TradingTips.com |
- Legend Who Bought Apple at $1.42 Says Buy TaaS now
- 3 Stocks that were Made for Sheltering in Place
- Is the Huge Option Put Volume on Financials Thursday a Bad Omen?
- This CEO is Selling a lot of Shares, What’s Next?
| Legend Who Bought Apple at $1.42 Says Buy TaaS now Posted: 22 May 2020 09:32 AM PDT Courtesy of our friends at Empire Financial Legend Who Bought Apple at $1.42 Says Buy TaaS nowDear Reader, Hi, Whitney Tilson here. I made my mark on Wall Street over the past 20 years by starting my first hedge fund with just $1 million… which I ultimately grew into a series of funds worth more than 200 times that amount.
I’m writing today because my team and I have found what we believe will be the next big tech trend that will make investors rich. It’s called TaaS—and if you haven’t yet heard of this technological breakthrough, you soon will. Over the next few years, TaaS will change the way you eat, shop, work, and travel. It will change the value of our homes and where we live. It will radically alter prices for airline and train tickets, gas, and even household goods. It could even help slow the spread of the coronavirus… and help get the American economy moving again. Along the way, it could make you a small fortune. Look, this is going to be the biggest trend affecting you and your money over the next few years—yet most Americans don’t have a clue. And that’s why I’m going public today with the full story. Prior to the coronavirus, I traveled around America and the world (more than a dozen trips in the past six months), talking to every expert I could find. I’ve put everything you need to know in a simple presentation, where you’ll even learn the name and stock symbol of my favorite TaaS investment in the world today. No subscription, e-mail address, or credit card required. You can watch or read my presentation for free right now. We’ve posted it on my research firm’s website, right here… Best regards, Whitney Tilson P.S. It’s not all good news, however. TaaS is going to cause a lot of people to lose money too. Dozens of well-known businesses will go bankrupt. But the truth is, the positive effects of this radical development far outweigh the negatives. Get the facts for yourself. Make sure you’re not on the wrong side of this trend. Click here to see my brand-new analysis…  |
| 3 Stocks that were Made for Sheltering in Place Posted: 22 May 2020 04:30 AM PDT
The market is filled with companies that have struggled in terms of earnings and performance through the COVID-19 closure of our economy. With shelter-in-place orders in place throughout the country and continued fear of leaving the house, it makes a lot of business models not work. However, the idea that it's affecting every business the same wouldn't be accurate. There are a number of companies that have been thriving in the current environment. As you try to identify companies that might be doing well, it doesn't hurt to start with what has been performing well and work backwards. For example, which companies are higher year-to-date? From there you can see if there are any themes present with any of them. For example, maybe there are a number of ecommerce companies. Sometimes you have an idea and you search for companies that fit the narrative. In this post, the focus is more on companies that you might use frequently in normal circumstances but may use even more often in "the new normal." Companies like social media, education and gaming. Once you've found your companies, then you move forward with earnings and price performance. The following three companies have some degree of fundamental improvement during the first quarter and are higher year-to-date. Shelter Stock #1: Electronic Arts Inc (EA) As you may have guessed, staying at home generally leads to more video gaming. In the company's recent earnings announcement, they reported that Digital net bookings for the current fiscal year were up 9% year-over-year (yoy) and represents 78% of the total through three quarters. Two of their biggest gaming properties have been taking off as well. FIFA 20 now have more than 25 million unique players and Madden NFL 20 reached its highest engagement in history. The company recently reported earnings of $1.34 compared to analyst estimates of $0.98, which was a 36.73% beat. Analysts are currently projecting $0.72 for the current quarter EPS, which is higher than the $0.01 loss the company earned last year. The current year EPS estimate of $4.99 is higher than the 2019 fiscal year at $4.25. So far, year-to-date the company is up nearly 10%. Shelter Stock #2: Snap Inc (SNAP) SnapChat has seen substantial growth in a lot of different areas of their business. For social media companies, active daily users are a huge metric since these companies generate most of their revenue through ads. Their daily active users (DAU) increased 20% yoy in Q1 2020 to 229 million. They saw 75% of their users engage with their camera and augmented reality platform every day. Revenue growth was 44% yoy, with their highest revenue growth occurring in Europe at 61%. The rest of the world saw growth of over 40%, including North America. The company recently reported earnings of a loss of $0.08 compared to analyst estimates of a loss of $0.07, which was a negative surprise. Analysts are currently projecting a loss of $0.10 for the current