Weekend Update #039
Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
Vimeo showed continued growth for the second quarter, growing over 42% year-over-year. Ironically, that actually represented a slowdown from previous quarters which were accelerated by the pandemic when companies were looking to utilize more video and digital products. Now over a year into the pandemic, Vimeo has indicated difficulty comping similar growth rates for the second half of 2021, leading to a large sell off from investors. However, the company maintained its 30% CAGR revenue targets over the next 5 years while it continues to grow geographically and improve and expand its product portfolio, offering a potential buy opportunity after the 17% decline on Friday. Vimeo Library, for example, which allows employees to share and access content across teams all while being automatically captioned and transcribed, is just one example of how Vimeo plans to be a one stop shop for businesses’ internal and external applications. Thank you Blue Room Analyst, Nick Peart.
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POLL RESULTS FROM LAST WEEK
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WOULD YOU USE NETFLIX FOR GAMING?
YES: 50%
NO: 50%
—THANK YOU FOR VOTING—
{ END OF THE WEEK }
Market
— Debrief —
All three major indices ended the week slightly higher this week, and even reached all-time highs. The S&P 500 reached a high of 4,440.82 on Friday before closing at 4,436.52, up 47 basis points on the week. The Nasdaq reached a high of its own, peaking at 14,896.47 on Thursday, and ended the week at 14,835.76, up 89 basis points.More companies released earnings this week, including the following covered by Blue Room staff (their respective updates can be found throughout this week’s newsletter):
Take-Two Interactive (TTWO)
Activision Blizzard (ATVI)
ViacomCBS (VIAC)
Roku (ROKU)
Square (SQ)
NXP Semiconductors (NXPI)
Regeneron Pharmaceuticals (REGN)
Intellia Therapeutics (NTLA)
Moderna (MRNA)
Editas Medicine (EDIT)
Allogene Therapeutics (ALLO)
10x Genomics (TXG)
Guardant Health (GH)
Costco Wholesale (COST)
Beyond Meat (BYND)
lululemon athletica (LULU)
iRobot (IRBT)
On the jobs front, the US Bureau of Labor Statistics reported on Friday that total nonfarm payroll employment rose by 943,000 in July, while the unemployment rate fell 0.5 percentage points to 5.4%. Job growth occurred primarily in leisure and hospitality, in local government education, and in professional and business services. The number of unemployed persons fell by 782,000 to 8.7 million. Both the unemployment rate and number of unemployed persons figures remain elevated compared to their pre-COVID-19 levels of 3.5% and 5.7 million, respectively.
Thank you Blue Room Team Leader, Omar Guzman.
iRobot designs, builds, and sells robots in the United States, Europe, the Middle East, Africa, Japan, and internationally. It offers Roomba floor vacuuming robots; Braava family of automatic floor mopping robots; and Root robots to help children learn how to code. The company sells its products through distributor and retail sales channels, as well as through online stores and resellers. iRobot Corporation was incorporated in 1990 and is headquartered in Bedford, Massachusetts.
Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today reported net sales of $15.21 billion for the retail month of July, the four weeks ended August 1, 2021, an increase of 16.6% from $13.04 billion last year.
For the forty-eight weeks ended August 1, 2021, the Company reported net sales of $176.30 billion, an increase of 17.8% from $149.66 billion last year.
"Regeneron had outstanding performance in the second quarter during which we delivered to the U.S. government the entire order for our COVID-19 antibody cocktail and recognized record global sales from our EYLEA and Dupixent franchises," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "We continue to advance Dupixent's potential to help new patient groups, with recent positive Phase 3 data in chronic spontaneous urticaria and additional late-stage read-outs expected later this year in prurigo nodularis, eosinophilic esophagitis, and pediatric atopic dermatitis. With today's positive Phase 3 results in combination with chemotherapy in non-small cell lung cancer, Libtayo yet again demonstrates its potential to be a leading checkpoint inhibitor. We also progressed our genetics medicines platform, with landmark clinical data alongside our collaborator Intellia using a CRISPR therapeutic and the discovery of a promising new obesity target from the Regeneron Genetics Center."
Vimeo is the world’s leading all-in-one video software solution, providing the full breadth of video tools through a software-as-a-service model. Vimeo’s comprehensive and cloud-based tools empower its users to create, collaborate and communicate with video on a single, turnkey platform. Our platform enables any professional, team, and organization to unlock the power of video to create, collaborate and communicate. We proudly serve our growing community of over 200 million users — from creatives to entrepreneurs to the world’s largest companies. It also provides Vimeo On Demand, an open self-distribution service that enables users to sell their works directly to their audiences and retain a share of the revenue after transaction costs; and Vimeo Create, a suite of tools for making social videos. In addition, the company offers professional video hosting solutions for small businesses. It provides solutions for creative professionals, small businesses, enterprises, education sector, fitness centers, and faith teams. The company was founded in 2004 and is based in New York, New York.
Founded in Vancouver, Canada, in 1998, lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails, yoga-inspired, technical athletic apparel and accessories for women, men, and female youth through company-operated stores and their online marketplace. The company’s core values of personal responsibility, entrepreneurship, honesty, courage, connection, fun and inclusion are at the heart of its company culture. As of February 2, 2020, lululemon operated 491 company-operated stores under its lululemon and ivivva brands in the United States, Canada and more than 15 international locations.
Thursday
August 5, 2021
12 PM
__________ __________
BLUE ROOM
MEETING NUMBER SIXTY
__________ __________
UPDATES
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— QUESTION —
You have a jar of new belief seeds ready to be planted. What are the new beliefs that you would like to plant?
