What are you buying today?

[Ross812]

Closed out my $38 ebay puts on the bump after earnings thus morning.  Bought some 90 day treasuries yielding 4.2%. 

[Xerxes]

I saw a note that says Apple is now valued more than Amazon, Facebook and Alphabet combined !! Wow. 
 

$1.1 trillion for Google

$938 billion for Amazon

$238 billion for Meta

 

The last of the “Generals”, Apple, holding the line at $2.3 trillion.

 

Today, would you rather pay $2.3 trillion to buy the whole of Apple or would you rather own the whole of the trio of Amazon, Google and Meta at these prices.  

[Gregmal]

3 minutes ago, Xerxes said:

I saw a note that says Apple is now valued more than Amazon, Facebook and Alphabet combined !! Wow. 
 

$1.1 trillion for Google

$938 billion for Amazon

$238 billion for Meta

 

The last of the “Generals”, Apple, holding the line at $2.3 trillion.

 

Today, would you rather pay $2.3 trillion to buy the whole of Apple or would you rather own the whole of the trio of Amazon, Google and Meta at these prices.  

Basically would you rather own the internet, or simply the medium through which people access it. Pick and shovel is usually the best approach. 

[Red Lion]

I'm short $90 GOOGL puts expiring today, and I'm going to just let them get assigned because I've been trying to add at or below $90. Managed to get a couple options premiums out of it. 

 

I also had more $90 GOOGL puts expiring on January 2023 I rolled those out to January 2024 down to a $78 strike for a $0.30 net credit. This position is not going to be anything special as far as IRR, but at least I can leave money in T-bills paying 4.5% while I wait to see if I can get these shares at a lower price.

 

I'm trying to be disciplined while building positions on the downturn and am trying to add after 5-10% market price drops while I'm still building my position. 

[KJP]

IAC

[Agrippa07]

added to Paypal and IAC, also Meta/FB earlier this week 

[n.r98]

Been buying $DCP. Another MLP company, probably gets taken out by PSX soon - read PSX latest Q3 transcript - almost seems like a 99.99% probability, big question is what's the premium? That's all a wild guess of course - SHLX was 23%, BKEP was like 50% +.. 

 

Simple back of the envelope - 8% normalized yield on 60% 2022 distributable cash flow = $47 per share. So maybe another 15-20% upside from  here, downside is perhaps 10% (?) - PSX offered a zero premium bid in August. But given oil markets a lot stronger now than in Aug, maybe trades higher even.

 

Seems like a nice uncorrelated sit.

Edited November 5, 2022 by n.r98

[Red Lion]

GOOGL puts were assigned @ 90. 

[Dave86ch]

Added to $META

Added to Bitcoin

[ERICOPOLY]

Today I paid $48 for a $1,499 Samsung Bespoke counter-depth refrigerator at Home Depot.

 

It was part of my 6 appliance order, and the bundle discount for 6 or more Samsung appliances is $750.   If you only buy 5 Samsung appliances the bundle discount is $500.  So I was given an additional discount of $250 for appliance #6.

 

In addition, I got $500 off for purchasing a Bespoke refrigerator as part of the bundle.  The one I purchased was on sale for $798, reduced from $1,499.

 

$798 - $500 - $250 = $48.

 

And delivery+install is free too.

 

Edited November 6, 2022 by ERICOPOLY

[matthew2129]

2 hours ago, ERICOPOLY said:

Today I paid $48 for a $1,499 Samsung Bespoke counter-depth refrigerator at Home Depot.

 

It was part of my 6 appliance order, and the bundle discount for 6 or more Samsung appliances is $750.   If you only buy 5 Samsung appliances the bundle discount is $500.  So I was given an additional discount of $250 for appliance #6.

 

In addition, I got $500 off for purchasing a Bespoke refrigerator as part of the bundle.  The one I purchased was on sale for $798, reduced from $1,499.

 

$798 - $500 - $250 = $48.

 

And delivery+install is free too.

