Latest Positions Rundown

Here is a list of 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.”

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
  • Apple (8) – Apple remains perhaps over-owned by the average retail investor, but is hated by most traders and many professional money managers. I still think this stock will run back to its all-time highs above $130 this year.
  • Facebook (8) – The stock’s been capped since it’s most recent and very strong earnings report. Trading at $105 per share, gives it a 25 forward P/E, the stock isn’t terribly expensive, even with its $300 billion market cap. By the way, here’s something I wrote about $FB back in 2012 when I was buying it at $26 per share and explaining how cheap the stock was at the time: “Facebook is cheap at $26 a share. Here’s why.  The proceeds from the IPO are around $16 billion.  With a market cap of about $63 billion that means you’re buying in at just around the valuation Goldman Sachs GS invested at ($50 billion + what’s now in the checking account) in it back in January of 2011.  With just over two billion shares outstanding that means Facebook has about $8 of cash per share. The company is quite definitely cash flow positive and will be for the foreseeable future, and that means you’re actually buying the stock at only $18 a share, when you include that $8 per share that the company has in its checking account because of that hugely successful IPO they just pulled off. The analysts are still estimating  an average 54 cents of earnings for this year and 65 cents for 2013.  That means, I’m buying a company a soon-to-be must-own for every tech mutual fund and money manager’s portfolio that just came public for only 25x next year’s earnings.” Cody back in real-time here. Amazing that four years later and $FB is still trading at exactly 25x next year’s earnings, huh?
  • Google (7) – Google’s stock has also been capped since it reported a blowout earnings report a few weeks ago, but stocks don’t go up  in a straight line, not even great ones like Google. Android is set to dominate much of the interfaces for wearables and Internet-of-Things.
  • Qualcomm (9) –  Everywhere I look I see Qualcomm announcing that they’re going to be providing the next generation smartphone chips for Android smartphones and wearables. The smartcar chip business is also looking very good for Qualcomm over the next couple to five years.
  • F5 (8) – F5 has been on a tear, up 15% in the last couple weeks after hitting an intraday panicky low in early February. I think it remains well positioned as a stealth network security play and a potential takeout target by Cisco or HPQ or someone else.
  • Amazon (7) – What a pop we’ve had in this stock since we bought some call options in it back near the February panicky lows. I’ve taken some nice profits on some of those calls already and am likely to go ahead and lock in the outsized profits on the remainder.
  • Sony (8) – Same as I wrote in last month’s round up: “We need to see Sony deliver some strong sales from their TV and movie library for this stock to rally back to $30. Until then, it’s likely dead money as the market is worried that Sony built up their image sensor business for smartphones at just the wrong time.”
  • First Solar (6) – First Solar’s dominating the solar industry and its clean balance sheet makes it one of the rare energy-related companies with flexibility to buy assets when all the rest of the industry is selling them in a panic.
  • Netflix (7) – Like with Amazon, our timing in buying Netflix call options last month has turned out to be very profitable and I’m likely to sell the last of my Netflix call options to lock in the remaining large gains here.
  • Ambarella (7) – Ambarella is successfully transitioning away from GoPro as its primary customer and is winning lots of new supply contracts from the likes of Taser and others. After seeing revenue flat in 2015, Amba is looking to grow sales 20% again this year off these new customers. Trading at about 13x next year’s earnings estimates and with a couple hundred million dollars (equivalent to about 1/6 of the company’s $1.2 billion market cap) of net cash in the bank with no debt, I’m holding onto my remaining shares.
  • FitBit (6) – I feel like an idiot for having ever turned bullish on this stock. I’ve ridden this name down to some embarrassing levels and have ugly losses on it in my portfolio. One thing that keeps me interested here at the current levels especially, is the fact that the new FitBit smartwatch is absolutely dominating the smartwatch best seller list on Amazon.
  • Axogen (8) – This company that recovers nerves from cadavers for surgeons to use reported another strong quarter and guided for more growth again this year.

• Primary short portfolio
  • Pandora (7) – Like I said last week: “It’s tough to compete against Apple, Google, Amazon and Spotify in the music market. Staying short this name for now, though I have locked in some profits as the stock has dropped 50% since we put this short on.” The company’s desperately trying to come up with a new business model.
  • GW Pharmaceuticals (8) – I stuck my head in a panel discussion about marijuana stocks when I was at the MoneyShow in Orlando and the one question I heard asked was whether the panelists thought GW Pharma was a good stock. They all agreed it is. I liked hearing that as the panelists, CEOs of smaller pot companies with questionable business models and shareholder structures, aren’t the kinds of folks I look to for stock advice.
  • IBB Biotech ETF (8) – 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.
  • Valeant Pharmaceuticals (6) – *Tiny Position A poster child for the ridiculous pricing models in the biotech/health care industry.
  • Kandi Tech (*no rating, too hard to short, puts too expensive) –*Tiny Position This stock continues to fade lower, but it’s so hard to find shares to short and to buy the puts at reasonable prices that I’m likely to move on from this name.

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.