What makes the market move?
Here’s a look at the stories behind October’s biggest rises and falls in the Spaceship Universe and Spaceship Earth portfolios in our Spaceship Voyager Monthly Flight Log: October 2024.
(Remember, these figures are from 1 October 2024 – 31 October 2024, are converted in Australian dollars and aren’t annualised. Markets move up and down, so stay tuned for part two of our report, with the stories behind October’s biggest falls.)
Spoiler alert:
Moving up 📈
- Lululemon (LULU): +22.32%
- Nuix (NXL): +18.90%
- ZIP Co (ZIP): +16.08% No news
- Life360 (360): +15.88%
- Block Inc (SQ2): +15.20%
Moving down 📉
- Enphase Energy (ENPH): -21.77%
- ASML Holding (ASML): -16.95%
- Roku (ROKU): -12.92%
- AMD (AMD): -12.89%
- First Solar (FSLR): -12.84%
Moving up
Lululemon Athletica Inc
Rose 22.32%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Lululemon stock go up?
Lululemon’s yearly stock chart looks like I do each time I go to yoga class: reluctant to come out of child’s pose.
But after a long year in savasana, the luxury athleisure brand has been showing signs of revival.
To date it’s been challenged by a few things:
- Baggy pants are in fashion now, which is at odds with Lululemon’s flagship yoga leggings line.
- Dupe culture, there have been more than 150m views of #lululemon dupes on TikTok. Lululemon has been fighting back, letting potential customers trade the knock offs for the real deal so they know the difference.
- It stopped releasing as many new colours and prints of its core lines, so shoppers had less options, which inspired less repeat business.
- It had to lower its profit forecast for FY25 – and the market never likes that.
But lately, it’s been saluting the sun.
- The company announced a partnership with the NHL in North America, so it’ll be selling merch for a whole bunch of ice hockey teams.
- It just released a short video with its ambassador Park Seo-Jun, a dreamboat who starred in The Marvels, Parasite, and Jinny’s Kitchen.
- It’s taking on – and succeeding in – the Chinese market, which is pretty rare for a Western brand. In its last earnings release it reported 34% increased revenue from China Mainland year on year.
You can watch ‘Stories of Growth’ here.
Fun fact (depending on your definition of fun) – Lululemon also has a collection of online workout videos you can access for free.
Nuix Ltd
Rose 18.90%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Nuix stock go up?
One word: AI. A key driver of results is their new product, Nuix Neo. With AI integration, Neo can quickly and accurately transform data into actionable insights, transforming and making sense of data for government agencies and corporations around the world.
When shady things happen, Nuix helps shine a light on them.
Shady thing #1: The Panama Papers
The Prime Minister of Iceland stepped down, the Prime Minister of Pakistan was implicated, gaoled, and then banned from being PM, and a bunch of Vladimir Putin’s pals were revealed and copped fallout fallout from the leak of 11.5 million documents, coordinated by 370 journalists in 100+ countries working together, that exposed offshore tax evasion of the prominent and powerful.
And they might’ve gotten away with it, too, if it weren’t for that pesky Australian forensic data company, Nuix.
The journalists used Nuix to interrogate the leaked data and it led to eventual recovery of more than $1 billion in fines and back taxes.
Shady thing #2: Crypto-related Cybercrime
A specialised cybercrime unit in the United Kingdom was having trouble making sense of the digital evidence it seized, which included cryptocurrency addresses and keys.
The trick was, it was hidden by sophisticated hackers in places like images, PCs, laptops, and cloud storage.
Who you gonna call? They reached out to Nuix.
Nuix built a special algorithm that helped recover the addresses and keys, and recover stolen currency from a global crime that stole 20 million pounds from thousands of victims worldwide.
Obviously they’ve got skills. And they had a cracker of an annual report, released on 19 August 2024, that absolutely blitzed it – the company reported statutory net profit had more than doubled year over year – causing the stock to go on a tear ever since.
Zip Co Ltd
Rose 16.08%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Zip stock go up?
Zip’s story is in the eye of the beholder. If, like us, you’ve been holding it since 2018, you’ve had a crash course in volatility – the stock crashed, and now it’s correcting its course.
In 2024, Zip’s been flying. It’s grown about 500% (from .62c on 2 January 2024, and closing at $3.02 at the time of writing on 4 November 2024) – though there’s still a way to go before it returns to all time highs.
Most recently, though, Zip announced some stellar results: its total transaction value grew 22.8% for the 1Q FY25 quarter, vs the same period last year. The company decreased its bad debt, and increased both its active customers and merchants. America has been the standout with revenue growing 45.6% showing accelerating growth.
And now there are even whispers it might return a dividend over the next few years.
Life360 Inc
Rose 15.88%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Life360 stock go up?
LIfe360 stock took a leap on this year’s leap day (29 February), when it reported plans to start advertising to its 61 million monthly active users globally. It was a good month for them – we reported on it at the time.
