🍪 A Cookie Stock With 17% Upside Potential

Plus, 60% of millennials are willing to accept a 20% salary reduction for improved work-life balance

February 09, 2024

Happy Friday 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 generally moved higher Friday after the revised inflation reading for December came in lower than first reported. The S&P 500 crossed the 5,000 level for the first time ever. With that said, the Dow ended slightly in the red.

  • 📈 | One Notable Gainer: CleanSpark jumped 33% after beating fiscal Q1 expectations with 14 cents EPS and $73.8 million revenue, further boosted by bitcoin's climb above $47,000.

  • 📉 | One Notable Decliner: Expedia fell 18% after its Q4 bookings of $21.7 billion missed Wall Street's $22 billion expectation. Additionally, a CEO change was announced, and Bank of America downgraded the stock to neutral.

  • 🍪 | Tomorrow's Trade: A Sweet Investment. Scroll down for more.

Plus, find out how this company plans to lead the electrification revolution.

YESTERDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Berkshire Hathaway (BRK.B)

🟨🟨🟨🟨🟨⬜️ Eli Lilly (LLY)

🟨🟨🟨🟨⬜️⬜️ Broadcom (AVGO)

S&P 500 Heatmap. Credit: Finviz

All stocks on US exchanges. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

PINS: Pinterest's shares dropped 9% due to weaker-than-expected Q1 revenue guidance, despite beating earnings estimates but posting disappointing Q4 revenue.

PEP: PepsiCo's stock dropped nearly 4% after Q4 revenue of $27.85 billion missed the $28.4 billion forecast, with high borrowing costs and lower savings affecting consumer budgets.

NET: Cloudflare's shares surged 20% after surpassing Q4 Wall Street estimates and providing positive full-year EPS guidance.

TTWO: Take-Two Interactive's shares dropped 9% after forecasting Q4 bookings of $1.27 to $1.32 billion, under analysts' $1.51 billion expectations.

BILL: Bill Holdings' stock declined over 13% after issuing Q3 revenue guidance of $299 to $309 million, around analysts' expectations of $302 million.

PRESENTED BY FOREMOST LITHIUM

As energy transitions away from fossil fuels, there presently lacks suitable alternatives for lithium, a crucial component in the production of batteries, and a key element of the advancement of clean energy technology. The demand for lithium-powered energy sources are expected to increasingly grow this decade as today’s governments attempt to meet clean energy goals. The current climate in the lithium market may seem uncertain, but energy transition is gaining global momentum.

Pricing volatility in today’s lithium market in part can be attributed to China, which dominates the lithium-ion battery industry, enjoying government subsidies and incentives. The Canadian Natural Resource Minister announced in February 2024, plans are underway to make massive investments to meet the growing demand of the clean tech revolution as well as reduce regulatory approval and review processes in half.

Foremost Lithium Resource & Technology Ltd (NASDAQ: FMST, CSE: FAT) is a hard-rock lithium exploration company located in Manitoba, Canada drilling for future lithium feedstock. 

Click here to learn more on how Foremost plans to lead the electrification revolution.

OVERHEARD ON THE STREET

BBC: A Rainforest Action Network report identified Barclays as Europe's largest financier of the fossil fuel industry from 2016 to 2021.

Fox Business: Disney CEO Bob Iger stated on an earnings call that millennials, Gen Z, and Gen Alpha significantly invest their screen time in video games, as observed by the entertainment company.

Reuters: The S&P 500 surpassed the 5,000 mark for the first time, elevating its valuation to new highs. Its forward price-to-earnings ratio climbed to 20.4 this week, a peak not seen since February 2022, and well above its historical average of 15.7

Fortune: Burger King is hosting a contest promising $1 million to the customer who creates the next hit version of the Whopper, with submissions accepted on their website until March 17.

BI: A study revealed that 60% of American millennials are willing to accept a 20% salary reduction for improved work-life balance.

TOMORROW’S TRADE IDEA, TODAY

Tapping Into New Markets

While Americans focus on weight loss, Mondelez (MDLZ) is making a killing overseas.  

The manufacturer of snacks like Chips Ahoy! and Clif Bars is currently seeing almost 75% of its business coming from outside the US. Of that 75%, around 40% is from emerging markets.

The stock is up 12% over the past 12 months. One of the company’s flagship products, Oreos, surpassed $4 billion in revenue in 2022, hitting a record high. 

Sometimes The Cookie Crumbles

It hasn’t all been smooth sailing, though. 

The company reported earnings on January 30th, which beat expectations. However, there was a notable drop in sales volumes. Mondelez chalked this up to cyclical price negotiations in Europe and issues with Clif Bar sales in North America. It doesn’t expect these situations to affect earnings long-term. 

Investors are also concerned with the rising costs of cocoa and sugar. However, analysts believe the company should be able to evade this concern with its strong pricing power. 

17% Upside Potential

Mondelez has a history of keeping expectations reasonable and delivering results that surpass these expectations. It also closely monitors suppliers to ensure ethical production.

While many analysts are bullish on Mondelez, the stock isn’t cheap. It’s trading at 21.2 times 12-month forward earnings. But, analyst Brian Holland still gives the stock a 17% upside. 

As Mondelez continues to capitalize on its presence in emerging markets, investors have an opportunity to get a piece of the pie.

Are you bullish or bearish on Mondelez (MDLZ) over the next 12 months?

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PRESENTED BY FOREMOST LITHIUM

As energy transitions away from fossil fuels, there presently lacks suitable alternatives for lithium, a crucial component in the production of batteries, and a key element of the advancement of clean energy technology. The demand for lithium-powered energy sources are expected to increasingly grow this decade as today’s governments attempt to meet clean energy goals. The current climate in the lithium market may seem uncertain, but energy transition is gaining global momentum.

Pricing volatility in today’s lithium market in part can be attributed to China, which dominates the lithium-ion battery industry, enjoying government subsidies and incentives. The Canadian Natural Resource Minister announced in February 2024, plans are underway to make massive investments to meet the growing demand of the clean tech revolution as well as reduce regulatory approval and review processes in half.

Foremost Lithium Resource & Technology Ltd (NASDAQ: FMST, CSE: FAT) is a hard-rock lithium exploration company located in Manitoba, Canada drilling for future lithium feedstock. 

Click here to learn more on how Foremost plans to lead the electrification revolution.

ON OUR RADAR

Fox Business: Credit card delinquencies increased in Q4, with 8.5% of debt becoming delinquent, up from 8.01% in Q3 and significantly higher than the 5.87% rate a year prior.

YF: Global digital ad spending is expected to grow by 13.2% this year, outpacing traditional media's ad growth of 2.4%, according to projections.

Bloomberg: US inflation rates for the end of last year were confirmed by revised data, with a 3.3% annualized rise in core consumer prices for Q4 2023 and a slight adjustment in December's monthly increase to 0.2%, as reported by the Bureau of Labor Statistics.

ZH: Yesterday, spot Bitcoin ETFs experienced their third highest net inflow, over $400 million, led by iShares Bitcoin Trust (IBIT) with $200 million, offsetting GBTC's $101 million outflow.

BBC: Cocoa prices hit a record $5,874 per ton in New York's commodities market yesterday, doubling since last year's start.

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