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Bought SFM, Sold AMT, ADBE And Half Of CRM Positions

Feb. 02, 2021 2:00 PM ETSprouts Farmers Market, Inc. (SFM)
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Sold AMT this morning at $236.86. This position was purchased December 9 at $220.13.

Bought Sprouts, $21.39. Three percent of portfolio.

Sold ADBE $481.37. This was a substantial position — 20% of portfolio — bought at average price of $469 in the first week of January. Cash position now 42% of portfolio.

The AI Algo

Out of a concern for where in the cycle the market is, I’ve run dozens of backtests on minor modifications in the software to buy slower and sell faster. Midnight last night I finally found a combination that generated optimum returns — didn’t buy too slow or sell too fast over the last twelve months and is still capable of building substantial liquidity to the portfolio should this market enter a blow off phase followed by a substantial correction. I tend to be overly bearish. If there is a modification that hurts performance, it will likely be sell too fast.

Chart Of The Day

Sprouts Farmers Markets (SFM), a wholefoods grocery store chain, is showing similar strong performance to that of Weis Markets, mentioned last week (and now dropped from the SuperGrowth MultiBaggers list). Sprouts annual appreciation potential is estimated at roughly twice that of Weis Markets — 28% versus 15%. This is due to current price in relation to estimated value, and Sprouts’ more consistent performance, which should allow it, over time, a higher multiple.

Risk Research Inc. provides research tools to professional investors based on proprietary AI software. Our software is also available, customized to client specifications, both fundamental (financial statement characteristics and trends) and technical (BuyAt and SellAt levels based on AI pattern recognition) on a monthly rental basis.

Analyst's Disclosure: I am/we are long CRM.

We offer this research as insight into what we do in our own portfolio rather than as a recommendation or offer to buy or sell securities. This research should not be your sole source of information. It is based on probabilities, not certainties.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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