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    Stocks - r/Stocks Daily Discussion Friday - Jun 29, 2018

    June 29, 2018

    Stocks - r/Stocks Daily Discussion Friday - Jun 29, 2018

    r/Stocks Daily Discussion Friday - Jun 29, 2018

    Posted: 29 Jun 2018 04:08 AM PDT

    These daily discussions run from Monday to Friday and Friday's will stay up till Monday.

    Some helpful links:

    If you have a basic question, for example "what is EPS," then google "investopedia EPS" and click the investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned.

    Please discuss your portfolios in the Rate My Portfolio sticky. or see past portfolio discussions with this link.

    See past daily discussions here.

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    Tesla Reaches Moment of Truth in Mad Dash to Make 5,000 Cars Per Week

    Posted: 29 Jun 2018 08:34 AM PDT

    https://www.bloomberg.com/news/articles/2018-06-29/tesla-reaches-moment-of-truth-in-mad-dash-to-make-5-000-cars-per-week

    It's been another rough quarter for the rollout of Tesla Inc.'s Model 3. The factory was shut down at least twice for extensive upgrades, a new production line was hastily erected in a tent in the parking lot, and Tesla Chief Executive Officer Elon Musk moved from sleeping on the couch to sleeping under the desk. He was even seen personally torquing bolts on an assembly line, alongside a summer intern.

    Now the mad scramble to meet a self-imposed production deadline—a rate of 5,000 cars per week by the end of June—is coming to an end. The quarter concludes Saturday, and Tesla is expected to report its production figures for the last three months before the July 4 holiday. Tesla has repeatedly fallen short of its own manufacturing targets. Now investors will find out exactly how many cars Tesla made, sold, and stockpiled and what sort of weekly rate they were finally able to achieve.

    Here's our rundown of what to expect.

    Seeing a Shortfall: Bloomberg's Model 3 Tracker

    Back in February, Bloomberg introduced an experimental tool to track the Model 3 rollout. The tracker uses vehicle identification numbers (VINs) to estimate production in real time. The model projects that Tesla finished the quarter making 27,957 Model 3s—or 4,533 per a week, shy of Musk's goal. Since production of the Model 3 began in July 2017, the Bloomberg tracker estimates that 40,409 of the sedans have been made.

    Musk himself has suggested that this estimate is too low. An analyst report by Goldman Sachs, which projected quarterly production that's just 43 cars more than the Bloomberg estimate, prompted the CEO to send an email to his employees. "They are in for a rude awakening," Musk wrote.

    The Bloomberg model is, by design, slow to reflect sudden shifts in production and could underestimate Tesla's last-minute manufacturing push that spilled into a gigantic tent outside the factory in Fremont, California. Back in the first quarter, the Bloomberg Model 3 Tracker underestimated the actual production total by less than 5 percent—coming closer than the Wall Street consensus. The tool doesn't estimate total deliveries, which can vary based on the number of cars in transit at the end of the quarter.

    Wall Street Doesn't Think Tesla Made It

    Wall Street has also been placing their bets on Tesla's quarterly figures. The average of eight analysts surveyed by Bloomberg projects second-quarter Model 3 deliveries of 26,121 cars. Three analysts also gave estimates for production, which averaged 30,167.

    The number most people are watching is Tesla's weekly production rate, a squishy figure that Musk has set up as his quarterly benchmark. Tesla initially targeted a rate of 5,000 per week by the end of 2017, but the company has since moved that target back twice. Only one firm stuck their neck out with an estimate of weekly production: Evercore ISI predicts that Tesla will hit 4,600 during the final week.

    Total shipments for Models S and X are expected to be around 22,622 units, according to an average of six estimates.

    One thing that makes this quarter particularly hard to assess is the approaching expiration of the U.S. tax credit for electric vehicles. Tesla may be suppressing U.S. sales as the quarter ends as way to extend its federal electric-vehicle tax credit of $7,500 per car. The subsidy begins to phase out one full quarter after the quarter in which Tesla sells its 200,000th electric car in the U.S. By hitting that milestone after July 1, rather than a day earlier, Tesla would gain an additional three months of tax credits that could be worth more than $400 million to Tesla customers, according to Bloomberg estimates.

