Today I am opening my 18th and 19th trades of the year which will be my last 2 ones for the year (for tech long & short). It’s been a rocky year, my worst on record, hopefully these 2 help start a turnaround. As is always the case, you can see past 2016 (and previous years) trades here:
Let’s start off by looking at the numbers:
|Ticker||Name||Price||PE Ratio||PE Next Year||Return YTD||Sales Growth||Analyst rating||Book Value||Beta||Earnings||Revenue/Share||Sales 5Y Avg Growth||EPS 5Y Avg Growth|
And the usual chart that I like to bring up:
Long Tripadvisor (TRIP) & Short Twitter (TWTR)
Being long Tripadvisor has certainly been a difficult position to hold in the past few months but I think it’s getting closer to its bottom. On the other hand, Twitter has been a big story in the past few months. There are some rumours that it will be acquired and that is clearly a risk but the company seems to be determined to find a better way out. The NFL deal has been perceived as a bid win for Twitter and in many ways it is. It got the rights for extremely cheap, was able to deliver a very solid broadcast in the first game, and got a lot of eyeballs. That being said, it remains unclear to me how this fits into the company’s longer term goals, how it will help deliver more visitors to its site or more money. I think the stock gains are clearly unjustified.
Long Amazon (AMZN) & Short Netflix (NFLX)
I will be writing more in-depth very soon about these two companies but I think one clear opinion is that Amazon is starting to create issues for Netflix, pressure on its growth and while I do remain optimistic about Netflix’s long term future, I think Amazon will put more pressure on NFLX’s margins and at these high valuations, I prefer the upside/downside risk of Amazon in this trade.