Investment "Logic"

On November 1, Apple announced it's fourth quarter results for fiscal year 2018.  Revenue rose twenty percent to $62.9B and earnings rose forty-one percent to $2.91.  Most important in the transforming Apple story is the continued growth of the services sector, which grew twenty-seven percent YoY.  This is important, because it's this services story which I believe will change how the stock is looked at and valued more as a consumer products company than a tech provider.  Services provides an ongoing revenue stream even if phone sales are choppy or peaking out.  That said, phone sales are still looking good on the revenue front as the company reported a 29% increase YoY and per-unit prices were higher than expected at $793, meaning the higher end phones were wildly sought after.  All of these numbers beat analyst expectations, but the headline numbers aren't what has driven the stock's action since the announcement. Forward guidance was pretty much in...

Back on Tuesday, Cedar Fair announced the results of their third quarter operations.  Results were pleasantly pleasing as revenues came in at $664M, which is about 1% better YoY.  Earnings came in at $3.76 which was well in excess of analyst expectations of $3.25.  Results were bolstered by an increase of both attendance and spend coupled with cost management within the organization.  July was seen as a volatile month for the company, weather-wise, resulting in lower than expected visitation during a key portion of the year.  However, in the following two months of the quarter, attendance and spending rebounded and exceeded expectations as season pass holders returned to the facilities with better overall weather patterns.  This trend continues into October with the various Fall festivals which they hold and 2019 season pass purchases are off to a strong start - to show ongoing strength for the next year.  As a result of these patterns and how it f...

Back on October 25, Raytheon announced strong operational results for their third quarter of 2018.  Sales were up 8.3% YoY and earnings were up 14.2%.  These results were stronger than wall street expected with revenues of $6.81B beating estimates of $6.69B and earnings of $2.25 killing expectations of $1.97 per share.  Backlogs also grew to new record levels of $41.6B, increasing by almost $5B YoY.  This resulted in a guidance update for 2018 bookings to increase by $1B.  Additionally, the company provided a preview to 2019 guidance.  Within this guidance, the book to bill ratio is expected to be over 1 (more orders than output), which is bullish.  They also guided sales growth of 6%-8%, operating margins to be in line with 2018 results, a tax rate of 17%-19%, and operating cash flow of $3.8B-$4.0B. Looking for negatives to note, operating margin results were down some and guided down some on the year mainly due to Missiles, which is seeing a nu...

After watching the stock drop to the low 30s and start jumping back up with what appears to be a turn in the overall market, I have decided to purchase one ninth of a position of Canopy at a price of $36.50.  This is a very small position to take advantage of prices significanctly below my cost basis while also leaving me room for the stock to go back down further - given that I am making this purchase at a time the stock is up over 8% on the day.  I continue to belive that Canopy is the best - potentially the only direct pot play and I play it as a speculation for long-term gains as the company continues to gain footing and take market share of failed companies in countries where cannabis is legal as well as being a leader into the next countries that legalize it.  Additionally, I am not convinced the stock is done going down.  I still believe prices in the 20s are possible, and as such this is why I'm taking a more concerted effort to buy smaller positions....

On October 19, Honeywell announced their third quarter earnings results and they were fantastic.  Earnings came in at $2.03, beating out the $1.99 estimates while revenues came in at $10.76B which just edged expectations of $10.75B.  Organic sales came in at 7% which was the very high end of the anticipated range while margin expansion exceeded their range by 20 basis points on a 50 basis point high end.  On top of that, the company exceeded the guided amount of capital returned to shareholders via buybacks by $1.5B on a $3B guidance.  Hopefully, the company was buying back shares towards the end of the quarter when the stock was getting hit its hardest, but if it was, we certainly haven't seen it in the stock prices since - outside of the fact that they may not be in a window in which they can buy back shares now, resulting in less of a floor of protection for the stock.   All segments performed well for the company with SPS and Aero leading the way ...

Yesterday, I received a small number of shares of Honeywell spinoff Rezidio as a part of the spin-off process.  I have decided to sell the entire position at a price of $25.51.  While I expect the company to perform well long-term, in the short-term this is a declining sector given the slowdown we've seen in home building and company investments.  I anticipate the company to have to deal with this pressure over the next several quarters as a result and do not expect the stock to perform well.  One thing that I do see as an interesting opportunity for this company is what happens with the United Technologies/Rockwell Collins merger.  Should China decide to let this deal happen, United Technologies will likely split itself into 3 companies which will also include a home/HVAC space that I can see merging or being bought by Rezidio in the future.  That said, I don't think the homework effort is worth the small number of shares I will have in the company as ...

On October 12, Citigroup announced third quarter 2018 earnings results and they were rather strong.  Earnings came in at $1.73, above estimates of $1.69.  Revenues came in at $18.38B, which was slightly below consensus for $18.45.  75 million common shares were repurchased as a part of the $6.4B in returned capital to shareholders over the quarter.  The Tangible Book Value also increased to $61.91.   Loan growth was up 3% from the same quarter a year ago and deposits were up 4%.  Revenues from investing were also up nicely as the company took advantage of the volatile markets we've been experiencing since February.  The fact that about half of the company's business comes from overseas also seemed to be a benefit, as there was less impact to their operations compared its peers who are mostly US based.  Despite the fact that revenues missed expectations, it's not as bad as it may seem, given there was a sale of a Mexican Asset Management...