The guys discuss Beauty Tech, Halma and Tesco plus Adobe, Apple, Oracle and the SpaceX IPO

With SpaceX shares indicated sharply higher and another risk-on rally in US stocks, markets are set for a strong finish to the week. We talk through the mega IPO, plus updates from Adobe, Apple, Oracle, the Halma sell-off, and what to expect next week from Beauty Tech Group and Tesco.

Transcript

SPEAKER_00 0:05

Hello and welcome to the latest episode of the Share Spy Podcast. I'm James Crux and I'm joined as usual by my colleagues Stephen Fraser and Ian Conway. Hi Chaps. Hey James. Right, so risk on sentiment has very much returned on hopes this US Iran conflict could be coming to an end. This side of the pond, the FTSE's up 1.1 today, and the 250 is doing even better, and that's despite that uh disappointing GDP print. But there's really only one show in town today, and that's SpaceX. Uh Steve, penny for your thoughts with the IPO looming.

SPEAKER_01 0:35

Yeah, I mean that it's been priced at $135, as was well flagged. Um, it will start trading when the US market opens later today. Um, you know, we'll brace to see how it does. I suspect um it's my opinion, but I suspect it might pop quite quite well in uh the early trades. But I mean I think it's a really we've we talked about it ad nauseum. I think it's a really good opportunity to to reach out to you, our listeners. This is this is your podcast. Um, you know, did you invest in the IPO? What are your hopes? What are your your concerns about the company going forward? Drop us an email at editorial at sharesfire.com and uh give us your thoughts. We'd love to read some of the best ones out over the next few uh weeks or whatever. And of course, this plays into the whole kind of risk on uh attitude. We've seen a massive recovery rally in US markets, all because of uh talk about the Middle East conflict uh calming down. Um so really strong moves in in the SP 500, the Nasdaq, etc. etc. Um, where does that place us now? Uh it's it's been the most capricious of markets, uh, and it's it's all it's always uh a market in flux, but it's it's really difficult to know um what the move is going to be tomorrow. Never mind uh uh in two, three weeks' time.

SPEAKER_02 1:49

Yeah, well Steve, we'll get a lot, we'll know a lot more at three o'clock this afternoon when uh when SpaceX starts trading. I think four times covered, and the talk is grey market is up 35%, which actually is in line with previous IPOs like Meta, Tesla, etc. They all did 35% on the first day. Yeah, so that would put the price at 180 bucks. Whether you can sell straight away is another matter. You need to check that with your platform, people, because some platforms will allow it and others won't. But um, returning to Earth once again, Steve, Apple was out this week, Oracle was out as well.

SPEAKER_01 2:28

No, I mean Apple didn't have uh results, but it um it ran its um Worldwide Developers Conference. And these these are these are um annual events that most of the big tech companies do. Um and I think it was it was a mixed bag, really. I mean, investors were hoping for just a bit more concrete evidence um on uh its AI monetization plans, amongst other things. And and there was definitely some very good news and very uh positive news to to come out of the company, but I just don't think it was quite enough. And so uh on the day on Tuesday, uh the market reacted relatively negatively, the shares fell about three and a half percent. Um I think they've recovered some of that um in uh over the last couple of days. But I just think it's it's one of those companies that investors don't quite see the oomph of the AI um angle at the moment, and and so far it hasn't really uh sourced those concerns. Um I mean at Oracle that you know they were knockout results, but again, as I've mentioned before, the big concern is is the CapEx, another 40 billion dollars being raised. It raised about 45 to 50 billion dollars earlier in the year. Um, it's just chucking billions of dollars at data centers, uh, and um investors are just concerned about you know where's where's our return on that investment? Yeah, that's that's the big issue.

SPEAKER_02 3:45

Yeah, I mean I I the one I was watching, as you know, we were talking on Wednesday. I was watching Halmer, and uh numbers looked absolutely fine, and then the outlook looked absolutely fine. Stock got walloped 16%. Um now typically the thing with this is typically the thing with Halmer is when it goes down, the smart thing is to buy it. I think people are just maybe concerned about the valuation because it's run a long way. Don't know, you've got to go back and look at it, but certainly there was nothing in there that made you think that the growth had run out, let's say.

SPEAKER_01 4:17

Yeah, I mean it's been such a reliable performer, total term, it's been absolutely outstanding. Absolutely, and but you're gonna get these these these periods of flux and volatility. Um, ultimately, you know, nothing really changes for that company, does it? It it it it carries on acquiring these small bolts on acquisitions to bolster the overall growth story, and it it sort of chugs away. So really interesting.

SPEAKER_02 4:40

Yeah, yeah, interesting. James, um, quite a bit of MA news for you this week.

SPEAKER_00 4:46

Yeah, yeah, talking of acquisitions. So uh well, Pacific Assets and um Schroeder Asian Total Return are going to do a combination. This is Pacific Assets is the worst five-year performer. Schroeder Asian total returns, the best five-year performer on a share price total return basis. Creates a bigger fund, you're larger, more liquid, lower cost, which investors and wealth managers like, but it does reduce choice for investors in that sector, Asia Pacific. And then this morning we've had another one. Glenstone's gone hostile on its bid for alternative income REIT. Um, but it's offering 17% below the latest nav, which looks a bit miserly. Um, yeah, which uh will another bidder join the fray, I guess, is the question for investors. We'll keep an eye on that one.

