Before the bell: the Curse of the Bel20

Amazon reported record revenue yesterday, but its outlook disappointed analysts. Meanwhile, Titan Cement will debut today with its U.S. IPO.

For decades, Lotus Bakeries consistently outperformed the Bel20 index. But since joining the index last year, some analysts have joked about the “curse of the Bel20″—companies often peak upon entering the index, only to experience a downturn shortly after. Conversely, companies that exit the Bel20 following a sharp decline sometimes stage an impressive comeback—such as Colruyt. Yesterday, Lotus Bakeries dropped 8.7%, marking its worst trading day in nearly five years. Meanwhile, in Hong Kong, tech stocks are rallying to their highest levels since November.

Today, investors will react to the disappointing earnings report from chipmaker X-Fab, which forecasts annual revenue of 820 to 870 million dollars, below analyst expectations. Meanwhile, Orange Belgium posted higher-than-expected profits.

Amazon Bigger than Walmart?

There aren’t many companies that can generate over 100 billion dollars in revenue per quarter. Those that do tend to enjoy a near-mythical status among investors. Amazon set a new personal record, reporting 187.8 billion dollars in revenue last quarter, thanks to a strong holiday season. This means Amazon could surpass Walmart’s revenue for the first time in a single quarter, based on analyst estimates. However, investors are demanding when it comes to market giants. The problem? Revenue is expected to decline in the current quarter to 151–155.5 billion dollars, well below the market estimate of 158.3 billion dollars. This is due to seasonal holiday demand tapering off, currency fluctuations, and the loss of a leap day compared to 2024. A lower market opening is expected.

1 Plus 1 Equals… 1?

How much is a company really worth? At Spaarvarkens, we evaluate this weekly for our investment portfolios. For monoholdings, the calculation is straightforward: you take the value of its publicly traded assets, subtract its debt, and arrive at its net worth. This principle applies today to Titan Cement, which is spinning off its U.S. division and listing it separately on Wall Street. At a price of 16.50 dollars per share, the division is expected to be valued at 2.9 billion euros. Titan Cement’s current market capitalization? 3.5 billion euros—meaning its remaining divisions are valued at just 600 million euros by the market. Since Spaarvarkens analyst Jan Reyns highlighted this opportunity, Titan Cement’s stock has surged 38%.

Did You Know…

that Warren Buffett once had the opportunity to invest early in Amazon? He turned down Jeff Bezos, believing Bezos’ growth projections were too optimistic.

This article was translated from Dutch and was originally published on Spaarvarkens.be.