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Happy Sunday! |
Welcome aboard to all the new +250 subscribers who joined us this week! |
This week's newsletter will be a bit slightly shorter than usual due to Memorial Day. |
As a token of appreciation for your support, I've put together a free website where you can find all the earnings visuals for notable companies that have recently reported. |
Thank you once again for being part of my community! |
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Some key data bites from this week that you should know: |
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In today's newsletter: |
🌎 Global Stock Market Returns 😴 Boring Stocks Beating The Market 🏀 Everybody Loves Dick's Sporting Goods 🍗 Costco's Q3 FY24 Earnings 🌭 Costco's $1.50 Hot Dog Combo vs Inflation
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Let's dive right in! |
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The S&P 500 is not the only index that has been performing well. |
Italy's FTSE MIB, Japan's Nikkei 225, India's Nifty 50, and Russia's MOEX have all seen returns exceeding 20% in the past year. |
Europe's PIGS countries—Portugal, Italy, Greece, and Spain—are also shining with robust stock market performance, riding on mid-single-digit GDP growth since the pandemic. |
This marks a turnaround for Europe, which has lagged behind the U.S. for some time now. |
However, some economists caution that this growth may not last, as they believe its fueled primarily by pent-up post-Covid demand. |
Meanwhile, China's stock market is facing challenges, registering losses due to a real estate downturn, a slow post-Covid recovery, and government crackdowns on big tech. |
Since then, the government has pushed a variety of measures hoping to revitalize the stock market. |
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Speaking of great performances, let's focus on a couple of boring businesses. |
You don't need to invest into the next big thing to get extraordinary returns. |
Consider FICO, the credit score software creator, or Cintas, which supplies businesses with uniforms and safety gear. |
10 years ago, a $10,000 investment in FICO could have grown to $234,625, and in Cintas, to $122,753. |
Comparatively, the same amount in the S&P 500 would have returned $33,055. |
Other examples include Copart, an online vehicle auctioneer, and Crocs, the quirky footwear brand. |
Even household names like Domino's Pizza and Costco have been strong performers, beating the S&P 500. |
These "boring" stocks showcase how steady companies can deliver outstanding returns. |
And these are just a handful of names. Other companies like Celsius, Chipotle, and Waste Management have also outpaced the index over the last decade. |
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Dick's Sporting Goods is yet another example of a boring business. |
While retailers like Lululemon and CVS have been struggling, Dick's has been resilient. |
The company jumped over 20% this week after reporting stronger than expected earnings. |
Here are the numbers: |
🟢 Earnings: $3.30 vs. $2.95 Est. 🟢 Revenue: $3.02B vs. $2.94B Est. 🟢 Comparable Sales: 5.3% vs. 2.4% Est.
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The company surpassed expectations across the board, thanks to higher sales driven by increased customer traffic and spending. |
On the earnings call, CFO Navdeep Gupta highlighted a 2.7% rise in transactions and a 2.6% boost in average ticket size. |
Dick's is also optimistic about the future, raising its full-year 2024 guidance for comparable sales growth to 2% - 3%, surpassing analyst estimates. |
They also exceeded analyst expectations for full year earnings, expecting it to fall in the range of $13.35 and $13.75. |
In the past year, the stock has climbed over 75%. |
If you were lucky enough to buy during the Pandemic lows, Dick's stock has more than 10X'd, delivering a whopping +1,200% return. |
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Costco stood out as the main player in last week's earnings lineup. |
The quarter brought no surprises, with Costco exceeding all major expectations. |
Here are the highlights: |
🟢 Earnings: $3.78 vs. $3.70 Est. 🟢 Revenue: $58.52B vs. $57.98B Est. 🟢 Same-store Sales: 6.6% vs. 6% Est.
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Quarterly revenue jumped 9%, and earnings soared by 29%. |
The company is benefiting from customers looking for budget friendly prices on essential goods. |
E-commerce also thrived, growing by 20.7% thanks to strong sales in appliances, gold/silver bullions, and gift cards/e-tickets. |
Total cardholders increased by 7.4% to 133.9M, and paid memberships rose by 7.8% to 74.5M, with a remarkable worldwide membership renewal rate of 90.5%. |
While Costco's shares have risen by 25% this year, it's worth noting that the stock has never been more expensive, trading at a record earnings multiple of 53x. |
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One thing all Costco fans love is the company's hot dog combo. |
On the earnings call, CFO Gary Millerchip said, "To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe." |
Since its introduction in 1984, Costco's $1.50 hot dog and soda combo has remained a beloved staple, famously resisting inflation thanks to the company's commitment to affordability. |
In fact, Costco co-founder Jim Sinegal once famously warned the CEO, "If you raise the [price of the] f*cking hot dog, I will k*ll you. Figure it out." |
The hotdog combo has maintained its price since its original release. |
I personally crunched the numbers, and adjusting for inflation over time, the equivalent value of the $1.50 hot dog combo from 1984 would be $4.45 today. |
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📚 Recommended Reading |
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Get the latest market news and expert analysis directly to your inbox twice a week, completely free. |
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🧑⚖️ Trump Convicted. Donald Trump was found guilty on all 34 felony counts of falsifying business records - NBC | 💸 PayPal's Ad Venture. PayPal $PYPL is planning to build a new advertising platform - PYPL | 🗓️ T+1. Trades on the U.S. stock market will now settle in a single day - BB | 🔥 Inflation Figure. The Fed's preferred inflation measure, the PCE index, climbed 2.7% year over year, in line with expectations - B |
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Notable Companies Reporting Earnings Next Week: |
Monday (6/3): Tuesday (6/4): Wednesday (6/5): Thursday (6/6):
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All of the companies that are reporting earnings next week can be viewed here. |
 | Major Trades Published 05/27 - 05/31. Trades may be those of family members. [Source: 2iQ] |
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Buys |
Thomas Kean Jr (R) Susie Lee (D)
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Sells |
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 | Major Trades Published 05/27 - 05/31 |
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Buys |
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Sells |
Walmart ($WMT) Meta Platforms ($META)
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