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Wednesday Weakovery – An Apple a Day Keeps the Bears at Bay

Image result for iphone x salesWhat is fake news?

I'm not going to talk about AAPL earnings because everyone is talking about Apple earnings but I am going to make you a better investor by helping you to break the habit of making investment decisions based on BULLSHIT!  How do you know what is bullshit and what is not?  At PSW, we do our best to help our Members weed through the market noise and separate the real news from the fake news so we're pretty good at it at this point.

I often point out the fact that Apple tends to be attacked into earnings by funds who want to drive the stock down, so they float rumors about Apple that they know AAPL will not respond to and there's not much we can do about that (Jim Cramer explains how "every fund manager does it if they want to keep their job") - other than applying logical analysis to the story to see if it makes sense.  Something you can do, however, is to stop reading the publications that publish this BS as if it's real news.  

Sales of the IPhone X are a good example.  As it turns out, the IPhone X is Apple's best-selling smartphone EVER (for this part of the cycle) yet think about how many articles you read saying, very authoritatively, that the IPhone X was a disaster and people weren't buying them and Apple was going to discontinue it and give up on their "experiment".  It's been going on for months yet the completely irresponsible "news" sources that published that nonsense will go unpunished and keep misleading you in order to steer you into another round of bad investment decisions based on their fake, Fake, FAKE news.  

There are literally hundreds more of these.  For those of us paying attention, it was pretty much all we heard for the last few months so it came as quite a shock to people who believe this kind of BS, that IPhone X sales were, in fact, fantastic and that AAPL has made record profits selling them.  

Image result for iphone x sales

I wouldn't say the publications themselves are out to mislead you but this (as well as the political fake news) is the result of years of cutbacks in news organizations (cause by the Top 1% Billionaires who have taken them over) that have left them empty shells with virtually no resources to investigate anything, which leads them to rely on information from 3rd parties, who are often working for or with the people who look to manipulate you into believing things that simply are not true.  

Image result for trump no collusion animated gifAs Hitler's Chief Propagandist, Jaseph Goebbels used to say: "A lie told once remains a lie but a lie told a thousand times becomes the truth."  The Internet has made it possible to easily have a lie repeated 1,000 times – especially if you give it a better headline than the Truth – "No Collusion," for example because, as Goebbels also said: "If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself."  Aside from the obvious use of this concept by the GOP, think about Bill Ackman telling you, and everyone else who would listen, how he had "evidence" that Herbalife was running some sort of illegal scheme.  Carl Icahn called his bluff in the end, but not before HLF shareholders were massively harmed.

Image result for ackman herbalife stock chart

There was no point in seeking to convert the intellectuals.  For intellectuals would never be converted…   Arguments must therefore be crude, clear and forcible, and appeal to emotions and instincts, not the intellect.  Truth was unimportant and entirely subordinate to tactics and psychology. - Joseph Goebbels

Herbalife was an example of blatant, public stock manipulation that we saw playing out in plain site but that is NOTHING compared to the BS that goes on every day, behind the scenes.  Unfortunately, these days, manipulators can get anything they want published almost anywhere and news isn't news anymore because people insist on not paying for it, so the News Organizations have no money to hire investigative reporters – even if they wanted to.  The reason the "Failing New York Times" is, in fact, doing great is because people like me, who value FACTS, are willing to pay a premium for a service that still provides them – and there are very few of those outlets left!

A good sports reporter is happy to make $70,000 and get free tickets to ball games but a top-notch financial reporter could be an analyst – and an analyst can make $250-500,000 easily.  Papers simply can't afford to hire the kind of people it takes to analyze the information they get – so they run it all as if it's real.  The same goes for TV news and the so-called "Financial Media" is actually worse, because they do what their sponsors tell them and they are "not responsible" for the views of their guests – to the point that they rarely even challenge them – no matter what nonsense they are spouting.  

Image result for the truth is out thereKnowing that the majority of what you read and watch is nonsense is the first step to becomming a better investor.  Don't make decisions based on any single source and try to read aricles on both sides of the investments you plan to make and think about which side is actually making the most sense.  One way to help this is to follow Warren Buffet's advice and only invest in companies you understand fully – too many investors buy stocks because someone else picked them or they came up in a screen, but they don't even actually know how the company makes money or what the key factors are in the sector.

