Showing posts from 2019

Trade: Raytheon (RTN), BP PLC (BP)

On Monday, I closed out my position on Raytheon at a price of $169.50 as I mentioned looking to do in my earnings recap, here.  This close out may have been a bit premature, given the stock is another $6 higher than my sell point, but there was no way knowing that and I wanted to close out the position quickly to avoid any further losses, given the truly sad outlook the company provided for 2019. 

In an effort to put money back to work that I have collected from my sales, I have purchased a 25% position in BP PLC, an oil stock yielding over 6% at the time of purchase.  I've been wanting to buy this stock for a little while now, but with earnings so close, I decided it best to wait, plus I wanted to get rid of something before I added more.  As a result, BP posted impressive numbers on Tuesday morning and the stock took off.  My purchase price was $42.75 and while I'd like to get the stock priced more at $40, I'm not sure that will be possible any more without a significant…

Earnings Analysis: Raytheon (RTN)

On Thursday, Raytheon reported their fourth quarter 2018 earnings results.  While I am spending some time looking into this overall, this recap will not be as exhaustive as most of my efforts because I'm in progress of liquidating my holding.  This stock is currently less than 3% of my overall portfolio and is generally a non-factor - especially since I am looking to it for additional funds.  The results were somewhat mixed, as revenues missed expectations of $7.45B by $9M, coming in at $7.36B.  Earnings, on the other hand, were able to beat expectations of $2.89 by coming in at $2.93.  These results and the general explanations that go with them probably would've been given a pass, considering how hard the stock was sold off into the end of the year and what the stock was priced at a quarter ago.  However, the guidance provided really put a damper on the stock as they failed to significantly miss already subdued expectations.

Worries coming into the quarter have been that the …

Earnings Analysis: Apple (AAPL)

Apple announced revenues of $84.3B, which was below the adjusted consensus of $83.97B and earnings just beat expectations of $4.17 by coming in at $4.18.  It's important to note that these estimates were adjusted down based upon the earnings miss notification that was provided at the beginning of the month.  However, it's equally important to note that it's not as bad as analysts were expecting.  When you get a preannouncement, the key certainly won't be the past numbers, as they've already set expectations there.  The key information is going to be more about the deeper details as well as the forward guidance and readthrough on the current quarter performance to date.  We'll get to all of that in this recap, but let's start with the deeper numbers on the Quarter.

To start with, the cause of the poor performance in the quarter was related to iPhone sales - particularly in China.  As such, it's no surprise to hear that iPhone revenues were down 15% year o…

Earnings Analysis: Citigroup (C)

Citigroup announced fourth quarter and fiscal year 2018 annual results back on January 14.  Results for the quarter were a little mixed, as earnings of $1.61 beat estimates of $1.55, but revenues of $17.1B missed expectations of $17.59B.  While the results weren't what the street was looking for and the initial numbers provided a hit to the stock's price, management's subsequent commentary provided a significant change in sentiment and we've watch the stock price raise closer to its tangible book value in the two weeks since. 
Looking a little deeper into the numbers themselves, revenues were mostly hit due to an under performing fixed income market in addition to assets that were sold off as the company continues to shed its remaining legacy businesses that doesn't fit overall goals.  The fixed income issue is something that has been seen across all money center banks and Citigroup is one of the largest players in this space, so it is not a result that is fully und…

Trade: Canopy Growth Company (CGC)

On January 9, I pulled the trigger and purchased another one-sixth of a full position in Canopy Growth Company at a price of $32.80.  This wasn't at a lower price or below $30 as my last purchase, which was a bit disappointing, but the stock had started to build a trend that it wasn't going to sell off again, so I bought in - despite the stock being up over 5% at the time.  This also followed what was interpreted as a disappointing fourth quarter earnings result from Constellation Brands, who has provided a significant investment into Canopy.  It was clear that commentary around the cannabis investment were strong and that more positive results were expected as we hear more from the industry.  Since the announcement and the purchase, the stock has continued to climb unabated, closing the week at a price of $38.25 - a 16% increase from my purchase price.  I don not expect this climb to continue like this, given the stock has risen over 30% on the week alone.  Expect this run to…

Trade: Raytheon (RTN)

On Jan 7, I sold another third of my position in Raytheon at a price of $154.90.  As I said in my last trade, I've decided that while the company itself is strong, that I don't feel it is in a sector that has favorable outlooks at this time.  There is too much uncertainty around the FY20 budget with the new Democrat-led congress.  Given that prices have been on a rebounding jump, I felt the price increase warranted lightening up on my holding at increasing my cash position so it would be available to go after better options, should the market take a turn down again.

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.

Nothing on this site should be taken as advice, research, or an invitation to buy or sell any sec…

Trade: Home Depot (HD) and Raytheon (RTN)

Yesterday I made the move to do some stock trades.  I bought back the shares I sold a long time ago to put my money back to work (instead of just playing with the house's) at $173.80 and I sold a third of my position of Raytheon at 153.38.  These moves were made after we got a very strong jobs report and Federal Reserve President Jerome Powell finally softened his stance on the economy, inflation, and the need to raise rates.

Home Depot
While I certainly didn't get this stock as low as I would've liked to, it was harder to pull the trigger then because I had less favorable scenarios to work with.  With less pressure of rising rates, ongoing positivity for job and wage growth that isn't growing wildly, and 10-year rates now back down around 2.67% we have an environment that can be helpful to home building, buying, and remodeling again.  With spring around the corner and a consumer that has proven to be strong through the holiday season, I expect to see further retail stre…