 

I know that fridge, it is a fine fridge, but I would never pay over $45 for it personally

[Ross812]

@ERICOPOLY I hope samsung has worked out the kinks in their refrigerator line. We have a french door model, purchased in 2013, and the refrigerator fan freezes up causing it to get too warm which freezes up the ice maker. Samsung had a couple of service bulletins but they didn't solve the issue. 

[ERICOPOLY]

36 minutes ago, Ross812 said:

@ERICOPOLY I hope samsung has worked out the kinks in their refrigerator line. We have a french door model, purchased in 2013, and the refrigerator fan freezes up causing it to get too warm which freezes up the ice maker. Samsung had a couple of service bulletins but they didn't solve the issue. 

 

We have model RH22H9010SR, also purchased around 2013 and it doesn't do that.  But we own one with the same problem as yours and we left that behind when we moved recently.

[Castanza]

$SWK Stanley Black & Decker watcher position

 

Anyone else look at this lately? 

- Inventory was over built but they are rapidly reducing and expect to be back to normal levels mid 23. 

- Reduced production and headcount 

- Company focus is reducing debt and and reach a 2x debt/EBITDA level. Paid down 3.3b in Q3 more expected Q4

- Sept cashflow positive with expected positive fcf for 4th quarter. 

- Should see better margins. Current low 20's expecting high 20's by Q2 23 (excludes supply chain improvements)

- Targeting 35% margins by 2025

- Directors buying back shares mid 80s-90s

- Trading around 10 year lows

- Dividend Stalwart yielding 4+%

- EPS has been revised a few times. Recently revised down from 5-6 to 4-4.5 for Q4. 

- Softer demand is expected near term

- Production curtailment is a decision of cash generation vs softer market outlook. 

 

Due to management revising multiple times I think there is more room for pain in the next few quarters. But it seems like management is focused on the right things and have/are making necessary changes to supply chain which will pay off long-term. Definitely some headwinds. 

[Spekulatius]

1 minute ago, Castanza said:

$SWK Stanley Black & Decker watcher position

 

Anyone else look at this lately? 

- Inventory was over built but they are rapidly reducing and expect to be back to normal levels mid 23. 

- Reduced production and headcount 

- Company focus is reducing debt and and reach a 2x debt/EBITDA level. Paid down 3.3b in Q3 more expected Q4

- Sept cashflow positive with expected positive fcf for 4th quarter. 

- Should see better margins. Current low 20's expecting high 20's by Q2 23 (excludes supply chain improvements)

- Targeting 35% margins by 2025

- Directors buying back shares mid 80s-90s

- Trading around 10 year lows

- Dividend Stalwart yielding 4+%

- EPS has been revised a few times. Recently revised down from 5-6 to 4-4.5 for Q4. 

- Softer demand is expected near term

- Production curtailment is a decision of cash generation vs softer market outlook. 

 

Due to management revising multiple times I think there is more room for pain in the next few quarters. But it seems like management is focused on the right things and have/are making necessary changes to supply chain which will pay off long-term. Definitely some headwinds. 

I was in this at higher prices (small position) and sold out for a loss. I do agree with the thesis, but I think they are seeing significant reduction in demand while prior troubles were more self inflicted with supply chain troubles anf also cost inflation out of control.

 

Compare how TTC managed through the cycle so far as a comparison.

 

That said, I am watching SWK closely but I am leery of continued misses that just seem to keep on coming.

[Castanza]

1 hour ago, Spekulatius said:

I was in this at higher prices (small position) and sold out for a loss. I do agree with the thesis, but I think they are seeing significant reduction in demand while prior troubles were more self inflicted with supply chain troubles anf also cost inflation out of control.

 

Compare how TTC managed through the cycle so far as a comparison.

 

That said, I am watching SWK closely but I am leery of continued misses that just seem to keep on coming.

 

Agreed, I think management needs to prove themselves over the next few quarters. I listened to the latest call and every analyst only focused on the margins getting back into the 30's. They didn't really care about the supply chain improvements or the debt repayments. Maybe that's the story with the company and the market only cares about that margin rate. 