Founded in 2009, Beyond Meat is a California-based producer of plant-based meat substitutes that are designed to match the sensory profile of meat. Beyond Meat believes that “by shifting from animal to plant-based meat, we can address four growing global issues: human health, climate change, constraints on natural resources and animal welfare.” Beyond Meat products range from its signature Beyond Beef, to Beyond Sausage, to its newest creation, Beyond Chicken Tenders. Beyond Meat has manufacturing centers in the United States, Europe and in China. Beyond Meat trades on the NASDAQ Exchange under the ticker BYND.
Founded in 2013 by globally renowned CRISPR researchers, George Church, David R. Liu, Feng Zhang, and J. Keith Joung, Editas Medicine is a clinical stage gene editing company based in Cambridge, Massachusetts. Editas aims to harness the power and potential of CRISPR gene editing to develop a robust pipeline of medicines for people living with serious diseases around the world. Editas is currently concentrating their efforts in three major therapeutic areas: ocular diseases, blood diseases, and cancer. Editas Medicine trades on the NASDAQ Exchange under the ticker EDIT.
Moderna is a commercial stage biotech company based in Cambridge, Massachusetts. Founded in 2010, the company aims to pioneer a new class of medicines made of messenger RNA, or mRNA. Moderna has an extensive development pipeline of therapeutic candidates ranging across its six modalities: Prophylactic Vaccines, Systemic Secreted & Cell Surface Therapies, Cancer Vaccines, Intratumoral Immuno-Oncology, Localized Regenerative Therapeutics and Systemic Intracellular Therapeutics. Currently, Moderna’s only commercial therapeutic is mRNA-1273 -- its COVID-19 vaccine. Moderna is traded on the NASDAQ Exchange under the ticker symbol MRNA. Moderna is a recent addition to the S&P 500 index.
Founded in 2014 by globally renowned Nobel laureate, Jennifer Doudna, Intellia Therapeutics is a clinical stage gene editing company that aims to harness the genome editing technology CRISPR/Cas9 for human therapeutic use. Leveraging the technology that helped Doudna to win her Nobel Prize in Chemistry, Intellia aims to create diverse in vivo and ex vivo pipelines, spanning a wide range of therapeutic indications to help those suffering from genetic diseases. Intellia Therapeutics trades on the NASDAQ Exchange under the ticker symbol NTLA.
Roku, Inc. prides itself on pioneering the bringing the consumer streaming experience to fruition. The TV streaming platform utilizes the Roku Operating System, Roku OS, to provide consumers with on demand access to movies and television episodes, as well as, live sports, music, news and more. Roku also partners with television brand partners that manufacture Roku TV sets built to run on Roku OS. This allows the company to offer Roku branded products within a wide range of price points lowering the barrier of entry for consumers interested in the technology. As a complement to Roku OS and Roku TV, the company additionally offers Roku Smart Soundbars and Streambars that improve a user's auditory experience. The company hopes to capitalize on the growing amount of streaming hours by consumers worldwide and are looking for avenues to monetize user activity. Possible streams of revenue they hope to explore include video advertising, brand sponsorships and subscription services among others.
My name is David Kogan and I am a summer intern at Blue Room Investing. I was born in Torrance, California, but grew up in Marin County. Next fall, I will be a senior at Dartmouth College and completing my bachelor’s degree in Economics. At school, I am also a member of the Dartmouth heavyweight rowing team and compete nationally every year. I chose to major in Economics because I think it has an infinite number of potential applications and it is a crossroads of people, analysis, and statistics. I always thought I wanted to be a Math or Chemistry major coming into school, but after reading Nudge and taking my first Econ class at Dartmouth I ended up switching instead.
In my free time, I found that I really enjoy riding my bike around Marin County and Hanover, New Hampshire. The reason I enjoy bike riding so much is because it allows me to be outside and active while constantly exploring the areas I live in. Not to mention, it is also a great social activity and I have spent countless hours catching up with my friends while on the road. I also love to cook and watch movies in my spare time.
As a BLUE ROOM intern, my responsibility has been to help provide coverage on NXP Semiconductors, ticker NXPI, and the Semiconductor industry. I’ve learned how to conduct deep research into individual companies in order to find pertinent qualitative and quantitative information. Through my work, I’ve also gained lots of fluency with several financial documents such as Income Statements, Balance Sheets, and Cash Flow Statements. Furthermore, I’ve thoroughly enjoyed our daily Investment Bull Pen meetings and feel that my market awareness and knowledge has improved tremendously as a result. BLUE ROOM has provided me with a fun and deeply curious environment where I can learn and explore pretty much any part of the market. Through research and conversation with members of the team, I have become an expert in my particular stock and have been able to create my own detailed forecasts and predictions to thoroughly illustrate what I believe will happen, which is a very rewarding experience.
“Your sister is the closest person to you in the whole world! Genetically-wise, and family-wise.” My parents would say this to me and my sister every time we would argue, which, before she left for college, happened very frequently. My sister is a little bit over three years older than me, close enough in age that we competed with each other, but far enough apart in age that she could assert her status as the older sibling.
In my house, between the two of us, everything was up for grabs at all moments of the day – the last ice pop in the fridge belonged to whoever got there first, if I took the comfy spot on the couch then it was mine, if she grabbed the Wii remote before I did, she got to play. In addition to these turf wars, she and I would compete about almost everything:who was better at their respective instruments (she played violin and I played cello), grades, sports, even who was our parents’ favorite (a Pandora’s box of sorts that maybe shouldn’t be opened by any child with a sibling). She was better at school, I was better at sports and music. We’d hold it over each other’s heads.
PLEASE ENJOY NAIA’S IMMERSIVE EXPLORATION OF THE COLOR BLUE
Surveys in the U.S. and Europe show that blue is the color most commonly associated with harmony, faithfulness, confidence, distance, infinity, the imagination… Blue was the color most associated with intelligence, knowledge, calm and concentration.
