Latest Positions: Energy, China, And The Trillion Dollar Club

Here is a Part 3 of 5 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position.

Yesterday, I’d noted, “That was another rather amazing day at the markets, with Tesla and Virgin Galactic leading the way higher.” Well, such was the case again today though it was WORK and ROKU up in big rally mode today too. Tesla got an upgrade yesterday and a buy rating from Goldman Sachs today with a price target above $800. Both notes read like the analysts were quoting my recent Tesla analysis…that I wrote when the stock was at the lows, hoohah. The markets though, were not up at all today, as the indices were down across the board, led by small caps and semiconductor stocks. Stick with the playbook, folks.

The ratings for each stock go from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.” The positions that are bolded are those that I consider to be “core” holdings and am unlikely to ever sell out of them entirely.

Longs –

• (Energy Revolution)
  • SEDG SolarEdge (7) – It’s rather remarkable how well solar stocks have stood up while oil has crashed and energy demand has dropped and spending from corporations and households has been put on hold and the Chinese vs US solar tariff war hasn’t been settled. That said, SEDG, while perhaps the best performing solar stock out there, is still down 30% from its pre-Coronavirus Crisis highs. I’d like to find some other solar plays that might help me create a basket of solar stocks and I continue to study every other solar stock out there but I stick with this leader of the industry. I’ve owned Solar Edge for years now and I have trimmed some over time, but it’s not a name I trade much. I would look to buy more SEDG if it gets back below $80 and would probably trim some above $110 or so.
• (China Middle Class Revolution)
  • JD JD.com (6) – JD in China, like Amazon in the US, has benefitted from the Coronavirus Crisis shutdown that spurred mobile shopping and delivery. Also like Amazon, JD is trading at all-time highs right now today. JD announced in early March that business was better than expected and today they announced a $2 billion stock buy back program which I guess means they are quite confident in their business. That said, I would much rather JD either keep that money on their balance sheet or would send us a dividend. How many times have we seen companies buy back their stocks while times are good and then not have any money when times are bad (airlines, etc). Though it’s not a terribly big position anyway, I trimmed some JD today.
  • BIDU Baidu (5)– I’m going to move on from Baidu. I just think there are better places to put our money and maybe I’ll add another Chinese stock at some point.
• (The Trillion Dollar-ish Club)
  • GOOG/GOOGL Google (7) – Google has so many revenue streams that the hit it’s likely taking on advertising revenues from the Coronavirus Crisis is going to be made up somewhat by growth in other areas such as YouTube consumption. Analysts have hardly taken their estimates for Google down despite the Coronavirus Crisis as most are still expecting a little bit of revenue growth in 2020. I’m not sure that’s going to happen unless the rebound to the economy is straight up as Google’s going to have some serious advertising revenue headwinds this year and maybe next year. That said, this company also owns Android and that’s one of the primary reasons I own the stock and continue to hold it mostly steady. I have recently trimmed it down a bit of course, like with most all of our names. I’d be interested in buying more Google below $1100.
  • AAPL Apple (6) – Apple released a cheaper iPhone today, one for the masses, something I’ve wanted them to do for years. That’s a good thing and not just because of the smaller spending budgets of everyone in a Coronavirus Crisis world. Apple TV+ (what a horrible name for their Apple original TV content…heck I’m not sure what Apple TV+ actually covers and I frankly don’t think it matters enough to Apple’s stock to bother to look it up. And by the way, I sure enjoyed “The Morning Show” on Apple TV+). I’m not sure what the market is going to do with Apple this year as it seems to be looking completely past what will be a down year for Apple in revenues despite the analysts being slow to update their models. I’m worried their could be a repricing lower of Apple as the year wears on if the 5G iPhone doesn’t hit with some must-have features in addition to 5G speeds. iPhone revenues are going to be the driver of Apple’s stock price for the next year, not services, not Apple TVPLUS+MINUS+ or whatever it’s called. Not stock buybacks. Remember when Microsoft sent out a one time $32 billion dividend to help stimulate the economy in 2004? Apple and Microsoft should stop all stock buy backs and issue one or two dividends of tens of billions of dollars to shareholders. It won’t necessarily help the people who are worried about their next meal and don’t own any stocks, but it would certainly help buoy many middle class Americans who own Apple shares more than another giant stock buyback would.
  • MSFT Microsoft (7) – Softee’s stock is all about the Azure web services businesses and if that part of their can continue to grow in the Coronavirus Crisis, this stock can outperform the market. I’ve been late to the Microsoft investment and just recently added it as the trend towards ever more business and life being conducted over the cloud could make this company worth several trillion dollars in coming years. This is still a small position at this point.
  • AMZN Amazon (7) – In the prior Latest Positions update, from before the Coronavirus Crisis hit, I’d already mentioned that: “Amazon Web Services is perhaps the best reason to own AMZN. Or perhaps it’s the retail business. Or perhaps it’s the growing logistics and freight business. Or perhaps its the Amazon Prime Video business. Or perhaps it’s the Amazon Prime business itself. Whatever your reason for owning Amazon, I think it’s probably a good one. Amazon will nearly a third of a trillion dollars in revenue in 2020, up 20% from last year. Amazon will pass Apple in revenue this year, and Amazon generates 50% more in revenue than Google does, which does 25% more in revenue than Microsoft does. Each of these companies are worth about a trillion.” Cody back in real-time April 15, 2020. Notice that every single one of those reasons I mention for owning Amazon is a revenue stream that’s actually likely to benefit from the trends created by the Coronavirus Crisis. Amazon’s revenue estimates for 2020, unlike most of the other companies out there, are likely too low.  Before we all go jumping into more AMZN shares, it’s obvious that the market has already recognized much of this as the stock is at all-time highs and valuing the company at over a trillion dollar right now.

Also, my brother sent me the below Yoda meme in response to last night’s Latest Positions post. It made me chuckle pretty hard.