    In June, Tesla filled Model 3 orders to reservation holders in Canada ahead of deliveries to some U.S. customers. There are other actions Tesla may be taking, including accelerating its overseas deliveries for the Model S and Model X and stockpiling cars at holding facilities, all of which could push quarterly revenue into the third quarter, which is when Musk vows that Tesla will finally become profitable.

    Tesla's stock has been on a tear in the second quarter, boosted by apparent progress on Model 3 production. The stock has climbed 31 percent to close at $349.93 on Thursday. Tesla's market value reached $59.4 billion—more than long-established rivals General Motors Co. and Ford Motor Co.

    Here's a roundup of what analysts' are saying ahead of the key delivery figures:

    Goldman Sachs, David Tamberrino:
    (Sell, price target $195)

    • "We believe that Model 3 deliveries are tracking below consensus."
    • "Investor conversations on the stock have moved past the 5,000/week run-rate production target (as we believe most investors are giving the company credit for achieving this level entering third quarter) toward vehicle profit margins and conversion of Model 3 reservations to higher priced vehicles."
    • Forecasts Tesla achieving about 22,000 Model 3 deliveries to customers in the quarter, up from Goldman's previous 19,000 estimate, but well below consensus. His forecast for production is 28,000, in line with the Bloomberg Tracker.
    • Believes Tesla is tracking below its 2018 Model S/X guidance of about 100,000 units, based on the quarter-to-date May cadence.

    Barclays, Brian Johnson
    (Underweight, price target $210)

    • "While we appreciate the steps taken to raise capacity, we believe the admission that it needed a second general assembly line to reach 5,000/week is another indicator of the challenges in ramping production."
    • "On the path to reaching 10,000 model 3/week, one key item to be addressed is paint shop capacity. The paint shop will need to have capacity added to handle 10,000 Model 3/week in addition to 2,000 S/X per week."

    Bernstein, Toni Sacconaghi
    (Market-perform, price target $265)

    • Says Tesla's Automotive segment's gross margins may be overstated, noting a steep plunge in the gross margins of the Services and Other segment.
    • Expects second-quarter Model 3 deliveries of 26,000.

    Evercore ISI, Arndt Ellinghorst & George Galliers
    (In-line, price target )

    • Expects Tesla to deliver "21,800 Model S/X during the quarter and 30,700 Model 3, with Model 3 production at a run-rate of 4,600 during the final week versus guidance of 5,000.'"
    • Notes comments by Panasonic executive that a pick-up in Model 3 production has resulted in occasional battery shortages.

    Guggenheim, Robert Cihra
    (Buy, price target $430)

    • Still sees Tesla flipping from "losses to profits in second half of 2018" and the prospect of a profitable Tesla setting up a "meaningfully more positive stock narrative."
    • "Tesla producing as many as 35,000 Model 3s and shipping 29,000, up from just over 8,000 in the first quarter and 2,000 in the fourth quarter."
    • "While 6 months later than projected, we continue to estimate that 5,000/week bogey then setting up Tesla's overall model to flip from sizable cash burn in first half of 2018 to profitability in second half, as Model 3 volumes drive big revenue, margin and free cash flow leverage off the big fixed-cost structure Tesla has been building."

    Consumer Edge, James Albertine
    (Overweight, price target $385)

    • "Production of the Model 3 is still the primary driver of upside to expectations and shares in 2018."
    • "We visited the Gigafactory in May, which is when we learned about Tesla's push to 5,000 units per week of Model 3 production by second quarter-end, a goal we believe many investors did not believe management could achieve prior to our visit."
    • Estimates second-quarter Model 3 deliveries to stand at 25,000 units.

    Baird, Ben Kallo
    (Outperform, price target $411)

    • "We expect the focus will be on exit rate Model 3 production and total Model 3 production in June, in that order, and believe the stock could trade up if Tesla approaches its 5,000/week production target."
    • "We think TSLA may deliver about 25,000 vehicles."
    • "Consensus estimates for second-quarter deliveries may be too high, particularly given our belief there could be a larger-than-normal delta between production and deliveries due to the ramp during the quarter."
    submitted by /u/OptionsGeek
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    ROBO vs BOTZ etfs?

