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CVS -5.92 to 66.80, bouncing back from the morning low of 64,62 after the company reaffirmed 2023 adj EPS guidance of $8.50 to $8.70 and expects immaterial impact to long term outlook. The risk is that Blue Cross in other states will follow California's new model, but that remains to be seen. Even so, CVS may have to make some pricing concessions.
I added some shares in the $65's, hedged with covered calls. My cost basis gets lower each week as I roll over the calls.
8K -
CVS Health Corporation (“CVS Health,” the “Company,” “we” or “our”) understands that Blue Shield of California has announced today, as part of a new pharmacy care model, that it will use a number of pharmacy service providers beginning in 2024. CVS Caremark will continue to provide specialty pharmacy services. The financial impact associated with the partial termination of the Blue Shield of California contract is not expected to have an impact to our previously issued 2023 guidance and is expected to have an immaterial impact on our longer-term outlook. CVS Caremark remains the leading pharmacy benefit manager in the United States, serving more Americans and more health plans today than any of our competitors. CVS Health believes customers choose CVS Caremark because of its ability to seamlessly administer complex pharmacy and specialty pharmacy benefits with high levels of customer service and satisfaction, as well as our leading cost position. We are pleased to continue to serve Blue Shield of California customers for their specialty pharmaceutical needs. Specialty pharmacy spend now represents over 50% of pharmacy benefit spend in the marketplace. We remain confident in the value that CVS Caremark provides to our customers and that our integrated solutions will continue to resonate in the marketplace as we deliver our leading cost position and service excellence to our customers.
CVS Health reaffirms its 2023 full year GAAP diluted earnings per share (“EPS”) guidance range of $6.53 to $6.75, adjusted EPS range of $8.50 to $8.70 and cash flow from operations range of $12.5 billion to $13.5 billion.
VFS (20.00) I shorted a few shares today at IB. Wish they'd had some available yesterday when it traded over $30. A big haircut already. It's not worth more than Ford or GM !
GCT (11.95) - I missed the buying opportunity Wednesday morning in the low $10's, but it's on my watchlist for potential purchase on a pullback -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172597110&txt2find=gct
GERN -.14 to 2.56, are you considering adding more shares ? Or too worried that the FDA rumor might actually be true ?
CI and UNH also down in sympathy with CVS -
WSJ -
The PBM business, which negotiates drug prices and offers other services like mail-order pharmacies, is highly profitable and largely controlled by just three companies: CVS, Cigna and UnitedHealth Group. Any sign those long-term profits are potentially at risk can send jitters through Wall Street.
Shares of Cigna and UnitedHealth also fell Thursday.
CVS deservedly getting hit, but I don't think many analysts saw Blue Shield of California dropping them .... it's out of the blue ! Presumably some analyst downgrades will be forthcoming, but whether Blue Shield will really be saving money by parceling out the pharmacy process remains to be seen. Sounds like "California Math" to me. jmho
CVS -5.02 to 67.70 in pre-market after Blue Shield of California drops them -
https://www.wsj.com/health/healthcare/a-big-health-insurer-is-ripping-up-the-playbook-on-drug-pricing-ec152227?st=wzt08k7gn3lgors&reflink=desktopwebshare_permalink
I bought some SPXS yesterday and added to it today .... I think this correction is picking up some momentum and has further to go. I'm guessing a 5% to 10% pullback, but maybe even more ?
Burry's Scion Fund has done rather well over the past 3 years according to the article -
While one big payoff doesn’t guarantee future returns, Burry does have a strong investment record. Traders following the investments disclosed by Scion’s over the last 3 years (between May of 2020 and May 2023) would have made annualized returns of 56% according to an analysis by Sure Dividend. Over the same period, the S&P 500 had annualized returns of about 12%.
Burry bets $1.6B on a market crash -
https://www.yahoo.com/finance/news/michael-burry-big-short-fame-162713259.html
GERN -.19 to 2.79, interesting, sounds like a manipulative false rumor, but maybe not. We'll see what happens. Good luck.
PYPL +.49 to 59.96, I added some shares this morning .... hedged with covered calls that I roll over weekly. Decent premiums on the calls. The stock is very near it's 52wk and multi year low which I think will provide technical support, so I think it's a very good buy in the $59's. jmho
VFS seems grossly overvalued .... hopefully shares for shorting will soon be available - check out the valuation cited in this article -
https://www.reuters.com/business/autos-transportation/ev-maker-vinfasts-shares-rise-premarket-trade-before-nasdaq-debut-2023-08-15/
Fidelity is confirmed down as evidenced by 5000 complaints in the past 30 minutes on Downdetector -
https://downdetector.com/status/fidelity/
This market looks like it may correct further and seasonally the coming 10 weeks are historically weak ..... maybe we should be looking for stocks to short ?