That's just fine with the pundits as it keeps you loyal to them because they "know" about the stock but, really, look at your actual history with those people – do they really know anything more than you do – or more than a coin flip?  

AAPL's earnings should give us a bit of a boost this morning but the pressure is still down for the markets and we have the Fed at 2pm (there will be a Live Trading Webinar at 1pm, EST) and I'm very concerned that no one but me thinks they are hiking rates today.  If they do, it's likely to be a downside shock to the market and, even worse, Powell is not scheduled to speak afterwords, so there will be no spin.

Be careful out there! 

 


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  1. Good morning, All!

    Join us for our weekly webinar, today at 1pm!

    https://attendee.gotowebinar.com/register/8689274758525969921



  2. CHK

    Chesapeake Energy beats by $0.07, misses on revs  (2.98)

    •Reports Q1 (Mar) earnings of $0.34 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus of $0.27; oil, natural gas and NGL revenues fell 15.4% year/year to $1.24 bln vs the $1.3 bln Capital IQ Consensus
    •Reduced $581 million principal amount of long-term debt in 1Q2018
    •Average 2018 first quarter production of ~554,000 barrels of oil equivalent (boe) per day, up 11% compared to 2017 first quarter, adjusted for asset sales
    •Average 2018 first quarter oil production of ~92,000 barrels of oil per day, up 16% compared to 2017 first quarter, adjusted for asset sales
     


  3. Phil,  GILD had a miss and shares have dropped 5%.  Perhaps wait for them to settle before we buy a 2020 spread?  I believe we have already sold puts while we waited for this opportunity. 


  4. SKT/GILD/Phil- Hi Phil regarding the above comments, I actually decide to wait for GILD earnings report before selling the puts. I was wondering if you will still sell for the same strike or you would sell a lower strike price? Lastly, on SKT I only bought 1000 shares will you still be a buyer after the earnings?


  5. YOWZA !

    FTR winning the race to 12 before CTL hits 22.

    Good opportunity to switch horses, IMHO.

    Swap FTR into CTL and pick up that nice dividend.  I'm just saying.


  6. Good Morning.


  7. Thanks Phil for all you do. I feel like I don't read all the newsprint because when I check in with you I know I get the "real" scoop. Your service is number Uno in my book for all the knowledge and teaching. I ignored the aapl spin and am now enjoying some rewards. Every AM I get my Phil fix and throughout the day any important links. Mucho gracias. It leaves me time for my volunteer work besides the investing.


  8. Sixty four thousand dollar question – we have TESLA reporting after hours. Is this the time the stock price will finally fall?  Have they improved their output rate? Are they still burning money? Or is that all fake news?


  9. GLUU – Up nicely.


  10. Good morning! 

    Not good for the indexes, that adre down despite AAPL up 4%, seems like sellers are using AAPL for cover to get rid of everything else.  

    SNAP disaster is spooking people out of 100x earnings stocks – which are half of them these days!  

    • Snap (NYSE:SNAP) has slid 22% and reached an all-time low of $10.96 following an earnings report where revenue growth failed to meet analyst expectations.
    • Downgrades are coming out of the woodwork: Evercore cut the stock to Underperform with a $9 price target, and Oppenheimer downgraded to Market Perform seeing a redesign that may have cost the company advertisers.
    • Morgan Stanley's cut its price target to $8, meanwhile.
    • On the bullish side, Credit Suisse and Goldman Sachs are sticking with Buy-equivalent ratings based on audience and upside potential.
    • Earnings call transcript
    • MBA Mortgage Applications
    • Composite Index: -2.5% vs. -0.2% (W/W).
    • Purchase Index: -2.0% vs. +0.0%.
    • Refinance Index: -4.0% vs. -0.3%.
    • 30 year mortgage rate at 4.80% vs. 4.73%
    • The Fed will likely hold interest rates steady this afternoon after concluding a two-day monetary policy meeting, but will likely hint to lifting borrowing costs in June on the back of rising inflation and low unemployment.
    • Investors have also priced out the chance of a hike, given the central bank's adherence in recent years to only raising rates at meetings that are followed by press conferences.
    • Previously: Eyes on Treasury refunding announcement (May. 02 2018)
    • The prime minister is facing a confrontation from Brexiteers over her support for a new hybrid "customs partnership," which would see Britain continue to collect EU tariffs for goods headed to member states.
    • Sixty Tory MPs wrote to her ahead of today's Brexit cabinet committee meeting, warning that the proposal would make it "impossible" to strike meaningful trade deals and could cause the "collapse" of the government.
    • Stocks are mostly lower at the open ahead of the release of the Fed's latest policy directive at 2:00 p.m. ET today; S&P -0.2%, Dow -0.1%, Nasdaq +0.1%.
    • The FOMC directive likely will not include a rate hike, but investors will parse the policy statement to help confirm the general belief that a rate hike will occur next month; the Fed also might lay the groundwork for additional rate hikes later this year.
    • European bourses are higher, with Germany's DAX +1.4%, U.K.'s FTSE +0.3% and France's CAC +0.1%; in Asia, Japan's Nikkei settled -0.1% while China's Shanghai Composite finished flat.
    • In earnings news, Apple +4% in early trade after beating Q1 earnings expectations, announcing in-line iPhone shipments, issued above-consensus revenue guidance for the current quarter, and adding $100B to its stock buyback program.
    • Also, Mastercard +2.9% after beating earnings and revenue estimates, while Snap -21.2% after missing estimates for Q1 revenue and daily active users.
    • Most S&P sectors are lower in the early going, led by health care (-0.8%) and consumer staples (-0.7%).
    • U.S. Treasury prices are modestly higher, pushing the benchmark 10-year yield down a basis point at 2.97%.
    • U.S. WTI crude oil +0.1% at $67.32/bbl.
    • Still ahead: EIA petroleum inventories

