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MPW -1.22 to 8.88, any thoughts on the earnings and selloff ? Is this a bottom fishing opportunity or are their medical property holdings too risky with further writeoffs likely ?
briefing -
Medical Properties Trust beats by $0.11, misses on revs (10.10 ) :
Reports Q2 (Jun) normalized FFO of $0.48 per share, excluding non-recurring items, $0.11 better than the FactSet Consensus of $0.37; revenues fell 15.7% year/year to $337.4 mln vs the $344.44 mln FactSet Consensus.
Wade - long term earnings growth is notoriously difficult to forecast for most companies, which results in very inaccurate PEG ratios. The market is much more focused on the short term. The year ahead is tough enough to predict, let alone several years ahead. Anyone using the PEG ratio as a primary criteria to buy and sell stocks will miss out on loads of opportunities. Like the homebuilders a year ago. I'm much more concerned about the quarter and year ahead earnings rather than speculation about growth over the next several years.
73 Stocks in the S&P 400 Mid Cap Index have forward PE's of under 10 - here's the list sorted by industry group -
Symbol Price Fwd PE Industry Name
HOG 35.6 8.1 Auto - Domestic Harley-Davidson Inc
ASB 18.82 8.4 Banks - Midwest Associated Banc-Corp
ONB 17.33 8.4 Banks - Midwest Old National Bncp
UMBF 72.25 9.6 Banks - Midwest Ump Financial Corp
WTFC 85.28 8.5 Banks - Midwest Wintrust Financial Corp
OZK 43.89 7.5 Banks - Northeast Bank Ozk
VLY 10.19 9.3 Banks - Northeast Valley National Bancorp
WBS 46.45 7.8 Banks - Northeast Webster Financial Corp
FNB 12.86 8.7 Banks - Southeast F.N.B. Corp
HWC 44.6 8.4 Banks - Southeast Hancock Whitney Corp
SNV 34.13 7.8 Banks - Southeast Synovus Financial Corp
FHN 13.69 9 Banks - Southwest First Horizon Corp
CATY 38.66 8 Banks - West Cathay Genl Bncp
COLB 22.32 7.1 Banks - West Columbia Banking Sys
EWBC 60.93 7.2 Banks - West East West Bancorp
TGNA 17.05 9.2 Broadcast - Radio & TV Tegna Inc
KBH 54.88 8.5 Building - Residential & Comm KB Home
TMHC 48.83 6.8 Building - Residential & Comm Taylor Morrison Home Corp
TOL 80.24 7.3 Building - Residential & Comm Toll Brothers Inc
CAR 225.91 6.2 Business Services Avis Budget Group
CNXC 79.63 7.4 Business Services Concentrix Corp
SNX 99.09 9.4 Business Software Services Synnex Corp
HRB 34.26 8.4 Consumer Services - Misc H&R Block
BERY 63.42 8.5 Containers - Paper Products Berry Global Group
GPK 23.35 8 Containers - Paper Products Graphic Packaging Holding Company
ARW 126.72 7.9 Electronics - Parts Distrib Arrow Electronics
AVT 45.74 8 Electronics - Parts Distrib Avnet Inc
WCC 153.59 8.8 Electronics - Parts Distrib Wesco International
SLM 15.77 5.9 Finance - Consumer Loans SLM Corp
AMG 140.88 7.6 Finance - Investment Mgmt Affiliated Managers Group
ESNT 53.14 8.3 Finance - Mortgage & Rel Svs Essent Group Ltd
NYCB 13.47 9.5 Finance - Savings & Loan New York Community Bancorp
WU 11.9 6.9 Financial Transaction Services Western Union Company
UNM 50.67 6.7 Insurance - Accident & Health Unumprovident Corp
BHF 54.09 3.7 Insurance - Life Brighthouse Financial Inc
RGA 140.57 8.1 Insurance - Life Reinsurance Group of America Inc
VOYA 73.84 9.1 Insurance - Life VOYA Financial Inc
CNO 25.18 9.3 Insurance - Multi Line Cno Financial Group
MTG 18 7.6 Insurance - Multi Line Mgic Investment Corp
RNR 196.15 7.9 Insurance - Proprty & Casualty Renaissancere Holdings Ltd
TNL 40.46 7.4 Leisure & Recreation Services Travel + Leisure Co.
