I always find it interesting that lots of investors think there is this p\erfect correlation between a stock and what the compa\ny is doing. If anything markets tend to overp\ay early and underp\ay later. Which typ\ically means if you spot a lulu esque brand early on...ride it longer than you think is rationally justified....but also be ready to short it once you are comfortable with their story and p\osition as that tends to be when the rerating occurs. Before the lule pa\nts issue kors was trading a 14x ev/ebitda and lulu at 29x. Kors as a brand is a lot hotter and infinitely more well recognized outside of NA as well as in the luxury sweet spot of womens bags. And to add insult to injury it was still growing same store sales as 4x lulu's clip.....sorry but in such an environment i short lulu...and to hedge if need be i long kors. There is nothing absolute about investing let alone stock investing...goal should always be to find best relative value
I'm good. Busy with set up and deep in Ent Soft/ SAAS land research as i'm working on something comprehensive to coincide with launch. Will be writing regularly again soon.
Lulu is such an amusing stock. Anyway, anyone who believes the stock dropped simply because Day resigned needs a little more experience investing. Lulu last bounce was more about a leaked short gone wrong which happens pretty often in the market, and a resoundingly strong tape for anything non industrial commodities or named facebook, vmware, or rackspace. I'd comment on Bill's geniusness, but with him now bullish on deckers after hearing nothing but reasons on why we should be shorting every pop under the sun from 30 to 60 I can't comment on such rationale and have decided to throw in the towel on the SA know it alls.(On a side note bill i've actually been shorting deck though rather cautiously as m&a mania needs to be respected....however i think the brand may be tiring now and they are super leveraged via the ramp in retail vs old p\ure wholesale to the whims of shoppers this coming winter) Anyway, short sellers in lulu will be the long-\term winners until the stock is cut in half......the sweet spot has passed and until the valuation mitigates that this a bad place to be a buy and holder.
I really don't care what the stock has done as the market as a measuring stick for your logic are a definitive way to go crazy. All I care is whether the argument is robust. Simply put yours is not. I've thought cvlt was expensive since $40, but the point is I have been waiting for mgmt to shift their tone. This cc was important within the context of the last 8 cc's and not on a stand alone basis. If you knew that, you'd understand why I am being so dismissive of your 'mgmt could low ball...don't want to be sued ' etc. Then there are simple things to factor in like their need to ramp up direct sales investment to replace dell, the fact that on a long-term basis their difference between effective tax rate and actual taxes paid is signficant enough to be a major headwind on the bottom line, and that rev growth can best be described as solid and not gangbusters for a company of this size. I assure you without a shadow of a doubt that this year is an investment year which at best is a major drag for a momentum stock like this after the op levg driven results they had last yr, and which at worse can result in a total collapse if any weakness no matter how temporary emerges on the demand side. But this quote is a gem "In the end you cannot know for sure, and to a large extent you are taking credit for partially random events"
I can assure you that I knew for sure that when Lehman was at 35$ that it faced bk risk, and that the stock was a short. At 18$ i was much less confident as I felt there was a very good chance they could raise signficant capital or sell the whole company. The x factor there was a delusional dick fuld getting in the way of everything that could have saved lehman. My point is investing is about degrees of confidence and the structure of your thesis and not whether or not you were right or wrong. A rational thesis can produce a horrific short term outcome and a fantastic long term return, while a flimsy thesis can produce the type of short term results that make the long-term investor look silly. Of course over a few years that flimsy thesis will be exposed and the skeptics will be proven right. So please i don't need lessons about how the market is unpredicatible, irrational, and for the most part at times no better than a casino. These assumptions are at the core of how i run money, but i am not going to tell my investors i am long cvlt because 'it demand could pick up and that's a wild card' or because i think a mgmt team that has been uber bullish for 8 quarters was simply low balling the street with their more conservative nature this quarter. And i wont even bother repeating the points on investment, oem relationship loss/cmpt, and the tax rate.
UBS upgrades global financials to Overweight from Underweight on a healing global economy, rebuilt capital, and the sector's shift "from being a net issuer to a net distributor of cash." Furthermore, the U.S. banking sector (XLF) is taken to Overweight as balance sheet strength and attractive valuations play well with the housing market recovery to create compelling opportunities. European banks (EUFN) are lifted to Neutral "with a preference towards Nordic and U.K. banks." Financials respond in London with LLoyds Banking Group (LYG) +2.3%, Royal Bank of Scotland (RBS) +3.3%, and Barclays (BCS) up 0.5%. [View news story]
Is this a joke?
