Palantir Reports Earnings Beat | The Biggest Headlines: Disney Earnings

MarketBites Investment Newsletter for 11/13/2020

Your daily dose of stock market commentary and most important investment and business news. written by investment professionals at Taylor Hoffman Capital Management.

Quote of the Day
“Don’t count the days, make the days count.”
– Muhammad Ali

Today’s Top Investment Stories
  1. Palantir Reports Earnings Beat
  2. Disney Freezes Dividend, Announces Disney+ Subscriber Numbers
What is driving the stock market today? – November 13th, 2020

– Stocks fell across the board, as the rise of Covid cases added concern that tougher restrictions could slow the economic recovery without further stimulus. The Trump administration stepped back from talks on a government relief package, and another round of aid possibly won’t come until January of 2021. Three of the world’s top central bankers warned that the prospect of a Covid-19 vaccine isn’t enough to put an end to the economic challenges created by the pandemic.

– In October, the U.S. federal budget deficit more than doubled from a year ago. It is now $284.1 billion.

Coronavirus tracker: Per John Hopkins, the U.S. reported 144,000 new cases yesterday, while Europe had 239,000 new cases. United States Covid hospitalizations jumped to 65,373. Chicago urged residents to stay at home, while New York City is preparing for the possibility of closing its schools again. Anthony Fauci said, “the virus won’t be a pandemic much longer, because of rapid vaccine development.”

– By Raymond Kanyo

Top Story 1: Palantir Earnings

What is Happening?
It seems that Palantir is a surprising beneficiary of the coronavirus pandemic. The mysterious data-mining company reported 52% revenue growth in its first earnings announcement, since going public in September. The revenue growth came on the back of impressive government contract wins. The company also raised its full-year revenue guidance to $1.07 billion.

Why does this Matter?
Palantir has enjoyed a 39% stock rally since election day, on the prospects of a Joe Biden presidency. Biden is expected to cut military spending, which could benefit Palantir’s cheaper, ready-made data-mining tech. In a report to clients, Morningstar’s analyst wrote that Palantir has been a U.S. government contract award winner in both Democratic and Republican administrations.

Palantir also managed to secure more than 100 new deals in the early months of the pandemic. Operation Warp Speed, the Trump Administration initiative to deliver vaccines to Americans, leverages Palantir tech.

The Takeaway:
For many investors, Palantir continues to be a confusing, mysterious tech-company whose products carry a lot of buzzwords like “AI” and “Big-data.” While Palantir managed to diversify its customer base, it still heavily relies on a couple of government contracts.

If you would like to learn more about what Palantir actually does, you may refer to the following article by Forbes – (click here)

– By Raymond Kanyo

Top Story 2: The Biggest Headlines: Disney Earnings

What is Happening?

Disney reported earnings after market hours on Thursday. The biggest news came in regards to Disney+ subscriber numbers, and the firm’s semi-annual dividend.

Why does this Matter?

Disney announced Thursday that Disney+ had over 73M paid subscribers by the end of the quarter. Impressive subscriber growth lessened the blow to the firm, after their theme park business was crippled by Coronavirus protocols.

Disney only lost $0.20/share, as opposed to the analyst estimates of $0.71/share. Shares rose a solid 6% on the news, and floated between 4% and 6% as the call continued.

CFO Christine McCarthy officially announced that Disney would suspend the firm’s semi-annual dividend over the short term. As readers of MarketBites may remember from past coverage, activist investor Dan Loeb called for Disney to temporarily halt the dividend, in order to invest in new content for Disney+. McCarthy assured investors that Disney will return to paying a dividend over the long term.

The Takeaway:
It is unknown what will be done with the money saved from the frozen dividend. Will Disney executives take Loeb’s advice and invest heavily in the Covid-resistant Disney+? Perhaps the money will be set aside to help offset further deficits due to forced park closures? It will be worth keeping an eye on in the coming months.

– By Jack Dunne

What else is happening:
Trump bans investors from 31 Chinese companies – (read here)
Ford’s electric van makes headlines – (read here)
Cargo vessels and cruise ships line up for scrapping – (read here)
Under Armour struggling amidst an athleisure boom – (read here)
Deals & IPOs:
  • Doordash and Affirm to help end of year IPO boom – (read here)
  • looks for 2021IPO – (read here)
  • Luxury retailer Mytheresa plans U.S. IPO – (read here)
  • Airbnb to delay IPO to prevent election overlap – (read here)
Earnings Calendar:
DraftKings ($DKNG), Manchester United ($MANU), Spectrum Brands ($SPB), Vipshop Holdings ($VIPS)
Have a great weekend! 🙂
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