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Just Another Manic Monday – Quiet Week Expected

I told our Members this would be a good week to take a vacation.

We have 7 Fed Speakers around the release of the Fed Minutes on Wednesday afternoon but now we're mostly wondering if the rate hikes will be 0.25% or 0.5% and the rest is getting baked in.  ISM and PMI tomorrow and really no other significant data is coming in, nor do we have many companies reporting earings.  As Jerry Lee used to sort of say "There's a whole lotta nothin' going on."

Earnings Reports are mostly from companies who count December as the first month of their year and we're a lot more concerned with guidance at this point.  Next week is a very different story as we have CPI and PPI, Retail Sales and Consumer Sentiment – all market-moving reports and the Banks start reporting on Thursday next week but then Friday is Good Friday and we're closed but make sure you are well-rested on the 18th as earnings and data will surely be hitting the fan then.

Image

Over in Europe, we're already seeing inflation at 7.5% for March, up from 5.9% in February, led by a 11.7% rise in Energy Costs that is not looking like its going away any time soon as the war rages on in Ukraine.  The repurcussions from this war will be felt all year – even if it stops now as crops have not been planted and supply chains have been further interrupted and these things are likely to get worse before and if they get any better.  

Maps from the U.S. Drought Monitor show California conditions on Oct. 19, 2021, and on Nov. 9, 2021, after two storms swept the state.Also getting worse is the drought in California as snowpack this year is at 39% of average and that's the wost level in 1,200 years – so pretty bad.  According to Dr. Schwartz, who wrote the report:

"Many people have a rather simplistic view of drought as a lack of rain and snow. That’s accurate — to an extent. What it doesn’t account for is human activity and climate change that are now dramatically affecting the available water and its management.

Droughts may last for several years or even over a decade with varying degrees of severity. During these types of extended droughts, soil can become so dry that it soaks up all new water, which reduces runoff to streams and reservoirs. Soil can also become so dry that the surface becomes hard and repels water, which can cause rainwater to pour off the land quickly and cause flooding. This means we no longer can rely on relatively short periods of rain or snow to completely relieve drought conditions the way we did with past droughts."

Even with normal or above-average precipitation years, changes to the land surface present another complication. Massive wildfires, such as those that we’ve seen in the Sierra Nevada and Rocky Mountains in recent years, cause distinct changes in the way that snow melts and that water, including rain, runs off the landscape. The loss of forest canopy from fires can result in greater wind speeds and temperatures, which increase evaporation and decrease the amount of snow water reaching reservoirs.

We are looking down the barrel of a loaded gun with our water resources in the West. Rather than investing in body armor, we’ve been hoping that the trigger won’t be pulled. The current water monitoring and modeling strategies aren’t sufficient to support the increasing number of people that need water. 

The California Drought | National Geographic Society

This is the kind of stuff that should be affecting your long-range real estate planning.  Of course, the same kinds of climate catastrophes will spread all over our country and the rest of the World in the not-too-distant future but this is happening now – a preview of things to come elsewhere.  The food shortages, unfortunately, will be felt nationally and it will happen this year as more and more of California's crop land goes off-line.

There was a great article in the NYTimes about one company's adventures in global shipping that gives us a good idea of what a mess everything is.  These are the kinds of things we'll be listening for as the Earnings Reports start pouring in next week but, until then – enjoy a quiet week.

 

 


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  1. Airlines cancel more than 3,500 US flights over weekend


  2. Good Morning.


  3. Good morning!

    Nasdaq is going up and saving the other indexes from a poor start (so far).  Mostly because TWTR is up 22% because Musk now owns 10% of it so kudos to Elon for finding yet another way to manipulate the market:

       

    Oil back over $100:

        

    At least we got a chance to fill our tanks this weekend.


  4. Saudi Arabia Hikes Oil Prices Further Into Record Territory


  5. ‘The Illegality of the Plan Was Obvious’




  6. GS downgraded BAX to sell (https://seekingalpha.com/news/3820395-baxter-cut-to-sell-as-goldman-sachs-flags-macro-concerns-on-medtech-space). 

    "Weak renal growth amid COVID-related impact on patient volumes" is oddly phrased…


  7. BAX/Rn – Seems like reasonable concerns:

    Some of the factors highlighted by Amit Hazan and analysts include the company’s heavy exposure to resin costs amid rising oil prices. In addition, the team argues that Baxter (BAX) is also vulnerable to higher freight and logistic costs, given its product mix.

    Meanwhile, the areas of concern in the base business, namely diminishing vaccine benefit, Pharma competition, and weak renal growth amid COVID-related impact on patient volumes, “further reduce the probability of top-line upside,” the analysts wrote.

    I imagine they mean renewal and no one proofed it?  

    All part of a general theme to downgrade Covid-related stocks:

    DGX -1.39%Apr. 04, 2022 10:46 AM ET

    • Quest Diagnostics (DGX -1.6%) was downgraded by Citi to Neutral from Buy with a price target of $140, down from $175, on post-COVID uncertainty.
    • Citi analyst Patrick Donnelly said he has concerns around the company's margin outlook in 2022 and 2023 on the heels of higher internal investments, heightened labor pressures, and potential for reimbursement cuts as the COVID Public Health Emergency gradually rolls off along with concurrent volume declines.
    • The chart below shows 6-month total return performance of Quest, Fresenius Medical, Labcorp and SP500TR:
    • Donnelly added that it will take more than a year for Quest's internal investments in advanced diagnostics and the buildout of the direct-to-consumer platform to increase base business sales meaningfully as the company transitions to a COVID-endemic world.

    BA -0.90%Apr. 04, 2022 11:10 AM ET

    • As the travel market recovers, Air Lease (NYSE:AL) has decided to expand its airplane portfolio with an order for 32 additional Boeing (NYSE:BA) 737-8 and 737-9 jets.
    • The additional jets will enable the aircraft lessor to meet airline demand for modern, fuel-efficient and sustainable operations.
    • Back in February, the lessor had added 18 737 MAXs to its portfolio.
    • With the new order, Air Lease has 130 737 MAXs in its backlog.

    COIN +2.33%Apr. 04, 2022 11:00 AM ET1 Comment

    • Cryptocurrency exchange Coinbase Global (NASDAQ:COIN) is planning to hire 1K people in India as part of the company's efforts to expand into the country, CEO Brian Armstrong wrote in a blog post Monday.
    • Coinbase Ventures, the venture capital arm of Coinbase Global (COIN), has already invested $150M in Indian technology firms in the crypto and web3 space, Armstrong noted, adding that COIN's "Indian tech hub was launched last year and already has over 300 full time employees across India’s state and regions."
    • "We have ambitious plans for India and seek to hire over 1,000 people in our India hub this year alone," Armstrong highlighted. The goal came after COIN's heavy expense outlook for 2022 pointed to international expansion.
    • Armstrong also noted that his company on April 7 will be hosting an event in Bangalore to discuss the future of digital assets and web3 in India.
    • At the end of February, Coinbase took on a Goldman Sachs veteran to run global financial operations.

