This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary to get the Daily Monster Market Commentary and join the 2,934 subscribers getting it for FREE!
The Amazon Money Machine: On or Off In The Third Quarter?
[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_tweetmeme type=”follow” follow_user=”michaelmottcm” show_followers_count=”true” large_button=”true”][/vc_column][/vc_row]
It is anyone’s guess just what Amazon’s ($AMZN) quarterly result will be when it reports third-quarter results on October 27. It all depends on whether the e-commerce giant burned its profits on future investments, or decided to turn on the printing press. Just look at the company’s second-quarter results, when it missed consensus earnings estimates by nearly 72 percent.
Not many analysts on Wall Street saw the second quarter results coming. It just serves as a reminder that Amazon, for the most part, can decide reasonably easily when it chooses to make money or not. The company reported earnings of $0.40 in the second quarter, which were well below estimates of $1.40. But revenue was undoubtedly not the problem because that came in ahead of expectations by 2 percent at $37.96 billion.
[poll id=”4″]
Estimates Cut
The big “surprise” has lead to consensus earnings estimates being cut drastically for the upcoming third-quarter. According to Ycharts, consensus earnings estimates have fallen by nearly 50 percent over the past 30 days. It looks like the chart below.
AMZN EPS Estimates for Current Quarter data by YCharts
Whoops. Now Wall Street is looking for a loss of $0.05, on revenue of $42.15 billion. We’ll see just what Amazon decided to do regarding its earnings this quarter. Did they spend all their profits again on investments, or did they choose to turn on the money printing machine this quarter? We’ll see.
Thematic Growth Investment Portfolio – IB Asset Management
Mott Capital Management uses a long-term thematic growth approach to investing in equities. We search for investments that both reflect and help to shape…
Nvidia’s Big Question Mark
Subscribe to the MCM Stock Market Commentary to get it Daily and join the 2,934 subscribers getting it for FREE!
Nvidia is still the stock I am most fascinated by, and I’m eager to see how the market greets its results. The company is set to report results on November 10, and that is when we will find out how the market feels about Nvidia and its growth rates. Consensus estimates show that analyst are looking earnings to rise by only 14 percent from a year ago to $1.07, and revenue increased by 17.7 percent to $2.359 billion, for the fiscal third-quarter of 2018. Most companies would kill for those type of results, but this is Nvidia, the stock that has risen by about 320 percent since June 30, 2016, embarrassing the SP 500 return of nearly 22 percent.
But for Nvidia growth rates drop significantly this quarter, at least based on the expectations. The company has been posting 50% + revenue growth on a y/y basis now for some time.
NVDA Revenue (Quarterly YoY Growth) data by YCharts
Nvidia Options
The options for expiration on November 17, are pricing in a nearly 11 percent move in shares of Nvidia by expiration, using the $200 strike price long straddle strategy. One could imagine just how much wider that spread could by the time earnings results actually come.
SP 500 – 2600 Here We Come
The SP 500 looks like it getting ready for its next push higher. The index has been consolidating quietly since rising above 2550. The SP 500 had previously broken above resistance at 2,550 and now seems ready to make a move to 2,600.
With earnings season now officially in full-swing, we will soon begin to find out just which companies are deserving of their returns in 2017.
Premium Content:
Micron Seeing Heavy Options Activity
Free Articles From Mike:
Netflix Has Entered Its Second Phase of Growth
Micron’s Heavy Option Volume Suggests More Gains Ahead
Morgan Stanley’s High-Flying Stock May Keep Rising
Why Johnson & Johnson’s Stock Could Rise 10%
Intel and Qualcomm Could Rise 20%: Technical Analysis
Goldman Sachs Shares Will Continue Going Nowhere
We offer a lot of great commentaries all week talking about the major an relevant market events. Be sure to subscribe to get this all and of all free commentaries sent directly to your inbox or follow us on Twitter.
-OR-
[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_tweetmeme type=”follow” follow_user=”michaelmottcm” show_followers_count=”true” large_button=”true”][/vc_column][/vc_row]
Thematic Growth Investment Portfolio – IB Asset Management
Mott Capital Management uses a long-term thematic growth approach to investing in equities. We search for investments that both reflect and help to shape…
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.
Tags: Amazon, Nvidia, SP 500, Quarterly Results
Comments are closed.