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They were a $8B company 7 weeks ago and now they are $30B.  It’s no different than TESLA after the run from $250 to $900.  If the CFO doesn’t raise cash at that new 3x 4x value he should be fired.  Sucks for the Johnny come lately hot money but they can’t worry about that.

 
Lot of our board favorite stonks crossed the 50 day average today.  The market has to take a breath here before it takes the next leg up to 3000 but we have some very well posistioned charts with CCL, MGM, BLMN.

 
Home Depot Disappoints

Home Depot shares fell nearly 3% Tuesday after the company reported first-quarter sales rose sharply, but profits were weighed down by extra costs related to the coronavirus pandemic.

For the first quarter that ended May 3, Home Depot reported that net income fell 10.7% to $2.25 billion, or $2.08 per share, compared to $2.51 billion, or $2.27 per share, a year earlier. Analysts surveyed by Refinitiv expected the company to earn $2.27 per share.

Revenue for the quarter rose 7.1% to $28.26 billion from $26.38 billion a year earlier, topping analyst expectations of $27.54 billion. Home Depot’s same-store sales grew 6.4%, beating expectations of 4.4%, based on StreetAccount estimates.

However, it’s difficult to compare reported earnings with analyst estimates for Home Depot’s first quarter, as the coronavirus pandemic changes customers’ shopping patterns and adds additional labor and safety costs for companies.

Home Depot said it took a number of  steps to boost wages for its employees during the pandemic. The company said it expanded paid time off for all hourly employees, as well as for non-hourly workers deemed at-risk for Covid-19 infection by the Centers for Disease Control and Prevention’s guidelines. It has also provided more incentives to keep workers coming in, such as doubled overtime and weekly bonuses, the company said, as well as expanded benefits. 

All told, Home Depot said these measures cost it $640 million after tax, or about 60 cents a share. 

Home Depot has had a few advantages going into the pandemic compared to other retailers. It’s been deemed an essential retailer in most states, so its stores have remained open. It’s invested in e-commerce and online offerings, such as curbside pickup. And spring is historically the busiest time of the year for the home improvement industry.

The Atlanta-based retailer previously said it planned to invest $3.9 billion in 2020 toward further integrating its online business with its traditional stores. The year is set to be the peak of an $11 billion, three-year investment in the effort. The investments have helped Home Depot to shorten delivery time and develop a more user-friendly website. It’s also sought to streamline curbside pickup with automated lockers for customers.

The company previously said it would hire 80,000 additional employees, with many part-time hires staffing its garden center, on par with spring hiring in recent years despite disruption from the coronavirus pandemic. 

However, the company has said it canceled major spring season promotions that drive foot traffic to stores, such as Black Friday-like events. It also has been enforcing social distancing in its stores, and it distributed thermometers to employees who work in stores and distribution centers so they can monitor their temperatures.
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CNBC's take yesterday...

Investors looking to capitalize on any earnings moves might want to consider stocks that are already beating the market, Craig Johnson, senior technical research analyst at Piper Sandler, told CNBC’s “Trading Nation” on Friday.

“You can clearly see that companies like Home Depot have definitely outperformed, Walmart has definitely outperformed and Target and Lowe’s have outperformed on a relative basis versus the overall broader market,” Johnson said. “Then you’ve got your store-based retailers like Kohl’s and Urban Outfittersthat have definitely lagged on a year-to-date basis.”

“We’re definitely going to be shaking out the winners and losers,” he said.

Johnson’s top pick was in the winners’ camp.

“If you take a look at Home Depot, this stock is almost back to all-time new highs,” he said, pointing to its chart.

“It has recovered very nicely off the lows, and I can just tell you from my own personal experience, I’ve spent a lot of time working on the yard this spring and, clearly, the neighbors are jealous,” Johnson said.

“On the weaker side, take a look at the chart of Kohl’s,” he said. “The stock has moved up nicely off the lows but is still very far below its 200-day moving average and, clearly, there’s a lot more time that’s going to be necessary for Kohl’s to recover.”

“Kohl’s is a name that I would be selling into strength here at this point in time and Home Depot would be one I’d be buying heading into the earnings front,” Johnson said.

John Petrides, portfolio manager in the wealth division at Tocqueville Asset Management, was eyeing two other large-cap names heading into the week’s reports.

“I think Walmart and Target are going to be really interesting,” Petrides said in the same “Trading Nation” interview. “From a fundamental standpoint, these companies get about 50% of their sales from groceries, and we know that’s where the majority of the consumer dollar has been going.”

