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Final Look at Micron, Starbucks' Game Over, Plus GE, Oil, and Biotech

Final Look at Micron, Starbucks’ Game Over, Plus GE, Oil, and Biotech



Final Look at Micron, Starbucks’ Game Over, Plus GE, Oil, and Biotech

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There remains this overall resiliency in the stock market, and I think for the most part that was has been demonstrated by the S&P 500 gapping lower at the open the past couple of day only cut those losses by days end.

Biotech

Biotech stocks had a solid day, with the XBI Biotech ETF finally breaking out.  Most of the significant gains can be attributed to Sarepta which was up nearly 40 percent, to $144. I remember it was about two years ago this stock was below $10, and everyone had on the brink of disappearing. The turn around has been amazing.

Spark also broke out today, rising above $83.20.  The breakout could trigger a rise to about $91.

once


Micron Final Thoughts

Micron’s stock seems flat going into these results tomorrow night; I haven’t even been seeing the big options bets I am used to seeing in this stock.  The chart has no upward momentum in it, the relative strength index is trending lower, and volume has been on the light side.

The company is going to have to report much better than expected results tomorrow, and I’m not sure if that is possible given that they just provided upward guidance a few weeks back.  My guess, we see $54 before $61.50.  You wanna hate me for it, that is fine. I’m just giving my opinion.

micron

Starbucks

Starbucks reported tonight out of left field they are looking for a fiscal third quarter same-store comp of 1 percent. After last quarter results, I was convinced that all the growth in this story was utterly gone which was why I sold the stock. Today I’m glad I did. For them to be looking at a 1 percent comp. It likely means traffic is below zero, meaning it is declining, and ticket sales are around 2 percent, that is my guess.  The China story is nice but is simply not growing fast enough to offset the losses in North America.  I’m sorry. I guess I’m Mr. negativity tonight.

GE

Since we are dumping on companies tonight, we might as well throw in GE.  I was afraid this day would come, and today it did, with GE is officially out of the Dow. Imagine how much higher the Dow would be if GE hadn’t been in the DJIA over the past year.  There is nothing to like at this point in this stock, maybe in another quarter or two sentiments will turn, but that time is not now. Don’t try to be a hero, don’t got bottom fishing.

Dollar

The dollar broke out today, and that means a rise to 98 on the dollar index is likely on the way.

dollar

Oil

And there goes Oil, should I say it? Ok. Oil will see $61 before $70.

oil

Yields

10-year yields closed below 2.9 percent today. Meanwhile, the 10-2 year spread is now at 35 bps. So the Fed still wants to raise two more times? Can you say inversion if they do?

10year

That is it, folks! Night

-Mike

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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. 

#biotech #breakout #sarepta #ge #starbucks #micron

 

 

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Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Michael Kramer and the Clines of Mott Capital own shares of GOOGL,V,MA

Well, if there were any questions that a strong earnings season was not going to help lift stock, I think today’s price action officially blew that theory out of the water. Add on Amazon’s colossal beat, along with Intel and Microsoft, and tomorrow is likely shaping up to be another intense day.

One needs to remember companies like Amazon, Facebook, Microsoft, and Alphabet aren’t any companies,  these are among the most significant companies by market cap, within the top 5 of the S&P 500. When they go up big or down, they take the whole market with them.


Amazon

Amazon just blew away numbers, and crushed it on the bottom line, reporting earnings per share of $3.27 per share versus estimates of $1.25. It seems impressive just how much control Amazon has over its bottom line, it comes down to if they want to make a profit or not, not if they can make a profit, and that is something quite frankly, I have never seen before.

Revenues also beat in a big way coming in at $51 billion, vs. estimates of $49.94 billion. But more importantly, the company is guiding revenue estimates next quarter to $51 to $54 billion, primarily inline with estimates of $52.24 billion.

I know the stock is up big after, and between its monster 4 percent before results, and 6 percent move after, it now up about 10.5 percent in total, to $1,615.

The revenue guidance is very impressive to me and there is plenty to like in the quarter, well have to see where estimates going forward start coming. If we start getting meaningful revenue upgrades, then an argument can once again be made that Amazon as plenty of room to continue rising.

