Intelligent Speculator

Time 2020-07-18 07:09:08

Web Name: Intelligent Speculator

WebSite: http://www.intelligentspeculator.net

ID:27710

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Good morning, it has been a long time but I m happy to be back with hopefully a lot more on the road ahead. For today, I wanted to update the list of stocks that I follow to include 2 newly turned public companies as well as one ticker change.Priceline (PCLN) renames to Booking Holdings (BKNG): Priceline has been one of the top success stories in the past decade in the tech space and while Priceline.com is the property most American users would associate most with the company, the facts are that Booking.com is a huge part of the company s business and while a large portion of the company s business is in Europe, it has been growing worldwide.  The name change is in part to more accurately align our company name with our largest business, CEO Glenn Fogel said in a news release.The other 2 names are companies that I had discussed here and was hoping to see turn public soon. From a consumer perspective, I do love both companies but I m also very skeptical of their long term success as independent companies.Dropbox (DBX): Dropbox is an online storage company that started off early, has been loved by its customers. It charges a monthly fee for customers to have access to online space where they can backup and store their data. Because of how well their product is built, they ve had little churn. Great business opportunity? I have 2 big concerns about DBX:-Margins will be under tremendous pressure. Dropbox s competitors are the big ecosystem plays that I often talk about. Google s Drive, Amazon s Cloud Drive, Apple s iCloud and Microsoft s OneDrive as well as more specialized players such as Box. That spells disaster for me. Several of these players consider online storage as a feature that they can include in other packages which will put tremendous pressure on prices but also mean they ll likely offer the product for free with other products.-Growth: I m skeptical that DBX will be able to generate much growth. The company has been around for a decade and potential users typically already know about the company. They have not become customers yet either because they already have storage from a competitor or because they do not see the value yet. Not exactly easy to turn up the growth in my opinion.I believe that DBX growth would need from building new products to existing customers which the company has attempted in the past with little to no success Spotify (SPOT): Like many of you I m sure, I m a Spotify customer and really like the product. I do have several of the same concerns about Spotify in the sense that it also competes with among others Google Music, Apple Music, Amazon Music and that will make it difficult to compete and even reach profitability. Tha being said, I do think Spotify has a better shot at making it because it could eventually start cutting out labels or signing its own artists because of its dominant position. If that were to happen, Spotify could improve its financial situation as its cost structure could become more fixed in nature.I don t expect to their DBX or SPOT in the near future but I will be monitoring and could certainly see myself shorting DBX after a few earnings are announced.Did any of you buy SPOT or DBX? Which one do you believe in more? 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! 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 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: 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. 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/livetradesLet s start off by looking at the numbers: TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthRevenue 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 2017Short 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 2017Disclaimer: Prior to opening this trade, I do not hold a position in EXPE or TZOO 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. 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. 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 NetflixNetflix 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. 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-14-2017-419873Looking at the EUR/GBPTechnical 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-20170710The 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 currenciesOverall, 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.         IntelligentSpeculator is an investment blog that discusses technology stocks, ETF's as well as general market commentary.

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