  11. FTR breaking out, officially now :)


  12. FTR I see a lot of ass kisses today!!!!!!!!!!!!!!!!!!!!!!!


  13. CHK/Albo – Well they are not spinning out of control as feared but not moving the stock either.  

    GILD/Learner – We're certainly waiting.  We sold the short puts so it didn't get away from us if it went up 5% but down 7.5% at $67.14 is fine, as we sold just 5 of the 2020 $70 puts for $8.50, so our net is $61.50.  After the settle down, we'll see what we want to do.  

    Submitted on 2018/04/26 at 11:22 am

    GILD/Jabob – I still like them but as a long-term value play – I don't see anything exciting in the near-term.  At $95Bn ($73) they should steady out at $8.5Bn in earnings so they'll look more attractive once they prove their downsizing is over (was $13.5Bn in 2016 and just $5Bn last year).  The assumption is revenues stay around $21Bn and margins stay around 40%.  Operating margin was 54% last year, they just took a lot of charges which are, hopefully, behind them.

    We do not have GILD in the LTP so let's sell 5 2020 $70 puts for $8.50 ($4,250) to collect our monthly rent and remind us to keep an eye on them for a possible bull call spread. 

    At the moment, the 2020 $60 ($17)/$75 ($9.20) bull call spread is just $7.80 so 10 long spreads ($7,800)  and 5 short puts would give you a net $3,550 entry on the $15,000 spread that's almost all in the money and then you could sell 3 July $80s for $1.10 ($330) using 85 out of 631 days and even if you just do that once a quarter – it's another $2,000+ towards the trade.  

    GILD/Dave – They are still on track to make $6/share this year so $61.50 is still a good target but lower strikes save you both margin and heartache and you can sell the 2020 $62.50 puts for $7 now – that's pretty good! 

    SKT/Dave – The earnings were not that bad but GAAP did miss consensus though still a respectable 0.24/share.  Adding back depreciation and amortization (funds per share), the number is more like 0.60.  Overall, cash-flow is projected to be $2.40 for the year and easily support the $1.40 dividend so yes, I still like them but keep in mind that REITs give away all of their profits so it's not likely to go much higher – you have to play it for the dividends.   That's why we sold $20 calls in the LTP – we can always roll the short puts:

    SKT Tanger Factory Outlet Centers Inc. 2000 3/16/2018 47 $44,500 $22.25 $-1.98 $22.25     $20.27 $-2.05 $-3,968 -8.9% $40,532
    Short Call 2020 17-JAN 20.00 CALL [SKT @ $20.27 $-2.05] -20 2/26/2018 (625) $-8,100 $4.05 $-1.45     $2.60 $-0.70 $2,900 35.8% $-5,200
    Short Put 2020 17-JAN 22.50 PUT [SKT @ $20.27 $-2.05] -20 2/1/2018 (625) $-5,400 $2.70 $1.38     $4.08 - $-2,750 -50.9% $-8,150

    Meanwhile, while we wait, we are collecting $5,600 in dividends against our net $31,000 outlay so that's 18% while we wait to get called away at $40,000 for another $9,000 in profit (29%) so we make $14,600 (47%) if SKT is over $22.50 and, if under $22.50 but over $20, we get re-assigned at net $22,500-$14,600 is $7,900 or $3.95/share would be our new basis.  

