Everything you need to know about this week

October 27, 2022
Market & Industry Analysis

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 & economic events. We’ve highlighted the most important topics in each section!

Crypto News:

Following the regulation from China, the crypto markets saw a significant drop downwards in the face of uncertainty. However on Friday, Cryptocurrencies rallied and bitcoin finished the day above $47,000 for the first time in two weeks. This comes around the same time that global equities balanced out after the worst trading month on record since last year. The rally in bitcoin specifically was significant the rally lead to over 35 million short futures positions being liquidated across many major exchanges.

While this is good news, the additional uncertainty has bitcoin trading range-bound and yet to brake $50k in some time. In the face of China, and security talks from US regulators, we may not see a strong sustained push through the resistance mark for some time. We’ll continue to monitor the situation and let you know if we believe this is going to change.

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

We’ve been regularly outperforming the market and our most recent trade ($DYDX) was up over 150% just in the last few days alone!

 


 

Most Important IPO This Week:

iFit Health & Fitness (IFIT), September 29th:

The most exciting company going public this week is iFIT Health & Fitness (IFIT) and they just filed to raise $600M! If you’re not familiar with the company, they sell fitness equipment and content through a hardware and subscription model. If you know of Peloton you can think of them following a similar model. What that means is that they sell the physical hardware and then get you to pay a monthly fee to access their recurring content. While you may not know the parent company, you may know some of the brands under their umbrella. They are: NordicTrack, ProForm, iFIT Subscriptions, Weider & Freemotion.

Looking through their published numbers we see strong revenue growth but it is coming at the expense of growing operating losses. With a valuation that is in line with their peers, we decided to take a deeper look to see if it warranted an initial position. The biggest things that stuck out where:

  • IFIT said it has 6.4M total members in more than 120 countries.
  • The firm reported that revenues more than doubled to about $1.7B in the current year but expenses also 4x’d and led to a net loss of $516.7M.

While the increase in operating losses does give us some worry, we are chalking this up to a shift in scale given the rapid growth due to WFH (workout-from-home). We’re therefore initiating a position, if we can get it cheap enough when it opens.

 


 

Most Important Companies Reporting Earnings This Week:

 

Constellation Brands (STZ), October 6th:

Constellation Brands is one of our favorite picks in the retail beverage and cannabis space! If you missed our write up on them last week, just check it out here -> STZ Research Report

If you do not know them, they are behind popular brands such as Corona, Modelo Especial, Kim Crawford, Meiomi, The Prisoner, SVEDKA Vodka and High West Whiskey. While the stock is down YTD, we believe earnings will have solid projections for them. Right now we see their valuation as attractive and think the pullback in the stock was unwarranted.

 

Tilray (TLRY), October 7th:

Last time Tilray reported earnings they had strong results and this put them in a better position to be a top cannabis brand. Their net revenue was $513M, which represented a 31% increase from the $390M in 2020. However, cannabis stocks like Tilray have really fallen out of the limelight since their spikes in February of this year. As we’ve mentioned countless times now, growth stocks with long-term potential have taken a hit from investors as they’re not willing to pay the heavy price of the valuation.

We do not see this changing anytime soon and therefore believe earnings should not change their outlook, unless there is a mass outperformance of expectations. Either way, we’re continuing to hold our position through this period of uncertainty.

 


 

The Key Economic Event in Focus This Week:

Unemployment Rate, October 8, 2021:

This week the unemployment rate comes out. The once a month event is often looked towards by investors for those wanting to gauge the health of the economy. With people returning to work, and people working remotely, the rate has been trending positively this year so far.

Trending from 8.4% last August to 5.2% this August, we’ve been trending in the right direction all year. While parts of the country and world are starting to re-enter lockdowns due to the Delta Variant, we still believe the unemployment rate will be moving in the right direction.

We therefore are watching this event closely, but don’t anticipate any major shocks.


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