Capnote’s Weekly Spotlight: 3 Must-Read Hints From Peers Before Buying Boeing

As US markets reopens after Martin Luther King Jr day, what better way to get started than with this edition of Capnote’s Weekly Spotlight – the free newsletter dedicated to improving your financial performance & expertise. 

In this edition (reading time 6 minutes), you’ll discover:

  • Gaining & declining trends to watch including Cocoa and Traditional Tobacco.
  • Insights into Boeing from a look at its Peer Group. 
  • This week’s special offer – earn income from your data & expertise.
  • Future look – a selection of items to watch out for including upcoming earnings, developments in Taiwan, Boeing’s continued troubles and more. 

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Trending Now In Finance

Sentiment Markers  

Over the last week, the S&P gained 2% as bond yields retreated. China’s deflationary trends continue to push the Hang Seng lower. Bitcoin fell 3% following a strong rally as Bitcoin ETFs were finally approved in the US. One could say it really was a case of ‘buy the rumor, sell the news.’

  • US 10 year treasury -2.52%
  • S&P 500 +1.84%
  • Hang Seng -1.76%
  • Crude Oil (Brent) -0.44%
  • US dollar index (DXY) +0.03%
  • Gold +0.55%
  • Bitcoin -2.97%

Gaining Trends 

Cocoa: Prices of this much loved commodity have continued to rise over the past year and now sit just below 50 year highs. Capnote’s indicator module rates prices “Very High” considering current levels of 4315 USD/MT are more than 4 standard deviations above its 5 year average of 2566 USD/MT. This could have unsavory implications for costs and profits of chocolate makers.

Semiconductors: The AI rally continues to drive the semiconductor industry. Shares of Nvidia gained 209% year-on-year and recently breached all time highs. Despite this, some strategists insist that they are still cheap. Over the last year, shares of other major players like AMD and Broadcom have also gained 104% and 91%  respectively. Upcoming earnings will be key to continuing or stopping this rally. View Capnote’s industry analysis module for more insights.

Declining Trends 

Big Banks: Earnings of some big banks released on Friday did not paint a pretty picture. JPMorgan Chase’s quarterly profits dipped following a $2.9 billion FDIC fee. Citigroup showed a $1.8 billion quarterly loss. Bank of America’s quarterly net profit fell by over 50% year on year. The opportunity for higher net interest income may be a bright spot this year.

Traditional Tobacco: According to Gallup, the US smoking rate is at its historic low In December 2023, British American Tobacco took an impairment charge of $31.5 billion related to a decline in its US brands. Management said the company is in the process of moving its business away from traditional, combustible products to “smoke-free” products.

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This Week’s Special Offer  💰

Earn From Your Financial Data & Intelligence

Capnote is excited to announce that individuals and small businesses can now earn income on the platform by contributing data and intelligence. Here’s how:

1. Sign-up to Capnote for free. 

2. Go to the “Earn & Buy” tab to view paid tasks
3. Apply to listings that align with your interests, skills and expertise.
4. Our team will review your Capnote profile and reach out.

You can apply for multiple listings – the more you contribute, the more you earn!

Tip Of The Week 📊

How Does Boeing Compare To Peers?

Frequently used by the best financial analysts and investors, Peer Comparisons provide deeper insight into a company’s trends, performance or valuation by comparing to similar companies. A profit margin of 20% may sound good. However, if similar companies are making profit margins of 40% then it could indicate there are operational inefficiencies.

Boeing has been in the spotlight once again this week following the shocking mid-air blow out of an Boeing 737 Max’s door during a commercial flight. Thankfully there were no fatalities. See a picture below.  Boeing’s stock has since dropped by over 10%. Is this a straightforward buying opportunity? What hints can we get from looking at Boeing’s peer group?

Capnote's Weekly Spotlight: 3 Must-Read Hints From Peers Before You Buy Boeing

Capnote saves time and makes the process of Peer Comparisons easier by automatically aggregating all required data and generating select analytical notes. Users can either define their own peer groups or use Capnote’s default peer groups that are put together algorithmically.  

To analyze Boeing, we used a peer group that included Airbus, RTX, Lockheed Martin, Northrop Gunman, General Dynamics, Transdigm and Heico.  Below is a screenshot from Capnote highlighting some of the data the platform considers including growth rates, efficiency, solvency, returns and valuation.

Capnote's Weekly Spotlight: 3 Must-Read Hints From Peers Before You Buy Boeing

Below are 3 key observations from comparing Boeing to its peers 

  • General expense structure is lower than peers. This is typically a good indicator but it could also lead to poor production quality. This article from The American Prospect suggests this incident is due to cost-cutting.
  • Price to book ratio lower than peers. This may indicate that Boeing is relatively undervalued compared to peers. However, it could also indicate that there are market expectations of further pain to come for the company’s valuation such as potential impairments. With some calling for the 737 Max to be scrapped, the latter may not be far fetched. 
  • Best cash conversion cycle – Boeing has the shortest cash conversion cycle in its peer group which is positive for cashflow generation and enhances its competitive position.

Sign-up to Capnote for free, search for a company and click on the Peer Comps tab  to see much more. 

Future Look 👀

Capnote will be releasing an update to its Portfolio’s module this week which will let you add in Cash in various currencies as an asset class. We want to make it easier for you to receive smarter information about managing cash and foreign exchange.

News To Watch

Click the below headlines to read more and leave a comment on Capnote.

AI to hit 40% of jobs and worsen inequality, IMF says – BBC. Policymakers should address the “troubling trend”, says the organization’s managing director Kristalina Georgieva.

US aviation regulator launches formal probe into Boeing’s mid-air blowout – Financial Times. FAA investigation comes as rival Airbus announces record number of orders last year.

Taiwan’s new president will face a divided parliament. Here’s why it matters – CNBC.The lack of a parliamentary majority may force Lai Ching-te to moderate his China policy and cater more to Taiwan’s disenchanted youths. 

Upcoming Earnings

 Below is a selection of events and earnings expected this week.

  • 2024-01-15 Earnings – United Airlines Holdings, Inc.
  • 2024-01-16 Earnings – Alcoa Corporation
  • 2024-01-16 Earnings – Kinder Morgan, Inc.
  • 2024-01-18 Earnings – Taiwan Semiconductor Manufacturing Co., Ltd.
  • 2024-01-19 Earnings – The Travelers Companies, Inc.
  • 2024-01-19 Earnings – Schlumberger N.V.

Use Capnote’s Intelligent Timelines to find events and customize alerts.

Written by Ikenna Ene

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