🤑247capital #23 | $VITL and Ray Dalios take on China🤑
Follow-Up, Stock of the week | $VITL, Read of the week | Ray Dalio, Tweets of the Week, ...
Hi Everyone 👋,
Welcome to the #23 issue of 247capital — your weekly source of Investment Research. If you are new, you can join my email list here.
The follow-up to former Issues
Below you´ll find the overview of all bought shares since Issue 1 and the current state. Please keep in mind we´re here for the long run. 5-10 years horizon at least.
$TAP - bought at $44.95 - Issue 1
Closed the week at $48.89 (up 8.77%)🔥
$GEO - bought at $5.79 - Issue 7
Closed the week at $6.92 (up 19.52%)🔥
XTRA:DFV - bought at 12.96€ - Issue 8
Closed the week at 13.48€ (up 4.01%)🔥
READ - bought at 43SEK - Issue 12
Closed the week at 37.50SEK (down 12.79%)❄️
$HIMS - bought at $8.95 - Issue 12
Closed the week at $7.91 (down 11.62%)❄️
Below you’ll find from now on also an overview of the portfolio with the actual price, the change versus the previous week, and the price range of the last 3 years.
READ - Still waiting patiently for the mentioned gap from #21 to be closed.
$HIMS - IMHO, a good time to buy-in. The current price drop is some confusion about their recent acquisitions like Apostrophe and Honest Health. Their IR Team promised to shed some more light on it in the next earnings call. Also, Management used the expiration of the lockdown period to sell some shares, only a minor position of their overall stocks.
$TAP - Molson Coors reports highest sales growth in a decade
Molson Coors Beverage Co. reported second-quarter earnings and sales that beat expectations. Net income totaled $388.6 million, or $1.79 per share, up from $195.0 million, or 90 cents per share. Who would have known 😉
Topo Chico Hard Seltzer continues to exceed our expectations in the 16 markets in which is sold it's the US. The demand is far outpaced our original plans for the brand and with supply improving we are now positioned to be more aggressive in marketing this brand.
ZOA already cracked the Top 20 of energy drinks in the US, so I expect to boost the Q3 earnings call numbers.
As expected, we’ll have a quarterly dividend of $0.34 per share. Compared to our entry point, it brings us a 3.02% dividend yield annualized.
The stock of the week - Vital Farms Inc - $VITL
Share price: $17.41 * Market Cap: $695M * EPS: 0.26 * P/E Ratio: 70.21 * Div: -
America`s Vital Farms started in 2007 with 20 hens. 😳
Now, 2.5M hens enjoy a meaningfully better life than the confinement they would face in the industrialized food system.
The Company packages markets, and distributes shell eggs, butter, hard-boiled eggs, ghee, and liquid whole eggs. The Company’s products include pasture-raised shell eggs, pasture-raised butter, pasture-raised hard-boiled eggs, pasture-raised ghee, pasture-raised liquid whole eggs, and pasture-raised egg bites. Its products are sold under the brands, including Vital Farms, Alfresco Farms, Lucky Ladies, and RedHill Farms, primarily to retail foodservice channels in the United States.
The Company sources its pasture-raised products from a network of over 200 family farms. As a result, paying farmers and plant workers at a premium. However, the company’s success proves that these more ethical standards are becoming increasingly appealing to consumers and investors. Also, over 6.000 acres of land can rejuvenate naturally without herbicides or pesticides.
Q1/2021 Numbers were looking fabulous.
Nevertheless, after the IPO ($22), shares soared more than 90% to around $42 and are now trading at an all-time low under $18.
Some IR-Highlights
👉🏻 As of December 2020, the products are sold in more than 16.000 stores, a 12% increase from the prior year
👉🏻 Amazon indirectly holds around 1.6M shares of Vital Farms, representing a 4.1% share.
👉🏻 Numbers like Rule of 40 - see below
Ums.wachstum = Revenue growth * Versch.grad = Debt level
👉🏻 Positive Earnings with a forecast to grow 61.16% per year.
👉🏻 Strong financial health and balance sheet with zero debt.
👉🏻 Individual Insiders holding 32.1% of shares.
TL;DR
At the current share price, “green” stock with great potential and good numbers to highly consider. With some more patience, a buy under $16 would be a great long-term steal, in my opinion.
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Quote of the Week
“Whatever methods you use to pick stocks, you success will depend on your ability to ignore the worries of the world long enough to allow your stocks to succeed. No matter how intelligent you are, it isn’t the head but the stomach that will determine your fate”
- Peter Lynch
Tweets of the week
Read of the Week - Ray Dalio: Understanding China’s Recent Moves in Its Capital Markets
Famous investor Ray Dalio posted on LinkedIn about his point of view.
As for investing, as I see it the American and Chinese systems and markets both have opportunities and risks and are likely to compete with each other and diversify each other. Hence they both should be considered as important parts of one’s portfolio.
My take on Chinese stocks is to avoid them because I don’t trust their regulators or their numbers. They screwed the west more than once. Therefore I highly recommend watching The China Hustle.
Also, there are far better options in the rest of the world, with a better risk/reward ratio.
Plus, if you want to have some exposure to China, you’ll get it with many big companies like BASF, which my brother will cover in a future edition.
Company names of the week - N
This is a list of company names with their name origins explained.
Today's Top 5 letter N:
Napster – original music-sharing service was named after co-founder Shawn Fanning's hairstyle-based nickname
Nestlé – named after its founder, Henri Nestlé, who was born in Germany under the name "Nestle," which is German (actually, Swabian diminutive) for "bird's nest" The company logo is a bird's nest with a mother bird and two chicks.
Nike – named for the Greek goddess of victory.
Nintendo – Nintendo is the transliteration of the company's Japanese name, nintendou (任天堂). The first (nin) can be translated as to "entrusted"; ten-dou means "heaven."
Nvidia (stylized as NVIDIA) – comes from "invidia" in Roman mythology, the Latin word for "envy."
Outlook to August
With the Fear & Greed Index switching from Fear to Extrem Fear (32->24) last week and August due to holidays traditionally being a weaker month, I would expect some more buying opportunities to come.
This one was a longer newsletter. Did you like it, or do you prefer a shorter version?
Just Hit Reply; I’d love to hear your comments.
Thanks for reading, and until next Monday,
Sebastian from 247capital