Talking Stocks 2.0

[JParm]

Picked up a few PINS LEAPS ($65) near the bottom this morning. Another favorite of mine that has been consolidating for nearly a month and a half.

Still expect big things through 2021 for a stock that has delivered well in 2020.

[chsu74]

Originally Posted by Zack21

Would you be willing to share some of your green energy holdings? Thanks.

I have disclosed them in my previous posts.

CLSK
EOSE
BEEM
STPK
SBE
IEA
RMG

My cost basis on most of these are in the neighborhood of 20-30% today’s price except for:

EOSE
STPK

I believe PERI is a great value compared to APPS, TTD, MGNI, DMS etc. great day to pick up a few shares. Disclaimer: I bought in at $7 and hold significant qty of Jan and Apr $10 calls. All I care is that it doesn’t go below $10 between now and Apr.

[Zack21]

chsu74: thank you for the info.

[beshannon]

Sold FDX for a loss and sold TDOC for a small gain.

I expect the trade to get quieter towards Thursday.

[logo]

Originally Posted by beshannon

Sold FDX for a loss and sold TDOC for a small gain.

I expect the trade to get quieter towards Thursday.

Did the same with TDOC recently. Still have June calls for FDX though - any reason in particular why you trimmed this one?

[7sins]

Watched LMND VERY closely today, as their lockup expiration is similar to the upcoming SNOW lockup expiration up I have been discussing the last few weeks here. LMND down 14% today with their expiration tomorrow of 30M shares that are being adding to the float currently of 37M. This is very similar to SNOW from a volume, float and share number lockup. Notable difference is that SNOW marketcap is much larger, however SNOW is almost 3X more expensive at 190 p/s compared to 78 p/s for LMND. Will be interesting to see how LMND does the rest of the week but I think this is a good insight into SNOW for the next week or two. Snow was down another 6% today to $302, over 30% off the price when I said to buy puts around $400, those who hopped in on the train should be positive over 100%.

For those who have the time, interesting buyout play on Gilead (GILD), https://www.griproom.com/gilead-and-roche-merger-theory. Checkout the Jan 2021 Open Call Interest on GILD below, it is MASSIVE. Stock has taken a beating this year and now at an 8 year low (forward P/E of an insanely low 8.65), I presume we still see more selling this week as people look to sell for tax loss harvesting. Highly speculative play but the company has numerous, total of eight, study milestones for 2021 for Magrilomab alone. Actual Trodelvy revenue will contribute along with MYR, REMY, GLPG licensing royalties from the EU, Truvada and HCV medicines from China. Downside is they are carrying a lot of debt due to two recent large acquisitions. From everything I have read, it appears a buyout should be ~$90. Options here are cheap, jan 2022 70c is $2.70, so if buyout does happen at $90, that would be about 670% return. Merger talks have been going on for awhile now but with how cheap GILD is today, could be a plausible longshot.



Loving this price action on FDX, I am buying every day it is down and bringing my DCA cost down. Following the same trend we saw in Oct when we bottomed at $259 before shooting up to $300. Trading at a forward p/e of half of sp500, just signed a deal with walmart to handle their returns and this will be there best upcoming quarter. Continues to be oversold on good news, patience is key here.

[beshannon]

Originally Posted by logo

Did the same with TDOC recently. Still have June calls for FDX though - any reason in particular why you trimmed this one?

I simply felt that the momentum was gone and this is a very long term story with a lot of uncertainty involved.

In addition, given the issues a family member has with just trying to do things right now over the phone, the challenges are significant and I do not be lieve they will be easily resolved both from a legal and logistical standpoint.

In short, this was no longer a good investment for me.

[chadwick4eva]

Opened a position in D R Horton Homebuilders (DHI) last week- largest homebuilder in the US currently. Expecting continued boom in housing for the next few years while interest rates are low, and this company has excellent financials. They build starter and some "luxury" homes across the US.

https://finviz.com/quote.ashx?t=DHI

Things I like-
1. Low P/E relative to the market- 11.0 P/E, 8.0 Forward looking P/E.

2. Room to grow on a low P/E stock- 5 year anticipated EPS growth by analysts is 15.8%. For a company trading at such a low multiple, this looks like a huge bargain. Their prior 5 year EPS growth is 25%. No reason to doubt they can't pull off this kind of growth the next few years with low interest rates creating perfect storm for homebuyers. Even if growth projections don't reach the consensus estimates (say it's only 10% EPS growth the next few years), there is solid margin of safety here given the discounted valuation.

