Thursday, April 10, 2014

The Glass is 1/2 Filled w/Putinization....What's in the Other 1/2???

Fyi….Position update…..In addition to periodic global-macro posts to this blog, we occasionally share position updates that are routinely shared with our investors.  These comments are absolutely not meant to be investment advice and readers are reminded that all comments posted here are for information and entertainment purposes only!  Any commentary, especially those that include specific mentions of 'buying' or 'selling' or 'positions', is made solely for those limited informational and entertainment purposes, and NOT as advice.  While we will be sharing some detail on changes made to our portfolios, it's important to consider that our portfolio decisions are taken in a much broader context of our overall portfolio strategies and our assessment of each of our investor's unique financial profiles.  As such, what we do, and when we do it, is specific to our investor portfolios and is NOT intended, in any way, as advice for use by others.
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With all the geopolitical fear-mongering going on re the Putinization of Eastern Europe, and I don’t mean to belittle the negativity that this rightfully engenders in market participants, it’s easy to lose sight of some global positives.
Question….if you don’t already know from this morning’s news, and had to guess where Greece would be able to borrow in the public markets for a 5yr bond, what yield would you put on it?
Correct answer:  4.95%!!!
Incredible.
How far we’ve come!!   While many wonder if the market is being too optimistic about Greece’s navigation out of its financial mess and believe that the market is far too complacent about the risks, for the moment at least, today’s bond sale, for Greece, is an unqualified success.
Also, and this is still a ‘wow’ item, though a touch less so, Italy and Spain’s debt is trading in the low 3% levels.  That’s a big positive for the European story.  Every day that goes by where they borrow at such low levels really helps on their fiscal and debt adjustments.
Add into that last night’s liberalization move by China re cross-border equity trading, and Australia’s strong employment data, and continued improvement in the jobs picture here in the US, and you have a good set up for the post-tundra winter when the sun ought to shine, not just literally, but figuratively on sales and earnings.
As I’ve been writing in these missives, I’ve selectively put cash to work on pullbacks in what I believe are quality names.  And I remain in that mode.  FYI, on my radar screen to either add to existing positions or to initiate new longs include:  Nike (NKE), Pembina Pipeline (PBA), Fresenius (FMS), US Ecology (ECOL). 
On the other hand, watching recent run-ups in Deere (DE) and Caterpillar (CAT) to assess valuation at these levels (still room to run?  Or, overextended?)
Will keep you posted.
Best,
Ed

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Tuesday, March 11, 2014

American Eagle Outfitters (AEO): Weathering the storm



Fyi….Position update…..In addition to periodic global-macro posts to this blog, we occasionally share position updates that are routinely shared with our investors.  These comments are absolutely not meant to be investment advice and readers are reminded that all comments posted here are for information and entertainment purposes only!  Any commentary, especially those that include specific mentions of 'buying' or 'selling' or 'positions', is made solely for those limited informational and entertainment purposes, and NOT as advice.  While we will be sharing some detail on changes made to our portfolios, it's important to consider that our portfolio decisions are taken in a much broader context of our overall portfolio strategies and our assessment of each of our investor's unique financial profiles.  As such, what we do, and when we do it, is specific to our investor portfolios and is NOT intended, in any way, as advice for use by others.
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The weather is largely to blame, but not totally, for AEO’s underwhelming earnings report and gloomy forward guidance.  A move by trendy teens towards cheaper chain stores (eg:  H&M, Zara) also took a bite out of earnings.  This left AEO with higher than expected inventory levels, tighter margins and higher promotional costs.  A bad combo!
That said, the price of the stock, which had already been lagging especially since the departure of the CEO in January and anticipating a bad ‘weather’ related earnings report, is down today over 7%.  The optimists, among which I count myself, think that the company will pare down their inventories, control costs and continue to gain from expansion efforts especially in overseas markets.   

Perhaps hardened by the tough NorthEast winter, at this point I’m still ready to weather the AEO storm.  I added to our position on the selloff. 
The upcoming warmer seasons should be telling.

Will keep you posted.
Ed

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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Additional Disclaimer: currently long many stocks/ETFs incl. AEO.  Positions may change at any time without notice.    

Tuesday, February 18, 2014

That's a bunch of....Waste.....Management, that is (& US Ecology)



Fyi….Position update…..In addition to periodic global-macro posts to this blog, we occasionally share position updates that are routinely shared with our investors.  These comments are absolutely not meant to be investment advice and readers are reminded that all comments posted here are for information and entertainment purposes only!  Any commentary, especially those that include specific mentions of 'buying' or 'selling' or 'positions', is made solely for those limited informational and entertainment purposes, and NOT as advice.  While we will be sharing some detail on changes made to our portfolios, it's important to consider that our portfolio decisions are taken in a much broader context of our overall portfolio strategies and our assessment of each of our investor's unique financial profiles.  As such, what we do, and when we do it, is specific to our investor portfolios and is NOT intended, in any way, as advice for use by others.
With that in mind, we hope you find our comments of interest, and we'd be delighted to hear feedback!



Waste Management (WM) reported earnings today and disappointed vs Street estimates.  Market took stock down close to 5%.  (see first chart below)

The company also announced a 2.7% hike in the dividend (which is approx. 3.3%) and a share buyback of $600mm. 

I still like the theme of waste removal, the high barriers to entry in this space, and the seeming uptick in the US economy which should help WM’s business on both corporate and retail level.  The latter, too, should be helped by privatization of services by struggling municipalities.

Technical players are likely to look at today’s price action as bringing WM close to key support levels and close to technically ‘oversold’ conditions.  Will be watching those levels closely as first key tests of support for a bounce.

Brought total position up to 3% from 2.4%.  If it dips further I’d likely add.



Another company in this space that I’m eyeing is US Ecology (ECOL) (no current positions).  They reported earnings last week, and on that day, the stock took its own ‘flash crash’ before rebounding strongly!  (see second chart below).  The market was initially concerned about a decrease in revenues from Gov’t contracts, which on the earnings call, the company explained as being largely due to the 2013 sequestration and budget cuts.  The business, however, is quite diversified, and the company sounded quite positive on upcoming projects for 2014 in other customer segments. 

ECOL is a relatively smaller company and trades in much less average daily volume.  But on a pullback from current levels, this is on my shopping list.

Will keep you posted.

Ed



Fyi….



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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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Additional Disclaimer: currently long many stocks/ETFs incl WM.  Positions may change at any time without notice.   

Wednesday, February 12, 2014

The "Cold" Facts: a quick thought.....



While you’re sitting there thinking about how cold it is, consider this info from the US Energy Information Administration website: 
Have a look at the first chart and note how natural gas prices have doubled in the past 2 years.  
Then look at the next two charts.  
The first shows the temperatures across the US for the 7-day period ending Jan 30.  
The second shows how that deviates from the average temperature historically during that same 7-day period.  
Not surprisingly, there’s a huge portion of the country at significantly lower temps than in years past, requiring more heat, at higher prices per unit of heat.

Going to have any impact on the percentage of income that is available for discretionary spending?????  Hmmmm……





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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs incl XLE.  Positions may change at any time without notice.