Difference Maker Investments

A few things to talk about ... UWMC - Came out with earnings and a few items of note. The stock is moving lower on mortgage rates climbing, up about 3/4% since their low. The Company reported a miss on EPS as they added personnel and costs during the quarter gearing up for refinancing activity. A prudent move by management. If you believe that interest rates will eventually go lower then it's still a buy. Dividends are $.40/year ... you're getting a 6.7% yield. I'm hanging tight. If mortgage rates get below 6%, this stock will go much higher ... but that's going to take longer than most thought a couple months ago. Viking Therapeutics - Obesity week was a home run ... unfortunately, short sellers jumped in as it seems like it was a sell the news event. RFK Jr. being named to lead HHS is adding insult to injury to the stock as biotech as a whole is selling off hard. Lots of fear in the biotech and general health care market. I'm holding tight as I think GLP1s is an amazing category of drugs that the global population needs and Viking has best in class drugs albeit a couple years out from launch. Oppenheimer reiterated a buy on 11/14 with a price target of $165. Philip Morris Int. - The stock sold off last week and has mostly rebounded. I saw was some new regulatory activity out of France proposing to outlaw nicotine pouches. Not sure if that was the reason for the selloff or maybe some profit taking. France is a very small market for Zyn and northern europe is growing at a solid rate and of course, the US is a huge market and growing very quickly. As always, consult your investment advisor as I am not one. Happy Investing!

Quick Digest of Q3 earnings. PM - Another nice quarter showing great growth in their smokeless portfolio. Stock jumped $10 and now trading at $132. Stock continues to be re-rated as a modest top line and double digit bottom line grower. When I look at other CPG comparisons I believe it has more room to go higher. GOOG - Beat all estimates and showing great growth in cloud, youtube, search etc. I love what they've done with incorporating their AI tool into google search results. I believe that keeps casual users on their platform rather than using a dedicated AI tool. Regulatory and Justice Dept. issues likely limits the stock's upside but not seeing much downside unless the overall market sells off. LKNCY (Luckin) - A great quarter as management signals the China coffee war is mostly over. They were very profitable in their home market, adding another 1,300 stores. They held their first live Q&A during their conference call. They've made some significant investments in their supply chain over the last two years and discussed that they will expand more into southeast Asia as well as the US. They were quick to point out that expansion into the US will be slow and careful as they noted it's the most competitive coffee market in the world. Press reports indicate that they believe they can offer $3 premium coffee drinks. The stock jumped on the results and is trading at $26. RELY (Remitly) - Announced great results and reporting an unexpected GAAP profit for their first time in history. 39% Y/Y revenue growth easily suprased estimates. I'm convinced that this is a Company that I want to invest in for their potentially huge future. I recently sold some puts and will be selling more tomorrow in the $16 range. In after hours the stock was up 22% and trading at $18.30. The risk is that the stock runs over the next few weeks after these results and I'm only left with the premiums from the put option trades. I'm willing to take that risk as the stock is volatile. I'll be patient as the long term key to this investment is how much of the growing cross border $1.8T remittance share can they capture? ... they have 3% today. As always, consult your investment advisor as I am not one.

Viking Therapeutics Quarterly Update - Wednesday evening Viking provided their quarterly pipeline update. The stock jumped 21% on Thursday and another 6.5% on Friday. Good news across all the platforms were reported ... not unexpected as the tea leaves told us that it should be good news. Next Sunday, Viking will step on the Global "Obesity Week" stage in San Antonio to report details for various mg cohorts on their Oral 2735 platform. I expect great results for safety, tolerability and efficacy across all cohorts. Below is a nice overview from Jared Holz from Mizuho on how to look at an investment in Viking. I continue to be fully invested in Viking and can not wait to see next week's results. As always, consult your investment advisor before making an investment as I am not one. Happy Investing! https://lnkd.in/e9Yk2P5R

