💰 Profits of the S&P 500’s Giants

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Happy Friday!

Welcome to the +400 new subscribers who've joined us over the last week. Glad to have you onboard. There was a considerable amount of news this week, so let’s get into it.

Some key data bites from this week that you should know: 

• Gold reached a record peak of $2,164.09 per ounce on Thursday.

• CrowdStrike $CRWD Q4 revenue jumped 33% to $845.3M.

• Apple $AAPL iPhone sales declined 24% during the first 6 weeks of 2024.

• Palantir $PLTR secured a $178.4M government contract.

• The U.S. national debt is increasing by $1T nearly every 100 days.

In today’s newsletter:

• 📊 Harvard’s Stock Portfolio

• 💰 Profits of the S&P 500’s Giants

• 🛒 Costco’s Earnings

Let’s dive right in!

📊 Harvard’s Stock Portfolio

It looks like Harvard continues to bet heavily on their alum Mark Zuckerberg.

According to their latest 13F filing, the university currently has a considerable 38.38% of its public equity portfolio in Meta, making it the largest slice of their investment pie.

Not far behind, Alphabet secures the position as Harvard's second-largest holding, accounting for 31.94% of its portfolio.

Together, these advertising giants make up a remarkable 70% of the university’s $1.12B public equity portfolio.

This strategic focus on technology has led to tech investments now comprising 98% of Harvard's portfolio, showcasing a remarkable increase from 53% in 2022.

💰 Profits of the S&P 500’s Giants

Legendary investor Peter Lynch once shared a timeless piece of wisdom:

"I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities.

What the stock price does today, tomorrow, or next week is only a distraction."

Among the top 10 giants in the S&P500, Apple sits at the top, with $101B in profits, followed by Berkshire Hathaway at $96.2B, and Microsoft at $82.5B.

However, it’s important to note that for Berkshire, net profit figures can be misleading due to the inclusion of unrealized investment gains.

From a growth perspective, AI kingpin Nvidia leads the pack with +581% year-over-year growth, followed by Meta with +69% growth, while Broadcom and Google are tied in third, each showing a 23% increase.

Bringing it all together, why is this important?

While it's common for investors to chase the stocks with the most rapid earnings growth over the last few quarters, it's important to dig deeper.

As we have learned from investors like Peter Lynch and Warren Buffett, success in investing comes from finding companies capable of sustaining their momentum over the long haul, without paying a premium for their prospects.

🛒 Costco’s Earnings

Yesterday after market close, Costco reported earnings for its fiscal second quarter of 2024 that saw mixed results.

Here’s a rundown of the numbers:

• Earnings: $3.92 (vs. $3.62 Est. from LSEG, +19% YoY Growth)

• Revenue: $58.44B (vs. $59.16B Est. from LSEG, +6% YoY Growth)

• Total Company Comparable Sales: 5.6% YoY

On the call CFO Richard Galanti noted that in the 2nd quarter, worldwide renewal rates came in at 90.5%.

Membership also continued to see growth, up 7.3% year-over-year, reaching 132M cardholders.

The company saw strength in Ecom, with sales rising 18% compared to last year.

This was primarily driven from sales of gold, silver, appliances, gift cards, and e-tickets.

Shares dropped 4% after hours, but this was negligible considering the stock has run up 61% over the last year, roughly doubling the return of the S&P 500.

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Notable Companies Reporting Earnings Next Week:

• Monday (3/11):

  • Oracle $ORCL, Asana $ASAN

• Tuesday (3/12):

  • On Holding $ONON, Manchester United $MANU

• Wednesday (3/13):

  • Lennar $LEN, Dollar Tree $DLTR, Williams-Sonoma $WSM, UiPath $PATH

• Thursday (3/14):

  • Adobe $ADBE, Dollar General $DG, Ulta Beauty $ULTA

• Friday (3/15):

  • Soho House $SHCO

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

Buys

• Sphere Entertainment ($SPHR)

  • Insider: James Dolan (Executive Chairman / CEO)

    • # of Shares Purchased: 110,156

    • $ Amount: $5,164,270

    • SEC Forms: [1]

• Keurig Dr Pepper ($KDP)

  • Insider: Robert Gamgort (CEO & Executive Chairman)

    • # of Shares Purchased: 171,821

    • $ Amount: $4,999,991

    • SEC Forms: [1]

  • Insider: Olivier Goudet (Director)

    • # of Shares Purchased: 171,821

    • $ Amount: $4,999,991

    • SEC Forms: [1]

• Dominion Energy ($D)

  • Insider: Robert Blue (Chair, President, & CEO)

    • # of Shares Purchased: 21,735

    • $ Amount: $997,891

    • SEC Forms: [1]

Sells

• Nvidia ($NVDA)

  • Insider: Tench Coxe (Director)

    • # of Shares Sold: 200,000

    • $ Amount: $170,020,366

    • SEC Forms: [1]

• Cava ($CAVA)

  • Insider: Ronald Shaich (Former 10% Owner)

    • # of Shares Sold: 1,500,000

    • $ Amount: $85,800,000

    • SEC Forms: [1]

• Meta Platforms ($META)

  • Insider: Mark Zuckerberg (COB & CEO)

    • # of Shares Sold: 309,648

    • $ Amount: $154,024,637

    • SEC Forms: [1], [2], [3], [4], [5]

📚 Recommended Reading

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