Daily Brief United States: Booking Holdings, US Foods Holding Corp, Alight , Cocoa Futures, Crocs Inc, Dropbox Inc, Enhabit , Ethereum, Kraft Heinz Co, Roku and more

• 4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)
• But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars 
• Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  

• This is our first report on food product manufacturer, US Foods.
• The company reported solid performance in the fourth quarter and full year 2023, demonstrating strong execution of its strategy and operational discipline.
• For the entire fiscal year of 2023, the company achieved record adjusted EBITDA of $1.56 billion driven by strong case growth, independent case growth of almost 7% and increased market share with targeted customer types.

Key points

• Alight has experienced strong organic revenue growth through recurring revenue contracts and acquisitions
• Concerns have been raised about stagnant gross margins, adjusted EBITDA margins, management turnover, and stakeholder selling
• Accounting validation issues further complicate the company’s financial standing and could potentially impact the stock price negatively

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• As per the International Cocoa Organization, there was a deficit of 216kt in the global market during 2021/22 and 99kt in 2022/23.

• With a significant decline in West African output in the ongoing 2023/24 season, it is anticipated that the market will experience a substantial third deficit, nearing 400kt.

• This would result in stocks reaching their lowest levels in at least a decade.

• This is our first report on Crocs Inc., a company that is well known for its distinctive footwear products.
• The company had a robust year in 2023, setting records and establishing a position of strength as it entered 2024.
• For the full year of 2023, the company reported a 12% YoY increase in total revenues, reaching nearly $4 billion, primarily driven by 19% direct-to-consumer growth at the enterprise level.

• Dropbox is a company that has seen considerable growth in its fourth quarter of 2023, with total revenue increasing by 6% year-on-year to $635 million, surpassing its guidance range.
• However, it also witnessed some challenges during this period, which were anticipated due to broader economic impacts that affected both their teams and document workflow businesses.
• For instance, Dropbox noted a decrease in gross new licenses and upsell activity as well as heightened churn rates.

Key points

• Enhabit Inc., the Home Health & Hospice unit spun off from Encompass Health, is undergoing a strategic review that could result in a potential sale of the company.
• Analysts estimate that if the company is sold, it could fetch a price 50-100% higher than its current value, with a potential equity value of $1.0bn or $20 per share.
• The opportunity for a sale exists due to the company’s undervaluation compared to its parent company, Encompass Health, as well as negative surprises in CMS rates and missed guidance, leading to activist pressure and a strategic review.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Ethereum has surged past the 3,000 ETH/USD mark, now trading at 3,050 ETH/USD.
• This increase is mainly driven by the intensifying anticipation over the potential launch of an Ethereum spot ETF, along with Ethereum’s recent breakout from a months-long period of underperformance compared to Bitcoin.
• Over the last week, Ethereum has seen an 8% increase relative to Bitcoin, with the latter seeing less net inflow into exchange-traded products than the week prior.

• The Kraft Heinz Company delivered a decent Q4 and its management expressed optimism about the company’s prospects in 2024.
• Assuring his belief in Kraft Heinz delivering solid results, he affirmed expectations for driving top-line growth, returning to positive volumes, expanding gross margins and operating margins, and making strategic investments in their business.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Roku, the leading streaming entertainment provider, delivered a strong fourth quarter and year-ended 2023 earnings as announced during the company’s earnings conference call.
• Roku’s CEO, Anthony Wood, and CFO, Dan Jedda, along with other executive members, shared insights into the company’s financials and business trajectory.
• On a positive note, Roku achieved adjusted EBITDA and free cash flow a year ahead of schedule, demonstrating the company’s focus on operational improvements and platform revenue growth.