🏆 These Are The Best Managed Companies

1) Adobe’s Earnings 2) Top 15 Best Managed Companies, 3) Costco’s Earnings, and more!

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Carbon Finance
December 15, 2023

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Happy Friday!

A warm welcome to the +208 subscribers who have joined our community this week.

As a thank you to all new and existing subscribers, I have created this website that allows you to visualize the portfolios of the biggest investors in the world.

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

In today’s newsletter:

  • 🎨 Adobe’s Earnings

  • 💼 Top 15 Best Managed Companies

  • 🛒 Costco’s Earnings

Let’s dive right in!

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🎨 Adobe’s Earnings

On Wednesday evening, Adobe reported earnings for Q4 FY 2023.

The Numbers:

Earnings: 🟢 $4.27 Beats $4.14 Est.

Revenue: 🟢 $5.05B Beats $5.03B Est.

Consensus estimates are from LSEG.

The Quarter:

Adobe achieved $5.05B in revenue in Q4 FY 2023, representing a 12% year-over-year growth, fueled by strong performance in its Digital Media and Digital Experience segments.

The quarter saw Digital Media segment revenue reach $3.72B and Digital Experience segment revenue hit $1.27B, both showing double-digit year-over-year growth.

Adobe also reported robust cash flows from operations at $1.60B and repurchased approximately 1.8M shares during the quarter. 

Future Guidance

Adobe's fiscal 2024 guidance for earnings per share of $17.60 - $18 on $21.3B - $21.5B in revenue fell short of Wall Street's expectations of $18 per share and $21.73B in revenue. This lead to shares dropping in after hours.

The company's CEO, Shantanu Narayen, remains confident in the growth potential of Creative Cloud subscriptions, despite some price increases and ongoing regulatory inquiries into the $20B Figma acquisition.

Adobe is also cooperating with a U.S. Federal Trade Commission inquiry regarding its subscription and cancellation practices, which could materially impact its financial performance.

💼 Top 15 Best Managed Companies

On Wednesday, the Wall Street Journal released their 250 Best-Managed Companies of 2023 report.

This report by the Drucker Institute ranks U.S. companies on management effectiveness in areas like innovation and social responsibility.

Based on 34 indicators from 15 sources, it evaluates companies listed on the NYSE and Nasdaq.

Rankings use T-scores (0-100 scale), placing companies within top or bottom percentages of a broad universe based on their performance.

The approach reflects Peter Drucker's principles, emphasizing balanced performance across all dimensions for overall effectiveness.

Based on this methodology, Microsoft topped the list in first place with a score of 88, followed closely by Apple in second with 87, and Nvidia in third with 78.5.

📣 A message from today’s sponsor:

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🛒 Costco’s Earnings

On Thursday evening, Costco reported earnings for Q1 FY 2024.

The Numbers:

Earnings: 🟢 $3.58 Beats $3.41 Est.

Revenue: 🟢 $57.8B Beats $57.71B Est.

Consensus estimates are from Bloomberg.

The Quarter:

Costco reported a 6.1% increase in net sales to $56.72B in the first quarter of fiscal 2024. Net income for the quarter was $1.6B, an increase of 14% over the last year.

The company’s total comparable sales for the quarter was at 3.8%, below the anticipated 4.3%.

Despite its membership fees for the quarter falling slightly short of Wall Street’s expectations, Costco demonstrated resilience in a challenging economic climate with a 7.6% increase in paid household members from last year.

The company's e-commerce platform also showed robust growth, marked by significant app downloads, with their app's user base reaching 30.5M.

In line with its expansion strategy, the company opened 10 new stores last quarter and has ambitious plans to open 33 stores in fiscal 2024, a notable increase from 23 stores the previous year.

Concluding its strong performance, Costco's Board of Directors declared a special cash dividend of $15 per share, payable on January 12, 2024, amounting to approximately $6.7B.

🔋 Starbucks’ New Venture. Starbucks $SBUX has partnered with Volvo $VLVLY to open EV charging stations at 15 locations between Denver and Seattle - QZ

💉 Pfizer Tanks. Pfizer $PFE forecasted lower 2024 sales than expected, driving shares to a decade low - R

💾 New Intel Chips. Intel $INTC introduced new AI-optimized processors, including the Gaudi 3 accelerator and 5th Gen Xeon for data centers - IBD

📈 Instagram Ad Boost. Major U.S. companies like Disney $DIS and Comcast $CMCSA have shifted significant advertising spending from X to Instagram $META - R

Notable Companies Reporting Earnings Next Week:

  • Monday:

    • Heico $HEI

  • Tuesday:

    • Accenture $ACN, FedEx $FDX, FactSet $DFS

  • Wednesday:

    • Micron Technology $MU, General Mills $GIS, Carnival Corporation $CCL

  • Thursday:

    • Nike $NKE, Cintas $CTAS, Paychex $PAYX

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

Major Trades Published 12/8- 12/14

Buys

  • Ford ($F)

    • Insider: John Douglas Field (Chief EV, Digital & Design Off)

      • # of Shares Purchased: 182,000

      • $ Amount: $2,010,590

      • SEC Forms: [1]

Sells

  • Palo Alto Networks ($PANW)

    • Insider: Nikesh Arora (CEO)

      • # of Shares Sold: 300,000

      • $ Amount: $91,738,710

      • SEC Forms: [1]

  • Intuit ($INTU)

    • Insider: Sasan Goodarzi (CEO, President, and Director)

      • # of Shares Sold: 93,641

      • $ Amount: $53,283,722

      • SEC Forms: [1]

  • Meta Platforms ($META)

    • Insider: Mark Zuckerberg (CEO and COB)

      • # of Shares Sold: 112,036

      • $ Amount: $36,938,737

      • SEC Forms: [1], [2], [3], [4]

  • Airbnb ($ABNB)

    • Insider: Brian Chesky (CEO and Chairman)

      • # of Shares Sold: 232,569

      • $ Amount: $32,571,956

      • SEC Forms: [1]

  • Coinbase ($COIN)

    • Insider: Ernest Ehrsam III (Director)

      • # of Shares Sold: 97,836

      • $ Amount: $13,605,630

      • SEC Forms: [1]

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