Showing posts from January, 2018

Trade: Home Depot

Today I removed my initial investment I made into my position of Home Depot.  The markets have gotten more volatile and turbulent and I expect this to continue as we move ahead.  The stock was up about $40 over the course of the last quarter from start to it's 52-week high just a few days ago.  I've made over 225% on my investment, so over 2/3 of my position contiues to exist.  It simply felt prudent to raise some cash and protect my gains.  The company reports in February and at these prices, I feel a perfect quarter and guidance is needed.  I feel like the stock could pull back to the 200 day moving average, at which point I could put my investment back in for awhile, if I wish.  I do have belief that the company will continue to do well in these early stages of rising rates, but I wanted to prepare for worse times, even at the risk of "selling into the panic."  I already know I didn't get my best price possible today, but my discipline has been telling me for …

Stock Analysis: Honeywell (HON)

On Friday, Honeywell announced results for fourth quarter and fiscal year 2017.  As expected, results were mostly spectacular.  Earnings came in at $1.85 on organic sales of 6%.  Revenues were $10.8B while delivering free cash flow (FCF) of 123%.  They repurchased 10.3M shares and also increased the dividend by 12% during the quarter.  These results mostly topped analyst expectations where earnings beat by a penny and revenues beat by around $90M.  Many analysts were hoping for 7% organic growth, though, which was the one bad mark for the company.  That said, the company projected only 2% - 4% organic growth, so they well exceeded their own expectations.  It is important to note that after all of these numbers, the company did report a loss of $3.8B due to provisions for U.S. Tax reform.  But these same reforms also allowed the company to adjust earnings guidance for 2018 up to $7.75 - $8.00, which is in line with my personal estimates of how reform would adjust earnings (I had conser…

Earnings Analysis: Citigroup (C)

Last week, Citigroup announced fourth quarter earnings and FY 17 results.  Overall, the quarter was solid with earnings of $1.28 and revenues of $17.25B.  This compares to estimated earnings of $1.19 and revenues of $17.22B respectively.  Something else to note is that these numbers are before what was $22B in charges related to new tax law changes.  That $22B number was two billion more than originally expected, but it seems the market was able to absorb that without too much concern.  

Looking a little deeper into the results, it was encouraging to see revenues increase across all regions, where we saw loan and deposit growth in Latin America and increases from wealth management and credit cards in Asia.  Institutional revenues were down slightly due to the continued lack of volatility in the fixed income markets.  Efficiency also improved over the quarter and despite the write down related to the Tax Act, the company is still on target to return $60B to shareholders via buybacks and…

Weekly Portfolio Summary

New year and it's time to get going on new weekly updates and a new batch of quarterly earnings reports.  Now that I've got the past year's review behind me, now it's time to start listening to fourth quarter and 2017 yearly earnings results.  We start on Tuesday when Citigroup announces their fourth quarter results.  Today, JP Morgan and Wells Fargo both reported.  There were significant tax losses and the trading divisions suffered because of low volatility.  There were also a fair amount of one-time charges,  which were expected to take advantage of tax loss benefits and other similar related events.  In general, the report was good for an institutional bank. NIM was higher and the forward outlook was postie, and with it, the bank stocks took off.  The markets will be closed on Monday for Martin Luther King Day, so Citi will be the next big bank report and I expect that we'll get another similar report and stock price results.  More specific to Citigroup, itself…

Year In Review: 2017 Trades

Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

The purpose of this discussion and review is to analyze the trades I made in 2017 - what went bad, what went well, and what's still undecided.  Hopefully we'll be able to glean some lessons from the experiences I've had and use those to become better in 2018 - so let's dig in.  Below are all of the trades I made in the year.  I'm going to try to break things down stock by stock, not trade by trade, but I'll do my best to keep all of this straight.

2017 was a year of low volatility.  Throughout the entire year the market never pulled back more than 5%, though many individual stocks certainly did.  I did find myself getting overly worried at times …