In today’s briefing:
- Buy This Give Back
- Defending the Gold Premium
- The Winners and Losers in a Post-FTX World
- ADEA: Free Cash Flow & Valuation
- Capri Holdings: Major Drivers
- Electronic Arts Inc: New Windows Application & Other Developments
- Lear Corporation: New Sustainability Solutions Addition & Other Developments
- Match Group: Major Drivers
- Qorvo Inc: Major Drivers
- Roku Inc: Expansion Of Free Streaming In Mexico & Other Drivers
Buy This Give Back
- US equities give back post PPI is a buying opportunity within our Q4 bull framework. The conviction trade is to sell USD upticks with lower yields in store into December.
- Sell the USD into Dec which supports turn around plays in Asia. DXY 103 is our bull support to stage a fresh rise. How will yields respond?
- SPX 3,850 buy support with 4,100/200 the Q4 target to top build ahead of a fresh Q1 bear cycle. Summer bounce similarities.
Defending the Gold Premium
- When you look around the world for a big, liquid, globally accepted safe haven, there is only one, and that is gold, which continues to reassert its status as the asset of last resort.
- Pre-1970, in the days of the gold standard, gold formally enjoyed this role.
- Today, after a 50-year break, the free market is putting gold back onto the pedestal where it belongs.
The Winners and Losers in a Post-FTX World
- The aftershocks of the FTX fraud continue to ripple through crypto, with entities such as Genesis Trading and the FTX-owned exchange Liquid halting withdrawals over the last couple of days.
- It’s likely that it will take months or years to determine who the real winners and losers of the biggest scandal in crypto history will be, but there are some interesting market dynamics to be aware of in the immediate aftermath of the collapse of FTX.
- Using Kaiko’s CeFi and DeFi data, we have identified some important trends that give an indication as to who may stand to win and lose in the future.
ADEA: Free Cash Flow & Valuation
- ADEA reported third quarter results that still included the financial results of its products business prior to the spin-off. ADEA generates revenue from IP licenses, creating a steady revenue stream
- ADEA expanding its base of licensees over the next year should set a pathway to ADEA reaching baseline revenue of $500 million a year from $375 million currently
- ADEA applying free cash flow to reducing its debt balance should yield a higher valuation for the stock price
Capri Holdings: Major Drivers
- Capri Holdings delivered quite a strong result which happened to be an all-around beat.
- With the three pillars, Greca, Virtus, and La Medusa making significant progress, the goal of the company is to position Versace as the prominent luxury leather house.
- Capri also expanded its core lines that incorporate iconic house codes for broadening the reach of Versace.
Electronic Arts Inc: New Windows Application & Other Developments
- EA’s stock trajectory has remained sideways even after a disappointing quarterly result where the company failed to meet Wall Street expectations in terms of revenues as well as earnings.
- Its EA Sports portfolio and its multiplatform live services businesses have helped the company thrive in a tough phase.
- During the quarter, EA launched Premier Sports Games and delivered its largest EA Sports FIFA console and PC launch.
Lear Corporation: New Sustainability Solutions Addition & Other Developments
- Lear Corporation saw a significantly improved set of results in the last quarter and it managed to surpass Wall Street expectations on all fronts.
- The improved results reflect higher production volumes as well as its strong new business backlog.
- Core operating earnings and sales increased and in both e-Systems and seating, operating margins improved as compared to the previous year.
Match Group: Major Drivers
- Match Group is currently operating in a challenging macro-economic environment and its stock price has been tumbling over the past few months.
- Excluding the forex impact, Match Group delivered double-digit growth given the fact that Tinder has been performing quite well.
- We provide the stock of Match Groups with a ‘Hold’ rating and a revision in the target price.
Qorvo Inc: Major Drivers
- Qorvo delivered an excellent result with its quarterly revenue as well as EPS above the market expectations.
- Revenue in high-performance analog was broad-based, with the strength primarily in high-power applications and defense.
- In Advanced cellular, Qorvo enjoyed quite a big customer ramp in the quarter.
Roku Inc: Expansion Of Free Streaming In Mexico & Other Drivers
- This is our first report on streaming major, Roku.
- The company had a strong first quarter of 2022 with Platform revenue up 39% yearly, driven by increased content distribution and advertising revenue.
- As one of the industry’s top platforms for streaming TV, the company anticipates long-term growth in active users and platform revenue.
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