Archive for January, 2016

New Trade: Long Apple ($AAPL) & Short Monster Worldwide ($MWW)

By: ispeculatornew | Date posted: 01.28.2016 (5:02 am)

Today marks the second long & short trade of the year and this one will also not come as a surprise to regular readers. To start off, all of my long & short trades are always available (for 2016 but also past years) here:

http://www.intelligentspeculator.net/livetrades

Yesterday started off very well as I bought Tripadvisor (which was knocked down by a Goldman Sachs downgrade). To be honest, that’s not a big source of concern although I will try to get my hands on that report and certainly get back to you with more thoughts. The impact though was TRIP starting off with a much lower starting point.

First off, here are the numbers for both names:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
MWWMonster Worldwide Inc4.88230.318.5-13.96-4.654.788.75-5.83N/A
AAPLApple Inc93.4210.69.8-5.0127.8623.1340.6225.5634.76

And here is the growth in revenues for both in the past few quarters:

AAPL_MWW_chart

It’s easy to get negative about Apple, but I think that almost any number of chart will speak for itself here. First off let’s compare both:

$AAPLLong Apple (AAPL)

No surprise here is I’ve been very vocal in my belief in the Apple stock for years so when one of the ecosystem plays comes down, it’s always tempting to add to my already existing significant position. For today though, I just want to focus on the fact that a lot of the negativity in recent days is focused on the growth story being over for Apple with many warning of a first decline in the number of iPhones sold. That is a fact and not one I’d argue, but it’s also a fact that year had an extraordinary 1 year-bump coming from the long anticipated introduction of larger screens. That made this year an “impossible” comparable. I do think the long term growth story is still very much alive and others such as Ben Thompson agree. Apple remains the dominant smartphone ecosystem not in terms of number of users but in terms of revenues for developers (that lead is not declining), of valuable traffic (which is why Google is paying Apple $1B to remain the default search engine) so I do think that Apple is a very good value at these levels.

AAPL_MWW_chart (1)

Next earnings: April 25th

$MWWShort Monster Worldwide

In many ways, Monster is a company that has struggled to adapt to Web 3.0 and to competition such as LinkedIn (LNKD), Indeed and more targetted offerings such as Dice Holdings. There has been very little innovation and for that reason, the stock has underperformed. It is unfortunately coming down to levels that will make it more difficult to short but for now, it’s a good option for me. There is obviously very little in common between Apple and Monster but this is a case of trading 2 stocks that are trading at almost identical forward P/E ratios.

AAPL_MWW_chart (2)

Next earnings: Feb 11th

Disclaimer: Long Apple (AAPL) and I will be opening this trade on today’s opening.

New Trade: Long TripAdvisor (TRIP) & Short Blue Nile (NILE)

By: ispeculatornew | Date posted: 01.27.2016 (3:00 am)

Today marks the first long & short trade of the year and this one will not come as a surprise to regular readers. To start off, all of my long & short trades are always available (for 2016 but also past years) here:

http://www.intelligentspeculator.net/livetrades

This week, I had more issues finding the ideal trade partially because most if not all of my names are reporting earnings in the next 2-3 weeks. That being said, I’m confident that the potential upside/downside ratio on this trade is very good and that this will be a good start to my 2016 trading.

First off, here are the numbers for both names:

data

And here is the growth in revenues for both in the past few quarters:

NILE_TRIP_chart

Another interesting thing I found is when I looked at search interest from Google trends for both brands. First off let’s compare both:

TRIPNILE

Ah, normal I guess right? One generates so much more interest and completely dominates its niche. So let’s take a closer look at NILE by itself:

NILE

Ouch.. so not only is sales growth weak for NILE but visitors are searching for it less over time? Not a good sign to be sure.

$TRIPLong TripAdvisor (TRIP)

TripAdvisor is one of the 3 tech names that I hold in more significant size (with AAPL and FB) so it’s not a big surprise to see it as my earliest picks to start the year. The stock has had its fare of tough days and even financials have not been growing as quickly as I was hoping for but I do till strongly believe in the brand and think it has continues to increase its lead over all challengers. The fact that it signed Mariott and Priceline among partners for its instant booking initiative also speaks volumes. I do think TRIP is a long term hold and I can’t imagine it justifying an identical valuation (in terms of forward P/E) to NILE.

