The Investing Week Ahead: 12/13/21
Join me as I highlight the most important topics to attack the investing week ahead.
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A quick callout before we get started:
As you all know, my Week in Review posts are exclusively for paying subscribers. But, considering nearly ~300 of you have joined us over this last week, I unlocked Sunday’s post to the public.
It covers 2 IPOs, 10 earnings reports, 3 investor events, and 3 major economic updates - you can read it below.
Let me know if you have any questions!
In this post, we’ll cover:
Hot IPOs taking place this week
Quarterly financial reports worth reading
Investor events to keep an eye on
Major economic releases
If you want to learn more about the companies mentioned in this post, consider using Unhedged to conduct your research.
The Investing Week Ahead - Too Long, Didn’t Read:
A fleet vehicle software IPO, earnings reports from Accenture, Adobe & Rivian (its first as a publicly-traded company), annual investor days for Delta & Lowe’s, and all eyes on the Federal Reserve meeting.
IPOs to Watch this Week:
Only one major initial public offering happening this week - and if you operate semi-trucks or other large fleet vehicles, you’ve likely heard of them.
This California-based company founded to “develop a cloud-based platform to assist fleet operators with software solutions to improve the safety and efficiency of their transportation systems” is planning to raise $753 million this week through an IPO.
The company generated $120 million in revenue in 2019, $250 million in 2020, and is on track to rake in $405 million in revenue this year - with roughly 72% gross profit margins. Over the last few years, this company has done a stellar job of closing the gap on their operating loss - from negative -190% operating margin to now only negative -34% in 2021.
Heading into the IPO, we’re implying ~$11 billion market cap on Samsara, which puts their stock around a ~17X forward revenue multiple .. pretty reasonable consider their growth and margins.
The only other company I can find that’s publicly traded to compare Samsara to is Trimble Inc (TRMB) - they’re valued around $22 billion and their stock trades for only ~6X forward revenue.. much less than Samsara’s implied 17X.
Trimble’s revenue growth has sputtered dramatically, which is likely the reason for the major discrepancy in their valuation. Regardless, it’s nice to see that there can be big winners in this space.
If you’re like me, you know that semi-truck drivers and transportation fleets are core to our economy’s continued success - and it seems like Samsara has done a great job enabling that. Over 13,000 customers, demonstrating a -50% reduction in driver accidents, a +76% improvement to dispatch productivity, and a -1,400 ton reduction in annual CO2 emissions from fuel savings using Samsara.
Read their S-1 here.
Key Earnings Announcements:
A handful of companies in our coverage universe report their quarterly earnings this week.
December 15: Lennar (LEN), Trip.com (TCOM)
December 16: Adobe (ADBE), Accenture (ACN), FedEx (FDX), Rivian Automotive (RIVN)
December 17: Darden Restaurants (DRI)
All eyes on Rivian Automotive (RIVN) as they report their first ever earnings as a publicly traded company. Personally, I’m going to be more dialed in to Adobe (ADBE) and Accenture (ACN) - two companies that will likely continue to see momentum going into 2022.
Not seeing a major investor conference on the calendar, but instead multiple company-driven “investor days.” Remember, these are a once per year day where the company throws the kitchen sink at making their company seem amazing - trying to impress banks, shareholders, and more importantly their own employees.
December 14: Campbell Soup (CPB) Investor Day
December 15: Lowe’s (LOW) 2022 Financial Outlook
December 16: Delta Air Lines (DAL) Capital Markets Day
Lowe’s has been a major winner (alongside Home Depot) since COVID began in early 2020. Keep an eye out for their CFO to walk us through a few margin expansion opportunities they’ve identified - trying to close the margin gap with Home Depot.
The company’s stock jumped +7% after their 2021 Financial Outlook event catalyzed by strong guidance - who knows what’ll do this time around.
Major Economic Updates:
Retail sales, interest rates, and building permits - big week ahead.
December 14-15: Monthly Meeting of the Federal Open Market Committee (FOMC)
The Federal Reserve’s final monetary policy decision of 2021 will be coming soon - which is largely responsible for the frightful market to start this week. Investors will be looking to hear updates on bond purchase tapering, interest rate hikes, recently-reported inflation data, and the Omicron variant.
"We expect the Fed to announce a doubling in the pace of tapering at the December FOMC meeting, bringing the monthly drawdown to $20 billion and $10 billion per month for Treasuries and MBS, respectively. This would conclude the tapering process in March and open up greater optionality for an earlier liftoff," said Deutsche Bank economists led by Matthew Luzzetti.
December 15: US Retail Sales for November 2021 from the Census Bureau
December 16: US Building Permits for November 2021 from the Census Bureau
It’ll be nice to see continued momentum surrounding November’s retail sales data. This week will certainly be rocky - as retail sales data, interest rates, and building permit data all make waves in the markets.
Have a great start to your week!
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.