While he expected “a big move on the top line” for both companies, Petrides warned that their margins could narrow as operating costs tied to things such as home delivery rose.

“Three to five years ago, the market was writing off Target and Walmart because they said, ‘Well, they’re never going to be able to compete with Amazon,’” Petrides said. “Well, is Covid-19 and social distancing in the new world we live in the tipping point that now gets these guys into the game of e-commerce in a really, really strong way?”

On the losers’ side, Petrides also suggested steering clear of Kohl’s.

“Kohl’s was a basket case coming into Covid-19. You see all the headlines of the department stores going out of business and Kohl’s is as discretionary as they come,” he said. “So, I think their earnings call is going to be really interesting to see, what is the uber-discretionary consumer doing in this environment and how is a Kohl’s even faring and what [are] their future prospects going to be like?”

The SPDR S&P Retail ETF (XRT) is down almost 20% year to date. while the S&P 500 is down more than 11%.
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May be time to buy some Kohl's

 
Can anyone field this question???

The article above says HD's 1st quarter ended May 3.  Is this typical and who comes up with May 3rd as a cutoff date for a quarter?

 
BassNBrew said:
Can anyone field this question???

The article above says HD's 1st quarter ended May 3.  Is this typical and who comes up with May 3rd as a cutoff date for a quarter?
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I’d have to assume their fiscal year is May to April and maybe May 3rd is when they close the books? It’s a wonky fiscal year anyway, but maybe it’s based on their seasonal revenue. I’ve worked with companies that do July too June or April to March, but when they weren’t calendar based it was still quarterly on track. I don’t do financial/audit type work so I don’t know exactly what it could be but actually ending on the 3rd day of a month would be really strange. I don’t think that’s correct.

 
BassNBrew said:
Can anyone field this question???

The article above says HD's 1st quarter ended May 3.  Is this typical and who comes up with May 3rd as a cutoff date for a quarter?
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Retail folks are all weird. They mostly all pushed back their quarter to account for the holidays hence why it's May instead of March. Then, they likely close it on a Sunday so they get the weekend earnings. I'd assume most of their sales are on the weekend so for comparability sake, they probably want to have the same amount of weekends y/y. 

 
Is BLMN gonna give us another yoyo opportunity?  Down 3% already today.

Edit....make that 4.5% after checking 2 minutes later

Guessing some pullback on stuff once people realize there is NOT a vaccine, the heroes act will NOT pass anywhere close to it's current form, and even when they do pass something it probably wont be for another month or more.

 
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ghostguy123 said:
Is BLMN gonna give us another yoyo opportunity?  Down 3% already today.
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I hope so, I’m itching to use my cash on something. Seeing as how I was behind the market yesterday, it’s kind of funny that I’m up almost 2% overall and the market is down a little bit. It’s almost as if everything has to go up but the rotations from growth to value to tech to restaurants to travel is daily.

 
stbugs said:
I hope so, I’m itching to use my cash on something. Seeing as how I was behind the market yesterday, it’s kind of funny that I’m up almost 2% overall and the market is down a little bit. It’s almost as if everything has to go up but the rotations from growth to value to tech to restaurants to travel is daily.
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Same.  Good reentry point for BLMN?  

 
BassNBrew said:
Apparently their expenses have been through the roof.
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Same thing happened to Amazon. They spent a ton on making their centers safer. Amazon also had a revenue bump of $2B more than expected. I’d think Amazon’s expenses would be more able to be leveraged for the future, kind of like their huge investment in one day shipping. That said, their results don’t surprise me at all based on them being similar to Amazon (retail wise). They got the revenue bump but had to spend a lot more to keep stores and distribution safer.

 
Nibbling at DFS, BLMN, MRO, and WFC

Also MAR when it dipped into the 80s.

 
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stbugs said:
I’d have to assume their fiscal year is May to April and maybe May 3rd is when they close the books? It’s a wonky fiscal year anyway, but maybe it’s based on their seasonal revenue. I’ve worked with companies that do July too June or April to March, but when they weren’t calendar based it was still quarterly on track. I don’t do financial/audit type work so I don’t know exactly what it could be but actually ending on the 3rd day of a month would be really strange. I don’t think that’s correct.
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If Q1 ended May 3rd, then their start to Q1 would have been 3 months earlier.  Probably Feb 1st (or the first Monday in Feb).  Their fiscal year is probably Feb to end of January.  They might do this so that the entire Christmas shop is captured.