BC 85.47 8.8 Leisure & Recreational Prdcts Brunswick Corp
TEX 63.44 9.1 Machinery - Construct & Mining Terex Corp
AGCO 130.96 8.5 Machinery - Farm Agco Corp
JAZZ 131.87 8.8 Medical - Drugs Jazz Pharma Plc
XRX 15.5 9.4 Office Supply & Forms Xerox Corp
OVV 48.38 7.6 Oil - C$ Exploration & Product Ovintiv Inc
PBF 46.67 5.2 Oil - Refining and Marketing PBF Energy Inc
CHRD 159.74 8.1 Oil - US Exploration & Product Chord Energy Corp
MTDR 58.21 9.4 Oil - US Exploration & Product Matador Resources Company
MUR 43.44 9.9 Oil - US Exploration & Product Murphy Oil Corp
PDCE 73.85 6 Oil - US Exploration & Product Pdc Energy Inc
DINO 55.89 6.9 Other Alt Energy HF Sinclair Corp
CUZ 24.05 9 REIT - Equity Trust Other Cousins Properties Inc
HIW 25 6.5 REIT - Equity Trust Other Highwoods Properties
KRC 37.8 8.1 REIT - Equity Trust Other Kilroy Realty Corp
MPW 10.07 6.3 REIT - Equity Trust Other Medical Properties Trust
PK 13.15 6.8 REIT - Equity Trust Other Park Hotels & Resorts Inc
SBRA 12.91 9.6 REIT - Equity Trust Other Sabra REIT
VNO 23.52 8.9 REIT - Equity Trust Other Vornado Realty Trust
EPR 43.47 8.8 REIT - Equity Trust Retail Entertainment Properties Trust
NLY 19.86 6.6 REIT - Mortgage Trusts Annaly Capital Management Inc
CPRI 35.91 5.9 Retail - Apparel & Shoes Capri Holdings Ltd
M 15.95 5.4 Retail - Regional Dept Stores Macy's Inc
AN 156.09 7 Retail - Wsale Auto & Trucks Autonation Inc
LAD 300.96 8.2 Retail - Wsale Auto & Trucks Lithia Motors
CMC 56.84 7.4 Steel - Producers Commercial Metals Company
X 24.42 5.9 Steel - Producers United States Steel Corp
CROX 103.84 8.5 Textile - Apparel Crocs Inc
PVH 87.37 8.7 Textile - Apparel Phillips-Van Heusen Corp
R 102.59 7.8 Transportation - Equip & Lease Ryder System
HTZ 16.53 6.6 Transportation - Services Hertz Global Holdings Inc
UGI 24.31 9.2 Utility - Gas Distribution Ugi Corp
Institutions file their 13F forms about 45 days after the quarter ends.
HRMY
HRMY is a one drug company but is seeking label expansion (broader application) for their Wakix which is seeing strong sales growth. Patent expiration is in 2028.
Here's an SA article that's worth reading if you're considering the stock -
https://seekingalpha.com/article/4607137-harmony-biosciences-company-solid-fundamentals-rating-upgrade
PYPL - thanks for 2 excellent posts - I joined you with a small position but wrote weekly covered calls that I'll be rolling over .... my hunch is that the stock remains range bound, better for trading than holding.
HRMY has a large short interest related to a short attack back in March which crashed the stock. I doubt it has much merit, but anything is possible, so I'm keeping my position small. I mentioned this issue in my original post.
https://scorpionreports.s3.us-east-2.amazonaws.com/HRMY1.pdf
S&P500 now down 20 after having been up 40 at midday .... the final 30 minutes might be interesting.
