In today’s briefing:
- NVIDIA: Global Funds Hit New Highs
- US Mutual Funds: Is Ford Motor Company Uninvestible?
- SoftBank Group (9984 JP) – Reasons to Be Careful
- BFI Finance Indonesia (BFIN IJ) – Short-Term Blip Provides Opportunity
- Softcat PLC: Record Overweight as UK Managers Buy In
- Dr. Reddy’s Laboratories (DRRD IN): Q1FY24 Result- US Business Shines; PAT Jumps 18%
- Steel Dynamics Inc: 4 Surprising Reasons For Their Growth – Financial Forecasts
- PI: Frequency Scrambled
- SAP SE ADR: Carbon Footprint Management Offering & Other Developments
- Alcoa Corp: New Carbon Capture Technology & Other Developments
NVIDIA: Global Funds Hit New Highs
- Global Fund exposure in NVIDIA Corp (NVDA US) has moved to record levels after a doubling of the share price this year.
- New positions from UniNachhaltig Global, JP Morgan Global Focus and BNY Mellon Global Equity (3.36%) were among a total of 14 funds who opened exposure to NVIDIA Corp in 2023.
- Growth and Aggressive Growth funds are at maximum levels of ownership, whilst Value managers are showing some hesitancy here.
US Mutual Funds: Is Ford Motor Company Uninvestible?
- US Mutual Fund exposure in Ford Motor Company hits all-time lows with just 11 out of 295 funds holding a position.
- Ford Motor Company is now the 6th most widely held Auto stock after Tesla, General Motors, Rivian Automotive, Harley Davidson and Oshkosh Corp.
- Ford tops the list of unloved companies in the US, with the vast majority of active managers expecting Ford to underperform.
SoftBank Group (9984 JP) – Reasons to Be Careful
- The SoftBank share price rally is, in our view, based on optimism around the Arm IPO, the Yen’s relative weakness and recovering share prices of public companies in the portfolio
- Nvidia’s emergence as a potential anchor investor in the Arm IPO has boosted SoftBank shares, yet there is still a big disparity between groups in terms of Arm’s potential valuation
- Aside from a recovery in public tech companies’ shares, Yen weakness has supported SoftBank’s asset values; monetary policy moves now indicate the prospect of a stronger Yen versus the USD
BFI Finance Indonesia (BFIN IJ) – Short-Term Blip Provides Opportunity
- BFI Finance Indonesia (BFIN IJ) booked a solid set of 1H2023 results that were marred by an operational blip, with 2Q2023 impacted but this is likely to abate in 2H2023.
- The company continues to stand out for its leading position in collateralized lending backed by 4W, 2W, heavy equipment, shophouses and property, with an accomplished 15-year track record
- BFI Finance Indonesia remains the top pick to play the increasing growth from multi-finance in Indonesia. It trades on 2x FY2023E PBV, forecast to book an ROE over 20%.
Softcat PLC: Record Overweight as UK Managers Buy In
- UK Fund exposure in Softcat PLC has reached new highs. The percentage of UK funds invested in Softcat now stands at a record 17.3% with average holding weights of 0.21%
- Softcat PLC moves to the 5th most widely held Technology stock in the UK, sharing similar ownership characteristics to Spirent Communications, Halma PLC and Oxford Instruments.
- With Softcat approaching the boundaries of FTSE 100 inclusion, it’s not hard to envisage investment levels moving higher from here.
Dr. Reddy’s Laboratories (DRRD IN): Q1FY24 Result- US Business Shines; PAT Jumps 18%
- Dr. Reddy’s Laboratories (DRRD IN) started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.
- Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.
- During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.
Steel Dynamics Inc: 4 Surprising Reasons For Their Growth – Financial Forecasts
- Steel Dynamics had a disappointing second quarter with revenues below Wall Street expectations though they did manage to report improved net income and EBITDA.
- The management noted increased pricing and metal spread across flat-rolled and long-product steel operations.
- Steel Dynamics’ net income stood at $812 million, operating income at $1.1 billion, and EBITDA at $1.2 billion.
PI: Frequency Scrambled
- Impinj warned revenue would decline sequentially in the third quarter due to weaker than expected demand from retail apparel customers. The shortfall started towards the end of the second quarter
- Impinj increased inventory in the first quarter and more so in the second quarter. Inventory within the channel has also increased compared to the first quarter
- Impinj’s stock continues to price the downward revenue scenario as a short-term event. Previous downturns have lasted more than one quarter
SAP SE ADR: Carbon Footprint Management Offering & Other Developments
- SAP delivered a mixed set of results in its most recent result with revenues above Wall Street expectations but below-par earnings.
- RISE with SAP and GROW with SAP have been well-received offerings, driving significant cross and upsell opportunities across their portfolio.
- SAP’s approach with SAP Business AI is unmatched in the industry, delivering relevant, reliable, and responsible AI solutions to customers, with plans to introduce new premium RISE offerings and an uplift of up to 30% in the fall.
Alcoa Corp: New Carbon Capture Technology & Other Developments
- Alcoa delivered a solid result and managed an all-around beat in the last quarter.
- The company had a mixed last quarter and reported slightly higher revenue and increased shipments but experienced challenges due to market conditions.
- Despite lower alumina and aluminum prices, they improved net loss due to the nonrecurrence of specific charges.
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