Adding 2 Names To The Stocks I Follow ($SEND, $SFIX)

By: ispeculatornew
Date posted: 12.04.2017 (3:00 am) | Write a Comment

Exciting times these days as a few new companies went public in recent weeks. While these are not the big ones that I’ve been looking forward to (Uber, Airbnb, Lyft and Dropbox among others), it is still very nice to have more trading options and while I never expect to trade recently turned public companies initially, I will be following news, earnings and will certainly comment when there is a good opportunity.

Sendgrid (SEND) is a new SaaS company which is nice to see given the lack of options (apart from Salesforce-CRM) as the numbers work out very differently when the costs involved are structured upfront and are paid off over several years. This breakdown of revenues is one great example:

SendGrid has over 50,000 paying customers that send 35 billion (yes, billion) emails every month! Crazy right? I will be following SEND’s progress over the next few months.

Stitch Fix (SFIX) is the second company I’m adding to my list and will be very interesting to follow. Like SEND, there are parallels with another public company but a less successful one (to say the least) as SFIX is similar to Blue Apron (APRN) by its model (sending a box of goods – in this case clothes) to paying subscribers. While they do not yet face competition from Amazon in that exact segment, it could be right around the corner and is clearly a threat. The story behind the company is a great one though as it is led by a 34 year old female, a rare thing in the tech space. She is also a young mother and brought her toddler to the IPO as you can see here:

Obviously, that is not enough for me to buy the stock but it is an interesting company that I will be following despite some obvious concerns with its model and possible competition.

I’d love to hear any thoughts about these 2 companies if you have any!

 

Closing 1 Trade ($PYPL, $IAC)

By: ispeculatornew
Date posted: 12.04.2017 (2:55 am) | Write a Comment

This morning, I will be closing one of the 4 live trades that I currently have on, the one where I went long Paypal (PYPL) vs. Short IAC Interactive (IAC). I continue to be a strong believer in Paypal and you can expect me to buy the stock in 2018 when I get back to trading:) As I wrote recently on SeekingAlpha, I do think Paypal has a very good opportunity to be one of the dominant payment players online which would be incredibly valuable. They are coming under attack from the likes of Apple, Google, and Facebook but I do like their odds.

The 2017 returns stand at 7.71% which is not bad at all. I will be closing the trade on the open today, you can go see this year (and past years) trades here:

http://www.intelligentspeculator.net/livetrades

Adding Roku (ROKU) To The Stocks I Follow

By: ispeculatornew
Date posted: 11.14.2017 (6:47 am) | Write a Comment

Good morning, today I will be adding one more stock the list of stocks that I follow. As a reference, this is the list of stocks that I follow news about, read earnings call transcripts of and eventually start trading for my long & short stock picks. In this case, I don’t expect to trade ROKU for a little bit as the company just went public and while it has had a promising start, I (almost!) always prefer watching from the sidelines initially as I get a better feel for the company.

Roku is a company that provides a tv stick/digital top boxes that basically provides content to users tv. It competes with the likes of Apple TV (AAPL), Fire TV (Amazon), Chromecast (GOOG) and provides a platform for content companies such as Netflix, Google’s Youtube and so much more. As you can imagine it is an incredibly competitive space but one that ROKU has been able to do very well in. The company has not been profitable on a EPS basis in the past few quarters which is not always a problem but I’ll be curious to see how they can turn things around in this case.

The stock has done incredibly well since its IPO though following earnings where revenues jumped by 40% y/y and the Q3 EPS loss was 10c/share, lower than expected:

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Changes To The Stocks I Follow ($GDDY, $WBMD)

By: ispeculatornew
Date posted: 10.31.2017 (5:51 am) | Write a Comment

There has been a lack of updates here in recent weeks caused by a very busy schedule more than anything else, very sorry about that. I did want to give an update on a change in the list of stocks that I follow.

Removing WebMD (WMBD): I had not traded WBMD in a long time mostly because there was so much speculation that it would eventually be taken over and that is exactly what ended up happening, the stock is no longer listed after private equity firm KKR ended up buying the company in a $2.8B deal.