Cont … Q3 Post 4/4 UWMC - Q3 Stock Performance 24%, 21% YTD Market Sentiment 5 ? Business Performance 8 I will post a long United Wholesale Mortgage analysis in the next couple weeks but the TLDR summary is that the Company is doing all the right things as they prepare for a long super cycle of mortgage originations and refinancing activity. The super cycle is being delayed by a quarter or two with inflation data moving mortgage rates modestly higher in the last few weeks. The silver lining is that with a longer, slower decline in rates is that UWMC will likely capture more activity from multiple originations/refinancings from the same borrowers than they would have from a quick steep decline in rates.? UWMC has significantly increased market share and margins over the last few years. The shareholders will benefit from refinancing and mortgage originations in what I'm calling a super cycle of financing activity. Refinancing activities were up in Q3 ‘24 vs. year ago however originations were flat. My scenario above should continue to move the stock modestly higher as profits increase. That certainly could be better for the business long term as they’ll benefit from refinancing and eventually a dramatic increase in new mortgage activity. I’m still bullish about UWMC in ‘25 and ‘26. I’m nearly fully invested in the stock and continue to sell put options at $7 to capture the premiums as I think the stock is likely not to move much under $7. Long term though, I still see a $12 stock when mortgage interest rates drop and originations dramatically increase. PM - Q3 Stock Performance 21%, 29% YTD Market Sentiment 6 ? Business Performance 9 I rarely am fortunate enough to invest in a company just as market sentiment changes to the good but that was the case with Philip Morris International. The stock has taken a little breather as the Company can’t make enough Zyn’s for the US market and as a result has lost some market share as the nicottine market has continue it's significant growth. At the same time, their long awaited launch of IQOS, a heated tobacco replacement for cigarettes, should be launched in Austin TX shortly. This product has had a lot of success converting combustible tobacco users to a much healthier product in a number of other countries. As a result the Company itself has went from a flat revenue producer to a high single digit grower. The Company reports results tomorrow and if they forecast modest growth, I think we’ll see the stock go higher to go along with a 4.5% yield. I continue to sell in the money puts to capture the premium or I’ll buy the shares at the lower prices. I’m not fully invested yet and will continue to add shares at the $115 level. Remember to consult with your financial advisor before investing as I am not one. Happy investing! ??

Cont … Q3 Post 3/4 GOOG - Q3 Stock Performance -9%, YTD +20% 4-Market Sentiment? 5-Business Performance The big news during the quarter is that the US Justice Department is asking for several changes to Alphabet’s business model and likely asking for a break up. Even if a judge agrees with a break up it will surely be appealed and take a number of years to come to resolution. With that said, the first two quarters in ‘24 were good from a business and stock standpoint. YouTube continues to show nice growth with excellent growth in youtubeTV. They continue to manage a large number of “small” businesses that are categorized as “Other Bets” in their financial releases. The most well known of these businesses is Waymo which I believe has a nice future as vehicles move to self driving. Ultimately, if the Company was forced to break up, I believe that the many businesses would be worth more than the current value of the company. Alphabet had some missteps in their new AI tool Gemini. I used Gemini for my investment research but I have since moved to ChatGPT as I get more tangible research from this tool. I do like how they have incorporated AI into their google search results. That should keep casual users in the Alphabet ecosystem for the time being. I think the Justice Department’s case will keep an overhang on the stock in the near term. The stock is trading at a PE ratio of 18 for 2024 earnings estimates with continued nice profit growth anticipated in ‘25 (+15%) and ‘26 (+10%). I think that keeps a nice floor in the stock as value investors see it enticing giving an overall expensive market. I am nearly fully invested and not adding to the investment. I do sell some out of the money call options as a hedge to the overall market as I collect the premium. BA - Q3 Stock Performance -16%, -41% YTD Market Sentiment 2 Business Performance 1 I believe the bad news in the stock. The labor strike will end at some point and they’ll raise needed cash by selling stock. That’s normally bad news for a stock but I believe it’s priced in as they’ve telegraphed that move for several months. As I’ve written here, fundamentally there ar etwo commercial airline companies and I’m still confident that a few years we’ll see Boeing stock much higher than $150. I’m fully invested and although I’m not buying shares, I’m certainly not selling Happy Investing! United Wholesale Mortgage and Philip Morris International write ups will be published in the next couple days.

