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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 15,000 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

The S&P 500, Dow Jones, and Nasdaq all closed the week at record highs following a promising CPI report suggesting that inflation may not be as concerning as previously anticipated.

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.

Amazon, Walmart aim to retain lower-income shoppers amid luxury push

Amazon and Walmart are both targeting high-income consumers while striving to retain their lower-income customers.

Amazon introduced Amazon Access, a platform aimed at making shopping easier and more affordable for lower-income shoppers. This initiative consolidates various programs and features such as SNAP EBT integration, Amazon Layaway, and discounted Prime memberships for qualifying government assistance recipients.

Walmart is testing a strategy called Walmarche, which features a new merchandise mix and upscale displays to attract higher-income shoppers. 

However, former Walmart U.S. CEO Bill Simon cautions that affluent shoppers, who turned to Walmart due to economic pressures like food inflation, might return to premium retailers as economic conditions improve.

Walmart CEO Doug McMillon believes that the company can retain these customers by continuing to offer both low prices and convenient services like pickup and delivery, regardless of economic fluctuations.

Buffett’s new mystery stock finally revealed

Warren Buffett's Berkshire Hathaway revealed its secret stock pick in its latest 13F filing: Chubb, a property and casualty insurance company. 

Berkshire purchased nearly 26 million shares, worth $6.7 billion, making Chubb its ninth largest holding at the end of March.

Berkshire, with a significant presence in the insurance industry, including Geico and General Re, kept this purchase confidential for two quarters, leading to speculation of what stock it could be. Many thought it might be a bank stock as the conglomerate’s cost basis for “banks, insurance, and finance” equity holdings jumped by $1.4 billion in the first quarter.

The last time Berkshire kept a purchase confidential was in 2020, with Chevron and Verizon.

📚 EDGE-UCATION: What is a 13F filing?

A 13F filing is a quarterly report that institutional investment managers in the United States with at least $100 million in assets under management must submit to the Securities and Exchange Commission (SEC). The form, officially known as Form 13F, discloses the investment manager's holdings in equity securities, including shares of companies, certain convertible debt securities, and options, as well as other types of securities specified by the SEC.

Here are some key points about 13F filings:

• Disclosure Requirements: Institutional investment managers must disclose their equity holdings, which provides transparency and insight into the investment strategies of major market participants.

• Timing: 13F filings are required to be submitted within 45 days after the end of each calendar quarter.

• Public Access: Once filed, 13F reports are made publicly available, allowing investors, analysts, and the general public to view the holdings of large investment managers.

• Purpose: The primary purpose of the 13F filing is to provide a window into the holdings and investment strategies of large institutional investors, contributing to market transparency and allowing other investors to gauge market trends and potential stock movements.

• Confidential Treatment: In certain circumstances, an investment manager can request confidential treatment from the SEC to withhold some or all of the information in a 13F filing to protect proprietary trading strategies.

Overall, 13F filings are an important regulatory requirement that helps maintain market transparency and provides valuable information to various market participants.

GameStop rally comes to an end after company files to sell additional stock and says first quarter sales dropped

GameStop shares dropped 25% on Friday after the company announced plans to sell up to 45 million additional shares and reported a decline in first-quarter sales.

Preliminary results indicate first-quarter sales will be between $872 million and $892 million, down from $1.24 billion the previous year, with a net loss expected between $27 million and $37 million. This contrasts with analysts' expectations of around $1 billion in revenue.

Despite a brief surge in stock prices earlier in the week to $64.83 per share, fueled partly by posts from "Roaring Kitty," the stock plummeted later, closing at $22.21 on Friday.

GameStop continues to struggle against e-commerce competitors and has recently implemented job cuts to reduce costs. Analysts predict ongoing losses, questioning the company's ability to grow revenues or profits as its core business declines.

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 inflation reports ahead and shared an options strategy to set up our portfolios for the huge week. See the latest full report here:

Stock Deep Dive - Amazon

Our Deep Dive focused on Amazon this week. We not only broke down the financials of the fifth largest company in the U.S. but we also shared our valuation models and price targets for 2024. You can see the full analysis here:

Earnings Recaps

Every week during earnings season we share a recap of the quarterly reports from stocks that we cover. You can see this week’s earnings recaps here:

The Week Ahead

Next week is all about inflation, the consumer and retail earnings.

Earnings Reports

Earnings season is winding down but it will still be busy for us here at The Investor’s Edge as several major retail companies we cover are scheduled to report. Here is the list of names we will be covering:

• Monday 5/20: Palo Alto

• Tuesday 5/21: Lowe’s and AutoZone

• Wednesday 5/22: Target and Nvidia

• Thursday 5/23: Dollar Tree

• Friday 5/24: --

Here is the full calendar of scheduled earnings releases:

Economic Reports

Next week is all about Fed speeches. There will be numerous speeches from Fed members every day next week - the question is whether the comments will be good or bad for markets.

There’s also PMI data, a few housing reports and the consumer sentiment survey on the schedule.

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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.