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Latest Positions: Analysis, ratings, 2018 outlook and where I’d buy more of each stock

Cody Willard

Cody Willard

— 13 min read

Here is a list of my latest positions with updated commentary and ratings for each position. I’ve broken the list into Longs and Shorts. And from there, I’ve broken down each list into refined categories in order from the largest positions within each category to the smallest. I also give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.”

I added another new name to my portfolio last week as I’ve started buying Wall Street’s most-hated sports brand, Under Armour. That makes a total of four new names in my portfolio over the last 90 days as I finally started seeing some pitches that I had been patiently waiting for.

So here’s the list:

Longs –

  • Forever assets and other permanent holdings –
    • Media and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
    • Real estate, including land and the ranch I live on in NM (8)
    • Physical gold bullion & coins (7)
  • Primary stock exposure portfolio
    • AAPL Apple (8) – Remember when Apple forced U2’s crappy 2014 album onto EVERY iPhone? Oh man, was that annoying. And frankly, I find that even more annoying than the fact that Apple said that it has algorithms in place to help keep an iPhone running at optimal performance if there is an older battery inside that can’t keep up with the required power. The aim is supposedly to stop unexpected shutdowns of older iPhones and keep them running to the best possible standard. But the company should have given you options to choose whether or not you wanted to sacrifice battery time for optimal performance, right? Eh, whatever. In 2018, the stock will be driven by iPhone X sales, as I’ve been saying for the last couple months. Speaking of which, my wife got me an iPhone X for Christmas and after a couple hours of using it, I do think it’s worth the upgrade to have the smaller form factor but bigger screen than the iPhone Pluses. And that anecdote feeds into the idea that I expect iPhone X sales to be very big in 2018, as I’ve also been saying for weeks. Many years ago, I was the first to predict that Apple would have a trillion dollar market cap, and I expect it’s likely that 2018 is the year it gets there which would mean the stock would top $200 per share. I’d personally look to buy some more if the stock got back into the $150s.
    • FB Facebook (7) – Facebook, Instagram, WhatsApp. Monetized. That’s the story of the Facebook stock and why it’s gone from $20 to $180 since we’ve owned it. The Virtual Reality bet on Oculus has not paid off and it’s unlikely to ever move the needle for this company. Not sure that matters, obviously. Another 80% rally and Facebook would become the first ever trillion dollar market cap company, and while I do expect Facebook and others will someday have trillion dollar market caps, I don’t expect to see FB hit that level in 2018 but I do think the stock could top $220 per share this year. I’d personally look to buy some more if the stock got back into the $150s.
    • GOOG/GOOGL Google (7) –Google’s got a YouTube Kids problem. Both my little daughters, age 2 and almost 4, love to watch the YouTube Kids app on their grandmother’s iPad and iPhone. What confounds me is that there’s almost zero educational or value in any of the videos that the YouTube Kids app feeds them. Moreover, why does Disney and Viacom and trademark holders allow their valuable content and names and logos to be splattered all over these horrid videos featuring adults dressed up as characters or bad cartoon imaging and repetitive children song videos? Why doesn’t Google feature content that’s got some sort of value? Anyway, YouTube’s parent, Google’s parent, Alphabet, the stock is basically steady as she goes. And a strong year of growth in 2018 could get Google to the trillion dollar market cap but I’d expect the stock will more likely not get above $1500 this year which would leave it slightly short of the trillion dollar mark. I’d personally look to buy some more if the stock got back into the $800s.
    • AMZN Amazon (7) – Amazon owned the holiday retail season. Amazon Alexa has established itself fully as a de facto standard for the home device operating system. Amazon Web Services is likely to kick off tens of billions of dollars in cash flow in the next five years. In 2018, it’s possible that the stock could double if the overall tech stock market is strong again, meaning that Amazon might even sneak up there and get to $1 trillion market cap before Apple does. More realistically, the stock might show some exhaustion this year and could stall out around $1200-1300. I’d personally look to buy some more if the stock got back near $1000.
    • NVDA Nvidia (7) – The stock has stalled since I’d trimmed some more and the company reported an earnings report that was good but not amazing. I expect that 2018 will be just an okay year for Nvidia the stock, even as the company’s growth and fundamentals continue to benefit from being in front of Revolutionary tech trends like Artificial Intelligence, Driverless Cars and Virtual Reality. The trade in this name is probably a bit crowded and I wouldn’t be surprised if this stock is still around $200 or so this time next year. Then again, it could be another year of momentum driven rallies for this stock and I continue to hold it tight. The stock would have to go up 8-fold to hit a trillion dollar market cap and I don’t expect that to happen any time soon if at all — maybe in five or ten years if this company is dominant in all three of its aforementioned Revolutionary tech sectors. Remember that this stock is already up 10-fold in the last five years. I’d personally look to buy some more if the stock got back into the $160s.
