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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

Autumn 2019

Having just reached 76 and after 30 wonderful years owning the prettiest farm in America, we have decided that a move to a Madison, Wisconsin apartment while maintaining a small cabin in the area is the proper way to begin the next chapter of our lives.

Of course, we plan on continuing Lemley Yarling Management Company- Old traders (52 years and counting) never quit until ----.

With that in mind we have listed our farm for sale.

15 November 2019

Markets are meandering as tax loss selling and rotation from the no earnings wonder stocks to value growth takes place.

During the week we added Twitter which is priced at only 12X earnings.

We currently own:

ViacomB, & CBS, to merge in December with VIAB shareholders receiving 0.59625shres of CBS for each VIAB share.

Shake Shack under pressure from less than earnings and tax loss selling because down from $125 to $62 this year.

Beyond Meat is up from $45 (first trade) and down from $239 this year to $80. And so, tax loss selling is occurring coupled with the opening of the ability of insiders to sell stock in the open market.

Twitter is remarkably priced at 12 times earnings.

Nokia is down because of less than quarterly sales and less than earnings. Own for 5G rollouts. Nokia has $7 billion in cash versus $3 billion in Long term debt ($1 per share for a stock at $3.50).

Tapestry (Coach and Kate Sade) had a disappointing quarterly report with a 5% yield.

Under Armour is off because of tepid quarterly numbers and the news that its previous revenue numbers are being investigated. Our take is that the investigation news refers to years prior to 2017 and that present numbers are OK.

Macy's is the retail Department store that the gurus hate. P/E of 6X and yield is 9%.

Michael's is the arts and craft store chain that is 50% owned by Bain Capital. MIK has too much debt but is priced at 4X earnings. We have traded profitably this year.

Ascena is our busted retail long shot hope.


8 November 2019

Markets continued to meander higher during the week. We added two low flying high flyers as the beginning of our year end buying for a January pop. We were overly aggressive on the Shake Shack purchase and reduced it a few days later and added Beyond Meat with the funds. Shake Shack is under pressure at $65 after trading at $105 earlier this year. SHAK is a favorite of the growth versus earnings crowd and we think a lot of day traders were in the stock. Given the profits many folks have this year, the high flyers like SHAK and Beyond Meat (we purchased at $80 down from $239- yes $239- earlier this year) are obvious tax loss candidates.

We also added Under Armour when it dropped 20% on news that it has been under investigation for accounting issues since 2017. Our thought is that this is old news in that UA has known of this investigation for 2 years so that recent sales and earnings numbers are probably OK. Coupled with the resignation of founder Kevin Plank as CEO -retaining the chairmanship-our view is that the reaction is overdone. Earnings and sales announced this week were fine although going forward forecasts were less than the street expected. We've been trading the shares profitably for two years.

Finally, we repurchased Michaels, Tapestry and Macy's to continue trading them as we have done -profitably- this year.

Since we used the AT&T proceeds from the profitable sale last week most accounts remain with very comfortable cash positions.

3 degrees above this morning, too too early. Brrrrrrrrrrrrrrrrrr.


Under Armour:

Goldman Sachs is sticking with its buy rating on Under Armour, even after shares plunged following disappointing quarterly update and the revelation of a federal investigation into the apparel maker.

"We come away from results with our long-term thesis intact," Goldman Sachs analyst Alexandra Walvis wrote in a note to investors. The firm removed the stock from its list of favorite stocks, but maintained a buy rating.




Shake Shack reported earnings that beat expectations; however, revenue and same-store sales fell short of Wall Street estimates, sending its stock reeling.

Following the results, shares of the burger chain, which closed Monday's trading up nearly 2% at $84.30 — tanked by more than 12% in after-hour trading. Shake Shack shares opened Tuesday's session down more than 17%.

Here were the numbers for Shake Shack's third quarter, compared to Bloomberg-compiled estimates:

Revenue: $157.8 million vs. $157.92 million expected

Adjusted earnings per share: 26 cents vs. 21 cents expected

Same-store sales: +2% vs. +2.9% expected

The burger chain boosted its full-year revenue guidance and now expects between $592 million to $597 million, up from the previously expected $585 million to $590 million. However, Shack slashed its same-store sales growth expectations for the full year. It now anticipates 1.5% growth, down from the previously expected 2% growth.


Beyond Meat Inc. shares rose 3% in Tuesday premarket trading after the plant-based meat maker was upgraded to outperform from market perform at Bernstein based on optimism about stock price upside. Beyond Meat maintained its $106 price target. On July 26, Beyond Meat stock closed at a high of $234.90. Shares fell 2.7% on Monday to close at $79.79. Shares fell last week despite reporting its first profit as the lockup on Beyond Meat stock expired. "While the stock could remain volatile due to more insider/pre-IPO shareholder selling in the coming days, we believe the risk/reward skews towards the upside at the current level," analysts led by Alexia Howard wrote. Bernstein analysts say Beyond Meat's trial of the Beyond P.L.T. burger at McDonald's Corp. in Canada hasn't been a "blowout," but in a best-case scenario, Bernstein says it could take Beyond Meat sales from $280 million in fiscal 2019 to $910 million in fiscal 2021. Beyond Meat stock has sunk 54.7% over the last three months while the S&P 500 index is up 8.2% for the period.


Tapestry on Tuesday reported that first quarter net sales fell 2% to $1.36 billion. By brand, Coach net sales rose 1% year over year to $966 million, gaining some 100 basis points through global e-commerce; Kate Spade net sales fell 6% to $306 million; and Stuart Weitzman net sales fell 9% to $87 million.

Comparable sales at Coach edged up 1% but tumbled 16% at Kate Spade, according to a company press release. The company didn't provide total comps or results for Stuart Weitzman in that metric.

Gross profit in the quarter fell to $914 million on a reported basis, from $935 million a year ago, while gross margin for the quarter contracted to 67.3% from 67.7%. Net income fell to $20 million on a reported basis, from $122 million in the year-ago quarter.


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