Just a 2.7% correction for the S&P500 from last week's high of 4607 to yesterday's low of 4485. I think we're overdue for a bigger pullback, but any dip quickly brings in buyers.
VTLE +1.26 to 53.92, reports next Tuesday after the bell .... they preannounced that production was up 11% sequentially. However oil and gas prices were down 3% and 13% respectively. They have a strong hedge position for NG with a floor of $4.14 for well over 50% of their 2023 production. Their reported adjusted EPS figure of $4.50 for Q1 excluded hedging gains and assumed a normalized tax rate of 22% even though they have a $1.5B operating loss carryforward that shelters them from federal taxes.
Their Forge acquisition closed on 6/30 and adds about 10% to production ..... they paid all cash from their credit line, so no new shares but increased interest expense.
It will be interesting to see the report on Tuesday. I have a decent sized position.
PYPL -1.05 to 63.13 after an analyst downgrade. Your thoughts on Q2 ?
fly -
PayPal downgraded at Evercore ISI on increasing competition, margin pressure
As previously reported, Evercore ISI downgraded PayPal to In Line from Outperform with a price target of $65, down from $85, based on a 2024 target PE of 12, down from 15. Intensifying competition, evidenced During Q2 by the sequential loss of 2.5M consumer accounts and nearly 300 basis point of transaction margin pressure, create increasing headwinds to revenue and earnings growth and the firm sees limited scope for earnings outperformance without a clear path to year-over-year transaction margin expansion, the analyst tells investors.
GERN -.23 to 2.93, evidently investors are not happy about the increasing cash burn. Net loss in Q2 was $49M, up sharply from $38M in Q1.
HRMY +.35 to 32.91, analyst commentary -
fly -
Cantor Fitzgerald analyst Charles Duncan lowered the firm's price target on Harmony Biosciences to $71 from $75 and keeps an Overweight rating on the shares. Despite the underperformance due to unforeseen specialty pharmacy-related low inventory levels at the end of Q2, the company reported Q2 was the strongest quarter for new-patient starts, with the highest top-line prescription demand since launch, the analyst tells investors in a research note. Top-line outperformance in FY23 for WAKIX revenues is possible based on reported new-patient starts, average number of patients on drug, and consistency in treatment persistence, the firm contends.
Mizuho lowered the firm's price target on Harmony Biosciences to $54 from $60 and keeps a Buy rating on the shares post the Q2 report. The analyst cites a revised Wakix outlook for the target drop but stays at Buy ahead of the company's Q4 catalysts.
HDSN - yes, the Q1 conf call also stated that 35% gross margin is the long term target.
NOG (39.38) Q2 numbers look decent -
briefing -
Northern Oil and Gas beats by $0.13, beats on revs (39.38 +0.01) :
Reports Q2 (Jun) earnings of $1.49 per share, excluding non-recurring items, $0.13 better than the FactSet Consensus of $1.36; revenues rose 7.9% year/year to $476.6 mln vs the $414.01 mln FactSet Consensus.
Record quarterly production of 90,878 Boe per day (60% oil), increases of 4% from the first quarter of 2023 and 25% from the second quarter of 2022.
Guidance: Annual Production (Boe per day) of 96,000 - 100,000. Q3 Production (Boe per day) of 99,000 - 103,000.
PYPL -6.15 to 67.05 in pre-market despite meeting estimates and maintaining guidance -
briefing -
PayPal beats by $0.01, reports revs in-line; guides Q3 EPS above consensus, revs above consensus; reaffirms FY23 EPS guidance (73.20 -2.33) :
Reports Q2 (Jun) earnings of $1.16 per share, excluding non-recurring items, $0.01 better than the FactSet Consensus of $1.15; revenues rose 7.1% year/year to $7.29 bln vs the $7.27 bln FactSet Consensus.