    Posted: 29 Jun 2018 06:05 AM PDT

    I'm looking to invest in an etf that is based on AI and other technologies like that. Does anyone have an opinion on whether they prefer ROBO or BOTZ or if you have any suggestions for similar ETFs that would be great. Thank you!

    submitted by /u/BuyHighSellLow101
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    RETO just signed a contract with JD.com. Seems like a little gem. Is it worth a damn?

    Posted: 29 Jun 2018 07:43 AM PDT

    So I was thinking of investing in this company. Contract seems legit:

    https://finance.yahoo.com/news/reto-eco-solutions-inc-jd-124500984.html

    Thoughts?

    submitted by /u/jdubs101
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    Enbridge (ENB) Spikes on Confirmation of Preferred Line 3 Approval in Minnesota

    Posted: 29 Jun 2018 07:43 AM PDT

    Output should increase from 50% to 100% capacity

    submitted by /u/mittrinilli
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    What’s going on with TESLA?

    Posted: 28 Jun 2018 09:16 PM PDT

    What do you all think will be the future of Tesla? With all the back and forth between musk and the media/analysts, what's the short-long term future of the company?

    How high do you think the stock will jump to (assuming Musk hits 5,000+ model 3/ week?)

    submitted by /u/rmunoz066
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    Advice on different sectors or stocks!

    Posted: 29 Jun 2018 08:01 AM PDT

    I currently hold more tech stocks then I care to admit (AMZN,GOOG, AAPL,CRM, TWTR just to name the big ones. What are your opinions on different sectors to look into investing? If anybody has any recommendations on company's to research, I would greatly appreciate it.

    submitted by /u/ch547611
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    Dividend stocks?

    Posted: 29 Jun 2018 07:34 AM PDT

    Already own some BAC and AAPL, any suggestions on some other dividend stocks? Not looking for anymore tech or banking companies.

    submitted by /u/Secretlygayhippo28
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    SCHD a good choice as an IRA account stock?

    Posted: 29 Jun 2018 01:46 PM PDT

    I usually see broad market ETFs recommended as holdings in IRA accounts. What about SCHD as a dividend ETF?

    submitted by /u/Sunstrider-
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    IQ, SPLK, ROKU looks strong

    Posted: 29 Jun 2018 11:54 AM PDT

    This week was tough as IQ and ZUO went down a lot. Hoping for a better next week.
    Here is the blogpost I made.
    https://wordpress.com/post/blog.snaptrade.us/76 .

    next week these looking good
    IQ, ROKU, SPLK, NUGT.

    WWE, WTW at their highest not sure if they continue go upward.

    submitted by /u/Alex_woo12
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    OCUL - what the sell the news

    Posted: 29 Jun 2018 10:58 AM PDT

    OCUL resubmitted as they promised before June 30. Stock down 5%. What gives?

    submitted by /u/KingBuck_413
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    Why is $CRSP crashing in light of no relevant news?

    Posted: 29 Jun 2018 12:03 AM PDT

    Down 10% in the last couple of days. Is it because of GBT success with sickle cell? But then why is EDIT also crashing?!

    submitted by /u/throwaway9732121
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    Where to find earnings history?

    Posted: 29 Jun 2018 10:24 AM PDT

    I'm looking for a site/app that tells me how many times a company has missed and best earnings targets. What do you suggest?

    submitted by /u/xAkdas
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    What’s the best way to “bet against” a stock in the long term?

    Posted: 29 Jun 2018 10:06 AM PDT

    If there is a stock (pick one anyone, let's use Tesla as an example) that I want to bet against in the long run (let's call it two years to three years) what is the best way to go about doing that? Are puts helpful that far out? What would the mechanics be of making those trades with $20,000 in capital to risk? Thanks in advance.

    submitted by /u/292ll
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    DR Horton beat incoming

    Posted: 29 Jun 2018 08:53 AM PDT

    Is DR Horton a good buy?

