In today’s briefing:
- Warren Buffett and the Japanese Trading Houses I
- Grab Holdings (GRAB US) – Solidifying Its Appeal
- SG Fleet (SGF AU): 8th April Scheme Vote
- Republic Services: The Secret Behind Its Pricing Power That’s Beating Inflation!
- Deere’s Precision Ag Revolution – How AI & Tech Are Transforming Farming!
- Howmet Aerospace: Can its Industrial Gas Turbine (IGT) Expansion Boost Revenue & Margins?
Warren Buffett and the Japanese Trading Houses I
- The Berkshire Hathaway Annual Shareholder Letter for 2024 was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses.
- He said Berkshire Hathaway’s admiration of these companies “has consistently grown” and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.
- He mentioned Berkshire will increase their stakes somewhat in the trading houses “over time.” That comment deserves some exploration, as does the comment about yen funding.
Grab Holdings (GRAB US) – Solidifying Its Appeal
- Grab Holdings (GRAB US) booked a strong finish to the year, beating its upwardly revised guidance, despite some decline in margins due to increased investment, partly due to competitive pressures.
- The company continues to expand its total addressable market through its Saver initiatives, whilst successfully increasing monetization through its high-value products, and improving retention and engagement through Grab Unlimited.
- Financial services and advertising are becoming increasingly important drivers for growth and profitability. Expect some seasonal slowdown in 1Q2025 but the outlook remains positive and valuations are attractive.
SG Fleet (SGF AU): 8th April Scheme Vote
- On the 25 November 2024, SG Fleet (SGF AU) (SGF), an Aussie provider of fleet leasing services, announced a A$3.50/share non-binding/indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
- On the 4th December, both parties entered into a SID on the same terms. SGF’s largest shareholder, Super Group (SUPER SP) (53.58%), was supportive.
- The Scheme Booklet is now out, with a Scheme Meeting on the 8th April. Expected implementation on the 30th April. The IE (Grant Thornton) says fair & reasonable.
Republic Services: The Secret Behind Its Pricing Power That’s Beating Inflation!
- Republic Services, Inc. reported a strong financial performance for the fourth quarter and full year 2024, showcasing revenue growth across various sectors of its operations.
- The company achieved 7% annual revenue growth and adjusted EBITDA growth of 12%, leading to a 140 basis point expansion in its adjusted EBITDA margin.
- The adjusted earnings per share reached $6.46, accompanied by a remarkable generation of $2.18 billion in adjusted free cash flow.
Deere’s Precision Ag Revolution – How AI & Tech Are Transforming Farming!
- Deere & Company’s latest financial results present a mixed outlook reflecting both challenges and opportunities within the company and its key markets.
- For the first quarter, Deere reported net sales and revenues down substantially, with a 35% decline in equipment operation sales to $6.809 billion.
- Net income attributable to the company stood at $869 million, impacted by a notable $163 million tax benefit.
Howmet Aerospace: Can its Industrial Gas Turbine (IGT) Expansion Boost Revenue & Margins?
- Howmet Aerospace’s third quarter 2024 results demonstrate significant performance gains amidst a complex operating environment.
- The company’s revenue growth was substantial at 11% year-over-year, with commercial aerospace driving much of this improvement with a 17% increase in revenue.
- The engine products and fasteners segments excelled, supported by robust structures performance.
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