Daily Brief United States: S&P 500 INDEX, Bitcoin Pro, Titan International , Gaia, Gevo, Leef Brands , Adeia, Zimvie , Cheniere Energy, East West Bancorp and more

• Over the past two weeks we’ve discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
• Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
• We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&P 500 as healthy/normal within the ongoing bull market.

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• Titan International is a global manufacturer of off-the-road tires, wheels and undercarriages.
• The company serves the agricultural, earthmoving / construction, and consumer markets.
• Recent strategic actions have created higher margins in recent years and brought the leverage ratio down to 2.0x.

• Gaia reported strong 1Q24 results, with revenue of $21.7 million (up 11%), 33,000 net member additions for a total membership count of 839,000 (all-time high), and strong operating cash flow of $5.9 million.
• International revenue growth was particularly strong at 20.4%, compared with respectable US growth of 3.7%.
• Member acquisition costs decreased 10%, partly as a result of a focus on direct-to-paid marketing campaigns, whereby free trial periods are replaced by special incentives to lock in longer-term membership commitments at attractive rates. This also fueled healthy deferred revenue growth of $2.0 million during the quarter.

• Gevo has begun repurchasing shares under the company’s previously announced program.
• The company has so far repurchased 5.5 million shares for $3.7 million, leaving $21.3 million available for repurchases.
• Gevo revised spending on its Net-Zero 1 plant project. 

• LEEF Brands (CSE: LEEF, OTCQX: LEEEF) is a scaled, vertically integrated operator in California.
• It holds the largest cultivation permit in Santa Barbara County, owns LEEF Labs, one of the state’s largest manufacturing companies, and has The Leaf dispensary in Palm Springs.
• The company recently successfully restructured its debt. 

• ADEA signed ten license agreements and reduced debt by approximately $40 million in the first quarter. ADEA has yet to announce a new major OTT license aside from Paramount renewing.
• The investment case for owning ADEA’s stock has centered on the Company’s ability to sign more license agreements
• ADEA remains on pace to generate $150 million of free cash flow to help reduce the Company’s debt balance further.

• ZimVie Inc. historically focused on dental and spine industries since spinning out from Zimmer Biomet in 2022
• Company faced challenges with large debt burden and declining spine business, leading to discounted valuation
• Recent sale of spine business to HIG Capital for $375 million expected to eliminate overhangs, simplify valuation, and position company for stronger future performance

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.

• Cheniere Energy (LNG) expected to have significant performance catalyst in 2024 with 4Q23 EPS print on 2/22/24
• Sell side has adjusted numbers for 2024 despite recent underperformance
• Anticipated conservative guidance for 2024 sets up positive surprise for investors due to focus on “tariff” type earnings and long-term contracts in place

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.

Key points

• Short shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat community
• Trading at 1.5x price/TBV with compression in NIM and increased deposit costs
• Concerns about CRE exposure, uninsured deposits, investments in China/HK, and creditworthiness due to uniquely correlated customer base and soft guidance from management

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.