A New Level Of Non-ESG | The Daily Peel | 3/9/22

Silver Banana goes to...

Market Snapshot

It was a hard-fought battle on Wall Street yesterday with bulls and bears going at each other like… cats and dogs. Up, down, up, and then down again. Really we just want traders to make up their minds. At the end of the day, the bears clawed out a W with the S&P 0.72% lower, the Dow down 0.56%, and the Nasdaq following with a 0.28% loss.

Piestro has designed a robotic pizzeria that makes pizza at a fraction of the cost of traditional pizzerias and boasts an impressive 48% projected profit margin (up from 5-10% industry averages).

With over $580mn in commercial contracts to-date, you can invest in Piestro here.

Let’s get into it.

Banana Bits

Evacuation attempts continue to fail for suffering Ukrainians
If I had a nickel for every percentage point nickel has skyrocketed recently…
Pizzas with a topping of profits (you smell that?)
Moderna wants its C-19 vaccines manufactured in Africa
Combine and Conquer: two U.S. oil players to merge in $6bn deal
Seems like cap, but apparently, Zelle runs more cash than Venmo
Bain launches a $560mn crypto fund with the least diverse team ever, Twitter has a field day
Dua Lipa may have to do-a copyright lawsuit settlement

Macro Monkey Says

A New Level Of Non-ESG — Oil has been the least ESG investment you can make, but yesterday, a certain segment of the oil market became even less ESG (if that’s possible).

Joey B and Big Dawg Boris (aka, JB and BJ) led a major and supremely bold charge yesterday to ban and/or phase out Russian oil imports. The U.S. came out with the most extreme decision, outright banning the import of oil from the war-hungry nation. The U.K., at the same time, committed to phasing out Russian oil by year end, while the E.U. did something similar but in a way more confusing way, as always.

So now what? Well, politicians, former politicians, and oil executives are memeing on this decision like Apple Music users when Spotify briefly crashed yesterday. Most notably, former President Donnie T hit ’em with his classic “Do you miss me yet?” in referencing the soon-to-be much higher pump prices we’ll face. ConocoPhillips CEO, however, was milder in his response, kindly calling the decision “the stupidest thing you could ever imagine.”

The move had been rumored since basically right when the war began. As always in the U.S., some were pro while others were against with extremely strong feelings on both sides, despite 99.9% of us having exactly zero idea what we’re talking about. Nonetheless, this could be seen as the nuclear version of a sanction, as oil is literally the lifeblood of Russia.

But, like anything, defending morals comes at a cost. Global oil prices hovered around the $130 mark, a high not seen in well over a decade, while American gasoline prices hit their highest average ever at $4.17/gal.

Not great for anyone, but at least Greta Thunberg is happy.

“Hey Google, What Company Should I Buy?” — If you asked that question yesterday, you would’ve received an answer loud and clear: Mandiant.

Despite the name of the firm being apparently unaware of international women’s day (MAN-diant, smh), Alphabet threw a ton of cash at the firm, nonetheless. Shelling out $5.4bn for the young firm, the search monster hopes that the addition of a cybersecurity player will help bolster the safety and security of its cloud unit.

Cloud, if you recall, is one of Alphabet’s largest growth drivers, so this should be a pretty big deal to shareholders. And spoiler alert, if you own the S&P 500, Nasdaq, or basically any U.S. index with some tech exposure, you own Alphabet.

Investors had a weird reaction. Alphabet shares ($GOOG/L) were up around 0.6%, and Mandiant fell 2% despite remaining below the acquisition price. I’ll give investors the benefit of the doubt for now and just say markets are weird… but also stupid.

Invest in the Pizza Chefs of Tomorrow

Piestro March 9th 2022

Full-service restaurants across the US are plagued by high real estate and labor expenses. With profit margins averaging a low 5-10%, the industry is continually threatened by high employee turnover rates and rising wages.

That’s why Piestro has designed a robotic pizzeria that makes pizza at a fraction of the cost of traditional pizzerias, requires no labor to operate, and boasts a 48% projected profit margin.

Piestro's robots have already received $580mn in pre-orders via commercial contracts and continue to expand their global reach.

Learn more and invest in Piestro right here

What's Ripe

Enphase Energy ($ENPH) — Amid a booming energy market, it can be challenging to separate yourself from the rest of the pack. Solid earnings will get the job done, as Enphase showed us yesterday.

Shares ripped 10.8% as both top and bottom line results beat expectations. Wall Street was anticipating EPS $0.58/sh on $396mn in sales, but Enphase gave ’em $0.73/sh on $412mn for the quarter.

Still, shares are down ~33% since peaking. But by the look of it yesterday, investors are more than fully charged for the future.

Dick’s Sporting Goods ($DKS) — Things weren’t very hard for the phallically named sporting goods store last quarter, and investors took notice.

Shares popped 2.1% after a solid earnings report indicated that brick & mortar sporting goods stores aren’t totally dead. Dicks delivered $3.64/sh in income on $3.35bn in top line, while the Street only wanted $3.43/sh on $3.31bn in sales.

Sports are back now that the pandemic is largely forgotten, so investors have a right to be hyped… for now. Reports allege that Jeff Bezos began aggressively licking his lips after watching this earnings call.

What's Rotten

ScottsMiracle-Gro ($SMG) — Everyone (that’s cool) loves weed. The problem is, y’all love weed a little too much, according to ScottsMiracle-Gro.

Yesterday, the lawn care and semi-weed company updated FY’22 guidance for its Hawthorne division, which sells hydroponic equipment and other weed cultivating tools, indicating that sales will decline 15-25% this year as opposed to the 8-12% fall they previously saw.

Citing an “oversupply of cannabis” as the driver, shares dipped 6.1% to a multi-year low. As we say, weed gets you high but your stocks low.

CrowdStrike ($CRWD) — Like going to a dentist appointment, investors are not at all excited for CrowdStrike’s earnings release later today, hence the 6.4% drop seen yesterday.

The high-flying cybersecurity stock has so far been beaten down only 45%. I say only because the rest of the unprofitable tech growth stock gang has had their sh*t rocked at least like 60%. Still, it’s strange in an environment in which cyber safety is increasingly becoming more and more relevant in the mind of business owners and politicians.

Thought Banana

No Lions And Tigers, But A Lot Of Bears — Bears are scary, but bear markets are a whole other level of terrifying. I wouldn’t want to face either, but unfortunately, markets have given us no choice.

As of Monday, the Nasdaq composite has officially entered bear market territory. Not to be confused with correction territory, which the index entered on January 19th, but bear market territory. Correction indicates a 10% fall from recent highs, while bear markets are denominated by a 20% drop.

As the saying goes, it’s about the journey, not the destination. We’ve officially arrived in the bear cave, but history shows that getting to this point tends to be the worst part. According to data from Barron’s, the average one-year return for the Nasdaq composite after hitting bear market territory is 13%. Still, it’s important to keep in mind the environment you’re trading in.

This part is pure speculation because not all bear markets occur in a macro environment that’s as radically distorted and just plain confusing as today. War in Ukraine, existing high inflation, the dying days of a pandemic, a Fed tightening cycle, and whatever the hell is going on in the commodities market, to name a few, would all challenge that 13% average return.

As always, the only way to know is to find out. Prayers up for your (and my) portfolios.

Wise Investor Says

“Einstein was right about relativity, but even he would have had a difficult time applying relative valuation in today’s stock markets.” — Aswath Damodaran

Happy Investing,

Patrick & The Daily Peel Team

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