Market 2018-02-01 (EBAY & PYPL, BABA, UPS, and more)

Market today: Tech down, Treasury down, Dollar down.

Treasury: 30-year -1.28%. 10-yr -0.49%. 5-yr -0.22%. 10-year note jumps to 2.78%.

Commodities: Crude +2.18% to $66.14. Gold +0.74% to $1,353.10.

The timing I mentioned yesterday happens again. Selling happened @ 1:30 pm and 3:00 pm.

Winners

EBAY +13.8% to all-time high after strong ER. Ebay is dropping PayPal (PYPL -8.1%) as its payment processor. Netherlands-based Adyen will gradually take PayPal's spot beginning this year, and will handle a majority of transactions in 2021.

FB +3.3% also reached all-time high today after strong ER and bright future. Analysts are convinced by the growing Ad price, and raising their PT.

Defense stocks are doing well today, for instance, GD +1.2%, LMT +0.7%....

Financial stocks are also performing well. GS +1.6%, MS +1.6%, BAC +1.6%, JPM +1%, C +0.9%..

Macau gross gaming revenue increased 36.4% in January, according to the Gaming Inspection and Coordination Bureau. LVS +0.9%, WYNN +3%, MGM +1%.

T +4.6% jumps after ER.

Losers

BABA -5.9% after reporting Q3 EPS of $1.63 misses by $0.04. Revenue of $12.76B (+51.5% Y/Y) beats by $400M. FY18 guidance was increased to a growth of 55% to 56% (was: 49% to 53%), which would represent a range of about $245.3B to $246.9B (consensus: $242.6B). Alibaba delivers solid ER and guidance, I believe the selloff is profit-taking. Other Chinese Tech stocks are also affected negatively. I will initiate my position if the selloff continues.

UPS -6.1% takes a hit despite ER beats. The company plans to make more than $12B in investments to expand its logistics network, increase pension funding and position the company to "further enhance share owner value." Investors were expecting a dividend hike, which may trigger the selloff. This is also a buying opportunity.

SQ -5.2%, dragged down by PayPal.

QCOM -2.1% despite ER beats, amid light guidance --- Q2 guidance: Revenue, $4.8-5.6B (consensus: $5.57B); EPS, $0.65-0.75 (consensus: $0.86).

CMG -3.1%, amid a downgrade to Sell from UBS with $290 PT.

REITs plunge as treasury yields surge, IYR -1.7%, O -3%, MAA -3.8%, OHI -3%...

Guess (GES -17.7%) plunges a tweet from supermodel Kate Upton "MeToo" moment against their creative director.

AH Earnings

Amazon (AMZN -4.3%) Q4 EPS of $3.75 easily beats consensus of $1.83. Revenue of $60.45B (+38.2% Y/Y) beats by $620M (Note: revenue number includes WholeFoods this year). Guidance from Amazon was roughly in-line at Q1 revenue of $47.75B to $48.71B vs. $48.7B consensus. Shares +6.3% in AH.

Apple (AAPL +0.2%): Q1 EPS of $3.89 beats by $0.04. Revenue of $88.3B (+12.7% Y/Y) beats by $670M. Downside Q2 guidance: revenue, $60-62B (consensus: $65.62B) Shares reverse from red to green now in AH.

Alphabet (GOOG -0.2%): Q4 EPS of $9.70 misses by $0.37. Revenue of $32.32B (+24.0% Y/Y) beats by $440M. Board authorizes the company to buy back up to $8.6B of Class C stock. Shares erase early loss in AH.

Amgen (AMGN -0.3%): Q4 EPS of $2.89 misses by $0.14. Revenue of $5.8B (-2.7% Y/Y) misses by $30M. Shares -3.5% in AH.

Tableau Software (DATA +0.4%): Q4 EPS of $0.12 beats by $0.09. Revenue of $249.4M (-0.5% Y/Y) beats by $8.72M. Shares +14% in AH.

GoPro (GPRO +0.5%): Q4 EPS of -$0.30 misses by $0.19. Revenue of $334.8M (-38.1% Y/Y) misses by $5.28M. Shares -4%. It is dead to me.

