Spekulatius Posted October 29, 2020 Posted October 29, 2020 Spec, what are your feelings these days about HII and GD? They got beat up pretty good since we last talked about them. I am not too keen on HII, they aren’t good operators and in addition to being lousy operators, what they are doing is not really technologically advanced work ( shipyard) and that’s where defense spending is going, imo. I had a small position, it reconsidered and sold out about flat. GD is performing quite well and they seem to operate much better in business comparable to HII (Electric boat) and they are also doing some more technologically sophisticated work in other business lines.
Viking Posted October 29, 2020 Posted October 29, 2020 BAM and SAP.TO CAN$ (moved another 10% of my portfolio out of US$)
BRK7 Posted October 29, 2020 Posted October 29, 2020 NVEC - small cap ($225m mkt cap). Consistent, after-tax net income margins of 45-55% year-after-year. Dividend yield of 8.5% currently. Nice, safe, boring, little Minnesota tech company. wabuffo Just took a quick look. Looks great in terms of margins, and balance sheet. But, then I discovered that 5-year revenue CAGR is -6%. Is the business in secular decline?
wabuffo Posted October 29, 2020 Posted October 29, 2020 Is the business is secular decline? It's hard to say. It makes specialized nanotechnology sensors that have very specific and defined applications in medical and industrial applications. Its main markets are hearing aids, pacemakers, and various industrial uses. While it's trying to innovate, I think its revenue trends follow these three markets. Due to the pandemic, I think its pacemaker business was down quite a bit this summer (but is coming back as surgeries were deferred but not cancelled). I think that unless one of its end customers gets out-innovated (say Abbott in pacemakers and NVEC loses business because Abbott loses business), it's probably a stable, annuity type of business. But I'm not sure about that. wabuffo
rkbabang Posted October 29, 2020 Posted October 29, 2020 Is the business is secular decline? It's hard to say. It makes specialized nanotechnology sensors that have very specific and defined applications in medical and industrial applications. Its main markets are hearing aids, pacemakers, and various industrial uses. While it's trying to innovate, I think its revenue trends follow these three markets. Due to the pandemic, I think its pacemaker business was down quite a bit this summer (but is coming back as surgeries were deferred but not cancelled). I think that unless one of its end customers gets out-innovated (say Abbott in pacemakers and NVEC loses business because Abbott loses business), it's probably a stable, annuity type of business. But I'm not sure about that. wabuffo It looks like they are spending 14-15% of sales on R&D. But this is a really tiny company. They have only 46 employees! I wonder how many of those are engineers and/or scientists? Most chip companies have teams larger than that working on a single product. That said their balance sheet is great, their margins are excellent. It looks like they can keep paying this dividend for years if they want to. I just bought a small position this morning.
Cardboard Posted October 29, 2020 Posted October 29, 2020 QQQ Nov 6 puts. It is highly risky since really short duration and many big tech guys report tonight. My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations. We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown. There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months. Cardboard
Gregmal Posted October 29, 2020 Posted October 29, 2020 QQQ Nov 6 puts. It is highly risky since really short duration and many big tech guys report tonight. My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations. We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown. There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months. Cardboard I think this is pretty spot on. As we've otherwise previously discussed, I just dont have the conviction necessary to make a macro type directional bet like I did in early September, at the moment. But I think your read is on point. For one, tech is priced pretty richly. Two, covid now, is pressing again and forcing repeated behavior similar to the first go around which will increase enthusiasm about these names. However at the same time, its always darkest before the dawn and while covid seems to be "spiraling out of control" according to some, we are also closer than ever to a vaccine and by any stretch, likely this time next year it will be a non story. So with tech co's trading at obscene valuations, the first sight signals indicate further robust demand, but the mid duration outlooks much of this dissipating or reverting somewhat, bleeding out the enthusiasm seems likely. I own but am underweight MSFT. I really want to add. The numbers were excellent, but Im holding off for now.
Spekulatius Posted October 29, 2020 Posted October 29, 2020 ^ The problem with puts is if they are adequately priced? To me the prices paid right now seem very high, as you would expect with a VIX of ~36. As mentioned before, the VIX never really got below 25 even in a steadily rising market. VIX 25 is a fairly high number, historically speaking.
drzola Posted October 29, 2020 Posted October 29, 2020 Started a position in ATCO as I was th one who got the opening fill under $8.50 a share Nice eh!
Gregmal Posted October 29, 2020 Posted October 29, 2020 QQQ Nov 6 puts. It is highly risky since really short duration and many big tech guys report tonight. My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations. We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown. There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months. Cardboard Nice start. QQQ's down about 1% a/h. As described, the MSFT experience indeed with FB, AMZN and AAPL. Google was super impressive but not really one of the stocks I view as having been put on steroids by the covid situation, so a bit different than some of the others.