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Microsoft

Microsoft also reported strong results as well, with earnings beating estimates by $0.10, coming in at $0.95 per share, while revenue also top expectations coming in at $26.82 billion, vs. estimates of $25.78 billion. Again very strong numbers, and impressive levels of growth. Microsoft is basically unchanged in the after hours.

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0 For 5, What!

So lets see I’m gonna give myself an 0-2 as a follow-up to my five stock prediction article.   It makes my total predictions at 0 for 5, with the immediate after hours market reactions. But in all fairness, lets see where all these stocks are in a weeks time.

Beside I am right sometimes aren’t? LOL. Of course, I am, I nailed Visa, eBay, Intel, Qualcomm, Verizon, American Express, Netflix, to name a few. Look we all get things right and wrong, it is just the way it goes. You have to go with the flow.

Anyway, moving on then.


Intel

Intel reported a big beat, and the stock is also rocketing higher following results, and I continue to think this one is heading towards, $60. I targeted that level back in December. intel

I still think SQ has further to fall as well, perhaps towards $42.

dquare


Visa

Visa had a big day, and is trading at all-time highs, I think a rise above that upper trend line, accerlates the rise. The numbers were that good. I think upgrades are still to come.

visa


MasterCard

Pretty much where Visa goes, so too does MasterCard, so I expect good results from MasterCard as well, and could it too could be getting ready for a big push higher.

mastercard

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GE

Did you notice where GE stopped rising? Yeah at $14.85, I swear you really can’t make this stuff up!

ge

Good night, and thanks for reading!

-Mike

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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.

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Tags: #stockmarket #ge #amazon #Microsoft #visa #mastercard #intel 

Stocks Breaking Critical Support And Could Be At Risk Of Falling Further


Stocks Breaking Critical Support And Could Be At Risk Of Falling Further

The stocks market recent bout of volatility is not only exhausting but confusing as well. It started in early February on inflation concerns, it moved to rising yields, to trade war fears, to Facebook, to Amazon, and now back to trade wars. So which is it? Not sure. But it does tell us one thing. The market and buyers are extremely fragile, and the slightest bit of negative news is enough to get traders to dump their shares.

It was January 29, that I warned stocks were looking toppy going into quarterly results, and for the most part those results were strong. But yet they weren’t enough to keep equity prices from dropping. But as I had noted back then, some of the prices had gotten way ahead of themselves. After the market bottom in early February, technology stocks took off once again, with shares of Amazon and Micron surpassing their previous highs, as analysts upgraded and raised their price targets.

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During the latest round of selling stocks likes Google, Netflix, Micron, Nvidia, Apple, Microsoft have managed to hold on and avoided breaking some key levels of importance. But in Friday’s commentary, I noted concerns, and cracks started emerging, and that was extremely worrisome to me.

Nvidia

Nvidia, which has held extremely well at $218 finally broke, and that should be a concern.

 

The RSI has been trending lower since peaking in mid-February over 70, and volume has been tapering off in recent days. If the stock bounces Monday and is unable to get above $219, it is likely a good sign that next move is lower to around $204.


Apple

Apple share failed at resistance around $174 moving below support at $169. If that isn’t a crack then I do not know what one is. I think downside is limited here to maybe $160ish.

 

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Biogen

Biogen shares continue to melt, with no end in sight, it might not stop falling until $250.


Incyte

Incyte totally blew-up on Friday after reporting negative results on its trial for one its cancer drugs in development in combination with Merck’s Keytruda. This is just another example of why the Biotech sector has been so terrible in 2018.


Nektar

It took Nektar down with it.

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GE

I still think GE is heading to a $10 handle.

Blackberry

Blackberry cracked and could be headed towards $10.

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Microsoft

Microsoft held support at $91.50 until it no longer could. Not good.

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Micron

Micron held $49.75 until it cracked as well.

Google

But at least one stock is still holding on. It is the lone wolf here.

-Mike

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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.

