Today I am opening my 17th trade of the year between between 2 names that I have traded quite a bit over the years, which will hopefully help me rebound from a few rocky weeks of long & short trading. 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||Revenue/Share||Sales 5Y Avg Growth||EPS 5Y Avg Growth|
Long Alphabet (GOOG)
Alphabet is a company I’ve traded less than you’d expect, mostly because as much as I love Google as a consumer, it’s not as straight forward in terms of investments. Why? Lack of discipline and transparency, but also the moonshots. While all of those issues still exist to some extent, I’d say they’re all getting better (with the hire of a new CFO, the new Alphabet structure, etc) so I do feel more confident in going long Google in a “short term” trade like this one.
Next earnings: October 13th 2016
Short eBay (EBAY)
While this could certainly look like I’m taking a negative view on eBay (in a way it is of course), this is more of a play on my strongs doubts about eBay being able to turn things around and/or come up with spectacular numbers. Ebay’s P/E and forward P/E ratio are not way off but do still point to more growth than what I think the company can pull off, especially in the face of Amazon, Walmart and others competing.
Next earnings: October 12th 2016