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Could Netflix Move Into Music? The Daily Rundown - MCM Market Recap

Could Netflix Move Into Music? The Daily Rundown – MCM Market Recap



Could Netflix Move Into Music? The Daily Rundown

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF nFLX AND TSLA

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Netflix

I thought Netflix may have broken out early in the day but was unable to hold the gains.  It has a solid uptrend in place, and the RSI certainly looks like it too is ready to breakout.

Into Music

I have been thinking a little bit about Netflix and wondering if it makes sense for them to get into a music service. They have 125 million subscribers, and maybe for an extra $5 a month they can bundle in a streaming music service. The Netflix app is already on my phone, making it easy to likely get conversions.

Yes, the streaming music space is getting crowded, but how many people would gladly pay $20 a month for music and content.  I’m sure a lot.

Doing some back of the envelope math, even if you consider the 55 million US subscribers, and a conversion rate of 30 percent, it could easily add about $250 million in extra revenue a quarter, and just further solidify the company’s dominance, in streaming media.

netflix


Broader Market

It was a pretty quiet day all around, stocks couldn’t build any positive momentum all day long, and the sellers just came in at the end of the day.  When it comes down to it, the S&P 500 was only down about 30 bps, certainly nothing to fret over, and refilling some of the gap created yesterday.

sp500

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Industrials

Industrials had a great day yesterday, and today we gave back a portion of that significant gain.  Again, some investors blame trade tension; I blame the Algo’s playing a game of fill the gap.

xli


Boeing

The same thing happened with Boeing.

boeing

Chips

The setup in the chip stocks still looks strong.

chips

Micron

Micron has a lot to do with the chips being strong; the stock jumped by about 6.5 percent today.  But, be mindful of that gap, just like the other charts above show us.  A fall back to $56 or even $54 is entirely possible.

micron

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Tesla

Tesla certainly has an unusual setup, with the stock sitting at support around $272, while the RSI continues to trend lower.  It is the stock that everyone loves to hate. It needs to find a bounce off this support level. Otherwise, things might get difficult for the longs. The short interest as of April 30 was at the highest level ever in the stock’s history at 39 million.

tesla


Now on to some boring, but very important stuff

Dollar Index

The dollar index has stopped rising for now, and where the dollar goes can have ramification on other parts of the market. For now, it struggles around $94, and should it break above $94, then is going to be a significant problem for commodities and multinational stocks. Should it managed to reverse and head lower, that is going to help fuel Oil rise even higher.


Eurodollar Rates

The Eurodollar deposit rate is perhaps telling us that demand for dollars abroad may be easing, and that may be a sign that the recent rise in the dollar is nearing an end. Back on March 20, I speculated that the rising Eurodollar rates were a sign the US dollar would begin to surge, and indeed since that time, the dollar index has climbed from 90.50 to a high of 94 yesterday, a climb of about 3.8 percent. So indeed, we should pay attention to the cost to borrow dollars aboard.eurodollar

Libor

Additionally, 3-month libor rates are stalling out, and perhaps that is a sign that expectations for future Fed rate hikes are cooling. It would surely be nice if that were the case.

 

For the most to think we are in a low inflation environment with strong earnings growth and a robust economy. Hard for me to bearish in this type of situation, I continue to see more and more signs of sectors breaking out, and individual stocks as well.  Outside of some unforeseen geopolitical event, I think the most significant risk to the economy and the markets is an over aggressive Fed. Nothing would make me happier than the Fed to leave things alone at this point.

That is it for today.

-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: #netflix #music #tesla #sp500 #industrials #boeing #dollar #eurodollar #libor

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8 Stocks To Watch For The Week of May 21 - Mott Capital

8 Stocks To Watch For The Week of May 21 – Mott Capital



8 Stocks To Watch For The Week of May 21

michael kramer and the clients of mott capital own shares of Aapl, googl, and Netflix

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I have been writing the past few days about the moves in semis, biotech, and the small caps, but I thought today we could focus on the large caps, because eventually for the S&P 500 to continue its rise, the large caps are going to have to get involved.


Apple

It would seem relatively easy to say that Apple has been hands down the best performer in May rising by nearly 13 percent, followed by Facebook, up half as much, increasing by about 6.5 percent. Alphabet is up about 5 percent, while Netflix and Intel are both up about 3.5 percent.

AAPL Chart

AAPL data by YCharts

How much higher can Apple rise, hard to say based on the charts. I never like to try to predict how high a stock can rise when it has broken to new highs; it becomes a guessing game for the most part.

aapl

But it is among the cheapest of the large-cap stocks based on a one-year forward PE earnings multiple around 14.1, while the group has an average of a one-year forward pe ratio of roughly 18.5, with a median of 16.5.

AAPL PE Ratio (Forward 1y) Chart

AAPL PE Ratio (Forward 1y) data by YCharts

Shares are also trading at the upper end of its historical earnings multiple range, so it would suggest there is likely further room for Apple stock to rise. However, that rise may be limited from here over the next quarter until we start getting details on the upcoming iPhone launch or better visibility into next year’s estimates.

Fundamental Chart Chart

Fundamental Chart data by YCharts


Amazon

Amazon’s stock has been stuck right below its previous highs and has thus far been denied what could be a massive breakout. I thought it would have happened this past week, but the market had its thoughts on the matter. But it is quite clear that the RSI is still trending lower, and the volume has been tailing off in the recent days.  So, does the declining volume mean the sellers are waning, or the buyers? Tough to tell with no clear stock price direction in place. If the stock doesn’t break out this week, then I’m beginning to think we retrace to around pre-earning levels of $1500, and it is clear the buyers are the ones that are fading.

amazon

Analysts have gotten more bullish on Amazon as well, upping their earnings estimates for the year by a stunning 48.3 percent to $12.83 per share over the past month. But everyone knows when it comes to EPS, those numbers are BS because Amazon does what it wants when it comes to profitability. Revenue estimates have only climbed by 1.57 percent to an amazing $237.26 billion, a growth rate, of get this, 33.4 percent! That is absolutely a fantastic amount of growth given the size of the revenue base.

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Alphabet

Alphabet has a rising RSI, and that is a positive sign momentum is still building in the stock. In fact, even Friday’s price action is a positive for the future direction. Volume has also remained relatively consistent. I still see this one rising to $1175. Plus, analysts have upped their earnings and revenue estimates for the balance of the year, by 4.5 percent and 1 percent respectively. So again, it suggests positive investor and analyst’s momentum.

