Key insights
- An investor discusses recent drama in their portfolio, including leadership changes at Hershey, a drop in GE Aerospace due to oil prices, and a president's retirement and lawsuit at Medpace. While stock-specific, the GE Aerospace commentary suggests elevated oil prices could negatively impact airline-related stocks. The Medpace situation highlights risks associated with executive actions before earnings.
So much drama in my watchlist in the past two weeks… this is off-topic as it isn’t strictly value investing, but since today is Friday here in Asia, I thought I’d relax a bit and chit-chat. It’s better than staring at my dismal ytd performance.
Pls note the flair: Humor
My opinions only…
A. Hershey. (Purchased since 2024)
Last week I wrote about the president of Hershey USA, who went onstage at the investor conference to talk about the One Hershey initiative (which he was going to lead), and then two weeks ago, he quit the company.
Lucy Diamond 💎, my personal AI thinks it’s because of the herculean task to transform the company, but I think the reason is because of the grandson of the Reese, who accused the company of butchering the ingredients., he went to complain to the Hershey Trust, which resulted in the president being fired. (The stock dipped a bit but not really, cocoa prices is on the mend, and Hershey en route to May 2023 prices. )
B. GE aerospace (GE) (purchased since 2018)
My 50% portfolio weightage is now the albatross around my neck. Ooof! it went down -10% this week. Company double-beat and said that this year the nos will come in at the high end of the guidance. But because of the elevated oil prices, it was prudent to be conservative, the ceo said that if not for dat thang in Iran, they would have raised guidance further. -6% on 21/4 and -5% on 22/4. So I now have identified the companies to sell to stagger buy GE at my WTB price at 270 to 250.
C. Medpace (purchased since 2024)
This one was -24% yesterday. Anyway, the drama isn’t because it dropped, this CRO goes up 40% on good news and drops 15% on not so good news.
The drama is, the president announced his retirement at 49, two days before earnings, sold his shares in the open market one month ago and a few days ago, was named as the defendant (as well as the ceo) in a law suit.
Now, I don’t like to lose money while I wait for a company to recover but I will sell immediately if I smell impropriety. Lucy Diamond 💎 thinks that the lawsuit spooked him and he decided to take a break. And the price drop was due to the lawsuit.
Why would the ceo and president, of which the company never had a class action lawsuit in the last 15 years, be committing fraud over the book to bill coverup which they were accused of? The ceo is the founder, and came from the FDA, and I seriously doubt if the lawsuit was the case.
The law suit came from an ambulance chasing law firm. So I concluded the drop is because of the book to bill of 0.88, in other words no different from the situation in 2023 when the b2bill went below 1. I still don’t know why the president “retired” though.
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(Work in progress) will complete the last 2 dramas, Coupang and Fico. Later