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Lemley Yarling Management Co
15624 Lemley Drive
Soldiers Grove, Wi 54655
Bud: 312-925-5248

Comments on activity in client accounts

18 May 2018

As May winds down it seems time to take some money off the table.

And so, we took profits in Symantec, Abercrombie, Kroger, Chico's and scratch profits in Marathon, Devon, DISH, Michaels and Bed Bath. We sold Bristol Myers for a plus/minus.

We are not abandoning the markets. Rather we are locking in some profits in keeping with the sell in May and go away theory. Also the markets are vacillating and may be facing for a longer rest.

We are keeping our food stocks including Campbell which we added this week right before it lost 10% on Friday. We knew earnings were coming and thought they would be OK. Obviously they weren't.

Mr. Market has a way of injecting reality into our thinking. We have been trading CPB profitably for the last year as it slowly moved lower. And so we bought at $39 yesterday- a trading level we used profitably twice before- only to wake up this morning to find the shares trading at $34 on lousy earnings and the removal of its CEO. The Dorrance family owns 45% of the company so they may have to cut short their vacation at Cannes next winter if the share price doesn't improve.

We have been suffering with our food stocks — Hain and General Mills — and now Campbell; But CPB and GIS both yield over 4% and as Hain moves lower it becomes an even more attractive takeover target for exposure in the fast growing organic food markets. Hopefully it doesn't drop so low that a takeover leaves us underwater.

We also added Sprouts this week after we took our rebound profit Kroger. We bought Kroger when it dropped on disappointing earnings and Sprouts dropped on May 4 on better than earnings but a disappointing forecast.

We ended the week owning: AT&T, Walgreen Boots, GE, Campbell's, Hain Celestial, General Mills, Sprouts, Deutsch Bank and Rite Aid.

Thankfully, it's finally green and warm in the land of milk and honey.

11 May 2018

When the Trumpster tore up the Iran deal we decided to sell GM for a scratch and buy Devon Oil back. We also used money raised taking nice trading profits in 3D, Stratasys and Under Armour to gingerly step back into Marathon Oil for outside the Permian basin exposure.

Paul Waldman in the Washington Post well expressed our sentiments on the terrible Iran decision:

This decision is deeply uninformed, utterly illogical, and inimical to the interests of the United States, taken for the pettiest of personal reasons and done with absolutely no plan for what to do next. In other words, it's pure Trump.

We added to Hain Celestial- now our largest position and well underwater- for now- when it dropped on analyst disappointment in earnings. And we traded Verizon in a few accounts for a nice $2 per share two day gain.

On Friday we bought Symantec when it crashed 30% on news. (See below). Whatever the problem, this drop places the shares at a very cheap 12 times earnings.

Symantec loses a third of its value after news of internal audit, on pace for the stock's worst day in 17 years

https://www.cnbc.com/2018/05/11/symantec-symc-loses-a-third-of-its-value-after-news-of-audit.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo

And

https://www.marketwatch.com/Story/symantec-stock-downgraded-en-masse-as-analysts-fret-about-internal-audit-2018-05-11?&siteid=yhoof2&yptr=yahoo

Selling On Amazon Boosts Traffic to Chico Stores

https://www.investopedia.com/news/selling-amazon-boosts-traffic-chico-stores/?partner=YahooSA&yptr=yahoo

Hain Celestial Group Inc. shares slid 8% Tuesday to their lowest level since January of 2013,

https://finance.yahoo.com/m/70e961c4-56c7-3a5e-9b86-ae2f830e79db/hain-celestial-shares-slide.html

Inside 'iPhone City,' the massive Chinese factory town where half of the world's iPhones are produced

http://www.businessinsider.com/apple-iphone-factory-foxconn-china-photos-tour-2018-5#we-met-liu-a-31-year-old-from-qianhoucun-an-hours-drive-from-zhengzhou-liu-and-her-husband-have-run-one-of-the-larger-restaurants-serving-workers-since-the-factory-opened-in-2010-we-dont-make-special-food-here-liu-told-business-insider-we-just-make-whatever-is-cheap-and-will-fill-the-workers-up-11

GE and Baker Hughes GE

https://www.bloomberg.com/gadfly/articles/2017-11-15/baker-hughes-ge-shouldn-t-mention-it

Oil at $100 Is a Possibility Next Year, Bank of America Says

https://www.bloomberg.com/news/articles/2018-05-10/oil-at-100-is-a-possibility-next-year-bank-of-america-says

Here we go again

https://www.bloomberg.com/news/articles/2018-05-11/leveraged-loan-safety-net-may-prove-to-be-frayed-for-investors

*****

4 May 2018

The up and down or down and up 1% days are here to stay. Thursday's 400 point drop was supposedly caused by a big boy/girl selling $4 billion in futures which in a $15Trillion marketplace is small potatoes but does demonstrate the lack of liquidity that exists.

During the week we added Stratasys and 3D systems. We have traded these 3D printing issues with middling success for the past few years. We also repurchased Campbell Soup for another trade and moved back into Abercrombie with purchases last Friday and this week.

5 inches of rain this week is enough to pop the morels and blossom the fruit trees.

Abercrombie

https://www.thestreet.com/investing/abercrombie-and-fitch-ceo-talks-to-thestreet-about-its-future-14567526?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

Under Armour

https://www.thestreet.com/investing/under-armour-tops-earnings-estimates-14573924?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

Apple

AAPL is going to buy back $100 billion in stock -at the all-time high- and increase its dividend. And so goes the Trumpster repatriation tax break that suggested the repatriated earnings would be used to crest jobs

Things Jeff Bezos Could Spend His Hundred Billion Dollars On Instead Of Spaceships To Space

https://wonkette.com/633384/a-thing-jeff-bezos-could-spend-his-hundred-billion-dollars-on-instead-of-spaceships-to-space

Newell (NWL) Beats on Q1 Earnings, Revenues Lags Estimates

https://finance.yahoo.com/news/newell-nwl-beats-q1-earnings-120412562.html

And

https://www.wsj.com/articles/newell-finds-waddington-buyer-and-puts-more-brands-up-for-sale-1525432751?mod=yahoo_hs&yptr=yahoo

*****

 


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15624 Lemley Drive Soldiers Grove, Wi 54655 312-925-5248
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