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Weekly Portfolio Summary

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Oh how the times change so easily.  It's become apparent that the stock market of 2017 is gone and what has taken its place is one filled with uncertainty and volatility.  Repeatedly over the last number of weeks we face wild swings as our President tweets, aids calm fears, and new complications arise.  It's important to note that for the last month and a half, we've truly been in the grips of a macro environment where everything from Presidential Tweets, Fed statements, Jobs reports, and other extraneous political and macroeconomic news controls the markets.  The one thing that could potentially put some calm to the market - earnings season - only started on Friday and despite what was a strong showing out of our biggest banks, what started as strong gains were wiped out and met with losses as people got prepared for a weekend which included fears of us dropping missiles on Syria (it happened Friday night and then called a "complete success"), as well as fears t…

Earnings Analysis: Citigroup (C)

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On Friday, April 13, Citigroup announced their results for the first quarter of fiscal year 2018.  Earnings came in at $1.68, beating estimates of $1.61.  Revenues were in line with expectations of $16.86B, delivering results of $18.87B.  The earnings number was a 24% increase from a year ago whereas the revenues were a 3% increase.  It's also worth noting that operating margins were up 4% from a year ago while the efficiency ratio continues to improve for the sixth consecutive quarter, up 50 basis points to 58.4% from a year ago.

Looking deeper, Global Consumer Banking (GCB) revenues increased 6% from a year ago with solid growth in both North America and International businesses.  There is a one-time boost from the sale of the Hilton brand cards which has about a 2% impact.  Credit costs rose 3% representing both volume growth and seasoning of their cards business in both North America and International.  NCLs grew overall in GCB, but much of this is seasonality, as there is typi…

Weekly Portfolio Summary

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Once again, it's been awhile since I've provided an update or completed missing quarterly reviews.  Time to put in some extra work and get caught up.  To start out with, my portfolio has been under performing the S&P 500 this year.  As of today, I'm just over 2% behind the S&P 500.  I'm finding this to be quite frustrating and am trying to figure out what/how/why that is the case after last year's over performance.  I have yet to figure out the solution, as many of these companies are still just as great as they always have been, but they've been out of favor in the market for the last couple months.  This is potentially a temporary thing and a test to my conviction in the holdings.

That said, there are other factors to consider as well.  The US Dollar has leveled off and shown a little strength with the rise of interest rates and lack of similar actions in other reasons, for example.  And to top that off, Trump just elected Larry Kudlow as the new Econo…

Trade: iShares MCI Eurozone ETF

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Yesterday I sold my entire stake of the iShares MCI Eurozone ETF at a price of $43.825.  While I haven't been able to post my weekly summary due to technical problems, followed by a busy life, I had written that the picture for that holding has started to change pretty significantly.  First, there is a lot of Tariff talk going on.  The EU is starting to look to Tariff the US after we set tariffs on steel and aluminum.  This is taking a hit to the market, overall, and makes it difficult to see as much growth and momentum for European companies if they can't make as much off of selling product to the US.  The second big event was the appointment of Larry Kudlow as the President's Chief Economic Advisor.  Larry is well known for his stance on "King Dollar" or a strong dollar, which goes against this fund in particular, as it is unhedged and was chosen to take advantage of a strengthening Euro to Dollar.  Since all of these events haven't taken place, I felt it w…

Earnings Analysis: Ionis Pharmaceuticals (IONS)

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Back on February 27, Ionis announced their fourth quarter and fiscal year 2017 results.  Instead of diving into results, the company started out with talking about its pipeline.  As I have been anticipating, we have some updated information on the PDUFA (and thus the retail approval) for Inotersen, which will be July 6.  At the same time, their EU review has also been accelerated and things continue to go smoothly.  With approval, Ionis will be ready for immediate launch of the drug.  They also appear to be getting close to deciding on a partner to take on the drug, which is a bit of a mix on emotion.  Giving it up means that Ionis will give up revenues, in exchange for all of the sales and marketing efforts, but given where they are in the process, the company should be able to maintain relatively high royalty rates.  Similarly, we also received an update on Volanesorsen, with the FCS therapy going in front of the FDA on May 10.  Again, the process is moving forward smoothly and Akce…

Earnings Analysis: Pepsico (PEP)

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Pepsico announced their fourth quarter and fiscal 2017 year end results back on February 13.  Headline results showed a slight beat of expectations with earnings coming inline with expectations at $1.31 and sales beating expectations of $19.38B with results of $19.53B.  The company was able to return organic growth back to anticipated levels of 2.3%, most North American segments grew and took share, and the international segments saw growth of mid single digits or higher.  The down side continues to be in the North American Beverages division.  It's true that they were able to see growth quarter over quarter, which was nice to see - especially after the product placement issues last quarter.  However, the growth is still not where expected or desired with an economy in its current state.  Pepsi is now about to introduce a new fizzy water called Bubly, which they hope will help bring some life back.  Personally speaking, they brought this on much too late.  Many people wanted them …

Earnings Analysis: Apple (AAPL)

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A quarter late, I'm finally writing my first review of Apple quarterly earnings.  The company reported their fiscal first quarter of 2018 on Thursday beating on top and bottom lines.  The company reported revenues of $88.3B and earnings of $3.89.  This results in a solid beat of expectations on the top line of $86.48B and a slight beat on earnings expectations of $3.86.  These results culminate in the best quarter ever for earnings and revenue for the company.  All this said, not everything was seen as great or perfect in the quarter.  IPhone sold 1% less units than that compared a year ago and mac units were down 5%.  IPad sales were up 1%.  Services grew 18% year over year.  It's worth noting that all of these numbers are built off of the fact that there was one less week this fiscal year than last.

This is the crux of where all of the chaos around this stock is based.  Essentially, it seems analysts were expecting some sort of "supercycle" because of the company se…