    Apr. 04, 2022 10:03 AM ET1 Comment

    • February Factory Orders: -0.5% to $542.0B vs. -0.6% consensus and +1.5% prior (revised from +1.4%).
    • New orders for manufactured durable goods fell 2.1% in February to $271.7B, after four straight months of increases. That figure was revised up slightly from the previously published 2.2% decrease.
    • Shipments +0.6% to $541.0B.
    • Unfilled Orders: +0.4% to $1,288.5B.
    • Inventories: +0.6% to $785.2B.
    • Inventories-to-shipments ratio is 1.45, unchanged from January.
    • Last week, ISM Manufacturing grew less than expected in March 


  8. AAPL +1.89%Apr. 04, 2022 9:53 AM ET3 Comments

    Apple (NASDAQ:AAPL) may still get more than half of its sales from the iPhone, but its services, including Apple Music, Apple TV+ and iCloud are increasingly becoming a "key differentiator," according to investment firm UBS.

    Analyst David Vogt, who rates Apple buy with a $185 price target, surveyed more than 4,000 iPhone users from four different geographies and found that U.S.-based upgrades and retention are still high, as 81% of users upgraded from a prior iPhone, up 4% year-over-year.

    The survey also found that iPhone handset age is around 2.3 years, up from a previous 2.1 years and that roughly 35% of the iPhone base is more than three years old and 25% is more than four years, "suggesting pent up demand."

    Apple (AAPL) shares rose slightly more than 1.5% to $177.11 in early trading on Monday.

    Other key findings from the survey include that Music, iCloud, Arcade and Fitness rates are higher (excluding China), while News is "flattish" and Apple TV+ looks to have plateaued.

    Users with higher-end devices, such as the iPhone 12 and 13, also drive Apple services revenue. App Store spending has "moderated" a bit following "COVID-related strength" and Apple Pay adoption continues to increase.

    "Respondents in the survey noted spending increased in Japan, was flattish in the US and the UK and down in China," Vogt wrote, concerning App Store spending.

    The analyst added that while it is one data point, it is worth watching "given Mar-Sept Services revenue comps are tough."

    On April 1, Apple (AAPL) was removed from J.P. Morgan's Analyst Focus List, with the investment firm citing worries over consumer spending.

    F -0.63%Apr. 04, 2022 9:24 AM ET29 Comments

    • Ford Motor (NYSE:Freports U.S. sales declined 25.6% to 159,328 vehicles in March.
    • Truck sales fell 34.4% Y/Y to 74,420 units, Cars sales down 67% Y/Y to 3,628 units, Electrified vehicles sales +16.9% Y/Y to 13,772 units and SUVs -9.4% Y/Y to 81,280 units.
    • Total retail sales -30.1%: Truck -39%, Electrified vehicles -16.2% and SUV +9.4%.
    • F-Series took in a new record 50,000 retail orders in March – up 38,000 over last year, while trucks turn at record rates on dealer lots.
    • F-Series in-transit inventory expanded 127% over February and 66.1% over a year-ago.
    • Mustang Mach-E sales jumped 18.1% in March from February, with total sales of the Mustang family — Mach-E and Mustang – totaling 5,978.

    EQNR +0.19%Apr. 04, 2022 8:59 AM ET49 Comments

    Disturbing reports from Ukraine over the weekend prompted EU leaders to address the prospect of further Russian sanctions, including energy sanctions. France's Macron called for a ban on Russian oil and coal imports. While Germany's defense minister said Sunday that the EU must discuss banning the import of Russian gas. Germany's Economy Minister Habeck said if gas is unavailable, Germany could fall back on coal in the short term. Italy's minister of foreign affairs Di Maio indicated that Italy would not veto sanctions on Russia gas.

    Conversely, Austria's minister of foreign affairs Alexander Schallenberg said, "Austria won't back EU embargos on Russian gas." And Swedish state-run utility Vattenfall planned to continue paying for Russian gas in Euros. While a meeting between US LNG producers and European gas consumers Thursday in Berlin showed muted interest in long-term LNG contracts, as Europeans were reluctant to commit to contracts that could set back the continent's energy transition.

    Setting aside forward looking statements, several actions were taken over the weekend that will impact markets. The Yamal natural gas pipeline between Russia and Germany was shut, again. Lithuania ended Russian gas purchases "from this month on" and called on the rest of the EU to do the same. Meanwhile, Latvia and Estonia began drawing on gas inventories, and stopped Russian gas purchases for the time being. In France, cold weather and reduced nuclear power resulted in the Government calling on companies and local authorities to reduce energy consumption, as power prices nearly doubled.

    Since the war in Ukraine began, Western leaders have encouraged the continued flow of Russian energy to global markets. Even so, oil, natural gas, coal and power prices have hit near-record levels in Europe and around the world. To the extent increased violence in Ukraine leads to Russian energy sanctions, energy prices globally would no doubt see new records in 2022.

    Investors are sure to remain focused on discussions of Russian energy sanctions. Shareholders of domestic gas producers like Equinor (EQNR), Vermillion (VET) and NRT (NRT) are positioned to benefit directly from higher European energy prices. While LNG producers like Shell (SHEL), Exxon (XOM) and Cheniere (LNG) also stand to benefit from increased gas prices. Though thermal coal producers like Whitehaven (OTCPK:WHITF), Peabody (BTU) and Alliance (ARLP) could be the biggest beneficiaries of Russian energy sanctions, as European nations fall back on coal for power generation.

    LL +1.83%Apr. 04, 2022 7:59 AM ET5 Comments

    • LL Flooring (NYSE:LL) is trading 1.29% higher pre-market after the flooring retailer announced the opening of seven new stores during the first quarter of 2022.
    • The new stores opened in Burlington, North Carolina; Framingham, Massachusetts; Menomonee Falls, Wisconsin; Muncie, Indiana; Rapid City, South Dakota; St. Augustine, Florida, and Tuscaloosa, Alabama, bringing LL's national retail footprint to 431 stores.

    CROX +0.18%Apr. 04, 2022 8:04 AM ET7 Comments

    Loop Capital Markets cut its rating on Crocs (NASDAQ:CROX) to Hold from Buy after saying it would rather wait on the sidelines for clarity from the retailer on normalized growth and margin rates.

    The firm lowered its 2022 and 2023 EPS estimates on Crocs (CROX) to below the consensus marks due to the uncertainty in the macro mix.

    Analyst Laura Champine: "Though we think the Hey Dude acquisition may accelerate the overall growth rate given CROX’s ability to sell the brand into its legacy distribution we think investors will wait for proof points before stepping into the shares. We are tweaking sales estimates lower near-term on Europe weakness and longer-term on conservatism as we too are unclear on how much Crocs may have 'overearned' during the Covid crisis. We are cutting gross margin significantly, as we are skeptical of Crocs' ability to continue to raise prices without a reversion to more normalized promotions."

    Champine and team slashed the price target on Crocs (CROX) to $80 from $150.

    Shares of Crox (CROX) fell 2.01% premarket to $74.21.

    AAPL +1.88%Apr. 04, 2022 8:00 AM ET18 Comments

    Apple (NASDAQ:AAPL) iPhone builds have dropped another 9 million to 254 million, Loop Capital said in a research note, citing "reads," cautioning additional cuts are coming in the not too distant future.

