Cody Kiss & Tell: Lots of Ambarella, GoPro, Cycles, Casinos and more

1. Seeing that $AMBA is so depressed by yesterday’s earnings release, what do you think about nibbling on some JAN 15 2016options?
2. You can buy the $AMBA$90 strike price January 2016 calls, which give you four months of time, for $11, meaning the stock has to rally $13 from its current $78 level for those to break even and kick in to profitability from there. You’re basically able to buy 100 shares of $AMBAat $91 per share for every one call option you buy (though you have to deal with an expiration of those call options rather than just being able to hold onto $AMBAeven if the markets have crashed, possibly taking $AMBA along with them, at the time those call options expire. Buying call options at these prices aren’t too wildly expensive in their premium, but neither are they cheap. Depends on your own risk-tolerance, but I might add a few AMBA call options to my portfolio myself at some point if the stock gets closer to $70 in the near-term. Their earnings were great, the revenue growth huge, and the reason the stock got hit is because the revenue guidance for the next 90 days was just “in line” with analyst expectations. With the stock at 20x P/E right now, it might just a good time to scale into some more AMBA common stock if you don’t own any of it. Good luck!
3. Do you feel longer term that $AMBAwill get back to 100? My cost basis is 95 on the shares I own and while I thought they had a very good quarter and guidance was fine I felt there were a couple of issues in the conference call that are of concern. First, they are constantly referred to by the media as “The guts of GoPro company.” The two are intertwined and while I understand that to a point the comments were made by $AMBA that GoPro has nothing new coming. Next, they mentioned China could be an issue for them in the future but this statement was not really clear and I may have it wrong Last is they have enjoyed relatively little competition but that may start to be heating up with Qualcom. I guess i would just like your take on the situation.
4. Relative to the earlier comment that AMBA is referred to by the media as “The guts of GoPro company.” and the two are intertwined… I remember some comments, I think from you Cody, that despite this market perception, AMBA’s business with GoPro was actually only a small portion of their sales. (1) What are your thoughts on this idea that the prospects of these two companies are as firmly linked as the market seems to think they are? (2) Would this change your perception of AMBA’s report yesterday?
5. $AMBA‘s the de facto standard for HD Chipsets and guts and their gross margins are higher than Intel’s or most any other major chip company which means that they have a target on their back as others want some of that action. But I think $AMBA‘s technology road map and distribution and customer base is very strong and while there is always competitive threat to any successfully growing profitable business like HD Chipsets, AMBA’s the de facto standard in the industry, supplying not just $GPRObut AMBA also supplies GPRO’s biggest competitors from China, at least for now.
6. Hi Cody, are you still keeping your positive outlook for the tech /economy in general, i keep hearing people like Cramer and others mentions it’s a bear market and that AMBA and GPRO won’t work in this environment, would you initiate a new position in GPRO or buy call options for next year ?!
7. When $GPROcame public and “wanted to share the wealth with its IPO investors” (read: left billions of dollars on the table instead of on GRPO’s balance sheet), I really started to doubt the company. Nothing since then has made me like their management, although I do think their latest, smallest ice cube-sized wearable cameras are very interesting and they just might roll out some cool drones in the next few months too. When $AMBA was at $30 and$GPRO was at $90 I used to write about how eventually their stocks would likely cross and switch places as $AMBA‘s margins and growth are stronger than $GPRO which has more competition than $AMBA too. So, here we are, nearly a year later, and $AMBA‘s more than twice the share price of $GPRO. I do think $GPRO is starting to look interesting as a long-term investment, but I’m not sure I want any more exposure to it since my $AMBA stock has increased so much in value and has become a pretty big position for me. Let you know if I do ever buy some $GPRO.
8. What are your thoughts/expectations for AAPL with next week’s event?
9. I think the Apple Events happen to often to make much difference to the stock these days. Unless there’s some brand new, HOLY COW kind of product that Apple’s been working on in secret that gets revealed at this next Apple event, that the event will likely be a yawn showing off the updated iPhone 6 and iPhone 6+ and maybe an updated Apple TV but nothing earth-shattering. Maybe an updated Apple Watch that improves upon the first version and addresses some of the complaints of its early adopters would be exciting enough to catalyze a stock pop. Otherwise, it’s just another day of trading for Apple just with lots of media hype and coverage to distract the masses with.
