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.
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June 1, 2020
Stocks – MU, SBUX, DOCU, ZM
Macro – SPY, QQQ
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN
MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR–
Stocks rallied on June 1, with the S&P 500 rising by 38 basis points to close at 3055. It was, for the most part just a slow grind higher all day, after the ISM manufacturing data came in a little bit worse than expected, but revealed no hidden surprises.
Nothing changed from a technical perspective with the next level of resistance around 3,080 to 3,100 region.
The NASDAQ composite for better or worse has filled the gap from its February 24 decline.
Interestingly, the NASDAQ 100 wasn’t able to get past its highs from last week.
Micron (MU)
Micron traded lower again today; this comes as a bit of surprise to me because this is one of the few companies I can think of that has boosted its guidance. But then again, not much makes sense. It probably, at the very least test the uptrend at $44.
Starbucks (SBUX)
An article in the Wall Street Journal noted that Starbucks does expect sales to bounce back until at least the fall. To me, that seems kind of obvious, maybe it is to the stock too, because it is hardly moving in the after-hours. The stock has what looks like a strong double bottom at $72.25, with the potential to break out to $83.50.
Zoom (ZM)
Call me crazy, how can a company have a $50 billion valuation when it forecast to have sales of $1.6 billion in 2023. The stock trades at almost 31 times 2023 sales estimates, 147 times 2023 earnings estimates, 147 times EV/EBITDA in 2023, and has a PEG ratio of 4.49 in 2023. Now I’m a growth investor, I owned Netflix for years, and I still even own Tesla since 2014! Man, when Tesla had a valuation of $50 billion, the shorts were all over it. Zoom, ahh, it is the future, because no one else can create a video chat app, Nah… The stock broke out today, who knows how high it can go tomorrow. Man, the pressure will be on tomorrow night when they report results, that’s for sure.
DocuSign (DOCU)
DocuSign has a market cap that is $25 billion. This one though, is a bargain compared to Zoom; it trades for only 13.9 times 2023 sales estimates, 121.4 times 2023 earnings estimates, 78 times 2023 EV/EBITDA, with a 2023 PEG ratio of 2.35. Stocks that go up in straight lines, usually don’t end ever well, but what I know, maybe it is different this time.
Fundamentals, those are so 2019, everyone knows fundamentals don’t matter anymore. 😛
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.