Here is the transcript to this week’s Live Q&A Chat. Visit the Trading With Cody Chat room on the Trading With Cody iPhone
Q. What booth will you be at during the Traders Expo?
A. I won’t have a booth at the Expo, just speaking at it. I will be happy to hook up with you for coffee after my talk tho.
Join me at The Traders Expo New York on February 27, 2017 from 1:30 p.m. to 2:15 p.m. for my new talk: “Flip it: You’re Doing It All Wrong”. Why everything you thought you knew about trading, investing and Wall Street is upside down. More info here: Cody.NewYorkTradersExpo.com
Q. Business Insider has an article out which states investment dollars that flowed out of equities and into bonds over the past decade is about to reverse due to rising bond yields. Would love to hear your takeaway from it. Here’s a snippet from the article: “A huge amount of investment dollars have flowed out of equities and into bonds over the past decade. But, according to a note published by Societe Generale’s Cross Asset Research team on Monday, this “de-equitisation” trend has slowly been reversing, and “a significant portfolio rebalancing may be on the cards. That could lead to a flood of money, potentially amounting to $2.3 trillion, moving in to the stock market. …However, with bond yields starting to rise again, investors are beginning to rethink their strategies. This reversal is already under way but still in the beginning stages, according to the note. During most of 2016, net inflows into bond funds remained very strong, especially in the US and in emerging markets. Net inflows into equities started to improve only toward the end of 2016.” Also, the other day, I spoke with someone at my brokerage firm, and he said after the election and when the market didn’t crash, money that was pulled out prior to the election, poured back in — they were slammed with buy orders.
A. My takeaway is this: Maybe the question is — are we supposed to be selling when bullishness about money flows are what the analysts are writing about?
Subscriber follow-up: Right — perhaps it’s an indicator it’s time to exit the Bubble Blowing Bull Market, right after all that money floods in.
Q. Our Herbalife puts expire Feb 17, do intend to ride them out to near expiration?
A. Yes, probably just going to ride our $HLF short and puts for at least a few quarters more. A little more about $HLF. We’ll know in the next 3-4 quarters if HLF’s new business model, forced upon them by the Justice Department when the JD came down on HLF’s old business model, has any chance of working like the old business model which for some reason they used even though it was found to be unfair by the Justice Department.
Q. If you have a chance please check out $COHR?
A. $COHR doesn’t have much topline growth this year (last year I assume they did a big acquisition?). The forward P/E of 14 isn’t bad, but unless there’s some new huge technology that’s emerging that needs lots of lasers, I’m not sure I get the Revolutionary aspect of the company. Thoughts?
Q. Cody, what’s your thoughts on Samsung forecasting a 50% profit jump? Does this news affect your previous guidance that we should short them (via shorting $EWY )?
A. Color me skeptical about Samsung’s ability to continue to grow real profits 50% in the midst of their Phones/Washer blowing up debacle. Much of the profit was from currency fluctuations (the South Korean currency was down 10% last quarter vs the US dollar which is how Samsung prices their products). That said, I’m always worried about overstaying my welcome on a short, so I’ll keep as tight leash on this one.
Q. A new ticker came up on my radar today and was wondering if you had ever looked at RealPage Inc (RP)?
A. $RP has 20% topline growth, P/E of 33 or so, software company for property leasing. Not a bad valuation, but not something I’m terribly excited about. What do you know about it?
Q. A company which looks interesting to me is MINDBODY $MB – as I look at booking yoga classes, gym classes and other sorts of classes, literally like 80-90% of them are using MINDBODY to handle their appointment bookings. They also just announced a pilot to integrate their booking functionality with Google Maps: http://www.prnewswire.com/news…Might be worth checking out. Low mkt cap (~$1bn).
A. Nice 30% + topline growth at $MB, but the company’s not profitable and that makes valuation tough. Especially with the stock up double in the last few months.
Q. A week ago you mentioned “I just plan on holding $AAPL………….. as the iPhone recycles play out and they take share from Android slowly but surely.” Did you basically mean their app sales (booming) or other avenues? Thanks.
A. Most people who ever move to iPhone never go back to Android and I think over the next few years, Apple’s going to stealthily take share in smartphones.
Subscriber follow-up: I was thinking the same thing. I went through their conference call and they were talking about OLED. I need to refresh again.
Q. Do you have any thoughts on $GWPH?
A. Still think $GWPH has too many red flags in management and valuation to merit a long side investment. Wouldn’t short it either though.
Q. $AMBA looks like it is continuing to tank. Is it worthwhile holding on for the long term? I doubt that this is the fault of management.
A. Maybe when $AMBA looks like it’s going to tank, it’s the time to buy some more. I want to see how $AMBA does over the next couple quarters but I do think longer-term there’s much more upside and/or this company gets taken out if they can keep their tech edge in the market place.
Subscriber follow-up: For me the problem is that too many people still tie it to $GPRO.
A. If $AMBA can continue to grow topline even as $GPRO fades, the stock will have upside from here. The reason the stock is down today is because of the report about how $GPRO might be moving away from $AMBA as a supplier and replacing $AMBA with $QCOM. I’m just holding this stock steady for now.
Q. $ACIA has been pretty beaten down. Is it worth a look?
A. $ACIA has 30% topline growth this year and is trading at less than 20x this year’s earnings estimates. I’m not a big fan of fiber optic components in large part because the prices have always commoditized over time in the last couple decades. The stock is cheap enough I’m interested, but not Revolutionary enough to make me buy it.
Q. Do you think sometime this year you might initiate a position in $IPHI?
A. $IPHI is similar to $ACIA in that I don’t trust the long-term margin sustainability of their business. I do wonder if I’m looking at the past and not the future of the fiber optic component industry — maybe it’s changed and the technology edges at $ACIA and $IPHI are sustainable even against the Chinese competitors, but at this point I don’t plan on buying $ACIA or $IPHI.
Q. Even though $GIMO is close to your original buy ($47.25), don’t chase here? I have one last tranche to complete a full position.
A. I wouldn’t rush it. Maybe do a 1/2 of a tranche here and wait another week or so and see if you can get the last tranche lower.
Subscriber follow-up: Oh, nice, I never thought to purchase 1/2 of a tranche before. Thanks for the guidance!
Q. Cody, are we due a “latest positions” update? I would like to see your current thoughts. Thanks.
A. Was just thinking that I need to do a Latest Positions round up this morning. Will work on it this week and send it out asap.
Q. While you have Alexa, are you concerned at all about privacy issues? It’s my understanding that it’s always on, “listening” for its wake word, and recording. Same goes for Google Home.
A. I’m worried about privacy issues with my browser cookies, my Facebook history, my Twitter data trail, my public profile from my TV days, my GPS, border patrol check points, my social security, my credit cards, my health data from my iPhone, my….you get the point. But to answer your question — sure, I’m worried about privacy issues with my Alexa too.
Subscriber follow-up: haha, yes, I get it, but somehow this feels/seems different. While the voice activated devices are impressive, maybe I just need more conditioning before I embrace it 😁
Subscriber comment: $PI — good grief. Up $2.66 yesterday, down $1.44 currently. Whiplash.
Cody’s response: Metallica Whiplash: “Adrenaline starts to flow You’re thrashing all around Acting like a maniac Whiplash”
Subscriber follow-up: Haha — stocks and metal music, we can only get it here! Love it.
Q. Are you going to be at the Money Show in Orlando February 8-11?
A. No, I won’t be.
