🗞️ 8 Hyper-Growers with High Insider Ownership

Happy Sunday!

This week we’re looking at Alphabet’s impressive quarter 📈, the potential slowdown in luxury spending 🛍️, and some of the fastest growing public companies with high insider ownership 📊.

Let’s dig in!

Earnings Roundup:

• ☁️ Alphabet (Google): Global search leader Alphabet, reported better than expected results for the 2nd quarter on Tuesday. The $2 trillion conglomerate grew its revenue 14% versus the same period a year ago and expanded operating margins from 29% to 32% over that time period.

  Alphabet’s strong growth was consistent across pretty much all of its divisions, but one segment stood out above the rest. Google Cloud crossed $10 billion in revenue for the quarter which was up 29% compared to a year ago, while also delivering more than $1 billion in operating income.

  Despite the strong numbers, shares of Alphabet dropped 8% this week after the management team stated that they plan to continue investing heavily in new initiatives like the self-driving division Waymo and training AI models.

• 🔈️ Spotify: The global leader in audio streaming Spotify, reported better than expected earnings on Tuesday. With total monthly active users rising 14% to 626 million and an increased focus on cost controls, Spotify has seen a rapid increase in its overall profit margins. This quarter Spotify reported a 12.9% free cash flow margin, which is quite the jump from last year’s figure of 0.35%.

  During the company’s conference call following the report, CEO Daniel Ek stated “Our focus may return to top-of-the-funnel user growth but in the near term, monetization remains our top priority.” Spotify’s stock closed up 9% this week.

• 👜 Moët Hennessy Louis Vuitton (LVMH): Concerns over a slowdown in luxury spending have been looming this quarter ever since Burberry Group reported -21% comp store sales, and the world’s largest luxury company LVMH, did little to quell those worries with its 2nd quarter report.

  LVMH, which is home to brands like Louis Vuitton, Dior, Fendi, and much more, reported a major slowdown in revenue growth. The company’s chief financial officer Jean Jacques cited Asia (which is LVMH’s largest market by revenue) as a particularly weak spot this quarter. Excluding Japan, revenue from Asia declined 14% versus the same period a year ago.

  LVMH’s stock declined by 4% this week.

• 🌯 Chipotle: Fast casual restaurant chain Chipotle reported 2nd quarter earnings on Wednesday that surpassed expectations across the board. The Mexican cuisine chain delivered 11% comp store sales growth making it the company’s 16th consecutive quarter of 5%+ comp store sales increases. In addition to the strong top-line growth, Chipotle expanded its overall operating profit margins from 17.2% last year to 19.7% this quarter.

  During the conference call following the report, CEO Brian Niccol addressed the concerns around decreasing portion sizes stating “I want to take a minute to address the portion concerns that have been brought up in social media. First, there was never a directive to provide less to our customers. Generous Portions is a core brand equity of Chipotle. It always has been & it always will be.”

• 🚗 Tesla: America’s leading EV manufacturer reported mixed results on Tuesday. While revenue of $18.5 billion surpassed expectations, earnings came in slightly below Wall Street’s estimates.

  Tesla, which has been forced to reduce prices on its vehicles over the last year, continues to see declines in its automotive revenue. However, with most investors focused on the potential upside of Tesla’s self-driving technology, Tesla’s valuation remains elevated relative to other automotive companies even after the 10% drop this week. 

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8 Hypergrowth Companies with High Insider Ownership

1.) Hims & Hers Health

Hims & Hers operates a telehealth platform that connects consumers with healthcare professionals and offers a range of health & wellness products that are available for purchase across its website and mobile app.

5-yr Revenue CAGR: 101%

• Insider Ownership: 13.9%

• Insider voting power: 89.4%

2.) AppLovin 

AppLovin is a software-based platform for mobile app developers that helps them enhance their marketing and monetization of apps.

5-yr Revenue CAGR: 46.7%

• Insider Ownership: 38.4%

• Insider voting power: 80.8%

3.) Duolingo

Duolingo provides a language-learning website and mobile app that offers lessons on more than 40 different languages.

3-yr Revenue CAGR: 45.6%

• Insider Ownership: 15%

• Insider voting power: 77%

4.) Coupang

Coupang is the largest e-commerce company in South Korea. 99% of all orders made on Coupang are delivered in 1 day or less.

5-yr Revenue CAGR: 43.2%

• Insider Ownership: 10%

• Total Insider voting power: 77.3%

5.) Fiverr

Fiverr operates a global freelance marketplace that lets sellers across 550 different categories list their services.

5-yr Revenue CAGR: 34.8%

• Insider Ownership: 12.6%

• Insider voting power: 21.6%

6.) Palantir

Palantir provides data fusion platforms that help facilitate machine-assisted and human-driven data analysis. More than 50% of Palantir’s revenue comes from the US and allied governments.

5-yr Revenue CAGR: 30.2%

• Insider Ownership: 13.5%

• Total Insider voting power: 50.4%

7.) Paylocity

Paylocity offers cloud-based human capital management and payroll software solutions for workforces in the US.

5-yr Revenue CAGR: 25%

• Insider Ownership: 20.7%

• Insider voting power: 20.7%

8.) Robinhood Markets

Robinhood provides a financial services platform that allows users to invest in stocks, exchange-traded funds (ETFs), options, gold, & cryptocurrencies.

3-yr Revenue CAGR: 14.7%

• Insider Ownership: 14.7%

• Insider voting power: 64.8%

Meme of the week

CrowdStrike CEO after causing billions of dollars in damages from a faulty update

Many companies around the world are still dealing with the repercussions of last week’s IT outage, which was caused by a faulty product update from cloud security company Crowdstrike.

Major airlines such as Delta have seen cancelled flights, lost luggage, customer reimbursements, and ultimately lost revenue as they continue to grapple with the fallout from this outage.

Well, on Tuesday, in an attempt to appease these disgruntles customers, Crowdstrike sent an apology email which included a whopping $10 credit to UberEats.

Shockingly, this attempt at conciliation seems to have fallen on deaf ears as customers likely view it as too little, too late.