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:

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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Is Gold a Good Safe-Haven Investment Now?

By: ispeculatornew
Date posted: 07.09.2017 (8:21 pm) | Write a Comment

Every time speculators get cold feet about equities, people flock to gold as a safe-haven investment. For the week ending Friday, July 7, 2017, markets were thrown for a loop. A large-scale tech stock selloff on the NASDAQ precipitated fears that Wall Street is on the decline. Pundits were saying that years of strong gains must certainly culminate in a market correction, or a dramatic long-term reversal.

The bulls will invariably run out of steam, and the bears will come out to maul markets – they say. But these naysayers are ill advised. The financial markets are not beholden to anyone, let alone speculative sentiment. Sure, a jolt hear or there will upset current trends but ultimately, it’s macroeconomic factors that determine what rises and what falls.

Tech Selloff a Blip on the Radar

Recently, the NASDAQ threw traders for a loop. A major selloff of tech stocks took place before the US Department of Labor released the June NFP data. And what a surprise it was: 220,000+ new jobs were added in the month – welcome news for stakeholders on Wall Street and abroad. Consider that economists were expecting 180,000 new jobs to be added, but the actual figures exceeded forecasts by a huge margin.

President Donald Trump wasted no time gloating about this news on Twitter, and his followers were quick on the uptake. More importantly, markets reacted favorably to the latest NFP data. By the end of the week, the Dow Jones Industrial Average (DJIA) was up 0.4% at 21,414.34.

Even the tech-heavy NASDAQ closed the week at 6,153.08 for a gain of 0.2%. The S&P 500 increased 0.1% to close at 2,425.18 for the week. These figures are especially encouraging since the bigwigs of the trading world were convinced that markets had topped out and were on an inexorable decline.

Trading Experts Weigh in on Market Activity

ECN Capital expert, Charles Wilson Sr. believes that the NFP data will have a profound effect on monetary policy, and equities markets. “Given the bullish sentiment on Wall Street as a result of the strong June NFP data, we are likely to see Fed chair Janet Yellen moving to unwind the $4.5 trillion balance sheet sooner, rather than later. Inflation concerns remain, owing to weakness in crude oil prices, but the Fed is likely to accelerate its monetary tightening. A dual approach in the form of asset sales and rate hikes to the federal funds rate will do the trick.”

A slight increase in hourly wages was also reported during June, up at $26.25, for an increase of 0.2%. This was marginally less than expectations, but nonetheless a positive sign. Over the past year, wages have increased modestly at 2.5%, which is behind the eight ball. As bond markets enjoy higher yields, a risk-off approach to equities markets kicks in. There is a sense that central banks are moving closer towards monetary tightening around the world, and this is keeping traders at bay. As bond prices fall, yields rise. Typically, people buy bonds when equities markets are in trouble, much like gold bullion.

How are Gold Markets Performing?

The current price of the precious metal is $1,212.82 per ounce, up slightly on Friday, 7 July. Over the past 30 days, gold has declined by 6.32%, or $81.50 on the back of strong USD performance and a risk-on approach to equities markets. Since gold is a dollar-denominated commodity, demand rises when the dollar depreciates. According to the US dollar index, which is now at 96.00, the USD is appreciating. Over the past 5 days, the US dollar index has gained 0.39%. This underscores the decline in gold demand.

However, for the year to date, the US dollar index is down 6.23% – a good sign for gold bugs. Mr. Charles Wilson Sr. believes that there is still a significant market for gold, possibly in different forms. These include ETFs, gold mining stocks and Gold IRA options. Presently, gold is languishing with steep losses. Increasing treasury yields and a stronger USD are hampering gold demand, but this also makes it a value-driven deal for long-term investors.

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Closing 1 Trade ($AMZN, $ETSY)

By: ispeculatornew
Date posted: 06.23.2017 (6:19 am) | Write a Comment

As much as Amazon has been in the news, Etsy has been on quite a streak and my short position has not done well in recent weeks so I will be closing the trade on this morning’s open. I do remain very skeptical about ETSY’s longer term prospects but it does look like it will be able to have a shot in competing against the likes of Amazon so it will be interesting to follow. As is always the case, you can see my 2017 (and previous years) long & short tech stocks here:

http://www.intelligentspeculator.net/livetrades

 

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