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Updated portfolio
Cash $82,855
GERN 50000 shares
HALO 3000
Sell SOXS @ $3.12
Sell 26500 SOXS @ $3.12 = $82680
Updated portfolio
SOXS 26500
GERN 50000
HALO 3000 shares
Cash $175
Sell IART @ $36.60/Buy SOXS @ $3.23
Sell 2340 IART @ $36.60 = $85,644
Buy 26500 SOXS @ $3.23 = $85595
Cash left over from trade $49
CRWD after the bell is up 18.5% PE 90+ going forward !
So in other words to make money, you have to chase super extended PEs ! I mean CRWD is growing at the pace of 27% going forward, and has a 90 PE going forward, and it's being chased like crazy after hours. I don't get it.
Updated portfolio
GERN 50000 shares
HALO 3000 shares
IART 2340 shares
Cash $126
Sell SOXS @ $3.42Buy AIRT @ $36.81
Sell 25000 SOXS @ $3.42 = $85500
Buy 2322.74 AIRT @ $36.81 = $85500\
Buy 17.26 AIRT @ $36.81 = $637
littlejohn- Real dough !
Thing is, I had many chances to get back in on the way up, and didn't. I just didn't understand how to value the stock now that they were making AI servers, and felt a 15 -17 PE going forward was all the money for this hardware maker. When SMCI was around $300, only several weeks ago, it had a PE of 20 going forward. When they guided for around 20% higher than expected, I figured the stock was worth $350-$400 max, but it went to over $1000 in about two weeks ! How could anyone know that the stock would go up 250%+ on guidance of 20% more in earnings going forward ? How could anyone have known how to value a stock on the way up, that was around a 10 PE going forward for the longest time in 2002 and early 2003, only to go to a 20 PE going forward only weeks ago, and now almost a 40 PE going forward today ? To me this is insane, and pure frenzied momentum at this point, and I would stay away ! However I will admit, I am upset I didn't stay in the stock till it at least got to a 10 PE last Feb, as when I got out around $75, it only had a 8 PE going forward. So most likely I would have sold around $95-$100, which was my price target when I originally bought it at $69.However I would have still missed out from $100 till now, as I just couldn't get a handle on the proper valuation.
You know LIttlejohn, I have many stories like SMCI. I brought TTD(The Trading Desk) up to the board a few years ago at $68, after a blowout report. Thing is, I had little idea how to value the stock. I mean at $68, it was already selling at a 30 PE going forward, and GOOG at the time, only had around a 27 PE going forward. I knew it was growing faster than GOOG, but it was infinitely smaller, and I hesitated to give it the 50 PE going forward GOOG got the first year or two, when it was growing quickly. Boy was I wrong, as TTD got to over $100 within weeks, and went straight to over $1000 within about a year, holding a PE of 50+ going forward the entire time ! Hindsight is 50/50 !
Tech valuations not as high as March 2000, but
that doesn't mean it isn't similar, and it doesn't mean is won't end the same way. My prediction is, with the S&P 500 and Dow up over 500% since March 2009, and the 2 and 10 year bond yield curve inverted for 20 months or so, with valuations 50% higher than historic, and with a consumer that's finally cracking, and with inflation that IMO will remain sticky(despite the progress so far), that we will see a correction by July, that will lead to a multi year downturn by mid 2025 at latest, and ending with the indexes down 50%+, before a new bull emerges.
littlefish- If my grandmother had balls, she's be my grandfather !
I mean I had 7000 shares of SMCI in Feb 2023, which I would have made $7M IF I kept, and Wadegarret would be up like 700%+ ! What kind of nonsense do you bring ! IF this IF that is bullshit. Plus I got clobbered on SQQQ in 2023, losing back over half my gains from 2022 on the short side, and am still up 185% or so for two years. Go back under your rock, and come back next year. Maybe I'll be up 300%, and you can say IF this and IF that once again !
Value- SMCI
No doubt, I am pissed I sold it at $74 last February, but sour grapes has nothing to do with my view that the stock is not cheap here. I mean I don't hesitate to buy anything(regardless of how much it's risen already) if I feel it's well undervalued, and with strong growth ahead. I mean I had months to buy this in the $200s not too long ago, and didn't. Why ? Because at the time the stock was selling for about a 17 PE going forward, and I felt that being the PE had doubled going forward already, that most of the potential was priced in for this hardware maker. Now at 1000, the stock is selling at around a 34 PE going forward, which is 4 times the PE it what it was a year ago. I mean NVDA is no more expensive on a valuation basis, and that stock has always had a high PE around 40 or more. So all I'm saying is, assuming SMCI doesn't have a monopoly on AI servers, it will never retain a 35+ PE going forward. Thing is, in all the years I've been investing, I've never seen one tech company that retained a monopoly on anything for very long.
