Stocks - r/Stocks Daily Discussion & Fundamentals Friday Aug 30, 2019 |
- r/Stocks Daily Discussion & Fundamentals Friday Aug 30, 2019
- How Tesla Boosted Their 2018 Earnings with Accounting Policy Changes
- What would your 5 Stock starter portfolio be?
- To what degree is stock market manipulation real on smaller exchanges?
- Sell JNJ to buy Microsoft?
- Most Anticipated Earnings Releases for the week beginning September 2nd, 2019
- Ulta Beauty Dip
- Do all shares of a company represent equal equity ownership portions?
- Short position sizing
- Trump and stock market
- Favorite iOS app to trade/research?
- Robo-advisors
- How would you go about investing in a way to take advantage of a graphene/borophene industry?
- Emerging market stocks
- IMTL last week's market cap was 174k, today is 540k. Stock price stays the same. What happened?
- ABBV vs TLSA
- Can stocks recover after years of steady decline?
- Why do Adesso stocks always in november go down?
- I am interested in stock trading
- Looking for small cap growth stocks
- Altria (MO) too cheap to ignore?
- What are some of your favorite stocks to trade against each other? $YINN v $YANG
- CHMI - a buy or a dog?
| r/Stocks Daily Discussion & Fundamentals Friday Aug 30, 2019 Posted: 30 Aug 2019 01:07 AM PDT This is the daily discussion, so anything stocks related is fine, but the theme for today is on fundamentals, but if fundamentals aren't your thing then just ignore the theme and/or post your arguments against fundamentals here and not in the current post. Some helpful day to day links, including news:
Most fundamentals are updated every 3 months due to the fact that corporations release earnings reports every quarter, so traders are always speculating at what those earnings will say, and investors may change the size of their holdings based on those reports. Expect a lot of volatility around earnings, but it usually doesn't matter if you're holding long term, but keep in mind the importance of earnings reports because a trend of declining earnings or a decline in some other fundamental will drive the stock down over the long term as well. See the following word cloud and click through for the wiki: If you have a basic question, for example "what is EBITDA," then google "investopedia EBITDA" 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. Useful links:
See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday. [link] [comments]  |
| How Tesla Boosted Their 2018 Earnings with Accounting Policy Changes Posted: 30 Aug 2019 10:39 AM PDT Hey all - here's a little something I wrote up to practice identifying potentially deceptive/manipulative accounting tactics. Hopefully it helps someone and hopefully you all have some thoughts on this as well since I'm certain there are things I'm not considering when writing this. I definitely don't know everything about Tesla or the subject matter in general, but I thought it was a good example of the practice: Identifying Earnings Management by Monitoring Revenue Recognition PoliciesIn the investing world, there's a concept known as cookie jar accounting. This is for all intents and purposes a friendly way of saying legal financial manipulation. Cookie jar accounting is not illegal, but it can be a troubling indicator if it's done chronically, and even in a singular instance it can indicate a potentially significant detriment to future cash flows and earnings. To that end, the intention of this post is not to take a positive or negative position on companies that employ cookie jar accounting or other earnings management tactics, but instead to educate and inform on how the process works and how it can be identified, potentially saving investors from unfavorable earnings surprises and allowing analysts to predict earnings more accurately. In Q1 of 2018, our friends at Tesla, Inc (TSLA) updated a key revenue recognition policy:
Source: 2017 TSLA 10-K This essentially indicated that Tesla planned to begin immediately recognizing revenue which would previously have been recognized over time, and trust that their leasing partners wouldn't exercise their right of return and dump the product back on Tesla, sticking them with a used asset that wasn't worth the revenue they recognized when they sold it and forcing them to adjust their earnings to account for the difference. Of course, because the customers in this case are leasing partners, the policy change was not as blatantly manipulative as something like channel stuffing, but it was certainly a gamble by Tesla management at the very least. Nevertheless, in Q3 2018 Tesla unsurprisingly announced a "truly historic quarter" with year over year GAAP revenue growth of nearly 130% to $6.82 billion and a "surprise" GAAP profit of $1.82/share. This in turn created a buying frenzy sending TSLA stock from just above $250 to nearly $400/share between October and December of 2018. Over the next six months though, Tesla stock bled away these gains in spectacular fashion, hitting lows below $180/share before finally beginning a small recovery. How could investors have seen this coming? How might you have saved yourself from buying Tesla at $375/share only to see it immediately shed more than 50% and decimate your portfolio? Enter the Manipulation Monitor:The first sign that something was amiss actually showed up before Tesla's "historic quarter." Almost immediately after the 2017 annual report, LazyFA's Manipulation Monitor identified large declines in both unearned revenue as a percentage of sales and days unearned revenue. Obviously, this