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• CWS Market Review – April 12, 2022
  Eddy Elfenbein, April 12th, 2022 at 7:56 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Change That: Elon Musk Won’t Be on Twitter’s Board

  In last week’s issue, I discussed Elon Musk taking a large stake in Twitter and being invited to join its board. The stock soared 30% in one day which helped the richest man in the world become even wealthier. Musk agreed not to own more than 14.9% of the company.

  That story got an update this week. Twitter said that Mr. Musk will not join its board.

  What happened? We don’t know the precise details, but I’m assuming the lawyers had a long talk with Musk and explained that even he can’t do some things as a board member. A board member has a fiduciary obligation to act in the best interest of the shareholders.

  

  That could be a wee bit of a problem for someone like Elon. For example, Musk suggested turning Twitter’s San Francisco headquarters into a homeless shelter. Make of that what you will. Musk also suggested deleting the “w” from Twitter’s name. You can see how this kind of behavior might be…problematic.

  As a board member, Musk would be banned from trolling the company or from commenting on non-public information. This is hardly the first time that Musk’s tweets have gotten him in hot water.

  In 2018, Musk famously tweeted that Tesla had “secured” a buyout offer. For that, the SEC fined him $20 million. That would be like levying a fine of $10 on a person with a net worth of $140,000.

  Personally, I’m a big fan of Elon. I like the idea that there’s a multi-zillionaire who goes out and says whatever he likes. I also realize that a good part of Musk—say, 30%— is pure showman. He’s often closer to P.T. Barnum than he is Ford or Edison. Of course, those folks were part-showmen, too.

  There’s also an important angle to this in that the founders of Twitter never bothered to structure the company to prevent it from being taken over by activist investors. Alphabet, the parent company of Google, has different voting classes of stock which are designed to prevent someone on the outside from taking over the company. Facebook has also prevented itself from being easily pushed around.

  All in all, I don’t like these dual-class structures. The argument used to be made that it could be important for some companies, such as newspapers, that needed to be protected from outside shareholders. Years ago, some companies viewed themselves as guardians of the public trust. Naïve? Probably, but they believed it. I suppose there’s an argument to be made for dual classes, but I’d much rather see regular shareholders treated best.

  There’s perhaps some irony in that Elon Musk can probably best serve shareholders off the board and make his feelings known without restrictions. How else? Via Twitter.

  Inflation Jumps to Highest Since 1981

  We had another inflation report this morning and it was a doozy. I’ve become used to saying that inflation has soared to its highest level since 1982. That’s now changed. Thanks to the March inflation report, we can now say that inflation is at its highest level since December 1981.

  The report said that last month, headline inflation rose by 1.24%. That brought the 12-month rate to 8.56%. At the current rate of inflation, for a $1 million portfolio, inflation eats up $85,575 per year. For the Dow Jones Industrial Average, inflation gobbles up 3,000 points every year.

  Most disturbingly, at the current rate of inflation, if you’re paid in dollars, you effectively work one month of the year for free. That’s all due to inflation.

  Here’s a chart of headline inflation in blue and core inflation in red:

  

  The stock market responded by rallying more than 1.3% this morning. It later thought things over and decided that wasn’t a good idea. The market retreated for a daily loss of 0.34%. In the last 10 sessions, the S&P 500 has lost a little over 5%. The yield on the 10-year Treasury got all the way up to 2.77% today. Of course that’s still low, but it‘s a lot higher than where it was two years ago. The average 30-year mortgage rate is now up to 5.25%.

  You can see that inflation truly causes chaos for an economy. Here’s a quote to ponder from John Maynard Keynes:

  By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but at confidence in the equity of the existing distribution of wealth.

  This morning’s inflation report was also noteworthy because it’s the first report to be impacted by the war in Ukraine. Energy prices were up 11% last month. Not annualized, but for the whole month.

  If there’s any consolation, it’s that core inflation appears to be far more modest. Last month, consumer prices excluding food and energy rose by just 0.32%. That’s really not so bad. Over the past year, core inflation is running at 6.44%. That’s the highest since August 1982, which happens to be the same month the stock market reached a generational low.

  This low core inflation number for March could be good news going forward. I say that very cautiously. The increase for March was the slowest of the last six months, and the fourth-slowest of the last 12 months. If we assume that the headline rate will eventually move towards the core rate, then our inflation problems could be over soon. That’s a lot to assume for now, but it’s worth taking note of.

