In today’s briefing:
- Pause Continues But Oversold Bounce Likely; Buys in Energy, Construction/Engineering, Enrgy Shippers
- ARM Holdings Limited – The Positives – Pervasive Global Presence
- Ascending El Niño and Its Impact on Corn Production and Prices
- Dollar General (DG-US) – It’s a trap!
- Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers
- Starbucks Corporation: From Digital Dominance to Chinese Conquest – What’s Next? – Major Drivers
- DoorDash Inc.: Ghost Kitchen Expansion Could Usher In a New Era of Growth? – Major Drivers
- BorgWarner Inc.: Can The Acquisition of Eldor’s Electric Hybrid Systems Be A Game Changer? – Major Drivers
- Arista Networks Inc.: Capitalizing on Strong Growth Outside the Cloud Domain! – Major Drivers
- Etsy Inc.: What Are The Factors Responsible Behind Their Surge in New and Reactivated Buyers? – Financial Forecasts
Pause Continues But Oversold Bounce Likely; Buys in Energy, Construction/Engineering, Enrgy Shippers
- Support levels discussed in our 8/8/23 Compass broke, leading to a change in character (from buy the dup to sell the rip) and a deeper pullback.
- Supports we were watching included the 50-day MA and 4460-4475 on the S&P 500, $371.50 on $QQQ, and $190-193 on the $IWM; these are now resistance moving forward
- Longer-Term support on the S&P 500 is at 4300-4325 (nearly hit on Friday) and 4200, and we will remain constructive as long as these supports hold.
ARM Holdings Limited – The Positives – Pervasive Global Presence
- Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings ’ US IPO.
- ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In this note, we talk about the positive aspects of the deal.
Ascending El Niño and Its Impact on Corn Production and Prices
- El Niño & Southern Oscillation (ENSO) is a recurring climate phenomenon with adverse impact chiefly on agriculture causing volatility in grain production leading to price shocks.
- Shortening frequency of ENSO cycles and its intensity has increased due to global warming. Given its potency of causing shocks, ENSO now has an outsized influence on global economics.
- Considering El Niño’s impact on corn, expect production to decline next year as La Niña effects fade compounded by agri productivity declines due to higher temperatures & extreme weather.
Dollar General (DG-US) – It’s a trap!
- After spectating DG for some time, I bought a small starter position in June. It is not often that you get a chance to buy a compounder like this 35% from its highs.
- Historically it has paid to buy the dips on DG, so I figured I would buy now and ask questions later.
- This time it has not paid, at all. My average was ~$185 and I sold my stock last monday at $168. I know that some of my subs also follow the stock so I thought I would collect my notes and write up a few paragraphs.
Uber Technologies Inc.: Breaking the Mold With New Strategies! – Major Drivers
- Uber Technologies delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
- However, it has faced its fair share of challenges in the competitive landscape and increasing complexity of marketplace management.
- We give Uber Technologies a ‘Hold’ rating with a revised target price.
Starbucks Corporation: From Digital Dominance to Chinese Conquest – What’s Next? – Major Drivers
- Starbucks Corporation delivered mixed results in the quarter, with revenues below Wall Street expectations but managed a significant earnings beat.
- In North America, the company’s revenue growth was driven by strong same-store sales and operational improvements.
- Starbucks’ digital strategy, mainly through Starbucks Rewards, showed good growth, reflecting the brand’s strength in key markets.
DoorDash Inc.: Ghost Kitchen Expansion Could Usher In a New Era of Growth? – Major Drivers
- DoorDash delivered a mixed result in its last quarter, with revenues above analysts’ expectations but failed to surpass the analyst consensus regarding earnings.
- The quarter saw an increase in international business as well as better unit economics.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
BorgWarner Inc.: Can The Acquisition of Eldor’s Electric Hybrid Systems Be A Game Changer? – Major Drivers
- BorgWarner delivered an all-around beat in the most recent quarter, with double digits organic revenue growth, driven by stronger industry output and expansion in China and Europe.
- By 2027, their team anticipates purchasing over 200 million semiconductor dyes annually, based on the expansion of their power electronics goods.
- BorgWarner’s inverter industry is anticipated to be 70% silicon carbide based by the same year, with nearly 50% of its inverters being 800 volts.
Arista Networks Inc.: Capitalizing on Strong Growth Outside the Cloud Domain! – Major Drivers
- Arista Networks managed to surpass the revenue and earnings expectations of Wall Street.
- The company generated $1.46 billion in revenue for the quarter and $1.58 in non-GAAP earnings per share.
- Arista is adjusting to these developments and increasing its investments in AI as its biggest cloud customers reassess their conventional cloud and AI networking plans.
Etsy Inc.: What Are The Factors Responsible Behind Their Surge in New and Reactivated Buyers? – Financial Forecasts
- Etsy delivered an all-around beat in the previous quarter, with adjusted EBITDA margin and revenue increasing significantly.
- Their year-over-year growth rate was negative, but it increased sequentially.
- Etsy also observed healthy year-over-year growth in the number of new and reactivated buyers when bringing both groups together.
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