Next earnings: Feb 11th

NILE_TRIP_chart (1)

$NILE

Short Blue Nile (NILE)

Blue Nile has probably been the stock I’ve shorted the most since writing on this blog. Why? It has consistently been priced too high if you take into account its past, current and future expected growth. NILE has been able to escape competing (for the most part) with Amazon but does remain in a very tricky space with very little growth, a difficult market to target and customers that for the most part are one time buyers. I simply do not see how NILE can justify the same valuation as TRIP.

Next earnings: Feb 9th

NILE_TRIP_chart (2)

Disclaimer: Long Tripadvisor (TRIP)

My 2015 Long & Short Tech Stock Picks

By: ispeculatornew | Date posted: 01.26.2016 (3:00 am)

$msftGood morning:) I know it’s been a long time but I’m hopefully back for good now:) As i had mentioned I did close the remaining long & short trades on December 31st, concluding a year that was very poor. Yes, the portfolio did decently compared to the market but given this is a long & short portfolio, the expected return for me is closer to the 5-10% range. These were the trades that I closed on December 31st:

Long Microsoft (MSFT) & Short Adobe (ADBE)

MSFT_ADBE_chart

Long Twitter (TWTR) and short Yahoo (YHOO)

TWTR_YHOO_chart

Long Facebook (FB) and short eBay (EBAY)

FB_EBAY_chart

Long Expedia (EXPE) and short Blue Nile (NILE)

EXPE_NILE_chart

I will not spend too much time commenting those. The clearly bad one was going long Twitter which did not go well in terms of timing. In addition, with holidays I did end up closing this trade lower than I should have.

What’s Next:

There’s a lot on my plate for the coming days & weeks:
-Open 7 new long & short techno trades
-write a few updates regarding my views on some of those names
-Update the list of stocks I follow
-Work on the blog (it’s insanely slow.. I appreciate the patience in getting this fixed)

I hope all of you are doing well, expect more writing in the coming weeks!

thanks again!

One Way To Play The Current Market Crisis

By: ispeculatornew | Date posted: 01.21.2016 (6:44 am)

$MCDFair to say that the market has made things interesting to start 2016 and there are certainly real concerns about not only the market but the fundamentals involved for these companies especially with the prices of commodities, impact of China, etc. When crisis strikes, great opportunities rise as the number of investors making “irrational” moves increases. This seems to be a great time to find bargain stocks and finding a quality dividend stock at 20-30% less than its price from a few weeks ago is certainly very attractive.

I personally think one potentially interesting way to play this is to look at consumer cyclicals sector where I personally noticed quite a few stocks that are trading at significant dividend yields.

You will notice that there are several very known names in there including:

Staples (SPLS)
Ford Motor (F)
General Motors (GM)
Six Flags Entertainment (SIX)
Macy’s (M)
Viacom (VIA)
Darden Restaurants (DRI)
Best Buy Co (BBY)
Nordstrom (JWN)
Toyota Motor (TM)
Abercrombie & Fitch (ANF)
McDonald’s (MCD)

I’d personally likely go for the clothing and restaurant names rather than media for example where there is a deep transformation going on. These are mostly offline companies but for online shopping consumers could head to http://www.cost.co.uk for example. I’d stay away from companies (such as Best Buy and Staples) that are directly competing with online giants as it’s unclear how that future will play out. Why? My main concern is that there are many industries that are being drastically changed by the technology sector. When you think about shopping for electronics, books, media, transportation and so many more, you can think about the “traditional” players and how quickly their world is being transformed. Best Buy, Barnes & Nobles, traditional media companies and taxis are facing a very uncertain future and while it’s easy to say they should adapt to this new reality, that is far from easy. Many have failed and are out of business while others like the New York Times are adapting as fast as they can to survive in this new world.

Another factor to consider when buying is the impact of a very strong dollar. An international presence is always a positive and provides additional diversification but I would say a strong US presence isn’t terrible these days either and will offer less resistance when converting those revenues (and profits) back to US dollars. Just look at this 3 year chart for US dollar index and you’ll see what I mean. This explains why so many companies are reporting currency impact as a major negative in their earnings.

DXY

While online shopping for clothing and food delivery is certainly growing and happening, I’d say we seem much further away from companies such as Macy’s being disrupted.