    THAT is how you play a dividend stock!  

    FTR/Albo - cool

    Thanks Pirate!  That's always been my goal for this site, a place people can come to get the real scoop on the markets so they don't have to deal with all the noise on Wall Street.  And thank you so much for giving something back – especially to the Food Bank! 

    TSLA/Den – It is NEVER time to buy that stock.  Well, it was when they were $50 but not since $100, which I'm not even sure I would pay.  On the other hand, I wouldn't short them because it's a silly stock and who knows what they'll say at earnings or how the fans will react but I hope they do go higher so we can short them again.

    Hi ho Silver, by the way – back to $16.40 and that's plenty for me!  

    Go back to yesterday's notes, we simply followed through with our plan to add more on the way down because it seemed /SI was only being pushed down by the strong Dollar.  The Dollar didn't need to get weak for /SI to bounce – it just had to stop going up and putting pressure on it.  

    Because the Dollar is now popping again, I don't want to "go for it" on /SI and /YG is a fresher horse at $1,303 with $1,300 being a more reliable stop line with a roughly $100 loss risk ($32.20 per $1 move).

    It's all about limiting the losses.  If you do that, the wins will come. 


  14. FTR – Should I sell at 10.20?   ;)


  15. Phil  I wrote June $275 calls on TSLA a while back.  I am holding on hoping that the market will finally realize that TESLA should be below $200.


  16. 1020--i did… ;-)



  17. FTR/1020 – Our target was just $8, so we're happy.  

    FTR Frontier Comms. Corp. 2500 1/2/2018 120 $17,875 $7.15 $2.57 $7.15     $9.72 $1.57 $6,425 35.9% $24,300
    Short Call 2020 17-JAN 8.00 CALL [FTR @ $9.72 $1.57] -25 1/3/2018 (625) $-3,125 $1.25 $1.55     $2.80 $0.80 $-3,875 -124.0% $-7,000
    Short Put 2020 17-JAN 8.00 PUT [FTR @ $9.72 $1.57] -25 1/3/2018 (625) $-10,000 $4.00 $-1.20     $2.80 $-0.20 $3,000 30.0% $-7,000

    In this one, we spent just $4,750 and we'll be called away for $20,000 for a very nice $15,250 (320%) gain and we're already at $10,300 with a $5,550 (116%) gain in 3 months.  Other than having to deal with impatient people screaming from the sidelines – it's been a very easy way to make money but, like many of these plays – you have to understand the difference between PRICE and VALUE!  

    HBI/Jabob – Well they are at $17.50 so up from here, I guess.  At $19 in two years (these targets are one year) we net back $10,000 less $1,500 for the short puts is $8,500 on the $3,700 outlay – boo hoo!  And that's assuming 2 random analysts have a clue.

    Long Call 2020 17-JAN 15.00 CALL [HBI @ $17.42 $-0.31] 25 3/15/2018 (625) $14,500 $5.80 $-2.05 n/a     $3.75 $-0.25 $-5,125 -35.3% $9,375
    Short Call 2020 17-JAN 23.00 CALL [HBI @ $17.42 $-0.31] -25 3/15/2018 (625) $-5,250 $2.10 $-1.18     $0.93 $-0.01 $2,938 56.0% $-2,313
    Short Put 2020 17-JAN 20.00 PUT [HBI @ $17.42 $-0.31] -15 3/20/2018 (625) $-5,550 $3.70 $0.65     $4.35 $0.05 $-975 -17.6% $-6,525

    It's always so helpful when you pick through the portfolio to find positions that don't work so you can sow doubts into people who need to follow-through and take advantage of the downturn.  

     (premium) 

    Is FTR going to hold 7?

    What a POS!!!!

    March 19th, 2018 at 11:09 am | (Unlocked) | Permalink 

    FTR/Jabob – How much are you willing to sell me?