Total payment volume (TPV) of $376.5 billion, growing 11% on a spot and FX-neutral (FXN) basis. Operating cash flow of ($0.2) billion and free cash flow of ($0.4) billion, which include a ~$1.2 billion negative impact from European buy now, pay later (BNPL) loans originated as held for sale (HFS), expected to be sold in H2'23.
Co issues upside guidance for Q3, sees EPS of $1.22-1.24, excluding non-recurring items, vs. $1.21 FactSet Consensus; sees Q3 revs of $7.4 bln vs. $7.33 bln FactSet Consensus.
Co reaffirms guidance for FY23, sees EPS of $4.95, excluding non-recurring items, vs. $4.91 FactSet Consensus.
HDSN (8.63) reports EPS of $0.41 for Q2, beating estimates for $0.37. The y/y decline was fully expected due to the outsized margins of last year. I'll be adding shares if the stock is flat or down on these numbers -
https://www.hudsontech.com/press-releases/hudson-technologies-reports-second-quarter-2023-results/
CVS +2.76 to 76.71, I think bad news was already priced in .... the stock was over $100 last December when analysts were estimating EPS of $8.85 for 2023 .... now the guidance is for $8.60 midpoint, so a mere 3% drop in estimates yet a 25% drop in the stock price. As for FY24 and FY25, I don't think this is a growth story, it's a value stock. Hardly shocking to me that there's not going to be much growth. I expect CVS will continue to be a good trader for me .....
CVS (73.95) posts Q2 earnings modestly ahead of estimates and maintains guidance -
briefing -
CVS Health beats by $0.09, beats on revs; reaffirms FY23 EPS guidance (73.95 ) :
Reports Q2 (Jun) earnings of $2.21 per share, excluding non-recurring items, $0.09 better than the FactSet Consensus of $2.12; revenues rose 10.3% year/year to $88.92 bln vs the $86.41 bln FactSet Consensus.
Co reaffirms guidance for FY23, sees EPS of $8.50-8.70, excluding non-recurring items, vs. $8.58 FactSet Consensus.
Cohen has been calling all the shots behind the scenes. Eppler is just taking orders, imho.
Verlander is gone .... this trade completes the dismantling of the disastrous 2023 Mets team that was built with money yet collapsed like a house of cards. Hopefully there will be lessons learned from this debacle.
https://www.cbssports.com/mlb/news/justin-verlander-trade-astros-to-acquire-ace-as-mets-continue-sell-off-houston-sends-back-top-prospects/
VIRC - I got the same message in my Ameritrade Margin and IRA accounts .... try your Mom's account again with a low ball limit order to verify the new restriction. Then call them and ask why it changed ?
VIRC (4.37) looks attractive and that was a nice writeup you published last week on SA. Unfortunately Ameritrade has restricted BUY orders to phone calls only, for whatever reason ..... fyi -
Order rejected: Opening transactions for this security must be placed with a broker. Contact us.
https://seekingalpha.com/article/4620779-virco-dirt-cheap-and-at-an-inflection-point
HRMY +.50 to 35.87 after posting strong Q2 results. Adj EPS of $0.76 easily beat estimates for $0.61. The short attack which crashed the stock in March seems to be mostly without merit. Sales for their FDA approved Narcolepsy drug are surging. I picked up a small starter position this morning.
briefing -
Harmony Biosciences beats by $0.15, misses on revs; authorizes $125 mln for repurchases (35.37 ) :
Reports Q2 (Jun) earnings of $0.76 per share, excluding non-recurring items, $0.15 better than the FactSet Consensus of $0.61; revenues rose 25.4% year/year to $134.22 mln vs the $142.01 mln FactSet Consensus.
As of June 30, 2023, Harmony had cash, cash equivalents and investment securities of $429.6 million, compared to $345.7 million as of December 31, 2022.
