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Weber IPO: what you need to know

Weber enjoyed record sales during the pandemic. Now it plans to IPO, is this global BBQ grill maker a good investment?
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BBQ grill manufacturer Weber-Stephen Products LLC, the maker of Weber grills, is planning an initial public offering (IPO) in the coming weeks. Weber shares will be available to the public on the New York Stock Exchange, under the ticker symbol “WEBR”.

Weber filed an S-1 form with the Securities and Exchange Commission (SEC) on July 12, 2021.

It plans to go public under the company name Weber Inc. But it has not yet declared how many shares it plans to sell or the price it hopes to fetch. However, speculative estimates of its market valuation range between $4 billion and $6 billion.

How Weber Makes Money

Weber makes money selling BBQ grills, fuel, and outdoor cooking accessories.

The company reported net income of $73.8 million for the half-year ended March 31. It brought in revenue of $963.3 million during this period.

That’s a 212% rise in net income year-over-year and a 61% increase in revenue.

For full-year 2020, to the end of September 2020, annual revenue came in at $1.5 billion. Meanwhile, net income grew 77% over FY19, while revenue rose 15%.



According to Market research consulting firm Frost & Sullivan, Weber’s Total Addressable Market (TAM) is estimated to come in at $49 billion globally and $9 billion in the United States.

While its Serviceable Addressable Market (SAM) is around $15 billion globally and $7 billion in the US.

Between 2015 and 2020, Weber’s SAM grew at a 3.0% CAGR and is projected to grow at a 4.5% CAGR from 2020 to 2025.

Weber accounts for a whopping 44% share of the German barbecue market, where it’s a coveted brand.

In the US, it’s believed to have around 23% market share and 24% globally.

Who is backing the IPO?

The Weber IPO has attracted big names, with eight major underwriters named in its S-1 filing.

These include Goldman Sachs (NYSE: GS), Bank of America Securities (NYSE: BAC), and JP Morgan (NYSE: JPM).

The company is based in Illinois and was founded in 1952 by George Stephen. Since 2010, it’s been majority controlled by BDT Capital Partners, Byron Trott’s private equity firm based in Chicago.

Billionaire investor Warren Buffett has previously called Trott the only banker he trusts.

Shareholder risks

Weber’s success is dependent on maintaining and strengthening its brand, and reputation as a producer of high-quality goods.

Like all retailers it faces various risks to its business, which shareholders should consider before investing.

Negative publicity, poor product design, defects, or counterfeit products would all impact its share price and value. As could rising competition or a loss of market share.

Considering BBQ grilling tends to be weather dependent, poor weather conditions may affect quarterly results of operations. Meanwhile, extreme weather events could impact net sales, operations, or its supply chain.

There’s also the environmental concern that consumers may shift demand away from gas, charcoal, or pellet-fueled grills to more sustainable cooking alternatives.

Covid-19 also continues to pose a risk to growth, such as penetrating new markets and making acquisitions. But the pandemic-induced lockdowns did increase BBQ activity and thus sales.

Battle of the Grills

The battle of the grill makers is hotting up with Weber’s rival Traeger also planning on going public.

While Weber is bigger and more affordable, Traeger is touted as the superior product with an upmarket following.

Kyla Scanlon portrays upcoming Weber and Traeger IPOs.

TGPX Holdings owns Traeger Grills and filed for an IPO on July 6.

Traeger shares will also be available to the public on the New York Stock Exchange, under the ticker symbol “COOK”.

Meanwhile, retailer BBQGuys and Texas fire-pit maker Solo Stove are also rumored to be throwing their hats in the IPO ring.

Outdoor living retailer BBQGuys plans to go public via SPAC Velocity Acquisition (NASDAQ: VELO), with a combined value of $900 million.

According to Bloomberg, Solo Stove is seeking a $1 billion valuation but details so far are vague.

Should I invest in the Weber IPO?

Before buying Weber shares, investors need to consider what is Weber worth?

Using other outdoor brands as a benchmark (Newell Brands (NASDAQ: NWL), Yeti Holdings (NYSE: YETI), and Thor Industries (NYSE: THO) it could look to price around 3X this year’s estimated sales.

According to Reuters, this could pitch it around a $7.5 billion value.

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Should You Invest in Draftkings Stock?

Draftkings stock is new to the markets and could do well for investors. The sports betting industry is growing as more states legalize it.
The post Should You Invest in Draftkings Stock? appeared first on Investment U.