They downgrade the whole sector last may, and they are now upgrading them after the avg global financial stock probably doubled.
To be frank statements like 'i wouldn't count them out' are not very substantitive. Management has already warned you on the call the margins will be flat this year, and the way they mapped it out that is more like a 'flat at best'. 66% of ebitda growth last year can be attributed to margin expansion. Furthermore, this company's actual tax expense has been running well below their long-term rate and after this year you should start to see that revert. 2000 bps of reversion will wipe out a lot of net income growth. This wont be the first or last stock to witness a crazy multiple expansion because of a one time splurge in the bottom line that is out of line with their growth trajectory. Like i said in the article, you are buying 70% trailing growth ahead of 10-15% growth at best....this quarter was the warning sign....the next one will complete the drop....now the question is do you risk waiting till then when you can do very well without event risk in between.....
How To Play The Sina Corporation Earnings Announcement [View article]
This is an unbelievably dangerous stock to play a calendar spread on. It has been a perennial underperformer for a good six months now, and on a relative valuation scale looks about as cheap as you are going to get for a prime web asset. This stock is waiting for an excuse for a 20% rerating higher, and while i see no reason to think earnings will provide a surprise the event might just be the catalyst. We pretty much now know revenue guidance for weibo is going much higher courtesy of the alibaba deal, so why you would wait for mgmt to make that official on a cc with the way the crappier chinese net names have been moving is beyond me. If i wanted to play an options strategy here id be selling puts as the alibaba deal puts a nice floor under the name.
Umm the point is the recent conference call just gave you that. The next call could stabilize it or lead it to bounce, but as it hasnt even started falling yet that shouldnt be your focus. Hence the short it now mantra. Listening to the call i really expected the stock to fall on the open as its not really a liquid name so i put little stock in the 4-5k it traded pre mkt. I chose to write the piece when i saw it open and hold its ground. I could write a much more detailed piece on the name getting into what actifio is doing and veeam as well as why fundamentally speaking it is ludicrously priced based on past m&a deals in this space going back almost a decade. But really i wrote this because if you listen to that call and go back and listen to the previous calls you should pickup on what i picked up on which was a soft warning. A soft warning for a company that has been firing on all cyclinders for two years with a perfecto priced stock is a dream come true for someone like me. I even punted on some may 10c options on the open which are now over a buck. You dont have to get into scenarios until this has fallen 20% plus at which point you have the sector, the rest of the market, and of course their performance to factor in. We can't predict all those variables...what we can do is on a risk/reward basis take the best possible positions we can find and reasses later....and in this case its not time to ponder whats the next catalyst as most longs in the name are still trying to figure out what the hell happened today. On a side note, when stocks peak permenantely; they tend to do it in the manner cvlt exhibited today. Big gap ups that get reversed just like big ones down that do the same are great indicators for long term price direction changes. What do you think attracted me to deckers?
I wouldn't really focus on a target. This will be a miserable laggard till they shift their tone which basically means you have a holiday to remain short till next earnings. If they can deliver what they have promised i think it can remain a 50-60 stock. If they warn in the next quarter or two we are looking at something closer to 35-40, but at that point takeout risk elevates signficantly. The way I look at it is from here on down to 60 or so should be a stress free ride. But its not like the business model is blowing up. They are executing and in a good position; they just suffer from a grossly unattractive share price that needs to be balanced out relative to their immediate growth trajectory. And i will be frank...it seems actifio will ipo this year which is never a good thing competition wise as they will be aggressively hiring and chasing the same biz ...people seem to forget that a boat load of ipos ultimately ends up being a bad thing for business which btw is something to think about in the SAAS sector for those fishing for other ideas.
