Building on Block (SQ) and Uber (UBER)

On Wednesday, we added to Uber (UBER) and Block (SQ), while trimming Alcon (ALC) and Mastercard (MA) on behalf of members in our Flagship strategy.

Let’s dive in.

Adding to Uber

Uber (UBER) reported solid third-quarter results with beats on revenue and earnings, as well as continued traction across several idiosyncratic growth initiatives. Despite the strong print, Uber shares came under pressure due to scrutiny surrounding two factors: (i) Decelerating growth in its ride-hailing segment, and (ii) Conservative guidance into year-end (driven by temporary impacts of recent hurricanes).

We believe the selloff following Uber’s results depicts a textbook case of short-term trading decisions overshadowing the strong underlying fundamentals of the business. 

Our constructive view on Uber’s dominant market position in two secular growth industries (technology and mobility) and its potential for capital returns remain intact. We seized the opportunity to increase our position in Uber at compelling prices given we maintain confidence in management’s ability to execute going forward.

Building Block(s)

Back in April of 2024, we initiated a ‘starter’ position of ~2.5% in Block (SQ). After their October earnings print revealed that our sign posts are tracking nicely, we elected to add to the position to make it a core holding.

Despite its recent run, we believe that a Republican-led administration focused on pro-growth policies and de-regulation could present a strong setup for the company in the coming 12-24 months. With the election results behind us, we’ve added to Block because we believe regulatory tailwinds and a strong growth profile support its ability to execute on its ‘Rule of 40’ targets by 2026.

Taking Profits

After a strong +35% rally over the past twelve months, we’ve trimmed our position in Mastercard (MA) and repositioned our financials exposure to align with the changing regulatory landscape. We also trimmed Alcon (ALC) after its return potential became less compelling and allocated the proceeds into higher conviction names across the portfolio. 

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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