The Closer – Minutes, 5y Sale, Consumers Bullish, 5 Fed, French Yields, Housing – 11/26/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we review the minutes from the FOMC’s November meeting (page 1). We also review a strong 5y note auction (page 1), improving consumer confidence including a record reading on bullishness towards the stock market (page 1 and 2), the latest manufacturing sentiment data (page 2), outperformance of low dollar price stocks (page 3), surging French government bond risk premiums (page 3 and 4), Case-Shiller home prices (page 5), and new home sales activity (page 5).
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Daily Sector Snapshot — 11/26/24
Thankful Investors — Last 20 Years
It’s a holiday-shortened Thanksgiving week, so over the next few days, we plan on writing about some of the stocks that investors can be most thankful for. Yesterday we looked at the best performing stocks over the last five years, and in this post, we’re highlighting the 30 best-performing stocks in the S&P 1500 on a total return basis over the last twenty years. In the table below we rank them from 1st to 30th and show how much a $1,000 investment in each stock twenty years ago (on 11/25/04) would be worth today. Below the table, we provide a one-sentence blurb generated by AI that describes what each company does.
AI chip maker NVIDIA (NVDA) has easily been the best-performing stock over the last twenty years, and it has made a large number of investors extremely wealthy. Incredibly, a $1,000 investment in NVDA twenty years ago would have almost turned you into a millionaire today! Unbelievably, $1,000 in NVDA back on 11/25/04 would be worth roughly $944k today. (By the same math, $10k would be worth $9.44 million, while $100k would be worth $94.4 million.)
Twenty-year returns for streaming giant Netflix (NFLX) haven’t been too shabby either. $1,000 in NFLX twenty years ago would be worth more than $550k today. Rounding out the top five are Texas Pacific Land (TPL), Apple (AAPL), and Booking Holdings (BKNG).
In total, eight stocks have turned $1,000 into more than $100k over the last twenty years. This includes the aforementioned NVDA, NFLX, TPL, AAPL, and BKNG along with Monster Beverage (MNST), Intuitive Surgical (ISRG), and Amazon.com (AMZN).
Other notables on the list include Deckers Outdoor (DECK), Salesforce (CRM), Domino’s Pizza (DPZ), and United Rentals (URI).
For anyone out there who has been riding any of these big winners for the last twenty years, bravo to you, and Happy Thanksgiving!
For a quick description of each company listed above, we asked AI to give us its best one-sentence blurb:
- NVIDIA (NVDA): A leader in graphics processing units (GPUs) for gaming, artificial intelligence, and data centers, driving innovation in computing and visual technologies.
- Netflix (NFLX): A global streaming service offering a vast library of movies, TV shows, and original content, accessible on-demand across various devices.
- Texas Pacific Land (TPL): Manages oil and gas royalties, land leases, and water services for energy production in Texas.
- Apple (AAPL): Designs and sells consumer electronics like the iPhone, Mac, and iPad, along with software and services like the App Store and iCloud.
- Booking Holdings (BKNG): Operates online travel brands like Booking.com, Priceline, and Agoda, providing services for hotel reservations, car rentals, and flights.
- Monster Beverage (MNST): Produces energy drinks, including the flagship Monster Energy brand, targeting consumers looking for enhanced energy and focus.
- Intuitive Surgical (ISRG): Manufactures robotic-assisted surgical systems, including the da Vinci system, enhancing precision and minimally invasive procedures.
- Amazon.com (AMZN): A global e-commerce leader offering retail, cloud computing, and digital streaming services, alongside innovations like Amazon Web Services (AWS).
- XPO (XPO): Provides freight transportation and logistics services, specializing in less-than-truckload (LTL) and last-mile delivery solutions.
- UFP Technologies (UFPT): Designs and manufactures custom packaging, components, and engineered products for medical, automotive, and industrial applications.
- Regeneron Pharmaceuticals (REGN): Develops biopharmaceuticals to treat serious medical conditions, including eye diseases, cancer, and autoimmune disorders.
- Comfort Systems USA (FIX): Provides mechanical systems installation and services, specializing in HVAC and building systems for commercial clients.