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In May of 2018, New Jersey won a landmark court case in the Supreme Court. This victory repealed a long-standing ban on states’ rights to legalize sports gambling. Since then, the floodgates have been open for states to legalize sports betting. This has given rise to Draftkings stock and other investments. In just two short years since this decision, more than $20 billion has already been bet with the U.S. sportsbook.

If you’re a big sports fan then you’ve most likely heard about DraftKings thanks to their aggressive ads. If not, DraftKings is an online sports gambling company. Thanks to the ease of use of their app and frequent promotions, they have built up a solid user base. This begs the question: should you invest in a hot, young company that’s in an exciting, freshly legal industry?

Let’s take a look at a few reasons why you should consider investing in Draftkings stock…

NOTE: I’m not a financial advisor and am just offering information and commentary. Please do your own due diligence before making any decisions. I also own a small position in Draftkings.

Draftkings Stock Still Run by its founders

Draftkings was founded in 2012 by Jason Robins, Matt Kalish, and Paul Liberman. These three are all still involved in the company.

In general, founder-led companies tend to have a better track record for success. If you look at some of today’s most successful public companies, they are almost all founder-led. For instance, there is Facebook and Zuckerberg, Netflix and Hastings and Amazon and Bezos (until just recently).

These men have dedicated the past eight years of their lives building DraftKings into what it is today and will want to continue their success. Since sports betting was just legalized two years ago, they will likely have a huge second wind. This could push Draftkings stock higher.

Sports Gambling is an Industry on the Rise

Let’s compare the sports gambling industry to another up-and-coming industry, marijuana.

Marijuana used to be known as “the devil’s lettuce” and smoking it was a serious offense that could land you years in jail. Now, it’s legal in close to 20 states and you can find hemp and CBD products in your local grocery store. On top of that, legal cannabis is expected to generate $43 billion by 2025. It’s a growing industry and here are some of the top U.S. marijuana stocks.

On that same note, gambling used to be associated with mobsters and money laundering. Now, companies like Draftkings make it fun and harmless to bet a few bucks on your favorite sports teams. The stigma surrounding Draftkings stock and the entire sports gambling industry is shifting. Already, in just two years, 20 states have rushed to legalize sports betting. States where sports gambling is legal, like New Jersey, are generating tens of millions in tax dollars.

Online Sports Betting has a Distinct Edge

It’s important to note the difference between in-person betting and online betting. Most states choose to legalize both but some states will choose to legalize one and not the other. In total, more than 20 states have legalized sports betting. Of these, 18 have legalized in-person betting compared to just 14 for online betting.

Yet, when it comes to where people prefer to do their betting, the internet is by far the more popular choice. According to Sports Betting Dime, more than 80% of the total bets placed in New Jersey in 2019 were placed online. When it comes to online gambling, Draftkings is in more states than any other operator.

Draftkings Stock Earnings

So far, I’ve discussed a lot of external factors about the industry. Sure, sports betting may be on the rise but will Draftkings stock and the company benefit?

Draftkings went public via a SPAC merger with the Diamond Eagle Acquisition Corporation in late June of 2020. If you’re not familiar, a special purpose acquisition company, SPAC, or “blank check company” is a company with no actual business. Instead, their main goal is to buy another business that’s already thriving.

Since DraftKings has only been public for about one year, there isn’t a lot of financial data to view. Additionally, most of their time as a public company was during 2020, when live sports were canceled. As you might imagine, canceling live sports for a company like DraftKings is like banning the consumption of chicken for a company like KFC.

Despite this mild hiccup, DraftKings still grew their revenue by 90% from 2019 to 2020. That said, they also posted a whopping loss of $1.23 billion for 2020.

Evaluating their performance so far is like trying to evaluate the potential of a first-round draft pick who sat out his rookie year with a torn ACL. It’s hard to draw any concrete conclusions because they haven’t really been given an opportunity.

Drafting Stock Prediction, Should You Invest in Draftkings?

At the end of the day, Draftkings is an exciting young company in an industry that has amazing potential to grow. Although, I’d be doing a disservice to not bring up a few of the risks associated with their business, so here they are:

  • Competition – Draftkings and Fanduel are the Uber and Lyft of their industry. These two will likely be in a cutthroat fight over the coming years.
  • Societal pushback – Gambling is addictive and Draftkings makes it incredibly accessible. They tend to treat gambling like much more like a video game, not a risky practice that has consequences. This could lead to increased scrutiny and regulation.
  • Future variants of COVID-19 – Another wave of COVID could crush DraftKings stock.
  • Gambling laws are complex – Each state has their own rules and essentially acts as its own market. For DraftKings, this means high costs and potential lawsuits.

