find our current holdings, really. The first three form our slightly larger positions. We invest long-term, 2 years or greater. Markets go both ways, yet some of our future can be seen clearly now. That is our target.
We also realize that we are not strictly diversified. Quite clearly, we position radically for trend-driven secular shift(e-commerce, SVOD, etc.) All dividends are reinvested. Our average time horizon is now 11 years. Our holdings include 10 equity positions, call options, and cash(averaging 10%.)
AS OF 07-21-18.
PORTFOLIO-SHAPING CHANGES DO OCCUR REGULARLY. FULL UPDATES MONTHLY.
1. Amazon–(NASDAQ: AMZN) IT, Internet, Direct Marketing.
Be there with StockJaw in the end–when AMZN does everything everywhere.
Amazon remains one of the epic growth stocks of the age. AMZN isn’t even close to done. Founder/CEO Jeff Bezos is doing what the Soviets couldn’t. AMZN is taking over the world, but in such a way that they become integral to non-retail industries. Amazon doesn’t want every industry. They want to sell goods and services to every industry. “Look regulators–no monopoly.” Forget the P/E on AMZN. Buy on a 3%-8% pull-back, if not bad company news. Amazon passes on a lot of conference call questions.
On July 11th StockJaw called–“AMZN, BUY below $950.00.” AMZN opened that day at $993.00. Forty-one days later AMZN hit our buy price. Five weeks after that, on 9-26-17, it hit an intraday low of $931.75–the cheapest since our “BUY” call. Which means we called 98.2% of the discount for AMZN that the market provided. It’s now $1156.16. If purchased at our $950.00 call, it translates into a 21.5% move in eight weeks.
Savvy-up with our unzipped twin takes on World Killer Amazon:
“That Smiley Amazon Show.”
or “‘Follow That Crowd?’ Amazon Prime Day Pump.”
22% of Total Equities Held(up from 17%).
Our cost basis: $758.06.
Morningstar fair value; $1600.00.
AMZN’s big tell remains Prime memberships. After revenue, they report a metric they call CSOI(consolidated segment operating income.) On calls AMZN provides mostly general info/color. Read the press releases first. Q3’s call was short, loud, glitchy, and chaotic.
Amazon Investor Relations:
StockJaw.com Conference Call Rating: 2 Stars.
AMZN–Crooked Hours Report.
1. Anti-trust regulation. Amazon’s size, increasing reach, and rail-dragster growth, make it a prime target for regulators. Regulation is often a political ploy, rather than consumer protection. Amazon is for sure the nail to be beaten down if consumer sentiment shifts.
2. Execution risk. AMZN continues to startle. No company in human history has expanded this broadly, and this far. AMZN wants the world and they’re going for it.
3. The rebirth-hard of Wal-Mart. The purchase of Jeff Lore’s Jet.com is transforming WMT’s entire online presence. It’s working–big time. Jet.com’s model rewards shoppers with both lower shipping and item costs. How? Customers save when selecting regional sellers, buy more, and are willing to wait, thus allowing sellers time to bundle orders efficiently. It works. WMT’s revenue displays as much.
2. Alphabet–(NASDAQ: GOOG, GOOGL) IT, Internet, Software & S.
T h e EU’s $2.7b. anti-trust fine is the cost of doing business for Alphabet. That issue irons out over time. They have $90b. and own 90% of EU search. No competitor stands in position to threaten Alphabet. Love this oligopoly search/advertising juggernaut, and mother of Waymo. Who knows what else co-founders Page and Brin may cook up in that backyard they call Other Bets? Mash the link for our full report on Alphabet, after the arrival of “Ruthless Ruth.”
Our sweeping and nuts and bolts look at Alphabet:
“How Many Stars in Constellation Google?”
11% of Total Equities Held.
Our cost bases: GOOG $605.98, GOOGL $680.90.
Morningstar fair value: $1200.00.
A grip on digital advertising helpful–like ‘programmatic.” Google it.
Alphabet Investor Relations:
Alphabet once sports perhaps the worst Investor Relations website we work with. No longer. Alphabet provides perhaps the very best earnings press releases going.
StockJaw Conference Call Rating: 3 Stars.
Alphabet–Crooked Hours Report.
