Nov 10, 2023
As the third quarter earnings season comes to a close, we elected to add to some of our highest conviction holdings including Amazon (AMZN), Meta Platforms (META), T-Mobile (TMUS), and Uber Technologies (UBER). We also elected to trim TransDigm (TDG) following its exceptional earnings on Thursday morning.
Let’s dive in.
The near-term outlook for Amazon (AMZN) looks strong as AWS growth is poised to accelerate, retail margins are well positioned for continued expansion, and incremental growth drivers such as advertising present opportunities to push margins even higher. We’re bullish on the fundamental set up for 2024 and elected to add with conviction.
Meta Platforms (META) reported promising engagement trends with strong growth from Reels and Click-to-messaging. Perhaps most importantly, Meta is committed to maintaining its cost cutting initiatives as Zuckerberg and Co. plan to extend the ‘year of efficiency’ into multiple ‘year(s) of efficiency’. We added to Meta’s lean machine and we’re optimistic heading into 2024.
The free cash flow machine is rolling at T-Mobile (TMUS) as the company continues to gain market share with momentum in both enterprises and rural areas. Despite an intensely competitive environment, post-paid phone net-adds (new paying subscribers) smashed expectations and we used the opportunity to add after earnings.
Uber Technologies (UBER) printed solid results as gross bookings accelerated in the quarter. The combination of a potential capital returns program and possible inclusion in the S&P 500 (following positive GAAP earnings on a trailing twelve month basis) creates a positive near-term set up for the stock. Despite trading at 52-week highs, we added ~1% to the gig economy giant.
TransDigm (TDG) has organically become one of our largest holdings in Flagship (~8%) and we elected to trim the stock for risk management purposes. We were fortunate to be trimming into extreme strength after a blockbuster earnings report on Thursday morning.
The results of the trades increase our net exposure to ~90% and reduce our strategic cash to only ~10%. We have reason to be increasingly optimistic as we head into year-end and our positioning reflects that view. As always, let us know if you have any questions about the recent trades; we’re happy to assist.
– Your Titan Team
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