  What’s also interesting is that the 2/10 Spread has backed off significantly over the past few days. On April 1, the two-year Treasury was yielding 0.05% more than the 10-year Treasury. That’s usually a signal of more Fed tightening and slower economic growth. Since then, the 2/10 Spread has turned positive. The 10-year now yields 0.33% more than the two-year. Perhaps the Fed doesn’t have a lot more work to do? Again, it’s too early to draw sweeping conclusions, but it’s not to be ignored.

  My Mistake with AmerisourceBergen

  We all learn from our mistakes including me. To quote Freddie, “bad mistakes, I’ve made a few.” I find it useful to go over my past errors and try to learn from what I did wrong.

  I made a big one this year. In January, I told you how I strongly considered adding AmerisourceBergen (ABC) to our Buy List, but ultimately, I decided to pass. The stock is up over 20% this year. Smooth move, Eddy!

  

  Here’s some of what I wrote:

  There’s a lot to like about AmerisourceBergen. If you’re not familiar with the company, ABC is a major drug wholesaler. The company was formed 20 years ago through the merger of Bergen Brunswig and AmeriSource. They also have units offering consulting services and veterinary supply.

  It’s a great business to be in. I especially like their smooth earnings line. This is an important characteristic in a successful company. Some businesses see their earnings bounce all around during a business cycle. Other stocks, by contrast, churn out steady increases. All things being equal, the market prefers the steady increases.

  The stock is literally ABC. How could I have passed?

  Frankly, it’s not the worst of errors to pass on a good stock. As investors, we should be very discerning. My mistake was not realizing how strongly the market would favor stocks with consistent earnings growth. I also didn’t fully realize how the company had addressed its legal issues.

  But first, here’s the yearly earnings for AmerisourceBergen:

  2017: $5.62
  2018: $5.88
  2019: $6.49
  2020: $7.09
  2021: $7.90
  2021: $9.26
  2022: $10.80 (est.)
  2023: $11.60 (est.)
  2024: $12.45 (est.)

  Those numbers are exactly what we’re looking for. Steady upwards growth. But numbers don’t tell you everything.

  While AmerisourceBergen appeared to be inexpensive based on conventional valuations, I was put off by its legal risks for its role in the opioid epidemic. Over a 20-year period, nearly half a million Americans died from opioid addiction.

  Last July, AmerisourceBergen and two other drug companies, Cardinal Health and McKesson, reached a major settlement with several state governments. The deal calls for the drug companies to pay $21 billion over the next 18 years. ABC’s portion comes to $6.4 billion. The deal is intended to address, in one big action, more than 3,000 lawsuits. None of the companies has admitted to any wrongdoing.

  I’m still not certain if that ends the matter for ABC. So far this year, the stock market appears to be greatly relieved. That’s a decision I felt I couldn’t adequately make in January. Investing is about predicting the future. Instead, it’s about weighing the risks and potential benefits.

  The other lesson with investing is to not beat yourself up for “the one the got away.” Chasing it is not the answer. Instead, be patient and wait for the next chance. There’s no game clock with investing. We can pass on as many stocks as we like.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

  P.S. Q1 earnings season starts soon, and this looks to be another good season for us. Don’t forget to sign up for our premium newsletter.

• Morning News: April 12, 2022
  Eddy Elfenbein, April 12th, 2022 at 7:07 am

  China Sets Aside Push to Spread Wealth in Pivotal Year for Xi

  Moscow’s Central Banker Dismantles What She Built

  Here’s How Much It Is Costing Companies to Leave Russia

  Rocketing Prices Test Europe’s Political Resolve in Confrontation With Russia

  Inflation Seen Nearing New Four-Decade High in March

  Treasury Yield Surge to Threaten Bull Run’s Last Resistance Line

  SPAC Trades May Have Made as Much as 888% Profit—Now, Some Are Drawing SEC Scrutiny

  ‘Staggering’ Crypto Seizures Have Cops Struggling to Keep Up

  Elon Musk, Again an Outsider at Twitter, Emerges as Unshackled Wild Card for Company

  Etsy Sellers Strike as Site Ramps Up to Battle Amazon

  Pandemic Jet Deals in Spotlight as Airbus Axes Russia Delivery

  Digital Ad Revenue Jumped 35% in the U.S. Last Year, Biggest Gain Since 2006

  The Clean-Power Megaproject Held Hostage by a Ranch and a Bird

  Goldman Women Pick Big Lawsuit Over Arbitration But Many Abstain

  Unraveling a High-Rise Horror Story

  Be sure to follow me on Twitter.