     

    Key points from Frontier’s outlook

    During its recent 4Q17 earnings conference call, Frontier’s management provided its guidance for 2018. Frontier’s management anticipates adjusted FCF (free cash flow) to be approximately $800.0 million in 2018. The company anticipates capital spending to be in the range of $1.00 billion to $1.15 billion in 2018. Additionally, management is confident that the company can achieve adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of about $3.6 billion by the end of 2018 through improved operating metrics and cost-cutting.

     

     

     

     

    Additionally, management expects cash taxes of less than $25.0 million, cash pension and OPEB (other post-employment benefits) of approximately $150.0 million, as well as interest expenses of about $1.5 billion in full-year 2018.

     



     

     

    FTR/John – It's a phone company, that's how they work.  "Assuming they need to direct all of free cash flow towards debt" is just the sort of idiotic assumption junior analysts make.  They are not paying 18% on their debt, that's just the price demanded by new buyers to take their bonds off your hands since it has since been downgraded.  As the guy notes, their avg interest is 8.4%.  The author does not "believe" the statement of the CEO that the Cap-Ex is non-recurring and then extrapolates off his non-belief.  

    And yes, this is a long-term hold stock – the way T was in the 50s or VZ in the 70s or TWC in the 80s – it's very expensive to build out phone networks and it's a long-slow payback cycle that rewards only the patient.  

    Meanwhile, in our LONG-term Portfolio, our FTR position is this:

    FTR Frontier Comms. Corp. 2500 1/2/2018 76 $17,875 $7.15 $-0.20 $7.15     $6.95 $-0.70 $-500 -2.8% $17,375
    Short Call 2020 17-JAN 8.00 CALL [FTR @ $6.95 $-0.70] -25 1/3/2018 (669) $-3,125 $1.25 $0.45     $1.70 $0.00 $-1,125 -36.0% $-4,250
    Short Put 2020 17-JAN 8.00 PUT [FTR @ $6.95 $-0.70] -25 1/3/2018 (669) $-10,000 $4.00 $-0.60     $3.40 $0.32 $1,500 15.0% $-8,500

    So we bought them for $7.15 and we sold $8 puts and calls for $5.25 so our net cost of the stock was $1.90 and, if we are "forced" to double down at $8, our average cost will be $4.95 and then, in 2022, we will sell a few more Dollars worth of puts and calls and our basis will be zero so cry me a river if the stock is not going up – I COULD CARE LESS!

    You don't have to play a stock only because it's going up – sometimes you can just buy a stock so you can rent out puts and calls to make an income – it's called being the house and not the gambler…

    Image result for waldorf and statler animated gifThis is why I started ignoring you Jabob, you are not contributing, you are simply catcalling from the sidelines – these are not meaningful contributions and you don't actually care to learn and improve – only to point out things that aren't going our way – over and over again, without adding anything insightful to the conversation.   

    Our entire long-term Portfolio has 15 (32%) out of 47 positions that are red and, since the point is to have a diversified group of positions where some will do well in various market conditions and others will not – if we had 8 out of 47 I'd have to go find some "losers" to balance things out.  Yet ALL you do is focus on the negative and it's distracting to me and the other Members, who are still very much ignoring you – even if I am not.  

    I am trying to teach people how to play for the long-term and ride out the down cycles in stocks and you've certainly been here long enough to know that.  If you don't think it works, then leave, but don't keep undermining my lessons or you'll have to leave anyway.


  18. Phil 

    What was the name of the restaurant 

    In Washington DC with  the buffet ? 

     

    we had lunch


  19. I posted downgrades… don't blame the messenger.. i do not think it is cat calling.

    very happy to see ftr move higher after earnings for once…

    happy for your virtual portfolio too.

    if i point out stocks that aren't going our way it could be in order to hear your opinion about if we should add to the position.

    I have learned some things at PSW over the years but that does not mean I have to be happy when numerous calls hit 52 week lows.

    Is your skin really that thin?

    Whenever someone disagrees with you on this site you slam and insult them and paint them out to be an idiot.

    I don't and have never undermined your lessons. 


  20. Oil/Phil- oil futures going down as we speak, 

    US commercial crude oil inventories rose by 6.2 million barrels in the week ended April 27 to 436 million barrels, according to data published by the Energy Information Administration. This compares to the American Petroleum Institute's forecast, released on Tuesday, for a 3.4 million barrel weekly increase.

    good for short if $67 don't hold?


