What's the idea? In March 2024, Cisco completed its largest acquisition to date, buying Splunk for $28 billion. The acquisition was funded by issuing additional debt and is expected to create significant synergies by combining Splunk's artificial intelligence capabilities with Cisco's data. Management plans to focus on growth areas such as software, services, AI and cybersecurity, while balancing financial obligations and reducing the hardware portion of its product mix. Cisco reported mixed financial results for Q4 FY2024. Revenue for the quarter declined 10% year-over-year (YoY) to $13.64 billion from $15.20 billion a year earlier, but exceeded analysts' expectations of $13.54 billion. Adjusted earnings per share (EPS) were $0.87, down from $1.14 a year earlier, but slightly above analysts' forecast of $0.85.

What's the idea? In Q2 2024, Corning reported an adjusted earnings per share (EPS) of $0.47, a 4.4% increase from the previous year, in line with analysts' expectations of $0.45. Revenue grew slightly by 0.3% to $3.25 billion, missing analysts' estimates of $3.58 billion. Despite mixed results, the management remains optimistic, citing strong adoption of Corning’s new optical connectivity products for generative AI and a new agreement with Lumen Technologies. Corning has shown a recovery in net sales growth rates, with quarterly sales up 0.2% YoY in Q2 2024, compared to a 6.4% YoY decline in Q1 2024. However, the company is sacrificing margins in favor of business expansion. Its gross margin fell from 31.2% in Q2 2023 to 29.2% in Q2 2024, while its operating margin decreased from 8.6% to 5.7% over the same period.

What's the idea? Couchbase provides database solutions that meet today's demands for information scaling rates and business continuity. Microsoft's recent global outage due to a bug in its CrowdStrike software proved that even short-lived outages can cause multi-billion dollar damage, which could prompt businesses to move to more reliable and modern NoSQL databases. In 2024, companies are poised to spend an average of $35.5 million to improve their IT systems, a 27% increase from the previous year. Following Q1 2025, Couchbase increased the amount of revenue it expects to recognise in the current financial year by 18.16% and backlog by 20.77%. The closing of several Couchbase deals with new customers has been postponed from Q1 to Q2 of FY2025 due to force majeure, which will boost the company's results for the current fiscal period. Couchbase raised its full-year revenue guidance to $204.5–$208.5 million. The company continues to develop its new Capella service, which has recently become a major factor in attracting new customers.

What's the idea? In his recent speech, Federal Reserve Chairman Jerome Powell said that the central bank would base its interest rate decisions on macroeconomic data and not on the upcoming presidential election. It seems that today's data are favorable for the start of monetary easing. While the market has been expecting rate cuts for a long time, current economic data finally reflect a real slowdown in inflation and rising unemployment. At least one rate cut is expected in 2024 and this trend is likely to continue into 2025. One of the easiest ways to capitalize on interest rate changes is to invest in long-duration bonds, although building such a portfolio can be costly. For investors willing to speculate on interest rates for higher returns, we recommend buying CALL options on iShares 20+ Year Treasury Bond ETF with a strike price of $94.0 and expiration date of 20/06/2024. The option will cost around $5.50, while buying one contract will cost $550 as options are traded for 100 shares.

What's the idea? The crude oil tanker market is expected to face heightened demand and longer routes as a result of geographic demand-supply differences among regions. Another current driver is political instability that reshuffles global fleet routes and contributes to growth of needed charter times. As the average mileage remains at historic highs, oil tanker companies’ revenues will benefit. Supply of oil tankers remains rigid due to price rise and length of investment cycle in the ship construction industry. The aging fleet contains supply growth as well. Northern American has a strict specialization on Suezmax-type vessels, which contains its operational and maintenance costs and provides operational flexibility. The company targets regular dividend payments, despite its inherent business volatility and manages to pay dividends even in the negative-EPS years.

What's the idea? Deutsche Lufthansa AG is one of Europe's leading airline groups. In addition to its own brand, Lufthansa Airlines, the group owns several other airlines, including SWISS, Austrian Airlines, Brussels Airlines and Eurowings. Air passenger transport in the EU reached 976.4 million passengers in 2023, up by 19% year-over-year (YoY). However, the figure remains 5.7% below the pre-pandemic level in 2019. In 2024, passenger traffic in European airports may surpass the 2019 level by 3.2%. Operationally, Lufthansa faced challenges in Q1 2024, including widespread strikes. Nevertheless, traffic revenue in the Passenger Airlines segment increased by 7% YoY, driving total revenue up by 5% to €7,392 million.