 
Random said:
Same.  Good reentry point for BLMN?  
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I see 30% upside from here on BLMN. I am holding for that $13 target I set, as news keeps rolling out people are flocking like cattle to eat out. 

We are range bound in the market IMO for pretty much the remainder of the year. Maybe a tad higher from here....maybe a tad lower. 

I expect 6-10% gyrations and buy the dips (on my master list) for the long term. And trade the ups and downs in our favorite onion and hotel (BLMN, MGM). Buy DIS when you see sub 100 prices...not here. I was happy when I was able to grab more at 82 and change during the panic sell off back in March. I doubt we see that level again.....but 90’s are very much in the cards IMO. No way I pay the premium you saw yesterday when there is clearly much more earnings pain to come. It is not priced in folks. And if it never prices in...so be it. 

If CCL retreats another 10% from here I will add more as my confidence level in that particular cruise line is better than theater two on the recovery in that industry simply due to their balance sheet strength. 

 
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HD is up 9% YTD and only off 3% from its highs. KSS is now down but it's also down 64% YTD. Think of it like grading on a curve. When your stock is down 60%+, you aren't competing against a stock that is up on the year. Southwest said May revenue will only be 90% down vs prior expectation for 95% so things are better. Still ridiculously bad but people are looking for signs of any recovery in those stocks. If you bought something for 95% off and they said now it's only 90% off, it should go up. A few people here were pitching HD and LOW given all the people buying there so the market was expecting strong sales. Stock was up 10% on the month. 

I do think the expenses for all these consumer facing companies will be destroyed. Increased spending for cleaning, higher wages for hazard pay. And that doesn't even consider the reduced economy of scale in places like airlines or casinos. 

 
Sputnikv8 said:
Lol.  So weird (to me). I just sold some of these yesterday.  Now looking at rebuying. 
 

Is everyone doing the same thing what drives all this?
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I've been watching the same cycle for weeks.  I've been buying our favorites whenever they show dips that exceed the general market.  I don't know what's driving the over reactions.  Then again, maybe we aren't seeing overreactions, maybe we're seeing FAANG keeping the indexes on a tighter range than what most of the market wants to trade at.

 
Random said:
Same.  Good reentry point for BLMN?  
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No. Based on the 1 month chart, seems like around $9 is the bounce point. I assume that’s what @Todem has been watching. Would have been smart for me to look at that as well. I have noticed that the bounce highs have been lower each time, making it seem like it’s lower lows and lower highs. Below $9 again (it hit $8.50 the day after most bought) is probably a good entry point.

I just want to see a broader dip.

Looks like @Todem posted something different. Might be a good buy in point. Don’t listen to me.

 
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stbugs said:
No. Based on the 1 month chart, seems like around $9 is the bounce point. I assume that’s what @Todem has been watching. Would have been smart for me to look at that as well. I have noticed that the bounce highs have been lower each time, making it seem like it’s lower lows and lower highs. Below $9 again (it hit $8.50 the day after most bought) is probably a good entry point.

I just want to see a broader dip.
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While I know you chart.....I am looking at more and more locations opening. More and more people going out, and sentiment and momentum will drive the pop higher again to that 13 range. I could be wrong.....and I did enter in again in the 8 range like you mentioned on an oversold day. It very well may dip again to 9 or below it before making that 13 high I want to see (or something very close to it) but we are loosening up more and more and I feel it is a very in motion situation that no chart can predict. 

Pure sentiment and momentum play for me with BLMN and MGM. And short covering is what drives the pops and short selling driving the dips IMO. Most of it anyway. 

 
Just random thoughts and maybe some naive comments...  There just seems to be so much money out there that could be dumped into markets yet.  CNBC had a segment with someone from Fidelity talking about the $4.8T sitting in money markets making nothing.  Other countries rushing to buying US Stocks.  Fed has what, $300-400B more to use yet, not to include other means?  WH seems interested with another stimulus and only a matter of time before their Senate minions join in.  Who knows if/when or how long it takes the Fed to start lowering it's balance sheets or raising rates too.  Maybe another new norm since it's already been going on for years.   