  21. Restaurant/QC – Was it the Sequoia?  

    Undermining/Jabob – My skin is very thick, thank you but you are far more annoying than helpful and I've put up with that but now I hear from other people who find you annoying and detrimental to the site so I will no longer abide it.  Can you find ANYTHING positive you have posted?   ANYTHING???  I can find hundreds and hundreds of negative comments – don't even have to go back far…

    Oil/Dave – Oops, forgot about that today (I was distracted by my "helper").  

    Net build in oil and /RB not good but a draw in distillates helps:

    • EIA Petroleum Inventories: Crude +6.2M barrels vs. +0.7M consensus, +2.2M last week.
    • Gasoline +1.2M barrels vs. -0.6M consensus, +0.8M last week.
    • Distillates -3.9M barrels vs. -1.4M consensus, -2.6M last week.
    • Futures +0.09% to $67.31.

    Still too early in the cycle to jump on it short, more likely to bounce off $67 than break below and $2.05 for /RB also should be bouncy but, if not, will be interesting to see where we hold up.  And then there's this BS:

    • Banks raised their forecasts for oil prices for the seventh consecutive month in April by more than $1.00/bbl compared with the prior month, according to a poll of 14 investment banks surveyed by WSJ.
    • Brent is now expected to average more than $64/bbl this year, while WTI should average just above $60/bbl; Brent closed yesterday at $73.13/bbl  and WTI settled at $67.25/bbl.
    • “OPEC has done a better job than expected” in its efforts to curb crude production, and "the market is likely to remain well supported," says ING Bank commodity strategist Warren Patterson, adding that a reimposition of some U.S. sanctions on Iran could result in a reduction of up to 500K bbl/day of Iranian crude.
    • Many analysts missed the mark predicting the iPhone shipments in Apple’s (NASDAQ:AAPL) earnings report and have said so in notes to clients.
    • Morgan Stanley’s Katy Huberty wrote, “Weaker iPhone supplier results suggested meaningful downside in the June quarter which didn’t come to fruition.” 
    • Huberty notes that the firm originally forecasted 42M iPhone shipments in the quarter but had since dropped its estimate to 34M. Apple reported 39M units. 
    • Morgan Stanley reiterates Overweight rating and $200 price target, an 18% upside to yesterday’s close. 
    • BofAML analyst Wamsi Mohan notes that iPhone demand shifted to the cheaper phones, as evidenced by the lower-than-expected iPhone ASP of $728 (consensus: $742). 
    • BofAML reiterated its Buy rating and increased its price target from $220 to $225. 
    • Citi Research analyst Jim Suva agrees with ASP showing strong demand for older iPhones. Suva also notes that the iPhone X “super cycle” won’t happen this year since a 3% Y/Y shipment increase “stops short of investor expectations for a super cycle.”
    • Apple shares are up 4.4% to $176.49.   
    • Previously: Apple +4.4% after Q2 beats on rev, EPS, device shipments, and Services rev (May 1)
    • Previously: Apple suppliers pop after Q2 beats (May 1)
    • Previously: Apple earnings call: X most popular iPhone, Services has best quarter ever (May 1)

  22. pirateinvestor 

    How is Duluth after the fire ?


  23. If it weren't for AAPL, the Dow would be down over 100 points now!


  24. Phil

    Sequoia  correct

     

    Thank you


  25. Phil, what are you going to discuss with Jackie about SNAP?

    Any interest in big pharma , MRK, PFE, BMY or ABT?

    Also been seeing bullish option trades in BBBY in 2019 & 2020


  26. Snap/Stock – Well, as I expected, not worth $17.50 so will be a good lesson for her (since I never bought the stock) and maybe next time she'll do more research than simply thinking an app is cool.  I bought here MVEN instead as well as, of course LQMT.  

    As to Pharma, GILD I still like and PFE also very good.  MRK is OK but I like PFE more.

    Webinar time


  27. Webinar/Phil,

    Couldn't join..

    Getting this error 

    "

    Please Try Again

    We apologize, but an error has occurred while processing your request. Please try again. For support, please contact Global Customer Support."


  28. Ok. Joined now..


  29. CPB- can you get any more boring and staid than Campbell's Soup? Been paying dividends for over 100 years. Has my interest at $40. Will get very interested if it falls into the mid-30's. Watching for now. Staples unloved. 


