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moby week ahead

Everything you need to know this week

market & industry analysis Oct 18, 2021

We're bringing you all the news you need to know for this week. This report contains news on the most important IPO this week, the crypto world & earnings news. We've highlighted the most important topics in each section!

Crypto News:

Bitcoin clears the $60K mark! 

The last time bitcoin was at these levels was in April of this year. Over the last several weeks we've seen the price rise every week but this week the catalyst was due to the bitcoin ETF.

For the first time ever, it appears as if a bitcoin ETF will go live next week!

The ProShares Bitcoin Strategy ETF is scheduled to debut at the New York Stock Exchange on Tuesday, and experts believe the SEC is unlikely to object to the product. If this happens, a ton of money will flood into the market for bitcoin, thereby driving the price up further. As of writing this up (October 15, 2021) we believe the price should continue going up as people buy the rumor and get excited about the future.

As we've mentioned for years now, we have and continue to be very bullish on the future of bitcoin and think it'll clear $100k!

If you want more crypto news and access to our free trading channel on Discord just click here -> Crypto Discord Channel

 


 

Most Important IPO This Week:

 

Vita Coco Company, Inc. (COCO): 

Launched in 2004, Vita Coco is a leader in the global coconut water category, offering plain coconut water or coconut water flavored with pineapple, peach or mango. They also sell pressed coconut water, as well as coconut oil.

Keurig Dr Pepper (KDP), who is Vita Coco’s largest distributor, has quietly agreed to buy $20 million of stock from Verlinvest in a private placement. Verlinvest, will then own a 38% stake in Vita Coco after the IPO. Verlinvest has some serious food companies in their portfolio and it signals a big vote of confidence having them add this to their portfolio. In addition to this positive signal the financials of the company are very strong. Here are the most important points that stuck out to us:

  • Robinhood has access to their IPO: For a brand with a very strong retail presence, depending on the size of Robinhood's order, this could help push this stock upwards given Robinhood's average user.
  • Net sales increased 10% to $310M for 2020. 2021 will likely come with stronger numbers and we're extremely encouraged at the size of the growth. While 10% may seem low relative to the tech world, 10% in the beverage industry is very strong.
  • Gross margins increased by 3% to 35%. While the gross margins are a bit lower than we want to see the below graph shows us their pricing power (which should allow them to grow margins every year). The chart shows each companies beverages price per ounce. What we can see is that Vita Coco charges more per ounce than basically any other company besides energy drinks, ready to drink coffee and kombucha. This is a strong sign for us to take notice of as beverage investors.

 

When combining the facts above in conjunction with the management team's experience and their outlook and we actually really like this IPO.

However as we mentioned last week, with all IPO's, getting allocations of pre-secondary market shares is the key to success. If you're able to grab these primary shares then we'd definitely recommend locking them up! If you're not able to, we'd wait until some of the early trading volatility shakes out before allocating a portion of your portfolio to this new IPO. In the long run though, we're buyers of the name and are looking forward to tracking their growth!

 


 

Most Important Companies Reporting Earnings This Week:

 

Tesla (TSLA), October 20th:

 
 

Tesla is a beast - there should be no doubt about it. While we did write a post recently about China trying to beat Tesla at their own game (see it: here), Tesla is still in a league of their own. While Tesla does not have the backing of a government to make sure their company survives, they have the best technology and are true masters of their craft.

If you want to see our entire analysis on them just click: here

But in the shorter term, we're using this earnings call to get updates on their supercharger network, Q4 expected car deliveries and YoY sales growth. But with a true hot start to earnings season so far, we expect Tesla to follow suit and report better than expected numbers.

While their outlook while likely drive home the stock price, we believe they beat on expectations drive the price higher.

 

Nasdaq (NDAQ), October 20th:  

 

Do you remember when we wrote up Nasdaq over the summer? If not see the post: here.

Since we wrote them up they're up now over 17% and are on the way towards hitting our price target!

As with the rest of the financials sector, Nasdaq is benefitting from some serious tailwinds. And with earnings set to be announced later this week, we see more upside coming their way. With over $2.9B in revenue last year (15% YoY Growth), and profit growth of 20%, Nasdaq is in a position to generate more growth like we've seen over the last few years.

With expectations higher due to the start of earnings season, we still think Nasdaq has a good chance to beat expectations! 

Blackstone (BX), October 21th:  

 

The last company on our list is Blackstone. Last we wrote them up (see here for original analysis)  it was March and the stock was trading at $76.

Fast forward to today and the stock is at $123 - giving you a gain of 62% in only 7 months!

We hope you were able to profit on the upside, but if not, do not fret. There is still some time left. With Blackstone due to report later this week, we see strong numbers being reported. As a huge manager of private assets and real estate, Blackstone should be profiting like crazy for the rest of 2021 and beyond. 

We therefore are continuing to hold our position. We are watching closely to this earnings call to see if there is any update on their real estate holdings going forward.

In any case we expect another beat and more stock appreciation going forward! 

   


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