GOOGL EPS Estimates for Current Fiscal Year Chart

GOOGL EPS Estimates for Current Fiscal Year data by YCharts


Intel

Intel continues to grind higher, and momentum appears to be higher as well.

intel

Analysts have upped their eps estimates by about 7.6 percent to $3.85 per share while raising revenue estimates by 3.9 percent to $67.6 billion.  The setup and the momentum continue to be strong.


JP Morgan

It had looked like JP Morgan shares broke out, and while it may merely be the way I drew out the trendline, but it appears the breakout is in jeopardy.  Volume levels have been steadily dropping, but the RSI is trending higher, and if the stock can find a bounce early in the week than perhaps momentum can continue higher.

jp morgan

Boeing

Boeing shares appear to have broken out and can increase back to $370 could be in order.

boeing

Microsoft

Microsoft has broken out as well and appears headed higher.

microsoft

Netflix

Finally, Netflix looks like it may be getting to breakout.

netflix

Good Luck this week

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 #may21 #largecap #apple #microsoft #alphabet #microsoft #boeing #jpmorgan #netflix #amazon 

 

FANG Stocks Are Still Cheap, More Gains To Come In 2018

FANG’s Stocks Are Still Cheap, More Gains To Come In 2018



FANG Stocks Are Still Cheap, More Gains To Come In 2018

Michael kramer and the clients of mott capital own shares of googl, nflx, and aapl

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With earnings season pretty much finished, analysts have been steadily adjusting estimates, and as a result, valuations have been re-weighted. It leaves me to believe that the FAANG’s will continue to have a strong run, and likely continue to be the market leaders.


Amazon

Amazon’s earnings estimates for 2018 have increased by 44 percent, and the street now sees the company earning $12.38 per shares, year over year growth of nearly 172 percent, while revenue is forecast to rise by almost 34 percent to $237.26 billion.
One must remember though that Amazon is not valued on a PE or earnings basis.

Amazon always has, and likely always will be evaluated on a sales basis. I’d hate to say it because I know many will not be happy to hear, but the stock based on its historical sales basis is not cheap, trading at currently 2.7 times next year’s sales estimates. The chart below shows that it is the highest multiple in over the past three years.

Fundamental Chart Chart

Fundamental Chart data by YCharts

Now, I realize that the dynamic of Amazon Web Services adds another layer of growth, that wasn’t there three years ago, we must assume a premium to historical trends is warranted, but one should be aware.

Amazon is a key to this market. I’m not saying I think Amazon is about to plunge, I’m just saying that the stock’s outperformance from this point forward for the balance of this year may be limited.


Facebook

Facebook’s estimates have also been tweaked higher, not nearly as much as Amazon. Forecasts over the past 30 days have climbed by 2.6 percent, and analysts now see Facebook’s earnings at $7.48 per share in 2018, a growth rate of 21.5 percent versus last year, while revenue is seen climbing nearly 39.25 percent to $56.61 billion.

Unlike Amazon, Facebook is trading at the cheapest earnings multiple in over the past three years. In fact, the last time shares were this cheap was in January of 2017, and we all know how good the year 2017 was for Facebook.

Fundamental Chart Chart

Fundamental Chart data by YCharts


Alphabet

Alphabet is another stock that is expected to have significant growth in 2018. Earnings estimates have been adjusted higher by about 5 percent since reporting results and are now seen climbing by 35 percent in 2018 to $43.26 per share. Meanwhile, revenue is expected to rise by 22.36 percent to $135.65 billion.

Alphabet is trading at 22.7 times 2019 earnings estimates, and while shares are not at their cheapest levels, they are not at their most expensive, trading at just 22.7 times 2019 estimates. It puts Alphabet in a strong position to continue climbing.

Fundamental Chart Chart

Fundamental Chart data by YCharts

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Netflix

Netflix is a subscriber growth story, which makes it more of a sales growth story, than an earnings growth story. Earnings for Netflix have been adjusted higher by 5.78 percent to $2.88 per share, while revenue has been upped to $16.10 billion in 2018, representing growth of 130 percent and 37.7 percent, respectively.

I created my crazy way to value Netflix, based on what I understand the story to be. I take the Market Cap and divide it by the number of Subscribers. I do this to get a sense of how the market values each subscriber. It looks like this:

Then I multiply it by ARPU. I do this because as subscribers grow, it creates more revenue, and as the ARPU also increases it also generates more revenue. Essentially each new subscriber added is worth more than the previous subscriber added. It looks like this:

We can see the market valuing subscribers at a much higher level than in the past. My thought process is that value will only continue to climb, because ARPU is now on a steady path higher.

While Netflix is not cheap today, it may be reasonable when considering that ARPU will continue to climb, as price increases continue to take hold, and subscribers continue to rise.


Apple

Finally, Apple’s estimates are unchanged for this year, at $11.55 per shares, and revenue of $261.12 billion, growing at 25.45 percent and 13.9 percent, respectively.

But the big thing for Apple, I believe will be a re-rating of the stock, as service revenue becomes the driving growth factor. Apple has never had a premium valuation because of the cyclical nature of the iPhone sales. But as service grows and becomes a more significant portion of total revenue, I believe the market will begin to give Apple a higher valuation. Will it ever be Netflix like, probably not.

But could it trade with more of a market like multiple? Sure. At 18 times 2019 earnings of $13.18 per share, Apple’s stock suddenly is worth about $240. I think if Apple can get another one or two-quarters of strong service revenue, I think that multiple becomes a reality.

That is it for today!

-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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #fang #faang #alpahbet #google #amazon #netflix #apple #netflix

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Michael Kramer and the Clients of Mott Capital own shares of AAPL, NFLX

Another positive day on Wall Street with the S&P 500 climbing by nearly 1.3 percent closing at 2,663. I still happen to think the setup in the S&P 500 is positive, and rise to 2,800 is at work. I spoke about it the other day, and I continue to think that is very much case. The more I look through companies earnings and trends; the more positives keep emerging, over the negatives.   