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Tags: #sp500 #tech #technology #tesla #micron  #nvidia #google #blackberry #ge 

 

 

netflix

Netflix Subscriber Growth, GE’s Valuation, Incyte Rising, And Much More


Netflix Subscriber Growth, GE’s Valuation, Incyte Rising, And Much More

Stocks were mixed today for the most part, and the market was not nearly as confident today as it had been yesterday. Is this going just be a repeat of last week? With a one or two day rally, followed by a week of retracements? The charts would seem to suggest that we have a bit further to rise, perhaps to around 2,750. That would be the next test, the big question do we breakout and continue to rise, or do we fail and fall.

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S&P 500

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Gary Cohn Resigns

Then, of course, the other question, will the market react negatively to the news of Gary Cohn’s resignation?  Not sure. Right now the futures are pointing to lower open, with the Dow futures down about 400, and the S&P 500 futures down about 39 points. The chart below of the S&P 500 futures shows that gap lower.

SP futures

The dollar weakened initially on the news but is bouncing back some.

dollar

I think the Cohn resignation is likely a sign to the market the tariffs are likely to happen, and the market is fearful of the fallout. Perhaps Cohn was looking to get out, and he merely used this tariff fiasco as a way to make that happen.

Regarding the economic agenda, it will continue to be the Republican agenda, not the Gary Cohn agenda. So at the end of the day, his resignation is likely not a big deal over the longer-term.


Biotech Stocks

Biotechs stocks continue to struggle and have yet to rise above $111.50 on the NASDAQ Biotech ETF (IBB). We need this group to rally, and soon. The risk-on part of the market is desperately missing.

biotech

It isn’t just in the big biotech’s either; the more evenly weighted iShares Biotech XBI is also exhibiting the same pattern as we noted yesterday.

bch

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Incyte

Incyte has had terrible run since March of 2017, but the tide appears to be turning. The stock managed to finally find a bounce, but the big test comes around $93. Should it fail at $93, a move back towards the low $80 is likely. A rise above $93, likely sends the stock over $100.

incyte

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Consumer Stocks

Consumer Discretionary stocks are also nearing a make or break level, like the biotech stocks. You would never know how weak the set up is in the group based on Amazon and Netflix. In fact, except for Amazon and Netflix, the rest of the group is pretty terrible, and the discretionary XLY ETF would likely be down even more.

https://www.tradingview.com/i/WzshyRES/

Just look at the top 25 holdings within the XLY ETF. 

 

(Data from ycharts)

Netflix


Speaking of Netflix, the stock got yet another upgrade today, this time from Pivotal. The price target was increased to $400 from $300. This is the part they I can never get, they are expecting international subscribers to hit 250 million by the year 2024! How do they come up with these things? That is six years from now.  I don’t even know what Netflix will report next quarter, let alone 24 quarters from now.

You know it is kind of funny though because my model shows me the same thing! It shows Netflix hitting 250 million international subscribers in June of 2024! Wow. You think that is a coincidence? I don’t know, but if I told you I ran my model in excel with the basic trend line function on the graph, would that give you more or less confidence in the projection? Well, that is exactly how I did it.

The function actually works quiet well, when trying to predict shorter-term outlooks, but anything beyond that to me seems pretty suspect. I own Netflix, and I am more than happy to see it continue to rise, but I think looking out that far seems like a bit much.

GE

Another interesting call this week was that GE was going to rise 50 percent back to a range of  $20 to $22. That would mean GE would trade at a higher valuation than Honeywell, and I can’t comprehend that. GE is expected to earn $1.05 in 2019, while Honeywell is expected to earn $8.66. At $22 GE would trade at 21 times one year forward earnings, while Honeywell now trades at 17. Hmm..

GE PE Ratio (Forward 1y) Chart

GE PE Ratio (Forward 1y) data by YCharts

Maybe I’m missing something here, but it feels like every time you think all the bad news is out of GE’s stock more bad news follows. Should GE trade at a higher multiple than United Technologies too?

I can’t seem to wrap my head around this one.

Well that is going to be it.

 

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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.

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Tags: #sp500 #cohn #netflix #ge #incyte #biotech #consumer #stocks

Previewing Netflix, GE, Starbucks, Lam, and Intel Earnings Results

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Previewing Netflix, GE, Starbucks, Lam, and Intel Upcoming Earnings Results

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This week will feature earnings from some big companies such as Netflix, Starbucks, Verizon, GE, Lam Research, Celgene, Intel, and Caterpillar. Below is a chart of the major companies slated to report this week, I have compiled, along with the latest estimates, using Ycharts.

