Good Evening,

Welcome to Equity Espresso’s Daily Recap. Markets gave back some of yesterday’s gains after three consecutive positive days leading into the end of November. OPEC said they would cut oil supply, but a lack of detail kept prices unchanged. Let’s jump in.

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The Recap

Markets fell on Friday but bounced from the intraday low, with the ASX 200 index ending the day down 14.1 pts. or 0.20% to 7,073.60 but was still able to register a weekly gain of 0.50%.

There weren’t many places to hide today, with ten sectors lower, led by Tech (-1.08%) after the NASDAQ (-0.28%) dropped overnight in the U.S. Staples (-0.84%) and Discretionary (-0.81%) were also in red.

Energy (+0.12%) was the only sector to finish in the green, with Uranium stocks moving higher, led by Paladin Energy (+6.4%) and Boss Energy (+2.5%) as the Uranium price trades at $US81.00 /Lbs.

On Thursday, OPEC+ oil producers agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) from eight producers for early next year, led by Saudi Arabia rolling over its current voluntary cut. This figure includes extending the Saudi and Russian voluntary reductions of 1.3 million bpd. OPEC+ said it is focused on lower output, with prices down from nearly $98.00 in late September, with concerns brewing over weaker economic growth in 2024 and expectations of a supply surplus. The oil price remained unbudged due to a lack of detail provided by the group.

Premier Investments (PMV) said it has delivered record sales during the Black Friday trading week and expects H1 EBIT for the first 26 weeks of FY24 to be ~$200 million. PMV reported an EBIT of $242.8 million in the pcp.

Economic Data

• The Judo Brank Manufacturing PMI in Australia decreased to 47.70 pts. in November from 48.20 pts. in October, its lowest point since 2020

• The Caixin China General Manufacturing PMI rose to 50.7 in November, from 49.5 in October, which beat market forecasts of 49.8 and marked the highest reading since August.

• The U.S. Personal Consumption Expenditure (PCE) price index was flat month-over-month in October 2023, the weakest reading since July 2022, after a 0.4% rise in September and August.

• The Euro Area Inflation declined to 2.4% in November, its lowest level since July 2021 and below the market consensus of 2.7%.

• U.S. Pending Home sales declined by 1.5% in October from the prior month, with the index pushing down to 71.4, its lowest point since 2001.

• U.S. Jobless Claims rose by 7,000 to 218,000 during the week ending November 25, an increase from 211,000 a week earlier.

Wall Street

The Dow Jones led the way on Thursday on Wall Street, rising 1.47% to close at its highest level since January 2022, capping up a strong month for equity markets in November. The S&P 500 (+0.38%) was also higher, but the NASDAQ (-0.28%) traded lower.

Disney stock traded 1% higher on Thursday after the company reinstated its dividend at $0.30 per share. Salesforce stock finished 9.4% higher after beating analysts’ estimates in its Q3 report. Adj. EPS was $2.11 versus estimates of $2.06 per share. The company revenue increased by 11% to $8.72 billion and guided revenue to increase by 10% in the fourth quarter to between $9.18 billion and $9.23 billion. Snowflake stock rose 7.1% after the company reported better-than-expected earnings of adj. EPS of $0.15 vs. estimates of $0.05. Snowflake reported revenue of $734 million - a 31% increase from the pcp.

Outlook

Key economic data to be reported overnight includes U.S. Manufacturing PMI and Price data, while in the U.K., House pricing index data drops for November and Manufacturing PMI data for November. The Bank of Montreal is the largest company of note reporting quarterly earnings tonight.

It’s looking like a slow start again tonight for the NASDAQ, which is currently trading -0.22% lower, while the S&P 500 (-0.08%) is also in the red.

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Quick Singles

🪃 Local News

• The Australia Competition and Consumer Commission (ACCC) will not oppose Coles’ proposed acquisition of two dairy processing plants owned by Saputo Milk at Erskine Park, NSW and Laverton, VIC. The regulator said that the acquisition is unlikely to result in a substantial lessening of competition in breach of section 50 of the Competition and Consumer Act.

• Melanie Cooper has been appointed chairwoman of Coopers Brewery, making her the first female chair of the company in its 161-year history.

🌏 Around The Globe

• The cheapest Tesla Cybertruck will start at $60,900 but won’t be available until 2025. Tesla chief executive Elon Musk delivered a small number of new Cybertrucks to owners on Thursday at the company’s headquarters as part of a launch event.

• According to the Wall Street Journal, healthcare insurers Cigna and Humana are reportedly in talks to merge by the end of this year in a deal reportedly worth $US60 billion.

• Spanish infrastructure giant Ferrovial will sell a 25% stake in London's Heathrow Airport for $US3 billion to private equity fund Ardian (15%) and Saudi Arabia’s Public Investment Fund (10%).