Do you hold any of these names? Here is the full list:

SymbolNameIndustryDividend Yield (TTM)
IGTInternational Game TechGambling8.8
PSOPearsonPublishing7.94
LVSLas Vegas SandsResorts & Casinos6.71
GEFGreifPackaging & Containers6.33
FUNCedar FairLeisure6.05
MATMattelLeisure5.92
GMEGameStopSpecialty Retail5.62
TIMETimePublishing5.5
TUPTupperware BrandsPackaging & Containers5.42
SPLSStaplesSpecialty Retail5.32
GESGuess?Apparel Stores5.16
WYNNWynn ResortsResorts & Casinos5.14
RGCRegal EntertainmentMedia - Diversified5.04
FFord MotorAuto Manufacturers5.01
SEASSeaWorld EntertainmentLeisure4.8
GMGeneral MotorsAuto Manufacturers4.67
MDPMeredithPublishing4.63
MDCM D C HoldingsResidential Construction4.61
IPInternational PaperPackaging & Containers4.5
SIXSix Flags EntertainmentLeisure4.44
DINDineEquityRestaurants4.31
COHCoachLuxury Goods4.3
GPSGapApparel Stores3.96
VIABViacomMedia - Diversified3.84
AMCAMC Entertainment HldgsMedia - Diversified3.82
TRIThomson ReutersPublishing3.81
PKGPackaging of AmericaPackaging & Containers3.76
KSSKohl'sDepartment Stores3.74
MMacy'sDepartment Stores3.68
VIAViacomMedia - Diversified3.61
SONSonoco ProductsPackaging & Containers3.59
DRIDarden RestaurantsRestaurants3.57
AEOAmerican Eagle OutfittersApparel Stores3.49
DSWDSWApparel Stores3.48
CBRLCracker Barrel OldRestaurants3.48
BKEBuckleApparel Stores3.46
WRKWestRockPackaging & Containers3.4
BBYBest Buy CoSpecialty Retail3.39
CNKCinemark HoldingsMedia - Diversified3.29
JWNNordstromDepartment Stores3.26
LEGLeggett & PlattHome Furnishings & Fixtures3.26
TMToyota MotorAuto Manufacturers3.23
CATOCatoApparel Stores3.22
KARKAR Auction ServicesSpecialty Retail3.2
GPCGenuine PartsSpecialty Retail3.14
ANFAbercrombie & FitchApparel Stores3.13
JCIJohnson ControlsAuto Parts3.08
HOGHarley-DavidsonRecreational Vehicles3.07
CHSChico's FASApparel Stores3.06
MCDMcDonald'sRestaurants2.99
HSNIHSNSpecialty Retail2.95
OMCOmnicom GroupAdvertising Agencies2.87
JW.BJohn Wiley & SonsPublishing2.87
WWEWorld Wrestling EnterMedia - Diversified2.86
JW.AJohn Wiley & SonsPublishing2.85
TGNATegnaBroadcasting - TV2.83
PAGPenske Automotive GroupAuto & Truck Dealerships2.8
RENXRELXPublishing2.8
DNKNDunkin Brands GroupRestaurants2.8
MINIMobile MiniPackaging & Containers2.74
WSMWilliams-SonomaSpecialty Retail2.74
PIIPolaris IndustriesRecreational Vehicles2.68
TVPTTravelport WorldwideLeisure2.66
MGAMagna InternationalAuto Parts2.62
LUXLuxottica GroupApparel Stores2.61
YUMYum BrandsRestaurants2.59
ALSNAllison TransmissionAuto Parts2.57
WYNWyndham WorldwideLodging2.57
BMSBemis CoPackaging & Containers2.54
EATBrinker InternationalRestaurants2.53
HASHasbroLeisure2.51
HRBH&R BlockPersonal Services2.51
HOTStarwood Hotels & ResortsLodging2.51

Rookie Forex Tips­

By: ispeculatornew | Date posted: 01.15.2016 (9:52 am)

Forex is short for foreign exchange with the underlying asset being currency. The FX market is by far the largest global market and operates around the clock. Currencies float freely against each other, meaning that the intrinsic value of each one varies greatly, this is where you can make money.

It’s very simple, the aim of any trader is to make a profit, but FX trading is slightly different. You can almost bet on whether the value of a currency will rise or fall, allowing you to make money on either result, unlike conventional trading.

Forex trading works as follows: Say you ­want to buy the AUDUSD (Australian Dollars/American Dollars) currency pair. If you were to buy the AUDUSD pair at 1.0715 and it then moved up to 1.0800 then the trade was close, you would make a profit on the trade of 85 pips. Alternatively if the pair had moved down in value to 1.0700 at the time the trade was closed, you would have made a loss of 15 pips.

Currency trading is a macroeconomic endeavour. A currency trader needs to have a solid understanding of various economies and the role they play on each other in order to grasp the fundamentals that drive currency values

Trading Tips

Stick to what you understand

As a rule of thumb, if you’re unsure of what you’re doing then back away. It’s also wise to avoid trading on the basis of rumours or hearsay, ensuring that you understand both the positive consequences, and the adverse results that may result from any given trade.