• Musk Will Not Be Joining Twitter’s Board
  Eddy Elfenbein, April 11th, 2022 at 10:55 am

  The stock market is down again today. This could be our fourth down day in the last five sessions. At the time I’m writing this, the S&P 500 is off by 1.03%. Tech stocks are especially weak, but the Russell 2000 is barely positive. Among the different sectors, financials and industrials are both positive.

  The surprising move is in the bond market. The 10-year yield is now up to 2.75%. In July 2020, it was yielding just 0.55%.

  We’re starting to get earnings dates for the upcoming earnings season. The reports will start coming out around April 20. Between then and mid-May, 21 of our 25 Buy List stocks are due to report.

  The big news this morning is that Elon Musk will not be joining the board of Twitter. If I had to guess, I’d say the lawyers had a chat with him and told him that as a board member, his public comments would be under a microscope. Even Elon Musk won’t take on the SEC. Twitter’s stock is up so he’s making money from the news.

• Morning News: April 11, 2022
  Eddy Elfenbein, April 11th, 2022 at 7:09 am

  Treasuries Slump Ignites Global Selloff as Rate Hikes Gain Focus

  Recession Risk Is Rising, Economists Say

  Fed to Raise Rates Aggressively In Coming Months, Say Economists

  Tech Rout Could Drag Bitcoin to $30,000, BitMEX Founder Says

  Crypto Industry Helps Write, and Pass, Its Own Agenda in State Capitols

  How Sotheby’s Combined NFTs And A Netflix Attitude In A Wild Bid To Be Crypto Cool

  Big Banks Set to Post Weaker Deal Revenue Amid Ukraine Chaos

  After Many Western Companies Fled Ukraine, a Holdout Adapts to Wartime

  Truck Makers Face a Tech Dilemma: Batteries or Hydrogen?

  Gas Price Surge Fuels Fights at FedEx, Uber Over Who Will Pay

  Elon Musk’s Mysterious Investment In Twitter Is a Happy Rejection of Victimhood

  Musk Rejects Twitter’s Offer to Join Board in Surprise Twist

  Amazon’s Drone Delivery Program Is Hit by Crashes and Safety Concerns

  Harvard Endowment’s Debate Shows PE Funds’ China Struggle

  New Era Begins at Warner Bros., Tinged With Nostalgia

  Be sure to follow me on Twitter.

• Morning News: April 8, 2022
  Eddy Elfenbein, April 8th, 2022 at 7:01 am

  A $430 Billion Habit Got Japan’s Central Bank Hooked on ETFs

  Crypto-Like Digital Dollar at Least Several Years Away, Yellen Says

  Biden Plan to Combat Inflation with U.S. Manufacturing Faces Skepticism

  Thiel Blasts Dimon, Buffett and Fink as ‘Finance Gerontocracy’ at Bitcoin 2022

  Food Prices Jump Most on Record as War Sparks Supply Chaos

  Energy Funds Lead Again, but Ukraine War Makes Future Uncertain

  Staying the Course May Be the Key to Wartime Investing

  Brands That Just Can’t Quit Russia

  Facial Recognition Goes to War

  The Huge Endeavor to Produce a Tiny Microchip

  China’s Covid Lockdowns Hit Supplies to Companies Like Apple and Tesla

  Tesla Will Sell Its Long-Awaited Cybertruck Next Year, Elon Musk Says

  U.S. Bank Earnings to Decline in First Quarter

  How Greenwood Became the Most Hyped Startup in Black America

  Blue-Collar Workers Make the Leap to Tech Jobs, No College Degree Necessary

  Be sure to follow me on Twitter.

• Morning News: April 7, 2022
  Eddy Elfenbein, April 7th, 2022 at 7:09 am

  JPMorgan Says Be Ready for 40% Commodities Rally in Market Shift

  Russia Coal and Oil Paid for in Yuan Starts Heading to China

  Oil Major Shell to Write Off Up to $5 Billion in Assets After Exiting Russia

  Tesla-Backed Startup Made Cheap Power a Debt Burden for the World’s Poorest

  Yellen Says the Aim Is ‘Maximum Pain’ for Russia Without Hurting the U.S. Economy

  Fed Signals Faster Pace of Rate Increases, Likely Bond Runoff

  U.S. Solar Expansion Stalled by Rural Land-Use Protests

  U.S. Consumer Watchdog to Ramp Up Credit Card Enforcement, May Review Fee Caps

  Biden Extends Pause on Federal Student-Loan Payments Through August

  This Is the Red-Hot Center of the Tightest Job Market Since WWII

  Job Wars: Employers Wince as Amazon Warehouse Rises in Indiana Town

  Amazon Workers Who Won a Union Their Way Open Labor Leaders’ Eyes

  Twitter’s Edit Button Isn’t Just a Simple Fix. It Could Be a Mistake.

