PRISM MarketView Commends US Military and Showcases Patriotic Stock Plays in Honor of Memorial Day Weekend
As Memorial Day weekend approaches, we must remember and honor those who have served and sacrificed for our country. We thank those who have dedicated their time and/or life to protecting our freedom.
On a lighter note, this weekend is also the second most wonderful time of the year, as in part, it marks the official start to summer. Outside of the fact kids are allowed to be everywhere at any time of the day, how could you not like it? Summer includes warmer temps, more opportunities for ice cream, and rooftops are once again the new hangout. However, before we start to bask in all the sunshine glory this weekend, we’ve also kept patriotism in mind. PRISM consulted Uncle Sam to determine what companies he is planning to invest in on this holiday. If you can play these picks right, “We Want You” to avoid the sounds of kids screaming as the ice cream man rings his bell incessantly and instead find yourself attending a yacht party.
I’m On a Boat…
Everyone really has two fun options to celebrate the start to summer, you can either be on a boat or at a pool party. Cooler people make it to the boat while the “almost cool” people attend the pool party. The rest make excuses as to why they are not at either. Uncle Sam intends to be on the Ocean Force One yacht this weekend. We’ve suggested removing the top hat to lessen the tan lines.
In its earnings release last month, the boat and yacht retailer, MarineMax, Inc. (HZO) reported disappointing Q2 financials with EPS of $0.18 vs FactSet $0.66 and revenues that also fell below consensus by ~$8M. Its FY guidance followed the dismal report, lowering EPS to $2.20-$3.20 vs prior $3.20 – $3.70. The company cited a challenging market environment that is industrywide as boat registrations declined more than anticipated. Softness in the marine market is likely driven by macroeconomic factors due to interest rates and ongoing inflation.
The Dog Days of Summer
Whether you make it on the boat, or your lack of coolness has you attending “the backyard barbeque”, Uncle Sam thinks it’s important to ingest only All-American foods. Therefore, hamburgers and hotdogs must be included on your weekend menu. Just please do not put ketchup on your hotdog.
Hailing from the Windy City, Portillos, Inc. (PTLO) recently announced its Q1 financial results that slightly exceeded EPS estimates but came in below on revenue for the quarter by ~$10M. FY24 guidance was reiterated. The company is working to increase its drive -thru speed and cited its 2023 store openings, while still in the early stages, are performing at or above expectations. Its catering and third-party services remain strong. Even if hotdogs aren’t your thing, don’t sleep on the Italian beef sandwich.
Wake Up and Smell Patriotism
As it relates to beverages, Uncle Sam will be drinking ice cold beer. He prefers a nice lager, like a tall Sam Adams. However, let it be known that some wines are made in California or Washington so, we’re here also to support our country “beverage-wise” this weekend (and every other).
For those looking to be less boozy but want to still support our troops and country, Uncle Sam seeks a nice cold brew from Black Rifle Coffee Company, a veteran-owned business. BRC, Inc. (BRCC) recently announced its first quarter earnings sending shares up over 25% upon the release. The company’s quarterly adjusted EBITDA came in smoking hot at $14.1M vs FactSet $1.7M. BRC increased its 2024 guidance on adjusted EBITDA of $32M to $42M. Additionally, announced was a new partnership with Keurig Dr Pepper for K-Cup pod manufacturing and distribution.
Home of the Braves
The only other weekend activity outside of a boat or pool shindig that will still allow you to “sit at the cool kids table” is attending a baseball game. Honestly, singing the national anthem while eating a hotdog with a beer in hand as you watch America’s Past Time doesn’t get anymore Memorial Day celebratory than that.
If he hadn’t already committed to the yacht party, Uncle Sam would be at an Atlanta Braves game. Atlanta Braves Holdings, Inc. (BATRA) reported Q1 financial results that missed on EPS ($0.83) vs FactSet ($0.65). However, revenue grew from broadcasting and increased away games. Strong demand was cited as game day attendance experienced multiple sellouts and the company feels it’s poised for another successful year. On the flipside, uncertainties exist around Diamond Spots and increased payroll investments contributed to higher operating costs.
While Uncle Sam counts his Benjamins from his patriotic picks, it is important to remember no matter how you celebrate this holiday weekend, be thankful to have the opportunity to celebrate it, as freedom isn’t free. Thank you to all the men and women who have served and sacrificed. PRISM hopes everyone has a wonderful and Happy Memorial Day weekend!
