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Showing posts from August, 2021

Zoom Video: Normalization Gone Bad

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  Zoom beat FQ2'22 analyst targets, but the size of quarterly beats continues to trend downwards. The company forecast FQ3'22 revenues to decline sequentially in further signs of a slowdown in business. The stock headed into the quarter trading at 20x forward sales while the future growth rates don't warrant this valuation. Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street.  Learn More » A lot of individual investors didn't want to listen, but  Zoom Video  Communications  ( ZM ) faced nearly impossible comps due to pulled  forward  demand. In  addition, the recent deal to acquire  Five9  ( FIVN ) is exactly what companies do in order to replace stalling growth. My  investment thesis  remains very Bearish on the stock not correctly priced for the new normalized, post- Covid  phase. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  Update - Sept. 17 ISS

Freeport-McMoRan: Minting Cash

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  Freeport-McMoRan continues to benefit from high copper prices despite the recent dip from levels near $5/lb. At $4.50/lb, the copper miner produces FCFs in the $8 billion range and EBITDA reaching $15 billion. The stock is too cheap with a market cap of just $54 billion with the bullish long-term demand trend due to EVs. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.    Learn More » Freeport-McMoRan  ( FCX ) fell to nearly $30 on fears of slowing Chinese demand for copper, yet copper prices remain sky high. At current prices, the copper miner is poised to generate billions of dollars in annual free cash flows. My  investment thesis  is Bullish on the stock in the mid-$30s, though investors should take some profits due to the historically volatile prices for the red metal. Read the full article at Seeking Alpha.  Disclosure: Long FCX. Please review the disclaimer page for more details.  Update - Sept. 20 Copper is only down 2

Jushi: Focus On Progress, Not Perfection

  Jushi Holdings grew Q2'21 revenues 15% sequentially to $48 million. The MSO set aggressive '22 targets for revenues of $400 million and adjusted EBITDA of $120 million for 30% margins. The company is strongly positioned for eventual recreational cannabis sales in Pennsylvania and Virginia. The stock is cheap at ~10x '22 adjusted EBITDA targets of $120 million. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » The  Q2'21 earnings  report continued to show growing pains at Jushi Holdings ( OTCQX:JUSHF ). The budding cannabis MSO (multi-state operator) is trading at yearly lows similar to the whole sector. My  investment thesis  remains very bullish on the stock following the weakness and based on the plans to greatly expand cultivation. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Volta: Another EV Charging Network With Too Many Questions

  Volta goes public via closing the business combination with the Tortoise Acquisition Corp. II SPAC. The company operates an EV charging station network in a competitive space leading to 24 million SPAC shares being redeemed. The stock appears to have an EV of only $1.3 billion, but too many questions exist around charging station network moats to buy Volta. I do much more than just articles at Out Fox The Street: Members get access to model portfolios, regular updates, a chat room, and more.  Learn More » The SPAC craze has left several sectors crowded with newly public companies including the EV charging station space.  Tortoise Acquisition Corp. II  ( SNPR ) just got shareholders to approve their business combination with  Volta   (NYSE: VLTA )  to enter the space. My investment thesis remains negative on the space due to material inefficiencies in the business models. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for

HEXO: Cheap, But Integration Risk Is Concerning

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  HEXO announced a surprisingly large equity offering causing the stock to collapse. The company sold at least 47.5 million units at just $2.95 per share while the stock traded above $7 as recently as June. The stock is cheap here, but shareholders face massive integration risk. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » While cannabis stocks have traded weak since the February peak,  HEXO  ( HEXO ) tops the list with a massive 27.5% loss on just Friday alone. The company has turned a promising acquisition of private Canadian firm Redecan into a horribly timed fund raising. My  investment thesis  remains Bullish on the stock after this massive dip, though my view remains concerned about integration risks of the three acquisitions. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  Update - August 31 Good sign that R

Matterport: Buy These 3D Digital Assets On Weakness

Matterport reported minimal Q2'21 growth due to a shift to subscription models. The spatial data company continues to capture massive growth in the subscriber base. The stock is just too expensive at 20x '22 EV/S targets, but Matterport would be a solid purchase on dips. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » Over the last 5 months, Matterport  (NASDAQ: MTTR )  has traded mostly sideways to down while the business is booming. The company is transitioning the business model to a subscription service hiding the actual growth rates from unknowing investors. My  investment thesis  remains on the border of being bullish, telling investors to snap up the stock closer to $10 similar to the lows from May while avoiding the stock here at $14. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

Spirit Airlines: Overlook Recent Hiccups

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  Spirit Airlines cut Q3'21 guidance after a period of strong rebounds from the covid lows in 2020. The airline had to cut nearly 3,000 flights in early August due to internal issues. The stock is cheap back closer to $20 with a path to $4+ EPS in the next few years due to capacity growth. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » The Delta variant has slightly dented travel demand, but the airline stocks have fallen up to 40% from the recent highs.  Spirit Airlines  ( SAVE ) hasn't helped their case with systems troubles causing the cancellation of thousands of flights. My  investment thesis  remains very Bullish on this stock following this dip as air travel demand remains on track for a full recovery. Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details.  Update - August 29 TSA traffic has definitely dipped, but Sat. traffi

Ayr Wellness: Doing Even Better

  Ayr Wellness reported another strong quarter with Q2 revenues now topping $90 million. The MSO has now updated '22 guidance to revenues of $800 million and adjusted EBITDA of $300 million. The stock is exceptionally cheap at only 6.5x '22 adjusted EBITDA targets. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » Most MSO (multi-state operator) stocks continue to struggle while the businesses are booming.  Ayr Wellness  ( OTCQX:AYRWF ) is no exception with sales surging 56% sequentially to top $90 million for the first time. My  investment thesis  remains very Bullish on the MSO trading at a small fraction of current growth rates. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  Update - August 25 A 5% buyback for a MSO is impressive, but the market will probably fear more stock sales in the future. The stock is just too cheap he

Charlotte's Web: Improving Trends Not Visible Yet

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  Charlotte's Web reported another weak quarter with revenues of $24.2 million missing estimates. The company continues to have multiple catalysts for future revenue growth including primarily FDA regulatory certainty. The stock only trades at 3x '22 revenue estimates, likely to be conservative once Congress approves a CBD bill. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » While the trends in the CBD market continue to head in the right direction,  Charlotte's Web Holdings  ( OTCQX:CWBHF ) has yet to see much in the way of financial benefits. The lack of FDA regulations on CBD in dietary products continues to hold back the sector. My  investment thesis  remains very Bullish on the stock with plenty of positive indications Congress will finally pass a bill giving the FDA regulatory clarity needed to drive growth. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review

Payoneer: Strong Start

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  Payoneer got off to a strong start as a public company with 42% revenue growth. The company disappointed on guidance due to weak payments volumes, but Payoneer still forecasts revenues to beat original 2021 estimates by $13 million to reach $445 million. The stock remains cheap at ~6x '22 EV/S targets. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » After completing the business combination with the FTAC Olympus SPAC back at the end of June,  Payoneer  ( PAYO ) just reported a strong first quarterly report as a public company. Unfortunately, the market overly stressed on some of the  Covid  normalization numbers. My  investment thesis  remains very Bullish on the stock below $10, as the payments company continues to show promising long-term growth prospects in excess of 20%. Read the full article on Seeking Alpha.  Disclosure: Long PAYO. Pleaser review the disclaimer page for more details.  Update - August 2