In today’s briefing:
- Meta’s Achilles Heel(s)
- Ford: Surprisingly Still Undervalued
- Oddity Tech IPO Preview: AI In The Beauty Industry
- Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys
Meta’s Achilles Heel(s)
- First some caveats: while we have all probably read Charlie Munger’s quote “I never allow myself to hold an opinion on anything that I don’t know the other side’s argument better than they do”, the reality is this is exceptionally uncommon and challenging.
- In fact, when investors mention risks about a company they like, they often deliberately choose strawman arguments from the other side and advertently or inadvertently ignore steelman arguments.
- I will try to avoid strawman bear cases (and boy there are many), and only outline the bear cases that indeed concern me as a shareholder.
Ford: Surprisingly Still Undervalued
- Receding credit risk and a more predictable inflationary environment will likely deliver tailwinds to cyclical stocks.
- The U.S. Government is set to throw its support behind the EV industry, and Ford might be a primary beneficiary.
- However, we are giving the stock the benefit of the doubt.
Oddity Tech IPO Preview: AI In The Beauty Industry
- Oddity Tech (ODD US) , innovative consumer-tech unicorn and a prominent player in the beauty industry, filed for a $100M U.S. IPO, with Goldman Sachs leading the offering.
- Founded in 2013 in Israel by CEO Mr. Holtzman and Chief Product Officer Ms. Holtzman-Erel, Oddity Tech (ODD US) wants to disrupt the global beauty and wellness market.
- Founder-Led company delivered profitable high-growth at a scale and has a rapidly growing user base. Given the company’s attractive fundamentals, Oddity Tech is bound to have a very successful IPO.
Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys
- We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.
- We continue to watch short-term support at 4300, and we cannot be bearish if the S&P 500 is above 4300.
- The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170
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