15 May 2024 – The Fund Society

Trump Media delays filing earnings after SEC shuts down auditor

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Stocks making the biggest moves after hours: Chubb, Cisco Systems, Palo Alto Networks and more

Check out the companies making headlines in extended trading. Chubb — The property and casualty insurer gained nearly 6% after Berkshire Hathaway revealed it has bought nearly 26 million shares of Zurich-based company for a stake worth $6.7 billion. Chubb became Berkshire’s ninth biggest holding at the end of March, according to a new regulatory filing. AST SpaceMobile — Shares rocketed 33%. AST SpaceMobile announced a commercial agreement with AT & T to bring its space-based broadband network direct to everyday cell phones. AT & T shares were little changed. The company also posted a narrower-than-expected loss of 16 cents per share for the first quarter, compared to a 23 cent loss per share in the year-ago period. Cisco Systems — Shares jumped nearly 5% after the IT giant reported fiscal third-quarter adjusted earnings of 88 cents per share on revenues of $12.70 billion. The results topped analysts’ estimates for earnings of 82 cents per share on revenues of $12.53 billion, according to LSEG. B. Riley Financial — The Los Angeles-based middle-market investment bank fell 2% after losing $1.71 per share in the first quarter, reversing year earlier net income of 51 cents. Riley, which received a Nasdaq delinquency notice in March, left its quarterly dividend at 50 cents a share after halving it in February . Hawkins — The Minnesota-based chemical maker dropped 6% after fiscal fourth quarter sales fell 2% from the year-earlier period. Management warned about its industrial business in the next 12 months, saying “We are cautiously optimistic about our Industrial segment, but we believe economic and competitive pressures will continue to weigh on many of our customers and impact demand.” Palo Alto Networks — The cybersecurity company saw its stock rise 1% after announcing it will buy cloud security software assets from IBM . The move is part of a broader partnership, giving Palo Alto access to more consultants and a bigger customer base. IBM shares were little changed. — CNBC’s Scott Schnipper contributed reporting

CNBC

Warren Buffett’s Berkshire Hathaway reveals insurer Chubb as confidential stock it’s been buying

Berkshire Hathaway has bought nearly 26 million shares of Zurich-based Chubb for a stake worth $6.7 billion. The property and casualty insurer became Berkshire’s ninth biggest holding at the end of March. Berkshire has been keeping this purchase secret for three quarters straight. Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 4, 2024.

Warren Buffett finally revealed his secret stock pick in a new regulatory filing, and it’s insurer Chubb.

His conglomerate Berkshire Hathaway has bought nearly 26 million shares of Zurich-based Chubb for a stake worth $6.7 billion. The property and casualty insurer became Berkshire’s ninth biggest holding at the end of March.

Shares of Chubb jumped nearly 7% in extended trading following the news of Berkshire’s stake. The stock has gained about 12% year to date.

Insurer Ace Limited acquired the original Chubb in 2016 for $29.5 billion in cash and stock, and the combined company adopted the Chubb name. Evan Greenberg, CEO of Chubb, is the son of Maurice Greenberg, the former chairman and CEO of insurance giant American International Group.

Stock chart icon Chubb shares over the past year.

The Omaha-based Berkshire has a large footprint in the insurance industry, from auto insurer crown jewel Geico to reinsurance giant General Re and a slew of home and life insurance services. The conglomerate also acquired insurance company Alleghany for $11.6 billion in 2022.

Berkshire recently exited positions in Markel and Globe Life in the same industry.

Mystery unveiled

Berkshire has been keeping this purchase secret for three quarters straight. Berkshire was granted confidential treatment to keep the details of one or more of its stock holdings confidential.

The topic of this mystery holding didn’t come up at the Berkshire’s annual meeting in Omaha earlier this month.

Many had speculated that the secret purchase could be a bank stock as the conglomerate’s cost basis for “banks, insurance, and finance” equity holdings jumped by $1.4 billion in the first quarter after an increased of $3.59 billion in the second half of last year, according to separate Berkshire filings.

It’s relatively rare for Berkshire to request such a treatment. The last time it kept a purchase confidential was when it bought Chevron and Verizon in 2020.

CNBC

US stocks close at record high on slower pace of inflation

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Libor convictions reviewed by UK fraud agency in wake of disclosure problems

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Weak Carbon Pricing Stalls Energy Transition

Low and patchy carbon prices will delay the transition to a clean economy but present political advantages, says the Institute of International Finance. The sluggish spread of carbon pricing around the world risks holding back the urgent transition to a low-carbon economy, a leading financial industry bodies has warned. In…

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Denim stocks can benefit with Western style in vogue, TD Cowen says

