Tritium brings the thunder
Tritium DCFC has been on a major bender this week. The Australian electrical equipment company saw its stock jump over 55% after announcing on Tuesday that it was expanding operations with a new facility in Lebanon, Tennessee-- and then another 64.57% yesterday after Grandpa Biden put the company front and center for his green infrastructure plan in a televised address. But will he remember that he said it?
- Production is expected to start in Q3 2022, with the Infrastructure Investment and Jobs Act providing $7.5B to install half a million of Tritium's chargers throughout the country. The chargers are supposed to be distributed in such a way that EV drivers can easily drive long distances between communities and also short distances within them, though it's unclear how fun they'll be to siphon.
- This is absolutely huge for Tritium, which has been losing money for a while now and has only been reeling in $56M in revenue annually. Thankfully for them, Joe fixed that problem with a wave of his wrinkly hand. Thanks, Dad!
Tritium has basically just received a gift from God. The company hasn't been so good at the whole "cost-profit" thing for a while now, but with this kind of sugar-rush cash infusion Tritium would really have to f*ck up to not be able to turn things around. My guess is that Tritium will be able to hit economies of scale and attract more efficient management as time goes on. In my opinion, I think it's still a buy.
Fed boutta go big or go home
*Rare footage of JPow behind closed doors*
For once, the CPI might actually matter. If January's numbers come out higher than expected on Thursday-- meaning, over a 7.2% YoY increase-- the Fed might sac up and roll out a half-point rate hike rather than the quarter-point that they've been teasing. That would be the biggest single hike in over 20 years-- but then, inflation is the worst it's been in 40, so go figure.
- Analysts say that the chance of this half-point hike happening in March's FOMC meeting has apparently gone from one-fifth to one-third, which-- for those keeping score at home-- is bigger.
- This is still a less-than-likely outcome, though. The Fed historically prefers gradual hikes and Powell still awaits confirmation for his next four-year term. Many think that a half-point hike would be ill-advised because it would be tantamount to an admission of fault for acting slowly in 2021. Can't have our leaders owning up to their mistakes, now, can we?
- The question marks in the CPI equation will be airfare and travel lodging, as the Omicron variant curbed travel.
Faster hikes would cool down the market faster, driving down inflation (good in the long term) and hitting your portfolio across the board (bad in the short term). There's nothing to do but wait for the CPI data to come out on Thursday, but the higher that number, the bigger the dip in volatile stocks in the short term. I'm going for safe bets if a half-point hike looks imminent.
Mickey Flexes His Muscles
The poet laureate Ric Flair once said "Space Mountain is the oldest ride in the park but it has the longest line" which is reflective of Disney's (DIS) big quarter. The company put estimates in the figure four leglock with strong results across the board, particularly in the theme park space, which brought in $7.2B for the quarter vs. $3.6B in the same period last year. Shares of DIS were up more than 8% after hours on Wednesday, so to again quote the Nature Boy, "WOOOOOOOOOOO!".
- EPS came in at $1.06 vs. estimates of $0.63 on revenue of $21.82B vs. expectations of $20.91B.
- Results from the Disney+ streaming service were strong as well, with total subscriptions of 129.8M vs. estimates of 125.75M. I still haven't watched the Book of Boba Fett yet though.
- Average Revenue per User (ARPU) came in at $6.68 per month, almost a buck more than the $5.80 a year ago. Thanks a lot, inflation.
People booking cruises and going to theme parks again is a great sign for both Disney's future prospects... and for life in general as society gets back to normal after 108 weeks flattening the curve. March starts spring break season as well, so families should be flocking to Orlando as restrictions ease. Streaming numbers should continue to grow thanks to new Marvel and Star Wars content released throughout the year.
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