  30. On my todays trades, I looked at MSFT and filled the July 100/85 strangle for 3$ I do hold the leap BCS on MSFT to make this trade. The stock is not a contender for an armchair trade but for me just a potentilal side trade.


  31. Webinar/Ayyaps – Glad you got in, I have zero technical ability but Greg at Philstockworld dot com is who you contact if there are difficulties (though better to retry first, as you did). 

    CFB/Pstas – Nice and boring but so is GIS – also cheap.

    Left off the Webinar with an /RTY short at 1,565.  /YM good too below 24,000.


  32. Overall, I think the tone of the Fed statement was that they are right on the cusp of tightening but they put it off for one more meeting to double-check that inflation is really topping 2% – that's not market bullish.

    Wow, /YM making money fast, /RTY already up $250/contract at 1,560 so that's the stop once we're below.


  33. Looked as well at STWD pays a 9.18 div, low 19.50 and now up to 20.93, however the option premium is very low for my type of plays. Any comments.


  34. I am in STWD Yodi but the options are not that good if you want to sell premium. I guess the 10% dividend doesn't help there. You have to time your sales well! I sold some puts when it was closer to $20 and I'll take more shares at $19 or so if assigned. If not, it's another 4% for 6 months on top of the dividend. I guess you could expect between 15-20% or so per year. Not great, but keeps you ahead of inflation.


  35. STJ thanks good point made


  36. Wow, that was a nice drop!  

    Dollar made a move back up so not helping at all.  

    At least we'll get another crack at /SI

    STWD/Yodi, StJ – I like that one.  Aren't they merging with MAR somehow?  

    150 on /YM ($750) is now the stop there.  

    1,555 is $500 per contract on /RTY – also the stop. 

    Congrats to the Webinar players!  


  37. NYSE is below the 200 dma (12,462) again @ 12,417.


  38. STWD / Phil – That was the Starwood Hotel that merged with Marriott. STWD might have some investments in them.


  39. FTR/Phil,

    Continuing with your comment above where you say FTR is a phone company and operates like one.  Where I have difficulty is digesting articles like what I posted below where the writer posits FTR will not succeed due to cord cutting which will affect all tellecoms but possibly more so FTR as they are distressed.  How does one evaluate this?  This has been my biggest stumbling block with value investing and why I stay here because you are right more often than wrong and are able to cut through the BS.

     

    Frontier Communications (NASDAQ:FTR) has been in steady decline. It has lost customers in every quarter since it spent $10.55 billion in April of 2016 to buy Verizon's (NYSE:VZ) wireline business in California, Texas, and Florida.

    That deal was supposed to give the company the scale it needed to compete with the bigger players in pay television and broadband. The purchase gave the company approximately 3.3 million voice connections, 2.1 million broadband connections, and 1.2 million FiOS video subscribers.

    On the positive side, the Verizon purchase did give Frontier added operational efficiency. The company has created over $1 billion in operational efficiencies due to being bigger. Unfortunately for shareholders, Frontier has not been able to hold onto those customers and that's something it can't seem to fix.

    Year

    Pay TV gains/losses

    Internet gains

    2012

    170,000

    2,000,000

    2013

    -105,000

    2,600,000

    2014

    -125,000

    3,000,000

    2015

    -385,000

    3,100,000

    2016

    -795,000

    2,700,000

    2017

    -1,495,000

    2,100,000

    DATA SOURCE: LEICHTMAN RESEARCH GROUP.

    What's happening with Frontier?

    The Verizon purchase happened before cord cutting had become as significant a trend as it has grown to. Still, at the time of the purchase, it was clear that people leaving cable for streaming services was indeed happening.

    In addition, Frontier has suffered because it offers telephone line-based DSL broadband service which has proven less popular with consumers compared to cable-based service. That has meant the company has not been able to make up for its cable losses with broadband gains.

    The losses — both in customers and cash — forced Frontier to cut its dividend as of the first quarter of its fiscal 2017. It dropped the quarterly payout from $0.105 per share, where it had been for over two years, to $0.04 per share. The company also, at roughly the same time, conducted a 15-1 reverse split of its stock. That move was made to keep shares above the $1 threshold required to maintain its listing.

    More recently, the chain has fully suspended its dividend. That's a move needed to conserve cash, but it's not likely to be well-received by investors.

