Cody Kiss & Tell: Investing “morally” is impossible, WFM, GPRO, CSCO and more
All right folks, let’s do this week’s Live Q&A Chat. Ask me anything.
Q. Whole Foods is positioned well to dominate the natural food market. Is $WFM a stock you own more for moral issues than financial?
A. I probably wouldn’t own a single publicly traded stock of any sort if I were looking to invest in one for “moral reasons.” I’m anti-corporate welfare because I think it’s immoral and any company that gets subsidized in any way are immoral…and I don’t think there’s a publicly-traded company in the US or anywhere else that’s not being subsidized in covert and overt ways that I find appalling. When I first bought $WFM a few months ago, I wrote about it at the time similarly: ‘We need to keep it real in our analysis like we did with Google’s “Do No Evil” slogan — owning the stock despite their hypocrisy as they lobby for more profits and protection from smaller competitors. Whole Foods hurts local markets, but when it comes to investing, there’s no way to buy a major corporation that doesn’t hurt local markets these days.’
Q. I always prefer the small natural food stores, and farmers markets for my family, but WFM is a common choice. I also go to The Fresh Market $TFM, any opinion on them?
A. I’ll look at $TFM some more, I’m not as quick analyzing food-related stocks as I am tech and other sectors that I know much better. I always finished my TV show saying, “Support your local businesses,” and I meant it.
Q. $WFM reports earnings after hours. You rated them an 8 in your portfolio on February 6. What do expect to see from their report to support this rating?
A. More growth. I don’t care too much about $WFM‘s report tonight, which shows how business has been for it for the last 90 days, but I do care that they continue to growth steady on the top and bottom lines and open more stores and get more revenue per store, etc
Q. I’m also curious to see who leads the way in local power storage. History may show Elon Musk to be a great battery maker who once dabbled in making cars. That market is massive, and would solve the biggest challenge to powering remote locations/peoples.
A. I’ve been thinking about the Battery Revolution for the last few years and we’ve hit on it here in the Chat a few times. A battery that’s 10-100x more efficient and/or smaller than the ones we use today is coming — will it be eventual or will there be a break thru? Is $TSLA the future of battery technology? Good questions. Will keep searching for answers.
Q. Who has the most important IP in the solar space?
A. Hmm, I don’t think there’s a Sandisk $SNDK-IP in the flash industry type of pureplay on the solar industry. But recall $FSLR buying IP and solar patents back a few years ago at the bottom. They own some for sure: “First Solar buys GE’s intellectual property for nearly $84M archive.azcentral.com › Business › Consumer Aug 6, 2013 – First Solar buys GE’s intellectual property for nearly $84M…”
Q. Why do you firmly believe wearables will be a HUGE market? I am anticipating the I-watch myself. Cook says he cant live w/o it. Can you explain why you both think that is the case with your google glass and cook with his iwatch??
A. The same kids (and adults) today who take selfies with their smartphones to post on SnapChat and Facebook are going to be doing 10x more of that and most of it in real-time using wearables. I don’t understand how anybody would doubt that anything that gets people posting more and easier and consuming more to and from the net is only going to grow exponentially. The smartphone becomes the hub for these wearables, a centralized place to control the devices and the content that goes thru them and on them. Some people will have 3-5 wearables for every smartphone they have. Others will have 10-20. More than a billion smartphones will be sold this year, up from less than 100 million seven years ago. I say there will be several billion wearable devices sold over the next few years. Did you know there’s now a Wearable Workout shirt from Polo. How about wearable chips that you put on your skin that measure your blood and oxygen levels? Need I go on?
Q. Hi Cody, Your comments/opinion on IPHI?
A. I didn’t know $IPHI Inphi Corporation until you asked about it and I just looked it up. It’s in a good, but competitive space, making communications chips for devices and networks. Stock’s struggled since it came public four years ago. Analysts estimate 15-20% topline and 20%+ bottomline growth this year…and it’s trading at 20x this year’s earnings. I’ll take a deeper look at $IPHI in the next few weeks.
Q. Do you have enough knowledge on the subject to comment on the new electronic LBMA price-discovery process which is set to be unveiled in March and what that might mean for the price of gold? Is this really an honest attempt to create more transparency in gold pricing or is it something else?