 

Q4, Q1 will be important and give some more insight to whether or not the market is truly softening. Will also find out if management is right in the margin improvements. See a decline the next two quarters and this could really dump. Something I'll be watching for sure as this is a good coffee can idea if you can get it at a great (not good) price. 

[competitive-advantage]

Maersk

[Ross812]

Bought more META today. Also bought a starter in DFIN. 

[nwoodman]

 

META

[Spekulatius]

7 hours ago, Castanza said:

 

Agreed, I think management needs to prove themselves over the next few quarters. I listened to the latest call and every analyst only focused on the margins getting back into the 30's. They didn't really care about the supply chain improvements or the debt repayments. Maybe that's the story with the company and the market only cares about that margin rate. 

 

Q4, Q1 will be important and give some more insight to whether or not the market is truly softening. Will also find out if management is right in the margin improvements. See a decline the next two quarters and this could really dump. Something I'll be watching for sure as this is a good coffee can idea if you can get it at a great (not good) price. 

The last earnings reports had a lot of focus on FCF and it’s easy to see why- their FCF went almost to zero in 2021 with a huge inventory buildup.

As a rule of thumb, when you turn around a business, the first focus is almost always on FCF first and earning a second. This is because it’s game over when a company is running out of cash (and the ability to borrow more) rather than when it shows large losses.

 

Also, reducing inventory will generate cash, but probably make earnings worse due to “under absorption” and probably some discounted liquidations etc. 

 

While the plan makes sense in a high level, the current CEO (since June 2022) was coming from a CFO role at SWK and shares some of the blame, imo. The current CFO is interim, which I don’t think is ideal either. Quite a mess and it’s not because the business is in a steep downturn really.

 

The former management screwed up operations and lost control of their supply chain so to speak. other companies in similar business have done much much better than SWK. I think there is some real risk here that shareholders get permanently impaired (dilutive capital raise etc).

[Castanza]

11 hours ago, Spekulatius said:

The last earnings reports had a lot of focus on FCF and it’s easy to see why- their FCF went almost to zero in 2021 with a huge inventory buildup.

As a rule of thumb, when you turn around a business, the first focus is almost always on FCF first and earning a second. This is because it’s game over when a company is running out of cash (and the ability to borrow more) rather than when it shows large losses.

 

Also, reducing inventory will generate cash, but probably make earnings worse due to “under absorption” and probably some discounted liquidations etc. 

 

While the plan makes sense in a high level, the current CEO (since June 2022) was coming from a CFO role at SWK and shares some of the blame, imo. The current CFO is interim, which I don’t think is ideal either. Quite a mess and it’s not because the business is in a steep downturn really.

 

The former management screwed up operations and lost control of their supply chain so to speak. other companies in similar business have done much much better than SWK. I think there is some real risk here that shareholders get permanently impaired (dilutive capital raise etc).

All good points Spek I think it will be a tight race to see if they can meet their goals or if they will have to raise capital. Thanks for the thoughts

[aatrox919]

16 hours ago, nwoodman said:

 

META

I couldn't find a META thread. Is this a long position for you? Are you thinking that the layoffs will have a positive affect in the near-term? Do you think the market prefers a smaller or larger layoff if META does go through with it? I think I read somewhere that it would be in the thousands.

[Castanza]

7 minutes ago, aatrox919 said:

I couldn't find a META thread. Is this a long position for you? Are you thinking that the layoffs will have a positive affect in the near-term? Do you think the market prefers a smaller or larger layoff if META does go through with it? I think I read somewhere that it would be in the thousands.

 

It's under the Investment Ideas section

 

https://thecobf.com/forum/topic/7110-fb-facebookmeta/page/95/#comment-494700

 

[lnofeisone]

AIV and JOE. 

[rkbabang]

Added to a bunch of positions yesterday and this morning.

JOE, AIV, AIV $5 2024 calls, AIV $10 2024 calls, BRKB, and SRUUF.