VFS +17.85 to 28.30, probably a good short if you can find any shares .... this Vietnamese EV company is losing a ton of money and the stock is flying on hype, not fundamentals .... it's the first day of trading under the new symbol, so maybe it will be shortable in another day or two. I'll be checking.
BDCO -3.06 to 3.30, darn, would have made a great short ahead of the earnings .... IB has over 100k shares available at a 20% annual borrow rate.
VFS +6.80 to 17.25 ..... VFS just started trading post SPAC merger. Evidently lots of hype surrounding this Vietnamese EV company. Wish I had picked up a few shares of the SPAC, BSAQ yesterday. It finished trading at 10.45, so a hefty 65% overnight gain, assuming the broker promptly exchanged the shares, but sometimes it takes them a while.
IHUB mobile works well .... I use it occasionally. It's available in the APP store.
RCMT +1.63 to 20.60, a fabulous 43% gain from Thursday morning's low of $14.40 .... that turned out to be a great buying opportunity. I bought a bunch in the $14's but should have backed up the truck ! Still holding for now ....
SBH has a variable rate term loan of $407M due July 2024 and another $605M fixed rate due Dec 2025.
See page F-22 of the 10-K for more details -
https://www.sec.gov/ix?doc=/Archives/edgar/data/1368458/000156459022037949/sbh-10k_20220930.htm
SBH -.12 to 10.95 looks oversold. I've owned the stock for a long time and regret not trimming some shares in Feb when it got over $18. Recently I've been adding shares. June Q3 looked decent as was the guidance. It's always been a low PE stock, but it' rarely been at 5.8 which is where it is now based on FY23 estimates.
briefing 8/3 -
Sally Beauty reports EPS in-line, misses on revs; Q3 comps +0.6%; provides FY23 guidance (11.85 ) :
Reports Q3 (Jun) earnings of $0.49 per share, excluding non-recurring items, in-line with the FactSet Consensus of $0.49; revenues fell 3.2% year/year to $931.1 mln vs the $945.42 mln FactSet Consensus.
Consolidated comparable sales increased 0.6%, driven primarily by Sally Beauty's strong sales recapture rates from the Company's recent store optimization efforts, mostly offset by the continuation of stylist demand trends seen over the last several quarters at Beauty Systems Group.
FY23 guidance: The Company is updating its full fiscal year 2023 guidance by revising its Adjusted Operating Margin to the higher end of the original guidance. All other components of the Company's full fiscal year 2023 original guidance are being maintained: Comparable sales are expected to increase by low single digits compared to the prior year, driven by growth in key categories, sales transfer from store closures related to the Company's store optimization efforts, the expanded Regis distribution and new strategic initiatives; Net sales are expected to decline by low-single digits compared to the prior year, reflecting the unfavorable impact due to store closures from the Company's store optimization efforts, net of expected sales recapture rates; Gross margin is expected to remain above 50%; and Adjusted Operating Margin is now expected to be in the range of 9.0% and 9.4% (previously 8.5% to 9.5%).
PYPL -.94 to 61.85, this SA article agrees with you -
https://seekingalpha.com/article/4627298-paypal-loading-up-at-this-price
yup, that UPS contract secured by the Teamsters is getting a lot of publicity and will motivate other Unions to be aggressive in negotiations. It could have broad implications for wages and the economy.
GTEC (1.64) Q2 earnings due out next week might spark another rally. The stock zoomed 74% higher from a low of $1.13 ahead of the Q1 report to a high of $1.97 a few days after the report with volume peaking at 2.1M shares on 5/19 ....
Q1 EPS was $0.11 and I'm hoping for a repeat.
TAST -.74 to 6.25, evidently traders think Q2 adj EPS of $0.27 was a one quarter wonder, but who knows ? I joined you with a few shares and have lower GTC bids placed.
fly -
Truist analyst Jake Bartlett raised the firm's price target on Carrols Restaurant to $9 from $7 and keeps a Buy rating on the shares after its Q2 earnings beat. The company should be a beneficiary of a successful U.S. Burger King turnaround which focuses on driving sales and franchise margins concurrently, the analyst tells investors in a research note. Carrols Restaurant's leverage ratio has fallen below its prior target, and the firm sees the possibility of resuming franchise store acquisitions which could drive multiple expansion, Truist added.
Stephens analyst Joshua Long raised the firm's price target on Carrols Restaurant to $10 from $6 and keeps an Overweight rating on the shares following the company's report of better-than-expected Q2 results. Carrols offers investors "a compelling vehicle for gaining exposure to improving performance of the Burger King brand," the analyst argues.