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Technology

When looking at sectors the same positives trends keep showing up for the most part. In fact, it would appear the technology sector broke out today, and that is a very positive sign. In fact, a rise back towards $69 is maybe on the way.  The relative strength index broke out today as well.

xlk

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A Rise Back To 2,800 On The S&P 500

Biotech

Biotech stocks have been stubborn and have been able to hold support at $100 nice. I think it sets the group for a rise of about 10 percent back to $110.

biotech

Consumer

We can see a similar pattern forming in the consumer discretionary stocks as well.

xly

The same with the chip sector.

soxx


Microsoft

Microsoft has a rising-triangle formation in, and that suggest may about to rise.

microsoft


Netflix

Netflix appears headed towards $340.

netflix


Not All Equal

But that doesn’t mean all stock is about to rise because Facebook, Amazon, and Broadcom have struggled to move higher, and I think it may continue to stay that way. Well, see though. I just find it interesting that Amazon and Facebook reported monster results, and the market hasn’t rewarded them in a big way.

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Apple

I teased this idea on the blog the other night about Apple and a Netflix like valuation. No, I do think Apple will trade at a 60 earnings multiple, but I think in time as investor begin to realize services are becoming a more significant part of the revenue, the market will give the company a higher earnings multiple, as the stock moves away from being primarily an iPhone business.

More and more of our lives are moving to mobile devices, and I think Apple will now start to provide even more services on top of the hardware to make substantial growth the future. Well see, but I like the idea enough, that I bought it today.

That is it for a Friday.

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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #apple #netflix #amazon #technology #bitoech #microsoft #sp500

Is Apple The Next Netflix? Plus Why The Job Market Is Broken

Is Apple The Next Netflix? Plus Why The Job Market Is Broken

Michael Kramer and the Clients of Mott Capital own Netflix

Apple Vs. Netflix

I’m not going to spend much time on Apple tonight because I’d like to see how it trades tomorrow, and then expanded on the topic. But the service revenue growth was very impressive. But I shall tease with this. How much would Apple be worth if it traded with a Netflix or Amazon like valuation? It sounds crazy yes, but what if the key to Apple’s future isn’t the iPhone, but the content the iPhone can provide. Because as I said to my friend today at lunch prior to the Apple report, everything that is happening today is on the smartphone. I can run my whole business on my smartphone, and nearly all of my content for entertainment or web browsing is on the phone. If Apple should happen to own some of that content or charge a fee to access it, as service revenue would indicate, then that may be a huge growth opportunity and worth a higher earnings multiple.

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Moving on…

Economic Reports

There will be a lot of economic data over the next three days, ADP Private Jobs and FOMC tomorrow, then PMI Services and ISM non-manufacturing on Thursday, and BLS Jobs on Friday morning. Seems like plenty of economic data to get the markets rising of falling.

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ADP

We have been talking about this for some time, and since ADP only reports once a month, it has taken almost a year. But it seems to be pretty clear now that ADP job growth is starting to accelerate on a y/y basis, and the chart suggests we are beginning to make the “U” turn higher.

The BLS job number is also starting to turn higher, on y/y basis as well.


Broken Job Market

Fundamentally, I still think there is something wrong with the labor market, and what I find most curious, is that for the time since the 1940’s, the labor participation has been falling, as the unemployment is falling. It is clear as day in the chart below that since the 2008 recession the u3, u6 measures of unemployment, and the labor participation rate are falling together.  It mildly happened after the 2000 recession, but not like the most recent period.

If the unemployment rate is falling, then more people should be working, and that should mean the participation rate should be rising.


95 Million Americans Not In Labor Force

The issue comes from the fact that the population growth in this country is exceeding that of job creation, and the chart below shows that, giving us our 95 million Americans, not in the labor force.

It would tell me, that the low labor participation rate is not because of a flood of people retiring, is because there are people who still can’t find employment.


Stable Unemployment Rate

That is why I also still believe we will continue to see job growth in coming months and year, without seeing the unemployment fall below much 4 percent. As more jobs are created, more people will join the labor force and start looking again or start working on an “on the books” capacity. It may even cause the unemployment rate to rise.

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Not Enough Job Growth

The next chart illustrates just what I am talking above. It takes the change in the civilian labor vs. the prior year, divided by the total noninstitutional civilian labor force. It shows that in 1978, the number of jobs created represented nearly 2 percent of the population, while today it is merely three bps.


The Fed

We care about all of this stuff because the Fed sets monetary policy off maintaining full employment, and inflation.

There is also still a long way to go for wage growth to rise to a level of concern.

I doubt we find out the answer to any of this scenario in this week’s reports. But it is something to think about, and something I have been tracking since early 2016 when the unemployment rate was around 4.9 percent and I was even a more terrible writer than I am now. 🙂

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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #apple #netflix #amazon #jobs #unemployment #labor 

 

Earnings take center stage

It Is Time For Earnings To Take Center Stage

It Is Time For Earnings To Take Center Stage

Michael Kramer and the Clients of Mott Capital own GOOGL

Earnings take center state with companies like Facebook reporting today, and tomorrow we get Microsoft, Intel, and Amazon. It doesn’t get much bigger, and Facebook didn’t disappoint.

But first…

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Broader Markets

The S&P 500 continued to bounce around today, with the index finishing the day slightly higher up about 20 bps. The index managed to stay on the breakout side of the of the downtrend we crossed on April 11, and it has acted as support, to this point.

spx

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VIX

Meanwhile, the VIX has remained on the other side of 20, and that is also a positive.

vix


Facebook

Facebook, may have put some questions to rest, with its strong quarterly results. The company reported daily active user was up 13 percent to 1.45 billion on average. The second quarter will give a better reading of active users post the data scandal, but my gut suggests that the impact will be minmal, at least from my usage, and I have noticed a slowdown in my friends ussage either.

Revenue for the quarter grew to $11.97 billion, versus estimates of $11.41 billion. EPS came in better than expected, at $1.69, vs. estimates of $1.35.  Shares were up about $12 in the after-hours trading around $171. I got the retest of $150; post-results wrong!


AMD

Another call I got completely wrong was AMD, shares of that one are jumping after hours as well, to around $10.70. The company reported better than expected earnings per share of $0.11 per share, vs. estimates of $0.09 per share. Meanwhile, revenue also topped estimates at $1.65 billion, vs. estimates of $1.57 billion. The company also sees revenue in the second quarter at $1.725 billion, better than estimates of $1.57 billion.

0 for 2, out of five earnings predictions, and if you count Alphabet from Monday, that makes 0 for 3.

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Tomorrow

Tomorrow Amazon, Microsoft, and Intel report. I think if Intel can put a good report on the back of Texas Instruments, and Qualcomm it will give the semis a good jolt. The group has been walloped in recent days and needs to some positive newsflow.