    • SNE Sony (8) – For the first time in more than a decade, Sony’s hitting on several cylinders — including the image processors it sells into smartphones and their content business. Like we expected when we bought it a couple years ago in the teens. Steady as she goes. Sony once had a market cap of $150 billion, back in the year 2000 at the top of the dot com bubble. I think I’d probably sell most of my Sony before it ever gets potentially to that market cap again, with it presently at $45 billion. Steady as she goes with this stock for now though. I expect Sony could hit $60 this year. I’d personally buy more if the stock got back into the $30s near-term.
    • AXGN Axogen (7) – One of our best performing stocks stock this year, up well over 200%, Axogen has done just about everything right since we first bought it two years ago around $4. Axogen is an amazing Revolutionary company, growing quickly, creating their own industry, and partnering with the best surgeons in the world. The stock ain’t cheap, trading at 11x next year’s revenues. With at 40% topline growth rate, the company should be able to grow into this market cap and then keep going. I think Axogen could stall out here in the high $20s and/or even slide a bit in 2018, but it could hit $35 or $40 too. I’d personally look to buy some more if the stock got back below $20 or so.
    • FSLR First Solar (7) – What a year for First Solar as it continually beat/raised estimates and defied the bears. Meanwhile for 2018, analysts are actually expecting negative topline growth of -20%. The market clearly doesn’t believe that First Solar’s revenues will drop that much next year and I don’t either. If it does, the stock has some downside but it remains the best capitalized solar play in the US. I’m likely to trim a little more here soon near $70. I could see this one swinging between $50 and $100 at various points in a wild volatile year for solar in 2018. I’d personally look to buy more near $50 or so.
    • TWTR Twitter (7) – JPMorgan gave Twitter a big upgrade and talked about how the company’s efforts on streaming content and new redesign has turned this back into a growth story. The stock is up $10 from the mid-teens where we were buying it and I trimmed some after its big pop post-earnings report a couple. I expect the stock could get to $30 or $35 this year and maybe even $40 if growth reaccelerates. I’d personally look to buy some more back below $20.
    • SEDG SolarEdge (7) – Solar Edge has tripled off its bottom from a year and a half ago as the company has won new supply deals and estimates have continually been raised. Solar is my favorite revolutionary energy sector and SolarEdge is doing a great job executing on their plans. I was just talking to Robert Marcin about that stock- my favorite value investor, and his point with it was that as long as the subsidies and the Republican Democrat Regime (my words not his) are kicking around how much welfare they’re going to be giving. And not just welfare, but protection. But aside from that, SolarEdge costs and technology are disrupting the standard solar energy cell in solar energy cell industry and I think there’s growth ahead. So, $75-$80 is my target if I had a target somewhere in the next one to three years perhaps even spiking to their in 2018 if the year is strong, but there’s risk at $38. If they miss a quarter it could go below $30 where I’d likely nibble some more.
    • INTC Intel (8) – Recently stalled in the mid-$40s, Intel’s got a lot riding on IoT, servers, driverless cars, PCs, tablets…it’s a big company that still has a bigger market cap than Nvidia, at $215 billion presently. Will Intel or Nvidia be a half trillion dollar company and if so, which one first? I’d guess Intel could get to $100 before Nvidia can get to $800 where each would respectively hit the $500 billion market cap threshold. I expect Intel could hit $60 in 2018 and I’d likely buy some more below $40.
    • Palo Alto Networks (8) – I should do a deep dive analysis afresh on this stock. Stay tuned for that in the new year. In the meantime, this remains my favorite cybersecurity stock and I think it could hit $250 in 2018. I’d likely nibble more below $150.
    • VZ Verizon (8) – I’m pissed at myself for not having scaled into another tranche or two when VZ dropped below $45 right after we bought it. Verizon’s not going to be a terribly exciting growth stock but it will likely grow faster than most analysts expect over the next five years as its investments in 5G make it more dominant than ever. I expect Verizon could hit $60 in 2018 and I’ll likely do another tranche here soon around these levels and would be more aggressive in nibbling if we get the chance near $45 again.
    • Under Armour (7) – The stock has bounced nicely since we added it to the portfolio when it was below $11 a couple months ago. The big question is whether this is a growth stock or a value stock these days — or if it’s neither. 2018 will bring a lot of answers about what’s coming for this company for the next decade. The stock could get to $20 or so in 2018 if the answers are positive. I like the risk/reward of holding it here and I might nibble some more if it got back below $13 near-term.
    • BB Blackberry (6) – Handset sales dropped once again. Back when this company was called Research-in-Motion, it used to do billions of dollars a year in handset sales. By the way, Trading With Cody subscribers and I shorted RIMM (ie, BB) back at like $80 and covered it at like $25-$20. These days, I more recently bought it below $10 as a long position. Revenues on handsets hit nine million dollars in the last ninety days. That means they did whopping total of $100,000 a day in handset sales. On the other hand, services and their network security- crypto security- cyber security business grew from from $110 million to $162 million as they beat estimates. We own Blackberry for two reasons – the first being for the cybersecurity/the secure Android technology/the enterprise side of that also helping companies secure their mobile networks and that’s grown, and Blackberry’s pretty well positioned and leveraging their position to grow . The second reason we own it is because it’s in cars and it’s possible that Apple or someone who wants to get into the car brains business buys Blackberry just for the car business, but  I’m thinking that ship has sailed. Six month ago they still had a chance to get someone interested in and I just don’t know that anybody needs Blackberry technology in the next generation of smart cars and especially driverless cars. The reason I got so negative was because of that, and over the last six months this guard side of the business has gone nowhere. I expect Blackberry could hit $16-18 this year but because I’m a bit disappointed in the company’s fundamentals still, I’m not sure there’s a price I’d buy more. Which means we might still go ahead and sell this stock at some point soon.
