⁠Quality Stocks
It is important to distinguish between CHEAPER and CHEAP

For example, Salesforce $CRM and Visa $V may be considered cheaper right now, but they are not necessarily cheap

When PayPal ($PYPL) dropped below $100, it became cheaper, but only around $55 could it be considered truly cheap

Of course, a company can have a PE of 30x and still be considered cheap, while another with a PE of 15x might be expensive. This single metric alone isn't enough to assess a stock's true value
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⁠App Economy Insights
$AVGO Broadcom Revenue by Segment https://t.co/qUH7bwZdLZ
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⁠Bourbon Capital
September hates semiconductors

RIP $NVDA, $SMCI, $AVGO, and $ASML.

$ASML is finally below $800, and I'm more than happy to see it reach $750 https://t.co/OCumCkcTpa
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⁠Quality Investing with Aria
You buy your girl hermes, I buy her this. We’re not the same 😮‍💨

$NVDA https://t.co/Kdw4lTBSfW
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⁠Bourbon Capital
Oversold stocks:

Hims & Hers Health, Inc. $HIMS
Occidental Petroleum Corporation $OXY
Lululemon Athletica Inc. $LULU
Ulta Beauty, Inc. $ULTA
e.l.f. Beauty, Inc. $ELF
Celsius Holdings, Inc. $CELH
Monster Beverage Corporation $MNST
PDD Holdings Inc. $PDD
The Estée Lauder Companies $EL
Dollar Tree, Inc. $DLTR
CrowdStrike Holdings, Inc. $CRWD
BP plc $BP
Louis Vuitton $LVMH
Nestlé S.A. $NSRGY
Edwards Lifesciences Corporation $EW
DexCom, Inc. $DXCM

Almost there:
ASML Holding N.V. $ASML
Alphabet Inc. $GOOG
Old Dominion Freight Line, Inc. $ODFL

I'm not gonna buy anything yet, its too early
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⁠Bourbon Capital
Big lots $BIG is going to report earnings tomorrow

Revenue: $1.04B
EPS: -3.46

The stock is +23% after-hours

I love insider information https://t.co/nZEF2R1ODg
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⁠Bourbon Capital
lululemon athletica Inc $LULU insider bought 4k shares for $1 million

Price reported: $260

Thanks for that i thought I was alone holding $LULU https://t.co/VEB8CjnvKO
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Aswath Damodaran (Youtube)
The Power of Expectations: Nvidia's Earnings Report and Market Reaction
On August 28, 2024, Nvidia reported its second quarter earnings, and on the face of it, the numbers were dazzling. Revenues were up 122% from the same quarter the previous year, gross margins exceeded 75% and operating margins were 60%+, and the numbers exceeded analyst expectations. The stock price dropped 8% in the aftermath, and has continued to decline, wiping out more than $400 billion in market cap in the week since. I use this session to look are earnings releases, in general, exploring the expectations game, and Nvidia's in particular. I also look at the information that earnings reports contain for traders (about mood and momentum) and for investors (about growth, profitability and risk). I close by revisiting my Nvidia story, in light of the report, and revaluing the company.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Nvidia2024.pdf
Blog post:
Nvidia quarterly earnings: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/78501ce3-7816-4c4d-8688-53dd140df456.pdf
Valuation of Nvidia: https://pages.stern.nyu.edu/~adamodar/pc/blog/Nvidia2024.xlsx

⁠Quality Investing with Aria
Don’t know why I haven’t listened to this book until now.

Even if you’ve listened to the podcasts of Goggins. The book is 10x more detail and a 100x better than any podcast

Crazy human being 🤯 https://t.co/ADIGelafwH
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⁠Bourbon Capital
Time is fleeting, and the dreams you once had might not come true the way you imagined
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Musings on Markets
The Power of Expectations: Nvidia's Earnings Report and Market Reaction!
Last Wednesday (August 28), the market waited with bated breath for Nvidia’s earning call, scheduled for after the market closed. That call, at first sight, contained exceptionally good news, with revenues and earnings coming in at stratospheric levels, and above expectations, but the stock fell in the aftermath, down 8% in Thursday’s trading. That drop of more than $200 billion in market capitalization in response to what looked like good news, at least on the surface, puzzled market observers, though, as is their wont, they had found a reason by day end. This dance between companies and investors, playing out in expected and actual earnings, is a feature of every earnings season, especially so in the United States, and it has always fascinated me. In this post, I will use the Nvidia earnings release to examine what news, if any, is contained in earnings reports, and how traders and investors use that news to reframe their thinking about stocks.