• General Motors plans to cut spending next year on autonomous vehicle subsidiary Cruise following safety concerns.

• The United Auto Workers (UAW) will target around 150,000 workers across 13 non-unionised car companies, including Tesla and Toyota.

• Financial services company SoFi will exit the crypto space as regulators continue to scrutinise digital assets, telling customers to move their assets to Blockchain(.)com by December 19.

• Uber has partnered with London's iconic black cabs, allowing 15,000 drivers to receive trip referrals through the app. This deal enables Uber riders to hail traditional taxis via the app, complete with an upfront pricing estimate.

• An Indiana judge has dismissed a lawsuit filed by the state against TikTok, which has accused the company of making false claims about the safety of user data and age-appropriate content.

Markets

ASX Company Movers

Commodity Prices

Bond Prices

ETF Watch

ASX News

🗞️ Company Announcements

• AMA Group (AMA) appointed current COO Matthew Cooper as its new Group Chief Executive Officer, effective immediately.

• Develop Global (DVP) has been awarded a $46 million development contract at the Mineral Resources-owned Mt. Marion Lithium mine in Western Australia. The contract is for an 18-month term and is expected to start in 2024.

• Electro Optic Systems (EOS) provided revenue guidance for FY23 to be between $210 million and $230 million after generating higher-than-expected revenue in October, which the company expects to continue in November and December. EOS reported revenue of $137.9 million in FY22

• Latitude Group (LFS) confirmed it is on target to deliver a cash NPAT in FY23 within the range of $15 million to $25 million, in line with its previous guidance.

• Mesoblast (MSB) went into a trading halt today, pending an announcement regarding a proposed financing transaction.

• Pilbara Minerals (PLS) is the most shorted stock on the ASX, but that hasn’t stopped AusSuper from taking up a 5.1% stake in the company.

• Premier Investments (PMV) said it has delivered record sales during the Black Friday trading week and expects H1 EBIT for the first 26 weeks of FY24 to be ~$200 million. PMV reported an EBIT of $242.8 million in the pcp.

• SSR Mining (SSR) will sell its San Luis Project in Peru to Canadian-listed Highlander Silver in a $US42.5 million deal, with a $US5 million upfront payment. The deal is expected to settle in 2024.

• Tyro Payments (TYR) said that Kounta Pty. Ltd. has filed a Notice of Appeal in the NSW Court of Appeal. Following a November ruling, Kounta was restrained from persuading Tyro merchants to switch to another acquiring services entity.

Social Media

 📱 Post of The Day

While global new vehicle sales have flatlined or fallen, Truck SUV sales continue to climb.

This data was provided by Chartr.
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Broker Research

Pointerra Ltd.

Code: 3DP | Market Cap: $32.5m  | Current Price: $0.047
Price Target: $0.35 | Sector: Information Technology | Broker: Research as a Service

Overview

Pointerra Ltd (ASX: 3DP) is an Australian company that commercialises its 3D geospatial data technology. Pointerra delivers predictive digital insights and definitive answers to complex physical asset management questions. The company held its AGM last week.

Pointerra Highlights

• Pointerra CEO Ian Olson highlighted that the company expected to return to positive cashflows and EBITDA in H2 FY24 as a result of both the resumption of capex spending by U.S. energy utility clients and Pointerra’s expanded customer base.

• The CEO noted that the company had grown its cost base in anticipation of revenue growth from the US energy utility sector, which had been delayed.

• The CEO highlighted that these programmes were restarting and should deliver a positive H2 FY24 and FY25 to Pointerra.

• Pointerra reported Q1 FY24 cash receipts of $2.05 million late last month, a 162% improvement on the previous quarter but down 40% on the pcp.

• Operating cash outflow was a loss of $0.5m, an improvement from Q4 and in line with the broker’s expectations.

Recommendation 

The broker values Pointerra at $0.35 per share - down from the previous price target of $0.38. The broker estimates Pointerra will be profitable by FY25, with revenue growing from $7.3 million in FY23 to $29.3 million by FY25.

You can access the Pointerra Research Report here.

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Daily Quiz

❓️ Test Your Knowledge

Yesterdays Question. What degree did Charlie Munger earn from Harvard University in 1948?

Answer: Law. Charlie Munger studied mathematics at the University of Michigan in the 1940s. However, during World War II, he dropped out of college to serve as a meteorologist in the Army Air Corps. Later, he earned a law degree from Harvard University in 1948 despite not completing a bachelor's degree. 34% of you who responded got this one correct.

A Little Extra

📉 Going Down?

Top-10 shorted stocks on the ASX - as of November 27

📊 Broker Ratings

What do the brokers have to say?

1. Iress Limited (IRE) - Upgrade to Outperform from Neutral (Macquarie)

You can access full broker notes for Collins Food, Droneshield, Iress Limited 

👨‍💼 Director Transactions

What are the insiders doing? (On-market trade only)

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.