Talking AG Barr, AstraZeneca, Diageo, HSBC, L&G, Next, SanDisk, Seraphim, SpaceX & Emerging Markets

Join the guys as they dive into the first set of SpaceX results since the stock's much-hyped market debut. There's also chat about the week's winners, including L&G, Next and Seraphim, and losers including AG Barr, AstraZeneca and HSBC.

There's a look ahead to big US tech names reporting tonight and tomorrow, including memory device maker SanDisk whose shares are up 500% already this year.

And there's a reminder to sign up to the Wealth & Retirement Show on 6 November as the team announces new presenters.

Transcript

SPEAKER_00 0:05

Well, hello everyone and welcome to our regular podcast. Uh there's a lot going on in markets and we'll be record highs here and there all over the place. But before we get on to that, let's talk a little bit about Remember, Remember the 6th of November. Now, we're not a day late for the gunpowder plot. This is much more important than that. This is, of course, uh our debut live in-person event, um, the Shares of Wealth and Retirement Show, coming up on the 6th of November. Um, we've got a really good lineup. It's it's really adding new people, new speakers uh to the roster uh every week. But just to highlight, we have uh recently got uh confirmed that Richard Stone of the AIC will be presenting, so you don't want to miss him. And also Laura Fole, who's recently taken over as lead manager at Law Deventure. Um that was after retirement, wasn't it, James? Uh remind me who who retired. James Henderson, yeah, long-serving manager. James Henderson, yeah. And they were they were in tandem for a long time, but now Laura Foel's in in charge, and she'll be presenting at the uh Sheriff Wealth and Retirement Show. And also, we've noticed there's an awful lot of discussion around emerging markets at the moment, and particularly Asia. So interestingly, timing or not, I don't know if it was good time or just fortune, but we had a really fascinating chat, uh, Ian and I on Monday with Emily Whiting uh of JP Morgan, and we were talking about emerging markets and about uh India and China and and various other different markets out there. So definitely plug into that. And we're also talking specifically about India tomorrow. James and I will be chatting to James Tom of the uh Aberdeen New India Investment Trust. So don't miss out on that. Anyway, without further ado, let's talk about those record markets here. You've got some details.

SPEAKER_01 1:51

Well, yes, Steve. Looking at the SP, I mean, it's um it's been trading sideways since it hit uh that high in June. And this week, in well, this week and and last Friday, uh it's just smashed straight through that. In fact, uh it's up six percent in four days, it was up uh one and a half percent on uh Monday, and it's up another what 1.7 percent last night. So fully risk on, I have to say. These markets are fully risk on and rewarding companies, as usual, rewarding companies which deliver.

SPEAKER_00 2:23

Um I mean, I suppose we've had some really good results from the likes of Alphabet from Amazon, we know really well the markets. Um, some soggy results on some of the other big, big uh tech companies, but I mean uh uh Amazon and and uh Alphabet in particular, um, and AMD as well. Oh, that was a bit soggy actually, but um um so I mean we've had some very strong results, which has probably given uh the markets a kind of a general lift, yeah.

SPEAKER_01 2:47

And actually, even um duller sort of income stocks, the kind of stuff I like, you know me. Um we've had decent results from BP, Shell, Legal in general, they've all gone down quite well, they're big names and real staples in uh UK equity income funds, and also with retail investors, they're popular. The big disappointment this week has been HSBC, actually, which kind of failed to launch. Um, they did say they were going to buy back another billion dollars worth of shares, which the jury was out on that. That wasn't a given. They suspended buybacks last um, well, Q3 last year, because they were buying in the minorities and hanging sen bank. So they they came out with, and you'd think you know, the way the market is, oh, billion dollar buyback, great. Actually, the results, although they beat, they weren't great quality, and I think people are just taking a bit of money off the table, as I said in a previous podcast, it is the best quality, it has been a great performer. Those results I don't think lived up to expectations, and and of course, overnight we had uh well, expectations were pretty high after that IPA, Steve.

