Blackrock, Bitcoin, and the fastest growing ETF

Tickergeek weekend update:

Today’s big headlines:

• Blackrock, Bitcoin, and the fastest growing ETF

• Spotify partners with UMG & shifts to video

• The Caffeine monster eating Monster’s lunch

Blackrock, Bitcoin, and the fastest growing ETF💨

What’s happening? Blackrock the asset management Goliath, overseeing a whopping $10 trillion in assets under management (AUM), has been taken aback by the recent success of their new kid on the block, the iShares Bitcoin Trust (IBIT). This Bitcoin ETF, just a toddler at two months old, has already amassed $60 billion in assets under management (AUM). That’s not just impressive, it’s record-breaking. It’s like watching a baby Usain Bolt out-sprint grown athletes!

Even the Greyscale Bitcoin ETF (GBTC), which used to be the big cheese, has been left in the dust, with IBIT surpassing its AUM in just two months. To put things into perspective, it took physical gold ETFs over five years to reach this sum. It’s like comparing the speed of a horse-drawn carriage to a rocket!

“I would never have predicted it before we filed it, that we were going to see this type of retail demand," Fink confessed, probably still trying to pick up his jaw from the floor.

So, what sparked this gold rush? Well, the IBIT ETF was launched back in January, after the Securities and Exchange Commission (SEC) finally gave the green light. This approval was as eagerly awaited as the next season of Game of Thrones. Now, both retail and institutional investors can get a slice of the Bitcoin pie without needing to go through an exchange like Coinbase or Binance. It’s like ordering pizza directly to your door, instead of having to pick it up from the store. And let’s not forget the trusted brand name of BlackRock, which has been a significant magnet in this success story.

But what does this mean for the market? Well, institutional investors, such as hedge funds, operate differently than retail investors. We’re likely to see significant inflows and outflows in a blink of an eye, leading to some wild swings. Combine that with leverage, and you’ve got a recipe for further volatility. It’s like riding a roller coaster while juggling flaming torches. Hold onto your hats, folks, because this ride is just getting started!

sources: (yahoo)

Spotify partners with UMG & shifts to video🎼

What’s happening? In a twist that’s more delicious than a fresh croissant, the streaming behemoth Spotify (SPOT) and the music rights titan Universal Music Group (UMG) have announced an expanded deal on Thursday afternoon. Coming on the heels of a public spat between UMG and TikTok that saw UMG yank their entire music catalog off the TikTok stage. UMG promises that this new deal with Spotify will crank up the volume on “music discovery and social interaction”, and deliver fan experiences that are as unforgettable as your first concert.

Now, let’s put this into perspective. UMG holds the keys to the musical kingdom, owning the rights to tunes from chart-toppers like Taylor Swift, Billie Eilish, Ariana Grande, Bad Bunny, The Weeknd, SZA, Drake, Harry Styles, Kendrick Lamar, Adele and more. It’s no surprise that the renowned hedge fund investor Bill Ackman was eyeing UMG as a golden goose for his SPAC “Pershing Square Tontine Holdings” back in 2021.

Spotify transitions to video: In other news, Spotify is changing its tune and moving into video. Last week, the company announced plans to launch educational video content in the UK market, marking a significant shift in its strategy. Perhaps they’re trying to ride the wave of success enjoyed by educational apps like Duolingo (DUOL). This move includes the addition of music videos and a host of new features, as Spotify strums the chords of video-based content.

The market reaction to this news? Well, Spotify (SPOT) shares danced up almost 2% on the day, leaving them up a staggering 39% year-to-date. Meanwhile, shares of Universal Music Group (UMG), which trade on the Dutch stock exchange, also hit a high note, trading up over 2.5% on the day and leaving them up 10% for the year. Now that’s music to investors’ ears!

sources: (techcrunch), (MBW), (The Verge)

The Caffeine monster eating Monster’s lunch☕

Hot on the heels of last week’s spotlight on ELF Beauty, we’re turning up the heat with a look at a high-flyer with sky-high potential. Buckle up, folks, because we’re diving into the world of Celsius!

So, what’s the scoop on Celsius? Well, Celsius (CELH) is a sports beverage company that’s as refreshing as a Florida orange, and it’s taking on the big guns like Redbull, Rockstar, and Monster (MNST) head-on.

• You can find Celsius products chilling out at most major grocery stores, including Target, Walmart, Kroger, and even Amazon. In fact, Celsius is so cool in North America, it’s giving Monster energy a run for its money, and has surpassed the juggernaut in sales!

• In a move as smooth as a well-mixed protein shake, Celsius struck a partnership deal with its first two national restaurant chain partners, Jersey Mike’s and Dunkin’ Donuts, in September 2023. This means you’ll soon be able to grab a Celsius beverage at select locations of these restaurant chains.

• Celsius got a massive boost from PepsiCo (PEP) in the form of a $550 million investment back in 2022. This cash injection has allowed Celsius to open more distribution channels than a DJ has remixes.

Sales have been doubling faster than a sprinter on a treadmill for four years straight, and the company reported its first ever annual profits. With margins projected to continue expanding, Celsius is hotter than a summer in the Sahara.

What’s the forward outlook? Currently, analysts are projecting the following:

The growth profile of Celsius, highlighted in the table above, shows not just exceptional levels of growth, but growth that leverages economies of scale and leads to increasing margins. Net income is projected to grow faster than a pop star’s Twitter following as the business becomes more profitable, and the same goes for free cash flow.

How has the stock performed? Well, shares of Celsius (CELH) are currently up 40% year-to-date, and they’ve skyrocketed a staggering 5,865% over the past 5 years. The main concern for this business from an investment perspective is its current valuation. At present, a lot of future growth is already baked into this one, like a well-done soufflé, with it trading at a forward FCF yield of 0.94% using 2024’s projections and 1.5% using 2025’s.

For some perspective, Monster Beverages (MNST) are trading at a 2.8% forward FCF yield and are also expected to grow earnings 18%+ along with expanding margins. We’re fans of both companies, but remember, valuation is always the most important ingredient when cooking up an investment.

Additional market-moving events🌎

• Yen is in serious trouble: Shortly after the Bank of Japan (BoJ) raised interest rates for the first time in 17 years, the Japanese Yen has now hit a 34 year low to the US Dollar, sparking fears of another intervention. Time to book that trip to Tokyo!

• A new UK banking behemoth: UK-based banking group Nationwide have agreed to purchase Virgin money in a deal worth £2.9 billion, making it the nation’s second-largest financial services group.

• You shall not pass: ASML, the semiconductor equipment manufacturer based in the Netherlands, has been been informed the Dutch government will spend $2.7 billion to improve transport and other services in the Eindhoven region, where the company is based in an effort to encourage the company to keep its operations within its borders.

• Is the party over for Reddit: Hedgeye, a large hedge fund has just recently named Reddit as a strong short target for the fund. Could this be their undoing, and spark another Gamestop esque rally?

Notable earnings this week💵

• Dave & Buster’s (PLAY) will report Tuesday. Analysts estimate $603.41M in revenue (+7.03% YoY) and $1.07 in earnings per share (+33.75% YoY).

• Blackberry (BB) will report Wednesday after hours. Analysts estimate a loss per share of $0.03 (-50% YoY).

• Levi’s Jeans/Levi Strauss Co (LEVI) will report Wednesday after hours. Analysts estimate $1.53B in revenue (-9.54% YoY) and $0.20 in earnings per share (-41.18% YoY).

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500.

Here’s how the two stocks have performed since then:

• Evolution AB: 1,330.60 SEK (📈+1.40%)

• Hims & Hers Health: $15.74 (📈+10.64%)

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