    Analyst John Donovan, noted that Apple is likely to cut its iPhone build orders for 2022 to be between a range of 245 million and 250 million, adding that the iPhone SE, which was announced last month, is likely to have its orders cut by 20 million.

    In conjunction, Donovan noted that Apple is likely to raise iPhone 13 builds, but only half of the decline in the iPhone SE, as consumers opt for larger devices.

    "Citing several factors such as the Ukraine-Russia war, supply chain disruptions, and other usual rationale, digging deeper we are uncovering some additional insights," Donovan wrote in a note to clients.

    In addition to concerns about inflation, Donovan added "that the smaller form factor iPhones have a finite following."

    Apple (AAPL) shares rose slightly less than 0.5% to $174.80 in premarket trading on Monday.

    Following the "dismal" results of the iPhone 12 Mini and iPhone 13 Mini, Donovan believes that Apple (AAPL) has finally realized that smaller iPhones have "limited appeal" and given the wide availability of the iPhone 13, the iPhone SE is unlikely to sell well.

    "Despite this, clearly this lack of demand is surprising to AAPL and the pivot to more iPhone 13’s is underway," Donovan explained, adding that it was a "savvy move" by Apple to use the same processor for the iPhone SE with 5G and iPhone 13.

    Donovan also noted that Apple (AAPL) has been looking at an iPhone SE Plus product for future iPhone releases, which further solidifies that smaller devices are likely to remain "niche products."

    On April 1, Apple (AAPL) was removed from J.P. Morgan's Analyst Focus List, with the investment firm citing worries over consumer spending.



  9. AMZN +1.69%Apr. 04, 2022 7:11 AM ET28 Comments

    Morgan Stanley dove into the implications of the unionization vote at an Amazon (NASDAQ:AMZN) facility in Staten Island.

    Analyst Brian Nowak noted the financial impact is not finalized and there are steps Amazon (AMZN) can pursue before entering directly into bargaining with the labor union.

    Nowak and team also tackled the big question on if the unionization efforts will spread.

    "It is likely that additional unionization efforts by employees will need to be done on a facility-by-facility basis across AMZN's estimated hundreds of US fulfillment and distribution centers. These processes are long and uncertain."

    It was also observed that Amazon (AMZN) has been a leader in increasing worker compensation and it could increase the pace at which it invests and integrates robotics and labor alternatives into its warehousing efforts if unionizations efforts were to ramp up.

    By itself, the New York unionization is estimated to represent a ~$200M or less hit to AMZN's Opex tally or a ~0.4% reduction to 2023 EBIT. While a rapid trend towards unionization is not anticipated, if applied to AMZN's broader 750,000 U.S. fulfillment/transportation workforce, every 1% of employees that unionize is estimated to add an incremental ~$150M to annual opex.

    Amazon's (AMZN) statement on the development: "We’re disappointed with the outcome of the election in Staten Island because we believe having a direct relationship with the company is best for our employees. We’re evaluating our options, including filing objections based on the inappropriate and undue influence by the NLRB that we and others (including the National Retail Federation and U.S. Chamber of Commerce) witnessed in this election."

    Amazon (AMZN) rose 0.39% premarket.

    Read about the growing unionization push at Starbucks.

    MTN -0.62%Apr. 04, 2022 7:02 AM ET2 Comments

    Jefferies stayed constructive on Vail Resorts (NYSE:MTN) following the company's acquisition of Andermatt Sedrun.

    Analyst David Katz: "We believe MTN's track record from prior acquisitions should prove beneficial as it enters the European market for the first time. Fundamental differences in the European ski market such as considerably higher per capita skier visitation and lower ticket pricing levels and ancillary spending patterns present complex dynamics, but could play well to MTN's strenghs in customer analytics."

    Jefferies called the development a modest positive for Vail Resorts (MTN), which it has rated at Hold.

    Vail Resorts' investment into Andermatt-Sedrun Sport AG is expected to close prior to the 2022-2023 ski and ride season.

    Still too heavy at $10Bn, unfortunately. 



  10. TSLA +4.54%Apr. 04, 2022 6:58 AM ET19 Comments

    Tesla (NASDAQ:TSLA) traded slightly higher in early action on Monday after the electric vehicle company delivered 310K vehicles in Q1 to miss the consensus mark of 312K vehicles.

    Wedbush Securities characterized the deliveries tally as better than feared following light whisper numbers that came in late in the quarter amid new COVID shutdowns in China and massive logistics complications delivering units to customers in Europe.

    Analyst Dan Ives estimated roughly 20K to 25K units were pushed out of Q1 into Q2 due to the logistical and factory issues and said underlying demand number still look strong with a robust trajectory for the rest of 2022.

    "Relative to other automakers such as GM and Ford as well as Chinese EV players such as NIO, Xpeng, and others we view these delivery and production numbers as a positive step in the right direction for the next step of the Tesla growth story to take hold with Berlin and Austin factories now green lighted."

    Wedbush Securities maintained an Outperform rating on Tesla (TSLA) and assigned a price target of $1,400 following the quarterly deliveries update.

    Shares of Tesla (TSLA) rose 1.03% in premarket trading to $1,095.74. Earlier on Monday, Elon Musk disclosed that he took a passive stake of 9.2% in Twitter.

    VLVLY -1.50%Apr. 04, 2022 6:18 AM ET

    • Volvo (OTCPK:VLVLYreports sales declined 22.1% to 58,677 units in March, impacted by shortages of a specific semiconductor.
    • The number of active subscriptions at the end of March had increased by 174% Y/Y.
    • European sales in March fell 30.4% to 26,954 cars and in Q1 fell 25.6% to 65,157 cars.
    • Sales in China declined by 22.6% to 12,378 cars for the month and down 21.1% to 35,698 cars for the quarter.
    • US sales slipped 5% to 9,428 cars in March and -16.5% to 22,757 cars in Q1.
    • Recharge models made up 35.5% of the total cars sold globally during the month.
    • Volvo, majority owned by China's Geely Holding, said the shortage is expected to impact production during the second quarter.

    JPM -0.02%Apr. 04, 2022 6:18 AM ET69 Comments

    "The confluence of the dramatic stimulus-fueled recovery from the COVID-19 pandemic, the likely need for rapidly raising rates and the required reversal of QE, as well as the war in Ukraine and sanctions on Russia may be unprecedented," JPMorgan (JPM) CEO Jamie Dimon wrote in his annual letter to shareholders, which is widely read in the business community. "They present completely different circumstances than what we've experienced in the past and dramatically increase the risks ahead. While it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes."

    On the bright side: "The U.S. economy is strong… excellent mortgage underwriting (even though we've had home price appreciation), plentiful jobs with wage increases, and more than $2T in excess savings, mostly due to government stimulus… the consumer in excellent financial shape (on average) and leverage among the lowest on record. Banks also performed magnificently during the COVID-19 crisis… helping to weather the terrible financial storm while setting aside extensive reserves for potential future loan losses."

    Not all is well: "The war in Ukraine and the sanctions on Russia, at a minimum, will slow the global economy – and it could easily get worse. It is also clear that trade and supply chains, where they affect matters of national security, need to be restructured. You simply cannot rely on countries with different strategic interests for critical goods and services. Such reorganization does not need to be a disaster or decoupling. With thoughtful analysis and execution, it should be rational and orderly. This is in everyone’s best interest."

