Daily Brief United States: Samsonite, Tesla , Cocoa Futures, Root /OH, elf Beauty Inc, Ecovyst, Vera Bradley, NVIDIA Corp and more

• It seems like every week, Bloomberg reports a HK-listed company weighing privatisation options. HKBN (1310 HK), ESR (1821 HK), and Samsonite (1910 HK) have all been rumoured of late.
• Last Friday, Samsonite announced it was focused on pursuing the listing of its shares on a second exchange.
• No preferred exchange was mentioned. Nor whether the goal is to secure a dual primary listing, or a secondary listing. A buyout, for now, appears to be on the backburner.

• You know it’s bad when Tesla’s delivery trends blow through even my lowest estimates, which already had trailed market projections.
• With no help from the hapless CyberTruck which, not surprisingly, continues to shoot Tesla in the foot.
• See my latest Q1 and full-year estimates—which still prove to be too high.

• Fund Manager Positioning In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.
• Investors have been underweight commodities now for the past 4 months (longest underweight streak since Aug’19) Compared to the past 20-year z-score, fund managers remain heavily underweight in commodities and even more in energy.
• In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.

• Fiscal spending has been the key driver for this bull market as it reaccelerated in late 2022 following the inflation and subsequent interest rate shock.
• This impulse will likely diminish over the next months. It will be replaced by a credit impulse from rate cuts, the first few of which will be very powerful.
• Market mechanics will be accommodating. Leverage in the system is low. In fact, the pain trade is still higher.

• We are reiterating our Buy rating and $0.25 price target for Starco Brands with the company announcing 4Q23 (December) results after the close on Monday.
• We believe 2024, with a full compliment of unique, value-added brands which leverage Starco’s aerosol and marketing infrastructure in hand, and a laser focus on adding key categories and new relationships, is shaping up as another year of material progress for Starco.
• We believe there are also continued margin expansion opportunities from both economies of scale and the company’s manufacturing expertise.

• The macroeconomic conditions continue to pose as a tailwind for Ecovyst (ECVT) with commodity prices holding and the USA’s GDP expected to remain positive in 2024
• ECVT faced several challenges in 2023 that should be a non-factor in 2024’s financial results. ECVT has already set expectations for a soft first half of the year
• The scheduled maintenance cycle at oil refineries played a role in ECVT’s fourth quarter results and how ECVT is projecting 2024 to pan out

• We are reiterating our Buy rating, $10 price target and projections for Vera Bradley after visiting stores in Connecticut and Long Island.
• We believe, as we near the launch of management’s full vision for Vera Bradley in July, both the outlets and main line locations increasingly reflect what is being added and what will be discarded in the shift.
• As such, we are seeing less inventory, especially in the outlet stores, flow in; further, there is an increasing emphasis on core categories, especially handbags, totes and luggage.

• Jensen Huang showcased Nvidia’s dominance in the data center during his keynote address
• Nvidia’s new Blackwell architecture involves stitching together two monolithic cores, not using chiplets, to create a single functioning chip
• The innovation behind Blackwell and its impact on Nvidia’s technological advancements were not fully appreciated during the event, highlighting the complexity and ingenuity of the design.

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