 

Planning

Before you start on any journey it’s obvious that you need to know where you’re going and how you’ll get there. Whether you’re aiming to achieve financial independence or just to generate some extra income, it’s wise to outline a plan for at least the start of your trading career. Knowing what you constitute as failure and define as success is imperative to gaining the insight necessary for successful trading.

 

Keep it simple 

Forex trading isn’t rocket science, however overcomplicating things can make it feel like it. You needn’t be a maths genius or economics wiz to be successful. Clarity of vision alongside well-defined, carefully chosen goals and techniques offer the best path to a successful career.

 

Never add to a losing position

While this seems to be common sense, many people have fallen victim to this when trying to claw back a loss. It’s impossible to know how a currency pairing will shift during any given time frame. You can always calculate an educated guess, but you’ll never have a solid knowledge of where a price will be even in a short amount of time. Therefore, however tempting, it’ never wise to pump more money into a losing position.

 

Don’t go against the markets

As a beginner you’d never be advised to trade against the market. Joining trends allows you peace of mind. Fighting the trends, is a one way street to constant stress, fear and significant losses, they are trends for a reason. As a rule of thumb, never go against the markets unless you have the patience and financial resilience to stick it out as part of a long term plan.

 

Forex trading is simple to grasp but exceeding difficult to master. Years of practice are required to master the craft but sticking to a simple set of rules, abiding by a plan and being sensible with your trading will ensure you enjoy your trading and hopefully remain profitable! If you’d like to find out more about FX Trading then visit ETX Capital.

Forex 2015 Review

By: ispeculatornew | Date posted: 01.13.2016 (9:28 pm)

Forex is the most popular global means of trading and the average daily market turnover is around £3.5 trillion ($5.3 trillion). Trading Forex markets Trading Forex Markets is a matter of simultaneously exchanging one global currency for another at an agreed price. Traders speculate on rising currencies and sell off currency already held. Successful Forex traders deal on the 24-hour Forex market by profitably speculating on floating currency rates.

Best Forex Brokers 2015

Some of the most highly rated Forex brokers for 2015 include:

 

  • com – a good platform for novice Forex traders, providing four trading platforms with an auto trading function which allows traders to follow top Forex traders. Demo accounts give options to trial Forex before making monetary deposits

 

  • Ava Trade – this is a high quality platform, with a very good reputation. Has great mobile and web platforms for customers and provides auto trading facilities

 

  • com – with no need for minimum deposits, this is a good platform for novice traders. Customers can begin trading with XM.com when they deposit as little as $5 to the site. Clients can access up to nine different platforms and live customer support means customer queries can be resolved immediately

 

  • eToro – this is a reliable broker, popular with novices and experts. The education center provides learning for novice traders, giving valuable insights into dealing

 

Other popular brokers for 2015 include ETX Capital, Plus 500, 24Option, Easy Forex, and YouTradeFX.

Mobile features are hot in 2016

One common feature of the best Forex brokers in the modern market is interactivity and ease of use with mobile devices. Traders are placing more reliance upon accessing services via mobile devices, so brokers who cannot produce a valuable customer experience on smaller screens stand to lose more and most custom.

 

Auto Trade becoming more popular

The abilities to simulate and follow deals conducted by the top-rated Forex dealers on auto trade is also an indication of popularity within the Forex broking market. Many of the top-rated brokers like CMC Markets give a welcome bonus to new clients, and offer continual promotions and prizes, this may encourage fluctuating levels of clientele, however one of the best features provided to any loyal customer is the opportunity to benefit from building a solid rapport with a personal account manager.

One additional factor to recognize is that while all eyes may be focused upon the Asian markets, the influence of the United States Federal Reserve was once again illustrated in December. By raising its benchmark interest rates for the first time since before the global economic crisis, it is quit clear that the western hemisphere still plays a critical role within worldwide finance. As some analysts feel that the dollar and the euro may reach parity in the months ahead, any CFD trades within the Forex markets could very well prove to be rewarding positions. It is wise to keep a close eye on such movements.

 

Happy New Year!!

By: ispeculatornew | Date posted: 01.04.2016 (11:11 am)

Good morning! First off let me wish the best for 2016!! Just to confirm I did close out the 3 remaining long and short trades on the close of the December 31st and will be opening new trades closer to the end of January when I’m back from vacations 🙂 all the best!