    Disclaimer: "I should remind the reader that we normally don’t worry about – or even try to predict – normal fluctuations of the economy. In all times, we are prepared for difficult markets and severe recessions, as well as for unpredictable events, not only so we will survive them but also so we can be there for our clients when they need us the most. However, sometimes there are powerful underlying structural trends that we must try to understand since their impact can be so large, with widespread impact on many parts of human existence."


  11. BYDDF +8.45%Apr. 04, 2022 2:53 AM ET4 Comments

    • Chinese automaker BYD Company (OTCPK:BYDDF) says it sold more 104,878 new energy vehicles in March up 333% Y/Y (including 104,338 passenger cars, and 540 commercial vehicles) and up 18.8 percent from 88,283 units in February.
    • In the broader new energy passenger vehicles category, BYD sold 53,664 pure electric vehicles units, up 229% from 16,301 units a year earlier. Its plug-in hybrids sold 50,674 units in March, up 615 % from 7,085 units a year earlier.
    • BYD produced 106,658 NEVs in March, up 396 percent from 21,492 units in the same month last year.

    • The company produced 106,118 new energy passenger cars and 540 new energy commercial vehicles in March. The production of new energy passenger vehicles included 54,684 pure electric vehicles and 51,434 plug-in hybrids.

    • The company's total installed base of power and energy storage batteries in March was about 5.353 GWh, up 16 percent from 4.615 GWh in February.
    • BYD has stopped production of fuel vehicles since March 2022, saying it is based on strategic development needs.

    • In the automotive section, BYD will focus on pure electric and plug-in hybrid vehicle businesses in the future, it said, adding that it will continue with the production and supply of fuel vehicle parts.

    • Now read: XPeng reports Q1 deliveries ahead of estimates, March numbers surge 202%

    PDD +15.03%Apr. 02, 2022 5:35 PM ET246 Comments

    China confirmed plans to revise confidentiality rules in regards to overseas listings in a move that could help Chinese companies avoid being delisted in the U.S.

    The China Securities Regulatory Commission ("CSRC") confirmed its plans in a release on its website. The regulator said its original rules, which were established in 2009, had become outdated. The draft rules are under public consideration until April 17, according to various media reports.

    "After more than a decade, however, the document has not kept up with the changing legal and institutional landscape, and the evolving market and regulatory practices," the regulator said in a separate statement.

    The confirmation comes after Bloomberg reported Friday that Chinese authorities were making plans to give U.S. auditors full access to the firms' audit reports as soon as the middle of this year. Shares of Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), Didi Global (NYSE:DIDI). Pinduoduo (NASDAQ:PDD) and several other Chinese ADRs gained on the news on Friday.

    The SEC has threatened to delist companies that fail to allow U.S. regulators to review their company audits for three-straight years, a rule that went into effect in late 2020. The agency last month named five companies from China that could be delisted for failing to abide by U.S. accounting regulations.

    Earlier this week, Baidu (BIDU) was added to the list that it could possibly be delisted under the Holding Foreign Companies Accountable Act, or HFCAA. In response, Baidu said that it was "actively exploring possible solutions."

    SEC Chairman Gary Gensler recently toned down speculation of a potential imminent deal for Chinese companies to avoid delistings in the U.S., saying that conversations had been "thoughtful, respectful [and] productive," but that he did not know what the talks would lead to.

    On March 24, the Public Company Accounting Oversight Board told Seeking Alpha that it was not clear if Chinese authorities would agree to permit U.S inspectors to fully review audit papers of companies.

    NVDA +2.75%Apr. 02, 2022 4:05 PM ET114 Comments

    A lot of ink was spilled recently as Intel (NASDAQ:INTC) unveiled its oft-anticipated Arc GPU, slated to be released in the summer.

    The Intel Arc GPU received a lot of praise from the press, excited some in the industry and could be a positive for the company's financials, but it's too early to say that it will be a viable replacement for Nvidia (NASDAQ:NVDA) or Advanced Micro Devices' (NASDAQ:AMD) offerings, investment firm Truist said.

    Analyst William Stein, who rates Nvidia a buy, while Intel and AMD are rated hold, noted the Arc desktop GPUs are a "step in the right direction" for the Santa Clara, California-based Intel. However, Nvidia is well-established in the graphics card space and the new offerings are not likely to hurt the competition anytime soon.

    "We believe that [Nvidia's] well-established performance advantage in gaming GPUs and ongoing supply chain constraints collectively suggest [Intel's] product should have little to no impact on [Nvidia's] gaming business for now," Stein wrote in a note to clients.

    In addition, the analyst noted that Nvidia is well positioned in artificial intelligence in the datacenter and edge computing, as evidenced by its growing revenues and cash flows.

    The Intel Arc discrete GPUs are set for a "limited" release this summer, with the Arc 3 currently available in laptops starting at $899. In the summer, the Arc 5 will be released and the Arc 7 is set for later this year.

    These GPUs will offer Intel's Xe-HPG architecture, supporting ray tracing and can up-convert images for better quality.

    Stein noted that early reviews have shown Intel's (INTC) Arc GPU have a greater than 50% performance than an integrated graphics card, the Arc 3 is really only competitive with the lower end of the market.

    In comparison, Nvidia recently unveiled the Hopper H100 GPU, which has 80 billion transistors and tops the performance of the Ampere architecture, recently only two short years ago.

    At a recent event, Chief Executive Jensen Huang said 20 of Nvidia's H100's could handle the entire world's internet traffic.

    It's likely that the Arc 5 and Arc 7 will be priced "competitively" with other products in the market and could generated some additional revenue for Intel, and perhaps even gain some momentum from gaming fans, Stein conceded.

    However, it's likely that if there is any impact to either Nvidia or AMD (AMD), it would be "modest," especially given the semiconductor industry is still supply constrained, but still growing.

    Under Chief Executive Pat Gelsinger, Intel is looking to turn itself around and compete with the likes of Nvidia (NVDA), Advanced Micro Devices (AMD) and even Apple (AAPL), which has moved away its Mac computers away from Intel in favor of it chips it's designed itself.

    It appears the new Arc GPUs are a good start, according to Wall Street, but a lot more will need to be done if it's going to be a serious threat to either company.

    Intel (INTC) recently announced it would build a $20 billion plant in Ohio and invest as much as $88 billion in Europe over the next decade to boost chip production.

    HCA -1.42%Apr. 02, 2022 1:10 PM ET28 Comments

    Citing a decline in COVID admissions and normalization of elective procedures, Deutsche Bank warns that healthcare providers are entering into an “air pocket” that could lead to anxiety among investors.

    In a note issued this week, the analysts led by Pito Chickering slashed their 1Q and 2Q revenue estimates for hospitals to reflect the lower COVID admissions in March and a drop in COVID revenue from the add-on payments.

    The remarks come at a time the U.S. is seeing a record low of COVID-related hospitalizations. Citing the Department of Health and Human Services, NBC News reported this week that the seven-day average of hospitalizations reached 16,760 on March 31, the lowest level since the U.S. started tracking data at the start of the pandemic.

    In Texas, where some of the leading for-profit hospital operators have a major presence, the COVID-related admissions for this week have approached the lowest level since data collection started, Deutsche Bank team argued, as they opined that its impact would also drive down the Q2 starting point.