Blue is often seen as a sign of stability, reliability, dependability, trustworthiness, safety. Blue can also lower the pulse rate and body temperature. Despite tranquil feelings, blue also stimulates the mind, noted by color psychologist Angela Wright, and improves productivity.
HOW DOES BLUE MAKE YOU FEEL?
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THIS WEEK’S
UPDATE
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— DRY STORAGE —
As we eagerly await the installation of the new meadows mill, Dry Storage continues to have many other projects running this week. Currently in the sourcing and supply chain, Jones Family Farm sent 5 kg of clean 2021 harvest of Rouge de Bordeaux, and Twin Peaks will be sending 6 remaining totes of White Sonora to the mill.
In terms of the farming community, Tiffany Chau, the general manager of Dry Storage, found an indigenous purveyor of several dryland crops grown on the Gila River Reservation in Arizona by the Akimel O'Odham (Pima) tribe. They carry a unique dryland adapted bean that has been grown in the same area for generations called a tepary bean. In addition, they carry garbanzo beans, corn, and a few varieties of wheat including a durum. They also have been growing Sonora wheat for generations, and their variety is of higher quality than crops produced in Colorado. The community of Ramona Farms is unique in that “life [there] is still very traditional in many ways and slower paced than the communities off the reservation” and they are thankful to be such a closely knit community. Dry Storage is hoping to order some samples of what they have in stock, to maybe add the farm to their sonora to the grain menu. Learn more about the American Indian Foods of Ramona Farms.
On the distribution front, Dry Storage is infiltrating the beverage market as well, as James Howat of Black Project Brewing is enthusiastic about purchasing their rouge de bordeaux to use for their lambic/sour beer program. The Black Project’s (Spontaneous & Wild Ales) mission is “innovation in the research and development of spontaneous fermentation.” Black Project beers are fermented with microbes from the environment around us using a coolship, and their microbe cultures are intentionally evolving from batch to batch in an effort to allow variety and fascinating combinations from various releases of the same beer. The temperatures are currently prohibitive to brew his style of beer until the fall, so the beer would go into a barrel and then age so it wouldn't be able to be served until roughly the end of next summer (with no malting required), but nonetheless an exciting new faucet of Dry Storage’s impact. Learn more about Black Project’s brewing.
>>>
THIS ONE GOES OUT TO ALEXANDER CHANG
>>>
BLUE ROOM POLL
HAVE YOU WATCHED SPACE JAM 2?
AND IF SO
WOULD YOU WATCH IT AGAIN?
THANK YOU FOR YOUR RESPONSES> CHECK BACK IN NEXT WEEK.
Guardant Health is a leading precision oncology company dedicated to helping conquer cancer through our proprietary blood tests, vast data sets, and advanced analytics.
Cancer is data starved. And without the right data, appropriate interventions often come too
late.
To select the best treatment, doctors and patients must have access to detailed genomic information about the disease. But this information is not easy to get. Traditional tissue biopsies require physical access to tumor tissue and come with serious risks for some patients. And for many patients, they aren’t even an option. In addition, they do little to help detect cancer early, when patients have the best chance at successful treatment.
Take-Two Interactive is a leading developer, publisher and marketer of interactive entertainment for consumers around the globe. The company develops and publishes products principally through Rockstar Games, 2K, Private Division and T2 Mobile Games. Take-Two Interactive’s products are currently designed for console gaming systems, such as the Sony Computer Entertainment, Inc. Playstation 4 and Playstation 5, Microsoft Corporation Xbox One and Xbox Series X|S, Nintendo’s Switch and personal computers, including smartphones and tablets. The company delivers products through physical retail, digital download, online platforms and cloud streaming services. Take-Two Interactive was incorporated under the laws of the State of Delaware in 1993 and is headquartered in New York, New York, with approximately 5,800 employees globally. Take-Two is known for its staple gaming series, including Grand Theft Auto, Red Dead Redemption, NBA 2K, Borderlands and Sid Meier's Civilization.
P L E A S E E N J O Y T H E
—WEEKLY—
company updates
from the BR intern team.
Caroline Burnham
Ticker: ALLO
Name: Allogene Therapeutics
Number of Shares Outstanding: 141.5M
Market Capitalization: $3.3B
Stock Price History:
July 26, 2021 $21.70
July 27, 2021 $21.61
July 28, 2021 $22.57
July 29, 2021 $22.37
July 30, 2021 $21.95
August 2, 2021 $22.59
August 3, 2021 $21.93
August 4, 2021 $22.13
August 5, 2021 $23.73
August 6, 2021 $23.02
Allogene Therapeutics Company Update
Allogene Therapeutics is a biotechnology company currently developing allogeneic CAR T cell product candidates for the treatment of various cancers. As a clinical stage company, Allogene currently has candidates in clinical trials as well as in the preclinical stage. On Wednesday, August 4, Allogene reported its earnings for the second quarter of 2021. Earnings per share came in at -$0.53, beating expectations of -$0.55 by $0.02. Additionally, the company brought in revenue of $44,000. The earnings call was highlighted by the bullish report of Allogene’s leading product candidate, ALLO-501A, which is expected to enter a pivotal phase II clinical trial in late 2021. According to President and CEO David Chang, the results of the phase I trial of ALLO-501 are on par with FDA-approved autologous therapies. This is certainly promising for the company’s goal, to develop the first next generation allogeneic CAR T cell therapy to enable off-the-shelf, standardized and efficacious cancer treatment. Additionally, the company announced its plan to inaugurate its state-of-the-art manufacturing facility in Newark, California later this month. While this is promising for the development and manufacturing of its product candidates, it also supports its expectations for an increase in operating expenses. The company has set expectations for operating expenses of between $300 and $330 million for FY 2021. The stock market has responded positively to Allogene’s 2nd quarter earnings report, with $ALLO up multiple percentage points after the announcement.
