Analysis and ratings for Cody’s Latest Positions with earnings updates
According to my notes below, so far this earnings season, we’ve had 9 companies report “strong earnings report” and 8 of those stocks have rallied to new recent or even all-time highs. We had one “okay” report in Sony and three laggard reports in Twitter, Whole Foods and F5.
Every few weeks I sit down and go through my entire portfolio and rank each position on a scale of 1 to 10 and then send it out to my TradingWithCody subscribers. It’s very important to look at your own positions in order from largest to smallest and to rank each asset, equity and position you own. Doing so will help you realize the opportunity costs of owning lower-rated positions and to help you sell your losers while riding your winners.
Here’s a list of my latest positions. I’ve broken the list into Longs and Shorts. And from there, I’ve broken down each list into refined categories in order from the largest positions within each category to the smallest. I also give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.”
So here’s the list:
Longs –
- Forever assets and other permanent holdings –
- Media and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
- Real estate, including land and the ranch I live on in NM (8)
- Physical gold bullion & coins (7)
- Primary stock exposure portfolio
- Apple (8) – Strong earnings report and the stock has rallied to near its all-time highs. Everybody I know is either about to upgrade to the latest iPhones, waiting to upgrade til their contract allows it, or leaving Android for iPhone. The broader smartphone market is probably struggling a bit to grow this next year, but I think iPhone will continue to grow and take market share within that industry.
- Google (7) – Strong earnings report and the stock has rallied to new all-time highs. Google tries Android for machine learning, open-source for “crazy ideas.” – Expect big things when the App Revolution meets AI. I am writing a book called “Best Stocks for the AI Revolution” and would love to hear ideas and AI-related stock picks from any readers. Thanks.
- Facebook (7) – Strong earnings report and the stock has rallied to new all-time highs. I’m sticking with Facebook’s rating to a 7 on a scale of 1 to 10 because the stock is rather overextended and rather expensive as opposed to when I’d been calling it cheap back in the low $20s. That said, if I’d worried about every 10-20% sell off in $FB or $GOOG or $AAPL since I’ve owned them for many years now, I’d have missed the huge gains they’ve delivered for my portfolio and career.
- Amazon (7) – Strong earnings report and the stock has rallied to new all-time highs. Amazon Web Services is the driving this stock for now. The fact that Amazon retail has disrupted every retailer on the planet and Amazon Prime continues to grow strongly, makes this stock even stronger.
- Synaptics (7) – Strong earnings report and the stock has rallied to near its all-time highs. According to digitimes, Synaptics won the display controller for the next generation iPhone. If true, this is huge win as Apple was trying to displace Synaptics with an internally developed product.
- Sony (8) – I’ve owned Sony SNE for the last year and a half riding it up from the teens and holding onto some of it because of the value in their video library and, to a lesser extent, their music library from deals like the one they announced this with Pandora. Sony’s ‘PlayStation Vue’ Netflix-like/cable-broadcast-like service also just gains ESPN, ABC & More Disney-Owned Networks.
- First Solar (7) – Strong earnings report and the stock has rallied to near its all-time highs. Steady as she goes for now. “FSLR has $15 per share net cash and could earn $4 per share next year. With the stock at $50 right now, that makes it a very cheap 12 P/E and an even cheaper 9 EV/E.” First Solar raised fiscal 2015 EPS guidance to a new range of $4.30 to $4.50 per share and confirmed full-year revenues of $3.5 to $3.6 billion. The consensus estimate called for EPS of $3.43.
- Ambarella (8) – I would look to nibble $AMBA back near $50 where it was a couple weeks ago when I wrote, ” but I’m not in a rush to force more into the portfolio unless we get that discounted price.
- Silicon Motion (8) – Strong earnings report and the stock has rallied to new highs since we bought it a couple months back. Steady as she goes for now.
- Netflix (8) –
- Twitter (8) – Twitter’s in no-man’s land right now and unless the company starts to put together some strong user growth quarters, it’s going to stay in no-man’s land for few more quarters at least.
- FitBit (8) – Strong earnings report but the stock got hit on news that the company is doing a secondary. The company’s growing enterprise business where companies themselves are paying for their employees to use FitBit fitness trackers to cut health-care costs is the one thing the market doesn’t quite grasp the strength of yet.
- F5 (8) – FFIV reported earnings of $1.84 a share on revenue of $501.3 million. While F5’s earnings topped the $1.74-a-share analyst estimate, the company fell short of Wall Street’s consensus estimates of $506.52 million in revenue. F5 also gave a first-quarter forecast for earnings between $1.58 and $1.61 a share, on revenue of $480 million to $490 million vs the analysts’ forecast F5 to earn $1.71 a share on revenue of almost $508 million for its first quarter. Disappointing quarter and guidance but I’m sticking with this name for now as I’ve known the CEO and management there for many years and believe they’ve got this company on the right track still.
- Whole Foods (6) –
- Axogen (8) – Strong earnings report and the stock has rallied to near its all-time highs. Steady as she goes for now.
- Applied Materials (8) – The semiconductor industry continues to consolidate and spending by AMAT’s customers is rising. Good combo.
- GDX call options (6) – Just a few weeks left on the remaining GDX call options I own. We made some money on these calls overall, and I’ll take what we made and move on when these last few expire, win or lose. I’d recently noted that gold‘s near-term rally was looking tired and that I thought gold would top out near $1200 near-term. Gold topped around $1200 and is now back down and the gold miners are back in trouble.
- Primary short portfolio
- Pandora (8) – Pandora‘s stock is still down nearly 40% from where it was before reporting that brutal quarter with ugly guidance and still quite a bit below where it’s been trading in the first few days after that report. I’m still quite bearish on the stock, but have covered some of it lately to lock in these profits.
- Valeant Pharmaceuticals (7) – I am looking for other Valeant-like troubled pharma/health-care/biotech stocks, so stay tuned.
- IBB Biotech ETF (8) – Noah Blackstein, an old friend of mine who runs the U.S. and global growth portfolios for Dynamic, as well as two hedge fund mandates used to say to me that ETFs are for those too lazy to dig in and find specific stocks in a sector. I’m not planning on adding to this very small hedge position in my portfolio since I’d rather find some more VRX and Pandora individual stocks instead.
Remember: I wouldn’t rush into a full position all at once in any of these stocks or any other position you’ll ever buy. Patience and allowing the market and time to work to your advantage by buying in tranches is key. Maybe 1/3 or 1/5 of whatever you might consider to be a “full position” in any particular stock. And I wouldn’t ever have more than 5-15% of your portfolio in any one stock position at any given time. The younger you are and/or the higher the trajectory of your career income, the more concentrated and risk-taking you can be with weighting in your portfolio. But spread your purchases and your risk out over time and over a several positions no matter your age or risk-averse level.
Scaling into a position using an approach of buying 1/3 or 1/5 tranches over time is how I build my personal portfolio positions, but there’s no scientific answer for your question. Sometimes you have to pay up for the latest tranche but I try to be patient and wait for a temporary sell-off to add to the existing position.
** NOTE FOR NEW SUBSCRIBERS:
If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t acted on much of my strategies yet and/or if you haven’t been in the markets, but you’re sick of getting 0% on your CDs, Treasuries, savings, checking, etc while the markets have been continually hitting all-time highs this year, what should you do now?
Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.
If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.
Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.
You can find an archive of Trade Alerts here.