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Today's big stories

Bumble’s shares shot up after its initial public offering, suggesting the pandemic hasn’t dampened dating enthusiasm
We’ve gathered up the best hedge funds' big stock picks for 2021 – Read Now
Food giant PepsiCo announced better-than-expected earnings, but Kellogg’s wasn’t so lucky

Shares With Benefits

What’s Going On Here?

Bumble listed its shares on the stock market on Thursday, and investors used their best opening lines to slide into its good books: the dating app’s shares initially rose 76% (tweet this).

What Does This Mean?

Bumble’s shares listed at a higher-than-targeted $43 each, raising the company $2.2 billion in the process and valuing it at $8.2 billion. That led to a windfall for private equity firm Blackstone, which bought a majority stake in Bumble’s parent company at a $3 billion valuation back in 2019.

Bumble (and subsidiary Badoo) is free to use, so it makes most of its money by selling dreams – or rather, premium features that aim to increase users’ chances of finding a perfect match. And it’s working: Bumble has 2.4 million paying daters who spent a combined $417 million in the first nine months of 2020.

Why Should I Care?

Zooming in: Investors are ghosting Tinder.
It’s been up and down for Bumble over the past couple of years: the company made a $66 million annual profit in 2019, but suffered a $117 million loss in the first nine months of 2020. Still, investors were keen to buy in, which could’ve been because the company’s price-to-sales ratio – that is, its market capitalization to annual revenue – of 14 times was lower than Tinder-owner Match Group’s 20. In other words, Bumble’s shares might’ve been a bargain…

For markets: IPOs are hot right now.
Bumble’s not the first company to join the stock market this year, but its warm reception might set the tone for other high-profile listings to come. Newly infamous Robinhood, for instance, might be hoping for its own Bumble-esque liftoff, while cryptocurrency exchange Coinbase has opted for a direct listing. In other words, it’ll let investors set its share price directly, making its share price far less likely to shoot up when it debuts.

You might also like: Here’s how investors decided Bumble was worth buying into.

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🙋 Ask a question

2. Analyst Take

The World’s Best Hedge Funds’ 2021 Stock Picks

What’s Going On Here?

A few stock-picking hedge funds enjoyed serious returns in 2020, posting gains of more than double the US stock market’s 16% return.

And they’re confident they’ll repeat that success this year, with a favorable environment creating a wealth of opportunities to buy and short companies’ shares.

Because while volatility may have been dropping away, “stock dispersion” has been on the up: individual stock prices aren’t moving in sync much, creating loopholes for outperformance.

And if last year’s big hedge fund winners manage to replicate their success this year, they’ll do it through the stocks they’re betting big on and against.

So that’s what we’re looking at today: the world’s best hedge funds’ stock picks, and the stocks they’re shorting.

Read or listen to the Insight here

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A lot of fee-free brokerages use the practice in place of commissions, and there’s a lot of back and forth about whether it’s a good thing or a bad thing.

Either way, one thing’s certain: it can be a fairly opaque process.

That’s why our sponsor Public – a brokerage and social network for investors – has cut payment for order flow from its revenue model entirely.

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Cereal Killer

What’s Going On Here?

Breakfast magnate Kellogg’s announced weaker-than-expected earnings on Thursday, but at least PepsiCo’s update wasn’t such a soggy mess.

What Does This Mean?

Kellogg’s quarterly revenue and profit both fell short of investors’ predictions, but the breakfast-focused company hadn’t necessarily done much wrong. Investors might just have seen how fast competing consumer staples companies had been growing and set their expectations too high.

That wasn’t the case for Pepsi, whose North American food brands – which include Lay’s chips and Quaker Oats porridge – actually make up over half its profit. And seeing as there’s been plenty of comfort eating going on throughout the pandemic, last quarter’s earnings came in ahead of investors’ expectations – while its growth came in ahead of arch-nemesis Coca-Cola.

Why Should I Care?

Zooming in: Don’t write off a fixer-upper.
Kellogg’s might’ve missed the mark, but this kind of stumble in a year when demand for at-home food’s so high isn’t the be-all and end-all. Case in point: Kraft Heinz has been quick to adapt after publicly admitting that two of its major brands – Kraft and Oscar Mayer – weren’t worth as much as it thought. That might be why it announced stronger-than-expected annual results on Thursday, along with plans to sell its underperforming nuts business for $3 billion – pushing its stock up 5%.

The bigger picture: Consumer staples have their off-days too.
Investors make a big deal about how reliable the consumer staples sector is, given that shoppers buy its products no matter how the economy’s doing. And they’re not wrong: hygiene and personal care brands were, unsurprisingly, at the top of people’s shopping lists last year, while packaged food – especially healthy and plant-based products – benefited from pandemic-driven stockpiling. But the reliability of the sector isn’t a given: drinks firms, for example, struggled with collapsing restaurant and bar sales, which might be why their shares have done relatively poorly.

You might also like: Why consumer staples are (usually) a good bet in a downturn.

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🙋 Ask a question

💬 Quote of the day

“Have a vision. Be demanding.”

– Colin Powell (an American politician, diplomat, and retired four-star general)

Tweet this

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😭 In case you missed it…

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💡 2021: Six bold ideas from one of 2020’s best investors.

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🛁 Market bubbles: How to tell when you should cut and run.

🌏 Latin America: How to profit from the next fintech frontier.

💰 Invest like a VC: How to find the next big thing.

🌏 Finimize Community

👩‍🎨 Brush up on your investment strategy

Whether you’re looking to protect yourself from stock market ups and downs or just want to add some texture to your portfolio, our Investing in Art event could hold the answer. We’ll be talking to the founder of Artiste Culture about what’s what on the art investment scene. Hue’s in?

🎨 Investing in Art: 12.30pm UK Time, February 12th
🍃 The Biggest ESG Trends Of 2021: 6pm UK Time, February 16th
🎈 Navigating a Stock Market Bubble: 1pm UK Time, February 17th
👦 The Millennial Effect: 6pm UK Time, February 17th
🎮 The Boom in Esports ETFs: 6pm UK Time, February 22nd
♻️ The Path to Carbon Neutrality: 6pm UK Time, February 23rd
🚀 Unstoppable Investing Trends: 6.30pm UK Time, February 24th
🌱 The Science Of Sustainable Investing: 4pm UK Time, February 25th
🙋 Developing a Framework to Invest in Women: 6pm UK Time, February 25th
🌈 Financial Planning for the LGBTQ Community: 2pm NYC Time, February 26th
💪 Q&A with Finimize CEO, Max Rofagha: 1.30pm UK Time, February 26th

📚 What we're reading

Turns out your dad bod is good for you (Mel)
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Yes to once-weekly workouts (Outside Online)

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Finimize - 💪 Hedge funds pick their top stocks

Today's big stories

Shares With Benefits

What’s Going On Here?

What Does This Mean?

Why Should I Care?

The World’s Best Hedge Funds’ 2021 Stock Picks

Looking for a new broker?

Cereal Killer

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Investing, but not as you know it

😭 In case you missed it…

👩‍🎨 Brush up on your investment strategy

Older messages

🧟‍♂️ Total comes back to life

👀 Tesla backs bitcoin

📉 This is America

💡 Six bright ideas for 2021

😭 There are no PS5s left

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