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Showing posts from 2018

Trade: Cedar Fair (FUN)

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Yesterday I sold approximately one third of my position in Cedar Fair (FUN) at a price of $55.25.  This price represented a net loss of around 11.1% (tax harvested).  As I stated in my Disney initation here, I wasn't pleased with the results I've been seeing from the amusement park industry and noticed there seems to be something larger than just weather driving the lower than expected results (not to mention I've taken way too long to react to what I was seeing).  As such, I'm shifting away from Cedar Fair in favor of Disney for a more broadly diversified holding that doesn't rely on just amusement parks, but entertainment more broadly.  Third quarter results are coming up towards the end of the month and should they provide solid results, I may get a price pop I can take advantage of and maybe even get a small profit from.  In the meantime, I wanted to sell this position to pay for the Disney shares I grabbed.  I am waiting for my next DIS purchase opportunity, h…

Trade Initiation: Disney (DIS)

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On Thursday, I purchased approximately one third of a full position in Walt Disney Corporation (DIS), otherwise known as Disney.  This expands my portfolio into the entertainment space, given I currently hold shares of Cedar Fair (FUN).  The purpose of this purchase is to begin a transition away from Cedar Fair.  The company and the stock has not been performing up to expectations as of late.  Despite the strong dividend of over 5%, the company lost all of the capital gains I had in it and then some.  This was poor management on my part.  Regardless of what I did or didn't do right with Cedar Fair, I still have faith in the Entertainment industry.  However, I felt it would be more appropriate to diversify myself outside of just amusement parks.  I feel the timing of this switch is ideal too.  Besides the theme parks which Disney has and are doing well, they have TV via ABC channels and ESPN, which is starting to turn itself around with it's ESPN+ app and get itself repositione…

Earnings Analysis: Pepsico (PEP)

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On October 2, Pepsico announced their third quarter earnings results while saying goodbye to their CEO.  This was the last day and last earnings call to be led by Indra Nooyi, a venerable champion in the business with her strong leadership pointed towards a strong future for the company by making sure they stayed in front of and fully involved in snack and beverage trends.  I'll get more into the company's future as I close this up, though.  As for the earnings results themselves, the company generated non-GAAP earnings of $1.59 which beat consensus by two cents and delivered organic revenue growth of 4.9%.  Core constant currency growth was 9%.  This included a 2% impact from currency conversion, given the recent strength of the US Dollar.  They also guided up on their expectation for organic growth from less than 3% to at least 3%, a sign of confidence that their final quarter looks bright.  

While profit was down for the North American Beverages segment, Revenues again conti…

Trade Initiation: Canopy Growth Corporation (CGC)

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Last week I bought an initial position in Canopy Growth Corporation at a share price of $50.  This company is an early entrant to the Canadian Pot industry as a producer of both medical and recreational marijuana, a new market that opens up the first of October, now that the country has legalized it. Pot stock have been hot - really really hot.  There's no doubt that many of them, Canopy probably included, are over valued right now.  While I was looking to speculate there's a lot of publicity in this area right now.  I would say that I felt Canopy was one of the better stocks, though we all know there's another out there that has been surging in astronomical proportions due to shortage of stock availability.  The nice thing about Canopy is that they're adequately capitalized and won't likely look to raise cash through offering more shares.  However, there are a lot of other companies out there that will need to and even more that will be looking to go public and ca…

Trade: IONIS Pharmaceuticals (IONS)

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Today was a wild day for Ionis.  After FDA results for a competing drug failed to show signs that it was effective enough to prevent competition for FCS in the mix, IONS was up over 10% at varying points during the day.  I was contemplating selling some, given I was finally back in the green on the stock.  However, there was a PDUFA meeting coming on Thursday for the approval on Volanasorsen on the radar and I didn't want to try to sell out and hope to get back in to maximize gains (typically after a big jump, the stock sells off for a couple days).  Then after the bell, the stock was halted as the FDA issued a Complete Response Letter (CRL) notifiying their holding company Akcea that they have rejected their drug Walivra on serious concerns on safety with antisense oligonucleotide drugs.  This puts the upcoming PDUFA in some jeapordy and the future PDUFA for Inotersen in serious jeapordy (due to the fact it suffered a death related to platelet issues), significantly reducing the …

Trade: Citigroup (C)

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In preparation of the second portion of the CCAR results that will be announced tomorrow, I refilled my position in Citigroup today, purchasing shares at $66.  Unfortunately, I didn't get shares purchased yesterday when the stock was in the $64s and then I pulled the trigger a little too early today, as the market started making a massive swing to the down side around the time of my purchase.  My reasoning for purchasing the stock was that it was near the price target area I've been hoping for since I sold up in the $72 range and we now have a catalyst which I believe will charge all bank stocks in the second half of the year. 