Boeing

Boeing had a nice bounce today following its strong results, but the stock action didn’t impress me so much. Shares where up about 4 percent, basically regain the lost ground from yesterday.

boeing


Cat

To this point, Caterpillar has been able to stay above support at $143, and I think that is a huge positive. It is a critical level for the stock.

cat

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Yield

Finally, the 10-year got to a significant level today, right around 3.04 percent. We could see a considerable acceleration higher if we rise much above current levels.

That’s it.

-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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #tesla #chips #stocks #model3 #netflix #verizon #ibm 

It Is Simple Some Stocks Are Just Overvalued, It Is Obvious!

It Is Simple Some Stocks Are Just Overvalued, It Is Obvious!

It Is Simple Some Stocks Are Just Overvalued, It Is Obvious!

Michael Kramer and the Clients of Mott Capital own shares of GOOGL and UL 

Volatility continues in 2018, and again the narrative around the reasons for the volatility continues to shift. Earnings have not been too bad so far, but still, the significant results continue to roll out the rest of this week and next. So it is yet to be seen what direction earnings will keep sending the market. But in some cases it is crystal clear why stocks are going, they are merely overvalued, and no I am not talking about the FANG’s, nor most of the Techs. I’m talking about staples and industrials like Boeing, McDonalds and Home Depot.

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Wait, What?

Listening to the TV all afternoon, I got the impression that investors seemed surprised that 2018 would be the peak regarding earnings growth from a percentage standpoint. It has always seemed fairly obvious to me that 2018, earnings growth was being aided higher by the one-year tax benefit, and that growth would return to “normal” growth rates in 2019. The rate of growth in 2019 is undoubtedly nothing to dismiss, because as of right now that growth is expected to be around 10 percent, and with an S&P 500 trading at roughly 15.5 times 2019 earnings estimates, the stock market seems relatively cheap.

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Economic Slowdown?

To this point, I see no evidence of an economic slowdown. A company like Unilever saw pretty good growth in its first quarter with sales growth and volume growth of 3.4 percent, which again is a pretty healthy number for a company of its size, while emerging markets grew at a much faster pace.


Just Overvalued

I think in some cases, there are merely stocks that advanced so much ahead of these big earnings expectations, now it is time to sell the news.

BA Chart

BA data by YCharts

Companies like Home Depot, Boeing, McDonald’s, Lockheed Martin, Caterpillar were all up tremendous amount from the start of 2017 through the end of January 2018, much more than the S&P 500.  Boeing even now is up nearly 112 percent since the beginning of 2017! 112 percent! It and the others like it are trading at some of their highest earnings multiples in some time, and in some cases, those companies still need to see further multiple contractions.


Slowing Growth

The market is also looking to the future, and while Caterpillar is seen growing earnings in 2018 by over 36 percent, those earnings are seen rising by only 13 percent next year, while Boeings earnings growth is seen slowing from 37 percent to just 18 percent next year, while revenue is seen climbing only 5 percent! Better keep buying back that stock or improving margins. Home Depot is no different going from 27 percent to only 7 percent.

BA PE Ratio (Forward 1y) Chart

BA PE Ratio (Forward 1y) data by YCharts

How do you feel about paying 20 times one-year forwards earnings for growth in the mid to high single digits? Yeah, they are expensive. I have been saying this about McDonald’s for quite some time, with its monster earnings growth of about 14 percent in 2018, on an 8 percent drop in revenue! Give me a break; the stock is up nearly 30 percent! And it is no different for any of the others, and these are just a few.  The Banks may be another group in the same situation.

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Google or McDonald’s

Right now it would seem the selling is indiscriminate, but the cream will rise to the top, because companies like Alphabet are seen growing by 22 percent in 2018, slowing to 17 percent in 2019, on 11.5 percent revenue growth,  while trading at only 21 times, so I ask,  would you rather own Alphabet or McDonald’s? Alphabet every day of the week hands down.

If McDonald’s can trade at 19 times earnings than Alphabet must be the steal of a lifetime.


Moving on then to other topics….

VIX

The VIX got right back to nearly 20 today, before backing off. Remember 20 has been a support/resistance line, and the fact that it backed off is at that level is good.

vix

The S&P 500 also managed to find a bounce at least for today off its downtrend.

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Technology

The technology earnings are going to be extemely important the rest of this week, because the setup in the technology ETF XLK looks really bad. I’m hoping that is not a head and shoulder formation, because if it is then a fall back to $61 or further could be in the cards. With all the big results this week, those results could be a tipping point for the group.

technology

The one piece of good news so far is that Texas Insrutuments appeared to report solid results and for now at least the stock is finding a bounce.


Facebook

The big one tomorrow will be Facebook, and the stock melted today, falling below support at $161.50. It could be headed back to retesting the lows around $150. The chart clearly shows the stock was unable to rise above resisntacnce around $168.

facebook


Apple

Apple fell again today, and now sits at $163, and the company still has a week to go before results. Apple’s results can not come soon enough.

Micron

Micron staged a head fake breakout on April, 18 and it has been nothing but down since that time. Is there a rise in Micron’s shares in the future? I’m not sure, but the chart looks pretty weak, at current levels, and more declines may be in store.

micron

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Amazon

Amazon shares continue to trend lower too, and they are expected to report Thursday after the close. The chart like the others looks fairly weak. The earnings will matter  a great deal when they are released. We can see we back to within $1440 on the chart, and that again is an important level for the stock.

amazon

That is it!

-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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #tesla #chips #stocks #model3 #netflix #verizon #ibm 

Chip stocks continue to sink, tesla register 5,000 model 3's

Chip Stocks Continue To Sink, Tesla Registers 5,000 Model 3’s

Chip Stocks Continue To Sink, Tesla Registers 5,000 Model 3’s

Michael Kramer and the Clients of Mott Capital own shares of VZ, TSLA, NFLX, and GOOGL

The S&P 500 managed to finish the day flat, and for the most part, this 2,670 level on the S&P 500 continues to hold.

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Chip Stocks

The semi companies continue to struggle, with the SOXX down by over 1.3 percent, but some stocks were down by far more. The chart on the Soxx ETF surely doesn’t look great, and the big test for the ETF comes around $167.

chips

The relative strength index is still trending lower, and unless Intel, Qualcomm, and Texas Instruments can say something more positive, it might hard to turn the direction of this group.

