revenues increased 43% year over year across all products.
• The TTR brand generated $224 million in global net product revenues for ONPATTRO and AMVUTTRA, a 46% increase from the second quarter of 2022 and a 9% rise from the first quarter.

• Philip Morris International managed to surpass the revenue and the earnings expectations of Wall Street.
• This fantastic result supported high teens’ currency-neutral adjusted diluted EPS growth and double-digit organic top-line growth.
• Given these strong results, their team remains confident in a solid full-year result with exceptional revenue growth.

• Kellogg Company delivered mixed results in the quarter, with revenues below expectations but surpassed the Wall Street consensus regarding earnings.
• With this operating profit result, Kellogg is slightly above its previous full-year forecast.
• Market growth rates for the snacks category remained strong and may have even increased somewhat from the previous quarter.

• Quanta Services, Inc. surpassed the revenue and earnings expectations of Wall Street.
• They resulted in significant quarterly revenues exceeding $5 billion for the first time in company history and a backlog of $27.2 billion.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Year to date, Intel’s data center revenues are down 28% YoY. 
• By comparison, AMD’s year-to-date revenues are down just 6% YoY
• Why is AMD performing so much better than Intel in the data center and will their market share growth continue?

• The VIX INDEX is currently OVERSOLD from a time perspective, but not yet from a price perspective: if it falls <13, there is a high probability it will reverse up.
• A spike in the VIX will correspond to a drawdown in equities, globally. The MRM model indicates a 1-2 weeks duration for the event, price targets between 16 and 18.
• After the spike, the VIX could start to fall again, so this upcoming volatility spike should be a brief, short-lived event.

• Klaviyo, a Shopify-powered marketing automation platform provider for SMBs, mid-market, and B2B companies, filed to go public and plans to list on the New York Stock Exchange.
• The fast-growing company was backed by Summit Partners, Shopify, and top-tier VC firms, including Accomplice, Accel, Sands Capital Ventures, Astral Capital, Cross Creek, and W Ventures.
• Klaviyo is expected to IPO next week. S-1/A put the price range at $25-$27, implying a market cap of $6.5B at the midpoint, or $8.4B on a fully diluted basis. 

• Pegasystems delivered disappointing results as the company could not meet Wall Street’s revenue and earnings expectations.
• Pega achieved a remarkable feat in the first half of 2023 by producing $114 million in cash flow from operations and $123 million in free cash flow.
• The free cash flow dollars produced in the first half of the year was $123 million.

The managers of Baillie Gifford US Growth Trust (USA), Gary Robinson and Kirsty Gibson, aim to invest in exceptional US businesses with the potential to grow substantially faster than the market and deliver exceptional returns over the long term. Businesses capable of such growth tend to operate at the cutting edge of technology-led change, and USA has exposure to companies focused on artificial intelligence, space travel and drone delivery. The fluctuating fortunes of growth stocks over the past couple of years, combined with some de-rating of USA’s unlisted holdings, mean that USA’s performance has undershot market returns during the first five years since inception. Cumulative returns over the five years ended August 2023 totalled 49.1% in NAV terms, lagging the market return of 73.8%. However, the managers believe the ‘phenomenal’ fundamental performance of many portfolio holdings, combined with their very good growth prospects, augur well for the company’s ability to realise its return target over the longer term.

• Broadcom managed to exceed analyst expectations in terms of revenue as well as earnings.
• Infrastructure software revenue increased 5% yearly to 9 billion, while semiconductor solutions revenue gained 5% yearly to $6.9 billion.
• Wireless revenue accounted for 24% of semiconductor revenue in the quarter and was up 4% sequentially but flat yearly.

• Xerox Holdings Corporation delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• This quarter, Quocirca recognized Xerox as a leader in cloud print services, recognizing the company for its breadth of customer service as well as its strategic vision.
• Xerox Holdings received the renewal of a leading healthcare service company this quarter, boosting the yearly contract value by about 40%.

• Generac Holdings delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
• The company faced challenges as residential product sales declined significantly by 44%, primarily due to a softer consumer spending environment impacting home standby generators and chore products.
• In contrast, the company’s Global C&I product segment achieved an all-time quarterly sales high with approximately 24% growth, driven by broad-based expansion across regions and channels.

