💰 Companies With The Most Cash

It’s Tuesday.

Last Friday marked a historic moment as the S&P 500 closed above 5,000 for the first time ever.

If the idea of investing at all-time highs makes you hesitant, consider this: in 13 out of the last 14 times the S&P 500 reached a new peak after more than a year, it kept climbing for the following year.

On average, investors saw a return of 13.9% during these periods.

Some key data bites you should know: 

• Jeff Bezos recently sold $2B of Amazon $AMZN stock.

• Diamondback Energy $FANG will acquire Endeavor Energy for a whopping $26B.

• OpenAI has surpassed $2B in annualized revenue.

• Arm’s $ARM shares are up +100% this year following an optimistic profit forecast and strong earnings report.

• Bill Ackman has sold his stake in Lowe’s $LOW, realizing a gain of $1.3B from the investment.

• Sam Altman is looking to raise up to $7T for a new AI project.

In today’s newsletter:

• 💰 Top 10 Cash Giants

• 🌯 Chipotle’s Sales Are Sizzling

• 📙 Chegg’s Textbook Tumble

Let’s dive right in!

💰 Top 10 Cash Giants

Now that most major companies have reported earnings, its time look beyond just revenue and profits.

A key component to analyze is a company's liquidity—essentially, how much cash they have readily available.

This cash reserve is vital because it gives companies the ability to pay off debt, pursue acquisitions, distribute special dividends to shareholders, among other strategic moves.

At the top of the list is Alphabet, boasting an impressive $110.9B. Amazon is not far behind with $86.8B, closely tailed by Alibaba at $86.6B.

These figures highlight how big tech firms dominate in terms of financial flexibility, but the list also features noteworthy non-tech players.

Pfizer from the pharmaceutical sector, Exxon Mobil from the oil industry, and health insurance giant UNH have also secured their spots on the list.

Financials were intentionally left out of this analysis due to their unique regulatory cash reserve requirements.

🌯 Chipotle’s Sales Are Sizzling

For those of you that don’t know, Chipotle is my favorite fast casual restaurant because of their high quality ingredients, convenient locations, and reasonable pricing.

The company reported fourth quarter earnings last week that wrapped up a strong 2023.

Q4 2023 Key Figures:

• Revenue: $2.5B (up 15.4% YoY)

• Net Income: $282M (up 26.1% YoY)

• Comparable Restaurant Sales: 8.4% (up from 5.6% in Q4 2022)

• Operating Margin: 14.4% (up from 13.6% YoY)

• New Restaurant Opens: 121 New Locations

There’s a lot to savor about these results.

Revenue and net income are continuing to accelerate, margins are getting juicier, and the company is seeing robust comparable restaurant sales.

For 2024, Chipotle plans to spice things up with an additional 285 to 315 new restaurants and is forecasting mid-single digit growth in comparable restaurant sales.

📙 Chegg’s Textbook Tumble

Once considered a pandemic darling, shares of Chegg have gotten beaten up in the last year, dropping close to 50%.

In the last 5 years, shares have fallen nearly 80%.

Taking a look at their latest quarterly report that was released last week, we see the company is facing a lot of challenges.

As students increasingly turn to alternative AI tools for academic assistance, Chegg is struggling to keep up in a rapidly evolving educational landscape.

Q4 2023 Key Figures:

• Revenue: $188M (down 8% YoY)

• Adjusted EBITDA: $66M (down 11% YoY)

• Subscription Service Revenues: $166.3M (down 7% YoY)

• Subscription Service Subscribers: 4.6M (down 9% YoY)

• Free Cash Flow: $52M (down 4% YoY)

To make matters worse, the company is projecting revenue for Q1 2024 between $173M to $175M, below analyst estimates of $180M.

The forecast for adjusted EBITDA also fell short of the $54.2M expected, with management guiding between $43M and $45M.

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Notable Companies Reporting Earnings This Week:

• Monday (2/12):

  • Arista Networks $ANET, Cadence Design Systems $CDNS, Waste Management $WM

• Tuesday (2/13):

  • Coca-Cola $KO, Shopify $SHOP, Airbnb $ABNB, Datadog $DDOG

• Wednesday (2/14):

  • Cisco $CSCO, Equinix $EQIX, Occidental Petroleum $OXY

• Thursday (2/15):

  • Applied Materials $AMAT, Deere & Co $DE, DoorDash $DASH, DraftKings $DKNG, Coinbase $COIN

• Friday (2/16):

  • TC Energy $TRP

All of the companies that are reporting earnings this week can be viewed here.

Buys:

• Kathy Manning (D)

  • Company: Citizens Financial Group ($CFG)

    • Amount Purchased: $17K - $80K

  • Company: Costco Wholesale Corp ($COST)

    • Amount Purchased: $17K - $80K

  • Company: Mastercard ($MA)

    • Amount Purchased: $17K - $80K

  • Company: Medtronic ($MDT)

    • Amount Purchased: $17K - $80K

  • Company: Salesforce ($CRM)

    • Amount Purchased: $17K - $80K

• Bill Keating (D)

  • Company: Microsoft ($MSFT)

    • Amount Purchased: $15K - $50K

  • Company: Bank of America ($BAC)

    • Amount Purchased: $15K - $50K

  • Company: Union Pacific Corp ($UNP)

    • Amount Purchased: $15K - $50K

• Virginia Foxx (R)

  • Company: Energy Transfer ($ET)

    • Amount Purchased: $17K - $80K

  • Company: Hercules Capital ($HTGC)

    • Amount Purchased: $15K - $50K

Sells:

• Michael Burgess (R)

  • Company: Blackstone Group ($BX)

    • Amount Sold: $15K - $50K

  • Company: Valero Group ($VLG)

    • Amount Sold: $15K - $50K

• Virginia Foxx (R)

  • Company: Altria Group ($MO)

    • Amount Sold: $16K - $65K

  • Company: Cross Timbers Royalty Trust

    • Amount Sold: $15K - $50K

• Kathy Manning (D)

  • Company: Apple ($AAPL)

    • Amount Sold: $17K - $80K

  • Company: Inuit ($INTU)

    • Amount Sold: $17K - $80K

  • Company: Starbucks ($SBUX)

    • Amount Sold: $15K - $50K

🤝 Review of the Week