Z-SYMBOLS
May 24, 2023 | Daily JAM, NVDA, Top 50 Stocks, Volatility |
Nvidia (NVDA) shares were up 19.68% at 4:45 p.m. New York time today, May 24, after the company reported beating analyst estimates on earnings and revenue. The company also told analysts to expect second-quarter revenue way, way above pre-announcement projections. For the three-month period ending April 30, Nvidia earned $1.09 per share, excluding one-time items, as revenue came in at $7.19 billion. Analysts were looking for the company to report earnings of 92 cents a share and $6.28 billion in revenue.
May 23, 2023 | COST, Daily JAM, Morning Briefing, WMT |
More woe for the retail sector this morning BJ’s Wholesale (BJ) reported first-quarter results before the market open that missed expectations for same-store sales growth (with earnings per share matching estimates.) The big killer, though, was guidance from the company that said second-quarter comparable store sales are tracking below the 5.7% increase in the first quarter. That 5.7% growth in first-quarter comparable store sales was below the 5.9% that Wall Street analysts had expected. The stock closed today down 7.26% on the day.
May 18, 2023 | Daily JAM, GOOG, Top 50 Stocks, Videos |
Today’s Quick Pick is Alphabet (Nasdaq: GOOG), better known as Google. Morningstar calculates Google is trading at a 24% discount right now. Recently, the 50-day moving average moved above the 200-day moving average, showing momentum in the stock. There’s a perception that the stock had been unfairly pounded by AI hysteria because people believed Google wasn’t keeping up with Microsoft and its search business would suffer. Google did, however, come out with its own chatbot products and maintained some relatively slow growth. While ad revenue was down about 1% in the first quarter, total revenue was up about 2.6% year over year. The slowdown in the economy as a whole gave the impression that Google’s ads were slipping. I mentioned in yesterday’s video, we’re seeing a lot of Hedge Fund managers adding to their Google positions in the first quarter. I own the stock in my long-term portfolio and will likely add to my position. In the next year or two the stock will likely make up the difference between the current price of 120 and the Morningstar fair value of 154. You could consider this a value play.
May 17, 2023 | Daily JAM, GOOG, Videos |
Today’s topic is Value Over Growth. Hedge funds reported their first-quarter portfolio changes to the SEC and we’re starting to see those reports. Hedge Funds are a good indication of where institutional money is going and what their thinking is. These reports show that hedge fund managers are starting to move to value over growth. There are outliers but hedge fund managers like Steve Cohen at Point72 and Nelson Peltz from Trian Management were exiting or cutting their growth stocks and adding to their positions in value stocks like Google (Alphabet NASDAQ: GOOGL) and GE (NYSE: GE). Paul Singer at Elliott Investment Management exited both of his high-yield ETFs and reduced his exposure to Valaris (NYSE: VAL) an ocean drilling company. I saw other managers starting to reduce their exposure to energy and drilling companies as well. Going into the second quarter, after taking profits from first-quarter rallies, the pattern looks like institutions will be looking more closely at stocks that haven’t had big run-ups and could be considered to be value stocks (Alphabet?) vs putting new money into growth stocks.
May 17, 2023 | Daily JAM, LAC, Millennial |
One of the last remaining barriers to Lithium Americas’ (LAC) Thacker Pass lithium mine project in Nevada fell yesterday.
May 8, 2023 | Daily JAM, DVN, FANG, Jubak Picks, PXD, Videos |
This week’s Trend of the Week is Where is All That Oil Cash Going to Go? The likely answer: the Permian Basin and acquisitions. Oil companies like Exxon Mobil (XOM) are putting so much cash into the bank, they don’t know what to do with it. Exxon Mobil had $32.7 billion in cash in the bank. With little debt, and plenty left over after capital spending, dividends, and buybacks, the company is left with a tremendous amount of cash. Historically, extra cash could be used in oil exploration, which could take 5-15 years. In a global warming economy, that doesn’t make sense since we don’t know where oil prices and demand will be in the years ahead. The better option is acquisitions. One of the companies Exxon is rumored to be targeting is Pioneer Natural Resources (PXD) for their assets in the Permian Basin. Chevron (CVX) is in a similar position as Exxon and you can expect them to be in the market for Permian companies as well. Other Permian Basin companies that are ripe for being acquired are Devon Energy (DVN) and Diamondback Energy (FANG). I already have PXD and DVN in a portfolio in my JubakPicks Portfolio, and I’ll now be adding FANG as well.
