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This owns the licensing for the gaming side of Star Wars, and there was a lot of hype. Stock hasn’t done horribly, but it was felt that the big pop in numbers had been had. Any time a company says that the best is over, the stock can tail off. He likes the space. He would suggest you look at Take Two Interactive (TTWO-Q), which has a slightly different take on it, but are firing on all cylinders and the franchise is in great shape.
A tale of 2 time periods. Short-term they are running into competition. They put up some truly phenomenal comps, and they are heavily reliant on the product cycle. IPhone 7 is coming out in September, which is a period where you have not only lapped challenging comparison sales numbers, but at the same time you have a new product launch coming. Until then, it is a bit of a tough story. Likes the company and likes management. Doesn’t feel you need to rush into this, but likes the stock long-term.
Aircraft leasing company. Earnings trajectory is very, very good. One of the problems is the chart. You can have a good company, but a technical drop in the chart. With a continuation of lower lows, you face a wall of sellers every time. From a bottom-up standpoint, he doesn’t mind this space at all, but technically this has a lot of work to do. If it gets through the gap between $30 and $35, he would be a little more constructive on it.
Just cut their dividend. This is not the time to buy Private Equity. Wait until it gets completely washed out with bankruptcies in the oil patch, when they go in and Hoover up for $.30 on the $1 and get phenomenal deals, and then build a portfolio. It is tough to invest in these things at this point in the cycle, because we haven’t had the washout.
(A Top Pick Nov 17/15. Up 3.83%.) 82% of ad revenue is coming from mobiles. Grew free cash flow 68%. About 10% of cash flow is offshore, and 90% of it is available. While they haven’t put a lot of that to use in terms of capital return, they are still in an investment cycle. What they have going for them is growth, revenue, subscribers, and they are investing in technologies. Monetizing their user base of 1.6 billion people, and still growing it.
(A Top Pick Nov 17/15. Down 11.51%.) This has been a little tough, and he had warned that it would be choppy. The reason for choppiness is the Coca-Cola (KO-N) deal. They are now tapping into this enormous network. They did an acquisition which will be accretive to them. Feels there is still lots of upside.
The wheels have kind of fallen off. There have been a series of the earnings misses. The most recent quarter was better with a pretty significant restructuring. It seems like they are doing the right things, but the chart is working against you. It seems to him they are still dressing this up for sale, but where it gets taken out is a real question.
The company is phenomenal. With drones, etc., they are on the leading edge of distribution. From a logistical distribution standpoint you won’t find anything better. Part of the problem is that it is run like a private company. The most recent quarter was a big earnings miss, hence the pullback. It has been subject to moderate negative earnings revisions, which is never a good thing. On a long-term basis, it is still a very attractive place to be, but you can’t count on it on a quarter to quarter basis. Doesn’t make the cut for him because it is too volatile.
A very well-run company. Has a huge ETF business, Best in the world. The right product at the right time. The problem is that it is just asset management and is super cyclical. With the current concerning view of the market, it is a little early to be jumping in. If you have time to sit on this, his view is constructive. Asset management will be cyclical and positively so, especially with their positioning in ETF’s. A solid 3.8% dividend.
Markets. S&P 500 had a short, sharp rally, but doesn’t think it has legs and it has taken stocks into overbought territory. In mid-February he started to see the market really bottom. The correlation between crude and the S&P right now is extremely high, the highest it has been in years. Doesn’t have a terribly bullish view of crude, but it has had a nice bounce here. With this little bounce and the high correlation to the S&P 500, this is one reason he can start to see things petering out. While we have moved into a secular, very long-term bull market, you always have cyclical pullbacks. That is healthy. Credit has not confirmed this rally, so he is starting to see overbought territory, and believes we are in for another pullback.