What Caught Our Attention in the Investment World? – Week of August 5-9, 2019

By Anil K. Ambastha and Kuldip K. Ambastha

Following its second-quarter earnings report featuring lower than expected losses, higher than expected revenues, a year-over-year 39% increase of active users to 30.5 million, and bright future guidance, shares of a TV streaming platform operator, Roku (ROKU), rose by 20.9% on August 8. The company has lifted its full-year revenue outlook with a mid-point of revenue range being $1.085 billion, up from the previous mid-point of $1.04 billion. Roku’s stock has now risen by 309% year-to-date as of the market close on Friday, August 9, and is trading at very close to its all-time high, reached intraday, for this stock since its initial public offering on September 28, 2017.

Keywords – Second-quarter, Earnings, TV Streaming, Future guidance, Initial Public Offering, IPO.

Disclosure – The principals of Ambastha Financial LLC have no position in ROKU.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2019 – Ambastha Financial LLC.

What Caught Our Attention in the Investment World? – Week of July 29-August 2, 2019

By Anil K. Ambastha and Kuldip K. Ambastha

The second-quarter earnings report and guidance process parade is continuing. This week, reports from engineering and construction companies such as McDermott International (MDR) and Fluor Corporation (FLR) reflected large losses, revenue misses, and uncertain futures.

Following its earnings report, shares of McDermott International (MDR) dropped 35.3% on July 30. For the remainder of the week, shares of McDermott International (MDR) dropped a further 17.5% for a total weekly loss of 46.6%. Similarly, shares of Fluor Corporation (FLR) dropped 26.7% on August 2 after its earnings report that marked its biggest one-day share price drop ever since its initial public offering (IPO) in December 2000. Fluor Corporation’s (FLR) stock is now trading at close to a 15-year low.

Keywords – Second-quarter, Earnings, Engineering, Construction, Revenue miss, Uncertain future, Forecast, Guidance.

Disclosure – The principals of Ambastha Financial LLC have short option and long equity positions in FLR. They have no position in MDR.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2019 – Ambastha Financial LLC.

What Caught Our Attention in the Investment World? – Week of July 22-26, 2019

By Anil K. Ambastha and Kuldip K. Ambastha

Food industry and restaurant industry stocks generally move in a slow and steady manner. Also, once the initial hype is over shortly after an Initial Public Offering (IPO) of a company’s stock, generally, the IPO shares start to decline and, mostly, an IPO’s shares trade for less than the IPO price one year later. However, many strange things can happen in the stock market and are worth paying attention to.

A recent example of an amazing IPO success story in the food industry in 2019 is Beyond Meat (BYND) which has returned 839.6% since its initial IPO price of $25 in early May. The table below notes performance of some of the other notable winners in the food industry and restaurant industry sector this year:

(HSY, CMG, SBUX)

Keywords – Food industry, Restaurant, IPO, Initial Public Offering.

Disclosure – The principals of Ambastha Financial LLC have short option positions in BYND and HSY. They also have a long equity position in HSY and no current positions in CMG and SBUX.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2019 – Ambastha Financial LLC.

What Caught Our Attention in the Investment World? – Week of July 15-19, 2019

By Anil K. Ambastha and Kuldip K. Ambastha

Second-quarter earnings season started in earnest this week and will continue for the next 3-4 weeks. This week, the S&P 500, Dow 30, and Nasdaq indices respectively dropped by 1.23%, 0.65%, and 1.18%. Thus, movement of the indices was fairly benign and insignificant. However, individual stocks can and do change significantly based on their earnings reports and future guidance vis-a-vis market expectations based on analysts’ reports.

This week, some of the stocks that moved quite a bit after their earnings reports were Netflix (NFLX), CSX Corp. (CSX), and Union Pacific Corp. (UNP). Netflix dropped by 10.3% by the market close on Thursday largely because of disappointing subscriber growth. Transportation sector stocks such as CSX Corp. and Union Pacific Corp. moved in opposite directions after their earnings reports largely because of their current quarter earnings numbers and their future guidance. CSX Corp. dropped by 10.3% by the market close on Wednesday, while Union Pacific Corp. moved up by 5.9% by the market close on Thursday.

Keywords – Earnings Season, Second-quarter, Earnings report, Transportation sector, Subscriber growth, Future guidance, Market expectations.

Disclosure – The principals of Ambastha Financial LLC have short option positions in CSX and NFLX. They also have a long equity position in NFLX. No recommendations are being made via this post. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other investment instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2019 – Ambastha Financial LLC.

What Caught Our Attention in the Investment World? – Week of July 8-12, 2019

By Anil K. Ambastha and Kuldip K. Ambastha

After testimony of the U.S. Federal Reserve Chairman Jerome Powell to the U.S. Congress where he indicated the possibility that the central bank may cut interest rates during its meeting later this month, some of the major stock market indices reached their all-time highs. The S&P 500, Dow 30, and Nasdaq indices respectively closed at 3013.77, 27332.03, and 8244.14.

Another important event was the White House’s reversal on seeking to eliminate drug price rebates from drugmakers to pharmacy-benefit managers (PBMs). This resulted in major moves upward for the insurers and companies that operate large PBMs (e.g., ANTM, CVS, HUM, and UNH) and major moves downward for the pharmaceutical companies (e.g., LLY and MRK).

Keywords – Fed Chair, White House, stock market index, pharmaceutical companies, health insurer, pharmacy-benefit managers, drug price rebate.

Disclosure – The principals of Ambastha Financial LLC have short option positions in ANTM, CVS, HUM, MRK, and UNH. They also have a long equity position in MRK. No recommendations are being made via this post. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other investment instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2019 – Ambastha Financial LLC.