Lemley Yarling Management Co
309 W Johnson Street
Madison, WI 53703
Comments on activity in client accounts
25 May 2018
This week we decided to take our lumps in GE and to get rid of our trading anchovies (Campbell Soup, General Mills, Abercrombie (earnings come next week and we don't want to push our luck) to raise cash and concentrate on fewer issues.
And so we now hold AT&T with a 5% yield, Walgreens Boots, Hain Celestial, Deutsch Bank and Hewlett Packard Enterprises which we bought this week when it dropped 10% on a cautious outlook even though earnings and revenues for the quarter were above expectations.
We wish you a reflective Memorial Day
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
Selling On Amazon Boosts Traffic to Chico Stores
Hain Celestial Group Inc. shares slid 8% Tuesday to their lowest level since January of 2013,
Inside 'iPhone City,' the massive Chinese factory town where half of the world's iPhones are produced
GE and Baker Hughes GE
Oil at $100 Is a Possibility Next Year, Bank of America Says
Here we go again
Comments on activity archives
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