ChristopherCarrollSmith

ChristopherCarrollSmith

GM has been a company in decline for many years, and the coronavirus hasn't helped matters. Over the last three years, EPS shrank about 8.5% annually and SPS about 2% annually. The coronavirus caused GM to suspend its dividend, which at over 6% was the main reason for owning the stock. GM's stock price tanked hard, and I have to say-- based on current consensus...

ChristopherCarrollSmith

This chart shows the price movement of gold and silver vs. real 10-year treasury bond yields, which are now at nearly -1%. As you can see, gold has a *very* strong inverse correlation with real 10-year bond yields. Silver is correlated too, but it has long periods of under- or out-performance vs. gold. One way to play this is to wait for silver to get far away...

ChristopherCarrollSmith

On its earnings report today, Microsoft reported better-than-expected earnings and guidance, but issued first-quarter revenue guidance slightly below the Wall Street consensus. The poor revenue guidance was partly, but not completely, offset by slightly better-than expected guidance for first-quarter operating costs. Overall, the magnitude of the earnings beat was...

ChristopherCarrollSmith

First of all, I want to acknowledge that I am indebted for this idea to Raoul Pal and the fine folks at Global Macro Investor and Real Vision Group. I personally know just enough about finance to be dangerous, but these guys know their stuff and I stand on their shoulders, especially in relation to Forex. The U.S. dollar index is now *very* close to a key...

ChristopherCarrollSmith

Biogen today reported a huge earning beat, but disappointing guidance for the rest of the year. When you crunch the numbers, the midpoint of Biogen's guidance range for 2H 2020 came in slightly below Street consensus for both earnings and revenues. Biogen has a reasonable, but not great valuation, with forward PEG of 3.78 and forward PSG of 1.27. It's currently...

ChristopherCarrollSmith

HPQ recently broke out of a triangle to the upside. Analyst sentiment is bullish, with HPQ earning an 8.9/10 Equity Starmine Summary Score. Short-dated options positioning on HPQ are extremely bullish-- more bullish than any other security I've recently looked at. The news environment has been relatively positive, with a new suite of remote work product offerings...

ChristopherCarrollSmith

Economic downturns are usually accompanied (and perhaps prolonged) by a tightening of private credit, as you can see on this chart of S&P 500 performance vs commercial and industrial loans from all commercial banks. Lending significantly lags stock market performance, but a downturn in lending generally confirms a recession, and an upturn in lending generally...

ChristopherCarrollSmith

Abbvie's volume has slackened somewhat after its recent triangle breakout, and it has broken its steep upward trendline. We may see a small correction late this month as Abbvie pulls back toward triangle top. However, if healthcare and pharmaceutical sector earnings continue to deliver this month (as they have so far), then Abbvie should get some buying volume...

ChristopherCarrollSmith

IBM has been making this triangle chart pattern since 1997 and will forced to a decision point one way or the other by 2026. For some investment strategies, you have to perceive time like a tree. :) IBM's earnings and sales have been shrinking for many years-- EPS at a rate around 2.5% per year, and SPS at a rate around 0.25% per year. That makes this essentially...

ChristopherCarrollSmith

The financial sector's technicals are looking more bullish after earnings week, with the MACD above the signal line and the price above a volume support. Banks reported mixed financial results, with sales 4.3% above Street expectations, but earnings 3.3% below Street expectations. The earnings came in weak mostly because banks set aside big piles of cash to guard...

ChristopherCarrollSmith

So we've got macroeconomic forces pulling in a couple different directions right now. One the one hand, the Fed is talking about pumping trillions of dollars more liquidity into the market, which should further inflate equity prices. On the other hand, with coronavirus cases continuing to rocket, we're starting to see economic data fall off a cliff. Consumer...

ChristopherCarrollSmith

I saw a couple articles this morning suggesting that maybe TSM sold off today because forward guidance disappointed Street expectations. That's nonsense. Revenue guidance came in about 7% above expectations, and earnings guidance came in about 15% above Street expectations. This company's guidance crushed it . The stock sold off for one reason only: it is...

ChristopherCarrollSmith

I did a deep valuation analysis on Citigroup today, digging into their earnings reports for the last three years as well as analyst estimates for the next 4 quarters. Here are my conclusions. In forward P/S terms, Citigroup is nearly the cheapest it has been in the last three years. However, in forward P/E terms, it's nearly the most expensive it has been in the...

ChristopherCarrollSmith

CVS is pulling back in sympathy with Walgreens after WBA earnings were a dud. However, the adverse impact on Walgreens sales was "almost entirely from the company's non-U.S. businesses," according to the company's report. CVS operates almost exclusively in the United States, with 9,750 US locations and just 150 internationally. This suggests that CVS should be...

ChristopherCarrollSmith

Bank of America is near a three-month trend line today as the entire market pulls back. $BAC is far from the strongest of the bank stocks, which are a weak sector in general, so it's quite possible it won't hold the support. I've picked up a July 31 option call and set an alert to trigger to me to sell if it crosses below the trend line. Estimize is forecasting...

ChristopherCarrollSmith

Introduction Strong upward momentum for Lowe's has been slowing lately along with the rest of the market. However, I think the upward march for this stock can continue for both fundamental and technical reasons. Fundamentals Like nearly every other stock in this market, Lowe's is trading at a higher multiple than the stock has traditionally traded at. Unlike...

ChristopherCarrollSmith

Consumer staples tested and got rejected from a critical trend line this afternoon. The sector has been strengthening due to demand for groceries as economies reclose. Today it also got a bump thanks to news that people with incomes less than $40,000/year may get a second round of stimulus checks. This ought to help juice consumer demand a little. I've also been...

ChristopherCarrollSmith

I rolled the dice on a far out-of-the-money July 31 Tesla put this afternoon after Elon Musk tweeted at the SEC to suck his cock. If I'm wrong, it's no big deal to lose $60. If I'm right, maybe I'll make a quick c-note when news of an accounting fraud investigation breaks. Possibly...