Jackson Blaufeld
Ticker: QCOM
Name: Qualcomm, Inc.
Number of Shares Outstanding: 1.13B
Market Capitalization: $168.6B
Stock Price History:
July 26, 2021: $143.50
July 27, 2021: $140.93
July 28, 2021: $142.44
July 29, 2021: $150.99
July 30, 2021: $149.80
August 2, 2021: $148.86
August 3, 2021: $147.95
August 4, 2021: $148.22
August 5, 2021: $146.83
August 6, 2021: $146.28
Qualcomm, Inc. Executive Summary
Qualcomm, Inc., a global leader in the semiconductor industry, has had a few noteworthy news items this past week following the company’s third quarter earnings results.
Google announced its plans to ditch Qualcomm and build its own smartphone processors in the coming year. The “Google Tensor” will power Google’s Pixel and Pixel Pro smartphones. This move by Google did not come as a surprise, as it is another example of a large technology company building its own chips in-house instead of relying on traditional chip-making companies such as Qualcomm. While this news certainly does not help Qualcomm’s business, it will not pose much of a threat, as Google’s Pixel smartphone makes up a very small percentage of the global smartphone market. However, if Qualcomm were to lose Apple’s business, that would certainly change things drastically. Many in the industry believe that losing Apple as a customer will inevitably happen.
While companies have trended toward designing their own chip processors, Qualcomm has been busy diversifying different parts of the business independent of the smartphone market. One area that new CEO Cristiano Amon has focused on is automotive. On the July 28 earnings call, Amon boasted that the automotive revenue design win pipeline has reached $10 billion. This week, Qualcomm bid $4.6 billion for Veoneer, an American-Swedish provider of automotive technology based in Stockholm. Successfully acquiring Veoneer would allow Qualcomm to firmly solidify its position in the driver-assistance technology market, and would widen their presence beyond car connectivity to include driverless technology and more.
Ticker: WORK
Name: Workday
Number of Shares Outstanding: 189M
Market Capitalization: $58.487B
Stock Price History:
July 26, 2021 $238.61
July 27, 2021 $230.66
July 28, 2021 $234.39
July 29, 2021 $235.25
July 30, 2021 $234.40
Aug 02, 2021 $233.65
Aug 03. 2021 $235.36
Aug 04, 2021 $232.23
Aug 05, 2021 $236.00
Aug 06, 2021 $235.72
Workday Announces Date of Fiscal 2022 Second Quarter Financial Results:
On August 05, 2021, Workday, Inc. announced their date of Fiscal 2022 Second Quarter Financial Results. They plan to announce their second quarter results on August 26, 2021 after market close. Workday will also be hosting a conference call at 2:30 p.m Mountain Time / 4:30 p.m Eastern Time, where they’ll review their financial results and business outlook. Furthermore, Workday will be providing a live webcast on their investor relations website that will be available for a minimum of 90 days after the conference call.
Workday’s future outlook remains positive. Despite ending a contract with Amazon in late July, Prospectus for Workday remains high and positive. Despite having their stock price tumble in late July, Workday has been able to recuperate the lost share price, and is trading nearly at the same price. As demand for Cloud based software continues to increase, Workday is leading the pack with the most versatility. As Workday continues to pioneer through the adversities presented by the pandmeic, their competitors Oracle (ORCL) and Ceridian (CDAY) lag behind in innovation. Workday has successfully entered the mid-sized markets from HCMs, which introduces a plethora of new opportunities they can capitalize on. As working from home becomes the new norm, and companies continue to increase their IT budgets. Workday will remain busy attracting and catering to these new companies. The market is expected to stay strong for the next 12-18 months for private and midsized companies. Recent projections indicate that worldwide IT spending will grow 8.6% this year, far greater than the less than 1% growth in 2020.
Lisa Wong
Ticker: TGX
Name: 10x Genomics, Inc.
Number of Shares Outstanding: 87.27M
Market Capitalization: $20.855B
Stock Price History:
July 26, 2021: $179.57
July 27, 2021: $179.75
July 28, 2021: $187.00
July 29, 2021: $184.11
July 30, 2021: $183.23
August 2, 2021: $178.24
August 3, 2021: $178.55
August 4, 2021: $184.82
August 5, 2021: $175.26
August 6, 2021: $170.97
10x Genomics, Inc. Company Update
10x Genomics is a biotechnology company focused on producing genetic sequencing technology. A leader in the single-cell sequencing industry, its pioneering Chromium and Visium products and technologies have won numerous scientific accolades and helped to further societal understanding of biological structures. Chromium products allow for detailed analysis of hundreds of thousands of cells and biological units. Visium products are centered around spatial transcriptomics, which is genetic sequencing that uses detailed spatial resolution. Visium Spatial products therefore ensure greater understanding of biological units within the context of larger functional systems and processes.
This week, 10x Genomics reported its Q2 2021 financial results. TXG’s EPS of -$0.10 surpasses Wall Street estimates by $0.16, marking the third time in the past four quarters that they have exceeded EPS estimates. Its revenue of $115.84M, a 170% year-over-year increase, also beat forecasts by $2.99M – in the last four quarters, this is the fourth time TXG has outperformed expectations. Its revenue growth, specifically within its consumables sector, can be attributed to high growth in instrument installed bases. Operating expenses also increased by 68% year-over-year to $121.3 million due to higher personnel expenses and costs related to operational expansion. During the earnings call, 10x Genomics also announced a lowered price of $35,000 for its Chromium controller, a move that contributed to 100 incremental placements of Chromium instruments. 10x Genomics expects to meet its 2021 revenue guidance of $480 million to $500 million, a 61% to 67% growth since 2020.