    However, due to the strong rebound in elective procedures and favorable commercial payor mix, the turbulence "will be smaller than originally feared,” they added, citing higher confidence in 2H 2022 and 2023 estimates, as a result.

    Weighing in on several leading hospital operators, Chickering and the team predict that the sharp declines in COVID admissions could prompt HCA Healthcare (NYSE:HCA) to lower the upper end of its guidance.

    Despite a worse than expected COVID decline, the firm reiterated the Buy rating and 2H 2022 EBITDA forecast for HCA (HCA) due to the strength in its core business amid a rebound in elective procedures.

    Early this year, HCA (HCA), which operates primarily in Florida and Texas, projected $60.0 – $62.0 billion in revenue and $12.55 – $13.05 billion in adj. EBITDA for 2022.

    On Tenet Healthcare (NYSE:THC), the analysts noted that, with COVID volumes at the lowest level, the Texas-based operator’s “hospitals could face a slightly more challenging revenue ramp for 2Q:22,”

    Yet, Tenet (THC) stands “unique” to HCA (HCA), the team added, arguing that the strong elective volumes at its subsidiary, United Surgical Partners International, should offset some uncertainty in its hospital business.

    However, Deutsche Bank has trimmed the Q1 revenue estimates for Tenet’s (THC) hospital and revenue cycle management unit, Conifer Health Solutions, to reflect the impact on hospital growth amid lower COVID. Meanwhile, the estimates for USPI revenue were kept unchanged, pending the MedTech data for March due in a few weeks.

    For Universal Health Services (NYSE:UHS), Deutsche Bank has lowered the hospital revenue estimates for 1Q and 2Q due to the recent decline in COVID cases. However, the estimates for its behavioral health segment were left unchanged.

    Over the past 12 months, Universal Health Services (UHS) has well underperformed Tenet (THC) and HCA (HCA), as shown in this graph. See a side-by-side comparison of the performance and valuation metrics of the three rivals.

    PEI -0.66%Apr. 02, 2022 11:03 AM ET234 Comments

    In a backdrop of consumer price inflation surging at multi-decade highs, the historic acceleration in U.S. home prices since the onset of the COVID-19 pandemic is "out of step" with market fundamentals, according to a blog post by the Federal Reserve Bank of Dallas.

    “Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s,” the Dallas Fed highlighted, citing real time housing market data characterizing potential signs of "exuberance." The data suggested that “the U.S. housing market has been showing signs of exuberance for more than five consecutive quarters through third quarter 2021.”

    Price-to-rent ratios in particular have become unhinged from market fundamentals and moved into the exuberance stage, or "expectations-driven explosive appreciation," the Dallas Fed researchers noted. For company-specific context, Pennsylvania REIT's (PEI) robust fourth-quarter funds from operations reflected higher rents and occupancy rates. This comes as rental affordability issues rose in February as U.S. residents spent an average of 30% of their monthly budgets on rents.

    The researchers also pointed to the ratio of home prices to disposable income, a measure that's linked directly with housing affordability. "The rapid increase in the statistic close to the threshold during 2021 indicates that U.S. real house prices may soon become untethered from personal disposable income per capita." In an environment where consumers' purchasing power is declining, real disposable income contracted by 1.6% Y/Y in February and has remained in negative territory since April 2021, about the same time when real economic growth peaked, according to data from FRED.

    Unlike the 2007-2009 Great Financial Crisis, household balance sheets seem to be in better shape along with stronger equity positions, suggesting that any economic headwinds from a correction in home prices will not be on the same scale experienced during the GFC, according to the blog.

    The U.S. isn't the only country seeing home price inflation:

    The increase in home prices has been a "global phenomenon," Charles Schwab Chief investment Strategist Liz Ann Sonders wrote in a Twitter post March 28. In fact, 30 out of 60 countries (domestic and emerging markets included), "have been witnessing real house price inflation of >5%," she added, citing data from Capital Economics and Refinitiv.

    Looking at the worldwide housing boom from a different angle, "the 'global real house price index' over the last 50yrs shows the 3 periods where excess easing led to housing bubbles:" First in the late-1980's driven in Japan, second in early-2000's driven in U.S. and the European Union, macro analyst Adem Tumerkan wrote in a Twitter post March 30. "Via mean-reversion, home prices will sink eventually," he added. Meanwhile, bond investors are pricing in the Fed's transition to tighter monetary policy, with short-term Treasury yields rising rapidly and in some cases jumping above long-term ones in a move that usually precedes a recession or a slowdown in economic growth and inflation expectations.

    Homebuilders: D.R. Horton (DHI), KB Home (KBH), PulteGroup (PHM), Toll Brothers (TOL), Lennar (LEN), Beazer Homes (BZH), Tri Pointe (TPH), Hovnanian Enterprises (HOV), NVR (NVR), Taylor Morrison (TMHC) and Meritage Homes (MTH).

    Apartment REITs: Preferred Apartment (APTS0, Equity Residential (EQR), Independence Realty (IRT), AvalonBay (AVB), Bluerock (BRG), Camden (CPT), Apartment Income (AIRC), Mid-America Apartment (MAA) and Veris (VRE).

    At the end of March, mortgage rates surpassed 4.5% to the highest since 2018.


  12. Hi Phil,  Any thoughts on Dell?  They've had several downgrades on worries of a post-Covid PC market contraction, still the PE is currently 7 and this is a quality company with good leadership.  Is Dell worth a trade, or would you wait until it is pounded further?


  13. Comment content omitted because it is too long.


  14. Good morning!

    Fell asleep – the kids have been running me wild this week.

    Fortunately, as expected, things are uneventful today:

       

    Except for TWTR, of course:

    Dollar keeps trying to break up.  Markets think it will be rejected but, at some point, we're heading back over 100 – any slip by the Fed that indicates we're heading for a 0.5% hike at the next meeting could do it.

    KWEB +6.98%Apr. 04, 2022 12:13 PM ET

    Chinese exchange traded funds caught a bid to start the week, with the KraneShares CSI China Internet ETF (NYSEARCA:KWEB) having one of Monday's best performances among all ETFs. Interest around Chinese ETFs has been drummed up by further signs of movement from Chinese regulators, raising hope that companies would not be forced to delist from the U.S.

    Beijing confirmed plans to revise confidentiality rules in regard to overseas listings. That move could help Chinese companies avoid being delisted in the U.S.

    At the midpoint of trading, KWEB was +7.4% and found itself as one of the heaviest traded ETFs on the day. So far KWEB has exchanged more than 19M shares, making it Wall Street’s fifth most significantly traded fund for Monday.

    Based on the news, investors’ confidence in Chinese funds have grown, giving a boost to KWEB and other China-related funds. See other Chinese based ETFs that have experienced positive moves on the day:

    ETFs: (NASDAQ:PGJ+7.2%, (KTEC+6.9%, (NYSEARCA:CQQQ+4.2%, (EWEB+6%, (CHIQ+4.3%, (EMQQ+4.8%, (NYSEARCA:FXI+3.1%, and (MCHI+2.8%.

    Aside from ETFs, Chinese electric vesical stocks also have jumped to the topside.

