Cody Kiss & Tell: Scutify hopes, GPRO vs AMBA, Call options, and more
Here’s the transcript to today’s Live Q&A Chat. Lots of good back and forth.
I’m here but Robert Marcin called me a few minutes ago to discuss a tech stock I’ve been looking at. Let’s rock, ask me anything.
Q. Deadline for entry into Scutify secondary offering is this week. I would like to hear more regarding what you hope to get out of this investment for yourself and for your investors, as well as what you see as the value of the company in1-2 years? In 4-5 years? Do you anticipate a public offering at some point?
A. I’m hoping to build Scutify into a great company with nice cash flow and strong growth and a uniquely valuable network/app product over the next 2-3 years. The value of the company probably ultimately hinges upon us getting hundreds of thousands (or millions) or users on the site/apps and monetizing them using paid-for premium products, brokerage referral fees, sponsorships, advertising, and licensing our proprietary data about stocks, sentiment and social rankings. We have a terrific, very value-add product in our sites and apps already and we have tens of thousands of active users on the site, so we are on the right path, but we have a lot of work to grow and monetize along the way. I think an IPO or selling out to a publicly-traded tech company like Google or Facebook or Microsoft would be great, but I think that will all take care of itself if Kheang Ly, the CEO and I and the rest of the Scutify team do a great job of continuing to build a viable business on its own right. It could be a huge home run for our investors or a complete bust for our investors, but those are the risks inherent in investing in any kind of start up, including Scutify. I make no promises but that we’ll be working our butts off and doing our best to make this a huge success for all of us involved. We’ve still got some shares left for sell at $7 each, so let us know if you’re going to invest.
Q. Is Tradier Brokerage a related company in any way (to Scutify, Wall Street All Stars, etc.)?
A. No, Tradier brokerage is a partner whose got great technology for trading stocks and options and so we partnered with them and integrated their tech into our site so people can trade stocks and options without ever leaving Scutify at all. They are their own brokerage company tho, like eTrade or TdAmeritrade, etc.
Q. Please speak candidly about the rollout of a new website. This was promised in August, and then in November.
A. I’ve got a team trying to get TWC fully moved onto the new servers and rolling out TradingWithCody apps for iOS and Android too. They ran into a glitch trying to combine WordPress, which TWC is currently built upon, with our new mobile-first framework called “Bootstrap.” I think they’ve finally got it figured out now and we should be up and running by year-end, but I’m as frustrated at the lack of results as you are and am embarrassed to have promised it before it was done.
Q. What stock were you talking to Marcin about?
A. You’ll have to wait til I finish doing all my homework on it…it’s a new tech pick that I’ve been working on and coincidentally, he has been too.
Subscriber Comment: Well THAT’s a good sign!
Q. What would be the catalyst to move TWTR aside from possible short term pop from change in leadership?
A. The next catalyst for $TWTR is simply growth in the next quarter’s earnings report. I don’t think management is gonna change and I do think they’re monetizing faster than Wall Street analysts are expecting. At a $25BB market cap I think it’s got 5x upside over the next five to ten years unless they just completely blow it.
Q. Cody, should Luxottica be added to the wearables revolution?
A. LUX is indeed already in my book, “25 Stocks for the Wearables Revolution” which you can read for free here/content/files/wp-content/uploads/2014/08/25stocksforthewearablesrevolution-2.compressed.pdf — Luxottica Group S.p.A. is the world’s largest eyewear company, controlling over 80% of the world’s major eyewear brands.Its best known brands are RayBan and Oakley. It also makes sunglasses and prescription frames for a multitude of designer brands such as Chanel and Prada, whose designs and trademarks are used under license. Luxottica also makes sunglasses branded Giorgio Armani, Burberry, Stella McCartney, Versace, Vogue, and Donna Karan. In March of 2014, LUX and GOOG announce strategic partnership for Glass to develop innovative iconic wearable devices. It was announced that Luxottica would partner with Google on the development of Google Glass and its integration into Luxottica’s eyewear. With net sales of more than Euro 7.3 billion in 2013, over 73,000 employees and a strong global presence, Luxottica is a leader in the design, manufacture, distribution and sales of premium, luxury and sports eyewear. This company will be a powerhouse in the Wearables Revolution, owning most of the brands of eyewear that will be used for Glass. Revolution Investing Rating: 6/10
Q. We’ve done very well on our $AMBA investment and since we are up substantially I am trying to develop a better understanding of its long-term potential. The information I’ve read indicates that approximately 25% of $AMBA’s production is being sold to $GPRO. My concern is that $GPRO is going to tank after the Christmas rush. Is $AMBA so dependent on sales to $GPRO that if $GPRO stock takes a significant downturn so will $AMBA?
A. Imagine if $GPRO ends up cutting the price of their cameras in half over the next year or two and that $GPRO’s margins collapse as a result and that $GPRO’s stock goes down big because earnings don’t look good even tho they’re selling more GoPro cameras than ever before courtesy of the half-price. AMBA, meanwhile, would benefit from the total units of GoPro cameras sold, no matter what price. All that said, $AMBA’s stock does and probably will continue to somewhat follow where GPRO’s stock goes.
Q. So, feet to fire, would you rather be long or short going into $AMBA’s earnings release after market tomorrow?
A. I’d rather be long than short $AMBA into the call tomorrow, but I wouldn’t try to game its reaction to the report since the stock has been on such a tear and expectations are so high. Growth should be great in the report, but that doesn’t mean it’ll pop.