would lead to a decline in the actual unearned revenue itself. This is Tesla with their "hands in the cookie jar", accelerating revenue recognition in accordance with the new revenue standard. And of course, depleting that unearned revenue would lead to the simultaneous "increase" in recognized revenue. This (partially, in fairness) explains the huge year over year increase in sales in Q3 and Q4 of 2018. As Tesla tapped their unearned revenue over the course of 2018, assets and liabilities related to the adoption of the new revenue standard were shifted around, resulting in a wonderful finish to the year showing operating cash flow of $2.10 billion, a staggering $2.16 billion increase from the previous year's cash outflow of $60 million. This type of statistical outlier is a clear red flag, and as such was easily identified by LazyFA's Red Flag Analysis Engine. Make no mistake though. Tesla was very clear about the source of these changes. All investors needed to do was read the 10-K:
Source: 2018 TSLA 10-K Is it any surprise then, really, that the "historic" Q3 2018 and its Q4 successor were not sustainable? While there was certainly some healthy growth in production numbers and legitimate vehicle sales, these increases in revenue, operating cash flow, and earnings per share were largely driven by an accounting change that allowed Tesla to recognize revenue earlier than it normally would have been able to. Subsequently, soon after the announcement of Q3 2018 earnings, Tesla announced that they expected earnings to be much worse in the first half of 2019, which they were. Just look at the complete 180 from the second half of 2018 to the first half of 2019. The first half of 2019 was not unexpected for Tesla. It was a reversion to the mean ... a return to normalcy. Management almost certainly knew that this massive positive flip in earnings and cash flow wasn't sustainable, but tapping the cookie jar allowed them to provide the market with a little hope for the future. Being able to identify this type of accounting tactic ahead of time could have saved investors who bought into the hype following Q3 earnings from losing 50% of their investment. Tesla isn't alone in their quest to please Wall Street. Many companies employ these kinds of accounting tricks under pressure to meet analyst expectations and please the market at large. It's up to us as investors to read between the lines. What do you think? What am I missing that would change my opinion? Obviously not the entire flip from negative to positive earnings for a couple quarters was due to accounting tricks. What's your take? Cheers! [link] [comments]  |
| What would your 5 Stock starter portfolio be? Posted: 29 Aug 2019 07:08 PM PDT My friend just started investing and we were coming up with ideas for a 5 stock portfolio. We came up with Nike, Disney, Visa, Starbucks, Apple. What do you think of these stocks for a starter portfolio? What would your 5 stock starter portfolio be? [link] [comments]  |
| To what degree is stock market manipulation real on smaller exchanges? Posted: 30 Aug 2019 10:02 AM PDT I'm curious about how rampant stock manipulation is, specifically on smaller exchanges like the OTC and CSE. Many people know r/weedstocks, but I was hoping to get a more unbiased opinion here. Stock like GTII (GTBIF:OTC) just reported earnings, and they were arguably very strong. They have a ~$1.7 billion US market cap, and just reported $44.7 million US revenue on their latest Q, an increase of 228% YoY and 60% QoQ. Gross margins improved to 52% from 46%, good balance sheet, and there was nothing said on the Conference call that would be interpreted as negative. (Earnings Report here if you'd like to see the numbers). Despite the good earnings, and their strong growth potential as more US states open up to Recreational use, the stock went down the day of earnings, and continues to fall today. Down about 65% from their all time high despite consistent QoQ growth and execution from strong management. The US market is expected to be $50+ billion by 2025, so there's definitely growth potential. On r/weedstocks people say that the stocks are heavily manipulated on these exchanges like the CSE and OTC, and that's why even when they report good earnings, they go down. Now, you could argue they are all massively overvalued, but compared to the Canadian LP's, the US MSO's (Multi State Operators) are much better value, especially if you believe the US will eventually legalize on a federal level. So my question is, are these stocks actually manipulated by aggressive short selling, or is it truly a question of valuation, and both US/Canadian MJ stocks are over valued? Thanks! [link] [comments]  |
| Posted: 30 Aug 2019 08:59 AM PDT Hello, I bought some JNJ back in 2012 ish. I have a heft gain of 140%. I love seeing the spread between cost basis and gain, but I'm starting to feel like I might want to get out of it and get into something that is also high quality, but maybe has some room to run. Microsoft caught my eye with their investment into cloud computing. Looking for opinions on if this is a decent line of thought, particularly with the opiod stuff going on Edit: Other option is to just hold my position, build other positions around it and potentially add to JNJ whenever it's at a discount. [link] [comments]  |
| Most Anticipated Earnings Releases for the week beginning September 2nd, 2019 Posted: 30 Aug 2019 04:53 AM PDT Here are the most notable earnings releases for the trading week beginning September 2nd, 2019.
