Mr. Sensitive

April 27, 2012

FSX Friday Update

Filed under: Uncategorized — lbej @ 17:45

Apple earnings were this week!   Apple earnings!  This week!  I have never seen a market so committed to peeing its pants, no matter what the results were.  Before this week, I didn’t know the market had pants to pee, so even I learned something.  Apple released quarterly earnings after the bell on Tuesday, and all day it was like the countdown to midnight for Harry Potter and the Deathly Hallows.  I can’t believe no one on CNBC asphyxiated.  As a backdrop, AAPL had run up from $400 at the end of last year to $640 a week or so ahead of earnings.  With almost a billion shares outstanding, you can do the math as to how much market value had been added in a little over three months.  Then the stock seemed to crack on a technical basis, giving up 10% in a week on huge volume and breaking through all kinds of magical short-term supports in the process.  Leading into earnings a miss was baked in.  Instead, Apple beat on every single metric: revenue, EPS, gross margin, unit sales (35 million iPhones sold in the quarter!).  The stock popped from $560 to $610 after hours and held that gain the next day.  After all that, AAPL still only sells at 13 times earnings, a below-market multiple.  In comparison, Amazon ‘beat’ their expectations last night with ‘only’ a 35% DECLINE in earnings per share year over year (Apple EPS doubled).  AMZN trades at nearly 200 TIMES EARNINGS.  If Jeff Bezos wasn’t Katie’s boy, I’d be even more incensed than I am.  How a 35% decline in profits counts as beating anything (except investors, in the face) I just don’t get.  I understand how AMZN could have a higher multiple than AAPL; after all, Apple’s competition is just getting geared up, while Amazon’s is fading away.  But a 200 multiple, on top of declining earnings, and a stock price near record levels—it’s just too much.  Now that I’ve said that, watch AMZN trade over $300 before the end of the year, because I am the worst market-timer ever.

The Family Stock Index traded lower for most of the week before inching back into the green over the final two trading sessions.  The FSX closed at 13,479; its 0.6% advance was well below the 1.5%-2.3% gains logged by the major averages.  We’re headed into a major event cycle, with wedding season beginning next month, school ending in June, and my first draft wrap/complete nervous breakdown just a few weeks away.  If we hadn’t run up 21% year-to-date, I’d be a buyer here, because I think the risk/reward profile looks promising.  But we have run up 21%, so a lot of that promise is priced in.  I wouldn’t be surprised to see the FSX top 14,000 in the near-term—that’s only 4% away, after all—but I think the odds of a 10% drop to around 12,000 before the end of the summer are greater than the odds of another 10% rise.  Just saying.

Advancers

  • Brinkley (BCO) +17%.  I can’t think of anything Brinky’s better at than he was last week, except for things it’s not better for him to be better at.  The market has come around to him as the strong, silent type, I guess.  Whatever the reason, this big move takes Brinky from the bottom of the FSX to near the middle.  I’ve taken to calling him Number One almost exclusively (shortened from Number One Top Baby), so maybe the market is listening.  He’s got a long way to go to catch Reagan, though, and I’m not-so-secretly hoping he won’t—for all our sakes.
  • Reagan (REGN) +11%.  Another big move on earnings carried Reagan across the $140 mark this week.  Up 150% year-to-date and 10% for the week, she still couldn’t get past Justin and Brinky, respectively.  Reagan has actually seemed slightly less fragile in recent weeks; maybe the market’s fooled, but I know better.  Sometimes I seem less insane, too, but it always comes back.
  • Charlotte (ICE) +3.3%.  UPS delivered two big boxes of what I’m betting isn’t actually guitar amps.  They look to be in good shape (the boxes, not the amps) and I haven’t set fire to either of them yet.  Chawly to NC looks like a fait accompli.
  • Mario the Elder (MGEE) +2.4%.  Katie told me something is happening with a house, although whether we’re talking buy or sell is beyond me.  Hopefully Mario T.E. knows which it is; I couldn’t fault him for getting confused and bidding on the house he’s selling, but you can bet the market would.

Decliners

  • Justin (WOLF) -2.6%.  Speaking of a fait accompli, the Justin takeover is all but done.   He’s agreed to a final price of $7.85 with Apollo; KSL has declined to go higher; and the market has bought into $7.85, giving up all last week’s hopes for a price north of $8.  The tender offer closes next week, so I’ll be looking for a new stock for Justin over the weekend.  So long WOLF, and thanks for the 170% year-to-date gain.
  • Jodi Ann (JOY) -3.4%.  Jodi Ann’s continued underperformance worries me, because I think when heavy-equipment stocks are lagging it suggests dwindling industrial demand.  CAT has faced similar market headwinds and has been holding down the Dow Industrials much as JOY has held back the FSX.  She’s hardly been in freefall, but if we’re going to top 14K on the index we need Jodi Ann to put in a bottom here around $70.  No pressure, though.
  • Jenny (JNY) -10.1%.  Jenny admitted to her mother this week that she tends toward obsessive when it comes to books, shows and movies.  Well, the market was hoping for a little more contrition, frankly.  Admitting that the actor who plays Peeta is horribly miscast and looks like a shrimpier Alan Tudyk would be a good start.

Alan Tudyk was ripped up on Dollhouse, in case you forgot.  If you’re going to cast shrimpy pseudo-Alan, just cast ripped-up Alan.

And Eliza Dushku could be Katniss.  Then you could get Rick Fox to play Cinna, and all would be right with the world.

  • Zero (ZIP) -10.4%.  Maybe there are guitar amps in these boxes.  I’m not going to open them and find out, not that I know a guitar amp from a warp drive.  As long as there aren’t body parts in there, we should be good.  Looks like the market’s not assigning a zero probability to body parts, though.
Name Ticker 4/27/2012 Change
Brinkley BCO $25.98 +3.79
Charlotte ICE $132.67 +4.28
Dustin DST $55.95 +1.31
Icarus FLOW $4.10 +0.12
Jenny JNY $11.69 -1.31
Jodi Ann JOY $71.60 -2.49
Justin WOLF $7.85 -0.21
Katie CATY $17.73 +0.21
Lee MSTR $141.11 -4.09
Lisa LNCE $26.04 +0.19
Lucas LEI $1.81 -0.06
Lulu LULU $74.71 +1.01
Marcus MCS $12.81 +0.18
Mario T.E. MGEE $45.82 +1.09
Mario T.Y. SUP $18.10 -0.35
Marisa MOLX $27.90 +0.90
Namilita NL $14.41 +0.37
Nicole B. NI $24.49 +0.08
Nicole L. COL $56.27 +0.71
Reagan REGN $140.01 +13.63
Ruby RJET $5.15 +0.14
Wilson WILC $4.51 -0.15
Winston ED $59.31 +0.70
Zero ZIP $12.20 -1.41
Zondro ZQK $3.46 -0.09
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3 Comments »

  1. “I have never seen a market so committed to peeing its pants.” is one of the best sentences of all time.
    I hope Zero goes up after we move. Also, there are body parts in those boxes.

    Comment by Charlotte — April 27, 2012 @ 18:50 | Reply

  2. Maybe Zero’s down because he’s so sad to leave his awesome coworkers, whereas I can only be completely elated to finally be moving out of this garbage apartment. I’m going to have a bath tub again! Nothing else matters!

    Comment by Charlotte — April 27, 2012 @ 18:53 | Reply

  3. I was going to comment that there were body parts in those boxes. Touche.

    Comment by niceowl — April 30, 2012 @ 16:59 | Reply


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