Monthly Archives: May 2017

KWCP Daily Roundup May 19 The Calm Before the Storm

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As the parade of Donald Trump into the Middle East begins, the NASDAQ bounce continues. But it comes with a tinge of bias toward the larger and safer technology plays as Alphabet aka Google (GOOG, $934.95) and Amazon (AMZN, 965.95). Even the very hot Nvidia (NVDA, $136.24) is on the rise. Same is true for the biopharm and biotech sector as Allergan (AGN, $220.07).

Though the market has been somewhat impenetrable to the political winds that had stirred the business tax cut rally just a few months ago, the tide has steadied and now is the time to find bargains that may find headway in the not so distant future. Lululemon Athletica (LULU, $49.04) and Under Armour (UA, $17.58) still have cache with the customer but have been beaten down by the retail lag. With that, the growth stories still present great value plays with catalysts that are attractively priced as of today.

Amongst the larger companies, Disney (DIS, $107.48) has been beaten back significantly due to the crown jewel ESPN losing automatic cable bundling preferences, however in a world with content is king, few companies carry the content upside as the juggernaut. With Marvel and Lucasfilm in the fold and producing movies, spin-offs, and products, it looks like time to reinvest the Walt's World.

Again, today we like the Etsy (ETSY, $13.19) and Snapchat (SNAP, $20.18) with still healthy real estate in the valuable internet world present valuable, depressed jump in points. We look forward to a good weekend, have a good one everyone!

KWCP Daily Roundup May 18 Uncertainty Continues But Market Marches On

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NASDAQ bounce this morning. Tech looks strong this morning as the Darth Trump of the Russian Empire Saga continues, technology and biotechnology seem the sectors that benefit most from the demise of the Commander. Today we highlight three instances of cautious investing on every pullback in three varying stages of development which make sense. Companies like Tesla (TSLA, $310.53) continue to trade at such a high multiple to (negative) earnings. Companies like this have a visionary leader, and much like Steve Wynn (WYNN, $123.52) on the Vegas Strip, on a global scale, it is very hard to bet one way or another on such idealistic chieftains. They are habitual huge bet takers and performing upon those ventures despite a large amount of turmoil, strife, and controversy. But Wall Street loves these Disney-esque gamblers that create this dreamy, futuristic world. Trading in and out cautiously, on every pullback, seems to be the right step-wise catalyst strategy here since the potential upside still remains great.

Netflix (NFLX, $156.42) also continues to roar on up +3.24 based on the installed base of users and its gentle redefinition of content distribution and now creation of content. We believe in this story for the short and medium term, but often feel for the longer term, NFLX becomes a great complimentary piece for content conglomerates as they bump into other giants in the future. Similarly, taking position in and out cautiously, on every pullback, watching for positive catalysts unless a deal-breaker arises, seems to be the right step-wise strategy here since the potential upside still remains great.

Along the lines of the biotech, the bounce back of Valeant (VRX, $13.51) because they stated they are on track from debt repayment seems to be a good harbringer for the company, however the debt is still a long way from being paid in full or refinanced. But again this company is a long way off from it's $200-plus Pershing Square stock price and selling off assets which were paid for at a premium acquisition price doesn't make for sound policy. On the natural resources front, with Rio Tinto (RIO, $40.60) sniffing around their premium copper assets, there is no doubt that Freeport-McMoran (FCX, $11.40) possesses premium assets, and if they have ability to navigate geopolitical risk and gain strength in management, there continues to be considerable upside here as well. At the risk of being redundant, trading in and out cautiously, on every pullback, seems to be the right step-wise catalyst strategy here since the potential upside still remains great.