Friday, March 31, 2017

TLH Market Review -3/31/17

There was some big stock news this week. For one Apple(AAPL) hit a market cap value of $750 billion.  Then portfolio member Facebook(FB) announced it's next full out assault on Snap Inc(SNAP) with the addition of its stories feature within it's Newsfeed on Mobile and Desktop. That's on top of it being accessed via it's Messenger & Instagram apps, and it was recently added to WhatsApp.

In other portfolio news we received word that Danone and WhiteWave have gotten some approvals from the DOJ this week.  The stock quickly shot up close to the buyout price of $56.25/share. It was interesting to see shares trade around $54.50 just last week.  Originally the company said the merger would be done by this month. I still think there's another 3-6 weeks until investors see shares being replaced with cash in their broker accounts.

Also we received earnings from McCormick(MKC).  The company posted another steady quarter as it does in my opinion a great job managing currency fluctuations, and costs. For Q1'17 EPS came in at $0.74 on revenues of $1.043 billion.  A bright spot was operating earnings were up 3.8% to $134 million despite weaker EPS and top-line growth.  Yet that hasn't stopped the shares from reeling this week. 



In economic news  we received the third estimate for Q4 GDP. The market gave a collective yawn at this one per usual.  It's frankly old news.  At this point in time investors are gearing up for Q1 earnings so GDP isn't forefront unless it's Q1 2017 GDP. There was some talk that the job market is getting soft with Initial Claims coming in at 258k.  That's some short term thinking right there. The number has been lower for a record amount of time.  Yes the job market is not robust like it was in previous recoveries, but it doesn't seem to be anything to fret about yet. Once it starts climbing fast then we can pay attention. 

I'll be getting Q1 results for the portfolio going this weekend as I'll need to be the S&P's 5%+ return. I'm going to be working on some calculation changes going forward as I refine my reporting.  Stay tuned. I never updated the portfolio page with 2016 results and I apologize, although you can check out the portfolio results in the google sheet. 

Tuesday, March 28, 2017

Can Anyone Compete With Facebook?

The big news today is Facebook(FB) has released a "stories" feature similar to "camera company" Snap Inc(SNAP).  Facebook has stated the move has come from user requests. Sure I don't doubt that, but we aren't fools either.  The news has initially sent Snap shares reeling.  But this begs a bigger question.

Can Anyone Compete With Facebook?

Earnings - McCormick(MKC)

This AM we received earnings from McCormick(MKC) a global leader in flavor. For Q1'17 EPS came in at $0.74 on revenues of $1.043 billion.  A bright spot was operating earnings were up 3.8% to $134 million despite weaker EPS and top-line growth.  The company continues to do a great job maintaining costs and currency headwinds. The stock has seemed to meander around the last few months.  That's fine as it was a nice winner for us in 2016. I expect the stock to get back on track come summer.  Here is what management had to say:

Sunday, March 26, 2017

TLH Market Review - 3/25/2017

This week was definitely one that investors have not become accustomed too in 2017. Despite it being the 4th weekly decline in a row this week was reminiscent of 2008 to some.  I wouldn't necessarily agree with that. We just ended one of the longest streaks in history for the S&P 500 going without a 1% drop. The last time the S&P 500 declined by 1% was October 11, 2016.  What's also interesting is we saw the yield on 10 Year US Treasuries decline a few basis points to 2.41% on the week so investors weren't running for the perceived safety of government debt.


Thursday, March 23, 2017

Domino's Pizza Coming In HOT!

No that's not a mistake. Domino's Pizza Group(DPZ) has absolutely crushed it since March 2008 with a 1,487% gain.  Remember them? They are the company that satisfied all your dorm room cravings for hot pizzaand cheese sticks.  Well your finance professor should have mentioned you should buy shares. Ah woulda, shoulda, coulda.

The stocks performance has literally smoked Altria's(MO) 438% gain,  fabled Google's(GOOGL) 255% gain, and left the S&P 500 in it's flour dust.  Who knew making pizza was so profitable. The company started paying a dividend in 2012.  




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Tuesday, March 21, 2017

The Apple Mega Cap King

That's one mighty fine chart.  Apple(AAPL) is closing in on being worth $750 billion dollars today.  That's a lot of coin.  By my calculations shares need to hit around $190 to be worth $1 trillion with a float of 5.24 billion shares. If you aren't away the I-Phone make is the largest company by market cap in the world.


Investors holding on since January of 2000 have seen a 4,185% gain in value. In other words $1,000 is now worth $41,850. That's serious long haul investing gains.



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Saturday, March 18, 2017

TLH Market Review - 3/18/17

I don't know if it's St. Patricks Day giving us some that good old fashioned Luck of The Irish, or just flat out good times to make money that heaved indexes up this week. Either way it was another up week for all the indexes. Although large caps didn't quite participate to the extent small caps did.  