Melanie Gong
Ticker: CMCSA
Name: Comcast Corporation
Number of Shares Outstanding: 4.58B
Market Capitalization: $269.68B
Stock Price History:
July 16 $56.63
July 20 $57.08
July 21 $57.81
July 22 $57.79
July 23 $58.36
July 26 $58.70
July 27 $58.56
July 28 $57.98
July 29 $58.48
Comcast Corporation Q4 Earnings Update (7/31/21)
Comcast Corporation is a media, entertainment and communications company providing video, internet and phone services. The company was founded by Ralph J. Roberts in 1963 and is headquartered in Philadelphia, Pennsylvania. Segments Comcast operates include Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks and Sky. The Cable Communications segment provides video, Internet, voice and security services through Xfinity. The Cable Networks segment consists of national and international cable networks, regional sports, news networks and cable television studio production operations. The Broadcast Television segment includes NBC and Telemundo broadcast networks. The Filmed Entertainment segment is involved in the production, acquisition, marketing and distribution of filmed entertainment. The Theme Parks segment manages Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. Finally, the Sky segment consists of Sky, one of Europe's largest B2C entertainment companies providing video, internet, voice and wireless phone services.
On July 29, 2021, Comcast released the company’s 2nd Quarter 2021 Earnings Results. Some highlights include:
Consolidated Adjusted EBITDA increased 12.6% to $8.9 Billion; Adjusted EPS increased 21.7% to $0.84; Generated free cash flow of $4.8 Billion
Cable Communications Total Customer Relationship Net Additions were 294,000; total Broadband Customer Net Additions were 354,000. Both are best second quarter results on record
Cable Communications Adjusted EBITDA increased 14.5% and Adjusted EBITDA per Customer Relationship increased 8.9%
Cable Communications Wireless Customer Line Net Additions were 280,000, which is the best quarterly result on record
NBCUniversal Adjusted EBITDA increased 12.5% to $1.6 billion
Theme Parks experienced its first profitable quarter since the first quarter of 2021, mainly driven by Universal Orlando.
Sky Revenue Increased 28.0% to $5.2 billion
Elias Haynes
Ticker: RGLD
Name: Royal Gold
Number of Shares Outstanding: 65.6M
Market Capitalization: 7.67B
Stock Price History:
July 23, 2021: $115.71
July 26, 2021: $116.64
July 27, 2021: $117.30
July 28, 2021: $117.39
July 29, 2021: $120.45
July 30, 2021: $120.96
August 2, 2021: $121.47
August 3, 2021: $120.39
August 4, 2021: $121.94
August 5, 2021: $118.45
Royal Gold, Inc Executive Summary
Royal Gold is a Denver-based alternative mine financing company focused on acquiring and managing precious metals royalties and streams that seeks to provide investors exposure to precious metals with lower levels of risk. Royal Gold owns interests in 187 properties on five continents, including interests in 41 production stage mines and 16 development stage projects. Managed by a team with extensive experience in the mining industry, Royal Gold has a longstanding reputation for diligence that has rendered it among the three largest precious metal streaming and royalty companies – which together control approximately 80% of the total value of streaming and royalty contracts. Royal Gold has established itself as a partner of choice for mining operators and a frontrunner in a space offering alternative forms of financing to mining companies. Royal Gold also adheres to sound ESG practices, taking time to contribute to the environment and local communities.
Alternative mine financing accounts for only 1-3% of global debt and equity mine financing. Streaming and royalty agreements present much more attractive terms for mine operators than traditional debt and equity financing. Oftentimes, stream and royalty agreements have a longer payment period, no fixed obligations in cash, present less risk during periods of lower prices, have limited restrictions on the use of cash, have no debt covenants to maintain, share production and operational risks across the value chain, and are less dilutive. According to an article from McKinsey, the alternative mine financing space grew from roughly $2.1 billion in 2010 to $15 billion in 2019. As this alternative form of financing becomes more recognizable to markets outside of North and South America, I would expect a continuation of growth in the sector – which bodes well for Royal Gold as a top contender in the space.
Joe Kramer
Ticker: VIAC
Name: ViacomCBS inc.
Number of Shares Outstanding: 605.6M
Market Capitalization: $26.3B
Weekly Stock Price History:
July 26, 2021 $42.16
July 27, 2021 $41.34
July 28, 2021 $41.65
July 29, 2021 $41.69
July 30, 2021 $40.93
August 2, 2021 $40.84
August 3, 2021 $38.47
August 4, 2021 $38.79
August 5, 2021 $41.55
(Earnings release - up 7%)
August 6, 2021 $41.50
ViacomCBS inc. Executive Summary (7/31/21)
ViacomCBS is a global media and entertainment company that’s shifted its focus toward streaming over the course of 2021. It operates in 3 segments: TV Entertainment, Cable Networks, and FIlmed Entertainment. On Thursday, August 5, ViacomCBS reported its earnings for the second quarter of 2021. Following the report, ViacomCBS’s stock jumped up 7% by market close. It reported revenue of $6.56B, beating expectations of $6.51B by 0.8%. Earnings per share was $0.97, missing the estimate of $0.99, a 2.29% surprise. The highlights of the call were centered around streaming. Streaming revenue overall was up 92% YoY, while streaming advertising revenue was up 102% YoY and streaming subscription revenue was up 82% YoY. ViacomCBS added 6.5M streaming subscribers this quarter, bringing their total to 42M globally. It plans to reach 25 global markets with Paramount+ by the end of 2021, and 45 markets by the end of 2022. PlutoTV surpassed 52M MAUs this quarter and realized a 169% increase in revenue YoY - more than doubling for the fourth quarter in a row. Advertising revenue, which excludes streaming, was up 24% YoY, primarily driven by the return of live sports and what management cited as a “better advertising market.” ViacomCBS also reached a deal with Comcast’s Sky TV that will allow them to expand their Paramount+ footprint internationally to include the UK, Ireland, Italy, Germany, Switzerland & Austria in 2022. ViacomCBS also came to a deal with South Park creators Trey Parker and Matt Stone that sets them up for 6 more seasons of South Park as well as two movies per year through 2027, all released exclusively on Paramount+.