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Verizon

Verizon reports results tomorrow, and what will be the most thing that comes from the report? Well, any commentary the companies give around the upgrade cycle of smartphones will be interesting. Remember it was Verizon that told us last quarter, that they saw an elongation of the upgrade cycle. That will give us a good sense of where we stand with the chip stocks until we find out details on next iPhone launch from Apple.


Tesla

Tesla registered over 5,100 new VIN with NHTSA, which is the highest total I can remember. This comes after the company shut production for a week. Again, we will need to see what that number the next time they register VIN’s, and just how much time has passed. That could help us get a handle on the weekly production rate.

 


Netflix

Did Netflix the gap today? Maybe, it sure was impressive where the stock stopped falling and where it stabilized.

netflix


IBM

IBM shares have struggled since its quarterly results, for apparent reason, but the stock is pretty close to having an even bigger fallout.

Ibm

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Alphabet

Finally, Alphabet reported strong results beating on both the top and bottom line. But for now, investors are not happy enough to send shares higher in the after-hours. The stock is mostly flat at that moment. I haven’t had the chance to dig through the numbers yet, but when I do will be sure to share any feedback, if I should anything worth noting.

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #tesla #chips #stocks #model3 #netflix #verizon #ibm 

stock amrekt soars netflix april 17

Netflix Jumps, While IBM Slumps, Roku For Real?


Netflix Jumps, While IBM Slumps, Roku For Real?

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If the stock market needed the narrative changed then Netflix did just that. The S&P 500 jumped by over 1 percent on the day. The jump helped to the fill the gap at 2,713 was filled today in the S&P 500, closing at 2,706. We got right up to that resistance level in late trading and managed to back off by the end of the day. It will not surprise me if we retest the 2,691 level again tomorrow, before moving higher again. The next significant resistance level comes at the downtrend around 2,740.

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spx


VIX

The good news is that the VIX continues to decline and is back to 15. We want to see the VIX continue to fall, and I think as strong earnings continue to roll-out and the narrative in the marketplace shifts, that will be the case.


Netflix

Netflix was a prime example of that today with shares of the stock soaring above its old high, and rising to $334 up 9.2 percent on the day. $333 will now serve as support, and we can see that held today when tested.

netflix

IBM

Interestingly IBM posted what on the surface looked like substantial numbers. But if you want to be picky, gross profit margins slipped by 60 bps, to 43.8 percent. Total expenses were up; net income was down versus last year. Even on non-GAAP basis gross profit margins were down to 43.7 percent from 44.4 percent a year ago.

When adjusting for currency IBM’s revenue was mostly flat on the year, and this strategic imperatives part of the business, that is supposed to be the big growth engine, only grow by 10 percent on the year adjusted for currency. That cloud number seems awful low? 20 percent growth? 14 percent adjusted for currency? Amazon’s AWS only grew 42 percent last quarter. How does that 20 percent sound now? I guess we will know how good or bad that number is when Alphabet, Microsoft, Amazon start reporting next week.


Amazon

I hope for Amazon’s sake cloud didn’t slow to mid-teen growth rate, if so watch out. The chart is in an interesting spot here, we never entirely made it to $1,250, but we got to about $1,360. The stock finally firmly crossed over $1,440, and now the next big test comes around $1,500, where a downtrend meets a resistance level. Breakout and jumps quickly to $1,578. Fail, and you fast fall back to $1,440. Which way do I think it goes? Well, I believe it sees $1,440 again before it sees $1,578. We’ll see.

amazon


Roku

So I want to know did Roku go up to because it launched the ESPN app on its platform, or because Point72 has a 5 percent in it; because neither was a good reason for the stock to rise by 9 percent. I’m sure if ESPN + isn’t on other platforms, it will be soon. But yet the stock was up how much? 9 percent? That is a joke right?  I never said the market made sense.

That’s 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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #sp500 #netflix

 

 

 

Netflix’s Monster Beat Continues To Show Why Shares Are Still Cheap


Netflix’s Monster Beat Continues To Show Why Shares Are Still Cheap

Expectations were high for Netflix, and the company delivered in a big way, adding 7.41 million new subscribers in the quarter. Total subscribers now stand at 125 million, and the company is guiding for that number to climb to 131.20 million at the end of the second quarter. The beat was driven by international growth as we expected, with nearly 5.46 million new subscribers in the quarter, down sequential from 6.36 million, but again google trends was suggesting strong international growth, but not as strong as the last quarter.

It was US growth that was very strong, with nearly 1.96 million net adds, primarily in line with the fourth quarter. Surprising to me. The strong domestic subs were very impressive, with the growth coming despite the price hike last fall, and suggests the price is likely still too low. I think even at $19.99 a month it would not hurt the companies ability at growing revenue.

Guidance was solid too. There is nothing from what I can see from my quick look that suggests anything bad.

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145 Million Subs By Year End

The company is now on pace to eclipse 145 million by the end of 2018, based on my model.

 

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Jumping Afterhours

The stock is trading around $325 in the after-hours, and that clears resistance at $323, but we shall see what happens in the morning. I expect that the stock will be up tomorrow.

netflix


Can Still Rise

The stock is likely still cheap based on expectations of earnings growth of around 55 percent in 2019 and 2020, with earnings forecast in 2020 of $6.58. A PEG ratio of 1, gives the company a 55 earnings multiple and the potential to rise to around $360, based on those 2020 estimates. It sounds crazy, I know, but remember Netflix gave guidance of $3.934 billion for the second quarter, and that comes ahead of estimates of $3.893 billion. It means that revenue estimates need to come up and so do all those earnings estimates.


ARPU Second Ingredient

Additionally, the ARPU for the latest quarter rose to $9.86 per month, up from $9.31 per month in the fourth quarter. Also based on those estimates, ARPU is expected to be $10.01 for the second quarter.  ARPU is trending higher and looks to be heading towards $11.75 per month by year end too. The higher ARPU climbs, plus the addition of more subscribers has a multiplying effect on revenue.

With 145 million subscribers at $11.75 per month, the company could be looking at total revenue in 2019 starting the year around at over $20.5 billion. That is about $1 billion more than current estimates of $19.47 billion.

International Growth

International growth remains in the early innings, and I expect this part of the business will only accelerate. Additionally, one must remember that ARPU in the latest quarter for the international segment was only $8.70 per month vs. $10.70 per month for the US. So the ARPU is likely to continue to climb as well in the international segment.

