Cody Kiss & Tell: Apple vs Samsung, Facebook TV and more

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 app,, the Trading WithCody Android app  or in the Chat Room. If you have any questions about our service, just email us at support@tradingwithcody.com.

Q. I think $AAPL‘s ER supports your thesis that the-y’re incrementally taking market share from Samsung. Great forward thinking on your part!

A. Apple sold 78 million iPhones vs 77 million Android phones for Samsung last quarter, making Apple the largest smartphone vendor in the world for the first time in five years. So yeah, it appears I am correct that Apple iPhone has been taking share from Samsung for the last few months.

Q. Man am I glad I stayed steady with my $AAPL and didn’t get scared off by that guy who supposedly bet it all on $AAPL dropping. He lost it all. Lesson: do not let emotions sway trading. Another lesson: any last ditch effort like that is most likely going to fail.

A. Yes, so true on all points. And anyway, Why would we care what some desperate message board trader thinks a $600BB company is going to trade after its earnings report for the last 90 days of business? Here’s the article you’re referencing about the trader who bet it all on $AAPL dropping after earnings.

Subscriber comments about article and trader who bet it all:

• Bet he’d gladly exchange his 15 minutes for his money back from all his reckless trades. Gotta respect the money.
• Poor doofus, his 15 minutes of fame.
• Right, about the trader who bet it all on $AAPL… bet he ain’t feelin’ none too good today 😰
• Cody’s response: A billionaire friend of mine who’s taken two or three tech companies public in the 80s and 90s told me when I was on TV and complaining about it, that it’s much better to be rich than it is to be famous. Haha.

Q. Will $SWKS continue to move up? It is somewhat tied to $AAPL (40% of its business).

A. Let’s analyze the fundamentals at $SKWS first. The stock is trading at 13x next year’s earnings estimates. Revenue expected to grow 10% next year. Next terribly expensive and could be considered cheap. As for the stock near-term and its ability or not to keep going up, it looks awfully extended to me, but this is a Bubble-Blowing Bull Market, so it certainly could!

Q. Cody, thoughts on this —> “The Wall Street Journal is reporting that Facebook is developing a video app for television set-top boxes, including Apple TV.”

A. $FB is the king of the App Revolution on smartphones and its high time they get set to become a power in the burgeoning television app/video streaming business.

Subscriber follow-up: Interview I watched reported the ad market in TV is $70B. So happy Facebook is going after a piece of it.

Q. Your thoughts going into $FB earnings. Know already you have been on this name from beginning.

A. Gulp! No, just kidding. But we do know $FB tends to drop after earnings and then work its way back up over the next couple months. Wouldn’t surprise me to see that happen again this time. I don’t game earnings on $FB. I’ve owned it since $20 and still sit tight.

Q. From what I tallied, do you now have a full position on GIMO? I believe there were 3 tranche buys at 1/3 each. Correct? Also can you refresh us on your big picture analysis on GIMO (aside what was already written). Lastly, you purchased a tranche after they pre-announced. What was the rationale for the purchase rather than waiting for actual earnings? I ask because you usually wait for the facts. 😁

A. Correct, I’ve made $GIMO as large a position as I want it to be, which is in the lower half of my overall portfolio’s position sizes, but I could conceivably add another small tranche at some point. I think the company pretty much told most of the story on their preannouncement, but you make a good point that I usually wait for the earnings call to hear more color on something like this.

Subscriber follow-up: Thanks for the reply. It seems like you are quite confident in GIMO based in the rapid scale up to a full position. Can you share more of your sentiment?

A. $GIMO has very high gross margins and is growing quickly as a way for companies to protect their cloud networks. It’s got the Amazon Web Services upside potential if they ever start generating revenue through their trials there. Much more than that, but that’s the 30 second elevator pitch, I guess.

Q.  I know you are doing work on Under Armour. What is your high level thought on the potential of the company. Also if you were to buy, which share class would you buy…Voting or non-voting? Lastly, good wishes to you and your family😁

A.  I would buy the $UAA non voting probably if were to buy Under Armour. As for the potential, they could become the next Nike or bigger if they deliver. My issue for now is that the growth rate for next year indicates the high growth years could be over. Is it a blip or a long-term trend for Under Armour? Are margins sustainable?

Q.  $UA under $20 yesterday. Thoughts?

A. I’ve long said that $UA $UAA was too expensive for me to buy it, and I have stayed away from it since I made some nice money on some $UA call options a couple years ago. I’d rather be a buyer than a sell of of $UA $UAA after the 25% decline. But then again, I don’t have to do either and I’m not planning to get involved in it any time soon.