Clearly ViacomCBS is planning to fight the streaming battle through the release of high quality, original content. This is certainly no easy task, but considering they run one of the more successful TV production studios, it seems like a viable strategy. I wrote a piece last week about whether or not I’d buy it and said I’d check back after it released earnings. Although there are some major players in the streaming space, I think there’s certainly value in ViacomCBS given its massive and growing array of content and its valuable sports rights that draw advertisers in year after year. I’d buy them now and could see them getting up to around $50-$53 in the coming months.
Lexi Linafelter
Ticker: SQ
Name: Square, Inc.
Number of Shares Outstanding: 392M
Market Capitalization: $129.5B
Weekly Stock Price History:
July 26, 2021 $261.99
July 27, 2021 $251.73
July 28, 2021 $258.61
July 29, 2021 $255.28
July 30, 2021 $247.26
August 2, 2021 $272.38
August 3, 2021 $269.49
August 4, 2021 $266.42
August 5, 2021 $281.81
Square, Inc. is an American financial services and digital payments company based in San Francisco, California. Square revolutionized payments in 2009 with Square Reader, making it possible for anyone to accept payments using a smartphone or tablet. Sellers use Square to reach buyers online and in-person, manage their business and access financing, and individuals use the Cash App platform to spend, store and invest money. Overall, it builds tools to empower small businesses and individuals to participate in the economy. Square reported earnings on Monday, August 2, and results differed from analyst estimates. Earnings per share spiked 266% to $0.66 in the second quarter, which was a 112% increase YoY and beat expectations by a sizable margin. On the other hand, revenue grew 143% to $4.68 billion; this was ~7% less than the expected $5.08 billion. However, this was noted by Square to be primarily a result of Square’s increased investment in Bitcoin over the last quarter, and Bitcoin’s subsequent volatility impacting that investment adversely. In conjunction, following the announced acquisition of Afterpay and launch of multiple new service platforms this quarter, bullish analysts aren’t discouraged regarding the stock price going forward, as Square has been focused on expanding globally and expanding its suite of services this quarter and revenue growth is expected to bounce back in future quarters. Gross profit was $1.14 billion dollars in Q2, which was a 91% increase year-over-year, as derived from the $42.8 billion gross payment volume transacted this quarter. Of this gross payment volume, 10% ($4.1 billion) came from Cash App, and $2.72 billion in revenue was generated through transacted Bitcoin. Also this week, Square announced the acquisition of Afterpay, an Australian payments platform that allows for payment in installment, or buy-now-pay-later capabilities. Square acquired Afterpay for $29 billion dollars making it the biggest acquisition in company history; going forward, it will be interesting to see how Square competes in the buy-now-pay-later space, as this acquisition was a strategic motion into a market of payments already well established by its competitors.
Julia Martin
Ticker: TSLA
Name: Tesla, Inc.
Number of Shares Outstanding: $615.95 Billion
Shares Outstanding: 963.33 M
Share Price History:
July 19, 2021 $646.22
July 20, 2021 $660.50
July 21, 2021 $655.29
July 22, 2021 $649.26
July 23, 2021 $643.38
July 26, 2021 $657.62
July 27, 2021 $644.78
← -1.95% a day after Q2 ‘21 Financial Results released
July 28, 2021 $646.98
Corporate Profile:
Tesla, Inc. produces electric vehicles and clean energy generation, storage, and consumption solutions. Tesla is focused on accelerating the integration of clean energy transportation and production into society in order to more quickly achieve a zero-emission future. Additionally, all of the new Automotive products include self-driving capabilities and continuing to develop this Autopilot capability is at the core of Tesla.
Tesla designs and manufactures several products based on sustainable energy usage. The products within their Automotive sector are all various types of electric vehicles: Model S, Model 3, Model X, Model Y, Roadsterm, Tesla Semi and Cybertruck. Tesla’s Energy Generation and Storage sector comprises Powerwall, Powerpack, Solar Roof and Solar Panels which are all products focused on the generation, storage and consumption of renewable energy.
Maxwell McIntosh
Ticker: ROKU
Name: Roku
Number of Shares Outstanding: 115.2 M
Market Capitalization: $59.527B
Weekly Stock Price History:
July 26, 2021 $479.50
July 27, 2021 $459.37
July 28, 2021 $468.35
July 29, 2021 $449.60
July 30, 2021 $428.31
August 2, 2021 $421.37
August 3, 2021 $417.80
August 4, 2021 $420.32
August 5, 2021 $403.38
← Post Earnings Share Price
August 6, 2021 $398.47
Roku Company Update
Roku, Inc. prides itself on pioneering the bringing the consumer streaming experience to fruition. The TV streaming platform utilizes the Roku Operating System, Roku OS, to provide consumers with on demand access to movies and television episodes, as well as, live sports, music, news and more. Roku also partners with television brand partners that manufacture Roku TV sets built to run on Roku OS. This allows the company to offer Roku branded products within a wide range of price points lowering the barrier of entry for consumers interested in the technology. As a complement to Roku OS and Roku TV, the company additionally offers Roku Smart Soundbars and Streambars that improve a user's auditory experience. The company hopes to capitalize on the growing amount of streaming hours by consumers worldwide and are looking for avenues to monetize user activity. Possible streams of revenue they hope to explore include video advertising, brand sponsorships and subscription services among others.
