29 July 2016
Oil didn't bounce at $45 as we thought it would and is now at $40 down 20% from its high of $50. So our initial buys at $45 of MRO, BP and XOP are slightly underwater but not abandoned. We did take a loss on part of MRO and placed the money in Devon and Marathon Petroleum for a bit more diversification within the industry.
During the week we added Skechers, the shoe folks, when the stock dropped 20% on less than earnings, it is down 50% from its high and priced at one times revenues while Nike sells at three times and Adidas is priced at two times.
Twitter also dropped 20% on a disappointing report and we bought a reasonable amount for a trade/hold. Finally we added Sprouts Food Markets when Goldman upgraded to a buy. Goldman put a sell on it in May before less than earnings and a big price drop. Goldman banished Whole Foods from its buy list on Tuesday at the same time it was upgrading SFM. Two days later Whole Foods delivered less than and dropped 10%. SFM announces on August 4 and we are betting on Goldman being right for the third time. if not we have room to add more.
Even with these purchases we remain 70% or more cash in large accounts and 50% and more in smaller.
As we enter the dog days of summer (dog days: the sultry part of the summer, supposed to occur during the period that Sirius, the Dog Star, rises at the same time as the sun: now often reckoned from July 3 to August 11. a period marked by lethargy, inactivity, or indolence), we expect markets to mender awaiting some event to move them up/down.
Shares of Sprouts Farmers Market are advancing 1.83% to $23.88 this morning after Goldman Sachs upgraded the stock to "buy" from "sell".
The firm maintained its price target on the Phoenix-based grocery store at $29, saying it is a disruptive company in the grocery market, providing an affordable, healthy alternative, TheFly reports.
Goldman analysts expect the company to benefit from the continued focus on wellness given its natural, "farmers market" style, according to TheFly.
Sprouts Farmers Market is slated to report fiscal 2016 second quarter results next week. Analysts project the company will post earnings of 25 cents per share on revenue of $1.05 billion.
Shares of Skechers USA Inc. plunged Friday after the footwear maker reported a fall in second-quarter profits despite recording sales growth. Manhattan Beach-based Skechers (NYSE: SKX) reported earnings of $74.1 million, or 48 cents per share, for its quarter ended June 30, down from $79.8 million, or 52 cents per share, in the year-ago period. The company blamed foreign currency exchange rates and higher general and administrative expenses for the decline. Sales rose 9.7 percent to $877.8 million from $800.5 million, lifted by growth in its international subsidiary and joint venture businesses. However, its domestic wholesale business were hurt by shipments being pulled from April into March.
Disappointing earnings revive speculation on Twitter's future
SAN FRANCISCO (Reuters) - Twitter Inc disappointed investors yet again on Tuesday with second-quarter earnings that missed estimates and a lower-than-expected outlook, reviving chatter about a possible sale of the company and the future of Chief Executive Officer Jack Dorsey.
With the stock falling almost 15 percent Wednesday, Twitter shares are down 50 percent since Dorsey returned last summer to the helm of the social media company he co-founded.
Twitter continues to show almost no growth in its user base of a little over 300 million, an ominous sign, and advertising revenues are showing surprising softness; the company cuts its forward revenue estimate for the next quarter to $590 million- $610 million, while analysts had been expecting $681 million.
At a market cap of about $11 billon, compared with more than $40 billion at its peak, Twitter could now be a more attractive takeover target. CNBC commentator Jim Cramer, for one, suggested that Twitter could be rolled into the combined Yahoo-AOL.
Verizon, which owns AOL, this week said it would buy Yahoo for $4.8 billion. Google, Disney and Apple have also been mentioned as possible acquirers of Twitter over the years.
Twitter surged briefly earlier this month after Microsoft announced its acquisition of LinkedIn, as investors hoped for a similar deal for Twitter.
Still, a person close to the board said it was highly unlikely that there would be any move to oust Dorsey or actively seek a sale of the company anytime soon. Dorsey also serves as CEO of payment company Square, a dual role that many have questioned.
The live-streaming video deals with the major sports leagues that Dorsey and his executive team touted in an investor call Tuesday could add to the company's appeal, said James Cakmak, analyst at Monness, Crespi, Hardt & Co.
"The good news is these content deals could potentially make (Twitter) a more attractive acquisition target for a media company looking to expand digital distribution," he said.
Twitter has struggled to translate its high public profile into the kind of user growth that has propelled Facebook, which now boasts 1.71 billion customers. The company has also suffered from management turmoil since its earliest days; former CEO Dick Costolo, who was credited with quickly building the company's advertising operations, resigned under pressure last June.
Twitter's board of directors has been reconstituted under Dorsey, with the addition of former Google executive Omid Kordestani as executive chairman and new members including former Facebook CTO Bret Taylor, U.K. internet entrepreneur Martha Lane Fox and BET Networks chair Debra Lee.
Dorsey outlined a turnaround plan earlier this year to focus on five areas: Twitter's core service, live-streaming video, nurturing the site's "creators and influencers," creating an environment in which users feel safe and building better relations with third-party developers.
Some analysts say Dorsey needs more time to reap the benefits of his turnaround plan, but patience is waning.
Robert Peck, analyst at SunTrust, pointed to several big concerns: lack of any uptick in user numbers or engagement, faltering ad sales, and questions about the company's competitiveness in live video given rival initiatives by Facebook and Alphabet Inc's YouTube.
When analysts asked Dorsey on Tuesday the value in remaining an independent company, he said that "there's so much farther for us to go" as a company and business of importance.
"I have a lot of confidence in our ability and that our five priorities are the right ones," he said.
For those clients of LY & Co and other
interested persons the Quarterly Report on the routing of customer orders under