Adding GoDaddy (GDDY): Godaddy is a domain registrar and web hosting company more known for its Super Bowl ads and its publicity stunts than anything else and while it has been a publicly traded company for some time (2014), I have not to this point spent much time looking at the stock so I don’t expect to start trading it in the near future or until I get a better feel for the stock. At first glance, I am surprised by GDDY’s valuation and lack of earnings. While the company has not been public for that long, it is not a new company by any standard having started operating in 1997.  Here is an idea of sales growth and EPS over the past few years.

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New Trade: Long Expedia ($EXPE) & Short Travelzoo ($TZOO)

By: ispeculatornew
Date posted: 09.15.2017 (6:01 am) | Write a Comment

Today I am opening my 13th trade of the year in what has so far been a good year. As is always the case, you can see past 2016 (and previous years) trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
EXPEExpedia Inc143.3855.4621.8329.3931.494.5327.8558.3520.277.3
TZOOTravelzoo7.7525.3226.61-16.49-9.2931.189.18-7.182.91

Revenue growth for Travelzoo has been challenging to say the least and that makes it difficult for me to make sense of its current valuation.

Long Expedia (EXPE)

Expedia has been an incredibly steady and high performing name in the past few years and part of that, of course, was due to CEO Dara Khosrowshahi who has now left to take the same job at Uber. I do believe that the future continues to be extremely bright for both Expedia and Priceline in the online travel industry and at these levels, I have slightly more confidence in Expedia but both will do well as they continue to profit from the consolidation of the industry.

Next earnings: October 26th 2017


Short Travelzoo (TZOO)

Looking at traffic data and trends from Google confirms that there is very little growth coming out of Travelzoo. One thing that did come out is that TZOO seems to be getting some traction in China which would be promising but that is also an extremely competitive area and I’m not convinced that it is enough for TZOO to turn things around.

Next earnings: October 26th 2017

Disclaimer: Prior to opening this trade, I do not hold a position in EXPE or TZOO
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Closing 1 Trade ($FB, $MTCH)

By: ispeculatornew
Date posted: 09.15.2017 (5:36 am) | Write a Comment

This morning I will be closing one of the 4 existing live trades, where in April I went long Facebook (FB) and short Match Inc (MTCH). Obviously, MTCH has done extremely well and continues to be the clear leader in the online dating space. That trade currently stands at -29.69% bringing down the average of the year to barely breakeven.

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Closing 2 Trades (TRIP, YELP, PCLN, TZOO)

By: ispeculatornew
Date posted: 08.07.2017 (8:59 am) | Write a Comment

This morning, I will be closing 2 trades that are currently beyond their stop. One winning and one losing trade:

Jan 4th: Long Tripadvisor (TRIP) vs Short Yelp (YELP):  This trade currently stands at -32.79% on the back of an incredible jump by YELP following its latest earnings and specifically its decision to sell its Eat24 business to Grubhub.

March 16th: Long Priceline (PCLN) vs Short Travelzoo (TZOO):  This one currently stands at +28,59% and its incredible how reliable of a play being long Priceline (PCLN) has been over the past couple of decades. Just stunning and I’d actually bet that will continue.

 

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Thoughts From A Busy Tech Day ($APRN, $AMZN, $NFLX)

By: ispeculatornew
Date posted: 07.18.2017 (6:10 am) | Write a Comment

Blue Apron (APRN) was going to face an uphill battle no matter what as part of being the lead player in a rather risky and expensive new business but it’s difficult to imagine a worse timing for the company to go public isn’t it? It did so a few days before Amazon’s (AMZN) announcement that it would buy Whole Foods and now Amazon seems intent on directly competing with APRN after filing for a trademark related to meal delivery. I don’t think the risks are overblown here. I don’t believe APRN can currently survive competition from AMZN so the current move does not seem overblown to me:

Impressive Numbers From Netflix

Netflix was expected to add a bit over 3m subscribers in the last quarter but it did much better than that by adding over 5m (4.14 intl and 1.07 domestic) which is highly encouraging. I will try to write more about it but I personally continue to be a believer in NFLX’s long term business even though its current financials are not great. Netflix should continue to focus on user growth and international expansion.

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Technical Analysis Weekly Overview

By: ispeculatornew
Date posted: 07.17.2017 (3:30 pm) | Write a Comment

As of July 10, 2017, the USD showed a 2-sided trade in the previous week yet still closed higher. The USD index was strong at the beginning of the week reaching its weekly high after the Federal Reserve released minutes of its June meeting. It still managed to get back to positive even after a setback in two days caused by the Friday release of the US Non-Farm Payrolls report.