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:
Have a great weekend r/stocks. [link] [comments]  |
| Posted: 30 Aug 2019 08:36 AM PDT The stock was a buy before their dip this morning. Looks like Q2 targets weren't reached and it drastically when 28% down. Might buy some shares and hold. Who's with me ? [link] [comments]  |
| Do all shares of a company represent equal equity ownership portions? Posted: 30 Aug 2019 08:31 AM PDT Trying to understand stocks at a fundamental level, wondering if all "shares" are worth the same equity percent. That is to say, if a company has 1000 shares, is each one worth 0.1% of the companies assets in the case of liquidation? I understand there are many factors that make the market value of a share different. I am aware of two independent strata shares are classified by:
In the case of a distribution, if the fixed payouts exceed the "percent ownership" of the preferred stock, they still get their money, common stock gets shafted on their percent ownership. As far as I know this is the only thing that makes one share worth potentially more "percent" in some cases. Correct me, but it does not seem voting rights have any relation to "financial entitlement", unless by choice of the issuer through coinciding higher voting rights on preferred stock In a Perfect World™ Example: there are 1000 shares issued. The company has absolutely no debt to pay.
In the case of liquidation, is Tom entitled to 99% of the liquidated assets value if all fixed payout requirements entitled to Jerry are less than 1% of the total liquidation value? If so, is this something "fundamental", or does it vary country to country, company to company, etc? Additionally, I assume that in example Jerry had full control of the company while it was running. Please excuse/feel free to correct any misuse of terms. [link] [comments]  |
| Posted: 30 Aug 2019 12:14 PM PDT How irresponsible would it be for me to make my TSLA short -8% of my portfolio (currently -4.8%). I'm very risk tolerant and very bearish on TSLA (obviously) but is -8% just plain stupid? [link] [comments]  |
| Posted: 29 Aug 2019 05:40 PM PDT Not willing to start a conspiracy theory but I noticed how Trump remarks on China tariff create such high volatility that a well informed investor could easily make a lot of money out of that. Lately, I've been buying on the well-off that are nearly weekly and selling after a nice and easy 3-5% bump. So far I did ~50%. Eventually I know this cannot be sustained. People are still risk friendly right now so we see these big movements. Anyway, knowing that Trump has done sketchy stuff with stock. I remember reading at one point he was saying he'd take over a company and on the side he was selling his shares that got a nice bump after his false intentions of taking over the company. To me, it smells like it right now. How likely is it do you think? Have you noticed this as well? It's like they want it on purpose to play with people's sentiments and just play the market. [link] [comments]  |
| Favorite iOS app to trade/research? Posted: 30 Aug 2019 06:52 AM PDT I almost always only trade on my computer w TDA TOS bc I feel like I have a better grasp on what's going on (technically trading). Does anyone use a system that they feel works for them on their phone? I'd love to be able to trade on my phone and feel comfortable. I have TDA on my phone but the time-frames are limited. [link] [comments]  |
| Posted: 30 Aug 2019 10:03 AM PDT What is everyone's opinion on Robo-advisors? Are they helpful for beginners? Do they provide any benefits? Thanks! :) [link] [comments]  |
| How would you go about investing in a way to take advantage of a graphene/borophene industry? Posted: 30 Aug 2019 09:12 AM PDT And is this too general of a question? I.e., is this like asking about investing in the WWW, and ending up in Pets.com? Or are there some clear leaders who are likely to find success? [link] [comments]  |
