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First-quarter earnings season is about to kick off, and investors should be prepared to be inundated with endless headlines, reports and analysis – some more helpful than others – on a myriad of companies. . Although we generally focus on the 35 stocks currently held by Jim Cramer’s Charitable Trust, the reality is that any investor who wants to keep up to date should follow news from other major companies in the sector in which they invest. . By listening to what other companies are saying, we can better understand an industry and the potential implications for our holdings, all of which can inform our investment theories. Here are three notable news developments over the past two days that contain useful information about our actions. The news: French luxury goods maker LVMH Moët Hennessy Louis Vuitton reported strong results on Wednesday, with organic sales up 17% year-on-year, compared to analysts’ forecasts of an increase by 10%, propelling the shares to a new all-time high. The main driver of the upside surprise came from its fashion and leather goods division, buoyed by the resurgence of Chinese buyers. But the perfumes and cosmetics unit is also performing well, with organic sales up 10%, against a consensus estimate of 7.54%. The bulk of these gains were primarily in Europe and the US as travel retail in Asia did not fully rebound from Covid-related restrictions. Still, the leadership had some positive things to say about China’s spending habits since Beijing scrapped its zero-Covid policy late last year and gradually reopened its economy. “We are definitely seeing a normalization in this market with people returning to our stores as internet activity picks up, so we are really back to where we were before the complicated period of 2022, so we are extremely optimistic and should benefit of a strong push from mainland China in 2023,” said CFO Jean-Jacques Guiony. The Club’s view: LVMH offers one of the best views on all things luxury, which is particularly relevant for the prestigious beauty holding company Estee Lauder (EL).The main takeaway is that despite the continuing macroeconomic uncertainty, the wealthy are still spending money on luxury and high-priced products.Estée’s main overlap Lauder with LVMH is in fragrances and cosmetics, so it was encouraging to see overall spending in the category was strong for the French company, which explains the rise in EL shares we’ve seen since yesterday. While we would have liked to see more positive signs for travel retail – a key growth driver for Estee Lauder – Guiony’s comments clearly show that China is poised to rebound across the board, including in travel retail. , This year. The news: Danish pharmaceutical group Novo Nordisk (NVO) announced strong first-quarter results on Thursday and significantly raised its forecast for full-year sales and operating profit growth. In the first three months of the year, the company said its sales increased by 25% and its operating profit by 28%. For the full year of 2023, Novo now expects sales growth of between 24% and 30%, compared to earlier estimates of 13% to 19%. In addition, operating profit growth is expected to be between 28% and 34%, compared to a previous range of 13% to 19%. The advantage is being driven by growing demand for Novo’s popular obesity drug Wegovy, production of which is starting to ramp up after being limited by a supply shortage last year. The company also said it has seen continued strength of Ozempic – a diabetes drug that contains the same active ingredient as Wegovy – primarily in the United States. The opinion of the Club: The news bodes well for the Club holding Eli Lilly (LLY). Unlike Novo, Lilly is not a diabetes and obesity company, but it does share a similar best-in-class diabetes and obesity portfolio with drugs Trulicity and Mounjaro. Lilly hasn’t been able to harness Mounjaro’s full potential yet because the US Food and Drug Administration (FDA) hasn’t approved it for obesity, but that’s expected to happen later this year. year. Ultimately, we expect Mounjaro’s demand to rival or even exceed Wegovy due to its superior features combined with Lilly’s higher production capacity. The News: Shares of Sarepta Therapeutics (SRPT) fell today after healthcare news outlet STAT News reported that some FDA officials discussed the company’s experimental gene therapy rejection biotechnology for Duchenne muscular dystrophy (DMD), before a senior official finally stepped in and scheduled a public advisory committee meeting. Sarepta stock closed more than 9% Thursday, at $124.72 per share, on fears the therapy might not be approved. Club View: The news is significant for contract drug manufacturer (CMO) Catalent (CTLT), which earlier this year entered into a commercial supply agreement with Sarepta to manufacture its gene therapy candidate DMD. We’ve been watching Catalent since early February, after Bloomberg reported that Club holding Danaher (DHR) had an interest in buying the company. There are clear strategic advantages to acquiring a contractor based on Thermo Fisher Scientific’s (TMO) success with Patheon. But the market didn’t share that view because it would be a departure from Danaher’s history of acquiring high-margin, recurring revenue companies. Shares of Danaher fell more than 2% on February news and the stock hasn’t been able to gain momentum since. It’s unclear if Danaher is still interested in Catalent, but we’re interested to know if Sarepta’s potential regulatory issues change its calculus. (Jim Cramer’s Charitable Trust is long EL, LLY, DHR. See here for a full list of stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a transaction. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
A pedestrian carries a Louis Vuitton shopping bag, from a store operated by LVMH Moet Hennessy Louis Vuitton SE, on New Bond Street in London, UK, Wednesday October 21, 2020.
Hollie Adams | Bloomberg | Getty Images
First-quarter earnings season is about to kick off, and investors should be prepared to be inundated with endless headlines, reports and analysis – some more helpful than others – on a myriad of companies. .