  Google Bans Apps with Hidden Data-Harvesting Software

  Buffett’s Berkshire Hathaway Adds New $4.2 Billion HP Stake

  How Many Billionaires Are There, Anyway?

  Be sure to follow me on Twitter.

• The Fed Wanted to Raise by 0.5%
  Eddy Elfenbein, April 6th, 2022 at 2:13 pm

  The minutes are out from the Federal Reserve’s last meeting. It turns out that the Fed wanted to raise interest rates by 50 basis points, but the war in Ukraine changed their minds. If I were a cynical person, I’d say that was a very convenient excuse.

  Many participants noted that—with inflation well above the Committee’s objective, inflationary risks to the upside, and the federal funds rate well below participants’ estimates of its longer-run level—they would have preferred a 50 basis point increase in the target range for the federal funds rate at this meeting. A number of these participants indicated, however, that, in light of greater near-term uncertainty associated with Russia’s invasion of Ukraine, they judged that a 25 basis point increase would be appropriate at this meeting. Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified. A number of participants noted that the Committee’s previous communications had already contributed to a tightening of financial conditions, as evident in the notable increase in longer-term interest rates over recent months.

  This seems clear to me that the Fed wants to go 50 at the next three meetings, at least.

• Morning News: April 6, 2022
  Eddy Elfenbein, April 6th, 2022 at 3:56 am

  Why Tracking Putin’s Wealth Is So Difficult

  Oil Fluctuates as EU Avoids Immediate Sanctions on Russia Crude

  U.S. Wants More Oil from Canada but Not a New Pipeline to Bring It

  Yellen to Warn of ‘Enormous Economic Repercussions’ from Ukraine Invasion

  Fed Minutes to Reveal Long-Awaited Details on Balance-Sheet Plan

  Fed’s Brainard Says Reducing Elevated Inflation ‘Is of Paramount Importance’

  Deutsche Bank Is the First Big Bank to Forecast a U.S. Recession

  Pfizer’s $5 Billion Bill for Covid Pills to Take Big Bite from New Pandemic Funds

  Copper Leader Congo’s Addition to Trading Bloc Lures Ecobank

  JetBlue Offers to Buy Spirit in All-Cash Deal

  Starbucks’s Schultz, Back as CEO, Prioritizes Baristas Over Stock Price

  Instacart Faces Turbulence After Pandemic Boom in Grocery Delivery

  Trucking Companies Train You on the Job. Just Don’t Try to Quit

  Fast, The Easy Checkout Startup, Shuts Down After Burning Through Investors’ Money

  Resorts from the Maldives to Cuba Miss Their Russian Tourists

  Be sure to follow me on Twitter.

• CWS Market Review – April 5, 2022
  Eddy Elfenbein, April 5th, 2022 at 9:09 pm

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  Elon Musk Buys a Big Stake in Twitter

  Earlier this week, Elon Musk announced that he had taken a 9.2% stake in Twitter (TWTR). According to SEC rules, you have to make your positions public if you buy more than 5% of a publicly-traded company. The market was euphoric. On Monday, shares of Twitter rallied nearly 30%.

  

  Thanks to his big buy, Musk was given a seat on Twitter’s board of directors. That triggers another SEC rule. Musk can’t be the owner of more than 14.9% of Twitter’s stock until after his term on the board ends which is in 2024. Basically, that means that we shouldn’t expect Musk to bite off many more large pieces of Twitter.

  Musk’s stake in Twitter may sound like a lot, but it’s “only” $3 billion. That’s pocket change for Musk. With a fortune of $267 billion, Musk is the wealthiest man in the world.

  With Monday’s big rally, Musk is already sitting on a nice profit. In this case, the market’s reaction may be more than idle speculation. Don’t expect Musk to be a silent investor. Musk has talked about making changes to the social media site. He has criticized its willingness to ban some well-known individuals while going light on others. Musk even polled his followers to ascertain the popularity of an edit function. (Yep, it’s very popular.)

