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Today's big stories

A blockage at the Suez Canal risks hurting both company earnings growth and your bank account
Our analyst has laid out what you need to know to decide whether to invest in Deliveroo's high-profile IPO – Read Now
Philips agreed to sell its domestic appliances segment, marking the end of its sprawling conglomerate days

Dock Block

What’s Going On Here?

The Suez Canal has been blocked for a few days now, in what has to be the world’s most mortifying three-point turn.

What Does This Mean?

The Suez Canal – which runs through Egypt and connects the Mediterranean Sea to the Red Sea – is seriously important, with some $10 billion worth of trade passing through every day. Or rather, that’s what should be happening: nothing’s been able to get through ever since a 400 meter-long, 200,000-tonne container ship got stuck during a storm on Tuesday. That’s left 237 ships – and counting – waiting on either side.

A short-term disruption was unlikely to have much of an impact, but investors started to pay more attention after reports on Thursday suggested it could take weeks to resolve the blockage. And when you consider that economically vital commodities – crops, livestock, oil, fuel, chemicals, and much more – are aboard some of these ships, you start to understand why…

Why Should I Care?

For markets: The blockage might hurt stock markets.
Consumer products and the components used to make them are stuck on the canal too, and the longer they’re held up, the more companies’ profits – and in all likelihood stock prices – will suffer. If that “supply-side” panic sounds familiar, it might be because it was all investors were talking about this time last year, when the pandemic first brought global trade to its knees.

For you personally: The blockage might hurt your bank balance.
If this brouhaha drags on, one outcome’s almost guaranteed: higher inflation. That’s because a shortage of in-demand commodities and products will push up prices of those that are available. Any concerns about inflation could encourage investors to sell stocks again, sure, but it could also come back on you in a more noticeable way: you’ll have to pay more for products, leaving you with less cash to spend elsewhere.

You might also like: Why is everyone so worried about inflation?

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2. Analyst Take

Should You Dine Out On Deliveroo’s $12 Billion IPO?

What’s Going On Here?

Food delivery platform Deliveroo will hit the stock market on April 7th, and what makes this IPO so special is that retail investors can get in on it too.

As for whether you’d want to, that very much depends on what you think of the company.

See, it could be worth as much as $12 billion, or six times its predicted annual sales. That’s higher than Just Eat Takeaway.com’s four times, but half DoorDash’s twelve.

And if you think highly of Deliveroo’s growth and expansion plans, it could represent a pretty unique buying opportunity. Amazon certainly thought so.

Still, Deliveroo’s currently non-existent profitability is a big question for investors. So we asked an analyst who covered this industry for Goldman Sachs to answer it – our very own Carl.

It’s all in today’s Insight: everything Deliveroo has going for and against its stock, so you can decide whether to buy in.

Read or listen to the Insight here

What’s the best US brand in digital banking?

The pandemic has changed attitudes toward banking and personal finance, but you might not be clear on exactly how.

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How the pandemic’s changed the behaviors of Americans toward digital banking
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Shaving Face

What’s Going On Here?

Philips agreed to sell its domestic appliances business on Thursday, as it looks to make a fresh-faced start with conglomerate skeptics (tweet this).

What Does This Mean?

Philips became a household name for its shavers, lightbulbs, and televisions, but that reputation has been on the way out: the company sold off its lighting business back in 2016, and it’s been cutting back on its other divisions ever since. These days, it’s more interested in making healthcare technology, like in-demand respiratory machines and remote medical care equipment. And on Thursday, the company announced the final nail in the coffin of its former self: it’s selling its kitchen, coffee, and home care appliances business to a Chinese private equity firm.

Why Should I Care?

For markets: The sum isn’t greater than its parts.
Conglomerates are big companies that operate several entirely unrelated businesses. But despite the slanderous rumors you might hear, bigger isn’t always better. See, investors aren’t convinced that conglomerates can manage various offshoots better than they can a “pure-play” business. That means a multifaceted company isn’t always as valuable as the sum of its parts, and investors essentially get what’s known as a “conglomerate discount”. But Philips looks like it’s had some luck reducing that discount so far: the company is more profitable since it sold off its lighting business, and its shares have doubled too.

Zooming out: The telehealth industry might be worth a look.
Less of a focus on consumer products should free up Philips’ time to concentrate on healthcare technology – specifically, on remote medical care equipment. That market saw a sharp acceleration in growth during the pandemic, with the number of US patients using telehealth services going from 11% in 2019 to 46% by the middle of 2020. Consulting firm McKinsey even reckons the industry’s pre-pandemic revenue of $3 billion has the potential to grow to as much as $250 billion.

You might also like: How to value Philips’ new business model.

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💬 Quote of the day

“Don’t let the bastards grind you down.”

– Margaret Atwood (a Canadian poet, novelist, literary critic, and inventor)

Tweet this

Look beyond the stock market

With stocks near record-highs, profits are only getting harder to come by these days.

In other words, you’d be smart to look at investments that typically don’t move in line with the stock market.

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📚 What we're reading

Home sweet 3D-printed home (CNN)
This presentation software makes anyone a designer (Pitch)*
The Ever Given is very sorry (Twitter)
The digger guy is just doing his best (Twitter)

🌏 Finimize Events

🐮 Leave cows outta this

There’s big money in a meat-free world, and vegan-trepreneur Claire Smith wants to let you in on how you can profit from it at our Crafting a Vegan Portfolio event on April 6th. She can’t wait to meet – sorry, she can’t wait to plant you.

🎙 Finimize Monthly Town Hall: 1.30pm UK time, March 26th
🔥 The Wonderful World Of SPACs: 2.30pm NYC time, March 26th
💸 Become a Finimize Community Host: 4pm UK time, March 26th
😎 Crowdfund Club: 6pm UK time, March 30th
😡 The Influence of Behavior on Investing: 5pm UK time, March 31st
♻️ ESG: The Environmental Perspective: 6pm UK time, March 31st
⏰ Is It Too Late to Invest in Bitcoin?: 1pm UK time, April 1st
🥕 Crafting a Vegan Portfolio: 6pm UK time, April 6th
🚀 The Rise Of The Retail Investor: 9pm Hong Kong time, April 6th
👀 How to Spot the Next Bitcoin: 12pm NYC time, April 7th
💵 The Surge In Digital Payments: 6pm UK time, April 8th
🍷 Investing in Wine and Whiskey: 6pm UK time, April 9th

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Finimize - 🧙‍♂️ Su shall not pass

Today's big stories

Dock Block

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Should You Dine Out On Deliveroo’s $12 Billion IPO?

What’s the best US brand in digital banking?

Shaving Face

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Look beyond the stock market

🐮 Leave cows outta this

Older messages

😨 Tencent vs. China

💪 Hedge funds' new favorite trade

📉 Aramco can't get a break

🤫 Tesla is "way overhyped"

💰 Accenture's 1 trillion dollar breakthrough

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