3. Excellent financial track record:

https://www.macrotrends.net/stocks/c...horton/revenue
Beautiful revenue growth over time.

https://www.macrotrends.net/stocks/c...orton/pe-ratio
Beautiful corresponding earnings growth.

https://www.macrotrends.net/stocks/c...rton/price-fcf
3+ year trend of Free Cash Flow growth.

In combination with a reasonable P/E and reasonable 3-5 year projections, this is the trifecta for me- growing earnings, growing revenues, growing cash flows that can be put back into the business or paid out to shareholders. This management team is doing things the right way if all of these things are moving in the same direction. Speaking of payouts to shareholders...

3. History of Dividend Growth for shareholders. DHI is currently a "dividend challenger"- meaning they've increased dividend annually for at least 5 years. Annualized dividend growth rate for the past 5 years is a massive 25%. This perfectly corresponds to their earnings growth as well. While they don't pay out the highest yield (currently 1.14%), this kind of high DGR is what you want to see if you are aiming for big yield on cost in the future.

4. Gross margins of 24%, Operating margin >10%. Home building is a capital intensive business but they still manage to pull off a solid operating margin. Toll brothers, a competitor, has gross margins of 20% and operating margins of 6%.

5. Low debt. Current assets are 4-5x more than total current debt (ST and LT).

Current plan is to sit on this stock for at least 1-2 years and re-evaluate when interest rates start to rise.

[m j b]

Originally Posted by chadwick4eva

Opened a position in D R Horton Homebuilders (DHI) last week

I've owned them for a long time (not currently though since my portfolio is quite light). It is a good company, solid financials, and maybe not a sterling performer, but pretty steady.

[chsu74]

For housing, I had:

CCS
MHO
MTH
NAIL

Those above are among the best valued builders. Have been in those since late spring as folks were moving out of the city into homes and townhouses to balance out the portfolio. Solid financials and quarterly beats of 50% increase in profits and 40%+ in revenues.

Just don’t get enough attention so sold them all today. Market don’t like housing. Too boring and hard to trade with low volumes. My selling straddles often feels like dealing with one person on the other side lol..

[JParm]

Bought a TTD call for Jul 16/$800 target.

Big dip the last two days for a stock that hasn't changed in terms of model / outlook. I also own shares, so high conviction here as well.

[logo]

Bought more FDX calls for June today to average down as IV is still pretty low. Have some NET calls for May as well that are currently slightly red, but not worried (and of course I’m a long share holder since the 20s).

Also I’ve been accumulating a few shares in GEVO the past few weeks. Co-founded by a Nobel Laureate, company should be debt free by end of the year and they are in talks for financing to build a new plant as part of their 1.5B deal with Trafigura. They’ve been around for a while, and while I do think it’s a bit of a speculative play, I feel like the stars may just be aligning on this one as part of the green energy wave about to hit.

[albertf]

Do you guys have a general exit strategy for the SNOW put? My first time giving options trading a shot.

I'm used to gauging by risk:reward for setting some type of trailing stop but kinda lost as to what would be a reasonable upside reward for a trade like this.

[AshCashEmAll]

Originally Posted by logo

Bought more FDX calls for June today to average down as IV is still pretty low. Have some NET calls for May as well that are currently slightly red, but not worried (and of course I’m a long share holder since the 20s).

Also I’ve been accumulating a few shares in GEVO the past few weeks. Co-founded by a Nobel Laureate, company should be debt free by end of the year and they are in talks for financing to build a new plant as part of their 1.5B deal with Trafigura. They’ve been around for a while, and while I do think it’s a bit of a speculative play, I feel like the stars may just be aligning on this one as part of the green energy wave about to hit.

Should’ve listened when you were praising NET. Seriously missed out on that one ...


Sent from my iPhone using Tapatalk

[logo]

Originally Posted by AshCashEmAll

Should’ve listened when you were praising NET. Seriously missed out on that one ...


Sent from my iPhone using Tapatalk

I believe they still have huge room to run over the next few years, and this recent pull back is a nice entry opportunity IMO.

[Hard_Six]

NET has been excellent. I'm staying long.