S&P 500

The S&P 500 got up to 2,686, within striking distance of 2,691, which I noted yesterday as the next level of resistance. I drew in a new uptrend in the S&P 500 chart for the first time in a while, as it has become a little bit more clear now.

sp500

A rise above 2,691 puts the S&P 500 on pace to reach 2,713, filling a big gap, from at the end of March. The Vix also fell below 17, as volatility continues coming out of the market.

Back tomorrow.

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #sp500 #netflix

 

netflix earnings preview

Netflix Monster First Quarter Earnings Preview- A Complete Breakdown


Netflix Monster First Quarter Earnings Preview- A Complete Breakdown

Netflix will be the headliner this week when it comes to earnings. As I mentioned in the write-up last week, Google trends have been showing strong international interest. Cities like Mumbai and New Delhi are seeing significant search interest, while city-state Singapore is also up there over the past year.

(Google Trends)

It is a trend that has continued over the past quarter as well.

(Google Trends)


Options

Options are pricing in a massive amount of volatility after results. Look at the implied volatility term structure, with a reading near 90! Huge!

The long staddle option strategy is pricing in a rise or fall of nearly 10 percent for the $312.50 strike price, set to expire on April 20. Again a huge move. Keep in the S&P 500 has implied volatility term structure that is less than 14 percent! Netflix is nearly 90%.

Analyst Estimates

Analysts estimates are calling for earnings to climb by nearly 57 percent to $0.63 per share, while revenue is expected to jump by 40 percent to $3.69 billion. But the most critical metric’s will be those subscriber growth number and the outlook for net additions in the second quarter.


Subscriber Growth

The company is guiding for 6.35 million net additions in the quarter, bringing the total subscribers to roughly 124 million. But I think it may take a much more significant beat to move the stock higher.  According to my projections, the company should report result roughly in-line with expectations.

(Mott Capital)


Technical Breakout

The technical chart suggests shares could see a significant rise though, with a breakout occurring on Friday, and that could lead shares much higher, perhaps to new records post results.

netflix

So all that is left now is for the company to report those results.

Michael Kramer and Clients of Mott capital own shares of NFLX

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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: #netflix #earnings

banks bets blame netflix tesla amazon

Banks, Bets, Breakouts, and Blame – Freaky Friday


Banks, Bets, Breakouts, and Blame – Freaky Friday

It was another exciting day in the stock market. Nah not really,  it was mostly uneventful. Technicals continue to dominate trading, with the S&P 500 testing resistance at 2,672, and testing support at 2,647, at the end of the day, we closed at 2,656.

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S&P 500

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Taking A Look The Banks, And Prepping For Earnings Season

Banks

As of right now, it would seem that the financials will not be the group to lead stocks higher. JP Morgan, Citigroup, and Wells Fargo reported results and all three were down despite posting good results. It could be a combination of things at play, expectations were for better, all the good news has been baked in, or investors are concerned about slowing earnings growth. It doesn’t matter what the reason was, but what seems to be crystal clear to me at least, is that the banks will not be the group to lead this market higher.financials


Yields

I think for the most part the treasury yields on the long-end of the curve are not giving in and are refusing to rise, and again I think that is a function of the low yield environment globally. The Fed can control the short-end of the curve, but the Fed has no control over the longer-end the yield curve. As long as the free market controls the long-end of the curve, I think the yield curve may continue to flatten, and that is very bad for the banks and interest income.

The spread between German and US bond is fairly steep at over 2.3 percent, and that is likely a problem

yields

In fact, I continue to believe the 10-year is going back to 2.6 percent.

Amazon

Amazon failed to stay above 1,440. Again, bad!

amazon

Nvidia

So now, Citron is betting Jim Cramer $230k that Nvidia’s stock will be below $230 in 12 months.

All I can say to Citron is that Nvidia is a tough stock to bet against. I have never once traded a share of Nvidia long or short. But I have sure written plenty on it, and I for some time I was extremely negative on it, probably from around $100 to $200, :). Every time I thought Nvidia would crack, or revenue and earnings would slow, they didn’t. To this point, it still may be easy to bet shares of Nvidia continue to rise than to bet they shall fall. Good luck to those two, I’ll remain an onlooker.


Netflix

Netflix shares broke out today, and it managed to close above the downtrend. That is a positive, considering the stock is heading into results Monday after the close. The stock got a couple more upgrades today as well. I will put a pre-earnings look on Sunday, again.

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Tesla

Elon Musk was busy on Twitter today, first challenging the economist and claiming Tesla will be cash flow positive in third and fourth quarters, and then taking the blame for excessive automation causing problems in production.

I have no idea if Tesla will be cash flow positive or not by the third quarter. Lets first see how the first and second quarters go.

The one thing I do know is that that stock can’t get over $303.

tesla

Oil continues to rise and is getting closer to our $75 target.

oil

That’s it, see you Sunday! No commentary tomorrow, I’m taking the day off!

-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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #stockmarket #sp500 #amazon #tesla #nvidia #netflix #jpmorgan #banks

 

 

technology stocks

Technology Stocks Are Getting Ready To Go Higher, Plus Much More


Technology Stocks Are Getting Ready To Go Higher

There were a couple of positive developments today. First, the S&P was higher, by 83bps, and closed at 2,663. Next, the close above that pesky resistance level at 2,660 we had been watching. Today also established that 2,672 is now the next resistance area. The last two times the S&P 500 got to 2,672 it was followed by two nasty downdrafts, resulting in a fall of about 3 percent back to 2,600, each time. A rise above 2,672 would be an immensely positive sign for a continuation of the most recent rally.

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S&P 500


Technology Stocks

A new trend line was born today for the technology sector, XLK, and for the first time in a while, the technology sector has a direction other than down. $67.10 continues to be a resistance level, but should it rise above resistance to say $67.50 it gives the ETF a perfect shot of filling the gap at $69.25.

technology

Nvidia

Nvidia looks to be heading back towards $245.

nvda

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Consumer Stocks

Discretionaries are continuing to struggle after hitting resistance around $102.

consumer

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Amazon

For right now, Amazon maybe the only stock capable of lifting the entire group. First, because it has a nearly 20 percent weighting in the ETF, second because today it closed above $1,440, a mild positive. There are still plenty of hurdles for Amazon to overcome; the most obvious is that the stock needs to stay $1,440.

amazon


Netflix

Netflix appears to be setting up for a breakout towards $322. The company reports results on Monday after the close; I will have a closer look at it over the weekend.

nflx


BANKS

Tomorrow will be a big day for the banks, with JP Morgan, Wells Fargo, and Citigroup all reporting before the open.