SS- IART
Thanks for explaining further about the margins. I mean if this is all about the Boston Facility, then yes, this is a solid risk/reward at present levels.
I'm changing my market correction start date to July
or August. A WAG of course.
SS- IART cash position, and margins
SS, wanted to ask you why their cash went down so much, and are you concerned about the large decline in margins ?.
" Integra exited 2023 with cash and cash equivalents of $276.4 million, down from $456.7 million at the end of 2022.
Cumulative net cash flow from operating activities at the end of 2023 was $139.9 million compared with $264.5 million at the end of 2022."
" Integra exited the fourth quarter of 2023 with lower-than-expected earnings and revenues. Unfavorable product and geographic mix and Boston quality project expenses are exerting pressure on the bottom line. Escalating costs and the contraction of both margins are discouraging. The decline in the Tissue Technologies segment due to the impact of the lost revenues related to the Boston product recall is also disappointing.
On a positive note, in CSS, the company registered strong growth on the back of mid-double-digit growth in CSF management and low-single-digit growth in Neuro Monitoring driven by Certas Plus valves, BactiSeal catheters and ICP microsensors, mid-single-digit growth in Dural Access and Repair driven by DuraGen."
SS- IART
Nice analysis, and I agree, IART could be a turnaround play. I looked at the CC transcript. It appears they're predicting $1.61B revenues for 2024 vs
$1.54B for 2023. this increase included the Boston Facility coming back online in the second half of the year. That's around 4.5% more revenue growth total including the Boston Factory getting back online(vs 8% expected for Stryker). However I understand it's only the second half for the Boston factory, so I guess IART would show closer to Stryker revenue growth, was the factory running the whole year. So the eps guidance they gave would be based on that, and thus 12% eps growth expected in 2024 vs 2023, but again, only for a half year of the Boston Factory. Now I looked at Medtronic and Stryker, and noted they're both selling for around a 25 PE going forward, with around 12% eps growth expected. I guess my main questions would be, what PE was IART selling for going forward, before the Boston problems, and second, how much of a discount from their larger peers should it get in general, if any ?
This market on steroids is just like early 2000 IMO
I mean the Internet bubble sported even higher PEs, but this AI bubble on stock prices is topping out in my view. Wadegarret portfolio has been in SOXS on and off for months now, and is losing almost every entry. Only good thing is, the trading has made for less of a loss, than staying persistently in the ETF. I actually went to SQQQ for a short term last week, and may decide to go that route again. I mean from March 2000, the Nasdaq fell 78% by late 2001, while the semi stocks were down closer to 85%-90%. However the risk of being in SOXS is greater than SQQQ in general, so maybe SQQQ is more prudent. Either way, I believe we are near a top in the semi sector, and the market in general.
I also think one should start thinking of which stocks would be the best short candidates. I may actually start shorting stocks in Wadegarret soon !
GERN- Stock could rally into March 14 meeting of the
Oncology Advisory Committee to discuss GERNs drug Imetelstat for low risk MDS( a type of Leukemia). I think the stock could finally get back to $3+ soon. This stock has been decimated from around $4 to as low as $1.70 a couple month ago on no news. All the while, large Institutions ie Blackrock, Vanguard, and State Street have been increasing their positions, and GERN now has record high Institutional ownership of 72%. I believe GERN has a great drug, that's has the potential for $2B+/year in revenues by 2029, and that the stock action has been totally manipulated. If anyone follows the gross margin on Infusion drugs(which Imetelstat is), they can see it's around 80%. GERN has the potential for $2/year in eps by 2028 if their drug gets approved, and the potential pans out.
Value- SMCI
Yes, up in after hours, as I guess certain Institutions will have to own it now. However I'd be careful, for valuation has gotten stretched IMO. As I pointed out, SMCI makes hardware, and that sector generally has a low PE. When I owned SMCI a year ago, it was receiving an 8 PE going forward, despite having 20%-25% growth going forward. Now at 1000, with $29 expected in fiscal 2025, the stock is selling at a 34 PE going forward. Now I realize that the growth is great(about 35% in fiscal 2025 vs fiscal 2024) , but it always is at the beginning of a cycle of a new technology(AI). I believe there will inevitably be competition for their AI servers, and that the stock is rich at these levels. Good luck though if this is a long term hold for you.
Wadegarret portfolio- Up 9% YTD/up 185% since Jan 2022
Updated portfolio
SOXS 25000
GERN 50000
HALO 3000 shares
Cash $761
Buy SOXS @ $3.43
Buy 25000 SOXS @ $3.43 = $85750
Portfolio correction & new update
I made a mistake in math & my cash balance should be $86511.