Major events expected in the coming weeks will provide speculators with an insight into growth or global economy. We expect the Claimant Count Change and unemployment rate in the UK to be published this week. On Wednesday, BoC will release its interest rate and Janet Yellen will give her testimony before the US Congress on Thursday. US CPI will publish its retail sales on Friday. These are some of the events expected to have an impact on global economy and the forex market as well.

Technical analysts show the EUR/USD floor pivot points with a 3rd sup of 1.1198, 2nd Sup of 1.1255, 1st Sup 1.1325 and Pivot 1.1382.

Source: https://www.fxempire.com/forecasts/article/weekly-forex-technical-analysis-july-10-july-14-2017-419873

Looking at the EUR/GBP

Technical analysis shows that the EUR and GBP are once again at a crossroad. The two currencies have been on a 164 pip trading range for quite some time and only broke higher after the surprises of the June 9the election day. On June 12th, the swing highs reached 0.8865 and 0.8858 on Friday. See the chart below for other EUR/GBP swing highs and swing lows in this period.

http://www.forexlive.com/technical-analysis/!/forex-technical-analysis-eurgbp-at-cross-road-again-20170710

The chart shows that the EUR/GBP pair has gone through many ups and downs leaving us at a major cross road. Both EUR and GBP have been banging against significant resistance ranging from 0.8850 to 0.8879 on each day’s chart for the last 10 months. They are banging on a ceiling of 0.8858 and a floor of around 0.8834. Anything lower than the 0.8832 to 0.8834 range could be a reason to beware.

Strength and comparison of other currencies

Overall, the currency strength table shows the EUR being the strongest at the moment while the JPY is the weakest. The last week has brought some key changes with the GBP suffering a 3-point loss and the CHF enjoying a 2-point gain. Other currencies more or less stuck at the same level throughout the week with maximum strength changes of 1 point.

On the basis of Currency Comparison Table and the currency classification for the last 13 weeks, some of the interesting currencies worth going long on include EUR, CHF, and NZD. The 3 currencies are Strong or Neutral options when you look at them from a long-term perspective based on currency classification for the last 13 weeks. The same analysis is still relevant for going short term with the JPY, AUD, GBP, and USD being the best choices. These are Neutral or Weak currencies if you look at them from a long-term point of view. Currencies such as the CAD have a high deviation and less predictable therefore not very interesting to trade.        

Changes To Stocks I Follow ($APRN, $YHOO)

By: ispeculatornew
Date posted: 07.10.2017 (3:00 am) | Write a Comment

Today, I’m making a couple of changes to the list of stocks I follow. First off, Yahoo, which I had not been trading for some time given the M&A speculation involved but also the lack of activity. In the end, Yahoo’s purchase by Verizon (VZ) did go through and Yahoo is no longer listed.

On a brighter side, Blue Apron (APRN) recently went through its IPO. It’s fair to say its timing was bad. To give you context, Blue Apron is a meal delivery service where customers sign up, choose what they’d like to eat and then receive everything necessary to make the meal shipped at home. It’s a business that requires scale but the bigger issue is that potential competitors such as Amazon would have a big leg up in such a business. AMZN is able to ship cheaper than anyone thanks to its efficient warehouses and shipping network. There had been hints that AMZN was interested in the food business because of its testing with Amazon Fresh among other initiatives. But just days before APRN started trading, Amazon announced its intention to buy Whole Foods which in many ways could set it on a path to compete, put pressure on Blue Apron.

As is the case in companies that end up competing with ecosystem companies (FAAMG), things will get very tricky as Amazon is able and willing to operate at zero or even negative margins for long periods of time in order to:

-successfully enter a market, especially one where it needs scale like this one
-eliminate competitors

If one of the plans for Bezos decision to acquire Whole Foods includes shipping food, and even curated boxes such as what Blue Apron does, it’s fair to say that APRN will likely not survive. Yes, some players are able to compete with ecosystem plays and one such example might be Spotify but even that one struggles to generate any profits and the big difference is the heavy pressure on costs that shipping meals around the country has generated.

For now, difficult to say how much APRN is worth or how likely it is to survive but I will be holding off trading for now (as I do for most recently turned public companies).

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