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Table of Contents
FDA Bans Cancer-Linked Red Dye From Food
The FDA banned Red 3 from the US food supply, 35 years after prohibiting it in cosmetics due to cancer risks. Food manufacturers must remove the dye from products by January 2027, while drug makers have until 2028. The decision came after studies showed the dye caused cancer in lab rats.
Toyota Unit Charged with Emissions Fraud
Toyota’s subsidiary Hino Motors faced federal fraud charges in Detroit for selling 105,000 non-compliant diesel engines in the US. A company investigation revealed falsified emissions data dating back to 2003, far earlier than initially reported.
The Justice Department found Hino sold non-compliant engines from 2010 through 2022.
Macquarie Lays Cash on Applied Digital
Applied Digital secured a massive $5 billion investment deal with Macquarie Asset Management for data center expansion. Macquarie gained a 15% equity stake in Applied Digital through the deal. The partnership kicked off with a $900 million immediate investment into Applied Digital’s Ellendale campus.
Microsoft’s Warning Causes Stock Boom
Microsoft’s urgent call for businesses to get “quantum-ready” in 2025 sent quantum computing stocks soaring. The rally gained extra momentum from Nvidia’s announcement of a “Quantum Day” at its upcoming March conference. Microsoft’s president warned this is a “critical time” for business leaders to prepare.
J&J’s Acquires Access to Major Rx
Johnson & Johnson acquired neuroscience firm Intra-Cellular Therapies at a 39% premium, giving them ownership of the schizophrenia and bipolar depression drug CAPLYTA. The acquisition also included ITI-1284, a promising treatment for anxiety and Alzheimer’s-related psychosis.
GM’s Race for Cheaper EV Batteries
GM signed a major deal with Norwegian company Vianode for EV battery materials through 2033. The agreement focuses on synthetic anode graphite production, a key component for electric vehicle batteries. The partnership aims to reduce battery costs and boost EV profitability. GM’s CEO emphasized the company’s urgency in making their electric vehicles profitable.
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:
Early Bird Stock Market News
Daily overview of the stories driving today’s market, every morning at 7AM.
Weekly newsletter covering strategy, startups, marketing, decision-making, and the mindset of founders.
One-stop shop for the day’s biggest stories in the business of sports, music, and entertainment, sent daily.
Stock ideas
Here are three of my favorites from this past week.
Analysis provided by public.com.
Remember to always DYOR.
Charles & Colvard (CTHR)
Bullish Case
- Legal Victory: CTHR won a major arbitration against Wolfspeed, reducing potential damages from $28 million to just $3.3 million.
- Ethical Jewelry Focus: The company created the original lab-grown moissanite and maintains exclusive use of Made, not Mined™ gemstones.
- Strategic Reset Opportunity: Freedom from previous supplier constraints opens new growth paths in the lab-grown gemstone market.
Bearish Case
- Financial Obligations: The company must pay $3.3 million plus 8% interest to Wolfspeed, along with arbitration fees and limited attorney costs by early 2025.
- Supply Chain Risk: CTHR relied on Wolfspeed as its sole supplier of silicon carbide, creating uncertainty about future raw material sourcing.
JELD-WEN Holdings (JELD)
Bullish Case
- Insurance Claims Opportunity: Recent LA fires created potential insurance claims estimated at $250 billion and strong future demand for doors and windows.
- Market Position in Reconstruction: JELD’s established distribution network and manufacturing capacity position them to capture substantial market share.
- Supply Chain Readiness: The company’s diverse manufacturing locations allow quick response to sudden demand spikes in disaster-affected regions.
Bearish Case
- Raw Material Costs: Increased construction demand following the fires might push up raw material prices, squeezing profit margins.
- Regional Market Risk: Heavy dependence on LA reconstruction market creates vulnerability if insurance payouts or rebuilding efforts face delays.
Algonquin Power & Utilities (AQN)
Bullish Case
- Asset Sale Strengthens Balance Sheet: The $2.5 billion sale of renewable assets to LS Power exceeded market expectations and will reduce debt significantly.
- High-Quality Regulated Assets: AQN’s utilities serve 3.1 million customers with 20% exposure to water utilities that historically earned higher multiples.
- Attractive Valuation: The stock trades at 12.7x normalized P/E versus the peer average of 17.5x while paying a sustainable 5.4% dividend yield after a 65% payout ratio.
Bearish Case
- Management Execution Risk: The company faces uncertainty around new leadership after their recent CEO departure.
- Regulatory Approval Delays: AQN needs approval to embed $1 billion of previous capital expenditures into its rate base.
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.