In today’s briefing:
- Amazon: Having A Long-Term View Doesn’t Mean You Should Disregard Immediate Risks
- Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers
- IBM: Don’t Be Fooled By Recent Share Price Performance
- Old Dominion Freight Line Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- Charles Schwab Q1 Earnings Preview: Volatility En Route
- West Pharmaceutical Services Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- Dover Corporation: Initiation of Coverage – Business Strategy & Key Developments
- EURO-USD Cross Rate
Amazon: Having A Long-Term View Doesn’t Mean You Should Disregard Immediate Risks
- After losing nearly a third of its value, Amazon looks more attractive than a year ago.
- Investors should be mindful of recency bias when evaluating Amazon’s share price attractiveness.
- The unique business model also poses some risks that should be considered regardless of one’s investment horizon.
Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers
- This is our first report on Prudential, a major provider of life and health insurance.
- Prudential had a very strong quarter with 19% sales growth.
- Despite slower revenue recognition in the life insurance market, the company has been witnessing strong cash flows and returned over $800 million to shareholders in the latest quarter.
IBM: Don’t Be Fooled By Recent Share Price Performance
- IBM has delivered a positive return of nearly 20% over the past two years, but that has little to do with actual business performance.
- In addition to sluggish growth, IBM’s declining profitability remains a problem.Issues related to the company’s high debt load, low dividend coverage and an addiction to acquisitions have not gone away.
Being an IBM (NYSE:IBM) shareholder hasn’t been easy over the years as the market continues to make new highs, while IBM still trades at levels from 2010.
Old Dominion Freight Line Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on a major LTL shipping company, Old Dominion Freight Line.
- As a result, the company delivered double-digit growth in earnings per diluted share in the fourth quarter.
- Besides that, the productive labor expenses as a percentage of revenue decreased by 170 basis points within their direct operating costs, while their purchase transportation costs decreased by 200 basis points.
Charles Schwab Q1 Earnings Preview: Volatility En Route
- Charles Schwab is due to release its first-quarter 2023 earnings report on Monday.
- The firm’s sell-side trading activities remain in decline.
- The company’s elevated price-to-book multiple is a severe concern as slowing growth, a goodwill build-up, and recent impairment losses provide structural problems.
West Pharmaceutical Services Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on West Pharmaceutical Services, a major manufacturer of injectable medication delivery and packaging systems.
- West Pharmaceutical reported an all-around beat in its last result and generated about 8% growth in organic sales overall.
- With COVID-19 excluded, West anticipates that its base organic sales growth was in the low double digits, with proprietary product growth in the mid-teens.
Dover Corporation: Initiation of Coverage – Business Strategy & Key Developments
- This is our first report on Dover Corporation, a multifaceted international manufacturer offering cutting-edge machinery and parts, consumables, aftermarket components, software and digital solutions, and support services.
- The company’s last result was an all-around beat resulting from a good execution by the management and better price dynamics.
- Demand for services, consumables, and pricing decisions helped the quarter be profitable.
EURO-USD Cross Rate
- While the market has aggressively moved the US rates and the rate expectations lower, the European rates are pricing in higher for longer, with a rate hike possibility still on the cards.
- In the current market environment, the Dollar crosses are driven by rate differential and sentiment rather than growth differential and geopolitical risk of the Ukraine war.
- The Cross rate and the 13-day RSI are overlaid with two standard deviations Bollinger Bands to plot the mean reversion boundaries.
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