May 4, 2023 | Daily JAM, Jubak Picks, LVS, Videos |
Today’s Quick Pick is Las Vegas Sands Corp. (NYSE: LVS). Is Macau gaming the best way to play China? I would say yes. News out of China is that it’s clearly reaccelerating and will easily hit 5% economic growth in the current quarter. The economy is reopening and growth is up and Macau, as a gaming center, is benefitting in a pure Covid reopening story. Total gaming revenue in Macau was up 247% year over year in March and 450% in April. Normally I’d look at MGM International to play Macau, but their Las Vegas presence outweighs their China presence, and at this moment, I’m looking for something with less presence in Las Vegas. Although the name may suggest otherwise, Las Vegas Sands has a much bigger presence in China and is in the process of selling their Las Vegas assets in order to invest more in Singapore and Macau. This is a good place to play China gaming as the country accelerates and I’ll be adding it to my JubakPicks Portfolio with a target price of $70 a share.
May 3, 2023 | Daily JAM, MSFT, NVDA, Videos |
Today’s topic is Is This the End of Momentum? One Last Momentum Blowout. This has been a great market for very specific stocks. We’re seeing a very narrow momentum market. A few stocks are overperforming the index and propping it up. An example is Meta Platforms (NASDAQ: META), formerly known as Facebook. Meta is up 102% this year and it’s up about 14% in the last month. The S&P is up 9.5% year to date and just 1.5% in the last month. We’re seeing a large divergence between the index and a narrow group of a few rallying stocks, like Meta, Netflix, Microsoft, and Nvidia. These stocks are outperforming the index, but they’re up based on very recent history. Meta’s recent earnings jolted the stock upwards, but it’s still a company that is bleeding money to develop its virtual reality products, with billions of dollars ($13.7B in 2022) lost by its Reality Labs program. The company had staked its future on the Metaverse but has yet to create a viable product from the project. As the momentum of these few stocks starts to slow, Meta could take a big hit because of these fundamental factors. In my opinion, we’re near the top of this momentum market and it’s time to start taking profits from companies like Meta, Microsoft, and Nvidia.
May 2, 2023 | Daily JAM, Mid Term, MMM, Videos |
This week’s Trend of the Week is The Pain is Spreading. By pain, I mean layoffs. It started with technology companies as we saw job cuts from companies like Meta Platforms, Amazon, and Alphabet. Then recently announced cuts of 7,000 employees. Now, layoffs are spreading to other areas of the market. 3M (NYSE: MMM), a generally reliable blue chip stock, announced they’d be cutting 2,500 jobs back in January and have now added 6,000 more jobs to the chopping block- about 10% of their total workforce. This is in reaction to slowing sales and the potential for losses from liability lawsuits. In the most recent quarter, organic sales were down 4.9% (better than the expected 6.9%) with a guidance of a 2% sales decline for 2023. While 3M is trying to cut costs with layoffs, Wall Street remains skeptical. 3M hasn’t seen the rally other blue chip stocks have seen recently. The company has so many products out there, it is representative of the market as a whole. And this one example plays into the bigger picture of the slowing economy, greater job losses, and, possibly, a recession.
May 2, 2023 | Daily JAM, SCHW, Short Term, Volatility |
I’m closing this position on Schwab (SCHW) in my Volatility Portion at a slight loss–I bought these Put Options on March 28 at $3.70 and they traded at $3.50 today May 2–that’s a 5.4% loss. But with the expiration date on these options approaching, I am concerned that the price of the option will fall with time decay.
May 2, 2023 | Daily JAM, KRE, Morning Briefing, Short Term, Volatility |
Yes, it’s a volatile market. Yesterday, May 1, the take from the Wall Street talking heads and JPMorgan Chase CEO Jamie Dimon was that the banking crisis (or at least this stage of it, to be fair to Dimon) was over. Today, May 2, the fear is that the crisis isn’t over. Regional bank stocks have plunged again with Western Alliance Bancorporation (WAL), for example, down 17.12% for the day as of 3 p.m. New York time. The regional bank ETF, the SPDR S&P Regional Banking ETF (KRE) is down 6.61%. That all means that the August 18 Put Options with a strike price of $41 that I bought yesterday at $2.55 are selling at 3 p.m. today at $4.72. Counting a slight gain from yesterday’s action after the buy, these Puts are up 85% in a day. I’m taking that gain today and selling this position out of my Volatility Portfolio
May 1, 2023 | Daily JAM, KRE, Special Reports, Volatility |
JPMorgan Chase’s (JPM) deal today, Monday, May 1, to acquire First Republic Bank (FRC) after the Federal Deposit Insurance Corporation (FDIC) regulators seized the bank certainly puts an end to the First Republic chapter of the banking crisis. But there are lots of chapters to go in this banking crisis. So my second short for this market is to buy Put Options on the SPDR S&P Regional Banking ETF (KRE).