    Homebuilders have generally been punished this year -20% on increasing costs + interest rates but those fears have mostly been overblown. Furthermore, the summer buying season is upon us.

    Lennar earnings beat this week 0.45$ expected 0.94$ actual +5% AH
    KBHomes earnings beat 0.48$ expected 0.57 actual + 5% AH

    Considering the south is booming and housing is in short supply https://www.usatoday.com/story/money/personalfinance/real-estate/2018/06/25/us-new-home-sales-climbed-may-especially-south/730416002/ and that 80% of horton's new sales are in the south, these guys seem primed for some serious upside. KBHomes and Horton have a very similar business model but Horton is much larger and has better geographic distribution.

    -horton has forward P/E of 9, with XHB index avg of 12!
    -85% institutional ownership = stable af

    -low debt/equity 38 vs lennar's 88 vs kb homes 127 (you need alot of debt to do build)

    Barring more random market volatility , I'd say this is a good 1 month power play. Hortons earnings on July 26th will probably be a run up as the cats alrdy out of the bag on strong homebuilder demand.

    Thoughts? I"m guestimating 45$ by aug 1st ~15% upside :)

    submitted by /u/imakemyownbenchmark
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    [Survey] [Your opinion] What percentage of retail investors can beat the market?

    Posted: 29 Jun 2018 07:26 AM PDT

    [Survey] [Your opinion] What percentage of retail investors can beat the market?

    And do you consider yourself within that top percentage that beats the market?

    *by retail investors I mean those who are not working in an hedge fund or trading on behalf of an institution.

    submitted by /u/lamsiyuen
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    Is WEIBO a solid growth stock?

    Posted: 29 Jun 2018 07:05 AM PDT

    Hey all, I'm looking for a new stock to invest in and Weibo caught my eye.

    WEIBO is the Twitter/Facebook/Instagram of China and currently sits at a price of 88.59$ a share, down from peak 139.14$ in February of this year. Weibo stock trades at 23 times last year's revenue, but analysts expect sales to surge almost 57% this year, with estimates calling for 37% growth in 2019 as well. 411 million monthly active users, a 70 million increase above the year-ago period.

    What do you guys say, too high of a risk?

    submitted by /u/OHP_Plateau
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    Is GOOGL a good buy currently?

    Posted: 28 Jun 2018 03:47 PM PDT

    With tech being wonky due to the trade war, I'm tempted to buy in as it drops. How much longer do you guys see the market dropping?

    submitted by /u/ALT173869
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    Will companies such as Google, Facebook, Amazon or Netflix start paying dividends someday?

    Posted: 29 Jun 2018 01:43 AM PDT

    I wonder if it's possible to get passive income out of such companies.

    submitted by /u/peppermilkshake
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    $LPL Only sunshine on the horizon...?

    Posted: 28 Jun 2018 05:54 PM PDT

    Is anyone else thinking about going all-in on this one? Or, do you think they will continue to get pummeled? I personally think the price is right at $10 even without the prospect of being fed by Apple but it has so much terrible momentum and their are so many other stocks at attractive valuations now. Just fishing for anyone's thoughts on the subject.

    https://www.theepochtimes.com/china-tones-down-made-in-china-2025-policy-amid-trade-tensions-with-us_2574345.html

    submitted by /u/Heyviator
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    Why doesn’t Walmart just buy stake in Amazon?

    Posted: 28 Jun 2018 08:20 PM PDT

    Hi guys,

    So currently, Walmart has significantly more revenue than Amazon, but much less market capitalization because of Amazon's greater growth potential. Walmart is clearly concerned about the threat Amazon poses, hence why they bought Flipcart, Amazon's rival in India.

    Considering the difference in cash flows between these two companies, and Walmart's concerns about Amazon overtaking it, why don't they just use their cash they have to buy some of Amazon now? Even though their market cap is huge, Walmart has the money to buy a stake of them just through the free market if they so desired.

    I'm guessing there's a logical reason they haven't bought at least a piece of Amazon yet, but I was curious as to what that may be.

    Thanks in advance.

    submitted by /u/Trump_The_Lion
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