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- 📈 $UBER: $7B in Buybacks with an Aux Cord to Match
📈 $UBER: $7B in Buybacks with an Aux Cord to Match
Top of the morning lads, it’s Wednesday! Sorry for not sending this out yesterday…life can really life sometimes.
Spring is in 27 days….now is a great time to plan out some goals!
Featured Stock of the Week
A note that neither Underwriter nor this newsletter provides investing or trading advice. Please consult with a financial professional before making investment decisions. By reading, you agree to not take this as financial advice and assume all risk.
UBER: Uber $78.41
Our featured stock of the week is Uber.
I still remember how wild the first days of Uber were…back when drivers were handing over the aux like a ceremonial Olympic torch.
Uber is firmly exiting ahead of Lyft in its years long head-to-head war. Its deep investments in product and strategy of moving things (people, deliveries, food) are really paying off.
$1.7B in Profit for Second Profitable Running Quarter
Uber posted $1.7B in profit during it’s last earnings call. That’s the second quarter in a row that they report a profit. This is huge as it’s the first year since going public that Uber posts a profit. It’s a strong sign that many of the decision Uber made years ago (starting Uber eats, deliveries, safety standards etc) were right. Its main competitor Lyft -hasn’t made as many advancements.
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$7B in Share Buybacks
Share buybacks are usually a very positive sign as they may indicate that a company has a really positive outlook on its future…so much so that instead of reinvesting said cash into the business, it is using that cash to re-purchase it's own stock. On Valentine’s Day, Uber announced a $7B share buy back. With a total valuation of $161B, a $7B buy back is significant…that’s a little over 4% of the company. This buyback news was so well received that the stock jumped up 10%. Uber is also set to join the S&P 500 —the general group of stocks that tracks the largest companies. This is really significant as many investors buy the broader S&P 500 in things like index funds…as investors buy the S&P 500, so too do they purchase a bit of Uber which increases the likelihood of Uber’s stock going up. Additional Reading |  |
15% Potential Upside
Uber has broken through it’s low and mid level price targets. It had a high average price target of $84 which has now been revised up to $90 by Needham -a midsized investment bank. A word on price targets.. It’s important to keep in mind that price targets are projections not guarantees. Price targets help bypass extensive financial modeling by giving you a summary of where the big hedge funds and banks think a stock could go. At Underwriter, we believe that everyday people should NOT be delving in complex financial models to assess a stock. Creating your own model sounds sexy but it’s likely a waste of time. Leverage the work of dozens of investment banks and hedge funds who do this full time. |  |
Major Market News
Earnings Week for HSBC, Walmart, Nvidia, and Intuit
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Tuesday, Feb 20th - Leading Economic Indicators
What: Analyzes a number of key metrics for the US economy(Consumer credit, Stocks, Binds, Manufacturing etc)
Impact: The report on Leading Economic Indicators is like a broad health check up on all things that make up a healthy economy —everyday people are spending, manufacturers are making things, homes are being build, stocks are going up etc. A positive report here will mean that the US economy is doing well which is a catalyst for stocks to go up.
Source: The Conference Board
Thursday, Feb 22nd - S&P Service and Manufacturing PMI
What: Measures the output of the the services and manufacturing industries.
Impact: These are key as a good services report means that people are spending on leisurely things like going out to restaurants/bars, hotels, vacations, weddings etc. The same can be said for manufacturing —ultimately things are made so that they can be bought. Think of consumer spending as the oxygen of our economy…when dollars are circulating through spending, it indicates a healthy state of economic activity
Source: S&P Global
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A note that Underwriter and this newsletter is not investing or trading advice. These are stocks and information we find interesting. Please consult with a financial professional. By reading, you agree to not take this as financial advice and assume all risk. Futures, stocks, bonds trading of any kind involves a lot of risk. No guarantee of profit is made. In fact, you may lose your entire investment. We guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. Reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Underwriter. The data, quotes and information used in this blog is from publicly available sources and could be outdated or outright wrong - I do not guarantee accuracy of this information.