Market 2017-10-20 (GE, SKX, CELG and more)
New records again ... Everybody (nearly) in green
GE reported their Q3 earnings, in which EPS got a big hit although revenue beated. GE reached multi-year low $22.10 at the opening (so close to trigger my buy order @ $22, damn it! I have been calling $22 for a few times recently) before recovering all the loss and finishing green (+1.1%). After the panic sale as they released the ER, investors realize that GE is cooking the book for EPS growth in 2018. I am still suspicious about their turn-around story and will watch it closely.
CELG (-10.8%) dragged the whole healthcare sector down. In AH yesterday, Celgene announced to discontinue two studies evaluating GED-0301 (mongersen) for the treatment Crohn's disease (Phase 3 RESOLVE (CD-002) and the extension trial, SUSTAIN (CD-004)). The planned Phase 3 DEFINE study (CD-003) in Crohn's will not be initiated. The company is waiting to review the data from the Phase 2 study in ulcerative colitis to determine the next steps. This will result a writedown >$500M (estimated) in their ER. Its fast growth story (revenue growth > 15% for many quarters) will take a pause. I will watch CELG closely for good entry chances. At this moment, I cannot estimate a good entry price. However, I might start to build my position if it drops below $120.
SKX sky-rocked +41.5%, which also lifts UA, UAA, LB.... Nice ER burned the shorters. When I look into the ER, the EPS beat benefits largerly from low tax rate (9.4% Vs 24.2% in 16Q3). They expect 2017 tax rate is 13%. I will stick with my NKE for now.
Oilfield services firms Schlumberger (SLB, ER in-line) and Baker Hughes (BHGE, ER missed) warned on Friday of a challenging fourth quarter for the industry. Oil rigs fell by 7 to 736 and gas rigs slumped by 8 to 177. With cold weather approaches, I expect rig counts will continue to drop and crude/NG price will eventually rebound moderately (there will be a lag).
ESRX: sold all my shares for 3% profit. Health groups and insurers are praising a bipartisan bill to stabilize ObamaCare markets, urging Congress to take action on it. I have little confidence in Congress and Trump. If the process goes back and forth, I will be able to buy back ESRX at lower price.
Sold GNC for 5% profit. It's a very small position, just playing with it due to its big beta.
Reduced 15% M for 8% profit. As I mentioned on Wednesday, I bought M @ $19.5 when I was on vacation by setting up an automatic buying order. It then weighted almost 10% in my portfolio. I am happy with a quick profit within a week and lower the weight to 8%.
Bought more O to lower my average price to $56. I believe the current driving force of this market is rotation among different sectors. For instance, cash flows from healthcare to retailers today. Such rotation is good for active traders to gain some profit in a short period. Quick trades also help me to maintain my cash level around 20% so much I don't have to borrow if there are good buying opportunities.
GE reported their Q3 earnings, in which EPS got a big hit although revenue beated. GE reached multi-year low $22.10 at the opening (so close to trigger my buy order @ $22, damn it! I have been calling $22 for a few times recently) before recovering all the loss and finishing green (+1.1%). After the panic sale as they released the ER, investors realize that GE is cooking the book for EPS growth in 2018. I am still suspicious about their turn-around story and will watch it closely.
CELG (-10.8%) dragged the whole healthcare sector down. In AH yesterday, Celgene announced to discontinue two studies evaluating GED-0301 (mongersen) for the treatment Crohn's disease (Phase 3 RESOLVE (CD-002) and the extension trial, SUSTAIN (CD-004)). The planned Phase 3 DEFINE study (CD-003) in Crohn's will not be initiated. The company is waiting to review the data from the Phase 2 study in ulcerative colitis to determine the next steps. This will result a writedown >$500M (estimated) in their ER. Its fast growth story (revenue growth > 15% for many quarters) will take a pause. I will watch CELG closely for good entry chances. At this moment, I cannot estimate a good entry price. However, I might start to build my position if it drops below $120.
SKX sky-rocked +41.5%, which also lifts UA, UAA, LB.... Nice ER burned the shorters. When I look into the ER, the EPS beat benefits largerly from low tax rate (9.4% Vs 24.2% in 16Q3). They expect 2017 tax rate is 13%. I will stick with my NKE for now.
Oilfield services firms Schlumberger (SLB, ER in-line) and Baker Hughes (BHGE, ER missed) warned on Friday of a challenging fourth quarter for the industry. Oil rigs fell by 7 to 736 and gas rigs slumped by 8 to 177. With cold weather approaches, I expect rig counts will continue to drop and crude/NG price will eventually rebound moderately (there will be a lag).
My Trades Today
ESRX: sold all my shares for 3% profit. Health groups and insurers are praising a bipartisan bill to stabilize ObamaCare markets, urging Congress to take action on it. I have little confidence in Congress and Trump. If the process goes back and forth, I will be able to buy back ESRX at lower price.Sold GNC for 5% profit. It's a very small position, just playing with it due to its big beta.
Reduced 15% M for 8% profit. As I mentioned on Wednesday, I bought M @ $19.5 when I was on vacation by setting up an automatic buying order. It then weighted almost 10% in my portfolio. I am happy with a quick profit within a week and lower the weight to 8%.
Bought more O to lower my average price to $56. I believe the current driving force of this market is rotation among different sectors. For instance, cash flows from healthcare to retailers today. Such rotation is good for active traders to gain some profit in a short period. Quick trades also help me to maintain my cash level around 20% so much I don't have to borrow if there are good buying opportunities.
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