Weekly Recap | December - W1
Black Friday, Labour market report, Transmedics news, U.S. Antitrusts, Elon's package, Ulta Beauty & Victoria's Secrets earnings
Macro.
My global view didn’t change since I shared this write-up. We are still in the best environment for risks assets with liquidity injection & lower inflation, perfect conditions to create a good & nice bubble, which we start to see forming.
Labour Data.
Unemployement came on expectations, although "on expectations" means another upward tick, now at 4.2%.
The tendency remains upward with constant higher lows & higher highs, which is not a great tendency for the economy & consomation.
We had two other datasets; Non-Farm Payrolls & Private Payrolls. The first one came above & the second under expectations, which could mean most new jobs were added by public entities & not by the private sector - which isn’t a great tendency neither.
Nothing serious for now, the market continues to expect those but the tendencies aren’t those of an healthy economy.
Black Friday.
Numbers were great for online sales, hitting a record $10.8B - a YoY growth, inflation adjusted. This confirms a continuous spending in the U.S. & that our favorite payment processors will certainly give us satisfaction during Q4-24, between this event & the holidays.
In Brief.
Lots of data & words to conclude by: Nothing changed. The U.S. economy still works at two speeds while the labour market isn’t in a good health, but not sick enough to worry the market considering the liquidity injections.
As long as the DOGE doesn’t break anything or inflation doesn’t pick up, we’re good with stocks & risk assets.
Watched Stocks & Portfolio.
Transmedics FY-24 Revisions & CFO.
We had some news coming from Transmedics this week as they announced that their CFO was being replaced, but isn’t leaving the company. He will change activity and work on growing awareness around Transmedics & their products.
On the other hand, management revised its FY-24 revenue guidance from $425M - $445M to $428M - $432M with a median $5M lower than previously, which didn’t please the market.
My take remains exactly the same as during the last quarter; this is a fundamental play trading at low/fair multiples at the moment without any possibility to predict future growth rate.
Management is very confident but is also talking about a continuous slowdown during the first semester of 2025 while growth should reaccelerate afterwards. I believe it is almost impossible to predict so far in time, but FY-25 guidance will play a major role in the stock’s behavior, while the long-term fundamentals have not changed at all. Management will also focus next year on growing its reach with lung transplants, where they have pretty low market shares & which represents a very small part of their revenues.
The stock lost its bottom around $72, once more, and could fall lower.
This is the only name with which I want to break my rules of not buying downtrends, but that daily gap in the 50s could act like a magnet, while a flatish or poor guidance for FY-25 could destroy the stock… I remain very bullish on the company long-term, but have to stay patient before buying.
We will have another conference next week where they should give more information, I will keep an eye on it.
Antitrusts.
We are starting antitrust seasons. After Google by the DoJ, the Federal Trade Commission is setting its eyes on Microsoft. We might have more of those, with more aggressivity during the next months as some individuals in Trump’s team aren’t big lovers of those giants' monopolies.
As to whether they will lead to anything... It still looks like lots of noise, but who knows. what’s sure is that it’ll bring some volatility to those names.
Tesla & Elon’s Package.
Delaware strikes once more, as the judge who ruled against the first vote on Elon’s multibillion-dollar package, ruled against, again…
I have no legal background, but I continue to wonder how a judge has the power over a shareholder vote… Two shareholders' votes, even. It’s an interesting story to follow but it doesn’t impact the company at all. They will find a way to compensate Elon for his work, and that’ll be it.
Crazy story though.
Other.
Ulta Beauty Q3-24.
Ulta is a complex subject, but I remain bearish, especially with my pessimistic view on western consumption in the mid-term - two years-ish.
EPS. $4.52 | $5.14 | +13.72%
Revenue. $2.5B | $2.53B | +1.20% beat
Comparable grew 0.3% YoY for the nine months ending, which means that there is a decline in sales, inflation-adjusted. The bulls will see the other side, arguing that holding up to FY-23 in harder conditions is actually a sign of strength.
Financially, things are not very good as margins are shrinking while revenues aren’t growing. Nothing too concerning though. On the positives, the company continues to buy back "cheap" shares, and the guidance was very slightly "raised" upward - still far from being good.
I can understand why some see value here and expect a comeback, especially with the fundamentals and Ulta being one of the biggest cosmetic sellers in the U.S. But I believe there are better & cheaper values elsewhere - in the energy sector, notably.
Victoria’s Secret Q3-24.
I had Victoria’s Secret on my watchlist since the company announced they’d restart the angels shows, while they were still struggling ifnancially to be honest. But the stock reacted to the announcement and didn’t give back anything since, constantly running up. A good thing for those who bought the potential, not waiting for confirmations, but I’ve been left behind.
EPS. -$0.62 | -$0.50 | +19.35% beat
Revenue. $1.29B | $1.35B | +4.42% beat
Comps are easier after a tough 2023 but there is improvement. A correct growth, higher than inflation, which means a return of customers to the brand. A show which seemed to have pleased most. Financials are correct compared to last year, with flat margins and a probable profitable year as the nine months already are, and the guidance - which was raised, points to it.
There’s lots of work left but we might start to see the phoenix rising.
Thanks for keeping an eye on TMDX! Definitely a name with good potential in a niche market.