quarter EPS, which is lower than the $0.06 loss the company earned last year. The current year EPS estimate is a loss of $0.21, which is lower than the 2019 fiscal year of a $0.16 loss. So far, year-to-date the company is up over 8%. Shelter Stock #3: Chegg Inc (CHGG) Chegg is a student-first connected learning platform. The Company helps students study for college admission exams, find the colleges, get grades and test scores while in school, and find internships that allow them to gain skills to help them enter the workforce after college. The company has 3.9 million subscribers and saw its services subscribers grow 29% yoy. That growth led revenues to increase 31% yoy. The company sees the market opportunity at 54 million, which means there is substantial opportunity to expand its subscriber base. The company recently reported earnings of $0.35 compared to analyst estimates of $0.29, which was a 20.7% beat. Analysts are currently projecting $0.15 for the current quarter EPS, which is same as the $0.15 profit the company earned last year. The current year EPS estimate of $0.98 is higher than the 2019 fiscal year at $0.91. So far, year-to-date the company is up nearly 65%.  This posting includes an audio/video/photo media file: Download Now |
| Is the Huge Option Put Volume on Financials Thursday a Bad Omen? Posted: 22 May 2020 04:30 AM PDT
There are times when unusual option volume is an indication for the direction of a particular stock and then there are times when the activity is a reflection on the overall market. For many years I've watched the Skew Index that is published by the CBOE. This is a product that is a reflection of hedging activity. For example, if puts are being bought and calls being sold to help pay for them, it skews the implied volatility causing the call implied volatility to fall relative to the puts. Rising skew is an indication of increased hedging and typically represents more nervousness on the part of institutional investors. The activity on Financials Select Sector SPDR ETF (XLF) was significant. The put volume was over 2.5 times the average at over 500,000 contracts with 70% getting filled at the ask price. Over 200,000 of the volume occurred on the 17 JUL 20 $21 and $18 puts. That is a lot of volume and very decidedly bearish. The size of the trades are a clear indication that its institutional and that they may be using XLF to hedge themselves against other risk in the financial sector. As the trades were going through at the same time, there was also a surge in sell-side activity in the stock at the same time. If you were an option maker and had over 200,000 contracts fall into your lap that you have to sell, you would want to offset your risk as well. Action to Take: This is a reasonably significant sign that there is some skittishness in the market on the institutional side. The indication is not just about the near-term opportunity to go short XLF falling to $20, but a bigger indication that institutions might be getting a little nervous. Speculators may consider making a similar trade. In this case, the 17 JUL 20 21/18 long put vertical would be bought for around $0.60. The max gain of $240 is achieved if the stock closes below $18. Consider closing early for $2.25 or more.  This posting includes an audio/video/photo media file: Download Now |
| This CEO is Selling a lot of Shares, What’s Next? Posted: 22 May 2020 04:30 AM PDT
As you look at the current climate for auto sales, it isn't exactly promising. Sure, many dealerships were closed and people were limited in their ability to go out. However, beyond the COVID-19 restrictions is a harsh reality of a very likely impending depression. I'm not using that word lightly. The Atlanta Federal Reserve is forecasting GDP to decline 41.9% and we'll likely have over 20% unemployment in the next jobs report. As you look at companies like CarGurus Inc (CARG), you wonder what the future holds for them in this climate. The company had its IPO in late 2017 and is currently over $4 lower than its post-IPO price. They've been able to be profitable every quarter on a non-GAAP basis and the average analyst estimate for Q2 is for EPS of zero. Langley Steinert, CEO of CARG, discussed their pricing and may give some insight of where the company may be standing: "It's not a race to the bottom, it's actually a race to the mean. All of our regression models are built on a normally distributed curve… The only advice I can give is that you don't want to be in those two tails (of the curve). You want to be in the big, fat middle with 70% of the distribution." The degree of selling that the CEO is engaged in may indicate that staying in the middle 70% may be a lot harder than it seems. The CEO has been consistently selling shares since last September 2019. You may remember it as a time where the repo market was freezing and we began down this track of Fed liquidity and then lowering rates to zero. Since September 4, 2019, his holdings have fallen from over 4 million shares to 1.8 million shares on May 19, 2020. Since May 1, he's had 7 different sell transactions totaling 221,400 shares and over $5.26 million in value. Action to Take: CarGurus is a short opportunity at this level with a $20 near-term target.  |
| You are subscribed to email updates from Trading Tips. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment