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Weak job numbers last week are not indicative of overall strength of economy. US economy firing on all cylinders which will cause further inflation. US Fed in very tough position - high debt loads make it hard to raise interest rates. US Fed can't cut rates either, as will increase inflation. Higher jobs numbers and inflation will continue to fuel inflation. Expecting hard economic landing - just not sure when. Inverted yield curve is setting records on length. Recent earnings with tech, not very strong. Strength in economy is very narrow (tech). Warren Buffett trimming Apple indicative of strength.
Alternative income becoming more important for investor portfolios. Alternative investment conferences planned for Toronto in coming weeks will be indicative of sentiment in private equity and private credit. Public debt is not creating enough yield to keep up with inflation. Investors must find better options in the private markets. Top sovereign wealth funds (CPPIB) have directed investment to private markets. 90% of investment universe is located in private markets. VPC is a good option to get exposure to private markets in the USA. VPC comes with volatility in public markets - so would still recommend traditional private investments.
We have some comments posted on FLGT. While it is not without potential, it is likely going to get worse before it bets better, growth-wise. The most recent quarterly earnings were fine as revenue continued to decline, but beat estimates, along with EPS. There are positives as the pharma side of the business is making progress with over 30 issued or active patents and a promising lead drug candidate. The balance sheet does continue to be strong. We are OK selling.
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EPS of 11c beat estimates of 10c; Revenue of $235.2M missed estimates by 2.6%. EBITDA of $21.69M missed estimates by 10%. Revenue rose 5.3%. EPS rose from 7c in the prior period. EBITDA rose 17%. Canada revenue declined, but US revenue rose more than 20% on volume increases for fighter and wide-bodied aircraft. Strong growth is expected in 2024 overall. We would consider the quarter, OK, but not great. The stock remains cheap, but unexcitng.
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EPS had a nice beat on estimates of 69c coming in at 78c. Revenue did miss estimates of $1.7B coming in at $1.69B. IR has been growing nicely over the last few years and margins have also expanded substantially in recent periods. Debt is also at more manageble levels now with a net debt/EBITDA ratio at 0.7x. Revenue outlook for the year came in below expectations which caused the stock to take a bit of a hit after earnings were released. It is a stable name but with an expensive valuation at nearly 27x forward earnings. Debt is less of a concern now, but valuation is expensive for a slow-growth name. IR will likely be a stable investment opportunity that should continue to expand its bottom line, while top line growth will be slow. We think it is a good company, but not overly exciting.
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Preventing Investment Scams: Watch out for identity scams
The development of AI means this will be a far greater problem in the future. A grandfather might get a call from a grandchild saying they are in trouble and need money. They might sound exactly like the relative, with the scammers using AI technology to duplicate their voice and even image. We have heard of scams where a victim fears a relative has been kidnapped and pays thousands of dollars in ransom. Meanwhile, the relative is wandering about town just fine.
There is an easy solution to this scam: All families should have a verbal password of some sort. If there are any weird conversations, a password confirmation can help sort out identities. Or ask the caller a question that a scammer would not know. Be careful here as social media provides a lot of that information, so a scammer might know a lot of answers. Make the password or question highly specific, not something simple such as, “What is your birthday?”
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Believes stock is bottoming out right now. New products are going to present opportunity. ~5.5% also good.