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😋 A Food Stock That Could Serve Up Delicious Returns
Plus, find out how much Americans owe on their credit cards.
Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟨 | US stocks were mixed Tuesday as Wall Street tried to claw back to record highs.
📈 | One Notable Gainer: Shares of Palantir Technologies PLTR jumped over 30% after the company reported better-than-expected fourth-quarter sales results.
📉 | One Notable Decliner: Shares of DocuSign slid 2% after announcing a restructuring plan and a 6% cut to its workforce.
😋 | Tomorrow's Trade: A High-End Food Stock That Could Serve Up Delicious Returns. Scroll down for more.
Plus, today’s partner offers bankable borrowers the opportunity to gain financing solutions while providing investors with attractive returns paid monthly.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 Fixed income
🟨🟨🟨🟨⬜️⬜️ Japanese equities
🟨🟨🟨⬜️⬜️⬜️ Real estate
S&P 500 Heatmap. Credit: Finviz
All stocks on US exchanges. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
COHR: Coherent's shares surged 17% following better-than-expected quarterly earnings.
LI: US-traded Li Auto shares climbed 10.5% after Deutsche Bank upgraded the stock to buy from hold, citing an attractive entry point following recent underperformance.
SPOT: Spotify Technology's shares rose under 4% as price hikes and cost reductions narrowed Q4 losses, with paid premium subscribers increasing 15% to 236 million.
BP: BP's shares surged over 6% after accelerating its buybacks and dividend, announcing a $3.5 billion share buyback for the first half of the year. (We wrote about BP nine days ago)
UPS: United Parcel Service's stock rose 5% following an upgrade by UBS to buy from neutral, citing anticipated cost reductions to boost margins and earnings.
TOGETHER WITH IGNITE FUNDING
The financing landscape can be challenging for borrowers with stringent qualifications and criteria set by traditional banks and close circles of friends and family.
Often, borrowers can find themselves in a frustrating limbo with projects that are too small for national banks but too big for local ones. Additionally, successful ventures that challenge pre-existing norms may be overlooked due to rigid lending standards.
However, financing platforms like Ignite Funding offer bankable borrowers the opportunity to gain financing solutions while providing investors with attractive returns paid monthly.
The company has a track record of over a billion dollars in real estate loans and is known for its rigorous due diligence processes and commitment to fostering mutually beneficial relationships
OVERHEARD ON THE STREET
CNBC: Collectively, Americans owe $1.13 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
Reuters: Meta Platforms will begin detecting and labeling images generated by other companies' artificial intelligence services in the coming months, using a set of invisible markers built into the files, its top policy executive said on Tuesday.
YF: JPMorgan Chase said on Tuesday it was embarking on one of its most aggressive bank branch expansions in recent years, with plans to add more than 500 new U.S. locations by 2027 to broaden its footprint in areas where it is under-represented.
Reuters: U.S. Treasury Secretary Janet Yellen on Tuesday said she is concerned about looming commercial real estate stresses on banks and property owners, but believes the situation is manageable with assistance from bank regulators.
YF: So far, some 32,000 tech workers have lost their jobs in 2024 according to Layoffs.
CNBC: The iShares Transportation Average ETF (IYT) touched its highest level in more than a year on Tuesday.
TOMORROW’S TRADE IDEA, TODAY
Wealthy Diners Are Hungry
Food distributor Chef’s Warehouse (CHEF) is building a specialty food empire. Based out of Ridgefield, CT, its clientele includes some 44,000 restaurants nationwide. The distributor procures its products from over 3,000 suppliers across 40 countries.
Inflation has certainly affected the food industry, and prices are still rising. Fortunately for Chef’s Warehouse, this hasn’t had a major impact on its business. Wealthy patrons are still willing to purchase menu items like Wagyu beef and stone crabs.
Growing Like a Weed
As smaller distributors struggled with high inflation and rising interest rates, Chef’s Warehouse completed 12 acquisitions over the past two years. This added $324 million, or 58% growth, to its quarterly sales.
At present, its market cap is $1.3 billion.
The specialty food distributor also added new distribution centers in key markets like California, Florida, Arizona, and Texas. It has plans to continue growing distribution by 60% between 2022 and 2026. It's already halfway to this goal.
Changing Priorities
This rapid expansion has dented Chef’s Warehouse’s profit margins. The company announced that it will focus less on acquisitions and more on improving profits in the future.
With this shift in priorities, analyst Todd Brooks has the stock as one of his top picks in 2024. He sees the company generating between $50 and $80 million in free cash flow over the next two years.
Other analysts have noted that shares are currently trading below their pre-pandemic level. Metrics like revenue and profit are sitting at twice their 2019 levels, indicating to some that the stock is undervalued. Bulls are betting Chef’s Warehouse will be a tasty addition to their portfolio.
Are you bullish or bearish on Chef’s Warehouse (CHEF) in 2024? |
TOGETHER WITH IGNITE FUNDING
The financing landscape can be challenging for borrowers with stringent qualifications and criteria set by traditional banks and close circles of friends and family.
Often, borrowers can find themselves in a frustrating limbo with projects that are too small for national banks but too big for local ones. Additionally, successful ventures that challenge pre-existing norms may be overlooked due to rigid lending standards.
However, financing platforms like Ignite Funding offer bankable borrowers the opportunity to gain financing solutions while providing investors with attractive returns paid monthly.
The company has a track record of over a billion dollars in real estate loans and is known for its rigorous due diligence processes and commitment to fostering mutually beneficial relationships
ON OUR RADAR
Reuters: Georgia's acting prime minister accused Ukraine on Tuesday of trying to spread war to his country, after authorities seized what they said was a truck loaded with explosives bound for Russia.
Bloomberg: The number of London-listed companies shrank 25% over a decade.
Newsweek: Former Fox News host Tucker Carlson interviewed Russian President Vladimir Putin during his visit to Moscow.
CNBC: The number of American workers hired by international companies grew 62% last year, according to the State of Global Hiring Report from Deel.
Bloomberg: The US sees oil production flatlining for most of this year before reaching a new record in early 2025. That would ease concerns about a supply glut that has weighed on prices.
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