The CCAR results have been an inflection point for bank stocks, historically, as they are then allowed to start to distribute their excess capital as per agreement with the Fed.  I believe that Citi's captial distribution plan will be well received by the Fed, enabling them to distribute approximately $20B in dividends and stock buybacks over the ye…

Stock Initiation: Raytheon (RTN)

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After much contemplation, I decided it was time to move into a new position today and purchased half of my position in Raytheon at $188.50.  Raytheon is a defense company primarily known for the production of Patriot Missiles - a surface to air anti-missle defense system.  However, they also produce other items, play in cyber security and deep analytical analysis as well.  My theory is related to the fact that the US is looking to bolster their own military capabilities, to which Trump's declaration for a space force added to, but also the fact that the US is no longer spending as much of its money to protect its allies.  This means they need to increase their own purchases and Trump is using defense as something he's trying to push in all of his trade discussions.  These situations, I believe, spell out a strong runway towards ongoing profits in what is generally a robust global economy right now.  It is true that the Trade war pressures has the potential to strain some of th…

Earnings Analysis: Pepsico (PEP)

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Back on April 30 (yeah, I'm way behind), Pepsico announced their first quarter financial earnings for 2018.  Earnings came in at $0.96, beating consensus by three cents and sales were $12.56B also ahead of analyst expectations of $12.35B.  Finally, organic growth came in line with company guidance at 2.3%.  In all, the quarter was solid.  Maybe not perfect, but definitely solid.

As has been the case for a couple quarters already, North American Beverages (NAB) under performed the overall company.  There were operating and raw material inflation costs as well as some one-time bonus impacts.  That said, NAB did improve performance quarter over quarter for the third quarter in a row.  Guidance has been that this is the path they're on and that it will continue, so I see that as a positive at this point.  There are worries among the analyst community about competition and pricing wars, particularly in the sports drink section, but management seems to have the facts to back up their…

Trade: Pepsico (PEP)

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Today I increased my position in Pepsico by 25% at a price of $97.25.  While I haven't had a chance to complete my homework and post my review on the company's first quarter results, I do know the company beat expectations and provided a solid set of results for the quarter.  The one thing that I noted to like, in particular, was the fact that North American Beverages (NAB) didn't do as bad as analysts expected.  While there is some concern on all of the China and Tariff talks impacting the stock and the fact that the company is seeing more competition against the 10-year treasury, we've now seen the stock drop roughly 21% from its 52 week highs.  This selloff is getting to be over done and any good news could sent the stock higher.  If the stock drops to $92.75 we'll see the stock yielding 4% and that's far from typical for this consistent player.  I do have more room in my position and cash levels to take advantage of more down side - and I do see potential f…

Earnings Analysis: Honeywell (HON)

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Back on April 20, Honeywell announced the results of their first quarter operations.  Results were strong, with earnings coming in a $1.95 and sales coming in at $10.4B - both of which were beats against expectations of $1.90 and $10.02B respectively.  Organic sales also beat guidance of 2% - 4%, by resulting in 5% along with 40 basis points of margin expansion and $1B of cash flow.  Additionally, the company spent $1.4B in share repurchases ($950M) and dividends since there weren't ideal investment opportunities to go after.  Growth was led by the aerospace division with 8% organic growth along with 6% organic growth from the Safety and Productivity solutions division.  Home and Business Technologies and Performance Materials and Technologies grew 2% and 3% organically, respectively.  

Results were strong enough that the company raised EPS guidance to a range of $7.85 - $8.05, raising both the lower and upper ends.  They anticipate organic growth of 3%-5% and the sales of the busi…

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…