Friday File: Sales for Profit and Loss, plus a couple add-on buys post-earnings
by Travis Johnson, Stock Gumshoe | November 1, 2019 7:08 pm
Checking in on earnings and Real Money Portfolio updates -- including ANET, ATVI, OPI, MKL, SAND, SHOP, GOOG, AAPL and more...
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Source URL: https://www.stockgumshoe.com/2019/11/friday-file-sales-for-profit-and-loss-plus-a-couple-add-on-buys-post-earnings/
Thanks for another great Friday File, Travis!
Travis,
Kudos to you for your thoughtful and even handed response to the reader whose friend espoused the nonsensical (my word, not yours) conspiracy , deep state claptrap that’s promulgated by the right wing media and our distinguished Commander in Chief.
Not trying to start a political debate here. Just a compliment to our inimitable guide through the investment jungle. Have you considered running for public office?
I hope Travis doesn’t run for political office; he would have to divest himself of any affiliation with Stock Gumshoe. Even if he won all the debates and had the best ideas, it wouldn’t matter when you have to deal with ‘Roadblock Pelosi’ or ‘Mumbles McConnell’.
Travis,
Thank you for your “soapbox blather”. It was very enjoyable and the article you referenced is very insightful and thought provoking.
My Regards.
I too enjoyed your write up especially the soapbox blather. Thank you Travis.
Hello fellow Gumshoe’s, and Travis. Today, was a first. I read the comments before. I read the Friday file. I am so ready to read another one of Travis’s writings. O yea and a little equity position opinion. Love being a member, and will let everyone know when I have reached a personal goal of mine. Thank you, Jeff. Long Shop. Dis IIPR. AMZN. Apple, TTD , NOW, and a few others mentioned by our Guru. Ty
Such good information Travis!
I read an article once about people who were considered to have low functioning brain capacity…(I am one of those people) It stated they make better investors because they invest without emotion and are able to shut out all the garbage easier because they can not take on as much. This article turned me into an investor and I must say it was correct. If you have a high functioning brain, only read what you absolutely need to to maintain a strong portfolio, If you are a news junkie…shut off the news for most of the month…you will find it liberating and your portfolio will go up because you can check out what you need to know anytime to maintain your portfolio. I set alerts in my account for special news on my stocks only and the stocks I am following.
ANETs story resembles a lot NVDAs weakness during the past months, although ANET seems to be a lot more dependant on a few, large customers. @Travis, at what price level would you be interested in getting back into ANET?
Not sure yet. I didn’t sell quite all of my shares, and it has already popped back up a little bit — seems like it’s pretty hard to keep enthusiasm down in this market, at least on a “China Trade will be OK!” day. I expect I’ll need to see more data come in, particularly need to get a better idea on whether the revenue is going to slump throughout 2020 as they are currently guiding, analyst estimates may still be too high for 2020, and see whether that’s flowing through to the competitors too or is just an Arista thing. Will be very curious to see what Cisco says next week in their quarter.
Trade Note:
I hit my stop loss with Hershey (HSY), so those shares are sold. I wouldn’t be against getting back in at some point, but I’ll take this as a signal — the shares are still very richly valued for a very low-growth stock, as I’ve noted several times in the past couple months, but I don’t like to sell steady stocks with rising dividends… so I’ve resisted selling without a reason. A stop loss signal, however, is enough of a reason to drop the position (I’ve followed the TradeStop signal for this one, which was roughly a 13% stop because Hershey is a very low-volatility stock). I would think about getting back in to Hershey in the $120s if it continues to drop and/or gives up much of its premium valuation.
This might be a mistake, to be clear — Hershey is a good company, with rising free cash flow and a long history of dividend growth, and it trades at about 23X forward earnings, which is high but not necessarily perilously so (HSY’s PE ratio has been in the 20-30 range most of the time for 30 years). Charlie Munger, Warren Buffett’s muse, often says that the one rule for compounding wealth is not to interrupt it unnecessarily… and selling a dividend aristocrat is certainly an interruption of compounding, particularly because that money is going to sit in cash for at least a little while, but I don’t see a valuation “floor” for the shares if sentiment finally shifts away from no-growth blue chips.
So Hershey gets cleared out of the Real Money Portfolio right now at roughly a 60% gain, which is lovely for a stock I’ve held for about a year and a half.
On the flip side, I’ve made a small add-on buy to a medical equipment company that has done very well since I wrote about it for a Stansberry tease a few weeks ago and added it to my portfolio — so I’ve increased my holdings in Elekta (EKTAY for the US ADR) by about 50%. Still a smallish holding, but the rising investor interest is a good sign given the strength of their order book for their newest machines and the anticipation that targeted radiotherapy combined with immunotherapy will become an ever more important part of the oncologist’s playbook. This is a fairly high-risk area, given the competition for precision radiotherapy equipment and the sometimes cyclical nature of hospital capital investment, so I am watching the stop loss for that one as well — it’s around $11 at the moment.
I’ve noted before that I’ve traded in and out of Arista several times, and made money each time. At that time Arista traded on news from Cisco’s attempt to destroy them via legal action. Now the news is driven by their actual performance as a company, which is good.
I agree that the dependence on “Cloud Titans” (what a bleh marketing term!) is troublesome. I’ve been more and more impressed by Arista’s management team, esp Jayshree’s stone cold honesty with estimates for future quarters. You can tell in their earnings calls when things are going great (she and the other managers joke around) and when they are not (she actually sounded scared in this and the Q1 earnings calls).
To me that level of integrity deserves a premium above and beyond the numbers (and they are still selling a lot of product and still have a lot of money in the bank).
That said I have a small position currently as a means to limiting my risk.