In this article, I will focus on Netflix, GE, Starbucks, Lam, and Intel only.

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earnings week of January 22

 

Netflix

The first company to kick things off will be Netflix and based on the run-up in the stock since the start of 2018; expectations appear to be sky high. According to Ycharts, consensus estimates are calling earnings of $0.41 and revenue of $3.28 billion. Earningswhisper.com is looking for an earnings beat of 2 cents, coming in at $0.43. The company last guided for domestic net additions of 1.25 million, and international net adds equaling 5.05 million, giving the company total net adds of 6.30 million, bringing total subscribers to about 115.55 million.

The chart suggests that there is support around $220, while a break of this support likely sends shares lower back towards $204. Additionally, the relative strength index is still in overbought territory with a reading of about 73.

netflix

The options market using a long straddle strategy of buying one put, and one call is suggesting a rise or fall for the stock of 10 percent for expiration on February 16. It would place the stock in a massive range of about 199.50 and 241, a range of 20 percent. The open interest on the calls, as of Friday was heavily favored towards the calls, with nearly 9,000 contracts, vs. 1,500 puts. It would suggest that more bets are being placed on shares rising.

GE

General Electric is expected to report on January 24, and with all the recent bad news that keeps flowing from the company, there is likely not much that should change when the company reports results. Estimates are calling for revenue of $33.75 billion, with earnings of $0.29, a decline of nearly 39 percent from the same period a year ago.

Technically the chart of the stock is broken and appear headed lower towards $14.80.

general electric ge

Starbucks

Starbucks is expected to report EPS of $0.57 and revenue of $6.2 billion. More interesting will be if Starbucks changes its full-year outlook given the new tax laws that were put into effect. The company pays an effective tax rate in the mid-30 percent range, and should that rate decline, then it could be a big boost to Starbucks bottom line. For now the street is guiding for 2018 earnings of $2.35.

The stock has recently broken out, rising above $59.50 and appears headed toward the previous highs above $64, and with shares trading, at only 19 times 2019 earnings estimates of $3.10 the stock could have plenty of upside beyond $64.

starbucks

Lam Research

Lam Research is expected to report results this week as well, and fiscal second quarter 2018 results are expected to come in at $3.67 on revenue of $2.56 billion. It was just last week that ASML reported strong results, which helped give Lam shares a significant boost.

The chart shows that the stock has been able to put in a substantial support level around $185 and appear to be rising back towards the previous highs around $220.

lam research

Intel

Intel had seen its shares rocked recently when news of security flaws in its chips came to light. But still the stock appears more than ok on a technical basis, with the stock nearly refilling the gap entirely.

intel

The street is looking for the company to report earnings of about $0.87 per share, on revenue of $16.34 billion. Earningswhisper.com is calling for earnings per share beat of $0.02, coming in at $0.89. The options market is not looking for much of a surprise when the company reports results. The February 16, long straddle using the $45 strike price is calling for a move of only 4 percent putting the shares in a range of $43 to $47.

Hope this helps gets you through some of the big results coming this week.

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Michael Kramer and the clients of Mott Capital own shares of NFLX and SBUX

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.

© 2017 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #netflix #intel #lam #ge #starbucks

Thematic Growth Investing

GE, Tesla, Celgene, Acadia, Cisco, Wal-Mart – Monster Review

The Monster Week In Review: November 17

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GE

It was a big week with some significant news, which started Monday morning with GE announcing it would cut its dividend, and lower its full-year 2018 guidance. Shares of GE ($GE) fell about 10 percent this week alone, and are now down by 42 percent year-to-date. With the S&P 500 up by over 15 percent in 2017 and underperforming, by,  get this, 57 percentage points.

GE Chart

GE data by YCharts

Tesla

The week ended with Tesla ($TSLA) finally showing off its new Semi-Truck. But perhaps most impressive was the new Tesla Roadster. Wow. Zero to 60 in under 2 seconds, 600-mile range.  Ferrari and Porsche were just put on notice,  that is for sure.