• Under Armour delivered a solid result and managed an all-around beat in the last quarter.
• Revenue decreased by 1% after considering the adverse effects of foreign exchange brought on by the strength of the US dollar.
• Direct-to-consumer revenue climbed 4% to $544 million, owing to strong results in the e-commerce and retail channels.

• West Pharmaceutical Services delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• Sales price increases provided $43.1 million or 5.6 percentage points of growth in the quarter.
• The base Proprietary goods business expanded by the mid-teens and was the main driver of the second quarter achievement.

• Under Armour delivered a solid result and managed an all-around beat in the last quarter.
• Revenue decreased by 1% after considering the adverse effects of foreign exchange brought on by the strength of the US dollar.
• Direct-to-consumer revenue climbed 4% to $544 million, owing to strong results in the e-commerce and retail channels.

• Insulet Corporation exceeded analyst expectations in terms of revenue as well as earnings.
• The company’s revenue for the second quarter surpassed its projections, growing by 33% overall at Omnipod, including 41% in the United States.
• During the second quarter, Insulet made significant progress in its clinical and innovation programs.

• Softbank Group (9984 JP) raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)‘ US IPO.
• ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
• In our previous notes, we looked at the company’s past performance and valuation. In this note, we talk about the trading dynamics.

• Our base case valuation of Instacart is target price of $33.7 per share, which represents a 20% upside from the high end of the IPO price range ($28 per share).
• We estimate the company’s operating margin to improve from 2.4% in 2022 to 13.2% in 2023 and 14.6% in 2024.
• Although overall sales growth rate from 2020 to 2024 is lower for Instacart as compared to Uber and DoorDash, Instacart is having stronger growth in operating margins than its peers. 

• Snap-on Incorporated achieved decent growth in both sales and profitability in its most recent result.
• Moreover, Snap-on’s success in the Tools Group highlighted its ability to innovate and cater to customer needs effectively.
• Snap-on’s customization and profitability, particularly in low-volume production, have been a driving force behind its growth.

• Nutanix Inc. managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• Notably, the company outperformed all guided metrics, achieving robust ACV billings growth and quarterly revenue.
• Additionally, the company generated significant free cash flow growth compared to the previous fiscal year.

• Campbell Soup Company managed to surpass the revenue expectations of Wall Street.
• The fourth quarter saw a 5% increase in organic net sales, driven by inflation-induced net price realization and strong in-market performance.
• For the full year, Campbell Soup achieved double-digit organic net sales growth of 10% and solid adjusted EBIT growth of 5%, with consumption rising by 8%, reflecting increased consumer demand and effective strategic execution.

• Wolfspeed Inc. delivered mixed results in the last quarter, with revenues above Wall Street expectations but below-par earnings.
• The company’s Mohawk Valley Fab, the largest fully-automated 200-mm silicon carbide fab, started shipping products and continues to ramp production, thus contributing revenue.
• With customers transitioning to silicon carbide, the company continues to see growth in the traditional energy and industrial segment.

• Elastic NV delivered an all-around beat in the most recent quarterly result.
• The company achieved a milestone with annual contract values exceeding $100,000, demonstrating Elastic’s rising popularity as the preferred data analytics platform for real-time search use cases.
• The second trend involved customers consolidating their operations onto the Elastic platform for multiple use cases, benefiting from Elastic’s core strengths and unmatched value proposition in search, log analytics, and security analytics.

• The ECB is likely going to hike tomorrow and even after the repricing this morning, we still see risk/reward favoring a bet on a hike.
• With the inflation forecast likely being hawked up (as per sources in Reuters), we see a very high probability that the ECB will react to the hawkish adjustment of staff projections with a hike and continued hawkish messaging.
• If the ECB raises the inflation profile to >3% territory in Q4-2023 and Q4-2024, that would constitute a >0.3%-points increase in the profile, which will most certainly have to be followed up by policy action.

• It’s a “show me the money” versus a “build it and they will come” approach
• New fab construction will be based solely on customer commitments.
• It’s a curiously cautious plan and highly unlikely to succeed

• Dollar General Corporation’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
• Due to higher average borrowing amounts and interest rates, interest expense climbed to $84 million in Q2 from $43 million in Q2 of last year.
• Dollar General has experienced a significant drop in its stock value this year, sparking speculation about potential activist investors eyeing the company.