[AshCashEmAll]

Anyone got an opinion on AMWL? I already trimmed half my tdoc to get some holdings in other sectors.


Sent from my iPhone using Tapatalk

[7sins]

Originally Posted by albertf

Do you guys have a general exit strategy for the SNOW put? My first time giving options trading a shot.

I'm used to gauging by risk:reward for setting some type of trailing stop but kinda lost as to what would be a reasonable upside reward for a trade like this.

Since this is your first option, NEVER EVER put in a Market Order on a buy or sell. I can not stress how important this is. ALWAYS use limit orders when opening or closing positions, you should always split the bid/ask spread depending on how much OI/liquidity there is.

Your exit strategy is dictated by your conviction. A cautious bet is to pull out your initial investment and let your profits run or pull out your initial investment and partial part of your profit, then let the rest ride.

Lastly and VERY important is something called Option Theta, the closer you get to expiration, theta measures the rate at which options lose their value. This is usually more sensitive when you have less than 60 days until expiration but it is important to take into consideration when buying and selling options.

[7sins]

Originally Posted by chadwick4eva

Opened a position in D R Horton Homebuilders (DHI) last week- largest homebuilder in the US currently. Expecting continued boom in housing for the next few years while interest rates are low, and this company has excellent financials. They build starter and some "luxury" homes across the US.

https://finviz.com/quote.ashx?t=DHI

Things I like-
1. Low P/E relative to the market- 11.0 P/E, 8.0 Forward looking P/E.

2. Room to grow on a low P/E stock- 5 year anticipated EPS growth by analysts is 15.8%. For a company trading at such a low multiple, this looks like a huge bargain. Their prior 5 year EPS growth is 25%. No reason to doubt they can't pull off this kind of growth the next few years with low interest rates creating perfect storm for homebuyers. Even if growth projections don't reach the consensus estimates (say it's only 10% EPS growth the next few years), there is solid margin of safety here given the discounted valuation.

3. Excellent financial track record:

https://www.macrotrends.net/stocks/c...horton/revenue
Beautiful revenue growth over time.

https://www.macrotrends.net/stocks/c...orton/pe-ratio
Beautiful corresponding earnings growth.

https://www.macrotrends.net/stocks/c...rton/price-fcf
3+ year trend of Free Cash Flow growth.

In combination with a reasonable P/E and reasonable 3-5 year projections, this is the trifecta for me- growing earnings, growing revenues, growing cash flows that can be put back into the business or paid out to shareholders. This management team is doing things the right way if all of these things are moving in the same direction. Speaking of payouts to shareholders...

3. History of Dividend Growth for shareholders. DHI is currently a "dividend challenger"- meaning they've increased dividend annually for at least 5 years. Annualized dividend growth rate for the past 5 years is a massive 25%. This perfectly corresponds to their earnings growth as well. While they don't pay out the highest yield (currently 1.14%), this kind of high DGR is what you want to see if you are aiming for big yield on cost in the future.

4. Gross margins of 24%, Operating margin >10%. Home building is a capital intensive business but they still manage to pull off a solid operating margin. Toll brothers, a competitor, has gross margins of 20% and operating margins of 6%.

5. Low debt. Current assets are 4-5x more than total current debt (ST and LT).

Current plan is to sit on this stock for at least 1-2 years and re-evaluate when interest rates start to rise.

This is a great writeup, thanks for taking the time to put together.

[scarlet knight]

I bought two stocks for reopening. MSGE and BKNG.

[7sins]

FYI this afternoon, $snow filed their official form 8-K confirming lockup expiration after price condition was met for January 7th.

"On December 29, 2020, the Price Condition was satisfied, and the Early Release Date will be January 7, 2021. As a result, the Company estimates that up to approximately 37.9 million shares of the Company's Class A common stock will become eligible for sale in the public market at the open of trading on January 7, 2021."

[huncho]

got into some fedex calls yesterday/today. hopefully the bleeding stops

7sins - are you still in rkt/bullish on it? i honestly am amazed at the resilience this stock has towards price movements lol

[JParm]

https://www.barrons.com/articles/ark...?mod=hp_LATEST

Good news for Cathie Wood believers / ARK investors (I'm not one but I find them interesting).