A renaissance in Western styles can boost stocks that specialize in denim, according to TD Cowen. Analyst Oliver Chen hailed the jean-fabric category as a strong performer that should be able to keep up momentum through at least the end of 2024. While positive on stocks across the space, he specifically pointed to Boot Barn , Levi Strauss and Ralph Lauren as key plays on the trend. “We see the recent momentum in the denim category as sustainable in the near to medium term,” Chen wrote to clients Wednesday. “Our experts highlighted the continued growth of the Western fashion cycle likely until at least the end of the year until 1Q25.” Chen highlighted trends around head-to-toe denim dressing and artisanal garments, which can drive higher spending in the category. This comes as the broader Western style — of which denim has typically been considered a centerpiece — has garnered popularity through its association with music icons and a Louis Vuitton line that debuted earlier this year. Specifically, the look won attention as attendees of Taylor Swift’s high-flying Eras tour emulated “The Tortured Poets Department” singer’s early days in the country genre. It got another boost from fellow popstar Beyoncé’s “Cowboy Carter,” the chart-topping country album released earlier this year. But a key risk to the trend is if customers are still willing to spend on the look amid price increases, Chen noted. Playing the denim revival For clothing makers Levi Strauss and Ralph Lauren, Chen sees reasons to be bullish beyond just a Western resurgence. Ralph Lauren has juiced average unit revenue through a push to elevate the brand, while gross margins and return on invested capital have climbed to record highs, Chen said. And Ralph Lauren’s “strong heritage” in Americana and Western will also benefit U.S. comparable sales numbers. Meanwhile, the analyst said Levi Strauss’ direct-to-consumer premiumization efforts are something investors should watch. The company’s jeans line was referenced in the “Cowboy Carter” song “Levii’s Jeans,” which management previously said underscored the brand’s position in culture. Both stocks have outperformed the market in 2024, with Ralph Lauren adding around 16% and Levi Strauss surging about 36%. But Wall Street diverges on what to expect next. The average analyst has a buy rating with a price target that suggests Ralph Lauren has upside of approximately 15%. On the

CNBC

UBS chief Ermotti criticises Swiss regulators over Credit Suisse

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UBS chief executive Sergio Ermotti has lambasted Swiss authorities for allowing Credit Suisse to fail, as his bank fights back against growing calls within the country to increase UBS’s capital requirements.

Ermotti, who was brought back to UBS just days after its state-orchestrated rescue of Credit Suisse last March, criticised the oversight of the fallen bank in a speech on Wednesday.

“It’s especially confusing, if not extraordinary, to see many of the people who were in charge over the years saying they did everything correctly in relation to the management and supervision of Credit Suisse,” he said at the University of Zurich.

“Everyone who was involved needs to critically analyse the role they played and face up to their responsibilities. It takes courage to own up to shortcomings. But we must learn from past mistakes.”

His salvo comes a day after the new head of Finma, the Swiss financial regulator with supervisory responsibility over the country’s banks, said he supported new rules proposed by the finance ministry that could significantly increase UBS’s capital requirements. Analysts have predicted that the rule change could lead to between $15bn and $25bn of additional capital for UBS.

“Fourteen months after the Credit Suisse rescue, we are in the midst of an intense and often superficial debate over whether UBS is too big for Switzerland,” Ermotti said on Wednesday.

“To be honest, it’s quite surprising how quickly UBS went from being perceived as a saviour to a potential future problem for the country.”

Much of the growing animosity stems from a report published by the finance ministry last month, which included a proposal that banks with international businesses should be forced to hold higher amounts of capital.

Ermotti told analysts at the bank’s first-quarter results last week that UBS had not been consulted on the proposals, even though as the country’s most global lender, it would be hit the hardest.

While the report did not contain any details about what the requirements could look like — and they are not due to be put forward to the Swiss parliament until next year — finance minister Karin Keller-Sutter has indicated that analyst estimates of $15bn and $25bn of additional capital is “plausible”.

On Tuesday, Stefan Walter, the new head of Finma, told a banking conference in Switzerland that he supported UBS increasing its capital on foreign subsidiaries.

“The more

Glencore chief backs South Africa as Anglo takeover battle rages

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Stocks making the biggest moves midday: GameStop, AMC, Boeing, Nio and more

Check out the companies making headlines in midday trading: GameStop , AMC Entertainment — The so-called meme stocks retreated significantly after a two-day rally . GameStop declined about 30%, while AMC dropped 20% as the trading frenzy seemed to fade. The sell-off in AMC shares also came after the company announced a debt-for-equity swap. Before Wednesday, GameStop and AMC were up 179% and 135% this week, respectively. Boeing — Shares slipped 1.7% after the Justice Department said the airplane manufacturer broke a 2021 settlement that protected it from criminal charges related to two fatal 737 Max crashes. Boeing, which is now exposed to potential prosecution, denies the claims. Dell Technologies — The technology company rallied more than 8% after Morgan Stanley raised its price target on the stock. The firm cited increasing momentum among enterprise clients, including for artificial intelligence server demand. Nio — The Chinese automaker dropped 8% despite receiving an upgrade from JPMorgan to neutral from underweight earlier. According to the firm, shares could benefit from Chinese government stimulus policy and Nio’s latest battery as a service, or BaaS, strategy, which could drive sales, said the bank. Nio on Wednesday also launched its new lower-priced brand Onvo , which aims to compete with Tesla. Monday.com — The project management software company soared nearly 19% after posting better-than-expected first-quarter results. Management also raised its full-year guidance, citing strong demand and better customer profiles following a price increase. New York Community Bancorp — Shares fell 4%. The regional bank agreed to sell around $5 billion in mortgage warehouse loans to JPMorgan Chase to bolster its liquidity. The sale is projected to close in the third quarter. Petco Health & Wellness — Shares surged more than 16%. The pet products retailer appointed Glenn Murphy as executive chairman of the board, effective immediately. He also purchased about $2.5 million worth of shares as part of his appointment. TKO Group Holdings — The sports entertainment stock rose nearly 3% after an upgrade to buy from hold at TD Cowen. The investment firm said TKO’s stock looks like a relatively cheap way to invest in sports. — CNBC’s Yun Li, Pia Singh, Michelle Fox, Alex Harring and Jesse Pound contributed reporting.