    EBAY -1.64%Apr. 04, 2022 2:24 PM ET2 Comments

    Online retail stocks broke sharply higher on Monday as investors continue to weigh the inflation, recession, inverted yield curve and war concerns against consumer spending data that is still showing strong in many channels.

    Deutsche Bank weighed in on why consumers may be still spending despite the scare headlines.

    "There has been plenty ink spilled on the recessionary risk signal embedded within the yield curve," noted analyst Jim Reid.

    "Meanwhile, the narrative is that healthy sector balance sheets, including a stockpile of excess consumer savings, will foam the runway of any slowdown. At the same time, financial conditions have now eased to pre-invasion levels despite the implied market pricing of 2022 Fed hikes hitting their highest level. One wonders if strong balance sheets have made consumers less exposed to credit conditions, attenuating the link between higher policy rates and slowing demand."

    Notable gainers included Carvana (CVNA +10.3%), Chewy (CHWY +11.8%), Poshmark (POSH +11.2%), Farfetch (FTCH +9.4%), Newegg Commerce (NEGG +13.1%), Etsy (ETSY +8.5%), Wayfair (W +4.8%), Revolve Group (RVLV +5.6%), ThredUp (NASDAQ:TDUP +7.4%), a.k.a. Brands (NYSE:AKA +4.8%) and Blue Apron (NYSE:APRN +5.9%).

    Amazon (AMZN) rose 1.90% despite some buzz over the unionization hit to profitability.

    Meanwhile, eBay (NASDAQ:EBAY -1.6%) was an underperformer in comparison to e-commerce peers.

    See a list of the top rated consumer discretionary stocks.

    ROKU +8.00%Apr. 04, 2022 12:11 PM ET

    Elon Musk's investment in Twitter has had a significant halo effect in Monday's intraday action. Other social media stocks received a lift as well, including Pinterest (PINS), Snap (SNAP) and Meta Platforms (FB).

    Elsewhere, Roku (NASDAQ:ROKU) advanced on the extension of its partnership with Amazon. Meanwhile, Hertz (HTZ) also rallied after announcing a deal to expand its fleet of electric vehicles.

    Turning to one of the day's standout decliners, Curis (CRIS) lost more than a third of its value after announcing a major regulatory setback.

    Gainers

    Elon Musk's investment in Twitter gave a lift to the larger social media sector. The move is seen as a step by the world's richest person to take a "more aggressive ownership role of Twitter," according to Wedbush Securities analyst Dan Ives.

    Meanwhile, Musk's purchase of a 9.2% stake in TWTR signaled confidence in the overall industry. As such, Pinterest (PINS) jumped 8% in intraday action, while Snap (SNAP) climbed nearly 4%. Meta Platforms (FB) advanced more than 3%.

    Roku (ROKU) posted a midday gain as well, climbing nearly 7% after revealing a multi-year extension of its agreement with Amazon. The exact terms of the deal were not disclosed, but the basic agreement allows for continued access to Prime Video and IMDb TV apps on Roku devices.

    Another partnership gave a lift to Hertz (HTZ). Shares of the rental car provider jumped nearly 10% after reaching a deal with EV maker Polestar to accelerate electric vehicle adoption.

    Under the agreement, HTZ will purchase up to 65K EVs over five years. The precise financial terms were not disclosed.


  15. T +0.44%Apr. 04, 2022 12:50 PM ET10 Comments

    An updated model from Citi ahead of the AT&T/WarnerMedia spin-off has the bank maintaining its Buy rating on AT&T (NYSE:T), expecting room for multiple expansion amid prospects of growing revenue and EBITDA.

    The new model cuts back on an announced net debt reduction of $43 billion by $5.6 billion, for working capital adjustments.

    It also has analyst Michael Rollins presenting a pro forma model that reinforces that AT&T "needs to step up its execution on expense management to improve normalized RemainCo EBITDA during the second half of this year and into 2023.

    Rollins is keeping AT&T on Citi's positive catalyst watch list, with upcoming moves including the completion of the Warner Bros. Discovery (WBD) deal with Discovery (DISCA +0.4%), solid strategic volume performance, and better pro forma EBITDA in the second half of 2022.

    Citi's still below guidance for 2023 EBITDA and free cash flow, it says, but a pro forma FV/EBITDA multiple in the low-6x range points the way to multiple expansion.

    With the record date for the spin-off coming tomorrow, Rollins also updates the valuation methodology. In a target price of $28/share (implying 17% upside), he's estimating AT&T RemainCo contribution value of $22, and a pro forma contribution from Warner Bros. Discovery of $6 per AT&T share.

    Two-way trading of AT&T stock is expected to begin today, with two markets on NYSE: a "regular way" market and an "ex-distribution" market (under a temporary T.WI symbol), as well as a market for WBD common stock on a when-issued basis.

    LOGI +6.44%Apr. 04, 2022 12:13 PM ET

    • Logitech International (NASDAQ:LOGI+7% rallies after Goldman Sachs upgraded the stock to a Buy rating from Neutral in a research note issued on Monday.
    • Analyst Alexander Duval bet that the PC peripherals company will see attractive long-term growth as corporations continue setting up offices and homes for videoconferencing for years.
    • It comes after Bank of America weighed in at Buy rating on Logitech International, citing the company is likely to keep gaining market share in the video conferencing space. The firm initiates a $107 price target on the stock.
    • Logitech International reaffirmed its 2022 outlook of 2-5% sales growth in constant currency, and $850M-900M in non-GAAP operating income.
    • Top Trades for Thu, 24 Mar 2022 14:03 – LOGI

    SunPower raised at BofA as valuation backed by robust estimate reset higher

    SPWR +12.70%Apr. 04, 2022 11:57 AM ET1 Comment

    SunPower (SPWR +10.4%) surges to a YTD high as Bank of America upgraded shares to Neutral from Underperform on Monday with a $23 price target, raised from $13, following the company's analyst day which offered clarity on the growth trajectory.

    Despite the stock's "multi-fold premium to peers, we see no reason to doubt its substantive turnaround outlined given sector tailwinds," BofA's Julien Dumoulin-Smith writes, seeing strong residential trends as "exceptionally robust tailwinds."

    "Implied 20% growth CAGR on customer adds compares with similarly positioned peers suggesting growth well in excess, while expanded services per customer are effectively linked to "low hanging fruit" in financing and storage attach rates which have been demonstrated at or near SPWR's 2025 targets by peers already in 2021," the analyst writes.

    SunPower CEO Peter Faricy said last week that the company is in late-stage negotiations with First Solar to develop residential solar panels.

    You know I love SPWR! 


  16. SPWR

    I'm holding on to 3 Jan 2024 $13 synthetic stock positions on SPWR that I've had open for a couple months.  I don't yet see a great reason to cover them as SPWR is still fairly low in the range.  I was planning on putting on some covers if/when we hit $30.  Do you suggest sticking with the plan or making some tweaks?


  17. SPWR is a good example of a table-banger stock that just kept going lower and lower for no good reason and, rather than act like lemmings and dump out of it – we just kept buying more. 

