Cody Kiss & Tell: TradingWithCody Apps, Security Stocks, Sony and much more

Q. Any coming changes to Trading With Cody you can speak to based on that survey you gave us users about the service? The TWC Android App looks great, based on your screenshot. Highly anticipating the Apple version.

A. Lots of improvements, new features and ideas coming to TradingWithCody, so stay tuned. Our TWC apps are just getting started too, and they will improve much in coming weeks and months too. The TWC Android app is now available in the Google Play Store and the TWC iPhone app is awaiting approval from Apple’s App Store, but should be there any day now.

Q. I read comments that $SNE felt it was moving forward in its turnaround plans. Is the timing OK for another tranche.

A. $SNE‘s tried to stall here in the low $30s after doubling from its lows last summer. If $SNE‘s profitability is anywhere near what the company thinks it can attain ($4 billion in profits in 2018 for example), the stock would likely double from these levels. I wouldn’t want$SNE to be a huge position for my portfolio, but I do think it’s a good tranche candidate to build up slowly if you don’t have much of it. ““This year will mark the beginning of our profit expansion phase, as we carry out aggressive investments into promising areas,” Hirai told analysts at an investor briefing in Tokyo Wednesday. Image sensors such as those used in smartphone cameras, video game network services and virtual reality gear offer growth opportunities, he said.” http://www.bloomberg.com/news/…

Q. So, how ABOUT AMBA? Agree that it might be time to trim? The article Jahmon cited seems pretty compelling, and I think it fits in with your philosophy anyway. How about the concept of shorting it? Or is that just a foolhardy ER play?

A. I just clicked on that $AMBA article from Jahmon. So some dude who doesn’t even have enough guts to put his own name on this articles thinks $AMBA is a short sell into earnings next week because it “went up to fast”? Seeing this goober’s analysis leading him to believe he can successfully move from long to short this stock in short-term moves like that…well, his bearishness makes me a bit more bullish. I wish there were more analysts and traders clamoring to short $AMBA near-term. As far as trimming $AMBA after it’s run up more than 3x what we paid for it last year? Yes, I do think taking some partial profits before the earnings report makes sense, as a matter of following the playbook and being disciplined. Here’s the silly article: http://seekingalpha.com/articl…

Q. Thanks for yesterdays update on the Security Basket. I know that you rate each of the three stocks as an 8 in your portfolio, but each company services a different sector, are at a different stage of their growth, etc. Therefore, feet-to-fire, how would you rank the stocks against each other?

A. Tough to rate the stocks in the security basket against each other, but if I had to try…well, I just did try and I can’t pick any of the three over the others. I like all three equally for now, though I’ll learn more about each over time and valuations, pitches, opportunities will come along in each in coming months. I’ll probably make some nuanced, tranche moves in each name when the opportunity to do so arises.

Q. What are the differences between the companies in the security collection, i..e what problems do they try to solve? Are any of the problems more important then the others?

A. $PANW is probably the purest “Security” play of the three. $SPLK is probably the purest “Big Data” play of the three. And $FFIV is probably the purest “Networking/App” play of the three.

Q. How about with $PANW – would you trim before earnings tonight or just let it roll- assuming a full position, or assuming someone is still building, as I think some of us are?

A. I’ve only owned $PANW for a few weeks now and I’m in the same position as you guys are of trying to build it up slowly now. I’ve not even considered trimming any$PANW after this small position has rallied 15% in that time. If it gets hit after the report, I’d likely be buying more. If it rallies after the report, I’ll likely sit tight for the near-term on it sell.

Q. Did you add that tranche of SPLK this morning as you had planned? At what price? And how’s it going with adding that Weekly Purchases feature that lists what you bought/sold in the past week (prices, not volume), etc? It’s been quite a while since you said (a) yes, it would be valuable to bring it back and (b) you’d put someone on it after you re-did the site (which, for sure, has been done, and nicely so). Hope this hasn’t fallen through the cracks. Please.

A. Yup, nibbled some more $SPLK this morning as I’d noted in the Trade Alert I sent out last night. Paid about $67 when it was down earlier. And yes, Elad and I will start making sure you guys get the Weekly Trade Alert Round-Up feature again starting this week every Friday.

Q. Could you speak a little to the fundamentals of $SPLK and what is encouraging to you? Topline revenue is growing but eps declining.

A. If $SPLK grows its topline 40-50% per year for the next five years, earnings will be huge over the next five years from there.

User Comment: RE: ” $FFIV is probably the purest “Networking/App” play”. I use F5’s LTM/GTM everyday and I feel many of its shortcoming’s are very well answered by $ATENproducts. $ATEN is catching up in industry as it tries to offer all F5 features at fraction of cost. It’s worth having $ATEN in watch list for “Networking” play

A. Duly-noted, sir! I will check $ATEN out afresh.

Q. For those of us who were late to the game on AMBA, up maybe 20-25% or so (as compared to 3X), representing the second of maybe four ultimate tranches — would you recommend trimming? Or just riding the change out, either way (and adding if it drops)? I’m never sure what kind of a gain is worth a “trimming;” any Rule of Cody’s Thumb on that?

