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    Stocks - r/Stocks Daily Discussion Monday - Feb 07, 2022

    February 07, 2022

    Stocks - r/Stocks Daily Discussion Monday - Feb 07, 2022

    r/Stocks Daily Discussion Monday - Feb 07, 2022

    Posted: 07 Feb 2022 02:30 AM PST

    These daily discussions run from Monday to Friday including during our themed posts.

    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..

    See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday.

    submitted by /u/AutoModerator
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    Frontier and Spirit to merge creating fifth-largest airline in U.S. in $6.6 billion deal

    Posted: 07 Feb 2022 05:44 AM PST

    https://www.cnbc.com/2022/02/07/frontier-and-spirit-to-merge-creating-5th-largest-airline-in-us.html

    Frontier Airlines and Spirit Airlines, the two largest low-cost carriers in the U.S. have agreed to merge in a deal valued at $6.6 billion, creating what would become the fifth-largest airline in the country.

    The merger gives Denver-based Frontier Airlines a 51.5% controlling stake in the combined airline. Spirit investors will receive 1.9126 shares of Frontier plus $2.13 in cash for each share they own, giving Spirit shareholders an implied value of $25.83 per share, which is a 19% premium over the value of Spirit shares at the end of last week, the companies said.

    "This transaction is centered around creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public," Ted Christie, president and CEO of Miramar, Fla.-based Spirit, said in a statement announcing the deal.

    The boards of both companies approved the deal over the weekend.

    Frontier Chairman Bill Franke will chair the combined company, which he said "will create America's most competitive ultra-low fare airline for the benefit of consumers."

    The companies didn't announce the new name of the combined carrier, the CEO or location of the airline's headquarters. Those questions will be answered by a committee led by Franke after the transaction closes, which is expected in the second half of the year, pending regulatory and shareholder approval.

    For Franke, the deal is the latest in a career of making investments in and overseeing low-fare airlines around the world, including Spirit. From 2006 through 2013, Indigo Partners held a stake in Spirit with Franke serving as chair of the airline before he resigned when Indigo sold its position in the carrier. Shortly after that move, Indigo bought Frontier Airlines from Republic Airways for $145 million

    Since that acquisition, Denver-based Frontier has steadily expanded its route network with new destinations and additional flights, often targeting cities where larger airlines like Southwest have a strong presence. In almost every case, Frontier enters with low fares to gain a foothold with price-conscious travelers.

    Spirit has also been aggressively expanding in the last decade and plans to continue that strategy once combined with Frontier.

    In 2013, Spirit and Frontier had 2.8% of the revenue passenger miles flown by U.S. airlines, according to the Department of Transportation. By 2019, their combined market share had almost doubled to 5.4% while the four largest airlines in the U.S., American Airlines, Delta, United and Southwest, controlled 73.9% of revenue passenger miles

    With both carriers flying only Airbus planes and neither dominating one particular market, a Spirit/Frontier merger makes sense on paper. Still, the Biden administration has made it clear to corporate America it will scrutinize potential mergers far more aggressively than the Trump administration.

    In premarket trading Monday, Spirit shares jumped about 11% and Frontier Group stock fell about 3%.

    submitted by /u/_hiddenscout
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    Google down 7% from its post-earning jump

    Posted: 07 Feb 2022 08:41 AM PST

    I'm scratching my head here. Scanned the usual news sites and didn't see any big news involving Google today.

    I know many people were waiting for a drop from the post-earnings jump before picking up shares. Some topics for discussion:

    • Is this the right entry point or should we wait longer? (I got impatient and just picked up a few shares).

    • What is your best bear case versus Google?

    • How would you rank Google versus its peers Microsoft and Apple?

    submitted by /u/r2002
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    Own Ford Shares x 6 months => Get the X Plan discount

    Posted: 07 Feb 2022 05:29 AM PST

    There is probably a post elsewhere on Reddit but I just discovered if you own 100 shares of Ford stock for 6 months you can obtain their X-plan pricing for Ford/Lincoln cars. Some dealers are not honoring the plan in this environment and I have heard sales people do not receive much of a commission but do not know for certain.

    X-Plan price: Invoice - 0.4% + $275 program fee .