Even though I keep hearing how we're priced at 2021 & 2022 levels.  Just seems like we're going to keep climbing regardless of P/E ratios.  For the Pros here, is the standard P/E measure going to be a thing of the past?  Even before Covid, P/E's were high yet people kept buying.  Give it a 10-15% correction and the money seems like it will just keep coming back because where else can you put it where it doesn't deflate?  

When we bull out of this Covid Economy, it's going to be a stampede of Aurochs.  And God save the STONKS when that market correction happens.

 
BassNBrew said:
BUD is down 5.5% today.  Time to sip.
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If only beer was a commodity like oil and went negative.  No kids at school, fill the pools!

Don't own any beer stocks but probably should get in.  Bars are already getting crowed again in WI.  People have a lot of Donny Dollars to spend on getting drunk.  And maybe more soon.

 
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Todem said:
While I know you chart.....I am looking at more and more locations opening. More and more people going out, and sentiment and momentum will drive the pop higher again to that 13 range. I could be wrong.....and I did enter in again in the 8 range like you mentioned on an oversold day. It very well may dip again to 9 or below it before making that 13 high I want to see (or something very close to it) but we are loosening up more and more and I feel it is a very in motion situation that no chart can predict. 

Pure sentiment and momentum play for me with BLMN and MGM. And short covering is what drives the pops and short selling driving the dips IMO. Most of it anyway. 
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I don’t chart. I am definitely a novice, but I’m good with numbers and patterns. I just looked at the 1 month and the range it’s being zigzagging up and down. I get what you are saying. Do you think there’s a near term catalyst? We just had a huge pop for the top company in the vaccine race (based on Government links and progress), is there anything you looking or just your thoughts on more and more people going out so a gradual rise up? Q2 doesn’t report until late July.

 
stbugs said:
No. Based on the 1 month chart, seems like around $9 is the bounce point. I assume that’s what @Todem has been watching. Would have been smart for me to look at that as well. I have noticed that the bounce highs have been lower each time, making it seem like it’s lower lows and lower highs. Below $9 again (it hit $8.50 the day after most bought) is probably a good entry point.

I just want to see a broader dip.

Looks like @Todem posted something different. Might be a good buy in point. Don’t listen to me.
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I look at the “Totem stocks” (Also Ref stonks) as a high beta proxy for the market.  10-20% moves in big up days.  So while I agree that a better entry point for BLMN would be in the single digits if the market goes from 2950 to 3030 I could easily see BLMN rip from 10.80 to $12.

im also holding for now and will look to cut when we get up to the next S&P level.  I do expect that level to materialize but it may not be for another day or three as the market clearly was overheated from the 27 handles to the 29’s 

 
Marriott bounced backed $2.50 from the entry point this morning.  We'll see you later in the week.

 
-OZ- said:
I'd jump on the buying opportunity but it's already gone up like 20% since we bought a month ago.

No disappointment there.
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I going to sit on Lowes through earning tomorrow and hope they don't treat their employees as well as HD. :bag:

 
The Ref said:
I look at the “Totem stocks” (Also Ref stonks) as a high beta proxy for the market.  10-20% moves in big up days.  So while I agree that a better entry point for BLMN would be in the single digits if the market goes from 2950 to 3030 I could easily see BLMN rip from 10.80 to $12.

im also holding for now and will look to cut when we get up to the next S&P level.  I do expect that level to materialize but it may not be for another day or three as the market clearly was overheated from the 27 handles to the 29’s 
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No worries, if I see it get closer to 10, I might hop in for a little. Amazing to me that we are one little run away from being back at the top of the market as if nothing happened. Remember back when @siffoin was telling us in February that stocks were way overvalued? Lol. Retail sales drop was just at a historic low and we are just about back there. I’m enjoying yet very worried at the same time. Just so weird.

 
stbugs said:
No worries, if I see it get closer to 10, I might hop in for a little. Amazing to me that we are one little run away from being back at the top of the market as if nothing happened. Remember back when @siffoin was telling us in February that stocks were way overvalued? Lol. Retail sales drop was just at a historic low and we are just about back there. I’m enjoying yet very worried at the same time. Just so weird.
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I have no idea what makes a stock drop 8% in a a day and then gain all that loss back in under two hours when the broader market is flat.  It really is a gift.

 
BassNBrew said:
I have no idea what makes a stock drop 8% in a a day and then gain all that loss back in under two hours when the broader market is flat.  It really is a gift.
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So BLMN dropped to 10 then jumps up like 9% from that point.  I just dont get this stuff.  Sure glad you guys do so I can piggyback. 

