The price of admission is $25 million — and how you invest changes completely once you get there. On this episode of In the Money with Amber Kanwar, Stephen Harvey, CIO of Sagard Wealth, breaks down how ultra-high-net-worth investors are positioning portfolios today — and why it looks nothing like a traditional 60/40. He explains how families are increasingly thinking like institutions, with heavy allocations to private markets, real assets, and global opportunities.
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Our book club went on a field trip for yesterday’s meet up. Puppy yoga. Honestly, it sounds cuter than it is. In the end, we skipped the yoga and I sat on the non-puppy side of the partition. Namaste on my side of the fence. (I can make that joke)
Here are five things to know today:
Recovery: Stocks are higher this morning as the bond sell-off cools down and oil prices slip. Energy stocks could struggle today with crude oil slipping 6% as tankers exit the Strait of Hormuz with 6 million barrels of oil. For context, this is the largest shipment since the Strait was closed but it is well below the 20 million barrels per day that used to flow. Nvidia will be the scene stealer after the bell reporting quarterly results. The world’s most valuable company is trading near a record high, but has lagged the move in semiconductors. This morning shares of Micron and Sandisk are getting a lift after wage talks at rival Samsung broke down. Over 47,000 Samsung workers could go on strike, which could exacerbate the shortage in memory chips. Markets should also brace for a potential IPO filing from SpaceX as early as this afternoon, according to reports from the Wall Street Journal. The IPO could be the biggest one ever with a value of $1.5 trillion out the gate. With investors fully invested in the market, where will the funds come from to buy the IPO? Will it be the semiconductors? The mag 7? Come at the expense of commodities? Maybe all of the above. Stay nimble.
(Source: Wall Street Journal)
Bullseye: Target reported better than expected profit and its best sales growth in four years. The stock is up a modest 2%. Comparable sales jumped 5.6% which is triple what was expected. The retailer has been struggling since the pandemic losing share to the likes of Walmart and ecommerce players. It’s the first quarter under new CEO Michael Fidelke who issued an upbeat forecast, saying sales for the year can grow at double the rate of their previous forecast. “First quarter financial results were stronger than expected, providing encouraging early signs that our clarified strategy is resonating with our guests…,” said Fidelke in the release. The muted reaction in the shares could be because the stock has already run up 30% so far this year. Walmart is on deck tomorrow and the valuation gap between the two is stark: Target trades at 14x earnings vs Walmart’s 45x.
Get low: Shares of Lowe’s are poised to open at an 11-month low after profit and sales came in lower than expected. To be clear, the bar is already low for these home improvement retailers struggling with a dead housing market. Comparable sales growth was a tepid 0.6% matching what we saw from Home Depot yesterday. Lowe’s maintained its call for 0-2% sales growth for the year, suggesting they don’t expect much of a turnaround this year. With interest rates rising again thanks to higher inflation, the hope of the housing trade coming back to life has been dashed once again. There will be a time to get in, the results don’t tell us we are there yet.
Think of the children: Hasbro is down 2% on investor disappointment it didn’t raise its forecast after a better than expected quarter. Profit came in higher and sales grew 13% which was also more than expected. Strength in the quarter was driven by the Wizard’s category thanks to the game MAGIC: THE GATHERING sales soaring 36%. The trouble is that the unchanged forecast implies that growth will slow down. Perhaps it is management being conservative, but in this market you don’t get rewarded for that.
Notable calls: TD is upgrading Franco-Nevada to buy “reflecting a compelling combination of balance sheet strength, robust deal flow, and a potential Cobre Panama catalyst within the next 6 months.” Franco-Nevada’s valuation is at a 5-year low, suggesting an attractive entry point according to TD’s Derick Ma. He believes that Cobre Panama, which was halted after a dispute with the government, could get the green light to restart later this year. “FNV is trading at a large discount to its historical averages despite a Cobre Panama restart largely priced into the stock . We believe this valuation discount is unjustified,” wrote Ma. Recent IPO Lumina Metals is getting analyst coverage for the first time and it is universally bullish. The caveat is that all the analysts covering Lumina all ran its IPO process but that’s the game we are in. BMO, RBC, CIBC and National Bank have all put out reports this morning calling the stock a buy with the average analyst price target of $20/share compared to where it closed yesterday at $12/share. Lumina, which is backed by Ross Beaty, is one of the biggest Canadian IPOs in years and a play on copper and silver in Poland. It went public in April at $12.50/share.
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