    Shareholder . ford . com

    submitted by /u/Xarax23
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    Facebook/Meta price move shows that no individual stock is 100% safe

    Posted: 07 Feb 2022 10:57 AM PST

    It's a lesson that everyone who invests in individual stocks should keep at the back of his mind. Microsoft, Google, Amazon and Facebook have been praised on here for many years as stocks that will outperform the overall market with relative safety. It's very possible that Meta will grow for years to come, and the stock will recover, but at this exact moment:

    • Facebook has returned 65% over the past 5 years - not bad, but below the 88% for S&P 500, and the 172% for NASDAQ. Despite the fact that holding a single stock is significantly riskier than holding the index
    • The price has been cut almost in half from its ATH.
    • It is trading at its lowest P/S and P/E ratios ever. "The stock is cheap now, the P/E ratio will return to historical levels" doesn't always work out.

    Again, not to say that Facebook is a bad business or the stock won't recover, but if it was a big part of your position you're probably not doing too well right now. It just highlights that market dominance over decades is exceedingly difficult. There will eventually come a time when Microsoft, Apple, Tesla and Google underperform, start stagnating, missing earnings, and decrease in value. If you invest in individual companies you should make sure that you are willing to stomach that risk.

    submitted by /u/Neither-Freedom-7440
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    GoPro could be a turnaround company $GPRO (value $15.95 vs price $8.78)

    Posted: 06 Feb 2022 08:34 AM PST

    GoPro is down 75% since mid-2014 when it had its IPO. There has been a lot of negative sentiment around it and based on the negative returns to the initial investors, rightfully so.

    However, it might be a turnaround company and I'll make my case below.

    Up until 2019, the company was mainly selling hardware consisting of cameras and certain accessories around it. Over 90% of their sales were through retail and their gross margin was around 34%.

    In the meantime, there have been 2 main changes:

    1. In March 2021, they launched an app called Quik and they have 221k paid subscribers ($9,99/year), bringing in around $2.2m in revenue that has a higher margin than their old-school business.

    2. They introduced GoPro subscription, which grew to 1.6m subscribers fairly quickly (130k in 2017, 185k in 2018, 334k in 2019, and 761k in 2020). Why is this relevant? The annual subscription costs $49.99 and without knowing anything else, it seems as they're adding $80m in revenue (1.6m x $50). Well, not really. The subscription provides the following:

    - $100 discount on a new GoPro camera - Wait what? A user pays $50 in subscription and gets a $100 discount? That is a no-brainer! But wait, that's not all, it also provides:

    - Unlimited cloud back-up + auto uploads

    - Up to 50% off @ GoPro.com

    - No questions asked damage replacement

    - Full access to the Quik app

    - Share on the go

    So, what is the catch?

    From a user point of view, they get a lot of value and from GoPro's perspective, it doesn't seem to be that profitable as they pay by not only discounting the hardware price but also they have to cover the costs for the rest of what comes with the subscription. In theory, subscriptions are a high-margin segment, but when taking all of this into account, it is clear that we cannot expect the $80m on top of what they're earning. So, why do they offer this?

    1. At the beginning, I've mentioned the main sales channel in 2019 was retail, with 90%+ of the total sales. As of 2021, retail was 66%, with 34% being DTC (Direct to consumers). As the subscription is offered through the website, more users are opting for it. This means, they're not paying the "cut" to the retail companies and they can increase the gross margins (2021 - 41% gross margin, while 34% back in 2019)

    2. As they're providing a high-value no-brainer package, they are more like to retain the customers. When they need to buy a new camera in 4 years, they would not be considering only the hardware, but also what comes with it (Is there unlimited cloud back-up, is there a damage replacement policy, what about the Quik app substitute?). So, the subscription model (in my opinion), is less about making more money and more about retaining the customers by providing value.

    ​

    What about the brand?

    - The hardware is in a very niche industry (action cameras) and as they're focused on high-quality, they're targeting the high-end. Their Hero10 black was the best-selling camera in the US camcorder market.

    - They have over 46m social media followers across all platforms (YouTube, Facebook, Instagram)

    ​

    How does this reflect in the financials?

    Their revenue was almost $1.2b back in 2017 and is almost $1.2b now in 2021. So, in the last 5 years, it seems as there were no changes. That's not fully correct as 2020 was terrible due to the pandemic. The customers buy cameras with the purpose to capture memories while they're on holiday. Having that in mind, the drop of revenue to $900m was not unexpected.

    ​

    The rest of the operating expenses have also decreased:

    - R&D from 19% of the revenue in 2017 to 12% in 2021

    - Sales & marketing from 20% in 2017 to 13% in 2021 (As they have a huge social media presence, they can use that at a lower cost to interact with their customers)

    - SG&A from 7% in 2017 to 6% in 2021

    Where does that bring the company today?