  With this investment, there’s an odd dynamic at work. A mega-billionaire can quietly buy a stock and then make the news public and watch the market send the investment much higher. Of course, there aren’t many people who can move the market like that. Maybe Warren Buffett is the only other.

  In the past, Musk has hinted that he may want to start a rival to Twitter. I suppose he thought buying the thing was the easiest path. Having a quarter of a trillion dollars opens some options.

  I should say that in a strict numbers sense, Twitter is not a very profitable company. Last year, the company made a profit of 20 cents per share. The shares are currently around $51, which gives the stock a P/E ratio of roughly 250. That’s about 15 times what a normal company would go for.

  Of course, Twitter is not a normal company. This gets to the heart of a matter that’s very difficult for securities analysis: how do you value a relatively new company that’s growing quickly but is not very profitable? Nonconventional businesses should be looked at in nonconventional ways. Personally, I avoid such stocks. It’s not that I’m not a fan of the companies, but I simply can’t see which stock will emerge as the winner.

  If you had gone into a brokerage firm 40 years ago and boldly announced, “Computers are the future! That’s where I want to invest!,” the firm most likely would have recommended stocks like Wang and DEC. Probably IBM. Maybe Apple, but that would have been the oddball choice.

  My point is that even if your thesis was correct and computers had indeed been the future, finding the winners would have been very difficult. There used to be 400 domestic automakers in the U.S., but it wasn’t long before the industry became known as the Big Three.

  I think there’s great potential for Twitter, but the current model isn’t working. If there’s anyone who has the pull to make a big winner out of Twitter, it’s Musk. I wish him well.

  Get Ready for Three Straight 0.5% Hikes

  Tomorrow, the Federal Reserve will release the minutes from their last meeting. Of course, this was the meeting in which the Fed decided to raise interest rates for the first time since 2019.

  My view is that the Fed is way behind the curve and it needs to be far more aggressive in fighting inflation. I’m not alone. James Bullard, the top guy at the St. Louis Fed, agrees. He cast the lone dissenting vote at the last meeting.

  I have to explain something about the Fed’s minutes. They never use specific names. Instead, it’s an amazing study in the use of indefinite pronouns. “Some” said this. “Several” agreed that. “Few” countered with this.

  The minutes can be difficult to decipher, but I want to see how worried the members are about inflation. The minutes are usually released three weeks after the Fed meeting. The next meeting will be in in four weeks.

  For now, the futures market expects to see a 0.5% increase in May, another 0.5% increase in June and another 0.5% increase in July. That’s more aggressive than the Fed has been signaling.

  

  On Friday, the government released the March jobs report. During the month, the U.S. economy created 431,000 net new jobs. That’s another good report. Wall Street had been expecting 490,000. The numbers for January and February were revised higher as well.

  The unemployment rate fell to 3.6%. That’s another post-Covid low. It’s also lower than every single month from January 1970 through August 2019 (see chart above).

  The broader U-6 rate fell to 6.9%. That’s just 0.1% above the all-time low from 2019, although that series only goes back to 1994.

  One weak spot is that average hourly earnings grew by just 0.4%. In the last year, average hourly earnings are up 5.6% which is less than inflation. The next inflation report will be out next week. This report will also be the first one to feel the effects of the war in Ukraine.

  Lael Brainard, who is President Biden’s pick to be the next vice-chair of the Fed, spoke today about the impact of inflation. She underscored an important point that inflation weighs heavily on lower-income consumers. She gave the example of a family that regularly buys a brand-name cereal. When inflation hits, they can easily go to store-brand cereal. But a low-income family that already buys the store-brand can’t make that switch. When inflation is running at 8%, it’s not 8% for everyone.

  Speaking of finding a good bargain, let’s look at a retailer that’s thriving in the Age of Amazon.

  Stock Focus: Five Below

  In recent years we’ve heard a lot about the great “Retail Apocalypse,” and it’s true that Amazon has changed the game permanently for a lot of retailers. We’ve also seen the death spirals of once-mighty retailers like JC Penney and Sears and many others.

  But not everyone is being done in by Bezos and his ubiquitous retail machine. One standout is the quirky Five Below (FIVE).

  There’s something so elementary about Five Below that makes it brilliant. The concept is simple: They don’t sell anything for more than $5.

  The store is specifically geared toward teens and pre-teens. Their tagline says it all: “hot stuff, cool prices.” Five Belows are also purposely located in strip malls. That helps keep the rent down.

  They’ve hit onto something big. The company was founded in 2002 by David Schlessinger and Tom Vellios. These were the guys behind Zany Brainy.

