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Market scorecard
US markets cooled off from record highs yesterday. Tech stocks took a breather, and defensive sectors like utilities, consumer, and energy went up. Nike was 2.6% higher and Airbnb rose 4.2% ahead of results. ServiceNow, Adobe, and Tesla were the laggards.
In company news, Arm Holdings jumped another 29.3% and has now almost tripled its share price since the listing in September. The latest move helped its parent company SoftBank to rise by 8% in Japan. Diamondback Energy was the S&P 500's best performer, up 9.4% after announcing a merger with Endeavor Energy Resources to create an oil and gas giant worth over $50 billion.
Izolo, the JSE All-share closed up 0.41%, but the S&P 500 fell 0.09%, and the Nasdaq was 0.30% lower.
Our 10c worth
Michael's musings
Amgen's results from last week weren't as exciting as Eli Lilly's, but were still decent, with revenue and profit both higher than analyst expectations. Revenue was up 7% for the full-year, driven by record sales for 18 of their brands. We like Amgen because it isn't a one-trick pony.
To broaden their drug portfolio further, particularly in the rare-disease category, Amgen completed a $28 billion acquisition of Horizon Therapeutics last October. This deal makes it very difficult to compare like-for-like financial metrics from a year earlier, and also added $25 billion in debt to the balance sheet.
Amgen has their own weight-loss drug in the works, called MariTide (AMG 133 or Maridebart cafraglutide), which had very positive preliminary phase 1 results. The phase 2 study is now underway, and we should have those results out at the end of the year. If all goes according to plan, MariTide will be on sale in 2027. Even though that's three years away, we are already seeing some excitement in Amgen's share price, because of the sheer scale of the rapidly growing obesity drug market.
Over the next year, we expect the share price to be driven by data about the AMG 133 trial and how well management can settle operations after their big Horizon purchase. While we wait to see how things go, we can enjoy a 3% dividend yield.
One thing, from Paul
Our client assets in New York are held in safe custody by a division of Fidelity Investments, the Boston-based financial giant. I was pleased to note last week that Fidelity is very doing well and had record results in 2024. Revenue climbed 12% to $28.2 billion.
Fidelity is privately held by the Johnson family, and was established by Edward Johnson in 1946. The current chief executive is his daughter Abigail Johnson (pictured below).
Fidelity runs both actively managed investment funds and index trackers, and provides clearing and custody services to broker-dealers. Their total assets under administration, which includes its own funds as well as third-party assets (including yours if you are a Vestact customer in New York), rose by 23% to $12.6 trillion.
We can sleep easily, knowing that our custodian is very big, very reliable, and very carefully regulated by the US authorities.
Byron's beats
At the beginning of February Meta released results, and the share price surged over 20%. It was beautiful to watch, especially for the 496 Vestact clients who own it. The rally broke the record for the biggest single-day market cap gain in history.
Bloomberg has put together the top 10 list, which I thought our readers would find interesting, especially because all 10 of them involve Vestact-recommended stocks.
Bright's banter
In a story reminiscent of Silicon Valley's unicorns, Alessandro Rosano embarked on an entrepreneurial journey that defied industry norms and redefined success in the footwear market.
Rosano's brainchild, HeyDude, emerged from his vision of creating modern, comfortable slip-on loafers. Born in Tuscany, Italy, Rosano's fascination with footwear began at a young age, eventually leading him to establish HeyDude in 2008.
With an obsessive focus on simplicity and affordability, HeyDude quickly gained traction, resonating with consumers seeking casual yet stylish footwear. Despite minimal investment and virtually no marketing, the brand's revenue soared to $581 million in 2021.
This incredible growth story caught the attention of the big daddy of casual shoes, Crocs, culminating in a $2.5 billion acquisition. Forbes estimates that Rosano is now worth $1.4 billion.
His partner, Daniele Guidi, also reaped substantial rewards. Rosano's strategic acumen and relentless pursuit of innovation embody the essence of entrepreneurial spirit.
Linkfest, lap it up
New species are being discovered below the surface. Biologists identified four new types of octopus - Treasures in the deep ocean off Costa Rica.
Tuscany is known for good wine. Florence, the capital of the region, is hoping to attract more visitors through its airport - Florence airport plans to have a 19-acre working vineyard on its roof.
Signing off
Asian markets are up for the first time in four sessions this morning. Benchmarks rose in India, Japan and South Korea where trading resumed, while Hong Kong and mainland China are still shut for holidays. The Kospi index in South Korea is on track to erase 2024's losses.
US equity futures are flat in pre-market trading.
The Rand is at R18.93 to the US Dollar.
Tonight Coke, Shopify, Airbnb and Zoetis report their December quarter numbers. US CPI data will also be out this afternoon.
Cheerio.
Sent to you by Team Vestact.