5774.25 sell of SOXs @ 3.67=21191 not 21101
Furthermore 21191-20600 (Gern Buy)=591 in cash. 591 in cash plus 85920=$86511.
GERN 50000 shares
HALO 3000 shares
Cash $86511
Updated portfolio
Cash $85,920
HALO 3000
GERN 50000
Sell SOXS @ $3.58
Sell 24000 SOXS @ $3.58 = $85,920
Updated portfolio
GERN 50000 shares
SOXS 24,000
HALO 3000
Cash $392
Sell SOXS @ $3.67/Buy GERN @ $2.06
Sell 5774.25 SOXS @ $3.67 = $21101
Buy 10000 GERN @ $2.06 = $20,600
Updated portfolio
GERN 40000 shares
HALO 3000
SOXS 29774.25
Buy SOXS
Buy 29774.25 SOXS @ $3.69 = $109867
R59- GERN ready to make a move soon IMO
While the stock has done badly over the last year, about cut in half, institutions have been loading. Now at record 72
% according to Nasdaq- and look at the names that own the most !
https://www.nasdaq.com/market-activity/stocks/gern/institutional-holdings
Nelson- Not making out every year
I mean 2000, 2001, and 2002 were horrible years, as was 2008 & 2011. 2015 wasn't too good either. However 2004, 2005, 2006, 2007, 2009 2012, 2013, and 2014 were fantastic years, all on the long side. However what I mean when I say impossible is, stocks aren't acting healthy, or rational. I don't remember 2016, but I don't recall that being the greatest year. Now 2017 was a good year for one stock mainly- AAOI, where I hit a near quadruple on big dollars. 2018 I did ok for being in with a large position on the short side in SPXS from Oct to Dec. 2019 was not a good year, but 2020 I hit it out of the park for being heavy on the short side in both SPXS and SOXS right when COVID hit, and going at least half long when the Dow hit 18000 or so. 2021 was not a good year, but 2022 was a great one, all on the short side. 2023 was a terrible year(almost entirely short), and I'm about even in 2024. So I definitely have seen my share of painful years that I would have likely called impossible.
Nelson, I am much more seasoned now. So I think when I say the market is impossible now, it's more likely to be true. As I said, the combination of sophisticated algorithms, and just an un healthy market, is making it so you rarely can buy intra quarter, and make much. I mean when a stock goes up huge on earnings day, only to remain flat or down the rest of the quarter, I would call that un healthy stock action.
Updated portfolio
HALO 3000
GERN 40000
Cash $109,867
Buy HALO @ $39.80
Buy 3000 HALO @ $39.80 = $119,400
Updated portfolio
Cash $229,267
GERN 40000 shares
Sell SQQQ @ $11
Sell 15000 SQQQ @ $11 = $165,000
Updated portfolio
SQQQ 15000 shares
GERN 40000 shares
Cash $64267
Buy SQQQ @ $11.06
Buy 1099.55 SQQQ @ $11.06 = $12,161
Updated portfolio
GERN 40000
SQQQ 13900.33
Cash $76,428
Sell SOXS @ $3.84/Buy SQQQ @ $11.05
Sell 40,000 SOXS @ $3.84 =$153,600
Buy 13900.45 SQQQ @ $11.05 = $153,600
This market almost impossible to make out in
Why ? For one thing, you can't play momentum. I mean outside the huge SMCI spike for three weeks, I've seen few stocks which keep rallying after good news, past the day of the news. Look at SNOW today for example. The stock had the worst news I have seen for some time, suggesting the stock is selling for over a 200 PE going forward, and even if 2026 targets are met, around 120 PE going forward. Thing is, the entire 2024 guidance was take away, and margins will be 6% instead of 9% on lower revenues to boot. So one would think you could easily make out on shorting the stock at $182 pre market, at a 200 PE on 2024 expected eps. Well I did, and ended up covering at $186. What this and stock after stock after stock with the same kind of irrational intra day action tells me is, algorithms are not allowing stocks to be played short term on momentum much anymore, and that also, the market is not acting healthy.
So bottom line is IMO, when you must rely on holding a stock long term, and praying for good news to make money from time to time, the market is bad, and should be shorted or stayed away from. That's where we are today. Unfortunately those controlling the market are continuing to push it higher, screwing the shorts, and making longs akin to being total gamblers to make out. For me, I already have 95% of my cash outside the market, but still frustrated to try so hard to make out, and just getting nowhere.
Will the Nasdaq keep rallying like 1999/2000
I say no, but I've been wrong for the last 16 months, and continue to lose on the short side.