VFS - Vietnamese EV company to list on Nasdaq next week after SPAC merger with BSAQ -
https://www.reuters.com/markets/deals/vietnam-ev-maker-vinfast-gets-spac-shareholders-nod-list-us-2023-08-10/
GM and F hit hard today on concerns over major concessions the UAW may extract in wake of the big UPS contract with the Teamsters .... $170k salary and benefits for drivers by the end of the 5 yr contract ! Rather inflationary.
https://www.usatoday.com/story/money/2023/08/10/ups-driver-pay-new-contract/70571518007/
STRL +1.54 to 79.89, I have a very small <1% position in my IRA bought way back in May 2021 at around $21.50. It's been a great long term hold. I never found a reason to sell it, but wish I had added a lot more shares at $20 last September. I'm still holding but not adding at these prices.
SURG (5.43) posts EPS of $0.40 for Q2, inline with their preannouncement ..... looks like a solid quarter at quick glance yet the stock is flat after hours.
RCMT -2.10 to 17.23, a hefty 20% bounce from this morning's low of 14.40 ..... wish I had been buying more aggressively in the $14's where it was trading until 10:30am. That was a nice buying opportunity.
RCMT -4.62 to 14.71, I think the selloff is overdone and picked up a few shares this morning and will be accumulating on further weakness. I had sold about 60% of my position in recent weeks and now regret not selling all my shares !
SMCI +9 to 275, rebounding after that well deserved 23% haircut yesterday. Sequential guidance was a bit disappointing. I'd consider getting back in at around $200, but I doubt it gets that low given all the AI hype.
briefing -
Super Micro Computer beats by $0.60, beats on revs; guides Q1 EPS in-line, revs in-line; guides FY24 revs in-line (347.40 -5.89) :
Reports Q4 (Jun) earnings of $3.51 per share, excluding non-recurring items, $0.60 better than the FactSet Consensus of $2.91; revenues rose 33.6% year/year to $2.18 bln vs the $1.98 bln FactSet Consensus.
Co issues in-line guidance for Q1, sees EPS of $2.75-$3.50, excluding non-recurring items, vs. $3.21 FactSet Consensus; sees Q1 revs of $1.9-$2.2 bln vs. $2.2 bln FactSet Consensus.
Co issues in-line guidance for FY24, sees FY24 revs of $9.5-$10.5 bln vs. $9.88 bln FactSet Consensus.
CPRI +20.04 to 54.65 in pre-market after news of the $57 all cash buyout. A nice premium for shareholders. I'm glad someone else from the board also owns shares. Seemed like a decent risk/reward in the mid $30's !
Wade - the growth figure for the PEG ratio being calculated on often optimistic 2024 analyst estimates is not very meaningful. Almost no companies give guidance that far out - it's tough enough to predict 2023 EPS, let alone 2024. I delve a lot deeper into financials than a single ratio. Lots of stocks with low PEG ratios underperform while others with high PEG ratios outperform. And plenty of value stocks, like the homebuilders a year ago, had negative PEG ratios due expected y/y earning declines. Yet they proved to be great buys.
In summary, if one looks only at the PEG ratio, I think you'd find very little correlation to stock performance. Otherwise it would be super easy to screen for low PEG stocks, buy a basket of them, and outperform the market. It's not that simple.
VTLE (54.61) beats EPS estimates by 8%, raises production guidance - their adj EPS figure excludes hedging gains and losses and uses a normalized tax rate of 22% which they don't actually pay due to operating loss carry forwards.
briefing -
Vital Energy beats by $0.34, misses on revs (54.61 +0.82) :
Reports Q2 (Jun) earnings of $4.35 per share, excluding non-recurring items, $0.34 better than the FactSet Consensus of $4.01; revenues fell 40.2% year/year to $335.06 mln vs the $345.19 mln FactSet Consensus.
"Higher than expected volumes year-to-date were primarily related to stronger base production, which exceeded expectations for both oil and total production by approximately 10%. As a result, full-year 2023 oil production guidance is further increased to 41.9 - 43.4 MBO/d (previously 40.0 - 43.0 MBO/d) and total production guidance to 87.0 - 89.0 MBOE/d (previously 82.0 - 86.0 MBOE/d)."
SGMA +.38 to 7.05, nice breakout the past few days ..... I'm still holding.
PEG ratios can be calculated based on widely varied growth rates .... anywhere from 1 to 5 years. So you're using 2024 earnings estimates versus 2023 estimates for the growth rate ?
The P/E ratio used in the calculation may be projected or trailing, and the annual growth rate may be the expected growth rate for the next year or the next five years.
https://en.wikipedia.org/wiki/PEG_ratio
MPW - good point, it will be interesting to see how much they cut the dividend. I'd be surprised it they don't cut it. I think the stock is already pricing in at least a modest cut, but I could be wrong. We'll see what happens.
MPW -1.35 to 8.75, definitely still risky even after this selloff, but I'd rate it a speculative buy since a lot of anticipated bad news is being priced in. A dividend cut seems a distinct possibility, if not a likelihood, but I think it's expected and would help with their leveraged balance sheet. Book value is roughly $14. I might pick up a few shares depending on the action.