Deckers Outdoor (DECK +1.8%): Q3 EPS of $4.97 beats by $1.15. Revenue of $810.48M (+6.6% Y/Y) beats by $62.07M. Shares +7.7% in AH. Well, UGG is doing well in winter.

Mattel (MAT -3.3%): Q4 EPS of -$0.72 misses by $0.89. Revenue of $1.61B (-12.0% Y/Y) misses by $80M. Shares -8.2%. The company should sell itself.

Visa (V +1.2%): Q1 EPS of $1.08 beats by $0.10. Revenue of $4.86B (+9.0% Y/Y) beats by $20M. No surprise after Master Card (MA) beat this morning. However, shares -1.8% in AH.

My Trades Today


  • Added more CELG and O.
  • Initiated position in UPS @ $118.8.

Earnings Tomorrow


  • pre-market: AZN, CHTR, CVX, EL, MRK, WETF, WFT, XOM


Comments

  1. UnknownFebruary 1, 2018 at 4:29 PM

    AMZN adjusted EPS is $2.15, still a solid beat.

    ReplyDelete
  2. UnknownFebruary 1, 2018 at 4:30 PM

    From Apple's call:

    Paid subscriptions among services passed 240M (+30M Q/Q).

    Apple Watch unit sales up 50% for the quarter with Watch 3 volume twice that of Series 2 last year.

    Apple expects 13-17% unit growth of higher-priced iPhones with revenue $7-9B higher on the year despite downside Q2 guidance.

    The company plans to reduce its net cash balance ($163B by end of 18Q1) to “approximately zero” --- details will be discussed in April.

    ReplyDelete
  3. MichaelFebruary 1, 2018 at 7:01 PM

    Any thoughts on REGN?

    ReplyDelete
    Replies
    1. UnknownFebruary 1, 2018 at 7:17 PM

      REGN is still in the downtrend channel, which started last July. There is no sign of bottom to me yet.

      Delete
  4. UnknownFebruary 1, 2018 at 7:11 PM

    UPS looks like dead money after the quarterly print - much higher than expected spending spooked investors and will weigh down in the margins in following quarters.

    ReplyDelete
    Replies
    1. UnknownFebruary 1, 2018 at 7:23 PM

      New spending to invest in logistics network (facilities, aircraft and vehicles) will eventually cut the cost. FY guidance of EPS $7.07-7.37 looks great to me.

      Delete
    2. UnknownFebruary 1, 2018 at 7:45 PM

      For transport and most of the industrials stocks in this earnings season, beat and raise haven’t been enough; margins have been a much more important focus. Transport and Industrials investors generally don’t appreciate higher than expected investment spending and tend to hate near term spike of capex. UPS will be range bound (at best) and lag the transport group at least until next earnings season.

      Delete
    3. UnknownFebruary 1, 2018 at 8:03 PM

      Thank you for your information. I need to do more homework on this sector.

      Delete
    4. UnknownFebruary 1, 2018 at 8:28 PM

      Check out XPO - last mile logistic management, with a strong tie to AMZN (strong print after-market today) and e-commerce. Much better stock than UPS particularly for buying on weakness. Stock is still under valued. LTLs are also much better stories (while expensive) - ODFL SAIA.

      Delete
    5. UnknownFebruary 1, 2018 at 8:43 PM

      A lot of thanks for sharing!

      Delete
  5. no oneFebruary 1, 2018 at 9:23 PM

    any thoughts about NTES?

    ReplyDelete
    Replies
    1. UnknownFebruary 1, 2018 at 9:34 PM

      I am expecting ER beats next Wednesday. They have long history of beating consensus #s. If stock price dips after ER, I will add more shares.

      Delete
  6. dvdmvJune 22, 2018 at 2:28 AM

    I really like what you guys are up too. This sort of clever work and coverage! Keep up the great works guys I've incorporated you guys to my postroll. ειδησεισ απο την ελλαδα τωρα

    ReplyDelete
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