Mary Kate McIntyre
Ticker: NVDA
Name: Nvidia Corporation
Number of Shares Outstanding: 2.49B
Market Capitalization: $505.2B
Stock Price History:
July 26, 2021 $195.58
July 27, 2021 $192.08
July 28, 2021 $195.03
July 29, 2021 $196.62
July 30, 2021 $194.99
August 2, 2021 $197.50
August 3, 2021 $198.15
August 4, 2021 $202.74
August 5, 2021 $206.37
August 6, 2021 $203.66
NVIDIA Corporation Executive Summary
A Bloomberg report released on Tuesday indicated that Nvidia’s $40 billion acquisition of Arm Ltd may be in jeopardy after the U.K. reportedly considered blocking the deal. The acquisition of Arm, announced in 2020, would give Nvidia an even larger share of the HPC (High Performance Computing) market. With Arm’s CPU presence, Nvidia is better positioned to dominate the AI playing field. Though Nvidia continues to be enthusiastic about the probability of success, stating that the acquisition would “accelerate innovation and growth for the Arm ecosystem”, an ongoing investigation in the U.K. worries that the deal could potentially be a threat to national security. Sources do not indicate how exactly the switch from Arm’s Japanese ownership under Softbank to American ownership under Nvidia would jeopardize national security and there has been no final decision regarding a block of the deal yet.
Despite the uncertainty of closing the Arm deal, Nvidia has had a strong week. Stock prices neared an all-time high of $206.99 at market close on Thursday. A BWG Strategy call on Tuesday, which focused on Nvidia’s ability to maintain the GPU market share relative to competitive offerings from AMD and Intel, indicated a positive outlook for the company. Experts attributed Nvidia’s success to its segmentation of the GPU market with multiple different “flavors” of GPUs, each programmed for different levels of workload difficulty. Nvidia’s constant attention to its customer base was made evident when on Monday, the Base Command Platform, a subscription-based AI development hub that gives enterprises access to Nvidia DGX and other computing resources. Nvidia predicts that the global market for accelerated computing, including data centres and the edge, will be more than $100 billion a year.
A recent press release confirmed that the second quarter financial results of fiscal year 2022 will be announced on Wednesday, August 18, at 2pm PT.
Naia Morse
Ticker: LULU
Name: lululemon athletica, inc.
Market Capitalization: $49.224B
Shares Outstanding: 124.95M
Stock Price History:
July 23, 2021 $402.79
previous all time high
July 26, 2021 $395.44
July 27, 2021 $391.43
July 28, 2021 $393.09
July 29, 2021 $402.87
July 30, 2021 $400.17
August 2, 2021 $402.65
August 3, 2021 $407.51
August 4, 2021 $410.47
August 5, 2021 $414.39
all time high
August 6, 2021 $408.52
lululemon athletica, inc.
Founded in Vancouver, Canada, in 1998, lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails, yoga-inspired, technical athletic apparel and accessories for women, men, and female youth through company-operated stores and their online marketplace. The company’s core values of personal responsibility, entrepreneurship, honesty, courage, connection, fun and inclusion are at the heart of its company culture. As of February 2, 2020, lululemon operated 491 company-operated stores under its lululemon and ivivva brands in the United States, Canada and more than 15 international locations.
Kendall Smart
Ticker: MAC
Name: Macerich
Number of Shares Outstanding: 206.52M
Market Capitalization: 3.647B
Stock Price History:
July 2, 2021 $18.70
July 6, 2021 $17.58
July 7, 2021 $17.13
July 8, 2021 $17.20
July 9, 2021 $17.88
July 12, 2021 $18.16
July 13, 2021 $17.51
July 14, 2021 $17.52
July 15, 2021 $17.61
July 16, 2021 $16.78
Macerich: Company Update (7/17/21)
Macerich is a self-administered and self-managed real estate investment trust (REIT) that is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and/or community/power shopping centers. It owns around 50 million square feet of real estate, consisting mainly of interests in its 46 regional shopping centers. It specializes in retail properties in the country’s most attractive, densely populated markets, with a strong presence on the west coast, Arizona and the metro New York to Washington DC corridor. Macerich is also a recognized leader in sustainability, achieving the #1 GRESB ranking in the North American Retail Sector for six consecutive years (2015-20). The redevelopment of one of Macerich’s properties Paradise Valley Mall has recently begun with the demolition phase, as of July 8 (Source: KTar News in Phoenix). The former Sears store is one of the first to begin destruction, and the only stores still operating currently are JC Penney and Costco. In connection with closures and lease rejections of several Sears stores owned or partially owned in various Macerich properties, the company anticipates spending between $130 and $160 million at Macerich’s pro rata share to redevelop the Sears stores. The estimated range of redevelopment costs could increase if the company or its joint venture decides to expand the overall scope of redevelopments. On another note, Macerich announced that its second quarter 2021 earnings results will be released before market open on Wednesday, August 4, and management will hold a conference call at 10:00 a.m. Pacific Time on that day to discuss the quarterly results. These results will be important to analyze revenues given the re-opened properties and continually decreasing COVID-19 restrictions in comparison to the 2020 results.
David Kogan
Ticker: NXPI
Name: NXP Semiconductors
Number of Shares Outstanding: 275M
Market Capitalization: $56.1B as of 6/24/2021
Stock Price History:
August 6, 2021: $213.75
August 5, 2021: $212.90
August 4, 2021: $212.43
August 3, 2021: $210.53
August 2, 2021 $208.98
July 30, 2021: $203.59
July 29, 2021: $204.27
July 28, 2021: $198.48
July 27, 2021: $194.25
July 26, 2021: $198.16
NXP Semiconductors Executive Summary
NXP Semiconductors is a global semiconductor company and a long-standing supplier in the industry. In addition to supplying chips, NXP manufactures and designs its own multichip modules, electronic products and software for its chips. The company has a combined portfolio of intellectual property, deep application knowledge, process technology and manufacturing expertise in cryptography, high-speed interface, radio frequency, mixed-signal analog-digital, power management, digital signal processing and embedded system design. End-market applications include Automotives, Industrial and IoT, Mobile, and Communication Infrastructure.