JP Morgan is slightly breaking out

jp morgan

But the setup in Citi doesn’t look nearly as strong.

citigroup

If the banks want to be a leading sector in the stock market, tomorrow will be the day they can prove they are capable are leading or not.

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Acadia

Why is Acadia not back to $22 already, after the BS story from Monday? I was shocked to see the FDA made a statement on it.

The stocks downdraft proves once again you can’t believe everything you read, and that understanding what you are invested is so extremely important.

At this point, I’d be happy if we filled the first gap at $22, but the one at $30 would be a whole lot better.

acad


Tesla

You know, I was gonna end after Acadia, but then I saw this stupid analyst comment that Tesla is going to fall $84, because, get this, “increasing competition.” Are there no cars sold today? Is Tesla the only automaker in the whole world? Of course not.

I’m sorry, but Tesla has competition today and has had competition since the moment Elon Musk thought about making a car. A car is a car, and the thought that because Audi or Mercedes is going to start making an electric car, people are suddenly going to stop buying Tesla’s seems crazy to me. If someone wants to buy a Mercedes, they can get one right now. I do not think the world has become entrenched enough in the thought process of buying only green cars, that everyone is now running to Tesla. Besides, just how green are electric cars? The energy to power the battery needs to come from somewhere.  They are undoubtedly better than gas but come on; you still need the energy.

By the way, once again, the proof is the Chevy Bolt, how many cars did Chevy sell so far in 2018? A crappy 4,375.  How many in 2017 total? 23,297. Btw, they cost nearly 3 times less than a Model S, so why not 3 times the sales if the electric part matter so much?

People are buying a brand; they aren’t buying it because of the engine or motor type.

Good luck tomorrow

-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 #sp500 #amazon #tesla #acadia #nvidia #netflix #jpmorgan #banks

netflix subscriber growth tesla model 3

Netflix Subscriber Growth and Tesla Model 3 Ramp May Be Accelerating


Netflix Subscriber Growth and Tesla Model 3 Ramp May Be Accelerating

Attention will soon be turning towards Netflix, which is expected to report results on Monday, April 16. Analysts are looking earnings to climb by nearly 56 percent for the quarter, while revenue is expected to rise by almost 40 percent, versus last year.

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Netflix Subscriber Growth

When it comes to subscribers, the company is guiding for 123.93 million, making for net adds of 6.35 million. When using Google trends, and Netflix subscriptions as a search term, we find that search term has been trend higher in recent weeks. Although it is not nearly as high as around Christmas, the trend is noticeable moving higher, and the keyword is much more widely search today, than a year ago.

(Google)

India?

The biggest interest, to no surprise, is surging from overseas.  India seems to be breaking out, according to the table from Google, and India is a potentially a huge market for Netflix.

(Google)

The results will surely be important for Netflix when the company reports next Monday the on April 16.


Tesla

Tesla Model 3 production continues to ramp-up according to the latest number of VINS reports to NHTSA.

Interestingly on March 23, Tesla registered 2,655 VINS, and then a week later they registered 2,041 on March 30. In its delivery report, Tesla produced 2,020 Model 3 from March 26 through April 2 and noted it planned to build 2,000 more the following week. So perhaps the number of VINS registered each week serves as pretty good guide to what the weekly production rate is. Although not perfect, because Tesla does skip over VINS numbers.


New VINS

Tesla registered nearly 4,800 VINS on April 5 and quickly turned around and registered another 2,900 VINS on April 6. Has production climbed over 3,000 per week, over the past week? Not sure about that, but it would certainly be interest to see if Tesla comes back and registers more VINS next week, giving a sense of a trend. But regardless it would suggest that production is accerlating.

Another week of strong VIN registration may be enough to catch the bears attention, and for the short-sellers to really start sweating.

Well, get all our answers soon enough.

-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: #tesla #model3 #netflix #subscribers

Tesla Model 3 Tesla's Stock Price

Levels To Watch, Midday Update For April 5


Levels To Watch, Midday Update For April 5

I wrote in the commentary last night the next test for the S&P 500 would come at 2,675, and today it got to a touch below, before pulling back some. There is a gap that needs to be filled at 2,647, so don’t lose hope should the rally retrace back to 2,650 over the balance of today.

S&P 500


VIX

The VIX has fallen below support at 20, and it is likely heading lower towards 18.

vix

Technology

The technology ETF XLK is continuing to breakout and is stalling for now at resistance around $66. A rise above $66, sends it on quickly to $67.

technoloy

Netflix

Netflix shares have broken out over $295, and I think that leads to further gains.

netflix


Facebook

I drew in a new resistance line in Facebook at $161, and that to this point has held shares from breaking out further. A rise above $161.50, likely pushes it on towards $166.

facebook

Tesla

Tesla shares have rocketed higher, but $303.50 is going to be a critical level to watch. That level served as strong support level for a long time, and now it will act as significant resistance levels. Its need to get over $304.

tesla

Amazon

Amazon is back above $1440, and a sizeable gap to fill back to near $1500.

amazon

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Micron

Yeah, Micron got a downgrade today, but look at that chart, right back to support at $49.75. It is holding, that is a positive.

Micron

See you tonight!

 

Mike

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#midday #levels #amazon #micron #tesla #netflix #tesla #vix

 

 

 

 

 

 

 

 

Stock Market Volatility May Soon Fade Away


Stock Market Volatility May Soon Fade Away

I wrote in the midday commentary that for the morning rally to have any legs the S&P 500 need to rise above 2,610 and the XLY to rise above $99.40, and we got both going into the close, with the S&P 500 closing at 2,614, and the XLY closing at $99.68.

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The big breakout came in the final hour of the day, as sentiment changed when Bloomberg reported the White House isn’t taking steps to take action against Amazon, the market started ripping higher. The S&P 500 passed the crucial first test, rising above a downtrend and support which converged at 2,600. The next test comes at 2,633, but first, the S&P 500 will need to stay above 2,600.