I don’t expect much out of the semi-truck business, to be truthful. The market is estimated at $30 billion a year in North America according to Bloomberg. It comes down to how much of the market share Tesla can capture. Even if they should win 10 percent of the market, it would add only $3 billion in revenue, and would likely be a drag on overall margins.

TSLA Annual Revenue Estimates Chart

TSLA Annual Revenue Estimates data by YCharts

According to Ycharts, Tesla is expected to have revenue of roughly $28 billion by the year 2020, which means the Truck could maybe add $3 to 4 billion to that if we aggressively target a 10 percent share right off the bat, which seems highly unlikely. But perhaps the technology being put into this truck could be easily converted into other products, like the Tesla Bus.

The most significant news out of the Tesla event wasn’t the truck or the roadster, it was the hyper-charger, which Tesla claimed could give the truck a 400-mile charge in 30 mins. I’d have to imagine that Tesla has figured out how to put this technology on all of their cars, which means every car could get a full charge in under 30 minutes.

Additionally, the idea that Tesla would be powering the hyper charger through solar energy stored in batteries is a genius idea. Again, once the company recoups the cost of the equipment and installation, the rest of the money Tesla makes on the charger is profit.

Additionally, once the Model S is equipped with the 200 kWh battery pack in the new roadster, which I can’t imagine is too far down the road, the range issue for the Tesla is officially dead. The Model S would likely be able to drive further on one charge than a car on a full tank of gasoline.

So while the truck and roadster stole the headlines, the real news was the hyper-charger and the 200 kWh battery.

I’m still waiting for the solar paint or solar roof panels on the car. The day will come.


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Nailing The Biotech Breakout

Biotech’s Signal A Bottom

GE: Just Not Worth It Anymore

Disney Is Just Too Cheap


Biotech

Biotech has been absolutely crushed over the past month with shares of the Nasdaq Biotech IBB ($IBB), down about 8 percent, which is an improvement.

IBB Chart

IBB data by YCharts

The ETF appears to have bottomed out at the $300 -303 level again, as it did back in August. That region served as stiff resistance on the way up, and it shall act as strong support on the way down. It appears that ETF has bottomed and could be head higher again, back towards $320, as we previously noted during the week.

Biotech

The chart below shows that double bottom, and how quickly the ETF took out the $309 region, it seems like we could now fill that gap, at $322.

biotech

Celgene

One can get further confirmation by looking at some of the components. Celgene ($CELG) shares have broken out, rising above $102.5. Does the stock go straight up to $120, no but it is likely to head in that direction on both a technical and fundamental basis.

celg

Acadia

So why do we track and follow the ETF”s? First of all, it tells us the general direction of the sector, and it shows which direction stock within the ETF are likely to move. Acadia Pharmaceuticals ($ACAD) is a perfect example of this, with the way the stock goes up and down at multiples to that of the IBB. Just look, Notice anything?

IBB Chart

IBB data by YCharts

What about like this?

IBB Chart

IBB data by YCharts

Notice when Acadia and the IBB rise, the IBB trades at 7 to 8 times that of Acadia, but when the IBB falls, its trades at 11.5 times the price of Acadia. If you want to know which Acadia will go rise or fall just track the IBB if the IBB rises, Acadia rise and trades at a ratio of about 7 to one. If the IBB falls,  Acadia falls at a rate of about 11 to 1.

Cisco

csco

Cisco ($CSCO) shares have broken out to a level not seen since 2001, what is that 16 years! That is a long time to have to wait. Shares are likely going higher as well. But the stock could see a short-term pull before that longer-term rise happens.

It seems more than likely shares of the stock retreat back toward $34.50, filling the gap, before turning and making a run towards $45.

Wal-Mart

We’ll finish the week with Wal-Mart ($WMT) yes Wal-Mart, because it not every day that Wal-Mart trades like a high-flying tech stock. The share of the stock rose by over 7 percent to an all-time high, closing the week at $97.40. The company topped estimates when reporting its results this week, and its online business drove it.

wmt

That is a wrap.

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Michael Kramer and the Clients of Mott Capital owns shares of TSLA,CELG,ACAD

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.

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Tags: #GE #Tesla #Biotech #Celgene #Acadia #Cisco #walmart