1. Alphabet faces the same anti-trust concern as FB, or AMZN. Google owns search, particularly in the United States and Europe. The EU has been conducting an unending battle against Alphabet, for years. Late this summer the EU levied a $2.7 billion fine against Alphabet for unfair trade practices relating to its’ displaying of shopping results. The EU claims the company massages search results. Probably. Google could eventually be seen as a “utility” and perhaps be regulated along those lines.
2. Concern also exits around Alphabet’s “dependence on search and advertising.” We do not share this notion. Alphabet’s uniquely structured business incubator model houses Waymo(self-driving cars), Nest(groovy IOT homes), Verily(longevity/life science), Loon(balloon-borne internet delivery), Fiber(unaffordable high-speed internet), Glass(connected wearables.)
3. We have voiced concern surrounding the sheer number of ideas pursued by the company. How many is too many? How much money will they throw into yet unprofitable notions? Yet watching Amazon’s unfathomable expansion into everything has lessened our worry. The rise of Waymo is also very encouraging. Besides, Alphabet’s cashy enough.
3. Activision-Blizzard–(NYSE: ATVI) IT, Software.
Activision is the model for the E game industry. Enduring engagement is their mantra, and they pioneered the path. It works. All follow ATVI’s model now, and they’re getting better at it. Yet, heard of e-sports, or World of Warcraft, Call of Duty, Overwatch? TTWo and EA are also great “3rd party publishers.”
9.1% of Total Equities Held.
Our cost basis: $38.53.
Morningstar fair value; $59.00.
Annual Dividend Yield 0.48%
Fully informing, yet promotional, like Kevin Plank over at UA.
Activision-Blizzard Investor Relations;
StockJaw Conference Call Rating: 3 Stars.
4. United Health Group–(NYSE: UNH) Healthcare, Providers.
United Health is best in class health care management, and pharmacy benefits manager(pbm). Love or hate such companies, UNH has displayed adaptability in a rapidly shifting marketplace. They probably have some of your money. Why not get some back?
On Tuesday(7-17-18)United Health released a dominating Q2 performance. For Q2, 2018, UNH outperformed, exceeding both analyst’s expectations and their own guidance. What was the best-positioned and capitalized healthcare company saying? “Business is good and we’re growing every operating segment of the company, driving value, access, cost-savings, and consumer choice. And digital medicine is a prime focus for the team. All segments led with strong organic growth. The market hated results early, and loved them later, and on Wednesday.
Q2, 2018: Revenue +12%, EPS +28%, cash from Op. $4b. up from $2.2b. year ago, an 81.8% increase y/y, income from Op. +12.7%, dividend hike +20%. Raise of full-year EPS guidance up to $12.50-$12.75sh.(rep. EPS 24-27% growth rate).
United Health Group is a very large mature company–one turning in both strong double-digit top-and-bottom growth. This company is not concerned by the over-worked “built-in uncertainty” of the healthcare space. In fact, they expect to do better through the end of 2018, and even through 2021. How’s that for confidence? “We expect more tailwinds then headwinds, this year.”
8.7% of Total Equities Held.
Our cost basis: $177.76.
Annual dividend yield 1.44%.
Morningstar fair value; $161.00.
Annual Dividend Yield 1.33%
United Health Group Investor Relations:
Stockjaw Conference Call Rating: CCR–4 Stars.
Conference calls contain nice summary statements by top management, and clear metrics. The complexity of the business lends comments toward the summary style, yet are clarifying. Analyst’s questions often delve into more granular detail, thus can be difficult to follow. Terms will include “MA,” Medicare Advantage.”
StockJaw Conference Call Rating: 3 Stars.
5. TELADOC(NYSE: TDOC).
Savor all the details of TELADOC with our brand new piece–
“Beaning The Doctor-And Fast Growth-To you.”
6. Square(NYSE: SQ).
7. Paypal(NASDAQ: PYPL).
8. Twitter(NYSE: TWTR)
When TWTR was hammered on 7-9 we picked some up. We’ll see.
CASH; 17.4%, Target range 12-26%.
StockJaw is working to bring you even greater perspective. When we buy or sell you’ll find it right here.
Roll with volatility. Remain calm and keep your bucket upright.
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