Category Archives: $EZJ

2CentView performance in 2016

The 2CentView portfolio was up 12% in 2016, which outperformed the S&P500 by 3% but below the FTSE100 which returned 14%.

The objective of the 2CentView system is to outperform the index in rising markets and be at least in line when the major index is flat or falls up to 20%, and outperform if the market corrects more than 20%. The portfolio is benchmarked vs. the SP500 (50%, up 9.5% ) and FTSE100(50%, up 14%), so the outperformed by 0,75% in 2016.

Overall return since 2013, 86% (21.5% annually).

2016 was a volatile and difficult investing year, starting with a sell off in February, triggered by low oil prices and a distressed energy sector. This was followed by Brexit and the election of Donald Trump – both results proving the polls are meaninigless! Many pundits advocating ‘sell all’ following both of these events, but the key was NOT too panic, and look at these events as potential buying opportunities – quality companies will always do well no matter who is in power!

Where it did badly:
2 Core positions were savaged – $FIT (FitBit), $SPWR (SunPower) – both these core positions were down 30% following results, so they traded way through long term stops – 2Centview eventually did exit – the overall pain was not great as 2CentView always sells higher up to reduce the overall cost basis and protect you from the ‘wide arcs’, as the legendary investor Bill Miller says

“Stocks, markets, and money managers’ performance are subject to enantiodromia, the tendency of things to swing to their opposites. Those swings can have wide arcs, and unsustainable trends can sometimes persist beyond the ability of one to endure. That is why most investors are out of stocks at the bottom–they are tired of losing money–and fully invested at the top–they believe their good performance will persist despite their stocks or the market’s being overpriced.”

Trades in $SPD (Sports Direct), $EZJ(EasyJet) [ post Brexit trades],$SKX (Skechers), $VRX (Valeant) were all stopped out.

Where it did well:

Core positions which did well: $MS up 60%, $Z (Zillow group), $ACA (Acacia Mining – gold trade) up 109% were the best performers with other core positions in Apple, FaceBook, Celgene, DLG up between 5 and 15%.

Trades that did well : $LNKD (linked in) – bought by $MSFT, $BOO – boohoo.com (bought after sell off following Trump victory). $DVN – Devon energy  doubled.

Also taken a position in AK Steel and IAG following Trump Election (up 30% and 5% respectively).

The portfolio benefited a bit from the rally in the US$, but the currency exposure is broadly hedged using the $PUS contract.

Main lesson learnt from 2016 – DO NOT PANIC – exiting the market was the worst possible thing you could have done in 2016 – but STICK to your stops if the market or an individual position continues on a downward spiral (both $SPWR and $FIT $9 exit stops were hit).

2CentView is that 2017 could be a great opportunity to make 15-20% if Trump delivers on his election promise, tax cuts and infra-structure spending could really boost company earnings. More on the next tweet for themes for 2017.

Happy 2017  from the 2CentView team.

Post Brexit Opps: EZJ, IAG – pricing in a ….

Easyjet and IAG stocks have been battered post Brexit – both are pricing in a 50% cut to EPS.

If you think this is overdone trade – then this could be good time to get in – both yielding above 3%, so you are paid to wait.

Easyjet:

FV EPS Cut assumed

1080 50%

1350 25%

1500 0%

IAG

FV EPS Cut assumed

374 50%

485 25%

550 0%

The Brits love their holidays, even with sterling at 1,33 it will not deter holidaymakers to the extent priced in the current valuations.

Trade to a 25% EPS cut as follows:

Trade: EZJ Buy if stock gets to 1150, target 1350, stop 1020

OR

Trade: IAG Buy if stock gets to 410, target 485, stop 365

Market sell off Savage – quality stocks at lower prices…UPDATE…

Revisiting some the quality stocks tweeted out at the end of August, following a savage sell off.The market is punishing stocks whose guidance is weak – $SAVE, $GPRO and NXPI…but have rewarded big cap tech stocks like $GOOG, $MSFT.
Can FaceBook join the big tech party or will it sell off following its big run this month?

Here is an update on these great companies mentioned on August 23rd:

Biotech:
$GILD (Gilead) FV = 115 vs 109 – hold out for 115.

Financials:
$MS (Morgan Stanley) FV= 39 vs 34 1.75% 14% Cheap
Reported a terrible quarter, but hold  –  stock is back to 33.4 wait another quarter!

$JPM (JP Morgan) FV=72 vs 64 2.77% 12% Cheap
Prospect for lower rates for longer has not hurt the stock – HOLD.

$HSBC (HSBC) FV=625 vs 533 5.9% 18% Cheap
Weak earnings in Barclays and a potential cash call in Standard Chartered, has not hurt the stock that much at 510. Keep a stop of 470.

Social Media/Internet Retail
$FB FaceBook – look to buy around $80 (30% 5Y Growth)
Results next week – if you got in the low 80’s take profit. 2Centview sold some of the core at 104.

$AAPL (Apple) FV = 120 vs 105
Take profit some profit here above 120.

$TWTR (Twitter) FV=28 vs 26
Terrible quarter – but stock holding up – FV Much lower as company lowers growth expectations. Exit for flat or hold if you believe in Dorsey.

$YHOO (Yahoo FV = 36 vs 33 (vs 68.2 in BABA stock)
Take profit above 36.

$BABA FV= 88 vs 68
Take some profit here at 84.

Chips
$SWKS (Skyworks) FV=92 vs 79 14% Cheap
Stock lower following NXPI results – but FV Unchanged. HOLD.

3D Printing
$HPQ (hewlett packard) FV= 36 vs 27.5 2.56% Yield – Separation could add $5 – look at EBAY/Paypal!
HOLD. FV Unchanged.

$SSYS (stratasys) FV = 25 (if you include $6 of cash) vs 28
FV lower. Exit here at $26 unless you believe 3D printing is potential growth story.

Solar
$SPWR FV=26 vs 21.7
Take some profit here at $26. Keep a core if you believe in Solar Power long term.

Oil
$BP FV=470 vs 357 yield 6.8%
FV= 400 now – lower as oil prices expect to stay lower for longer. Hold for the YIELD or take profit if you got in at 357.
$PFC (PetroFac) FV = 930 vs 789 yield = 5%
Stock did get to 940 – where 2CentView took some profit – holding a core.

Insurance
$AV. (Aviva) FV=580 vs 482 yield = 4.4%
FV Unchanged – hold for the yield.
$AIG FV = 65 vs 60 1.88% Yield
Take profit at $65 (now 63.53)

Airlines:
$EZJ (easyJet) FV= 1950 vs 1624 3.4% Yield
HOLD.
$SAVE FV = $56 vs 55
Terrible run sees the stock trade down to $35. FV $10 LOWER. 2CentView has exited the core position.
$AAL FV=$55 vs 40
HOLD. Nice rally to $46.