Hundreds of investing and finance newsletters hit my (and maybe your) inbox every week. This is the best of the best.
Wednesday, we announced that Alts 1 is open again to new investors, and we’ve already received over $500k in interest. If you want to invest differently—in assets like blue-chip wine, British contemporary art, tequila barrels, and Pele rookie cards—please get in touch.
Oh, and don’t forget to check out our curated book recommendations.
This week, we bring you
Table of Contents
Hollywood Embraces AI Cloning for A-List Talent
Leading talent agency CAA is testing “CAA Vault”, an initiative to create AI clones of its A-list clients for uses like reshoots, dubbing, and stunt doubles.
The goal is to make the tech available industry-wide, not just for CAA clients. As AI models improve, the difference between hiring a real actor or their AI replica may become imperceptible to fans.
Is this the future of Hollywood?
Uncrustables: The Billion-Dollar Crustless Sandwich Empire
Smucker’s Uncrustables, the frozen sealed sandwiches, have quietly become a snacking sensation, with sales soaring 136% since 2019 to nearly $700 million last year.
As demand skyrockets beyond just kids to include adults, Smucker’s is investing $1.1 billion in a third factory devoted solely to Uncrustables production. Despite challenges in the processed food industry and the rise of weight-loss drugs like Ozempic, Smucker’s expects Uncrustables to become a billion-dollar business by 2026.
What’s behind this crustless sandwich craze?
Chinese Manufacturers Flock to Mexico in “Nearshoring” Boom
In a bid to evade tariffs and reduce shipping costs, Chinese companies are increasingly setting up production facilities in Mexico, a practice known as “nearshoring.”
This shift has led to a significant uptick in U.S. imports from Mexico, surpassing those from China in February.
The move not only benefits Chinese manufacturers financially but also provides a welcome economic boost to Mexico, with demand for industrial park space expected to soar in the coming years.
How Latin America Began Tackling Inequality
Latin America, often cited as the world’s most unequal region, has made remarkable strides in reducing inequality since the turn of the century.
While progressive policies played a role, the true drivers were broader: faster economic growth and increased education.
By investing in human capital and fostering inclusive growth, Latin American countries have demonstrated that inequality is not an insurmountable challenge.
Get the full story from Noahpinion.
Ikea to Train 3,500 Employees on AI Literacy
“This effort is a testament to the Ikea belief in the power of its people to harness technology for greater creativity, efficiency, and results.” – Parag Parekh, Ikea Retail’s chief digital officer.
Ikea is investing in both AI and its workforce by training 3,500 employees on AI literacy. The goal is to ensure Ikea’s values are reflected in how the technology is used, while enabling employees to harness AI for greater creativity and efficiency.
The brand has launched both a generative AI tool with Microsoft called The Hej Copilot, as well as a shopping tool through the OpenAI GPT store.
What impact will this have on the business?
Goldman Sachs Exits Robo-Investing
Goldman Sachs is officially exiting the robo-advisory business, selling its Marcus Invest unit to Betterment. In its place, the Wall Street giant has decided to refocus on its core strengths in investment banking, asset management, and trading.
The deal, expected to close by the end of June, marks Goldman’s retreat from the competitive consumer banking space after realizing the challenges of succeeding in it.
What I’m reading
I get a lot of mail asking where I find all this good stuff. Here are a few of my favorite newsletters, all of which are free to subscribe to:
Your one-stop shop for all things crypto.
Weekly strategies, insights, and lessons from SMB expert Michael Girdley.
5-minute reports on AI, Crypto, and more for those looking to start their own business.
Oh, and don’t forget to check out our curated book recommendations.
Stock ideas
Here are three of my favourites from this past week.
Analysis provided by public.com.
Remember to always DYOR.
Copart ($CPRT)
Bull Case:
- Financial Performance: Copart reported strong growth in gross margin dollars (9%) and EPS (11%), driven by higher salvage vehicle auction volumes.
- Industry Tailwinds: Rapid rise in U.S. vehicle repair costs and robust demand for salvage vehicles in emerging markets benefit Copart’s business.
- Operational Efficiency: Copart excels at maximizing recoveries for insurance carriers by efficiently developing a significant market for totaled vehicles.
Bear Case:
- Accident Dependence: Copart’s business relies heavily on vehicle accident frequency.
- Economic Sensitivity: Economic downturns may reduce the supply of salvage vehicles as consumers opt to repair.
Lululemon Athletica($LULU)
Bull Case:
- Membership Growth: A loyal consumer base and rapidly growing membership program indicate strength.
- Product Diversification: Expanding into casual wear, footwear, and men’s golfing attire presents significant opportunities.
- Attractive Valuation: Trading at a forward P/E of 25x, well below its historical average, LULU has substantial potential.
Bear Case:
- Economic Slowdowns: As a discretionary spending-focused company, Lululemon is susceptible to economic downturns.
- Credit Events: A broader U.S. credit event could lead to a sharp decline in discretionary spending equities.
- Inflationary Pressures: Resurgent inflation may necessitate higher interest rates, weighing on LULU’S stock price.
PetIQ ($PETQ)
Bull Case:
- Industry Trends: Increased pet adoption and aging pets drive growth in the pet wellness market.
- Diversified Model: PetIQ has balanced product and service segments. Branded products are targeting 15% growth and services are aiming for 20%+ margins.
- Acquisitions: Strategic acquisitions like Rocco & Roxie and Capstar expand offerings for further growth.
Bear Case:
- Inflation Impact: Less affluent customers may opt for cost-effective alternatives.
- Services Challenges: Underperformance since COVID and veterinarian shortages affect service profitability.
- Execution Risks: Growth relies on successful acquisition integration; missteps could hinder value.
That’s it for this week.
If you write amazing content and want to be featured, please send it through for consideration.
Cheers,
Wyatt
Disclosures
- There are affiliate links above; we’ll get a couple of bucks if you take action after you click.
- Nothing above is financial advice. DYOR, you filthy animal.
