Daily Reports
Mon
Trades:
Buy Supreme (SUP) – 3537 @ 141p.
This stock has been setting up for a couple of weeks now, mentioned regularly in my trading journal. Released news this morning of an acquisition that is immediately earnings enhancing. This caused a break through resistance with strong volume. When I bought I actually got a price below break, which I took. Strength has continued into the afternoon. 38/50
Earnings results:
Supreme (SUP) announced acquisition of Clearly Drinks ltd for £15m. Will be immediately earnings enhancing. They are a very well established company from 1885 & manufacture natural spring water & other flavoured soft drinks.
Tinybuild (TBLD) trading update. Doesn’t pass checklist, though a legacy stock I’ve held for years, one of my early mistakes. “Sales slightly ahead of expectations for the first five months of the year, with a heavily H2-weighted release schedule… Strong pipeline performance, including Level Zero: Extraction, Duck Side and Drill Core at Steam Next Fest” “All considered, the Board remains confident the Company is on track to deliver results in line with expectations.”
Wed
Earnings results:
Volex (VLX) Full Year 24 results – Heavy focus on acquisitions & capital deployment to expand factories etc. Hurting profits in the short term. On track for 5 year growth target of $1.2B revenue by 2027. Beat expectations on rev & EPS, though EPS was a decline YoY of -3%. Only scores a 22/50 on the checklist, so no way near. Though still holding from buys made before the checklist system on value investing strategy. Nothing too bad in this update so will continue to hold.
Lion Trust Asset Management (LIO) Full Year 24 results – Not great results with a hefty decline in revenue & EPS YoY, actualy a negative EPS now so making no profit. Another purchase from my value investing days. Not great results, though I think they are just a bit behind competitors such as Polar Capital in terms of the turn around. Assessing as a value investment, which was the intention, I think it’s still a hold. Paying a good dividend & I see large upside still over the next 2-3 years.
Micron Technology (MU) Q3 24 results – A very solid set of results, with 82% rev growth & EPS growth from negative to $0.30 (so can’t calculate a %). Huge tailwinds behind them in terms of data centres & AI, as they make the memory that is required for all of these industries. Doesn’t quite pass the checklist with a score of 32/50, due to poor 3yr CAGR growth rates from recent poor performance. Definitely one I’m keeping an eye on.
Thu
Earnings results:
Polar Capital (POLR) Full Year 24 results – Another purchase from my value investing days, there’s a bit of a theme this week. Far better results than LIO with growth in revenue of 7% & 16% EPS growth. They beat expectations & analyst revisions have been increased recently. AUM growing nicely again with 14% YoY to £21.9B. Seeing net inflows again as well with £197m net coming from 1st April to 14th June. Have been waiting for the turnaround with this & LIO & it appears POLR is there. The share price did move 3% on the day, though I actually expected a bigger move. Chart is looking good though, at the top of a two year trading range & trying to break out. Score is only 16/50 so I wouldn’t buy now, but happy to continue holding.
Nike (NKE) Q4 24 results – Not great really. Revenue down 2% YoY, though EPS is up an impressive 50%. The real killer was their forward guidance in which they say revenue for FY25 will be down mid to high single digits & Q1 25 will be down 10%. They are calling this a transition phase but time will tell. They aren’t close on the checklist at 28/50, but I like to look at them for a read across to my holdings of DECK & CROX, more DECK really as they have the HOKA brand, which is now a direct competitor with Nike. Both CROX & DECK saw a 2-3% sell off. Though NKE took a huge 20% drop in share price. It may be a sign for the entire footwear industry, both CROX & DECK are sitting just above their stop losses for me, so they may be gone next week.
Any major news:
US GDP (QoQ) ahead at 1.4%, beating forecasts of 1.3%. Was previously 3.4%, so a bit of a fall, though still vey strong & much better than the UK.
Fri
Any major news:
US core PCE price index (YoY) in line with forecasts of 2.6%, down from 2.8% previously. Heading in the right direction & what is needed for rate cuts to begin.
UK GDP (YoY) ahead at 0.3%, beating forecasts of 0.2%. Was previously -0.2%, so a vast improvement. QoQ was a beat as well at 0.7% vs forecast of 0.6%.
Weekly wrap
Trades made:
Buy Supreme (SUP) – 3537 @ 141p.
Best themes & subsectors. General market trend:
US markets trending sideways, nothing to be concerned about.
The UK markets are in a small correction, though it looks like its just a bull flag & the upward move will continue soon. Again nothing I’m concerned about.
No real changes to report in themes, all are holding their previous directions.
Thoughts on strategy, anything else:
Pretty pleased with my decisions & trade this week. Supreme entry was well timed and has gone as well as can be expeted, up 17% in one week.
I didn’t enter Medpace as it didn’t have the volume & the next day it fell right back. Quite happy with this decision & restraint, as I was tempted to enter.
Resmed took a large gap down on Monday on the news that Eli Lilly’s weight loss drug helps with sleep apnoea, so has the potential to take market share from Resmed. It gapped through my stop, though I thought the drop was way out of proportion with the news, there’s no evidence whatsoever how much, if any competition this will actually be. I made the decision to hold, thinking the price would bounce back, which it has done over the rest of the week (up 6% from low point). I put a new stop at the low point & have raised it each day.
I make a lot of mistakes still, though I do feel I’m getting a lot better at sensing how the market works & what individual stocks are going to do.
Looking to next week
Stocks setting up the best:
UK:
SOLI – Has maintained it’s tight trading range. Earnings this week so very likely to break one way or the other, be ready to act.
AJB – I already have a position, though not a full one. It’s been knocking on a resitance level for the past month. If it breaks with large volume then top up the position, though only on a very strong break.
AQX – Continuing it’s very tight trading range, be ready for the break. The 50 day MA has caught back up to the price, so likely to be a move soon I recon.
AUTO – Same as last week, took a huge one day run up & has been going sideways for a month since. Wait for the higher move.
USA:
SHOO – Has pulled back to the 150MA and bounced off it. Looks like a narrowing wedge, I would expect a break in the next couple of weeks, though may wait until earnings on the 24th.
MEDP – This broke through last week, though with no volume & fell back the next day. Wait for the volume. Earnings on 22nd July, which it may need for the volume.
APPF – Very close to resistance level and has been forming a narrowing wedge. Very large volume on Friday.
CRWD – Hasn’t actually gone anywhere since the huge volume spike last week. I had expected it to push higher off the back of that. Just wait for it to break.
Upcoming earnings:
Tuesday – Supreme (SUP), Solid State (SOLI)
Wednesday – Cairn Homes (CRN)
Upcoming news events:
Thursday – UK GDP numers & US CPI numbers
Friday – US PPI numbers