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Akoustis 3Q23 schedule, plus bank & yield notes ?4

08:22 02-May-23

The real purpose of this update is to mention that proposed changes from the FDIC have motivated me to get on a soapbox, with my first public macro entry.  The other macro news this morning is Biden setting a debt ceiling meeting for May 9th, after Yellen updated that the Treasury would begin to run out of funds in early June, sooner than previously anticipated.  The market is appropriately ignoring all of this for the time being.

It's also worth mentioning that VIRT declined 3% yesterday after the financial press jumped on a disclosure in Friday's 10-Q about the possibility of a Wells Notice from the SEC initiating a lawsuit alleging lack of proper information barriers from January 2018 to April 2019.  My view is that this would only happen because the Virtu management is unwilling to settle, and the situation should be viewed by long term investors as trivial, especially by comparison to broader pending SEC market decisions.

To wrap up the corporate trivia before we get into earnings - Vuzix has scheduled its first quarter report for the evening of May 10th.  For anyone that cares, the average of 3 analyst estimates is a loss of 15 cents per share from $3.7M of revenue, rising to $4.1M this quarter.  Obviously, this quarter's revenue estimates haven't been updated to account for the company's press release.  See my commentary there for the link to why I think VUZI may be trading around multi-year lows and why I have no intention to write about the report unless management can be convincing that it isn't throwing a substantial portion of its cash away on Atomistic.

Akoustis has scheduled the report on its fiscal third quarter for the morning of Monday, May 8th.  The average of 5 analyst estimates comes to a loss of 19 cents from $7.5M of revenue, rising to $9.1M this quarter.  The current revenue consensus is somewhat below management guidance, and it will be interesting to see if Akoustis products can avoid the general slowdown.  It may still be too early for management to give details on a CHIPS+ application, but of course, guidance in light of the gateway shipments and automotive design will also be important.  I remain interested in AKTS below $3, and particularly below the $2.75 placement price.

I will also note for investors that Telus reports its 1Q23 results Thursday morning.  The average of 11 analyst estimates is for 26 Canadian cents of EPS from CAD4.9b increasing to CAD5.0b this quarter.  Though TU is as close to buy and forget as they come, I will write about the event to at least report the numbers, including any forecast on a dividend hike, which would typically happen with the July and January payments.  The Canadian dollar appears to be working toward stabilization around $0.74 but we'll see what the Fed has to say on Wednesday, along with jobs data.

I'm generally constructive about the former, due in part to the seizure and sale of First Republic, which is another bank with a preponderance of Silicon Valley venture capital depositors.  That may bring some renewed opportunity in the banking sector, with CFG continuing to be my pick and going ex-dividend tomorrow.  Citizens was one of the bidders for First Republic, though Chase won out.  Though I have to reiterate than any bank can fail in the face of a run under the current system, the over 5.8% yield at this morning's sub-$29 price is well above this morning's new I-bonds rate of 4.3%.  Some savings accounts are competitive with that, and and CD rates are well above it, which signals a step toward stability for all involved, at least for the short term.

For corporate trivia this morning, we have Westport appointing a CTO, and Magnachip's CFO going on maternity leave until August, with the CEO taking her official duties in the interim.

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