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Showing posts from September, 2019

Buy Airlines On Oil Induced Weakness

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More evidence continues to show that the strikes on Saudi oil facilities actually came from Iranian missles, not Yemen drones. Not even sure, if it matters, because the whole world knows that Iran was involved. 

Dion Nissenbaum
✔@DionNissenbaum
US looking to declassify satellite imagery to bolster contentions that Iran was origin of weekend attack on Saudi oil industry as mounting evidence points to cruise missiles fired from Iran or Iraq, not Houthi drones launched from Yemen: https://www.wsj.com/articles/iran-rejects-u-s-accusations-over-saudi-oil-facility-attacks-11568544181?mod=hp_lead_pos1 … w/@summer_said

Intel Upside Capped By Yield

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Find it interesting that certain stocks appear to have capped upside based on the dividend yield. Intel (INTC) is such a stock when the yield hits the recent 2.4% levels. The stock might rally further to reach the recent highs, but the time to buy Intel is when the dividend yield tops 3.0%. 


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Disclosure: No position. See the disclaimer page for more details.  

Lyft: It Keeps Getting Worse

California continues to move forward on AB 5 that will turn contractors into employees. Lyft already has a slim profit margin. Avoid the stock until the company formulates a business model around generating solid operating margins. My previous work already focused on the lack of a margin of safety in Lyft (LYFT) and the news continues to get worse. The company faces legislative issues pressuring the gig work concept while the business growth is apparently decelerating at a very fast clip. The stock doesn't appear to have reached a low yet. Read the full article on Seeking Alpha.  More commentary - WhoTrades Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Aurora Cannabis: Supply Rationalization Needed Now

Canadian cannabis industry inventories continue to surge with over 300K kg in supply and monthly demand below 10K kg. The industry needs to rationalize capacity with store forecasts of only 600 retail locations by the March quarter. A stock price of $5 and a market cap of ~$5.5 billion remain lofty for breakeven EBITDA and FY20 revenue targets of $521 million. The cannabis bulls continue to claim that a lack of retail stores and legal supply has kept sales low, while the data doesn't support the thesis. No doubt, sales will increase substantially as retail stores in Canada grow, but the market is headed to a major over supply scenario led by market leader Aurora Cannabis (ACB). My previous research had the stock approaching a potential buy point near $5, but the latest Health Canada stats for June have the industry at a critical inflection point that needs immediate action. Read the full article on Seeking Alpha.  More commentary - WhoTrades

Update September 16
No surprise here. A…

Slack: Wheels Just Fell Off

Slack fell hard due to revenue growth expectations failing to meet expectations. The company is facing a period of decelerating revenue growth that always hits high multiple stocks very hard. A valuation of 8x FY22 revenues places the stock at only $17.50. By all accounts, Slack Technologies (WORK) reported a solid FQ2 for the first quarterly report following their hot IPO back in June. The stock was already down substantially from the highs above $40, but the IPO rally was so outrageous that investors should expect the IPO pricing at $26 is broken. My original research was bearish on the stock following the hot IPO, and the view hasn't changed much now. Read the full article on Seeking Alpha.  More commentary: Out Fox The $treet - September 5, 2019  Disclosure: No position. Please review the disclaimer page for more details.