If you’ve been tracking the stock since then, you’d note a few key inflection points: such as joining the Nasdaq in June, reporting over 2 million global subscribers in August, partnering with ad providers including Google, and now joining the Russell 2000 and 3000, which tracks the largest 3000 companies by market cap, as well as those ranked from 1000-3000.
Joining the Russells 2-and-3000 is a big deal. It’s sort of like the S&P 500, but for smaller stocks. Benefits include more eyeballs on the stock, and that index funds that track the Russell 2000 or Russell 3000 have to buy into the stock. It’s also confidence building. To borrow a football analogy – Life360’s made it to the Championship. Next stops are the Premier and Champions League.
Block Inc
Rose 15.20%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Block stock go up?
Block got a bump when it announced a new partnership between its Cash App and Lyft. Lyft customers will be able to pay with the Cash App straight from the Lyft app. In just one quarter, Lyft reported more than 23 million riders, and a cut of those payments could be lucrative for Block.
Block’s got an enviable financial product suite. Alongside Cash App, it counts Square and AfterPay as its own – and it mobilised them to grow gross profit by 17% year on year, vs Q2 2023.
Moving down
Enphase Energy
Fell 21.77%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Enphase Energy stock go down?
Sometimes stock charts look like sunrises, and sometimes they look like sunsets.
While Enphase Energy is in the solar power industry, it’s been in its sunset era recently.
Widely seen as a market leader, Enphase recently reported its 3Q 2024 earnings and the main takeaway was that they’re making less money than last year, and their European sales have dropped. Additionally, a large US customer also announced bankruptcy, and while management believe other customers would pick up the business, once again investors were disappointed as a turnaround in the solar industry continues to be pushed out.
In response, the company’s been shipping more of its product from its US facilities, which gives them increased tax breaks. It’s also leaning more heavily on its home battery and software products.
ASML Holding
Fell 16.95%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did ASML Holding stock go down?
ASML reported its earnings and the main takeaway is that the company has lowered its expectations for how much money it thinks it will make in 2025.
It’s taking less orders for its products than expected. Last month, we kept you posted on how ASML was copping some geopolitical blowback. It’s been prevented from exporting some of its products to China, which has weakened its results. The semiconductor foundry industry has always been highly concentrated, and it is becoming even more so. Traditional players like Samsung and Intel are struggling to compete with Taiwan Semiconductor. ASML machines are expensive, and customers are finding it challenging to manage the necessary upgrades to their ASML equipment.
The implication of this is that investors who had based their investments on increased semiconductor production in foundries are now witnessing a decline in the number of customers. As a result, the company's expected profits are being impacted, as the pool of successful customers appears to be shrinking, though we believe the overall market demand will continue to grow.
Roku
Fell 12.92%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did Roku stock go down?
Roku’s another story of a stock with slower than expected sales.
Ultimately, Roku makes money from streaming. In its Q3 Earnings report, it reported increases in the number of households that are using its products to stream, and in the number of hours they’re spending streaming. This adds up to an increase in revenue – so much so that it’s had its first $1 billion quarter.
So why the dip?
Roku’s expecting to grow more slowly in Q4 than the market wanted. Similar to Netflix, Roku announced that it will no longer report streaming household numbers. The market interprets this as a signal of potential slowing growth. However, like Netflix, we believe that metrics such as revenue and user engagement (time spent) are more important, as the key factor is not just the number of users, but how much time they spend on the platform.
AMD
Fell 12.89%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did AMD stock go down?
Fun fact! AMD CEO Lisa Su is related to NVIDIA CEO Jensen Huang. High performance computing clearly runs in the family.
AMD hasn’t been experiencing NVIDIA’s rocketing highs, but it’s currently second to Intel in CPU market share, and it’s gaining on second place in GPU market share behind NVIDIA.
In October AMD revealed the next generation of its products at an event it called Advancing AI, and market response was underwhelming with some speculating it’s not doing enough to catch up to NVIDIA. It’s tough to compete with NVIDIA, but second place isn’t so bad.
First Solar
Fell 12.84%
(from 1-30 September 2024, converted in Australian dollars and not annualised.)
Why did First Solar stock go down?
First Solar is another solar stock affected by the sector’s downturn, with concerns about a potential reduction in tax credits if Trump returns to office. While tax credits may be reduced or removed, tariffs could be implemented to protect domestic U.S. producers. Additionally, First Solar has completely sold out production through to 2026 reducing some of our concerns. In late October it reported 3 Q 2024 results that underwhelmed the market. Nonetheless, for the solar industry, we tend to defer to this song of wisdom: “The sun will come out tomorrow.”
Some of our Spaceship Voyager portfolios invest in Lululemon, Nuix, Zip, LIfe360, Block, Enphase Energy, ASML Holding, Roku, AMD, and First Solar at the time of writing.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