Cont … Q3 Post 2/4 LKNCY - Q3 Stock Performance +25%, YTD? +1% 7-Market Sentiment, 8-Business Performance? Market sentiment has changed completely in the last couple of weeks when the government announced a number of stimulus measures. From a business perspective, Luckin is still opening over 100 stores per week in China (265 last week), which now is over 21,000 stores. To compare, I think Starbucks has 16,000 or so in the US. and roughly 37,000 globally. Luckin’s profits have been depressed the last couple quarters as they were in a coffee pricing war with their largest competitor, Cotti. Tough competition continues as Luckin is still promoting various products with substantial discounts but from what I see from my network on the ground it’s not as aggressive as earlier in the year. From press reports, Cotti franchises are losing money and they are starting to lose franchisees as they move to other brands. It’s been reported that Luckin is looking at expanding into Malaysia and the US. I’m not so sure about the US expansion but I do see them continuing to expand throughout asia.? With that said, a “Luckin Coffee” store opened on Amazon in the last week or so. AAPL - Q3 Stock Performance +11%, YTD? +24% 6-Market Sentiment ? 6-Business Performance I’ve held Apple prior to the iPhone after falling in love with the iPod. I continue to sell out of the $ call options bringing in a nice stream of trading income and using the holding as a hedge against market downturns. It’s had a nice year and I like what they’re setting up with AI. That likely will generate a significant increase in apps on the App Store. I do believe the Company is fully valued. I wouldn’t be buying new shares right now but I’m not selling either. I do worry about how long the phone will be the dominant device for our personal communication... however I don’t see any significant changes near term. I continue to be fully invested. I will have reviews for GOOG, BA, UWMC, and PM in the coming days.

Reminder to Consult your financial advisor prior to investing, I am not one. This is 1 of 4 posts that I’ll post daily concerning 3rd quarter results. 3rd Q ‘24 is in the books. It was a good quarter for me as I saw my largest investment Viking climb 19% for the quarter. Luckin Coffee had a nice bounce back quarter climbing 26% as sentiment for Chinese stocks quickly changed with government stimulus measures announced late in the quarter. On the flip side, Boeing was down 17% as labor issues added to their troubles for the year. Listed below are 7 stocks that make up roughly 65% of my investment/trading portfolio. For my investments, I use a barbell approach - roughly ? my investments being in publicly traded stocks consisting between 4-7 holdings and the other half of my investments (in dollar terms) are made up of roughly 25 companies and sometimes market ETFs. New holdings always start with small holdings and I build them up assuming continued strong business performance. If I see something that surprises me I often will drop the investment. If market sentiment only changes, then I sometimes will add to my investment albeit slowly. I try to time my buys to be early as market sentiment changes to the upswing. Philip Morris International is one that I nailed but Stone Co. is one that I started and market sentiment turned negative so my investment is still modest for my overall portfolio. See the bottom of this post for more information. I share this info. as I believe it helps me sharpen my investment focus and gives an opportunity for my followers to get my perspective. Thanks to all and even those that lift my post and reference me/Difference Maker and post them on other platforms. VKTX - Q3 - Stock Performance +19%, YTD +341% 8-Market Sentiment? 10-Business Performance??? A good quarter with positive news on their obesity injectable and the FDA approved to go directly to phase 3 trials. This change saves them a minimum of 12 months and tens of millions of dollars. They also announced that they have continued to escalate dosage of their oral obesity drug. They will report their Oral findings at Obesity week early November. Given that they continued to escalate their dosage all the way to 100mg it would appear that the drug is both effective and safe. I still believe we could see a buyout during this quarter or some type of significant partnership with a large pharmaceutical with manufacturing and sales operations. Investors Business Daily just published a nice article giving a good overview of Viking and the obesity landscape. Check this out and if you have trouble finding it, send me a note. Still very bullish … I’m fully invested.??