Board of Directors authorized a $125 million share repurchase program.
https://seekingalpha.com/article/4607137-harmony-biosciences-company-solid-fundamentals-rating-upgrade
Met begin dismantling the most expensive team in history -
The New York Mets spent the last offseason building the most expensive baseball roster ever, a $364 million payroll-busting team loaded with huge contracts for veteran stars. Yet a few months later, they find themselves in the exact position they were trying to avoid: Irrelevant in August.
https://www.wsj.com/sports/baseball/mets-trade-max-scherzer-rangers-df4de0ea?st=4y61vwgblhpbc5f&reflink=desktopwebshare_permalink
HBM +.19 to 5.97 as copper prices break over $4/lb for the first time in several months .... good news for HBM and other producers like TGB, FCX and TECK.
CPPMF was recently acquired by HBM.
AER (65.85) posts strong Q2 earnings and increases share buy back authorization - Aercap is the world's largest airplane leasing firm.
briefing -
AerCap beats by $0.55, misses on revs; guides FY23 EPS above consensus; Co also announced new $500 million share repurchase program (65.85 ) :
Reports Q2 (Jun) earnings of $2.56 per share, excluding non-recurring items, $0.55 better than the FactSet Consensus of $2.01; revenues rose 9.8% year/year to $1.72 bln vs the $1.83 bln FactSet Consensus.
Co issues upside guidance for FY23, sees EPS of $8.50-9.00 vs. $8.36 FactSet Consensus.
Co also announced new $500 million share repurchase program authorized.
The Mets prove once again that money can't buy a World Series Championship -
The most expensive roster in major league history was a failure. The Mets’ superfan owner, Steven A. Cohen, committed nearly half a billion dollars this season to learn a timeless lesson easily forgotten when pursuing World Series glory: Money guarantees nothing.
https://www.nytimes.com/2023/07/29/sports/baseball/max-scherzer-trade-mets-rangers.html
Crude Oil +.31 to $80.40/bbl which makes small cap producers like CPE, VTLE and SBOW look very undervalued - I recently added to my positions.
https://oilprice.com/Energy/Energy-General/Oil-Prices-Are-Set-For-Yet-Another-Weekly-Gain.html
GERN has a very long timeline to sales, let alone profitability. Good luck. I prefer other ideas.
F -.60 to 13.13, despite a solid earnings beat. Their gas car sales were strong, but EV sales disappointed ..... but only 7% of the US market is EV, so they'll continue to rake in profits from gas and hybrid car sales for many years to come.
I picked up a few shares today for a trade .....
briefing -
Ford Motor beats by $0.18, beats on revs; raises FY23 adjusted EBIT and FCF guidance; raises FY23 EBIT guidance for Pro and Blue segments but lowers EBIT guidance for EV segment (13.74 +0.08) :
Reports Q2 (Jun) earnings of $0.72 per share, excluding non-recurring items, $0.18 better than the FactSet Consensus of $0.54; revenues rose 11.9% year/year to $44.95 bln vs the $43.17 bln FactSet Consensus.
Appeal of Ford Pro to commercial customers produces 22% revenue growth; EBIT more than doubles to $2.4 bln, a 15% margin; software, repair services sales up.
Ford Blue gas and hybrid business posts higher wholesales and revenue, reports $2.3 bln in EBIT; all-new global Ranger pickup even more popular, profitable.
Ford Model e revenue up 39%; scaling, competitive pricing further establishing leadership ahead of industry's next-generation EVs; now expecting to reach 600K run rate in 2024. "The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford," Farley said. "EV customers are brand loyal and we're winning lots of them with our high-volume, first-generation products; we're making smart investments in capabilities and capacity around the world; and, while others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away."
Co increases its FY23 guidance: Adjusted EBIT is raised to $11-12 bln from $9-11 bln prior guidance; co now expects FY23 adjusted free cash flow of $6.5-7.0 bln vs prior guidance of around $6 bln. Co also guides to FY23 cao-ex of $8-9 bln.