There are definitely plenty of risks associated with Draftkings stock. However, like their slogan says, “life is more fun with skin in the game.”

I hope that you’ve found this article valuable when it comes to getting a better idea of whether or not you should invest in Draftkings stock. If you’re interested in more investing opportunities, consider subscribing to Liberty Through Wealth below. It’s a free e-letter that’s packed with investing insight from market experts.

The post Should You Invest in Draftkings Stock? appeared first on Investment U.

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Economics

Weekly investment update – Emerging markets miss out on equities and bonds surge

At first sight, the direction of financial markets in July might have come as a surprise: global equities posted their sixth consecutive monthly gain despite a steep drop in emerging market equities, while bond markets also recorded strong advances, again

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At first sight, the direction of financial markets in July might have come as a surprise: global equities posted their sixth consecutive monthly gain despite a steep drop in emerging market equities, while bond markets also recorded strong advances, again except for those in emerging markets.

Volatility spiked at times during July. Indeed, it hit its highest since early May and took equities from a historical peak to the lowest level in a month within the space of a week before they set another high towards month-end. Emerging market equities suffered from a persistent sell-off in Chinese stocks over the government’s regulatory clampdown on sectors ranging from ride hailing to gaming.

Economic growth – On an even keel  

While markets worried that the economic recovery had peaked, the latest purchasing managers’ data – seen as a leading indicator of the direction of growth – did not signal a sharp slowdown. China’s PMI for July, typically also a proxy for wider emerging market growth, fell by 0.5 of a percentage point from the previous month, indicating that company activity had slowed down. Remaining at above 50, the indicator also signalled that overall economic expansion overall is continuing.

In the eurozone, business activity rose at its fastest rate in just over 15 years in July. At 59.8 in July, after 58.3 in June, the services sector PMI was at its highest since June 2006 and consistent with a sharp rate of activity growth.

US GDP growth was 6.5% annualised in Q2 after 6.3% in Q1 and fell short of expectations. While inventories and net exports contracted, personal spending on consumption and non-residential private investment grew strongly. GDP was above its pre-Covid peak. Thanks to massive fiscal and monetary stimulus, it is now back on its pre-Covid trend.

Despite this economic progress, the US Federal Reserve has continued to indicate that there is still ‘some ground to cover’ before it will start reducing its pandemic support for the economy. Employment is still some seven million jobs below pre-Covid levels. Risks to the outlook remain, not least as Delta variant Covid cases rise.

Equities: Record-setting

July saw concern over slowing global growth offset by news of strong corporate earnings and still record-low interest rates. Markets were buoyed by optimism over the outlook for the US economy in the second half of 2021, even in the face of a pickup in Covid infections due to the more contagious Delta variant.

Some observers are pointing to the small chance of widespread lockdowns, while others have noted that although caseloads are rising rapidly, hospitalisations and fatalities are not.

US stocks recorded their sixth monthly rise in a row. The S&P 500 rose by more than 2%, while the tech-heavy NASDAQ and the Dow Jones added more than 1%.

There were all-time highs for European stocks as well, allowing them to record a sixth consecutive month of gains. Mid-caps, IT and dividend stocks led the market, while the energy sector lagged.

Asia takes a dip

In contrast, Asian equity indices had a poor month due to rising Covid cases across the region and concerns that a regulatory crackdown on tech businesses in China could slow already decelerating growth. This came on top of spreading Delta cases in the country and a softening land and property market. The developments clouded market sentiment across various regions.

Japanese equities lost more than 2% on concerns about another coronavirus wave and its impact on the economic recovery. Investor worries over global economic growth not only drove down US Treasury yields, but also the US dollar, allowing the yen to strengthen. The break in what had been the yen’s weakening trend also roiled Japanese markets.

Tepid domestic data, concerns about growth in China and volatile oil prices – Japan imports some three quarters of its oil consumption – also weighed on the market.

We believe there are reasons to be somewhat cautious on equities despite the good recent earnings momentum and the continued support from central bank pandemic measures. Recent recoveries followed sell-offs on a modest scale rather than sharp retrenchments and dips have not attracted many more new buyers or more widespread buying. Recent gains look vulnerable to us.