- RadNet (RDNT): Operates outpatient diagnostic imaging centers offering MRI, CT scans, and other radiology services across the U.S.
- NeoGenomics (NEO): A cancer diagnostics company providing genetic and molecular testing for oncologists, pathologists, and researchers.
- Deckers Outdoor Corporation (DECK): Markets lifestyle footwear and apparel under brands like UGG, Teva, and HOKA ONE ONE, known for comfort and performance.
- AAON (AAON): Manufactures heating, ventilation, and air conditioning (HVAC) equipment, focusing on energy efficiency and innovative designs.
- Salesforce (CRM): A cloud-based customer relationship management (CRM) platform that enables businesses to manage sales, service, and marketing operations.
- Tyler Technologies (TYL): Provides software and technology services for local governments, focusing on public safety, tax, and financial management.
- Old Dominion Freight Line (ODFL): A leading less-than-truckload (LTL) carrier offering efficient freight transportation across North America.
- Fair Isaac Corporation (FICO): Best known for its FICO credit scoring system, it provides analytics and decision-making software for risk management.
- Monolithic Power Systems (MPWR): Designs power management solutions for electronics in industrial, automotive, and consumer markets.
- Repligen (RGEN): Develops bioprocessing technologies and materials used in the production of biologic drugs and gene therapies.
- O’Reilly Automotive (ORLY): A retailer and distributor of automotive parts, tools, and equipment, serving professional and DIY customers.
- Domino’s Pizza (DPZ): A global leader in pizza delivery and carryout services, leveraging technology for fast and convenient ordering.
- EMCOR Group (EME): Provides construction and facilities services, specializing in mechanical and electrical systems installation and maintenance.
- Lennox International (LII): Produces HVAC and refrigeration equipment for residential and commercial applications.
- United Rentals (URI): The largest equipment rental company in the world, offering construction, industrial, and specialty equipment.
- Manhattan Associates (MANH): Provides supply chain and omnichannel commerce solutions to help retailers and wholesalers optimize operations.
- Quanta Services (PWR): Delivers infrastructure services for energy and communications, including electric power and pipeline construction.
- Copart (CPRT): An online vehicle auction company specializing in salvaged and used cars, serving insurance companies, dealerships, and buyers worldwide.
As always, past performance is no guarantee of future results.
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B.I.G. Tips – Earnings Triple Plays Recap: Q3 2024
During the just-completed Q3 2024 earnings reporting period, there were a total of 142 earnings triple plays out of just under 2,000 individual quarterly earnings reports from US-listed stocks. That’s 16 more than the 126 triple plays we saw during the prior earnings reporting period.
What is a triple play? When a stock reports quarterly earnings, it registers a “triple play” when it beats analyst EPS estimates, beats analyst revenue estimates, and raises forward guidance. We coined the term back in the mid-2000s, and you can read more about it at Investopedia.com. We consider triple plays to be the cream of the crop of earnings season, and we’re constantly finding new long-term opportunities from this basket of names each quarter. You can track the newest earnings triple plays on a daily basis at our Triple Plays page if you’re a Bespoke Premium or Bespoke Institutional member. To read our newest report and see some of the triple plays with intriguing charts at the moment, start a two-week trial to Bespoke Premium!
Chart of the Day – Most Correlated 12 Month Periods
Six and Six
Both the S&P 500 and Russell 2000 came into the day riding 6-day winning streaks, and based on where both indices are trading at mid-day, the S&P 500 looks poised to extend that streak while the streak looks like it’s going to end for small caps. The current six-day streak for the two indices is the first time that both indices have simultaneously been up six days in a row since February 2021. Since 2000, there have only been 16 other streaks, so while they aren’t particularly rare, they aren’t too common either.
In the charts below of the S&P 500 and the Russell 2000, the red dots show each time the two indices were up six days in a row at the same time. Looking at the various occurrences, there were several from 2013 to 2014 and then from late 2016 through 2017, and in most cases, they occurred within longer-term uptrends. The only notable exception was in June 2007.