Ford now expects full-year EBIT by segment:
Approaching $8 bln (up from $7 bln prior guidance) for Ford Pro, more than double in 2022, from significant yr/yr improvement in pricing and volume;
About $8 bln (up from "approaching $6 bln" prior guidance) from Ford Blue, with higher volumes and stronger mix more than offsetting any potential pricing headwinds;
A loss of about $(4.5) bln (vs prior guidance of $(3) bln loss) for Ford Model e, reflecting the pricing environment, disciplined investments in new products and capacity, and other costs.
Homebuilders have been on fire since hitting bottom in June of last year with a retest of the lows in October -
Gains since 10/21/22 -
TKR % Change Cur Price Start Price
NAIL 280% 81.23 21.37
BZH 179% 27.74 9.95
GRBK 164% 53.78 20.36
MHO 144% 97.21 39.82
PHM 123% 83.64 37.49
MTH 101% 138.4 68.99
LSEA 100% 9.52 4.76
TPH 95% 29.93 15.32
KBH 94% 53.05 27.34
TMHC 92% 47.31 24.7
TOL 90% 79.25 41.76
DHI 82% 127.05 69.75
CCS 76% 77.18 43.86
LEN 71% 125.82 73.43
LGIH 68% 132.01 78.61
AVERAGE RETURN = 117%
Gains from 2022 lows (intraday) -
TKR GAIN Cur Pr Low Pr Date of Low
NAIL 328% 81.23 18.98 06/17
GRBK 220% 53.78 16.8 06/17
BZH 193% 27.74 9.47 10/21
MHO 183% 97.21 34.33 06/17
PHM 139% 83.64 35.032 06/17
TMHC 136% 47.31 20.045 06/17
MTH 121% 138.4 62.51 06/17
DHI 114% 127.05 59.25 06/17
KBH 114% 53.05 24.78 06/17
LSEA 112% 9.52 4.48 10/14
TPH 105% 29.93 14.59 10/13
LEN 101% 125.82 62.54 06/17
TOL 100% 79.25 39.532 10/21
CCS 98% 77.18 39 06/17
LGIH 84% 132.01 71.73 06/17
AVERAGE RETURN = 143%
PCE inflation continues to gradually cool -
https://www.cnbc.com/2023/07/28/pce-inflation-june-2023-.html
BZH - I'm glad someone else besides me and Cliff owns a homebuilder -
I like the long term prospects for the sector -
PR -
"We remain confident in the multi-year outlook for our Company and industry. Powerful demographic trends and a persistent undersupply of homes should provide support for new home sales, even when we encounter more challenging economic conditions."
CUBI +2.44 to 44.22 after another solid earnings report .... I've been gradually trimming my position, but there's potentially lots of upside left considering the forward PE of around 7. Also noteworthy is that the stock traded at $75+ just 18 months ago when earnings estimates and book value were significantly lower than they are now.
BZH +3.88 to 31.62 after another huge earnings beat -
briefing -
Beazer Homes beats by $0.54, beats on revs (27.74 -0.24) :
Reports Q3 (Jun) earnings of $1.42 per share, $0.54 better than the FactSet Consensus of $0.88; revenues rose 8.7% year/year to $572.54 mln vs the $512.26 mln FactSet Consensus.
Net new orders of 1,200, up 29.7% on a 28.3% increase in orders per community per month to 3.2 and a 1.1% increase in average community count to 124
Co added, "We remain confident in the multi-year outlook for our Company and industry. Powerful demographic trends and a persistent undersupply of homes should provide support for new home sales, even when we encounter more challenging economic conditions."
Why sell SPXS now ? Don't you think the market is due for a major correction ? Or just waiting for signs of a technical reversal before going short again ?
I no longer own MLPs in my IRA .... don't want to pay taxes when instead I can own any other securities and not be taxed.
ET
LAD +30 to 322, a nice quarter. I'm still holding my shares, albeit a very small position. Forward PE is around 9 and analyst estimates will be rising for this auto dealer.