    Quarter

    Customers Lost

    Q3 2106

    67,000

    Q4 2016

    158,000

    Q1 2017

    173,000

    Q2 2017

    162,000

    Q3 2017

    109,000

    Q4 2017

    99,000

    DATA SOURCE: FRONTIER COMMUNICATIONS EARNINGS REPORTS.

    What Frontier has to say

    CEO Dan McCarthy has remained a relentless cheerleader for his company. His comments in Frontier's fourth-quarter earnings release match his optimism from previous reports.

    "Our fourth quarter results highlight the ongoing progress on our key initiatives to improve customer retention, enhance the customer experience, and align our cost structure," he said. "We are pleased with continued improvement in subscriber trends and churn in our California, Texas, and Florida (CTF) markets, and the continued operating efficiencies achieved in the fourth quarter."

     

    CORD CUTTING IS A TREND FRONTIER HAS NO ANSWER FOR. IMAGE SOURCE: GETTY IMAGES

    Is Frontier Communications a buy?

    McCarthy has been very good at lowering expenses and manipulating debt to keep the company afloat. Suspending the dividend creates another $250 million in operating capital.

    That would all make sense if the company had a clear path toward reversing its subscriber losses. It does not. The company is operating in a market that's shrinking and there's no sign that will reverse itself or even level out any time soon.

    Frontier isn't a buy because it has no path to growth. An optimistic view would be that the company can bottom out and find a way to operate profitably at the current level. Even that scenario is unlikely simply because customers are leaving cable in general and that number is likely to increase for years to come.


  40. The TSLA conference call was great.  Elon really sounds like he is losing it.  Skipping analysts mid-question, when he thought the question was boring (ie too damaging).  He cut off one analyst and shifted the call to answer multiple questions from a retail investor on youtube.  I'm still heavily short.


  41. Global Economy Perks Up






  42. Good morning! 

    Markets took a sharp downturn in the last hour on no particular news – just the general chaos of Team Trump falling apart and Musk pleading the 5th in a conference call – yet another high-flyer's valuation called into question (finally).  

    Teva Q1 top line off 10%; earnings up 74%; cash flow rebounds; guidance raised; shares up 6% premarket

    • Teva Pharmaceutical Industries (NYSE:TEVAQ1 results ($M): Revenues: 5,065 (-10.4%).
    • Key product sales (North America): Generics: 1,088 (-23.1%); Copaxone: 476 (-40.3%); Bendeka/Treanda: 181 (+16.0%).
    • Key product sales (Europe): Generics: 997 (+17.3%); Copaxone: 153 (+0.7%).
    • Net income: 1,120 (+73.6%); non-GAAP net income: 954 (-10.6%); EPS: 1.03 (+80.7%); non-GAAP EPS: 0.94 (-11.3%); cash flow ops: 1,496 (+999%).
    • 2018 Guidance: Revenues: $18.5B – 19.0B from $18.3B – 18.8B; non-GAAP EPS: $2.40 – 2.65 from $2.25 – 2.50.
    • Restructuring plan on track to achieve $1.5B in savings this year and $3.8B by the end of 2019.
    • Shares are up 6% premarket.

     

    • Analysts are buzzing over the conference call antics of Tesla (NASDAQ:TSLA) CEO Elon Musk yesterday.
    • "While the consequences are unquantifiable, we believe Tesla’s CEO made a mistake in refusing to answer some of the analyst questions about the Model 3 ramp. Additionally, we found the posture out of character with the normally inviting,enlightening tone of prior conference calls over many years," writes Morgan Stanley's Adam Jonas.
    • RBC Capital and Goldman Sachs have also posted fresh notes questioning the impact on share price of Musk skipping over seemingly relevant inquiries on margins and reservations.
    • Why should Musk and gang care? "The analysts on the call represent the providers of capital that Tesla has throughout its history depended upon," reminds Jonas.
    • Naturally, not all analysts are convinced that the conference call uproar is significant. Baird advises investors to "ignore the noise" and keep the long-term picture in mind.
    • During the call Musk took a few questions via YouTube from a relatively unknown blogger named Galileo Russell, who also has posted Tesla articles on Seeking Alpha. Maybe you're next.
    • Previously: Tesla tops margin expectations (May 2)
    • Previously: Tesla backtracks after atypical conference call (May 2)
    • Sources: CNBC and Bloomberg
    • Shares of Tesla are down 4.83% premarket to $286.61.

    FTR/Jeddah – As again in today's chat.

    STWD/StJ – Thanks.