SPEAKER_00 3:53

Yeah, you you speak about um uh headline uh earnings, of course. I mean, so many investors uh bought into the IPO of SpaceX, these were its first ever earnings as a listed company, and I think we can sum it up with going, well, they were kind of all right. Uh I mean, ultimately, the numbers, the operational side of the business looks like it's going gangbusters. Of course, uh there's no sign of any profits, but I think what really uh dragged on the stock price was the fact that there was so so lit in the way of forward guidance. Um, no one really knows, no one's any any of the wiser really about what the kind of roadmap looks like. There was no conversation about um about any kind of merge with Tesla. So I mean they they were very soggy overnight, uh down about double digits, I think 10, 12, something like that. So I mean, I mean we're down under underneath the the $135 IPO price, now about $115, something like that. Um, but it's just it's just a company you can't really make a sensible valuation judgment call on it at the moment because it is really about the investment, how it might look in five, even 10 years' time. So I mean, good luck trying to analyze how you do that because I struggle. But we had AMD as well, very um, very interesting, very strong results, but again, another victim of super high expectations, and it didn't quite have enough oomph to suggest that you know optimism should be should be um heading higher. So that was a bit soggy as well, but that was balanced with uh some very strong numbers and very good share price reaction from Arista Networks, which is a company we've written about a few times.

SPEAKER_01 5:25

Nice one, yeah. Actually, one other factor I noticed with um SpaceX is I think the lockup expires today. So it's tomorrow, actually.

SPEAKER_00 5:34

Tomorrow is it's the 6th of August. That's right.

SPEAKER_01 5:36

Yeah, it was just this week, yeah.

SPEAKER_00 5:38

Just to make everyone clear about this. So these these are employees and they had share options um and stock that um at IPO, but they they were locked into selling them in the market until this point in time. So there's a theory that there could suddenly be a big flood of new stock comes onto the market tomorrow, which could dampen um um appetite for the stock uh a bit more and on the share price, but we'll see how that goes. I mean, it's a it's a it's a it's a temporary blip, it's not really an issue uh for the long-term story.

SPEAKER_01 6:08

So that despite that set off, James, um UK's very own listed space tech fund, Seraphim, has had a good week.

SPEAKER_02 6:16

Yeah, absolutely. And so it's invested over 21 million of that 137 million they raised through a C share issue back in May, which I think was one of the biggest trust raisings for many years. Um put the money to work with two existing portfolio companies, Pixel and Xenopower. Now we've written a story on the website, so if you want to know more about what they do, do check out that story. Um, some other big news was the kind of mixed picture from consumer staples this week, wasn't it, Ian? So Coca-Cola HBC, upgraded FY26 guidance, good volume growth of World Cup boost, which is actually it's actually a holding in the Aberdeen Equity Income Trust. And we did a recent podcast with the Impile where he talks about the ball case for that stock. Um, but the other day, AG Bar, a bit of a howler. So usually a very reliable stock, but with the supply constraints that had hit the second quarter sales, it seems like those issues have been kind of fixed, but you know, a rare blip from uh you know a company with a very good timed as well.

SPEAKER_00 7:08

Bad timing, James, because they've just uh just launched a new advertising campaign. I've seen it all over the TV about advertising various uh soft drinks. I don't know what I don't know what flavours they are, but yeah, so it seems a bit unfortunate, really.

SPEAKER_01 7:19

Yeah, I I've seen those, and James, you're too modest to mention it, but uh that tweet uh or uh X um that X post has received uh 6,600 views, which is I think the most we've ever had for a single story.

SPEAKER_02 7:35

Yeah, absolutely. So lots of interest, great brands. I mean, Iron Brew, Rubicon, Boost, so you know a lot of interest in that in that stock. Um sticking to kind of the FTSE 100. We've had another beaten racial next, sort of ever a reliable retail star turn. Um, but one of the big uh topics this week was that AstraZeneca talk of a merger with Bristol Myers. The market didn't like that at all. Yeah, a lot of skepticism about that. I think they've both got big sort of uh cancer drug pipelines, but you know, the market did not like the idea of another transformational merger with all the uh attending integration risk.

