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FANG Stocks May Be In Big Trouble – The Daily Recap
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX, MO, VZ, GOOGL
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NVIDIA
It has been the quarter of surprises. First, it was Netflix; then it was Facebook, now it was Nvidia. Nvidia! The company that hasn’t guided down a quarter in almost three years! OMG. I’m sure there will be a lot of commentary around Nvidia, and it may even be down big tomorrow. But let’s face facts here folks. The company grew earnings per share by 92 percent y/y, on revenue growth of 40 percent.
For the fiscal third quarter, it guided to revenue of $3.25 billion, versus analysts estimates of $3.33 billion. Meanwhile, non-GAAP gross margins guidance goes to 62.8 percent, that is down from 63.3 percent this quarter.
It doesn’t feel like a complete disaster to me. But it also comes down to expectations and the market, quite frankly, isn’t used to this from Nvidia and has been spoiled. The stock is not cheap and is priced to grow, with a one-year forward PE ratio of nearly 29, that is roughly double the average of most chip companies.
We’ll have to see where the stock opens tomorrow, but support now is around $235, and then $217.
S&P 500
Anyway, moving on stocks moved higher today, with the S&P 500 rising by nearly 80 bps, but I will not be happy until it clears 2,853, and for now, that hasn’t happened yet. In fact, the index failed right at resistance, so we need to a clean break out tomorrow. I’m not sure that happens on a Friday in the middle of August.
FANG Stocks In Trouble
Thes FANG stocks (minus the G) aren’t looking so good these days., and are looking somewhat troubled. I talked about it in my subscriber video today, breaking down what I’m watching and how I catch these little trends. Trouble Ahead For FANG Stocks?
Facebook has had a terrible few days, and that continued today with the stock down by nearly 3 percent. I think there is more downside here, probably a retest of $166 is now in the works.
Amazon
Amazon also failed at resistance, and that rising wedge is beginning to look problematic. I did a video and talked about Amazon yesterday. Amazon May Plunge 10%
Netflix
Netflix is holding by a thread at support around $323.
Money Flow?
Where is the money flowing? I’m growing more convinced it moving into the staples. Look at the chart of P&G; you’d think this was the newest high flying technology company.
Altria
Meanwhile, Altria is also starting to move higher. $64 to $65 seems within sight.
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[youtube-feed feed=7]Look at Pfizer.
Lilly.
So you do not have to be a genius to realize all these companies have a few things in common. They are all low beta and high yielding. You think there is rotation happening? I do not believe this necessarily a bad thing; it may even be healthy for the markets longer term.
Verizon
Have you seen Verizon lately? The stock is at nearly a multi-high! Two things are going on here in my opinion. The first are the reasons mentioned above, and second, 5G is coming. I think 5G changes a lot of things and opens technology to a whole new level. I like Verizon over the other carriers for this reason.
That it for today!
-Mike
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Here are some of the recent videos:
The Dollar May Soon Wreak Havoc On Oil And Gold
Inflation Runs Rampant Only In Fantasyland And That Is Good For Stocks
Tesla May Be Going Higher Regardless Of The Bid
Why The S&P 500 May Rise To 3,500
Netflix Is Not Broken, Plus S&P May Rise To 3,000 Sooner Than You Think
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#SP500 #FANG #FACEBOOK #AMAZON #NETFLIX #PROCTER #ALTRIA #VERIZON
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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.