Q. Howdy Cody, trying to find some long term call options, namely January or April 2018. Haven’t found any. Longest call on FB, AAPL, TWTR, ABX and other names I would like to play via options is January 2017. Is there any chance,
A. I don’t think the April 2018 call options exist for most of my stocks and haven’t seen any dated out that long on any stock.
Q. Hi Cody. Can you speak a few moments about GOOG in the nearer term? I know you believe Android is all it will need to rule the world one day… Just no love or momentum at all for awhile now…during good market times. Anything to move it forward near term? Fear about the breakdown of the ad model/search model? Sitting at $530 and listless…
A. I think $GOOG might just be a beneficiary of a rotation to “recently underperforming” high-growth stocks from recently outperforming sectors elsewhere. I also think sentiment on GOOG is apathetic to outright bearish and that provides bricks to a wall of worry for GOOG to climb.
Q. Watching two sectors closely now – solars and miners. Can you say few words about them, your rating? solars -FSLR, CSIQ, SCTY. Miners -ABX, GC, AYU, SLW. I would like to pick one or two names from each sector, buy and hold
A. I am concerned that there’s still more pain and not enough earnings for the miners until gold gets sustainably above $1300 or more per oz, which could take a while in a strong dollar environment like we are in right now. I like $FSLR as my solar play but a basket of solar stocks isn’t a bad idea either.
Q. Seems like we are in a post-hype “trough of disallusionment” with 3D printing stocks…Your favorite SSYS is down all the way to $92…opportunity here or do you see this sector floundering for awhile before slowly pulling out of it?
A. I think scaling into $SSYS might make sense starting around now at these low $90s levels, but as you suggest, it is highly out of favor and SSYS needs to show a couple strong margin and earnings quarterly reports in the next six months or it will flounder for a while longer.
Q. So much talk right now about a “once in a lifetime” chance to buy quality diversified oil and gas companies now/soon…On a scale of 1-10 (plus any additional commentary you can add) where do you stand on this as a bona fide moment of opportunity?
A. I think there will be a handful of oil stocks that will be up 10-fold in the next decade from today’s levels no matter what happens to oil in the next six months or so. As for timing it and calling right now the “last great chance to buy oil companies” I would worry that it’s too early in the downturn to say that…but guessing timing and trying to nail a bottom isn’t a good idea anyway. Taking advantage of the huge discount in energy stocks that you wanted to own for the long-term but didn’t want to chase is a good idea, as always tho, use tranches and slowly scale in.
Q. Cody, It was lot of fun in Las Vegas. Thanks for everything. You talked about looking into some call options into year end and next year. Is it the time yet to add any call options.
A. No, not time to add any call options yet and I thought you and I had discussed you not using options for a while anyway…I am thinking about buying some call options in a couple of my stocks and maybe a new name or two in coming weeks, but remember to do what is best for you and not just mimic my trades. I had a great time in Vegas too, thanks!
Q. Yes thats correct not many options until you buy it too and post here. LOL. I got email from SRP about increasing costs for only Non-solar customers. LOoks like they are giving more incentives for customers to go for Solar option. Buying power from customer in the peak sun time and selling it back to customer in non-peak. Is this a beginning of Solar revolution? Would FSLR benefit with this? Here is the link SRP sending out. http://www.srpnet.com/prices/priceprocess/video.aspx?et_cid=4298366&et_rid=615649071&et_ad=
A. Yes, $FSLR would benefit from just about any growth in the solar industry and that’s why I keep it in the portfolio.
Q. Hi, Cody — just read (thanks Elan) that JMP Securities raised their AAPL estimate to $180. Do you see others following? And if so — my highest call strike now is $120; time to venture higher? (I’m into mid-next year and January ’16.)
A. I don’t think $AAPL trades on analyst price target estimates at all. AAPL needs ApplePay and Apple Watch to take off in the next six months. Everything else if just noise.
Q. Cody, your rating of EWY is 9. just wonder that have you added any money to EWY recently?
A. No I haven’t added to my $EWY short position recently, as I am riding an $EWY short from higher levels and letting it work for me for now.
Q. Any opportunity in RSH, Cody? Full header…what’s the play?
Q. Agree with jahmon on RSH. If it DOES go BK, should we just jump in with the BK play . . . or wait for your word? The elements seem to be in place — lots of drama (funders claiming foul, etc.), apparently huge shorting, etc.
A. I’m still sick to my stomach over our most recent BK play. That said, I’ll deal with RSH if and when it actually files.
Q. Hi Cody! I know you sold all of your position in INVN after their disappointing earnings. Now that the stock has sold off further, now trading at 13.95, is this a company you can reconsider? You acknowledge that wearables will be a huge industry and INVN is in this industry, so at these levels is this a compelling entry point?
A. I lost faith in management at $INVN and as my first boss on Wall Street used to tell us “It takes a lifetime to build trust and one stupid move to destroy it.” I don’t like the margins and the way the company has mismanaged their growth and inventories. I’m out of INVN and don’t expect I’ll be a buyer any time soon.
Q. Food inflation has occurred across the board at supermarkets, and in wholesale prices. Wouldn’t it seem likely that distributors ie. Sysco, Whole Foods, etc. will see a large increase (say 20%) in revenue? Wouldn’t this lead to higher net profit for them, thus a higher stock price?
A. Great question and I will do some homework on the concept to see if there’s some legs to it. WFM remains my favorite food play.