Some interesting info to confirm my below post concerning the Chinese stock market and their traders. The last few days the volume has been up 200 - 330% as the Chinese markets have rallied several % higher on those big moves. Compare that the US on up days greater than 2% moves. In the US, those up days are accompanied with 20% - 50% upside in volume. This confirms that the Chinese traders are really driving the market up big time. Remember, as I've talked about a couple times over the last several months, most Chinese traders were short big time going into the Government stimulus moves. I think they're moving aggressively from being short to long. Luckin is up 50% in a week or so ... maybe more to come, maybe a lot more to come. The Chinese traders are aggressive momentum traders, IMO .... Luckin was ridiculously cheap ... I can argue that it's still cheap even after this big move up. Happy investing! ?? Remember, consult your investment advisor as I am not one! https://lnkd.in/eM9RSPGN

LKNCY - Luckin Coffee Buy Off the back of the China's Central Bank Head recent discussions on various measures to add stimulus, Luckin has made a 15% move up in 2 days. I've talked a few times on this page about how operationally this Company has made a number of good moves to strategically set them up for an emerging high growth coffee industry. Remember, Luckin is traded mostly by Chinese investors ... and those "investors" are mostly momentum traders, not investors. The Company has had a large short position (like most other Chinese equities). Is that changing now?? One of my favorite investors David Tepper said today on CNBC that he's buying and "buying everything" in China. Does the Chinese traders take off their short positions and and go long to ride the momentum?? That's the big question or is this just a relief rally? If you believe this is a longer term move like Tepper believes, Luckin will surely be leading the longer term rally. The stock traded 3MM shares in the first 1/2 hr today which is double their normal daily volume. Is the Chinese traders starting to cover their short positions? Again, operationally the Company is still adding roughly 100 stores per week and is expanding outside of China, albeit slowly and carefully. They're still aggressively investing in their supply chain. This has been one of my more frustrating investments over the last year ... but momentum might be changing and very quickly. I'm not adding to my position as I'm nearly fully invested. If I wasn't I would be would be as this Company is wildly undervalued. Again, always consult your financial advisor as I am not one. https://lnkd.in/eavHV4cq

Some 10K ft. research on a few interesting companies. COE - 51 Talk?? This Company has operations in China and had done English tutoring online in China until the Country changed its regulations around making profits on education in 2021. They closed down their China operations and took their processes and moved their business to Southeast Asia and recently expanded into the Middle East. The Company is again growing very fast. Their CEO recently bought tens of thousands of shares between $7-$11. Historically, the Company traded between 2 to 3x revenues. At $16/share it’s trading below 1x revenues on a run rate. I would argue that it's a much more valuable company now that it’s outside of China. Most investors have given up on the Company but I’m starting to slowly accumulate shares. RELY - Remitly? Remitly is an app based company that allows customers to transfer money back to their home countries. It’s like an app based Western Union type Company with 65% of their business is in the US but they do transfers from Canada and other western countries. Their average transaction is a little over $400. It’s growing roughly 30% y/y and will slow down as annual revenues are now over $1B on a run rate. Still researching but I could see the Company owning the small remittance category over the next few years. I may start accumulating a small amount of shares as the next quarters play out. Under $15 is probably a buy but I would like to get shares under $13. Trading at $13.74 now. Another interesting company is GLASF - Glass House, a marijuana Company that may have a best in class cost structure. To this point, marijuana companies have been losers as competitive pressures, complex state regulations and consumers lacking brand loyalty. Glass House has plans to change that but it’s too early for me to make an investment. Interesting Company?