[7sins]

Originally Posted by huncho

got into some fedex calls yesterday/today. hopefully the bleeding stops

7sins - are you still in rkt/bullish on it? i honestly am amazed at the resilience this stock has towards price movements lol

Still in RKT, it is a very small position for me, got in the low 20s, right after it crashed from its run up to $30 post IPO. Which I thought was a great entry point but this stock moves slower than my 103 year old grandmother. Strong outlook here, forward PE of only 11, 45% EPS growth this year, incredible 61% operating margin and large institutional ownership which I think is important when creating a floor which was around $18. All of this coupled with a massive share buyback and their best quarter in 30 years last quarter. And all it does is go sideways. It will need another catalyst and my hope was that share buyback (maybe a dividend and the stock would have responded better) would push the stock higher. Still in wait and see mode, going to give it a few more months.

FDX will require a bit of patience but the stock market is just the transfer of wealth from the impatient to the patient. It will pay off in the long run.

[capital]

Anyone familiar with FuboTV here? Any of you is a client? If so, could you share your opinion about the service and its pricing?

[capital]

Originally Posted by Dusko.Popov

For those who don’t want to read all that ...

Fubo.

Recommendation from a half-assed country lawyer.

Fubo

I should have made a search before my post... you're still long Fubo? I got in at 27$ and did not sell a single share when it went to 60 a few days ago.

80% of my portfolio is value, 20% growth. And Fubo is my second largest holding in the growth bracket.

[Flex368]

Thanks again @7sins for the info on SNOW.

[7sins]

Originally Posted by capital

I should have made a search before my post... you're still long Fubo? I got in at 27$ and did not sell a single share when it went to 60 a few days ago.

80% of my portfolio is value, 20% growth. And Fubo is my second largest holding in the growth bracket.

I have no position here and don't know enough about the company for an opinion but did notice across my bloomberg screen today was a new short report on them: https://www.kerrisdalecap.com/wp-con...-Inc.-FUBO.pdf

Originally Posted by Flex368

Thanks again @7sins for the info on SNOW.

You are welcome! Trading down/sideways last two days in two up markets.

[7sins]

Another upgrade for FDX today from Argus from 270 to $305 and re-iterate their buy rating. Two other upgrades in the last week too: BOA target price is $346 on 12/18/2020
CFRA target price is $327 on 12/26/2020. These analysts know the company in and out, I think this is continued good news as the stock consolidates on low volume. Added again, now my third biggest position.

Initiating position in $BBBY today, interesting short squeeze possible. Right now the float is 118M shares and 62% of the float is short (that is 73M shares), which is one of the most shorted companies in the market. It will take 10 FULL trading days to cover it, that is insane. On Dec 14th BBBY approved $150M for its ASR (accelerate share repurchase) on top of the 22m already in the ASR. Purchase of this stock is to be completed by February 27th and represents roughly 18m shares they are buying back. Catalyst is ER call next week which does not include December sales. Stock is down 8% this month, with positive news and insanely high % short, this potentially be back at $25 very quickly. New CEO Tritton this year was pivotal for the turnaround success at Target and has turned this company quickly around this year. Notably with a much larger push to ecommerce, sold several non-core brands to significantly lower debt and closed stores that were underperforming. Slowly building position here, next week can swing either way on ER so I am buying puts (in a smaller dollar amount and shorter expiration) as a hedge in case this goes the wrong way. If the stock moves up quickly, with their ASR, the short squeeze could easily push this above $25 very quickly. Next year will be make it or break it for them, but the turnaround is in progress, ASR is positive and recommend reading through their investor day presentation: http://bedbathandbeyond.gcs-web.com/...0-3fcf49e321d4. Currently trading at an incredibly cheap 0.24 p/s, 12.86 p/FCF!!, and EPS growth next year is expected to be 250% -highlighted below in yellow. All while generating almost $10B in sales with only a 2.4B market cap. Not for everyone and that is why I am buying longer calls in case we see short term vol.

[scarlet knight]

Originally Posted by chsu74

For housing, I had:

CCS
MHO
MTH
NAIL

Those above are among the best valued builders. Have been in those since late spring as folks were moving out of the city into homes and townhouses to balance out the portfolio. Solid financials and quarterly beats of 50% increase in profits and 40%+ in revenues.

Just don’t get enough attention so sold them all today. Market don’t like housing. Too boring and hard to trade with low volumes. My selling straddles often feels like dealing with one person on the other side lol..

I like 45 degree angle up stocks, not sawtooth. But these stocks do well in an up cycle.