• We still believe it’s possible we’ve seen the lows for this pause/pullback on the SPX, and we see low probability of meaningful correction if SPX is above 4300-4325 (1.5-year support).
• As initially discussed in our 8/29/23 Compass, we wouldn’t be surprised to see another month+ (i.e., through the end of September, and possibly longer) of consolidation between 4325 and 4600.
• Downgrading Industrials (XLI) to market weight due to 1.5+ year RS uptrend violation. Buys highlighted in Uranium and Energy (refiners and coal).

• MongoDB managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The company exceeded the high end of its projection and achieved revenue of $424 million, a 40% year-over-year increase.
• Atlas sales increased 38% year over year, accounting for 63% of revenue, and is now a product with a run rate of more than $1 billion.

• The Cooper Companies delivered a positive result and managed an all-around beat in the last quarter.
• The company surpassed revenue estimates, generating significant quarterly revenues of $930 million, driven by strong sustained organic growth.
• CooperVision reported $630 million in revenue, up 13% organically, while CooperSurgical reported $300 million in revenue, up 9% organically.

• Chewy delivered a solid result and managed an all-around beat in the last quarter, producing mid-teens growth that exceeded expectations as well as strong profitability.
• The number of active customers was almost steady sequentially, but the net sales per active customer, or NSPAC, rose by 15% to $530.
• Net sales growth was boosted by active customer participation, highlighting the steadily growing strength of the Chewy ecosystem.

• Workday exceeded analyst expectations in terms of revenue and earnings, with a non-GAAP operating margin of 24%, subscription revenue growth of 19%, and a 24-month backlog increase of 23%.
• Early renewals exceeded Workday’s expectations in the quarter and increased the 24-month backlog by nearly 1.5 percentage points.
• Workday’s team anticipates increasing their forecast for subscription revenue for FY 2024 to a new range of $6.57 billion to $6.59 billion, representing an 18% yearly increase.

• Dell Technologies delivered a positive result and managed an all-around beat in the last quarter.
• Government and small and medium-sized business demand also increased, and their transactional demand strengthened throughout the quarter.
• While the overall DFS portfolio quality remains good and credit losses are around historically low levels, DFS ending managed assets achieved $14.7 billion.

• Hormel Foods Corporation delivered a disappointing set of results as the company was unable to meet the revenue expectations as well as the earnings expectations of Wall Street.
• Additionally, Hormel Foods recently introduced an LTO for the fall season: apple cider donut-flavored cashews, which the team anticipates will increase category volume and attention.
• Hormel Foods noticed a recovery across the turkey portfolio in its Retail segment and increased volume in important categories.

• Lululemon Athletica delivered an all-around beat in the previous quarter, exceeding the management’s projections for revenue and EPS.
• Comparable sales increased by 17% online and 9% in-store, and adjusted EPS rose by 22% over the same time last year.
• In July, Lululemon Athletica established its first site in Thailand, making it the 100th APAC facility overall.

• Las Vegas Sands (LVS US) is coming up “cheap” on my monitor as Macau’s gross gaming revenue touches a new post-Covid high. 
• Preceding my comments on LVS are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Instacart is targeting a valuation between US$8.6 billion to US$9.3 billion in its IPO. Instacart’s valuation has declined nearly 77% from its peak levels US$39 billion a few years ago.
• Established in 2012, Instacart is a leading players in North America of delivering online grocery goods to consumers’ homes.
• Instacart generated sales of US$2.6 billion (up 39.1% YoY), gross profit of US$1.8 billion (up 49.3% YoY), and operating profit of US$62 million (turned black YoY) in 2022.

• Intel’s upcoming Meteor Lake family of chips will include a new specific component specifically for running AI processes locally on PCs.
• Meteor Lake will enable mass market adoption of AI PCs by providing a platform for developers to create more advanced AI PC applications than are currently possible.
• Meteor Lake’s launch could start by end-October. Intel’s Innovation conference September 19-20th will likely add visibility. Intel’s potential supports a Long thesis for Taiwan’s PC supply chain.

• Oil majors to extend voluntary production cuts with an eye to pushing crude oil prices to $100/barrel.
• Demand for oil at record highs, fueled by strong travel, increased oil usage in power production & solid Chinese petrochemicals activity.
• Refiners are reaping near-record profits as their throughputs are set to reach a summer peak of 83.9m bpd in August.