| Posted: 30 Aug 2019 09:04 AM PDT I am looking for stocks in emerging markets, specifically India, but could be other markets as well. My plan would be to hold for long term as India's economy continues to grow. What stocks would you recommend? [link] [comments]  |
| IMTL last week's market cap was 174k, today is 540k. Stock price stays the same. What happened? Posted: 30 Aug 2019 08:22 AM PDT Did they put in more shares, thus more money into the company? Could someone please educate me? [link] [comments]  |
| Posted: 30 Aug 2019 06:20 AM PDT An End To Humira? "Tiziana (TLSA) could have the first true platform to directly take on a drug that is doing over $20 billion is sales. Abbvie's Humira is incredibly diverse and has become one of the biggest autoimmune blockbusters in recent biotechnology history. But one huge flaw has left the door wide open for Tiziana's (TLSA) lead therapies to capitalize. In an autoimmune disease, the body's immune system falsely detects and attacks a threat within the body that does not really exist. This can lead to a number of problems and conditions, including rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn's disease, and psoriasis. Just like Tiziana's Foralumab, Humira is a monoclonal antibody that targets symptoms related to autoimmune disorders. But here's where the opportunity is: The only way to use Humira is intravenously via an injectable syringe or pen. Foralumab can be administered nasally or orally and this simple change in delivery method could set a stage for a strong argument supporting the potential of Tiziana's (TLSA) platform." Thought this was interesting, full read: https://stock-watch.market/biotechs [link] [comments]  |
| Can stocks recover after years of steady decline? Posted: 30 Aug 2019 05:10 AM PDT I have a small randomly picked stock portfolio on the side just for fun. One of these picks has been doing pretty well for me in the last couple weeks (up by about 20%). This prompted me to check this stock out. What I found interesting, is that this stock has been on a steady decline since 2015, going from >$20 to about $5 now. This has me wondering if there is any data out there on the likelihood that a stock can ever recover from such a sustained decline. How should you judge a decline like this? My initial goal with these random picks was to just buy-and-hold for at least a year. But if stock on these kindof trajectories keep going steadily downhill more often than not, then maybe I should take the short term gains and sell? [link] [comments]  |
| Why do Adesso stocks always in november go down? Posted: 30 Aug 2019 04:25 AM PDT If you take the chart of Adecco stocks this is a seasonality in August they rise and in November they go down... why does it follows this pattern? [link] [comments]  |
| I am interested in stock trading Posted: 30 Aug 2019 03:45 AM PDT I am interested in stock trading, where can I trade as a beginner, please advise thanks, and I have a 2 YO son, and I have saved around a 1000$ in a piggy bank, is there a good like 10-15 years option, I know I need to research and learn more about this but any word of advise on where to look would be great, so summing up: 1- where to trade 2- a good 10-15 years investment 3- any further advice Thanks [link] [comments]  |
| Looking for small cap growth stocks Posted: 30 Aug 2019 03:45 AM PDT Hi, does anybody know some promising growth stocks with a low market capitalization? [link] [comments]  |
| Altria (MO) too cheap to ignore? Posted: 29 Aug 2019 05:32 PM PDT Huge bargain right now and dividend yield is now over 7.5%. I suspect a rebound eventually, but how much further down can this go? [link] [comments]  |
| What are some of your favorite stocks to trade against each other? $YINN v $YANG Posted: 29 Aug 2019 08:49 PM PDT Like an idiot I just realized that AAPL and UGLD are similarly priced and inversely related over the past month. YINN and YANG are a very well known inverse pair. I typically don't pair stocks against each other, what are some good matches? [link] [comments]  |
| Posted: 29 Aug 2019 08:39 PM PDT |
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