Cody Kiss & Tell: Sony, Gold & Platinum, China stocks, TWTR, FIT 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 With Cody Android App or at https://twc.scutify.com/members/. If you have any questions about our service, just email us at support@tradingwithcody.com.
Q. Earlier today you spoke of “downstream” suppliers for VR devices, does that mean they make critical components?
A. I’ve been getting repeated requests for #VirtualReality Revolution plays so I’ll go ahead and paste the relevant parts from this article called “Everything You Need to Know About the Virtual Reality Revolution” here now: “Over the next few years, virtual reality will carve out its own niche in the consumer electronics space if it can just prove to both consumers and investors that it is not a fad that will disappear and never be adopted by the mass market. I choose to put my faith in Facebook, Alphabet (GOOG, GOOGL), Sony (SNE), and the other VR pioneers who already large networks of users and will dominate this market in the coming years. The best VR plays available to the average investor are Facebook, Alphabet, Sony, Nvidia (NVDA), Qualcomm (QCOM), Ambarella (AMBA), and even Apple (AAPL), who is in the early phases of developing a VR strategy. Subscribers to Trading With Cody know that I own all seven of these companies, with Nvidia being added very recently, so we already have a lot of exposure to the VR world. Some dark horse small cap plays on the VR sector include GoPro (GPRO), Himax Technologies(HIMX), and Vuzix Corp. (VUZI), none of which I own. I think that when investing in an emerging technology revolution it is important to go with the two or three companies that you believe will be the biggest players in the space over the long-term.”
Q. Do you think PPLT will catch up with $GLD – looks like a bottom may be in place?
A. I’m not a fan of precious metal ETF’s other than if you’re using them for a short to mid-term time frame. I think at some point, the major precious metal ETF’s won’t be able to deliver all the promised physical metal that they purportedly represent. As for platinum vs gold, I think holding some physical metal coins in each is a good idea, but I’d rather have 5-10x more gold than platinum.
Q. $FIT has been doing well last few days and looks like it has bottomed. Is it a value play?
A. I mentioned in today’s post that I’m considering nibbling on a new tranche of $FIT. I think the quarter and near-term guidance after the quarter are going to be much better than most analysts expect. Longer-term, yes, there is some potential that the stock is quite a value play here.
Q. Not sure these trackers are ready for prime time yet – saw this on 3/24. Thoughts?
A. Some tracking of your fitness is better than none…and the tracking technologies for these fitness wearables are only going to improve in coming years.
Q. Cody, how much do you like $TWTR management and $FIT‘s management
A. That’s a great question and one where the answer is subjective. Short-answer is that I’m warming up to Jack Dorsey and Twitter’s new management as they do things like add NFL streaming to the platform. I like $FIT‘s management pretty well and think they’ve done a good job managing that company and decent job managing the company’s financials.
Q. What’s a good price to initiate a position on Sony ($SNE)?
A. I always suggest starting with a 1/3 tranche if you want to initiate a new position in a stock. I think $SNE can run into the $40s or even higher this year if the Virtual Reality Revolution starts to Bubble.
- Subscriber Follow-up: If you think $SNE could run to the $40s or higher this year, have you considered $SNE LEAPS?
- I don’t have enough conviction about the one-year time horizon to buy call options for that timing. Five years out, I think the risk/reward for owning $SNE common stock is very compelling here. I would be plenty happy seeing my common stock in $SNE get up to the $40s this year.
Q. $IBB has caught fire lately. Is your bearish conviction still in place?
A. Until the last few days, $IBB has been a good short hedge as its remained weak even as most of tech and the broader markets have bounced back strongly from their February lows. I’m holding it for now as I continue to expect more biotech/health-care pricing scrutiny from the government and a general repricing of these health-care related valuations.
Q. $WB attempting to break out of base today – do you have any opinion on fundamental attractiveness?A. I prefer to stick with US-based companies as I don’t trust the long-term outlook for securities in general in China. I’ve always thought that $BIDU is the one tech name out of all of China’s tech names that I’d risk some of my own hard-earned capital on, but I don’t own it right now. I can’t find financials on $WB since 2014 and that alone would keep me out of the stock. Analysts do expect the company to earn more than 80 cents per share next year 30%+ top-line growth, so it’s got some relative valuation there.Q. Feet to fire would you be trimming holding or adding to $FB/$AAPL going into earnings if you weren’t already holding full positions?A. We still have three weeks worth of action before either $FB or $AAPL reports earnings, so let’s see how they trade over the next ten or so trading days and than we’ll have a better chance of gauging what to expect from the stock after the earnings report. I’m not in a huge rush to trim my longs, but neither am I in a rush to add to them either. Holding steady I guess is my answer!Okay thanks folks, that’s a wrap.