On a side note I just took a look at the report and there is nothing in there that changes my view on the stock. The growth is slowing markedly and if anything competition is now on firmer footing so the range of negative outcomes may increase not decrease from here going forward. If you actually are a capable short seller who knows how to manage positions and is not looking for max bang for the buck this is without a doubt reshortable here. I'll read the transcript tmrw am, but all I see here is some slight levg which came back and a guidance tweak. Stock move is more explainable by the general euphoria in equities and its huge underperf then anything company specific
Gary you are troll. Nothing more. Reality is you no very little about the markets or investing. I could be a stubborn guy and come on here and say omg its a fantastic short again, but fact of the matter is i have made a good 600% trading whole foods the last two earnings. Did i post something on this one? Have i recommended it to anyone on my newsletter lately? Answer to both those questions is no. And if you follow me you would know Im quite willing to flip sides. Look at lnkd i was recommending shorting it at 120, but second time around I passed and went long after the results. Why? Because the whole sector had reflated. I am always amused when people confuse macro for micro. My long book in groceries has supervalue and krogers . Might want to check out how they have done. Supervalue has doubled and Kroger is up 40%, while your favorite place to shop is -3%. Also starbux which is up 35% since i last shorted wfm at this level. So effectively speaking this is a stock that is flat over 6 months while the sp 500 has rallied 20%. And its not like this is the only name that i have shorted that has reflated lately. Bottom line is people are running out of things to buy and punting on some major laggards. Furthermore, I'm event driven so it is no coincidence i get the timing as right as I do. I had at least three emails asking whether i'd short it into earnings and i told them all the same thing...weather hit from last quarter will reverse this quarter so better to pass especially considering that the amount of more appealing shorts has exponentially increased. Reality is this multi year run in equities is coming to a close...and for me that is the new opportunity i am focused on as i see a point where making money short will be like shooting fish in a barrel .....if after the low hanging fruits are gone wfm is still there for the taking i will take a look....but for now i have better things to expend my energy on
$24-$77 in incremental enterprise value from $55...so 80-132 sina stock if you want to get hypothetical with respect to enterprise value missing. You could take the view that portal is worth 1billion...cash off 1.3billion and 70% weibo between 3.2-10bil gets you 5.5bil- 12.3bil which is a giant range of 84-186 for the stock.
Short The Lemon [View article]
Short The Lemon [View article]
Short The Lemon [View article]
Short The Lemon [View article]
Akram's Razor: Short CommVault Now [View article]
I've thought cvlt was expensive since $40, but the point is I have been waiting for mgmt to shift their tone. This cc was important within the context of the last 8 cc's and not on a stand alone basis. If you knew that, you'd understand why I am being so dismissive of your 'mgmt could low ball...don't want to be sued ' etc. Then there are simple things to factor in like their need to ramp up direct sales investment to replace dell, the fact that on a long-term basis their difference between effective tax rate and actual taxes paid is signficant enough to be a major headwind on the bottom line, and that rev growth can best be described as solid and not gangbusters for a company of this size. I assure you without a shadow of a doubt that this year is an investment year which at best is a major drag for a momentum stock like this after the op levg driven results they had last yr, and which at worse can result in a total collapse if any weakness no matter how temporary emerges on the demand side.
But this quote is a gem "In the end you cannot know for sure, and to a large extent you are taking credit for partially random events"
I can assure you that I knew for sure that when Lehman was at 35$ that it faced bk risk, and that the stock was a short. At 18$ i was much less confident as I felt there was a very good chance they could raise signficant capital or sell the whole company. The x factor there was a delusional dick fuld getting in the way of everything that could have saved lehman. My point is investing is about degrees of confidence and the structure of your thesis and not whether or not you were right or wrong. A rational thesis can produce a horrific short term outcome and a fantastic long term return, while a flimsy thesis can produce the type of short term results that make the long-term investor look silly. Of course over a few years that flimsy thesis will be exposed and the skeptics will be proven right. So please i don't need lessons about how the market is unpredicatible, irrational, and for the most part at times no better than a casino. These assumptions are at the core of how i run money, but i am not going to tell my investors i am long cvlt because 'it demand could pick up and that's a wild card' or because i think a mgmt team that has been uber bullish for 8 quarters was simply low balling the street with their more conservative nature this quarter. And i wont even bother repeating the points on investment, oem relationship loss/cmpt, and the tax rate.
Open Sesame [View article]
UBS upgrades global financials to Overweight from Underweight on a healing global economy, rebuilt capital, and the sector's shift "from being a net issuer to a net distributor of cash." Furthermore, the U.S. banking sector (XLF) is taken to Overweight as balance sheet strength and attractive valuations play well with the housing market recovery to create compelling opportunities. European banks (EUFN) are lifted to Neutral "with a preference towards Nordic and U.K. banks." Financials respond in London with LLoyds Banking Group (LYG) +2.3%, Royal Bank of Scotland (RBS) +3.3%, and Barclays (BCS) up 0.5%. [View news story]
They downgrade the whole sector last may, and they are now upgrading them after the avg global financial stock probably doubled.
Akram's Razor: Short CommVault Now [View article]
How To Play The Sina Corporation Earnings Announcement [View article]
Akram's Razor: Short CommVault Now [View article]
Akram's Razor: Short CommVault Now [View article]
Whole Foods Is A Short [View article]
Whole Foods Is A Short [View article]
Weibo's Pre-IPO Round [View article]
Weibo's Pre-IPO Round [View article]