    Submitted on 2022/01/24 at 2:48 pm

    SPWR/Swamp – Ah, I forgot about them, thanks!  There was something behind the fall.  They took a $31M hit on "cracking issues" with some 3rd-party connection equipment and they would have to replace it all but, of course, they will then turn around to recover it from the vendor so it's a long-term wash (though it may take time in court and not be fully recovered).  The bottom-line is, it's not an issue that affects sales revenue or profitability going forward so it doesn't knock SPWR as a long-term investment in any way. 

     

    Submitted on 2022/01/25 at 10:43 am

    Speaking of SPWR – since we are just watching today, it's a good time to make sure our SPWR positions are being all that they can be.  Why don't we need to wait for a bottom on SPWR?  Because we're going to do our rolls for no more than 0.50 per $1 lower in strike and we're HAPPY to do them again if they get cheaper.  

    Earnings Portfolio:  We have 10 2024 short $25 puts – no need to change those as that's still our target.  We have 40 of the 2024 $20 calls we bought for $7.25 and they are now $4.50 and the $15s are $6.20 so that's a good roll for $1.70 for sure.  The SPWR 2024 $10s are $8.15 so $3.85 to drop $10 in strike does seem like a good use of funds – especially since we can sell the 2024 $30 calls for $2.60 and pay for most of it (but not yet).  So we're paying $1.70 for the first $5 drop and $2.15 for the 2nd – it's not enough of a savings (0.45) to wait and see if it drops another $5 vs possibly blowing the opportunity to roll to the $10s so let's do that while we can.   

    Future is Now Portfolio: Here we have this:

    SPWR Long Call 2024 19-JAN 15.00 CALL [SPWR @ $16.40 $-0.31] 50 12/20/2021 (724) $44,500 $8.90 $-2.65 $9.94     $6.25 $0.25 $-13,250 -29.8% $31,250
    SPWR Short Call 2023 20-JAN 27.00 CALL [SPWR @ $16.40 $-0.31] -30 12/21/2021 (360) $-9,900 $3.30 $-1.57     $1.73 $0.03 $4,710 47.6% $-5,190
    SPWR Short Put 2024 19-JAN 20.00 PUT [SPWR @ $16.40 $-0.31] -25 12/20/2021 (724) $-16,250 $6.50 $1.50     $8.00 $-0.72 $-3,750 -23.1% $-20,000

    Since we can roll down to the 2024 $10 calls for about $2, let's do that we're not worried about the short puts but let's buy back the short calls as well so we can cover with something more expensive later.  

    Long-Term Portfolio:  Same deal, we have 100 of the 2024 $20 calls so let's roll them down to the $10s.

    We also have SPWR in the Money Talk Portfolio but we can't adjust that but certainly we'd roll down the 2024 $25 calls to the $10 calls if we could.  The MTP is holding up well at $220,561, down from $236,164 last week.  These were the stocks I thought could survive a correction without being touched:

     

    Submitted on 2022/02/01 at 2:15 pm

    SPWR/Rookie – It's not an emergency but rule of thumb is when you can roll long calls down $5 in strike for less than $2.50 – it's a good time to do it on stocks you are SURE you want to own for the long-haul.

    SPWR/Rookie – Let's start with the assumption that buying 1,500 shares for $15.45 is perfectly acceptable:

    • Sell 10 SPWR 2024 $22 puts for $9.25 ($9,250)
    • Buy 20 SPWR 2024 $13 calls for $7.10 ($14,200) 
    • Sell 15 SPWR 2024 $20 calls for $4.60 ($11,500) 

    That's a net $6,550 credit on the $14,000 spread so net $20,550 (313%) at $22+ is nice enough but, while you wait, you can sell 5 or 10 short-term calls along the way.  March $19 calls are 0.85 using 45 out of 717 days and selling just 5 of them is $425 so 10 sales like that (450 days) is $4,250 more in your pocket.  So the worst-case scenario is you own 1,000 shares for $15.45 ($15,450) and your upside potential is to sell 10 short calls when it's up in the channel and make maybe $10,000 more along the way – what's not to like?

    Of course, I said the same thing on Nov 3rd on SPWR for our Top Trade Alerts but it is with no shame that I pick them again at half the price!  

    At the time I said:

    The leg I would add since the MTP is up 107% and has $167,589 out of $207,249 in cash is as follows:

    • Sell 10 SPWR 2024 $25 puts for $6.25 ($6,250) 
    • Buy 25 SPWR 2024 $30 calls for $12 ($30,000)
    • Sell 25 SPWR 2024 $40 calls for $9.25 ($23,125) 

    That's net $625 on the $25,000 spread so $24,375 (3,900%) upside potential at $40 and our worst case is owning 1,000 shares at $25.625/share, which is 22% below the current price.  When you REALLY want the worst-case to happen – it's a good spread!  This is too good not to take so let's put it in the Earnings Portfolio!    

    Why so aggressive on this one (usually we go a bit more in the money)?  Because I like the no-cost trade ahead of earnings and it will be cheap to roll the long calls lower (the $25s are now $14.50, the $20s are $16.75) so we're just keeping the money on the side for a rainy day.  If SPWR pops, we'll just have to be content making 3,900% in two years.  

    So here we are, 3 months later and we still like the $25 target for the puts so the adjustment here would be to close the 2024 $30 calls (now $2.50, $6,250) and the 2024 $40 calls (now $1.50, $3,750) for net $2,500 so, overall, we still have a net $1,875 credit on the overall trade which we can apply to the following:

    • Buy 40 SPWR 2024 $13 calls for $7.10 ($28,400) 
    • Sell 30 SPWR 2024 $20 calls for $4.60 ($23,000) 

    So now we're spending $5,400 less the $1,875 credit is now net $3,125 on the $28,000 spread.  The puts are a bit higher than we'd like but, overall, not a bad adjustment on a stock that dropped 50% since we bought it.  That's because we were initially CONSERVATIVE with our $10 spread and it prevented us from taking too much damage.  The aggressive put sale is coming back to bite us but we still believe in the 2-year target and, if not, RAWHIDE!  The same short call selling strategy as above would apply, we look to sell 10 short puts when we can and 20 if we think SPWR is near the top of the channel.  

     

    GOOGL/Batman – What a powerhouse.  I guess with AMZN the assumption is cloud is going well for everyone.  

    Speaking of SPWR – they just called me to be on Money Talk again next week, so we'll have a chance to adjust SPWR in the Money Talk Portfolio as well.  

    SPWR/Swamp – Which one?  Probably one of these: Submitted on 2022/02/01 at 4:21 pm   Or these:  Submitted on 2022/01/25 at 10:43 am

     

    If they are going to keep giving it away, we're going to keep buying it!   To me, this is like when they were selling SIRI for 0.11 or M for $5 or VIAC now at $30 - I just can't get to that valuation, no matter how pessimistically I assume things will be.  

    Wow, SPRW going all in on consumer.   TTE already owns half the company so they are paying $310M for the other half.  SPWR's total income this year was projected to be $35M so $250M now and $60M over time should help.  $16 is trading at a $2.7Bn market cap though, of course, this will ding commercial revenues so forward earnings will not be as strong until they fill the gap with consumer.  