I sold all I had yesterday around 10.50, bought more today when it went under 10.10, though unfortunately nowhere near as much as I had before.

Also bought Bud at -5.5%.  Thanks

 
ghostguy123 said:
So BLMN dropped to 10 then jumps up like 9% from that point.  I just dont get this stuff.  Sure glad you guys do so I can piggyback. 

I sold all I had yesterday around 10.50, bought more today when it went under 10.10, though unfortunately nowhere near as much as I had before.

Also bought Bud at -5.5%.  Thanks
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Congrats.  Glad to see you making winning trades.  

Meanwhile @Capella and @stbugs sit on their lazy butts as Amazon cracks a new 52 week high.  Congrats to them too!

 
beef said:
Just random thoughts and maybe some naive comments...  There just seems to be so much money out there that could be dumped into markets yet.  CNBC had a segment with someone from Fidelity talking about the $4.8T sitting in money markets making nothing.  Other countries rushing to buying US Stocks.  Fed has what, $300-400B more to use yet, not to include other means?  WH seems interested with another stimulus and only a matter of time before their Senate minions join in.  Who knows if/when or how long it takes the Fed to start lowering it's balance sheets or raising rates too.  Maybe another new norm since it's already been going on for years.   

Even though I keep hearing how we're priced at 2021 & 2022 levels.  Just seems like we're going to keep climbing regardless of P/E ratios.  For the Pros here, is the standard P/E measure going to be a thing of the past?  Even before Covid, P/E's were high yet people kept buying.  Give it a 10-15% correction and the money seems like it will just keep coming back because where else can you put it where it doesn't deflate?  

When we bull out of this Covid Economy, it's going to be a stampede of Aurochs.  And God save the STONKS when that market correction happens.
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A few counterpoints. The $4.8T in the money market may not be what it seems. Before all this started, it looks like there was ~$3.7T in money markets. (https://twitter.com/TimmerFidelity/status/1262443096878481409). So we're looking at ~$1T in incremental money added to money markets. Most of that increase is attributed to Institutional money so retail is not really changing it's stance. For reference, institutional is now 2x retail in terms of who holds money market debt. Now there is some 'retail' money that is managed by institutions but there are also several other plausible reasons. Corporations have raised by some estimates ~$500bn in cash through debt and credit lines like Boeing doing a $25bn debt deal. Where does that money go? They aren't burning all that cash now, and these companies have all taken out cash to survive 12-18 months+ without making money. So they likely put this money back into the market. So up to half of that increase isn't money on the sidelines, unless of course they do buybacks, wouldn't that be ironic. Additionally, there is the Dollar Milkshake theory that someone here loves. But I believe there is $12-$13T of debt outside of the US denominated in dollars that have ~$300-$400bn in servicing costs each year. So you have seen the demand for USD increase, likely as those borrowers look to get defensive, they threw money in MM funds. This is also when I get out of my depth in terms of the flow of funds but presumably, there was also just the flight to quality out of EM. Perhaps that money is here to stay and will provide a techical tailwind for US stocks but just as easily, it will go back to EM. 

I suppose the last part is what matters. Is that money here to stay? Then there is also the Fed side. They've increased their b/s by ~$3T. So even if not directly into MM funds, they pushed money out of Treasuries and into MM funds. Of course that has flowed through to the rest of the market. So part of the rally is explainable by that liquidity. Is that liquidity here to stay? The rally may just be an effect of the Fed's actions but I'd be weary of buying a technical of the Fed when they don't care about the stock market, at least directly. Perhaps the market can outpace the economy as the Fed embarks on its mandate of "maximum employment, stable prices, and moderate long term interest rates" but I have a feeling there will be a day of reckoning for stocks as they reach record highs yet the Fed seemingly fails at its job. But that is probably a discussion for another thread/time. 

And just an FYI on the Fed. They have ~$259bn left on their $454bn facility from the CARES Act. They can lever that sucker up ~10x depending on what they buy so have another $2.6T bazooka. Doesn't mean they'll necessarily use it. 

 
ITRM another biotech jumps from $3.5 to $6.01 on the tiniest shred of good news.

C'mon CYDY get on the exchange already this could be you, but with your actual good news it would be 3x that kind of gain.

 
Sold most of my Wyndham for a 24% profit.  It's within 75% of it's 52 week high.  It looked attractive in the mid 30s, not so much as it knocks on the upper 40s.  

 
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