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Bespoke’s Morning Lineup – 11/26/24 – Pain in Retail
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“I think I’ve discovered the secret of life — you just hang around until you get used to it.” – Charles Schultz
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equity futures are mixed this morning. The Dow looks to open lower due to a 7% decline in Amgen (AMGN) after the company reported disappointing data related to its weight loss treatment. S&P 500 and Nasdaq futures are firmly in the green, but the Russell 2000 is indicated to open slightly lower after missing a record close yesterday by less than a point.
Treasury yields have barely budged from yesterday’s levels, crude oil is up less than 1% but below $70 per barrel, and gold is modestly higher. In a sign that some of the froth may be settling in the market, Bitcoin is down 3% this morning and trading near $92K after trading just under $99K yesterday. MicroStrategy (MSTR) calls its stock a leveraged play on Bitcoin, and that’s been the case both up and down. After trading as high as $543 per share on Friday, the stock is trading down near $380 this morning for a 30% decline. That’s a big move for a company that briefly had a market cap of over $100 billion last week!
Overnight, most major benchmarks were modestly lower in Asia, likely in at least part due to President-elect Trump’s statement that he would levy an additional 10% tariff on all goods imported from China. Europe was left out of the latest tariff talk, but stocks in the region are also lower across the board with modest gains as the STOXX trades down 0.4%.
Circling back to the US, it’s been a relatively busy morning for earnings, especially from retailers. Of the ten companies reporting, six topped EPS forecasts, seven beat sales forecasts, but two – Best Buy (BBY) and Kohl’s (KSS) – lowered guidance. Those two stocks are being punished accordingly with the former down over 7% and KSS down more than 15%. While the drop in KSS is large, in May it fell nearly 23% in reaction to earnings.
With Americans starting to get on the road for Thanksgiving today and tomorrow, one thing to be thankful for is lower pump prices. According to AAA, the national average price of a gallon of gas is just $3.067 per gallon. Over the weekend, it was as low as $3.056 which was the lowest national average price since June 2021 and nearly $2 below the peak from June 2022.
While the national average is still above $3 per gallon, just over half of US states have a national average below $3 per gallon, including Oklahoma which has the lowest average price at just over $2.50 per gallon. Nothing wrong with that!
CLICK HERE TO READ TODAY’S MORNING LINEUP PDF FOR FURTHER INSIGHTS.
The Closer – Small Caps At New Highs, Industrial Drivers, Treasury Rally – 11/25/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we look at the new highs for small caps after a drawdown that lasted three years and what that means for forward returns as well as which sectors have driven small caps (page 1). We then dive into the differences between small and large cap sector weightings with a focus on the Industrial sector (page 2), before moving on to a look at the 15 small cap industrials which have performed best since the last time the index was at a record (page 3). Finally, we preview 5 and 7 year note auctions later this week and review today’s 2 year note auction before discussing what drove the big Treasury rally today (page 4).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 11/25/24
Q3 2024 Earnings Conference Call Recaps: Palo Alto Networks (PANW)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Palo Alto Networks‘ (PANW) Q1 2025 earnings call.
Palo Alto Networks (PANW) is a global leader in cybersecurity, offering advanced solutions that protect organizations against evolving digital threats. The company provides products including firewalls, secure access solutions, cloud security platforms, and AI-driven threat detection tools like XSIAM and Prisma Cloud. Serving enterprises, governments, and critical infrastructure providers, PANW is renowned for its platformization strategy, consolidating disparate security tools into integrated, AI-powered systems. This quarter, PANW reported revenue growth of 14% YoY, with platformization being a key driver. The company highlighted 1,100 platformized customers and strong momentum in large deals, including a $50M SOC (Security Operations Center) transformation. AI was a heavy feature on the call as management hit on 400 new machine learning modules and expanded XSIAM (Extended Security Intelligence and Automation Management) adoption. Cloud security grew nicely, with cloud detection deployments increasing 10x since April. Opportunities in SASE (Secure Access Service Edge) were also discussed, now representing 16 million active licenses, and SIEM (Security Information and Event Management) replacement, with over $80M in conversions from its QRadar acquisition. On better-than-expected results, PANW shares finished 1.2% higher on 11/21…
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