  

  The stock IPO’d ten years ago. Today, there are over 1,200 stores across 40 states. The company has very ambitious plans for growth. Five Below aims to triple its number of stores by end of fiscal 2030.

  So what is it, exactly, that they sell? You name it. As long as it’s less than $5. They sell things like toys and games, or cheap accessories. A lot of it is tacky. A lot of it is silly. But it’s all well-planned.

  Are you in the market for an inflatable furry ottoman? Well, Five Below has got you covered. A pink duffel bag? Yep, they’ve got that too.

  The items aren’t supposed to be important. Instead, they’re supposed to fun impulse buys, but that’s the secret that sets them apart from Amazon. What Five Below shoppers like is the “treasure hunt” experience. A group of friends will spend time digging through their shelves. This is something Amazon can’t recreate online. By the way, the stores do have sections for $10 items.

  Five Below knows their customers. They don’t come in looking for the item they’ll eventually buy. They want to spend time combing through dozens of items before selecting a final few. As odd as it may sound, they come for the Five Below experience.

  Apparently, there’s a lot of business in $5 items. For the fiscal year ended in February, Five Below had sales of $2.85 billion. (That’s a lot of stuffed neon green hippos.) That’s also a 45% increase over the year before.

  Silly stuff is serious business. Gross margins currently run around 36% which is quite good for a low-cost retailer. Operating margins are 12% and net margin comes in at just under 10%. That’s an efficient shop.

  This is no small business either. Five Below currently has a market value of more than $9 billion and it’s a member of the S&P 400 Mid-Cap Index. The CEO summed it up perfectly: “We’re the T.J. Maxx for kids.”

  Here’s what else I like. Five Below has a solid balance sheet. The firm doesn’t owe a dime in long-term debt. Make no mistake, the company got hit hard by the coronavirus lockdown. In June 2021, Five Below reported a fiscal Q1 loss of 91 cents per share.

  That hurt but things are looking much better now. The gradual passing of Covid is also very good news for Five Below. Last week, Five Below reported fiscal Q4 earnings of $2.49 per share. That beat the Street by one penny per share. That was the seventh quarter in a row that Five Below beat the Street. For Q4, earnings grew by 13.2%. In times of inflation, consumers become more price sensitive which is good for Five Below.

  Joel Anderson, President and CEO of Five Below, stated, “We were very pleased with our fourth quarter results that capped off a record year. We delivered sales growth in line with our expectations against the difficult comparison to last year’s stimulus-fueled comparable sales increase of 13.8%, and despite the impact of weather in January. The strength was broad-based, with Sports, Candy, Seasonal and Style worlds outperforming.”

  Let’s look at guidance. For fiscal Q1, Five Below expects sales between $644 million and $658 million, and earnings between 54 and 62 cents per share. For the whole year, Five Below sees sales ranging between $3.16 billion and $3.26 billion, and earnings between $5.19 and $5.70 per share. That’s up from $4.95 per share last year. Frankly, the guidance is a bit lower than I expected.

  Last summer, share of Five Below got $237. The stock has drifted lower since then. On Tuesday, it closed at $165.74 per share. That’s still a little high for me, but I’d be interested if Five Below goes below $140 per share. This off-beat retailer is one to watch.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: April 5, 2022
  Eddy Elfenbein, April 5th, 2022 at 7:02 am

  EU to Propose Banning Russian Coal Imports After Atrocities

  How the Recoil From Russian Gas Is Scrambling World Markets

  Ukraine War Drives Countries to Embrace Renewable Energy—but Not Yet

  The $120 Billion Global Grain Trade Is Being Redrawn by Russia’s War in Ukraine

  Russian Auto Boomtown Grinds to Halt Over Ukraine Sanctions

  ‘Russia Is Half of Our Business.’ Or It Was.

  Treasury Stops Russia from Paying Debt Through U.S. Accounts

  The U.S. Economy Is Booming. So Why Are Economists Worrying About a Recession?

  Eyes on Inflation, Shoppers Cut Back on Staples

  As Global Economy Wavers, Even the Rich May Spend Less

  Manhattan Residential Real Estate Sales Hit A Record $7.3 Billion In The First Quarter

  Rags-to-Riches Stories Are Actually Kind of Disturbing

  He Quietly Turned Bank of America Around. Can He Do More?

  FTX US Invests in ‘Flash Boys’ Exchange in Crypto-Trading Push

  German Police Shut Down $1.3 Billion Illegal Darknet Firm

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