• WDFC faces continued headwinds with consumer spending remaining limited and distillate prices going up.
• We doubt WDFC would be able to raise prices with higher input costs since their customers were already trying to avoid the last series of price adjustments.
• The consumer is picking where they are spending their finite capital. In recent months it has become clear the consumer is not willing to invest in maintenance around the home

• Aspira Women’s Health announced it has named Jody Berry, Ph.D as its new Chief Scientific Officer.
• Dr. Ryan Phan, who stepped down from the position, remains as an advisor through the end of the year to help with the transition and provide scientific and operational advice related to ongoing product development programs.
• Dr. Berry is a recognized international expert in immunoassay development, antibody technology, and infectious diseases.

• Splunk Inc. delivered a decent result and managed an all-around beat in the last quarter, marked by solid execution, operational discipline, and favorable customer engagement.
• Total revenue experienced a healthy year-over-year increase, demonstrating Splunk’s ability to achieve this growth while managing costs underscores its strategic approach.
• Additionally, Splunk continued to innovate by leveraging AI in security and observability, introducing the concept of Splunk AI to empower organizations to detect, investigate, and respond more efficiently.

• Salesforce delivered an all-around beat in the previous quarter.
• The company’s non-GAAP operating margin increased in the quarter.
• Salesforce also had fantastic victories throughout the quarter with JPMorgan, Bayer, FedEx, Maersk, as well as the Department of Veterans Affairs.

• CrowdStrike Holdings managed to exceed analyst expectations in terms of revenue as well as earnings.
• The company outperformed top and bottom line metrics expectations, achieving strong, scalable growth, amazing leverage, and operating within its target model overall.
• CrowdStrike also successfully implemented a go-to-market strategy centered on cloud security this past quarter, hosting a virtual cloud security summit with over 12,500 security and DevOp attendees, followed by cloud-focused partner and sales plays.

• Dollar Tree delivered a solid result and managed an all-around beat in the last quarter.
• For the quarter, Dollar Tree produced a combined increase in sales of 8.2% to $7.3 billion, 6.9% enterprise comp growth, and operating income of $287.8 million, resulting in earnings per share of $0.91.
• In the Dollar Tree sector, with a slight offset from average ticket, their 7.8% comp was driven by 9.6% increased visitation.

• Freshworks, a cloud-based customer services software unicorn, held its first Investor Day on September 7, 2023. Management highlighted the long-term target to deliver the Rule of 40 by 2025. 
• The 2023 Investor Day agenda included company vision and strategy, solutions in action, strategy for durable growth, customer spotlight, and financial overview, among others. 
• Management plans to deliver a long-term balance of growth and profitability, with the 2026 model leading to an FCF margin of 20%+ and $1B+ revenue. 

• Veeva Systems managed to exceed the revenue expectations as well as the earnings expectations of Wall Street, with a total revenue of $590 million and a non-GAAP operating income of $212 million.
• The Veeva team has made some truly impressive accomplishments as they develop the next generation of CRM.
• Nearly 25% of their revenue comes from Veeva CRM and their add-ons.

• Burlington Stores managed to exceed the revenue expectations and the earnings expectations of Wall Street.
• Comparable store sales increased by 4%, while overall sales increased by 9%.
• This was caused by a 130 basis point drop in freight costs and a 150 basis point increase in merchandise margin.

• Marvell Technology delivered a positive result and managed an all-around beat in the last quarter, producing $1.34 billion in revenue.
• Revenue in their data center end market was $460 million, up 6% sequentially and significantly more than their forecast of a flat outlook.
• Notably, revenue from cloud AI and common cloud infrastructure both increased sequentially, with AI expanding more quickly.

• Ulta Beauty surpassed the revenue and earnings expectations of Wall Street.
• For the quarter, all major categories produced comp growth.
• The quarter saw double-digit growth in both prestige and mass skin care.

• The Gap, Inc. delivered a mixed result in the quarter, with revenues below expectations but surpassed the analyst consensus regarding earnings.
• The company continued to enhance its cash flows and strengthen its balance sheet by reducing inventory by 29% year over year, generating over $300 million in free cash flow.
• Second quarter sales were down in the mid- to high single digits, with net sales of $3.5 billion, down 8% from last year.