SPEAKER_01 5:24

It's not very compelling, is it? I mean, if you're on the board of directors, I mean you you're looking after shareholders' interests. I mean, why on earth would you accept a bid below net asset value?

SPEAKER_00 5:33

Glennsteiner, that they're the largest shareholder, so they've sort of got a you know an element of control there. The other interesting one was Foresight Group, wasn't it, Ian, which is selling its public markets business to Guinness global investors. Um that lets Foresight focus on your private markets where it's got a really good track record. Uh, and Guinness thinks this is a good time for investors to know to be invested in real assets.

SPEAKER_02 5:53

Yeah, I mean, we covered the Foresight Environmental Fund, didn't we, James? And uh maybe we should get somebody from Guinness on the podcast, actually. Um, that might not be a bad shout. Um next week, uh skinnier next week than this week, but Steve, you've still got Jabil circuit coming up.

SPEAKER_01 6:10

Yeah, I mean it's just called Jabil these days. They dropped the circuit from the name of World Bank. Oh, dear. Um I mean, this this is quite an interesting company, I think, because I I don't think many UK retail investors will will be that aware of the company. It's a contract's electronics manufacture, basically. So so far, so dull. But I mean some of its clients are just quite outstanding. So Intel, Cisco, Apple, Tesla. Uh, it's got things in many parties, but particularly in the data center expansion uh sphere. So that's really why its share price has been very strong recently. So, of course, investors are going to be looking for more noise about sustainability of CapEx budgets, etc. etc. So that's that's um due out before the market starts, I think, on Wednesday the 17th next week. Uh and you you've got a beauty, uh a beauty angle going, James, next week.

SPEAKER_00 6:54

Yeah, yeah, big week on the consumer spending front. So we've got beauty tech. I know we're all users of those at home beauty devices. So uh yeah, that could be interesting. Very good record in terms of upgrading guidance since coming to market. So we'll keep an eye on that one. These are the uh the face mask things, uh yeah, yeah, the kind of makes you look like American Psycho.

SPEAKER_01 7:10

Is it meant to be um ultraviolet rays or something? Is that yeah, yeah, yeah, yeah, yeah, yeah.

SPEAKER_00 7:17

Over to you, Ian, on that one. Pass.

SPEAKER_02 7:19

Yeah, I James, contrary to uh rumours, I haven't actually used one. It's all natural.

SPEAKER_00 7:26

Um we've also got uh yeah, we've also got Tesco, haven't we? Ian. So that does a give us a good read on you know the grocery picture. Um AO World as well. Will they say something about perhaps you know the World Cup, demand for TVs, etc. etc.? Oh yeah, yeah.

SPEAKER_01 7:40

I mean it's interesting, Ian, because um we were speaking about this uh earlier today. Uh there was a story going round about um all these weight loss drugs uh coming to the market, apparently 1.9 million users in the UK, which is is it's pretty staggering. I was very surprised by that. Um, but apparently they're dropping less, and that it may have an impact on supermarket um revenues and so on. But you know, we'll we'll have to see on that here.

SPEAKER_02 8:04

It's very interesting, Steve. The latest Cantar or World Panel rather figures are really interesting. There's there's a lot of changes going on in the UK market this year, kind of under the surface. Tesco is still the market leader, no question about that. Club card, Audi price match, and so on. They they kind of locked customers in. Um, a lot of purchases are part of a deal though. So I think 30% of across the sector, 30% of spending on consumer spending in supermarkets is now on some kind of deal. Um, own brand stuff sales chugging higher, and um uh brand label stuff sales absolutely flat. But what's really interesting is Lidl has overtaken Morrison, it's taken fifth spot now, it's the fifth biggest grocer in the UK, and Aldi's sales are kind of ground to a halt. Now, maybe that's the Aldi price match that all the other supermarkets are doing. I don't know. Yeah, Aldi standing still while Lidl's encroaching further. Um, really interesting to see what Tesco say next week.

SPEAKER_01 9:07

I I mean one observation I I had is that I'm I've not been to too many Aldi stores, I've been to a few little stores, and um the number of self-checkout terminals they have is pretty limited if if they exist at all. And I just wonder to what extent they're gonna have to spend quite a lot of money refurbishing their stores to to meet the standards that Tesco, Sainsbury, Morrisons are have are already at. So I wonder if you know the cheapness of the goods, if that tails away, then what's the other compelling reason to go there? It's it's going to be the level of service you get, and and I wondered if that that might be a factor in in all these uh flat sales.

SPEAKER_02 9:43

Absolutely, absolutely. Well, guys, I think that wraps it up for uh this week from us. Um, if you've enjoyed this, please do like and please follow on your podcast provider. Um, should say quickly, coming up, we've got our webinar with ABI Japan Opportunities Trust and JP Morgan European Growth and Income. That's uh 6 pm on Wednesday, 24th of June. Free to register. So go to the Shares If I website, sign up and ask questions.

SPEAKER_01 10:14

You know, you can send in questions in live in the event, and we'll put them to those those fund managers. So, what a great opportunity for you, the retail investor, to speak directly to these fund managers.

SPEAKER_02 10:24

Absolutely. Um, and with that, we'll wish you a good weekend. Cheers. Come on, England.