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Latest Positions Part 3: Energy, China, Trillions and Bubbles

Cody Willard

Cody Willard

— 4 min read

I’ve got an appointment in Albuquerque Friday morning and I’m going to take my wife up there a day early and there will not be a Weekly Live Q&A Chat this week.

Here is Part 3 of 5 of the list of my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position. I pasted an old write-up about Disney at the top of the Latest Positions Part 2 that we sent out earlier today. Sorry about that. I did in fact sell AMD not Disney, which we had already let go of a few weeks ago.

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) – Just like the solar industry as a whole, SEDG has recently corrected almost 40% from its all-time highs reached in January.  It has recovered some of those losses but SEDG is still down about 11% from the prior Latest Report.  2021 revenue for the company is expected to be around $1.85 billion, up 27% from last year’s $1.46 billion.  That growth rate is expected to remain roughly the same going into 2022 with expected sales of $2.3 billion.  After the huge surge in share price that we have ridden up, SEDG is kind of fairly valued.  Currently, SolarEdge trades at almost 8x this year’s sales and 6x 2022’s.  It is trading at a price/earnings ratio of 58 this year and a forward P/E of 45 for 2022 so it’s not cheap right now.  Just like most other stocks that we are following, this one is a hold for now and a nibble if it goes down.
  • (China Middle Class Revolution)
    • JD JD.com (7) – JD is my only China exposure.  China is booming (or so they say).  Last week, Chinese Premier Li Keqiang  announced that China is targeting 6% growth for 2021.  If that happens, the growing Chinese middle class will pour even more Yuan into JD.com.  With that said, here is what I wrote about JD in the previous Latest Positions. “China stocks, even one like the giant Alibaba BABA, are riskier than US-based stocks because they need government support from the Communists in charge and that requires graft and corruption and bad things. Remember a few weeks ago when the Communists in charge of China screwed up Alibaba’s Ant IPO because Alibaba Chairman Jack Ma had badmouthed some regulations the week prior? That’s a large part of why you have to be careful with stocks based in China.” Well, earlier this week JD announced that its fintech unit, JD Technology, will likely scrap its planned IPO application due to China’s crackdown on its online finance industry.  JD was expecting to rake in $3 billion ($20 billion Yuan) from the spinoff. And yes, that’s not as good an outcome as it would have been had they gotten the IPO out. We’ll see what happens with this IPO in the next few months, but I still want a little exposure to China.  JD is scheduled to report earnings on March 11, giving us a chance to see if they meet or exceed analysts’ 37% expected revenue growth.
  • (The Trillion Dollar Club)
    • GOOG/GOOGL Google (7-) – Nothing’s changed since I wrote this three months ago except the stock went up a bunch: “Google’s a great investment because the company runs illegal monopolies in many of its businesses. Google’s also constantly being targeted by politicians who pretend they someday might do something to stop Google’s monopolies. I think Google’s business model is terrible for the world and the consumers and any businesses not named Google at this point. But the dominance is real and not going anywhere. I’ve owned GOOG since the IPO and these are the same thoughts I had back then about why we should own GOOG.”  I think GOOG is a hold right now and I’d look to trim it if it runs to new all-time highs in the next few days or weeks.
    • AAPL Apple (7) – Apple’s got a problem with expectations here perhaps. The average analyst on the Street is pretty damn sure that Apple is going to sell a billion iPhones and a hundred million iMacs and 8 trillion Airpods (and zero iPods) over the next year or something and that’s probably not going to happen. Apple needs a new CEO or a new CTO or something that helps them take a risk someday. The fact that Elon Musk says he tried to sell Tesla to Apple a couple years ago and Timmie Cook wouldn’t even take the call is ridiculous. I mean, I was, sitting here in my pajamas in podunk New Mexico able to look at Tesla after buying the Model 3 and realized that it was the next Apple — but the entire team of analysts, financial geeks and so-called futurists at Apple couldn’t even convince their board to take the call?
    • AMZN Amazon (7+) – Jeff Bezos is boozing around and partying and buying mansions and living the Hollywood life, maybe taking steroids and getting jacked and retiring as head honcho at Amazon. Meanwhile, Amazon is still killing it. I’d rather bet on Elon’s company getting people off the planet before I’d bet on Bezos’ starship company, but I would bet on Bezos’ starship company if it would come public or even if it needed money in the private markets. Bezos funds the whole thing by himself. By the way, Bezos is truly the anti-Elon now, because Elon’s selling his mansions and giving up the Hollywood life. Wild times we live in.

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