Spekulatius Posted October 29, 2020 Posted October 29, 2020 QQQ Nov 6 puts. It is highly risky since really short duration and many big tech guys report tonight. My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations. We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown. There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months. Cardboard Nice start. QQQ's down about 1% a/h. As described, the MSFT experience indeed with FB, AMZN and AAPL. Google was super impressive but not really one of the stocks I view as having been put on steroids by the covid situation, so a bit different than some of the others. Well, it depends on when you bought them. The puts that I am looking at are still down significantly for the day, but bounced back a little after hours. If you bought them at the peak of today, then you are in the money.
kab60 Posted October 30, 2020 Posted October 30, 2020 Bought some MO and BAM. The secular tailwind for alt managers is just massive. I also follow Tikehau Capital in France closely, it's trading below the value of their balance sheet investments I believe and it's tiny compared to BAM while being run by founders. MO is just a crazy good business, and I don't really understand the price other than it's not exactly ESG kosher. Fat and growing divy in a world of negative rates, and if inflation ever comes around you have an asset light business with pricing power. It's tempting to lever up like crazy and enjoy the spread, but there's no Buffett put unfortunately. If only they'd issue some debt at 1 pct. and buyback shares yielding 9 pct. plus, but instead of doing the obvious thing these dumb smucks rather light their capital on fire. Glad the old CEO is gone.
Broeb22 Posted October 30, 2020 Posted October 30, 2020 Bought some ROP, TIG, CFX, and LESL over the last few days
Gregmal Posted October 30, 2020 Posted October 30, 2020 Added a little more MX. Good earnings and continued momentum. Volume should help remove some of the Brigade overhang. Cardboard.....lookin good.
rkbabang Posted October 30, 2020 Posted October 30, 2020 More BAM. Already my largest holding, but getting too cheap not to buy a little more.
Cardboard Posted October 30, 2020 Posted October 30, 2020 Yeehah! Sold all puts at a nice profit. However, what to buy now to hedge? Maybe that Einhorn is right and bubble is finally deflating? Some charts are starting to look real ugly with breakdowns and valuation remain high while Democrats are talking about tax hikes. Whatever you think politically this cannot be considered an earnings accelerator but, brakes. Problem with puts is price due to high VIX. I need to revisit Monday as I would not be surprised to see market rebound. We are more into complacency phase as Einhorn puts it vs panic. Cardboard
Gregmal Posted October 30, 2020 Posted October 30, 2020 Yeehah! Sold all puts at a nice profit. However, what to buy now to hedge? Maybe that Einhorn is right and bubble is finally deflating? Some charts are starting to look real ugly with breakdowns and valuation remain high while Democrats are talking about tax hikes. Whatever you think politically this cannot be considered an earnings accelerator but, brakes. Problem with puts is price due to high VIX. I need to revisit Monday as I would not be surprised to see market rebound. We are more into complacency phase as Einhorn puts it vs panic. Cardboard I'm actually, on a very speculative and short term basis looking at buying a tiny amount of OTM SPY calls thinking that Trumps gonna drop some kind of vaccine announcement over the weekend right ahead of the election. Still got a good bit of spec money after the 8 bagger on DDS options a few weeks ago. Swung a lot of it to the core portfolio for money sucking REITs, but I still think we see some sort of shenanigan around stimulus or vaccine in an attempt to buy off voters next week. On hedging, IDK, still waiting for something to come to me. Ive just been gradually reducing speculative exposure and limiting what I do to things where you have a bit of an event driven, high payoff trade. Otherwise trying to be more disciplined about longs and raising liquidity. My few Nov 20 put plays are kind of set. Not looking at being too aggressive on the hedges.
rb Posted October 30, 2020 Posted October 30, 2020 Yeehah! Sold all puts at a nice profit. However, what to buy now to hedge? Maybe that Einhorn is right and bubble is finally deflating? Some charts are starting to look real ugly with breakdowns and valuation remain high while Democrats are talking about tax hikes. Whatever you think politically this cannot be considered an earnings accelerator but, brakes. Problem with puts is price due to high VIX. I need to revisit Monday as I would not be surprised to see market rebound. We are more into complacency phase as Einhorn puts it vs panic. Cardboard If that's what you're worried about why QQQ? I would be more worries about the SPX than QQQ.
rb Posted October 30, 2020 Posted October 30, 2020 MO. I can't help it if they give it away for next to nothing.
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