10. I am trying to look at the carnage of the recent weeks positively and perhaps as an opportunity to re-balance how much I have invested in my core holdings relative to each other. Would you say your most recent list of holdings and ratings accurately reflects the current state or should I wait for the next report?
11. Let me do a fresh Latest Positions with new, updated Revolution Investing ratings for each in the next day or two, so you’ll have the latest. Not sure much has changed since last week, but I’ll update it so you can have my very latest ratings to help guide you. Good luck.
12. Good news about your daughter. Kids are tougher than us, their parts are brand new! Next, I listened to a report yesterday that gave $AMAT, $AVGO& $WYNN as some of the biggest losers in the recent “crump”. Would any of these warrant a consideration of calls yet?
13. First WYNN – In my hometown of Ruidoso, we have Ruidoso Downs Horse Race Track, which means we have a corrupted and economic-sucking, non-productive and probably outright “evil” form of “business” (ie, gambling) that brings in some tourists but also crushes any hope of an actual productive industry taking over here. On top of that, the whiner loser owner of the Ruidoso Downs Race Track, RD Hubbard, goes around funding Republican-Democrat Regime politicians in the state and county to beg for taxpayer welfare to support his business, further destroying the prosperity of people here in the county. I think most casinos are hurtful to our economy and productivity-sucking to their community and only the owners of the casinos/gambling joints are the ones who benefit from them. $WYNNhas gambled the billions of dollars he has taken out of Nevada’s hardworking people and the opportunity costs it took from them and gone to Macau to try to replicate the same playbook in a communist country on the other side of the planet. I hope and expect that over time, all major casinos/gambling joints collapse under their unsustainable and unprofitable businesses that only work with taxpayer subsidies and protections. $WYNNmight bounce from these levels some day but I don’t think I’d ever be interested in investing in a gambling company.
14. Second AVGO – $AVGOis a semiconductor company that has rolled up a lot of its competition and really juicing its margins now and growing as tablets, smartphones and, now, wearables, robots and drones growth accelerates. The stock is cheap at 12x next year’s earnings, on 10% sales growth estimates. I don’t own it, but I might consider buying that one.
15. Third AMAT – $AMATis one of the best-run semiconductor equipment suppliers and the stock has been crushed lately, down 50% to near 52-week lows because the cycle of spending from their semiconductor customers is looking like its peaked or is peaking at least. I like $AMATat these levels, trading at 12x next year’s earnings estimates, though topline growth is likely to be only in the single digits. You get a 2.6% dividend which is way better than a savings account or a CD while you wait for the business cycle to turn higher again tho.
16. Hope all is going ok with you and your family today. I’m wondering if you have any new thoughts on TWTR? You rated it a 6. Upgrade yesterday and some articles talking about GOOGL or FB acquiring it (again with these rumors). Board meeting this week, etc. Thank you!!
17. I don’t have anything new to add to the TWTR analysis yet. They need a good CEO and they need to keep the pedal to the metal on their hidden gem Periscope live video streaming app, but the stock is dead money til the new CEO gets in.
18. Hope all is well with Amaris, I know u are negative on oil right now but at some point we would have to flip it ..if you were to start looking at oils at some point any suggestions of what names you would expect to survive and eventually to be the winners
19. I agree it’s getting closer to “Flip It” time from bear to bull on oil/energy. Not there yet and probably won’t quite be there til the energy/oil pundits/investors panic over the coming dozens of publicly-traded oil/energy companies that are facing bankruptcy as long as oil remains below $50a barrel or so.

Okay folks, those are my answers to this week’s Live Q&A Chat, but I’ll be checking in on the Trading With Cody Chat Room almost every day throughout the trading day, so stop by and ask me anything any time and I’ll answer your questions as soon as I’m on.