S&P 500

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Technology

Unlike last week, I am not getting duped by the market again, until I get a confirmation breakout in the Technology ETF, XLK. That breakout has not occurred yet, and if it should come tomorrow a rise above $65.50 will be needed.

technology

Facebook tested the lows of last week, held, and rebounded.

facebook

Alphabet shares continue to hold the $1,000 level. Did shares breakout again today, or do I have to redraw my line?

google

Tesla

Tesla reported good delivery numbers today and got pretty close to that guidance target, much better than the bears had been hoping for. But I think the critical piece is that company is still saying it will not need to raise any capital this year. Well see about that, part, but for now, the stock could move back into the $300’s.

tesla

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VIX

The VIX continues to move lower, and I’m beginning to think the reason why it hasn’t elevated to higher levels, for the most, the traders do not believe this volatility will last.

vix

S&P 500 put volume hasn’t been all that elevated, in fact, it appears relatively in line with the past year, except for the one spike in February.

SPX Put Volume Chart

SPX Put Volume data by YCharts

The put to call ratio in the S&P 500, isn’t even high or outside of the what appears to be normal levels over the past year.

SPX Put/Call Ratio Chart

SPX Put/Call Ratio data by YCharts

It would suggest that all this craziness something that may be coming to any relatively soon.  Tomorrow will give us a good clue as to whether that is the case or not.

Good Luck

-Mike

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Tags: #sp500 #tech #technology #facebook #google #netflix #vix #tesla

stock market

Tomorrow Is An Extremely Important Day For The Stock Market


Tomorrow Is An Extremely Important Day For The Stock Market

Starting today, I am experimenting with a mid-day trading update. It will be a quick snapshot of the days market action, and a couple of things I’m watching.  For now, the only way to get sent it directly to you will be through push notification. If it proves to be successful and worthwhile, I will them institute a mailing list.

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The Stock Market Continues To Slide

The stock market continues its wild ride, and there is no telling when this roller coaster will end. I was fooled into thinking that the stock market may have bottomed last week. The signs were there, but the market had a different viewpoint today. The S&P 500 got to within 20 or so point of the February lows, and that makes tomorrows trading action extremely important. If we go below that 2,530 level, I will become much more fearful of additionally declines.

S&P 500

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Watch our latest premium video, and let Mike show you exactly what he is watching and seeing take place in the stock market: What Is Going On With The Stock Market! It Is Insanity!

Technology

The XLK may be the most important of the charts to watch, because what was obvious, and something I missed, was the fact that XLK never broke out Thursday, and that should have been my clue. I think any market rally, for now, is suspect until the XLK can breakout.

technology


VIX

The VIX continues to stay around 25 or below, and every attempt in the VIX to rise past resistance has failed. I can’t seem to understand why the VIX is not increasing more sharply, in this market turmoil. Watch the VIX, closely.

vix


Facebook

Here is a positive development today, Facebook didn’t retrace to its previous lows.

facebook

Google

Google also held its previous lows as well, around 1,000.

google

Netflix

Netflix too.

netflix

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Amazon

Amazon is the only chart that looks to be getting weaker, and I continue to think the selling isn’t complete. I still see a price below $1300

amazon

Micron

Micron stopped at $49.75. It was a level we had been watching, but again I got faked out on Thursday. So let’s see if Micron can get above $52.25, that will be the real test.

amzn


Boeing

Boeing chart is completely broken, a decline to $297 seems in order.

ba

Caterpillar

Caterpillar broke some critical support as well.

cat

Honeywell

Even mighty Honeywell is looking vulnerable here.

honeywellTomorrow becomes a critical trading session for the stock market.

Good Luck!

-Mike

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© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #tech #technology #semiconductors #boeing #micron #honeywell #amazon #facebook #google #catepillar #netflix #twitter

8 Stocks and 3 Sectors To Watch For The Week Of April 2!


8 Stocks and 3 Sectors To Watch For The Week Of April 2!

The first quarter ended on a positive note, with the S&P 500 finishing Thursday higher by about 1.4 percent. It appears for now that a double bottom has been put into place on the index when looking at the intraday charts, and we are going to want to see the momentum carry through on Monday morning.

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Sectors To Watch:

Technology

The technology ETF ($XLK) managed to finish just below its uptrend line, which again is disappointing, but still, the overall longer-term trend continues to be higher. We need to watch for the XLK to continue to hold the longer-term uptrend, currently around $64. That is the most important level to watch.

technology


Biotech

Biotech continues along its upward trend as well, that has been in place since last year. Additionally, a symmetrical triangle appears to be forming, and that could be a sign the group is gearing up for a break out at some point in the second-quarter, and perhaps a strong second-half of 2018.

biotech


Semis

The semiconductors continue to look strong as well and are entrenched in an upward direction as well.

semiconductors

Stocks To Watch:

Facebook

Facebook is still the stock to watch in this market, and for now, the trend in Facebook is higher, and like the broader S&P 5oo, it appears a double pattern is in place, and that is good. A big test comes at $166, that is the next resistance level.

Facebook


Google

Google managed to clear two downtrends on Thursday, and that is a positive. $1078 is the next level to watch.

google

Amazon

Amazon has a big gap to fill back at $1,500, so look for a rise. But should Amazon fail at $1,500, I think it moves lower, towards $1250.

amazon

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Netflix

Netflix closed right at resistance around $295. Which way does it go? I think it goes higher, especially as the earnings preview notes start coming out.

netflix

AMD

AMD found a nice bounce off of support at $9.80, a bounce to $10.70 is the next level to watch.

amd


Micron

Micron also managed to turn higher around support at $52.25, and an increase to $55.60 is the next level to watch over the short-term.

mu

Twitter

Twitter filled the giant gap last week, and that means you should watch for the stock to start working higher, the next big test comes at $36.75

twitter

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Tesla

It doesn’t get any bigger than Tesla this week, with first quarter delivery numbers, and of course the Model 3 ramp update. The Bloomberg Model 3 shows Tesla trending towards producing about 2,200 cars per week. While the company also registered about 2,050 VIN’s in a seven day period through March 30. My gut says the press release reads something like, “In the final few days of the quarter, Tesla was producing cars at a rate that would equal 2,500 Model 3’s per week”.

The stock found a very big bounce off of it long-term support around $245, and that means the next test comes around $290. Watch for a bounce this week, if those Model 3 numbers come around 2,500. We should know our answer no later than after the close of trading on April 3.

tesla

Good Luck!

-Mike

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Tags: #sp500 #tech #technology #semiconductors #biotech #micron #tesla #amazon #facebook #google #amd #netflix #twitter