SPEAKER_00 8:08

Do you do you think that's simply a case of the the market doesn't see the economies there, or do you think it's also about the very skeptical that um it'll get part past any monopolies uh inquiry?

SPEAKER_02 8:18

Yeah, I think sort of regulatory issues as well, and also it was a bit of a pivot if they do do it because Pascal Sorrio said they didn't need Emanator to meet their targets, so I think that sort of caught the market off guard, and also perhaps a fear that if Astra pivots more to the US, will it sort of you know ditch its London listing? I think that made investors a bit skittish as well.

SPEAKER_01 8:36

Well, it it did it did have a big listing in the States, didn't it? I think in June. Um that's right. And and as you say, you know, these these mergers they tend to take management's attention off the day-to-day business, and and that's you know, and really uh really do they have a positive outcome on the share price? Um, but Steve, you're looking at a few more big names coming out.

SPEAKER_00 8:58

Uh I honestly, I mean, we're right, smack bang in the middle of of uh peak earnings, really, for certainly certainly in the tech space. So we've got uh this evening we've got sand disk, which is you know, probably possibly investors' favorite memory stock. We've got Western Digital, we've got um uh Shopify, Uber, App Loving, there's a whole bunch of tech companies alongside companies like Disney, um Uber, as I said, and uh Eli Lilly, all out tonight. Tomorrow we've got Cloudflare, Datadog, Airbnb. Now, do you remember Airbnb? Well, it it was a thing, it hasn't been a thing for ages. I've no idea how it's doing, so it'd be interesting to find out tomorrow.

SPEAKER_01 9:32

Yeah, absolutely. And James, um, another big consumer name out tomorrow.

SPEAKER_02 9:38

Yeah, we've got Johnny Walker and Guinness tomorrow in. So Diasio, uh Dave Lewis setting out yeah, that that's gonna be that's gonna be a big one, and then uh Pisa Customs on Friday. So this is uh Imperial Leather, um, you know, various soaps and other sort of household brands, and across the pond, we've got Monster and Shark Ninja, so two sort of go-go growth stocks. Monster Beverage is one of the you know the best performing stocks of all time, anywhere, I think. So we'll be keeping an eye on those two.

SPEAKER_00 10:02

So I suppose so the big thing with with customs is always about lookout for the um the the denar, isn't it? It's the the Nigerian currency because they sell so much of their stuff into Nigeria.

SPEAKER_02 10:13

Yeah, that's right. It's it's been sort of uh Achilles heel for many years, but um, there's a there's a sort of broader turnaround going uh under the underway with that stock. So we'll certainly do something for the web, I would imagine.

SPEAKER_01 10:23

Just just to go full circle on it.

unknown 10:26

Sorry.

SPEAKER_01 10:26

Sorry, yeah, sorry, yeah, yeah. I was gonna say we haven't looked at sharp ninja for absolutely ages, have we? But that was such a hot stock. Talk of Airbnb, you could put that in the same bracket almost.

SPEAKER_00 10:36

Yeah, I mean, I just wonder if it's one of those situations where its products have just been uh copied, and there's just so many generic brands now in the kind of air fry market and the the mixer market and those kitchen appliances. I mean, it does it really have uh that kind of price protection, and and the the market seems to be saying probably not.

SPEAKER_01 10:56

Yeah, can I say maybe it was a flash in a pad?

SPEAKER_00 11:02

Just to go full circle, we were talking at this at the top of the show about um emerging markets. So we've looked in depth at uh China China-based uh trusts recently and to see whether there's an opportunity there. We've done that even more recently with Japan, and we will be looking at India um later this week. So check out our website for for those um for those features.

SPEAKER_01 11:23

Yeah, I think that just about does it for us, guys. We're out of time. Um, as I say, we uh got another fascinating podcast tomorrow. So stay tuned for that, and um, we'll see you soon. Bye for now.