A. No Rule of Cody’s Thumb on when to take profits and/or trim per se. We want to be flexible and take each pitch and stock on their own merits. I wouldn’t trim much $AMBA if you were late to scaling into it and/or only own about half as much as you want right now. If you had a “Full” position in the stock, I’d look to sell 15-20% after this triple we’ve had in it. Maybe trim 5-10% instead if you’re worried about it into the earnings report next week. And yes, either way, if the stock does get hit, I’d probably look to scale into a little more at some point.

Q. Do you feel that Yandex is worth staying in? Is there anything in your analysis which has changed? I am asking because it is hard to feel that the Russian consumer can buy anything.

A. I’m having a hard time sitting on the $YNDX position. We’ve got a small gain in it still but the stock has been in an ugly downtrend since it spiked to $21 soon after we had bought it. I might just go ahead and put a soft stop loss on it around $17 or so and if it drops below that, sell it and move on. Remember $YNDX is by far my smallest stock position in my portfolio.

Q. You mentioned about possibility of $BBRY being acquired. Are you considering it as short term play ? Even if not, what would be the good value to enter the stock ?

A. If I thought Apple or Google were actually about to pull the trigger and buy $BBRY, I might sneak in some call options. But even as I do think it would make sense for $AAPL or$GOOG to buy $BBRY to get into the car dashboard business easily, I don’t think it’s going to happen anytime soon. I don’t think I’d ever buy $BBRY on its own business merits.

Q. Hi Cody, Some questions regarding FSLR (1) What is your opinion of the FSLR downgrade this week? (2) Have you changed your rating based on the downgrade and the subsequent price action? (3) Are you considering any change to your holdings in FSLR?

A. I don’t care very much that some analyst thinks that $FSLR‘s growth projections for the next year might or might not be too high, which is what prompted that$FSLR downgrade this week. As far as the price action since the downgrade, if anything, I’m starting to get interested in scaling into a little more of the stock. No rush tho, and I might add another solar-related name to the portfolio instead of nibbling on more $FSLR. We’ll take the pitches as they come. 🙂

Q. Do you worry that once the government subsidies go away that fslr will have problems? In other words is solar a government program like ethanol was?

A. I’m worried that all of our stocks would be hit if the companies lost the trillions in corporate welfare, both explicit and implicit, that they get every single year. $FSLR is probably the most welfare-beneficiary of any of our stocks. In the end, I hope and pray that every single corporation loses their subsidies, protections and welfare handouts in coming decades, even if it means corporate profits and/or the stock market have to be reset with new valuation metrics. Renters, blue collar workers, even inner-city subsidized poor people, along with main street and Rural America will immediately benefit when they stop having their wealth redistributed upward.

User Comment: I totally agree with you. Subsidies need to stop. Simplify the tax code and everyone will be able to see where there money goes. The the pols will be running to the exits.

Q. How do you think WFM will hold up in terms of the added competition coming its way? e.g. : Costco has really ramped up its organic offerings and is planning more. Albertsons got bought out by Haggen, and they plan to convert all of them to Whole Foods competitors. Fast food chains are even finally starting to get on the ‘health-conscious’ bandwagon.

A. I could be wrong, but I can’t believe that anybody would ever confuse a Costco or an Albertson’s with a Whole Foods. I don’t know if Whole Foods can maintain their margins and their growth forever, but I do think they’ve got the high-end healthy grocery store concept nailed. Whole Foods is to groceries what Starbucks was to coffee.

User Comment: Thanks @CodyWillard, but as someone who shops mostly organic, I take deals where I can. And, Costco has definitely taken some of my business from whole foods.

Q. Back to $WFM for a moment. Perhaps there’s a case for holding on to it for the moment, but if one (that would be me) got out of it at a good time mid-decline, would you recommend starting a new tranche or — based on everything — sit and watch whether competition WILL indeed stifle its tremendous growth for the near-term? (BTW, I might possibly “confuse an Albertson for a WFM,” indeedf, if the owner changed the store/chain name and re-branded it entirely rather than just stuck a WFM-like section in an Albertson’s . .

A. I like $WFM for the long-term and would sell it too if I didn’t think it was a potential 3-5x bagger in the next five to ten years.

Q. Cody, your update on TWTR? Any catalyst for movement (periscope)?

A. Periscope is awesome and taking off. TWTR shareholders want monetization though. not just growth. TWTR might be dead money til they prove they can meet their own guidance for the next couple quarters.

User Comment: Re TWTR and Periscope: call me myopic, but how do you monetize something like that crazy, frantic mess?Put little ads in all those annoying hearts?Or is its value just to attract people in order to divert them somewhere else?Or does Twitter try to sell the feature/technology to others to put on THEIR site? (You heard it here first.)