    • TST The Street (6) – The biggest news is that TheStreet was finally able to rid themselves of the $55 liquidation preference that had been in place since the company raised money by issuing those Series B preferred shares back when the stock was above $10 about a decade ago. The company is spending $20 million cash to buy back those preferred shares and sold nearly $8 million in common stock at $1.10 in a private placement with a (hopefully) long-term investor who joined the board. At the end of last quarter they had $26 million in the bank, so I expect these transactions leaves would leave TheStreet with about $14 million in the bank right now. Any plans to buy back TST common stock with up to $5 million of that cash would leave the company with about $10 million in the bank. I do think TheStreet could generate $5-10 million in cash next year. By getting rid of those preferred shares, the company could conceivably sell itself, can have some flexibility with their balance sheet and gets rid of the overhang from these preferred shares. The company is continuing to generate cash and might finally be getting the topline growing sustainably again. To be sure though, this is still a penny stock micro cap which reflects that TheStreet is still totally not in the clear. I’m holding my shares steady for now. The stock is up 50% plus from where we bought it and it could easily get to $3 this year if the cash flow is strong. I might look to nibble some more if it got close to a $1 again.
    • AMBA Ambarella (6) –As noted in today’s Trade Alert: We’ve owned this stock for several years and we have overall made some great money on it even as we obviously should have sold all of it instead of just part of it at $120 when it peaked. The company’s had some execution stumbles and while I might revisit this name sometime next year, I’m going to go ahead and remove it for now.
    • PI Impinj (6) – As noted in today’s Trade Alert: This is pretty much our only big loser in 2017. It’s down 30% from our initial purchase price and I’m going to go ahead and take some losses on this one before the year end, not just because I want to lock in some losses to offset a small part of our locked-in profits from this year, but also because I want to step back from this name and re-analyze it from the outside in a month or two.
  • Primary short portfolio
    • P Pandora (8) – Rinse and repeat: Pandora radio sucks. Their subscription product is worse. And the company’s trying to compete against Google, Amazon, Apple and Spotify. I remain short even when the stock hits new lows. I’m still short but might cover a little bit of this one soon, just to be disciplined and lock in some of these huge profits. I might short more of this one if it popped close to $9 again.
    • IWM Small cap ETF (8) – Added some puts to this short hedge recently and am losing money on them. I do expect we’ll see some sort of a sell-the-news reaction to the tax bill in 2018 so I might add one more tranche of IWM puts this week before the year end. To be clear, this is a smallish hedge and not exactly a big bet on a sell-off.
    • Biotech ETF IBB (8) – Biotech stocks have been drastically underperforming for the last year and a half  and I expect they will underperform for the next year and a half. I might add to this short soon, even around the current $107 levels.
    • EWY SouthKorean ETF (7) – Will cover soon, but want some of this overseas exposure to the downside in case there is a near-term sell-off in early 2018 where I’d probably cover this position for real finally.
    • HLF Herbalife (7) – Waiting for what I hope is yet another disappointing earnings report as Herbalife’s cockroaches seem to come out every 90 days. I’m sitting tight on this name for now.

Remember: I wouldn’t rush into a full position all at once in any of these stocks or any other position you’ll ever buy. Patience and allowing the market and time to work to your advantage by buying in tranches is key. Maybe 1/3 or 1/5 of whatever you  might consider to be a “full position” in any particular stock. And I wouldn’t ever have more than 5-15% of your portfolio in any one stock position at any given time. The younger you are and/or the higher the trajectory of your career income, the more concentrated and risk-taking you can be with weighting in your portfolio. But spread your purchases and your risk out over time and over a several positions no matter your age or risk-averse level.

Scaling into a position using an approach of buying 1/3 or 1/5 tranches over time is how I build my personal portfolio positions, but there’s no scientific way to go about investing and trading. Sometimes you have to pay up for the latest tranche but I try to be patient and wait for a temporary sell-off to add to the existing position.

** NOTE FOR NEW SUBSCRIBERS:

If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t acted on much of my strategies yet and/or if you haven’t been in the markets, but you’re sick of getting 0% on your CDs, Treasuries, savings, checking, etc while the markets have been continually hitting all-time highs this year, what should you do now?

Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.

If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.

Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.

You can find an archive of Trade Alerts here.

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