Q2 Earnings Highlights:
Q2 Stats
Overall results were better than guidance for Q2.
2.6 Billion in revenue 43% YoY and 26 million above midpoint of guidance range.
Revenues
Automotive was 1262 million, up 80% over YoY.
Industrial was 571 million, up 31 % YoY.
Mobile was 371 million, up 36 % YoY.
Comm, Infra, and Other was 416 million, down 8% YoY.
In Q2, NXP repurchased 1.2 Billion in shares.
DIO 88 days, below the long term target of 95 days.
Days receivable was 35 days.
Days payable was 92 days.
Q3 and End of 2021 Outlook
Demand is still very strong and not seeming to subside anytime soon.
Supply chain disruptions are still causing delays of 52+ weeks for any Semiconductor product.
Revenues are up due to all NXP manufacturing facilities being run at full capacity in an effort to meet demand and therefore NXP expects revenue to increase to 2.58 billion in Q3 and exceed that number in Q4.
Alex Chang
Ticker: LSF
Name: Laird Superfood, Inc.
Number of Shares Outstanding: 8.99M
Market Capitalization: 251.57M
Stock Price History:
July 19, 2021 $29.36
July 20, 2021 $28.75
July 21, 2021 $29.35
July 22, 2021 $28.21
July 23, 2021 $27.98
July 26, 2021 $27.98
July 27, 2021 $28.35
July 28, 2021 $28.14
July 29, 2021 $27.77
July 30, 2021 $27.91
Laird Superfood, Inc. Company update (7/31/2021)
Laird Superfood, Inc., co-founded by famous surfer Laird Hamilton, produces plant-based food products that are functional, nutritious, good-tasting and sustainable. Laird Superfood’s products include their original plant-based coffee creamer, snacks, coffee blends, hydration energy drink mixes, with an aim towards providing products that are functional, delicious and accessible. The company, based in Sisters, Oregon, went public in September of 2020. Laird Superfood’s commitment to social and environmental justice is acted on by their Ohana Cares program, with a number of initiatives aimed at causes such as fighting food insecurity and reducing the environmental impact and greenhouse gas emissions of their shipments.
Earlier this week, Laird Superfood achieved SQF (Safe Quality Food) Level 2 Certification for its plant-based powdered vegan creamers and Hydrate drink mixes. The SQF Program is overseen by the Food Marketing Institute in the United States, and is benchmarked to the Global Food Safety Initiative, a globally recognized set of requirements and standards for food companies. This SQF certification of Laird Superfood’s flagship products certifies their quality and safety in accordance with worldwide standards.
With the company’s acquisition in May 2021 of Picky Bars, a provider of nutritious and performance-boosting snacks including bars, granola, pancakes and nut butter, Laird Superfood seems to be aware of the potential payoffs of strengthening and expanding their product range to meet the ever-growing demand for plant-based food.
Logan Chang
Ticker: ATVI
Name: Activision Blizzard, Inc.
Number of Shares Outstanding:777.0M
Market Capitalization: $64.9B
Stock Price History:
July 26, 2021: $90.14
July 27, 2021: $84.05
July 28, 2021: $84.82
July 29, 2021: $83.57
July 30, 2021: $83.62
August 2, 2021: $82.76
August 3, 2021: $79.83
August 4, 2021: $81.52
August 5, 2021: $80.32
August 6, 2021: $91.50
Activision Blizzard Executive Summary
The State Department of California’s sexual discrimination and harassment lawsuit against Activision Blizzard led Blizzard President J. Allen Brack to step down this Tuesday. Blizzard, the maker of the Warcraft and Diablo games, was the main subject of accusations in the lawsuit from a California state agency. While many of the allegations occurred before Brack was named president in 2018, Brack came under intense scrutiny over complaints of his leadership style. Activision Blizzard President and COO Daniel Alegre announced Jen Oneal and Mike Ybarra would replace Brack and become co-leaders of Blizzard, effective immediately. Oneal is an 18-year company veteran, previously serving as the head of Activision’s Vicarious Visions Studio. As the Executive VP of Development at Blizzard, Oneal has been providing development leadership and support to the Diablo and Overwatch franchises. Ybarra previously served as a senior executive at Microsoft in its Xbox division. Most recently, Ybarra served as Executive VP and General Manager of Platform and Technology at Blizzard, overseeing battle.net and development services.
Activision Blizzard also released its Q2 earnings for 2021 on Tuesday. Activision beat Wall Street estimates, posting $1.92 billion in revenue for the quarter compared to the expected $1.89 billion. The company also topped EPS expectations, announcing earnings of $1.12 per share—$0.37 more than estimates. While Activision Blizzard saw year-over-year increases in revenues and EPS, the company saw a 7.7% decrease in net bookings and a 4.7% drop in monthly active users compared to last year’s second quarter. Interestingly, this was the first quarter since Q3 2018 that "Mobile" was the leading revenue platform for Activision Blizzard, bringing in $795 million in net revenue. Activision’s platform revenues underscore the industry shift toward a greater emphasis on developing and monetizing mobile games and its current edge in the mobile gaming space, thanks to the operational strength of Call of Duty: Mobile. Activision Blizzard expects $1.97 billion in revenue for the upcoming quarter and $8.52 billion in revenue for all of 2021.
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