Bonds: The rally rolls on

Yields fell as investors sought shelter in haven assets such as US Treasuries and Bunds, extending the rally by a third month.

In the US market Treasury, 2- and 10-year yields notched their biggest one-month drops in over a year (March 2020), even as the Federal Reserve’s preferred inflation gauge rose sharply in June for the fourth big gain in a row. However, June’s increase was smaller than forecasters had expected.

Investors still appear to be siding with the Fed, accepting its view that higher inflation is due to supply bottlenecks and shortages and that these should ease off as the recovery matures. Ironically, the pressure should also ease as a growth slowdown tamps demand.

Over the month, long-dated debt yields fell to around five-month lows.

What’s up with real yields?

Some investors appear to worry that very low real yields — which measure the returns investors can expect once inflation is taken into account — are warning of a (coming) sharp slowdown in growth as the more contagious Delta variant spreads, turning businesses and consumers cautious again.

Others have argued that market pricing has become too pessimistic, pointing to the US economy’s strong rebound, even if growth has now peaked.

A further explanation could be that continued large-scale bond buying by central banks is still holding down yields across the board – even yields that are adjusted for inflation that has seen high readings in the US, the UK and Europe. An end to this form of support for economies does not appear to be in sight any time soon.

The Fed, which has bought about USD 120 billion of bonds monthly throughout the pandemic to pin down borrowing costs for households and businesses, reiterated after its latest policy meeting that the economy was making ‘progress’, but it remained too early to tighten monetary policy. Any tapering of bond purchases could be delayed by a growth slowdown, which should support markets.

Elsewhere in bond markets, high-yield credit in USD, EUR and GBP had another good month, extending their run of gains by a seventh month. UK inflation-linked bonds were in the lead in the fixed income segment.   

Gold was supported by the continued rise in inflation and the declines in real yields that have made it more attractive as an inflation hedge. Commodities more broadly were the best-performing asset class in July.

BOND MARKETS      
10-year yields   Monthly change 2021
US T-note 1.22 -25 31
JGB 0.02 -4 0
OAT -0.11 -23 23
Bund -0.46 -25 11
EQUITY MARKETS      
Euro Stoxx 50 4089.3 0.6% 15.1%
Stoxx Europe 50 3555.8 1.2% 14.4%
       
Dow Jones 30 34935.5 1.3% 14.1%
Nasdaq 14672.7 1.2% 13.8%
S&P 500 4395.3 2.3% 17.0%
       
Topix 1901.08 -2.2% 5.3%
       
MSCI all countries (*) 724.2 0.6% 12.1%
MSCI Emerging (*) 1277.8 -7.0% -1.0%
(*) in USD      

Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. The views expressed in this podcast do not in any way constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

Writen by Nathalie Benatia. The post Weekly investment update – Emerging markets miss out on equities and bonds surge appeared first on Investors' Corner - The official blog of BNP Paribas Asset Management, the sustainable investor for a changing world.

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Hot Robinhood Penny Stocks For Your Watchlist in 2021

Robinhood penny stocks are in focus right now; here’s 3 to watch
The post Hot Robinhood Penny Stocks For Your Watchlist in 2021 appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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Are These Penny Stocks on Robinhood Worth Buying This Month?

Following the HOOD IPO, penny stocks on Robinhood are once again gaining traction. While HOOD stock going public is not in itself a major catalyst for penny stocks, the momentum that it has seen since then has renewed interest in the stock market overall. In the past few months, trading has been undeniably slower than usual. This is the result of major uncertainty regarding the direction of the pandemic and the development of the Delta variant into the most transmissible strain of Covid out there. 

And while many investors thought that we were making our way out of the woods, the new variant seemed to take that progress to a screeching halt. So, in August, momentum has been better so far than in previous months. However, increasing case numbers in the U.S. are bringing that uncertainty back to front and center. 

[Read More] Are These Penny Stocks on Your List of Small-Caps to Watch?

So as prudent penny stocks investors, our most important job is to stay ahead and use these factors to our advantage. Because, with different events comes higher speculation and therefore more room for price movement. As a result, there is a lot of money to be made with penny stocks right now. Considering all of this, let’s take a look at three penny stocks on Robinhood for your watchlist right now.