Janet Yellen and her Federal Reserve took another step towards taking rates off historic lows. Don't get me wrong here by any means. Rates are still at rock bottom from a historical perspective. Even if rates follow the Fed's projected path to hit 3.0% by 2019 that's still a far cry from the 10%+ this country saw in the 80's. And let me tell you those hair styles were rocking!!!

Thursday, March 16, 2017

Bond Performance Blazing Hot!

No that's not the blazing hot performance of GoPro(GPRO) or Snap Inc(SNAP) below.  It's the "performance" of US Treasury 1 year(UST1Y), 2 year(UST2Y), and 5 year(UST5Y) yields.

Basically yields have gone up from their historic lows(less than 1%) to all now sporting yields above 1%.  So people who have been short near term duration treasuries have actually done quite well since the election. Remember with bonds if you buy them and interest rates head up you technically incur a loss on your holdings value, but the interest payment stays the same.  

Here is the percentage increase in yield for each Treasury type

1 Year: 61.90%
2 Year: 62.20%
5 Year: 56.59%



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Here is the performance YTD

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Tuesday, March 14, 2017

Intel Buys Mobileye As Self-Driving Vehicles Start To Accelerate

Besides the upcoming Federal Reserve rate hike everyone expects this week the big news has been Intel's(INTC) proposed $15 billion buyout of Mobileye(MBLY).  It looks like this past year big company's are starting to take note of the self driving space more as even Uber purchased self-driving truck startup Otto for $680 million.  Intel's offer for $63.54/share is a huge 34% premium to the closing price of $47.27.


Saturday, March 11, 2017

TLH Market Review - 3/11/117


It feels just like yesterday, actually it was February 28th, that it appeared metals were regaining some of that lost luster. Alas the market gods took note of my article and decided enough was enough. Over the last 2 weeks Gold and Silver have shed 4% & 7% respectively.  Not exactly a run for the exit beating, but noteworthy enough. I think this is more of harbinger of profit taking right now than anything else.  Still with the dollar not giving up any of it's gains, it's only a matter of time before currency headwinds kick back in.  Which brings us to our next topic. The rate hike. 

Friday, March 10, 2017

Crude Inventory At Record Highs

If you recall I wrote how the USA is a major producer of oil.  It turns out we are producing so much we are actually at record high storage levels as a result. Here is the US Ending Stock of Crude Oil from the EIA.  It's a weekly number that shows how many barrels of oil are currently in inventory for the USA.  You can see that the number has been spiking to new highs quite quickly since 2015 which coincides with the drop in crude prices. Currently there are 1.2 billion barrels of oil in inventory.





Meanwhile Crude Oil prices are down $54 to $48

Thursday, March 9, 2017

Index Performance As Bull Market Turns 8 Years Old

This week(March 6 to be exact) the bull market in equities turned 8 years old.  That's significant since it's getting towards the long end of bull runs.  Whats interesting is how much divergence there actually has been in the major indices since that fateful turn.  Now this doesn't include dividends so actual returns are higher.


Still it's noteworthy to see the Nasdaq has absolutely crushed all other indexes. Also small caps really got a nice boost the last few months and that's evident in the chart as it really pulled away from the S&P 500.


Nasdaq: 349.18%

Russell 2000: 290.91%

S&P 500: 246.20%

Dow Jones: 216.26%



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Tuesday, March 7, 2017

Short Term Bond Yields Press Higher

It wasn't all that long ago short term bond yields were yielding paltry returns for investors.  That's changed course lately.  The US 1 Year Treasury Bill has been flirting with a 1% yield the last couple days.  I think it might be able to break past that barrier this week. The 1 year has not traded above 1% since 2008!







Meanwhile German 1 Year Treasury Bunds have seen the exact opposite. Especially lately. They look to be on a crash course collision with a negative -1% yield. They hit as high as -0.959%.

Friday, March 3, 2017

Is Biotech Taking It's Medicine?

Despite the heavy political whipping this industry has taken the last few months biotech stocks have quietly been moving up along with the market.  For the first time since September 23, 2016 the IShares Nasdaq Biotechnology Fund(IBB) is trading over $300. I think if the fund can close above the high set in September 2016 we might have a chance it can go on a run that made it an investor favorite for years. The next resistance area looks to be in the $340 range.



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Thursday, March 2, 2017

Earnings - VGR, COST

Vector Group(VGR) reported Q4 and FY 2016 results after the close on Wednesday.  For Q4 the company reported EPS of $0.04 on revenues of $412.8 million. FY 2016 results came in with EPS of $0.55 on revenues of $1.69 billion, and net income of $233 million.The company saw a -5.2% decline in cigarrette sales volume in Q4 and -2.6% for 2016.  That's part of the reason why I think the stock is down over 4% this morning. Real estate results saw better revenue growth, but that didn't translate into a lot more profits.