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FEBRUARY 26, 2020
STOCKS: ACAD, TSLA, NFLX, DEO, ROKU
MACRO: SPY, 10-YR
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN DEO, ACAD, TSLA, NFLX
MICHAEL KRAMER OWNS SPY CALLS
Please excuse my sarcastic sense of humor, but I need to have a laugh to keep my sanity.
S&P 500 Futures
It has been a wild overnight trading session, with the S&P 500 futures pointing to a flattish open at 3,126. The futures traded to as low as 3,091 and have bounced.
Interestingly that level isn’t the strangest place for the futures to have bounced. When I show you the first chart, you can see it.
Pretty amazing. So we can see and hope. Levels, it all about levels and finding the ones the Algo’s are searching for.
US Yields
10-year yields are rising some this morning, finding a bounce off yesterday’s low, and are now trading around 1.37%.
Diageo (DEO)
Diageo came out and lowered its sales outlook for 2020 cutting net sales to a range of GBP 225 million to GBP 325 million. Yep, you know how much their net sales were in the first half of the year? GBP 7.2 billion.
Meanwhile, the stock here in the US had a $99 billion market cap on January 24, today, $89 billion. This on a sales decline of what amounts to around $420 million for a stock that trades at 5.2 2020 sales estimates of $17.1 billion. At that sales multiple, the revenue reduction should amount to a $2 to $2.5 billion hit to the market cap if you want to play it fairly.
Tesla (TSLA)
Tesla is falling today after it was announced it was ending its solar cell partnership with Panasonic. The stock is trading at support at $760. Remember, the company priced the secondary deal an eternity ago at $767.
Acadia (ACAD)
Acadia will report results tonight, and its stock has fallen by around 15.5% on the coronavirus fears. Oh right, they don’t sell Nuplazid outside the US. At least recently, the stock has found support around $40.85.
Roku (ROKU)
I’ll be watching Roku today, and not because I think it is going lower, but because I think it may be going higher. The stock has done well in the last couple of days despite the sell-off.
Netflix (NFLX)
Netflix has been hanging around the $360 region, and so this needs to continue to hold. Besides, if everyone staying home, they have to do something, binge-watching sounds good.
Anyway, good luck!
-Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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