📈 Starlink IPO?

Xi to Biden, Earth is “big enough” for US and China to succeed, US producer prices fall unexpectedly, SpaceX weighs spinning Starlink via IPO, Citigroup begins layoffs as part of corporate overhaul, and Berkshire sheds blue-chip stocks for cash...

November 16, 2023

☕️ Good Morning.

The Fast Five → Xi to Biden, Earth is “big enough” for US and China to succeed, US producer prices fall unexpectedly, SpaceX weighs spinning off Starlink via IPO, Citigroup begins layoffs as part of corporate overhaul, and Berkshire sheds blue-chip stocks for cash…

Your 5-minute briefing for Thursday:

BEFORE THE OPEN

As of market close 11/15/2023.

MARKETS:

  • Stock futures dip as November's strong performance continues.

  • Dow futures down 20 points (-0.07%), S&P 500 futures drop 0.1%, Nasdaq 100 futures slide 0.2%.

  • Cisco Systems falls 11% on weak guidance; Palo Alto Networks down 5% on dismal billings forecast.

  • Recent Wall Street gains fueled by positive inflation data.

  • October's producer price index (PPI) records largest monthly decline since April 2020, following flat consumer price index (CPI).

  • November sees S&P 500 up over 7%, Dow up nearly 6%, and Nasdaq surging 9.8%.

  • Focus shifts to economic data, Fed officials' remarks, and earnings reports from retailers like Macy's, Walmart, and Gap on Thursday.

EARNINGS

  • Thursday: Alibaba (BABA)

    • Walmart (WMT) - earnings expected: $1.41 per share (-6.0% YoY) on $149.8 billion revenue (-2.0% YoY)

  • Full earnings calendar here

NEWS BRIEFING

  • Earth is ‘Big Enough’ for U.S. and China to Succeed, Xi Says as He Meets Biden (Read more)

  • SpaceX Weighs Spinning Off Starlink Via IPO as Soon as 2024 (Read more)

  • US producer prices unexpectedly fall in October (Read More)

  • Biden, Xi begin high stakes meeting in California (Read More)

  • UK inflation slows to two-year low, bolstering rate cut bets (Read More)

  • Microsoft introduces its own chips for AI, with eye on cost (Read More)

  • US retail sales fall for first time since March as holiday season approaches (Read More)

  • FDIC Chairman denies being investigated, then changes testimony (Read More)

  • Microsoft is fine avoiding China as US considers national security implications, CEO says (Read More)

  • UAW workers at GM’s largest plant back labor pact, boosting deal’s chances (Read More)

  • Citigroup begins layoffs as part of CEO Jane Fraser’s corporate overhaul (Read More)

  • Housing inflation is hitting consumer sentiment harder than other prices (Read More)

  • Berkshire sheds General Motors, Johnson & Johnson, Procter & Gamble as it builds cash (Read More)

  • FAA clears SpaceX to launch second Starship flight (Read More)

CRYPTO

  • SEC yet again deferred making a decision on whether to approve the first US exchange-traded fund that invests directly in Bitcoin (Read More)

  • Bitcoin flirts with $38,000 as spot ETF hopes encourage bull run (Read More)

  • Binance to start Thai crypto exchange with billionaire Sarath (Read More)

BULLISH BITES

🤔 Do tell… Why the Godfather of A.I. fears what he's built

🌎 Already? Sphere and loathing in Las Vegas (Enjoy the experience while you can: the company that operates the Sphere just reported a $98.4 million quarterly loss, and the CFO resigned.)

🍔 WTF: McDonald’s and its growing appetite for fashion: Crocs, Moschino, more

🛏 Zzz: This sleep strategy may be the most important for a long life

💰 All set: Young and Rich: China’s scions set to inherit $120 billion in wealth transfer

STOCK IDEA

Voss Capital new holding: CRH

CRH plc is an international group of diversified building materials businesses whose headquarters is in Dublin, Ireland. It manufactures and supplies a wide range of products for the construction industry.

Ticker: CRH | Price: $59.11 | Price Target: $120 (+102%) | Timeframe: Late 2024

🏗️ Construction | 🏭 Manufacturing | 📈 Bullish Idea

CRH Plc, a leading aggregates and infrastructure company in the United States and Europe, has become one of our largest investments due to its minimal downside and potential for a stock rerate following its NYSE relisting. Since its formation in 1970, CRH has demonstrated a consistent 15% annual return, underpinned by disciplined operations and successful M&A activities, spending $10.3 billion on acquisitions and receiving $10.5 billion from divestitures. CRH operates four primary segments, with its Materials Solutions in North America contributing 49% to EBITDA. The company holds significant market positions in aggregates, cement, and asphalt production, benefiting from local market dynamics and stable pricing. CRH’s vertical integration enables efficient operations and customer service, offering end-to-end solutions. With 75% of its EBITDA from North America, CRH stands to benefit greatly from US government infrastructure spending programs. The recent US relisting is expected to bring the stock in line with US peer valuations. CRH trades at a competitive 11.5x P/E and 7.0x EV/EBITDA, with a projected cash generation of $35 billion over five years. Our price target for CRH is around $120 per share by late 2024, considering its operational stability, strong capital allocation, and growth prospects.

Read the full article here. Read time: 9 min

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