3 Robinhood Penny Stocks to Watch Right Now 

  1. Alterity Therapeutics Ltd. (NASDAQ: ATHE
  2. Bit Brother Ltd. (NASDAQ: BTB
  3. OneSmart International Education Group Ltd. (NYSE: ONE

Alterity Therapeutics Ltd. (NASDAQ: ATHE) 

Up by a solid 15% or so by EOD are shares of ATHE stock. In the past five days, that number jumps to over 20%, which is quite a solid gain to consider. So, why the major bullish momentum for a penny stock that was relatively unknown only a few weeks ago? Well, to understand this we have to take a closer look. 

Today’s momentum alone comes from the announcement of a new U.S. patent for a group of iron chaperones that can redistribute iron in the body. This can be put to use for neurodegenerative conditions such as Alzheimer’s and Parkinson’s. The patent it was awarded is known as “Compounds for and Methods of Treating Diseases” and includes over 80 new compounds. 

“As the scientific evidence implicating excess brain iron in neurodegeneration accumulates, our in-house research team continues to discover novel compounds that address this important target. The structural backbone illustrated in this new patent provides a larger foundation for small molecule drug candidates to attack this source of neuropathology.”

CEO of Alterity, David Stamler, M.D.

This major news for the company could help it to get new drugs through the various stages of the pipeline. And with over $28 million in cash as of June 30th 2021, Alterity looks well funded and could be worth adding to your watchlist. 

Bit Brother Ltd. (NASDAQ: BTB) 

Another decent gainer of the day is Bit Brother Ltd., pushing up by almost 10% by EOD. YTD, shares of BTB stock are down by quite a bit, however, we do see infrequent bursts with BTB on occasion. It is hard to place Bit Brother in one category as it works in both the distribution of specialty tea products and more recently, on blockchain and cryptocurrency mining.

[Read More] 3 Tech Penny Stocks To Watch In August 2021

In addition, the company added the Hunan Bit Brother Holding Ltd. subsidiary to its operations to begin developing blockchain based software and tech products. Two weeks ago, Bit Brother announced the closing of a $22.5 million registered direct offering. This includes 15 million ordinary shares at a price of $1.50 per share. 

And only a few weeks before that, it announced the acquisition of the century old, Angelo’s Pizza 1697 Inc. Angelo’s Pizza is working to move into international markets such as Canada, Asia, Australia and New Zealand.

“With Bit Brother’s experience in the catering industry, and Angelo’s Pizza’s rich history, we believe this opportunity will bring growth to all parties involved. Along with our plans to expand a restaurant with decades of success to have a global reach, we will be able to continue to grow our Bitcoin payment business.” 

Mr. Xianlong Wu, the CEO of Bit Brother

All of this news does seem to paint Bit Brother as a rather fragmented company. And while it does see certain short term gains, investors should consider how speculative BTB stock is before moving any further.  

Penny_Stocks_to_Watch_Bit Brother Ltd. (BTB Stock Chart)

OneSmart International Education Group Ltd. (NYSE: ONE) 

Arguably one of the largest gainers today is ONE stock, shooting up by over 65% at EOD. In the past six months, shares of ONE have declined by over 75%, which makes investors beg the question as to why it made such a large stride today. 

Today, OneSmart made a sobering announcement that it received a letter from the NYSE, indicating its lack of compliance with its trading price. To be listed on the NYSE, a stock has to meet the minimum bid requirement of $1. While this doesn’t fully explain today’s gain, news can result in spikes or drops in price. This news also comes only a few week ahead of OneSmart’s planned annual meeting on August 30th of this year. 

For some context, OneSmart provides after-school education services in China with a focus on technology. We have seen a lot of momentum in the ed-tech market recently, as kids go back to school. In its business model are offerings such as OneSmart VIP, HappyMath and FasTrack English. And with over 450 learning centers in China, there’s no doubting how broad of a reach OneSmart International has. Considering its speculative gain today, investors may want to do some more research before investing in ONE stock. 

Penny_Stocks_to_Watch_OneSmart International Education Group Ltd. (ONE Stock Chart)

Which Robinhood Penny Stocks Are You Watching Right Now?

Finding the best penny stocks to buy is all about understanding where the stock market is headed. With so many factors occurring simultaneously, it can be difficult to keep up with the trajectory of certain industries.

[Read More] 4 Top Reddit Stocks To Watch As Robinhood (HOOD) Stock Breaks $80

However, if we use all of the investment tools at our disposal, making a proper penny stocks watchlist could become a profitable endeavor. Considering all of this, which Robinhood penny stocks are you watching right now?

The post Hot Robinhood Penny Stocks For Your Watchlist in 2021 appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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