    Money Talk Portfolio Submitted on 2022/02/14 at 11:28 am

    • SPWR – Finally, something we can adjust!  SPWR is selling their commercial division to TTE for $310M and SPWR's total income for 2022 was projected to be $35M so another $310M will certainly help!  Their market cap at $16 is $2.7Bn.  TTE is the majority owner of SPWR as well (50.83%).  The cash improves SPWR financially and allows them to finance their transition to Consumer, which we already expected.  It's a long-term play and we need to be patient but that doesn't mean we can't make adjustments:  The 25 short 2024 $35 calls are down 81.5% to $1.41 ($3,513) so of course we want to lock it in and buy those back as well as the 15 short Jan $25 calls at $1.68 ($2,513).  Our 35 long 2024 $25 calls at $3.23 can be rolled down to the 2024 $15 calls at $6 for net $2.77 ($9,695) and we know, if we'd like, we can sell 35 of the $25s for $3.23 to someone else and get $11,305 back but, for now, we're spending net $15,721 to get more aggressive without the cover.  Should SPWR get back to $25 now, this would be a $35,000 spread but we're not going to project any gains until we see this thing find a bottom.

    Submitted on 2022/02/16 at 1:22 pm

    SPWR – Super-aggressive and now working yet but the $10 calls are fine and no desire to cover. 

    Submitted on 2022/02/24 at 10:45 am

    SPWR/Stock – That's notable.  Bounced off that lower trend line – that means people are waiting to buy and have orders in to go long.

    Submitted on 2022/03/09 at 10:10 am

    SPWR waking up finally:

    The Future Is Not Yet Portfolio Review:  Submitted on 2022/03/15 at 1:21 pm

    • SPWR – My baby!  Recovering from a bad start today is a good sign after a week of gains.    We're very aggressive here.

    Earnings Portfolio Review: Submitted on 2022/03/17 at 2:13 pm

    • SPWR – One of these days…  We're aggressive now and that's been great the past month.  Biden's got 2.5 more years so I can't think of any reason I don't want to be in a solar power company at the moment.  I don't think $30 is an outrageous target and the 2024 $25 calls are $6 so, if we can sell the $30s (now $4.50) for that price on a $5 move up, that would have us in for net $14,200 on the $80,000 spread with $65,800 (463%) upside potential.  BANG BANG BANG!!!

    Submitted on 2022/03/25 at 11:23 am

    LNG was in the running (for Stock of the Decade) but I was worried it wouldn't ramp up so quickly.  Meanwhile, SPWR is the one stuck in the mud:

    Notice I finally stopped banging the table as it went over $20 and now it's heading over $25 we can finally move on to my next value obsession….  wink


  18. DELL/John – They are really not getting credit for their Solutions Group, which has improved margins greatly and essentially drives 80% of the revenues now but it's mixed in with hardware sales and people still think of them as a hardware company.  Getting rid of VMWare in the fall really spooked investors and they are down about 20% but I agreed with DELL and think cloud has run it's growth course and I think they cashed out ($9.3Bn) on top there. They also went right back into cloud services with Apex – so I don't really see a negative getting out of VMW.  They project good, solid growth in the Integrated Service Group and some short-term fast growth in Consolidated as well:

    The bottom line is Dell projects $104.5Bn in revenues for 2023 (they are one of those companies that starts in Dec) with $5.2Bn in profits and that's very good for $37Bn at $49.50.  Goldman just said this about them on Friday and sent the stock tumbling:

    Dell Technologies (NYSE:DELL) shares fell slightly in premarket trading after Goldman Sachs downgraded the the IT company and removed it from its Conviction Buy List, citing outperformance and fundamental headwinds.

    Analyst Rod Hall downgraded the stock to neutral from buy and lowered the price target to $61 from $68, noting that since Dell completely spun out VMware (VMW), the value has been unlocked.

    "We continue to believe DELL remains inexpensive compared to its peers, but we see increasing fundamental headwinds hindering this value unlock," Hall wrote.

    Lowering their target to $61 shouldn't stop us from buying them under $50, right?  I wouldn't want to get too crazy but, in the LTP, we have no fear of owning 1,000 shares for $50 – so it's essentially free money to us to sell 10 of the 2024 $50 puts for $7.50.  If they drop to $25 – we're happy to buy 1,000 or 2,000 more to lower the basis and sell more puts and calls, right?  So $7,500 is free money and we take that and pick a sensible spread like:

    • Sell 10 DELL 2024 $50 puts for $7.50 ($7,500)
    • Buy 25 DELL 2024 $40 calls for $12.50 ($31,250) 
    • Sell 20 DELL 2024 $55 calls for $5.25 ($10,500) 

    That's net $13,250 on the $37,500 spread and I'll be very disappointed if all we do is make $24,250 (183%) at $55+ (10% higher than we are now) but what we have is a nice, uncovered gap where we can sell 5 or 10 short calls, like the June $52.50s, which are $1.55 so if we sold 10 for $1,550, we'd be using 74 (11.2%) of our 655 days to make 11.6% of our net entry back.

    That seems worthwhile but we'll wait for it to get higher in the channel or, if it goes lower, we could sell 20 of the July $50 calls, which are now $3 ($6,000) and use that money to roll our 25 2024 $40 calls to the $30 calls, which are now $20 for hopefully $5 or less so $12,500 and then we'd buy 10 or 15 more for maybe $16 so let's say we bought 15 more for $24,000 and then we'd have 

    • 10 short 2024 $50 puts 
    • 40 long 2024 $30 calls
    • 20 short 2024 $55 calls
    • 20 short July $50 calls 

    And we would have spent $13,250 – $6,000 + $12,500 + $24,000 = $43,750 for the $100,000 spread so instead of looking to make $24,250 at $55, we're now looking to make $56,250 and, of course, we could still reduce that cost along the way with 18 more month to sell when the short Julys run out and, if they don't – we can easily roll them up at least $5 and our spread would be back on track so – on the whole, we'll basically be very disappointed if all goes "well" and we only make 183% on this one.  


  19. SPWR/JPH – Well it depends how exposes you are, doesn't it?  If it's a small part of the portfolio, then a reasonable risk is fine.  It's very likely to be rejected at $25 after moving up more than 50% from $15 but we blasted right through $22.50 so I'd use that as a stop line for being fully open but, if we pull back and consolidate over $22.50 – then we're likely on the way to $30 and, eventually, I think we get there anyway.  

    Keep in mind SPWR is only a $3.7Bn company that's projected to make $100M NEXT year so it doesn't take much of a change in the wind to send them flying in either direction.

    Maybe Elon Musk will buy them?


  20. Gosh, now I'm all awake and in the mood to play and the market shut down! 


  21. Dell  works for me and it pays 2.7% for those of us who need dividend income 

    by the way on 3/31 MSCO also downgraded them    HOWEVER 

    on 3/30 someone bought 2000 January $50 puts for $4, likely a protective trade or perhaps it was just a MSCO or GS trader

    on 3/25 someone sold 1400 October $57.50 calls , 

    none of this has anything to do with our 2024 trade 


  22.  DELL / oh forgot to mention those 2023 puts that were bought for $4 the day before the downgrade are now worth $5.80     no one will be prosecuted of course 


  23. They never are.  


  24. US executives reap record pay as historic income gap opens with staff



  25. In the Kyiv Suburb of Bucha,‘They Shot Everyone They Saw’