Out Fox The $treet

Southwest Airlines reported mixed Q1 results as the coronavirus hit March revenues. The airline now has access to over $13 billion of cash after raising an additional $3 billion of funds. The company has reduced cash burn to ~$10 million. The stock is a bargain at 7x normalized earnings, but the airline isn't the best deal in the sector. Southwest Airlines  ( LUV ) has seen a tepid rally following  Q1 results  as the company is poised to quickly wipe out the daily cash burn. The general airline industry was up over 10% on the quarterly news and bullish signs of  reopening the economy  and international travel with passenger tests. Unfortunately, this airline caused a self-inflicted wound by rushing out equity offerings when cash wasn't needed. Under $30, my  investment thesis  remains bullish on the stock while acknowledging that better upside exists in other sector stocks. Read the full article on Seeking Alpha.  Disclosure...

Delta Air Lines obtained $5.4 billion in government aid. The airline stocks trade at constant discounts to the troubled cruise liners despite better business prospects. The stock trades at a substantial discount to the market at only 4.8x drastically reduced forward EPS estimates. For years now,  Delta Air Lines  ( DAL ) has been the best-run legacy airline, yet the stock was never loved by the markets. The airline always traded at far lower ratios than the other transport stocks and now the lack of love is apparent compared to the cruise lines. My  investment thesis  remains highly bullish on the airlines and particularly Delta as a safe bet for an eventual rebound in air passenger traffic rebound. Read the full article on Seeking Alpha.  Disclosure: Long UAL. Please review the disclaimer page for more details. 

Aurora Cannabis announced plans for a 1:12 reverse stock split. Most research supports dire outcomes for most reverse stock splits. Not all splits are negative, though, providing potential upside on the stock after already falling on the news. Aurora Cannabis only trades at ~3x sales estimates now. With  Aurora Cannabis  (NYSE: ACB ) trading below $1, the market shouldn't be too surprised the company announced a reverse split of their stock. Historically, reverse splits are negatives for participating stocks, but the cannabis sector is a new space where the capital structure and regulatory restrictions are as much the issue for the company than any dire situation. My  investment thesis  still remains positive on the catalysts for Aurora Cannabis during 2020, while the stock will be volatile during this process. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Despite the market uncertainties, AMD (AMD) remains a strong stock. In late Thursday trading, the sock ran into major resistance at $50. The chart appears to show a stock ready for a major breakout. My advice as long recommended this period is the last chance to buy AMD below $50. Any dip here is a buying opportunity. More research on Seeking Alpha: AMD: Work From Home Boost AMD: Right On Target AMD: Last Chance Below $50 Update April 10 Intel (INTC) says demand picked up for chips. Source: No position. Long in Out Fox model. Please review the disclaimer page for more details. 

Zoom Video is priced for unsustainable trends plus the video conferencing tools isn't ready for privacy issues. The stock is worth double and triple a similar group of companies benefiting from the work-from-home economy. The stock trades at an unsustainable 40x FY21 sales. As the market has collapsed this year due to the coronavirus outbreak,  Zoom Video Communications  ( ZM ) has soared. The company benefits from the virtual economy and reportedly has seen mobile  active users up over 150%  in March. The problem here is that the stock is priced for a virtual only world where users never return to normal trends. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

The Work From Home economy is set to boost data center demand. AMD is poised to take market share from Intel in the growing data center space. The stock has long term EPS potential above $3 making the stock a bargain down at $40. The work from home economy has already boosted several companies in the virtual space which should lead to higher data center demand. While  Advanced Micro Devices  ( AMD ) has held up well in the downturn, investors have probably missed the boost in demand the company could see from the data center segment. My  investment thesis  continues to see the stock as a very compelling buy anywhere below $50. Read the full article on Seeking Alpha.  Update - March 27 Don't see the recent lows being broken. The risk is to the update as virus totals dip over the weekend in Europe and the US potentially hit peak new cases here soon. Disclosure: No position mentioned. Please review the disclaimer page for more details. ...

Square gets 45% of GPVs from sellers generating under $125,000 in sales. The payments company is likely to see customers go out of business. My base case is 0% revenue growth in 2020 and a return to only 15% growth in 2021. The stock is a buy at 7x '21 adjusted revenues with potential upside to estimates. The Covid-19 outbreak and the shutdown of the global economy has investors fleeing  Square  (NYSE: SQ ). The mobile payment company is highly dependent on small business customers, and the economic slowdown is going to hit their customer base the hardest. Just weeks ago,  my view  on the stock was negative with the price back above $80, and now, the stock is far more appealing after a 50% collapse in a matter of weeks. Read the full article on Seeking Alpha.  Update March 25, 2020 The company updated Q1 guidance to only slightly below original forecasts. The stock has already soared on the backs of the agreement on a stimulus deal to help...