Q. I moved to about 40% cash in Sept-Oct – didn’t hit any tops or bottoms, so basically it’s been a wash. I sense you have some near term bullishness, so I have been adding back to my positions, especially your Latest Position 9s (FFIV/SNE/AAPL). Do you feel it’s time to get a bit more aggressive? And do you see any value in playing the persistent SPX 2000-2100 range with the calls and puts?
A. I am increasingly bullish and really would probably look to get more aggressive if the markets got one or two more -200 down days or so. I have also been nibbling on some of the 9-rated stocks as you’ve seen recently and I’m likely to buy back some of the Apple we sold near $130 soon as it is the only one of the three 9-rated stocks in the portfolio that I haven’t nibbled on yet.
Q. Any thoughts on the bottom in oil?
A. I wouldn’t be shocked to see oil bottom here in the $30s for the near-term and even make a move back above $40 at some point. But I wouldn’t want to try to game such a move. And unless oil can get and stay above $40 for a few weeks or months, there’s still going to be a lot of pain in the oil and natural gas stocks. There’s so much debt in the energy sector and companies from all up and down the supply chain are not going to be able to pay all their bills and meet all their inter-company financial obligations. I still say we stay away from oil/nat gas and oil/nat gas stocks and bet on truly Revolutionary companies instead.
Q. You previously mentioned LGF as a play on “content is king”. It’s stock has come down significantly recently due to secondary offering (from 40 to 32). Do you think it’s a buy at this level ?
A. Lionsgate $LGF did the secondary and doesn’t get any of the proceeds, so that’s not good. But the fact is that the company already has $2 billion in net cash ($14/share), no debt and could earn $2 per share next year. I’ll dig in and take a fresh look at this one as that strong balance sheet and cheap valuation makes it interesting here.
Q. Any thoughts on FTNT? I know you like FFIV, but curious.
A. $FTNT provides cyber security solutions for enterprises, service providers, and government organizations worldwide. The company’s growing 20-30% per year and is profitable. They’ve got $600 million cash ($3 per share) and no debt and the stock is down from$50 to $31 in the last year. The company is expected to grow earnings from 51 cents per share this year to 68 cents per share next year. Trading at nearly 50x next year’s earnings, it’s not cheap, but that growth rate is compelling. I’ll dig in a little more on this one and get a fresher take on it too. Thanks!
Q. Any new thoughts regarding TWTR?
A. I removed $TWTR Twitter from my screens since I sold the remaining shares I had for a loss recently. I needed a fresh break from Twitter, as I’ve met with people in the company and wasn’t feeling like I was being objective about the stock lately. I’ll have a fresh take on it in January after letting it breathe a little bit more.
Q. Any thoughts about CAVM and AKAM?
A. I haven’t looked at $CAVM Cavium which designs, develops, and markets semiconductor processors for intelligent and secure networks in United States and internationally in a long time. It’s got $130 million in cash, $20 million in debt and should grow earnings from $1.50 to $1.75 next year on 10-15% topline growth. The stock’s not cheap at $65 but it’s another fast growing company that might be worth digging into further. I will do so. $AMAM Akamai’s balance sheet isn’t as great as I’d like it to be as their debt nets out with the cash to a slightly negative value. The company is very well positioned as a cloud services company with their optimized network for delivering securing online content and business applications. Earnings should grow from $2.40 to $2.70 this year on 10% earnings growth. That gives the stock a P/E of 20 which isn’t bad, but it’s not a screaming buy either. I’ve had this on the Trading With Cody Watch List for a month now and would like to buy it near $40 if we ever got a chance too. Here’s the link for the Trading With Cody Watch List:https://twc.scutify.com/member…
Cody: Here’s a write up about Baby Amaris from the local newspaper today:http://www.ruidosonews.com/sto…
Amazing story Cody, wishing you and your family all the best and continued health. Story should be an inspiration to many not to give up hope.
Cody: Thanks and yes!
Cody, Thanks for posting that article about Amaris. No wonder Amaris is so tough, your wife seems to be quite the fighter too! I’m sure your family will be grateful for every blessing this Christmas, Amaris’ first!
Fascinating article in the newspaper! Praise God and Merry Christmas!!!
Cody: Thanks and yes and same to you!
Great article, great kid, please post part 2. MERRY XMAS
Cody: Thanks and yes and same to you!
Happy Holidays @CodyWillard and in this season of miracles I offer my best wishes to you and your family and hope that your little miracle continues to get stronger and healthier!
Cody: Thank you so much for the kind words! God bless.
After reading the article about Amaris, all I can say is that her parents are the real warriors. Take care of yourselves though. This is long term and you need to live your lives and be happy.
Cody: Thanks, but I do have to tell you that seeing how strong the will to heal and play and grow and become a healthy baby and to giggle and be such a sweet little girl even with all the tubes and poking and health problems she still deals makes me positive that SHE is the warrior around our house! 🙂
Happy Holidays to you & your family and to TWC members & their families. May 2016 be an excellent year for all!!!!!!!!!!
Cody: Thank you and back to you too!
Cody, I was late getting to this chat today . . . and as usual there’s interesting, valuable commentary in it… but once I read the item on Amaris, all else became minuscule in importance. What a WONDERFUL story about her and her family. I’m still VERY long on that kid!
Cody: Thank you and you just can’t imagine the joy that little baby brings into our lives every day.
I’ll be around here in the Chat Room mots of today and over the holidays, so stick your head in and post a comment or ask a question if you so desire.