🌯 Chipotle Does the Splits

MARKET UPDATE

Good Morning Investor! Shares of aircraft manufacturer Airbus ($AIR) fell almost 10% on Tuesday after the company cut its profit forecasts. It seems that their profits have been left on the runway after takeoff. Shares of Amazon-backed electric vehicle maker Rivian ($RIVN) surged almost 40% in after hours trading after it was announced that Volkswagen ($VOW3) will be investing $5 billion into the company as part of a joint venture.

TODAY’S BIG HEADLINES

Chipotle Does the Splits

What Happens to the News When Streaming Takes Over?

Uranium Demand Soars off the Back of Global Shift Towards Nuclear

RESTAURANTS

Chipotle Does the Splits🌯

Burrito Supremecy: Forget iced coffee, burgers, or pizza. The burrito maestro Chipotle ($CMG) is a one-way express train that’s got guac on board and shows no signs of stopping. Just when you thought the stock might finally take a siesta, the company performed its highly anticipated 50-to-1 stock split, sending shares up another 1.5% on Tuesday. The stock is now up a jaw-dropping 44% year-to-date.

Since Hitting the Street: Chipotle going public in 2006 was like discovering a hidden stash of extra guacamole—it just keeps getting better. The stock has skyrocketed an incredible 7,577%! With the stock split announcement, Chipotle is officially the only restaurant chain in the top 20 best performers of the S&P 500 this year.

• How did they manage this? Simple. Chipotle’s fans don’t mind paying a little extra for their burrito fix, unlike the customers of competitors McDonald’s ($MCD) and Starbucks ($SBUX), who’ve seen sizable slowdowns thanks to rapid price increases.

• McDonald’s, in particular, has raised its menu prices in the US by 100% over the past decade. Apparently, golden arches come with a golden price tag these days.

Doing the Splits: Taking a page from the Broadcom ($AVGO) and Nvidia ($NVDA) “secrets to success” cookbook, Chipotle finally executed the much-buzzed-about 50-to-1 stock split on June 25th. Now, the stock will trade at around $64 per share.

• Contrary to popular belief, a stock split doesn’t magically turn your investment into a money-printing machine. You’ll simply have 50 shares for every one you previously held, with the price adjusted down accordingly. Think of it like slicing your burrito into more pieces—still the same delicious burrito, just in more bite-sized portions.

• Stock splits do have their perks, though. They make shares more affordable for retail investors, boosting volume and liquidity in the market. So, while you’re still holding the same amount of burrito, now more folks can join the fiesta.

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STREAMING & MEDIA

What Happens to the News When Streaming Takes Over?🎙️

Lunchtime Bullies: I’m sure this will come as no surprise, but big tech is eating the media’s lunch like a hungry teenager at a free buffet. First, they set their sights on Hollywood, now? They’re snatching up live sports too. When will the pain end for legacy media? There is but one last bastion of hope that remains untouched by the tech giants: the daily news.

• The appeal of the daily TV news show is undeniable. Viewers will sit through the news, enduring ad after ad with the patience of a saint. Given this scenario, daily news programs are an enticing proposition for the likes of Netflix ($NFLX) and Amazon Prime ($AMZN), both of which have recently pivoted toward the world of advertising.

• Despite this appeal, Netflix’s Co-CEO Ted Sarandos recently remarked the company had no interest in live news. The collective sigh of relief from legacy media could be heard across the globe. For now, it seems the news anchors can keep their seats.

Breaking News Prints Money: When diving into the figures behind this industry, it becomes clear just how lucrative daily news shows really are. Warner Bros. Discovery’s ($WBD) CNN is expected to generate $1 billion in EBITDA for the full fiscal year. That’s a lot of dough for a station often playing third fiddle to Fox News and MSNBC.

• For context, Fox News’ viewership is roughly three times the size of CNN’s, at about 1.98 million viewers as of April this year.

• The unspoken perk of owning a daily news show watched by millions? Influence over politics, parties, elections, culture, and much more. It’s like having your own megaphone to the masses.

ENERGY & INDUSTRIALS

Uranium Demand Soars off the Back of Global Shift Towards Nuclear ⚡

Return of the Mac: Uranium is currently in its element (pun fully intended) as the mineral makes a significant comeback thanks to the global shift toward nuclear energy. This seemingly sudden surge in demand for carbon-free, stable energy is driven largely by the jaw-dropping energy needs of AI. That's right—our future robot overlords are fueling a nuclear renaissance.

• There are currently 61 new nuclear power plants under construction around the world, mostly in Asian powerhouses like China and India. But wait, there’s more! Another 110 are in the planning phase, and over 300 have been proposed. It's like a nuclear power plant boomtown out there!

• Beyond AI's insatiable energy appetite, countries are also looking to secure their energy independence amid current geopolitical tensions and reduce their reliance on natural gas and oil. Seems like uranium is the new black gold.

The Real Material Rally: As you can imagine, all this nuclear construction is leading to a surge in one of the core elements of the process: uranium. Prices have now surged 233% from 2019 to 2024, outshining even gold and silver’s 75% and 99% runs during the same period. Uranium: not just for glowing in the dark anymore.

American Nuclear: In the US, legislation has been passed to promote the development and construction of new nuclear power plants, while also banning the import of Russian uranium. These measures are expected to boost domestic uranium demand and ensure a steady supply. It's like Uncle Sam saying, "We've got this."

• This is translating into stellar performance for uranium miners in the US, with Cameco ($CCJ) being up 18% year-to-date. Looks like the uranium market is having its own little nuclear reaction.

MORE NEWS

Additional market-moving events🌎

PE Record-Breakers: HPS amasses $21bn private credit fund — the largest ever, as it plots expansion with a potential IPO on the horizon. (FT)

Footy Pays Big: Deloitte predicts that English Premier League club revenues will rise to €7.46bn in 2024-25, up from €6.97bn in 2022-23 and €7.05bn in 2023-24. (Sky)

The Electric Bottom-line: Electric-vehicle maker Rivian ($RIVN) simplifies output, cuts costs and is on track to see its first ever profits. (Reuters)

More Fat Loss Injections: Ozempic maker Novo Nordisk ($NVO) plans another $4.1 billion U.S. factory. (Reuters)

OUR PICKS

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. Then on the 10th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,107.00 SEK (📉-15.65%)

• Hims & Hers Health: $23.18 (📈+60.19%)

• PayPal: $59.63 (📉-7.94%)

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