Earnings Reports: The Components

When I was first exposed to financial markets in a classroom, I was taught about information being delivered to markets, where that information is processed and converted into prices. I was fascinated by the process, an interplay of accounting, finance and psychology, and it was the subject of my doctoral thesis, on how distortions in information delivery (delays, lies, mistakes) affects stock returns. In the real world, that fascination has led me to pay attention to earnings reports, which while overplayed, remain the primary mechanism for companies to convey information about their performance and prospects to markets.

The Timing

Publicly traded companies have had disclosure requirements for much of their existence, but those requirements have become formalized and more extensive over time, partly in response to investor demands for more information and partly to even the playing field between institutional and individual investors. In the aftermath of the great depression, the Securities Exchange Commission was created as part of the Securities Exchange Act, in 1934, and that act also required any company issuing securities under that act, i.e., all publicly traded firms, make annual filings (10Ks) and quarterly filings (10Qs), that would be accessible to investors.

The act also specifies that these filings be made in a timely manner, with a 1946 stipulation the annual filings being made within 90 days of the fiscal year-end, and the quarterly reports within 45 calendar days of the quarter-end. With technology speeding up the filing process, a 2002 rule changed those requirements to 60 days, for annual reports, and 40 days for quarterly reports, for companies with market capitalizations exceeding $700 million. While there are some companies that test out these limits, most companies file well within these deadlines, often within a couple of weeks of the year or quarter ending, and many of them file their reports on about the same date every year.

If you couple the timing regularity in company filings with the fact that almost 65% of listed companies have fiscal years that coincide with calendar years, it should come as no surprise that earnings reports tend to get bunched up at certain times of the year (mid-January, mid-April, mid-July and mid-October), creating “earnings seasons”. That said, there are quite a few companies, many of them high-profile, that preserve quirky fiscal years, and since Nvidia’s earnings report triggered this post, it is worth noting that Nvidia has a fiscal year that ends on January 31 of each year, with quarters ending on April 30, July 31 and October 31. In fact, the Nvidia earnings report on August 28 covered the second quarter of this fiscal year (which is Nvidia's 2025 fiscal year).
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The Expectations Game

While corporate earnings reports are delivered once a quarter, the work of anticipating what you expect these reports to contain, especially in terms of earnings per share, starts almost immediately after the previous earnings report is delivered. In fact, a significant portion of sell side equity research is dedicated to this activity, with revisions made to the expected earnings, as you get closer and closer to the next earnings report. In making their earnings judgments and revisions, analysts draw on many sources, including:

1.
The company’s history/news: With the standard caveat that the past does not guarantee future results, analysts consider a company’s historical trend lines in forecasting revenues and earnings. This can be augmented with other information that is released by the company during the course of the quarter.

2.
Peer group reporting: To the extent that the company’s peer group is affected by common factors, it is natural to consider the positive or negative the operating results from other companies in the group, that may have reported earnings ahead of your company.

3.
Other analysts’ estimates: Much as analysts claim to be independent thinkers, it is human nature to be affected by what others in the group are doing. Thus, an upward revision in earnings by one analyst, especially an influential one, can lead to revisions upwards on the part of other analysts.

4.
Macro news: While macroeconomic news (about the economy, inflation or currency exchange rates) cuts across the market, in terms of impact, some companies are more exposed to macroeconomic factors than others, and analysts will have to revisit earnings estimates in light of new information.
The earnings expectations for individual companies, from sell side equity research analysts are publicly accessible, giving us a window on trend lines.

Nvidia is one of the most widely followed companies in the world, and most of the seventy plus analysts who publicly follow the firm play the estimation game, leading into the earnings reports. Ahead of the most recent second quarter earnings report, the analyst consensus was that the company would report revenues of $28.42 billion for the quarter, and fully diluted earnings per share of 64 cents; in the 30 days leading into the report, the earnings estimates had drifted up mildly (about 0.1%), with the delay in the Blackwell (NVidia’s new AI chip) talked about but not expected to affect revenue growth near term. It is worth noting that not all analysts tracking the stock forecast every metric, and that there was disagreement among them, which is also captured in the range on the estimates; on earnings per share, for instance, the estimates ranged from 60 to 68 cents, and on revenues, from $26 to $30 billion.

The pre-game show is not restricted to analysts and investors, and markets partake in the expectations game in two ways.

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Stock prices adjust up or down, as earnings expectations are revised upwards or downwards, in the weeks leading up to the earnings report. Nvidia, which traded at $104 on May 23rd, right after the company reported its results for the first quarter of 2024, had its ups and down during the quarter, hitting an all-time high of $135.58 on June 18, 2024, and a low of $92.06, on August 5, before ending at $125.61 on August 28, just ahead of the earnings report:


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During that period, the company also split its shares, ten to one, on June 10, a week ahead of reaching its highs.
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