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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of nearly 20,000 subscribers striving to be better investors with an edge in the market.

Every weekend we publish “The Weekly Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

Grab your coffee and let’s dive in.

Market Talk

It was green across the board for the major indexes, with both the S&P 500 and Dow Jones making new all-time highs again.

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3 Stories Moving the Market

These are some of the biggest stories from the second half of the week that had an influence on market action.

Netflix's Subscriber Growth Is Slowing, but Its Profit and Stock Price Are Still Surging

Netflix ended September with 282.7 million subscribers, significantly more than any other streaming service.

In its earnings release on Thursday, the company reported a profit of $2.36 billion, or $5.40 per share, marking a 41% increase from the previous year. Revenue grew 15% year-over-year to $9.82 billion, with management expecting the same growth rate in the fourth quarter, slightly exceeding analyst expectations.

However, Netflix’s recent subscriber growth was the slowest in over a year, signaling a shift after benefiting from its crackdown on password sharing. Since implementing this policy, Netflix added 57 million subscribers from June 2022 through June 2023.

The company also saw gains from its ad-supported service, which has started contributing to revenue, though it remains a small portion. Netflix is now focusing more on its advertising segment to further drive profits.

Netflix also announced earlier in the year that it will no longer report quarterly membership numbers starting in Q1 2025.

CVS replaces CEO Karen Lynch with exec David Joyner as profits, share price suffers

CVS Health replaced its CEO as it warned of another earnings shortfall, causing shares to drop 7%.

David Joyner has taken over as chief executive, replacing Karen Lynch, as the company faces ongoing challenges, including higher medical costs impacting its Aetna insurance unit and weaker consumer spending in its retail pharmacy business.

CVS had previously lowered its full-year profit outlook for three consecutive quarters and announced $2 billion in cost cuts. For Q3, CVS now expects adjusted earnings of $1.05 to $1.10 per share, with higher-than-expected medical costs.

The company will report its Q3 earnings on November 6.

Meta is laying off employees at WhatsApp, Instagram, and more

Meta has begun a new round of layoffs affecting various departments, including WhatsApp, Instagram, and Reality Labs.

These cuts appear to be smaller and more targeted, coinciding with team reorganizations rather than a large companywide layoff.

According to a company spokesperson, the changes are part of Meta's strategy to align resources with long-term goals, with efforts to find new roles for impacted employees.

This follows earlier layoffs in Reality Labs and larger cuts in 2022 and 2023, as Meta continues its "year of efficiency" under CEO Mark Zuckerberg.

In Other News

In this section, we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• TSMC Stock Soars On Earnings Beat. Two Sectors Are Driving Demand

• Netflix shares jump 10% after third-quarter earnings beat

• Procter & Gamble earnings beat estimates, but weak demand in China hurts sales

• Uber has discussed a bid for travel booking company Expedia

• American Express profit rises in Q3 as card members continue to spend

• Gold Tops $2,700 for First Time to Extend Record-Breaking Run

• Retail sales post solid gain in September, showing a continued strong economy

• Spirit AeroSystems to furlough 700 workers as Boeing machinist strike continues

• US Housing Starts Ease on Decline in Multifamily Construction

IE+ Posts of the Week

We continue to push out more and more content every week to give investors that edge. Here are the posts Investor’s Edge+ subscribers received this week.

Edge Report

Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even share a sneak peek into our systems and models. This week we discussed the upcoming earnings reports and how we were preparing for them. See the latest full report here:

Stock Deep Dive - Lam Research

Our Deep Dive focused on Lam Research this week. We not only broke down the financials of the world’s second largest technology company by revenue, but we also shared our valuation models, price targets for 2024, and put the stock through our new Edge Scoring System. You can see the full analysis here:

The Week Ahead

With the S&P 500 still trading right near all-time highs, the earnings reports in the week ahead have the potential to make or break the market.

Earnings Reports

It’s officially earnings season and next week is jam pack full of major earnings. Here is the list of names we will be covering next week:

• Monday 10/21: Alexandria Real Estate

• Tuesday 10/22: Verizon, Lockheed Martin, 3M, and General Motors

• Wednesday 10/23: Tesla, Coca-Cola, IBM, and Lam Research

• Thursday 10/24: Union Pacific, UPS, L3Harris, and Tractor Supply

• Friday 10/25: --

Here is the full calendar of scheduled earnings releases:

Economic Reports

Next week is on the quieter end in terms of economic reports, but there will be initial jobless claims, housing data, consumer sentiment, and a number of speeches from Fed members.

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Thank you for reading this edition of the Weekly Wrap-Up. Have a great weekend!

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.