Subscriber follow-up: $UAA has another thing going for it. It is getting downgraded all around. They have deals with the MLB with baseball season coming up could be a catalyst. They also are trying to get athletes. I think $UAA is worth a nibble long term as they continue to build their player portfolio… just my opinion.

Q. $PANW at $126 1st of January and now at $145. Thoughts on initiating a position?

A. Yes, $PANW is a name I’m getting close to buying.

Subscriber follow-up: Re $PANW… good to hear!

Q. Last time asking about $NXPI and $QCOM . Do you think the merger is off now with $QCOM’s problems ?

A.  No, I think the $NXPI and $QCOM merger will still happen. I wouldn’t want to hold onto $QCOM regardless though.

Subscriber follow-up: Thanks ! Was thinking more about $NXPI.

Cody’s follow-up: Ah, well, $NXPI will at best trade with $QCOM if the merger continues to follow through, but could get crushed if the merger gets called off, I suppose.

Another subscriber comment: $NXPI. $QCOM is paying $110/sh cash for $NXPI. If $QCOM continues to fall, not sure how that could hurt $NXPI. If the deal falls thru, maybe $NXPI is worth $93/sh? or ? But there is no stock component with $QCOM buying $NXPI. Cheers.

Cody’s response: I stand corrected, thanks: “$QCOM is paying $110/sh cash for $NXPI. If $QCOM continues to fall, not sure how that could hurt $NXPI.”

Q. What is the main reason for not wanting to hold onto $QCOM?

A. There’s a lot of reasons in totality that tipped me into selling my $QCOM, but the fact that one of their largest customers is suing them and accusing $QCOM of some pretty nefarious stuff was probably the straw the broke the camel’s back.

Q. Seeking Alpha article: Just wondering your thoughts on what is a significantly negative piece and do you continue to be optimistic on $PI?

A. Wow, that’s a helluva long short analysis on $PI from that writer on Seeking Alpha. I just read half of it, let me read it and do article about it.

Q. Do you feel $GOOGL is at a good pullback point to begin a small position or does it have further to fall after earnings that analysts felt were not so great. Personally I thought they were not really bad at all.

A. Short-term, I frankly have no feel for how $GOOG will/has traded. Longer-term, they’re a dominant factor in tech/cloud/mobile/video/search/etc. So I would think starting a small position with a tranche buy isn’t the worst idea I’ve ever heard. 🙂

Q.  Have you commented on $SHOP (Shopify)? Even if so, what are your current thoughts, going into earnings? (2/15) Motley Fool and a whole bunch of others think it’s the bees knees; you think it’s close to Revolutionary status? Thanks.

A. $SHOP chart is straight up and its expected to grow 50% this year after 85% last year but it’s also not expected to be profitable this year. I wouldn’t want to follow the Motley Fool crowd into with the stock straight up from 20 to $50 in the last year — of course the momentum/herd are in love with the stock right now. I don’t have any feel for whether its going to make its quarter, but I would expect there will be a better time to buy it at some point in the next few months unless the quarter is just amazing and forces all the analysts to raise estimates and say the company will end up being profitable this year.

Q. What’s your thoughts on $TWLO at these levels.

A. $TWLO not expected to be profitable this year and is trading at 8x this year’s expected revenue. 30% topline growth rate for this year is nice, but not sure I want to venture into that kind of a stock at this point in the cycle.

Q. Any thoughts on / interest in $GEVO in the biofuel space?

A. $GEVO is a $3 stock? Looks fishy to me, but I don’t know it at all. What’s your thoughts on it?

Q. A little downdraft in SNE from letting go some ownership in M3, expecting less profit “within the picture segment”. Just wanted your thoughts on impact and trend long term of course … Sold some while up and back on my watch list.

A.  Didn’t like seeing that $SNE‘s still got a bunch of DVD and Blue Ray sales figures baked into the forward numbers. They need to be out there monetizing through streaming and creating bidding frenzies for their movie and tv show library.

Q. I’ve been feeling on the short side too with on IBB and also P. P spiked before I covered my put but still holding. I will be wondering whether to let go before earnings 2/16 since the improved guidance?

A. I’m sticking with my $P short, as I think it’s a long way down from here for that stock still in years ahead.

Any last words or questions?

Q. I hate to ask because the stock is speculative… I purchased shares of PULM based on their drug approval…. does it look like a company that could get back to its 2014 level… I made money on the shares and what i have left is paid for by the gains.

A. PULM is a $50 million market cap that’s down 95% in the last two years. Looks like a lottery ticket at best, but I have no edge there.

Subscriber comment: Yeah… have a great rest of the week and thanks for sharing your financial wisdom. Here’s to more great investments in 2017.

Thanks for the kind words! See you around the Chat Room all.