A. I haven’t done any work on LBMA gold pricing and its impact, but if I had to guess, in this day and age, it’s probably a new means for manipulating the price of gold by giant banks and their governments in the west. Doesn’t change anything long-term tho….price discovery in gold and everything balances over long periods of time.
Q. Hi Cody – CSCO reports tonight. Any thoughts on them now and going forward? Thanks.
A. $CSCO is navigating the slow move to software-defined-networking the core of the telecom networks and in the corporate networking setting better than anybody thought possible, including me. They are also seemingly eating $JNPR‘s lunch. Longer-term, I don’t see it growing at a fast enough pace to get me back into it. I hate to join the chorus but it’s probably time for new leadership there — Chambers, as I’ve said to Kudlow on CNBC years ago, has created hundreds of billions of dollars of value at Cisco over the years, so I hate to criticize him, but the last decade it’s been a boring slow growth mega cap company.
Q. Can you give a clue as to the direction of your next trades? Getting (even) more conservative with some shorts/puts or still looking for new longs to add here?
A. I just am looking for the next great long or short….got a lot of ideas, but the price and timing of the stocks haven’t made me feel completely comfortable in a time when I’ve been more cautious than I was in years past.
Q. I brought this up once on a normal day post, but are you not interested in QRVO? You were once interested in TQNT and I’m sure you were buying that for longer term revolutionary reasons. Any reason you don’t want to be in this name for the next 2-3 years?
A. I’ve got enough tech exposure right now that I’m comfortable with what I’ve got that unless $QRVO sells off and gives me an opportunity to sneak in at a great valuation, I’m just not seeing me chase it personally.
Q. Hi, Cody. I have still-nicely-out-there AAPL calls. Thanks for that. And about-a-month-left (March) TWTR calls. Thanks again. Question: is there a general rule of thumb (re TWTR) as to when you begin to worry about the time running out and how to stack that up against (hopefully) good prospects for the common? And in the case of TWTR, do you see any viable further-out calls at this time?
A. I think it’s time to catch our breaths with the options, as we’ve had some huge home runs of late including those you mention. I’d err on the side of selling my call options too quickly and letting common stock do the work for me instead for now.
Q. $AMBA has it’s earnings on 3/5 and $GPRO has it’s Lock Up expiration on 2/17. Considering AMBA and GPRO tend to move in tandem even though Gpro only makes up 3% of Amba’s earnings. Would you see any drop in Amba after the Gpro expiration as a buying opportunity so close to earnings? If so at what at price for a 1st or 2nd rebuy tranche with the acknowledged risk so close to earnings?
A. $AMBA‘s up near all-time highs while $GPRO‘s down more than 50% from its highs a few months ago. Not sure they’re trading in tandem at all anymore. Meanwhile, there’s a lot of hope from momentum traders who’ve been plowing into $AMBA with the proceeds from their$GPRO selling….and I’m worried that it’ll take a serious topline beat and guide for the stock to pop if its still set up like this in three weeks when it reports. No easy answers for you, sorry.
Q. How do you think the upcoming lockup expiration will affect &GPRO stock?
A. Gaming a lock-up expiration isn’t easy and might not even be possible. I’m still not a$GPRO fan at these levels tho personally.
Q. Wondering your generalized current stance on oil/gas stocks and where you see oil prices going for the next few months? Any of those sector stocks on your radar at this time?
A. I’ve been saying a lot lately that I don’t see any reason to try to game a bottom, or any type of trade for that matter, in oil/energy. We’ve made a lot of money and avoided a lot of heartache over the years sticking with our strategies and unless oil drops to like, say, $20 a barrel and there’s a wave of bankruptcies in the sector where we could go in and buy the survivors, I’m just not interested in playing energy/oil.
Q. For someone who hadn’t purchased those $XLF Puts June $24 you posted about a few weeks ago. Would you currently still look to start a 1st tranche here, or hold off and wait for other opportunities?
A. The $XLF puts (or an $XLF short for that matter) are partly hedges for our broader overall longish portfolio. I still think there’s some good possibility that a major bank or two announces “unexpected losses” in their currency/commodity trading desks in weeks ahead, so I’m letting the puts play out for now but might add another tranche myself at some point.
