Today I am opening my 16th 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:
http://www.intelligentspeculator.net/livetrades
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 |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FB | Facebook Inc | 124.88 | 60.05 | 24.59 | 19.34 | 43.82 | 4.6 | 17.56 | 0.98 | 6.4 | 48.81 | N/A |
NILE | Blue Nile Inc | 30.66 | 34.69 | 29.02 | -16.54 | 1.38 | 3 | 1.29 | 1.08 | 41.14 | 7.43 | 4.53 |
Long Facebook (FB)
No surprise in me picking Facebook which has done great things for me personally. I continues to be my largest single position and Facebook continues to execute extremely well. I do have a bit more worries when I look at the landscape for Facebook, especially about its ability to position itself against Snapchat but for that I reason I did very much like the most recent Instagram move of launching stories. Facebook continues to deliver on the top and bottom lines and it’s crazy to me to see it trading at a comparable forward valuation as Blue Nile. In many ways Facebook qualifies as a “platform” and I continue to think those will be long term winners. Just think of a recent phenomenon Pokemon-Go. You could argue that Apple is making as much as any of the parties that are actually involved in creating and licensing the game. This is playing over and over and the platform players are getting their “tax” on each transaction.
Next earnings: November 2nd 2016
Short Blue Nile (NILE)
Long term readers of this blog know that I’ve been bearish regarding this stock for a very long time and have shorted it quite a bit over the years. For some reason this stock has traded at very high valuations over the years with very little to justify it. NILE has continued to show very little ability to generate growth and I continue to expect increased competition, eventually from the likes of Amazon which will certainly send the stock much lower.
Next earnings: November 3rd 2016