In today’s briefing:
- US CHIPS Act: Long Intel Vs. Short TSMC or UMC?
- Snowflake FY2Q23 Earnings: High in the Hierarchy of Needs
- Nike Inc: Innovation For The Pregnant Women Niche & Other Drivers
- Paycom Software: The Beti Upside
- Levi Strauss & Co: Collaboration With Reese Cooper & Other Drivers
- Colgate-Palmolive: What Recent Results Mean For Long-Term Holders
- Abbott Laboratories: Capacity Expansion For Diabetes Care & Other Drivers
US CHIPS Act: Long Intel Vs. Short TSMC or UMC?
- Intel and Brookefield Asset Management recently announced that they intend to jointly invest US$30 billion into building Intel foundries in Arizona, leveraging on the US CHIPS Act.
- Although inflation and declining consumer demand continue to affect all chipmakers, U.S. strategic objectives and policies will set Intel on a new growth trajectory and competitive position in our view.
- A Long Intel/ Short Taiwan semiconductor strategy present a compelling opportunity. We prefer Long Intel vs. Short UMC, however, we expect Long Intel vs. Short TSMC to also be profitable.
Snowflake FY2Q23 Earnings: High in the Hierarchy of Needs
- Product revenues beat consensus by 7% and EBIT margins by 5%, while full year guidance was and margins were raised ~2% ahead of consensus.
- Fears of a consumption model driven slowdown (like Datadog) did not play out, and cRPO growth actually accelerated QoQ to 81%.
- Data sharing is picking up with larger customers, with 65% of $1M+ customers utilizing stable edges.
Nike Inc: Innovation For The Pregnant Women Niche & Other Drivers
- Nike Inc had another stellar quarter and managed to surpass Wall Street expectations in terms of revenues as well as earnings with plenty of new innovations coming out.
- A new lifestyle show, Nike Spark Flynit, was launched that introduces the latest innovation of NIKE Running with the Spark cushioning system.
- This quarter, in Jordan, Luka Doncic debuted his anticipated signature shoe Luka 1, during the NBA Playoff.
Paycom Software: The Beti Upside
- Paycom Software continues to witness a strong demand for automation of management of human capital and self-service payroll with more companies embracing its various solutions, especially Beti.
- The success to attract new business wins as well as robust demand for employee-focused easy-to-use solutions, drives the company’s revenue growth.
- We provide the stock of Paycom Software with a ‘Hold’ rating with a revision in the target price.
Levi Strauss & Co: Collaboration With Reese Cooper & Other Drivers
- Levi Strauss & Co continued to see a strong consumer demand in the last quarter as the management continued executing its strategic initiatives that are viewed clearly in the results.
- Its strategic priorities continue to be focused on margin expansion with a direct-to-consumer (D2C) first approach.
- We provide Levi Strauss with a ‘Buy’ rating and a revision in the target price.
Colgate-Palmolive: What Recent Results Mean For Long-Term Holders
- Colgate-Palmolive (NYSE:CL) is hardly a business for risk-seeking and short-term oriented investors.
- While the management has given us a master class in long-term value creation, the share price is also unlikely to make anyone rich quickly.
- On the contrary, CL is an investment akin for anyone looking for steady value accumulation, superior risk-adjusted returns and a wide moat.
Abbott Laboratories: Capacity Expansion For Diabetes Care & Other Drivers
- Abbott Laboratories had a strong financial performance in the recent quarter led by the development of medical, diagnostics, and pharmaceutical devices.
- During this quarter, the company is continuing to strengthen its Medical Device portfolio with new innovative products.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
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