    The company finally had a positive operating margin of 13.5% in 2021! Their free cash flow is a bit over $100m.

    What about the financial position (balance sheet)?

    The company has half a billion in cash (with a market cap of $1.4b) with debt being below $300m. From a financial health point of view, it is definitely in a good position. In addition, they have around $280m in deferred tax assets (related to valuation allowance) that they can use in the future and pay lower taxes. In my valuation, I'm adding 50% of this as the benefit will come in the future. If we adjust the market cap for the cash, debt, and deferred tax assets, we get to a price of around $1.1b. Not bad for a company with a $100m+ free cash flow.

    In addition, in the last earnings release, it was revealed that the management was authorized to buy back shares for $100m.

    ​

    What could be expected in the future?

    My assumptions for the future are as follows:

    - Revenue growth 6% in the next year (analysts forecast between 4% and 9%) and then 1.83% (risk-free rate) - This leads to revenue growth of modest 25% in 10 years to $1.4b.

    - Operating margin 13.5% in the next year, growing to 14% (long-term operating margin)

    - Reinvestment (sales to capital) ratio of 4 - Pretty high for a manufacturing company, but I do not expect them to invest in an additional factory or any heavy equipment. This reinvestment mainly relates to working capital

    - WACC 7.5%

    Plugging all of this into a DCF, the value per share is $15.95 (price $8.78)

    ​

    What if the revenue doesn't grow as fast and what if the operating margin isn't 14%?

    Let's take a look at a few scenarios:

    ​

    Revenue/Op. margin 12% 14% 16%
    -10% ($1b) $11.8 $13.1 $14.4
    25% ($1.4b) $14.2 $16.0 $17.7
    50% ($1.7b) $15.8 $17.9 $19.9
    75% ($2b) $17.4 $19.8 $22.1

    I'd like to get your thoughts on both my analysis as well as the company as a whole.

    submitted by /u/k_ristovski
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    Alibaba files another 1 billion ADS

    Posted: 07 Feb 2022 05:59 AM PST

    Recently, Alibaba Group Holding Ltd. (NYSE: BABA) filed one billion more American depositary shares. According to analysts, this implies that SoftBank Group Corp. might have been planning to sell a portion of its holding in the Chinese e-commerce behemoth. The BABA stock suffered miserably following this news.

    The share registration, which was revealed in a US SEC filing on Friday, resulted in Alibaba's stock falling over 4.5% in Hong Kong on Monday, the largest decline in the standard Hang Seng Index.

    According to Citigroup Inc. analysts including Alicia Yap, SoftBank made an investment in Alibaba before the company's first public offering, which means a major chunk of its assets were not registered as ADSs. According to the analysts, registering the shares allows holders to sell them more easily. Alibaba's requirement to issue fresh stocks for its employee equity incentive program may also be covered.

    According to Citigroup calculations, SoftBank possesses 5.39 billion common stock of Alibaba, or 673.76 million ADSs, or a 24.8% interest. Alibaba's initial public offering (IPO) in the U.S. resulted in the registration of about 2 billion ADSs in the year 2014.

    SoftBank, led by Masayoshi Son, has been under fire in previous months as such a sell-off in technology equities has driven down the value of portfolio businesses such as One 97 Communications Ltd., Didi Global Inc., and DoorDash Inc. SoftBank's stock has lost over half of its value since its high last year.

    Source: https://risingcandle.com/marketnews/alibaba-files-another-1-billion-ads-baba-stock-dips/

    submitted by /u/playoponly
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    With the stock split, GOOG or GOOGL?

    Posted: 07 Feb 2022 11:10 AM PST

    I'm looking to get into Alphabet after the stock slit announcement but am not sure if I should buy GOOG (Class C) or GOOGL (Class A) shares. I know Class A has voting rights.

    If Alphabet does enter the Dow, would GOOGL or GOOG shares be the ones to trade on the Dow?

    submitted by /u/zaqu23
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    I have trouble getting a clear picture of a company and its prospects

    Posted: 07 Feb 2022 03:48 AM PST

    In 2015 I was somewhat aware that AMD was making a comeback but I figured I didn't really know anything about how processors were made. Since the time I was looking at it it's gone from a few dollars to over one hundred dollars.

    In 2016 I was aware Nvidia's cards were used for crypto mining and machine learning in addition to being the best graphics cards. I figured I didn't know what advantage they had over AMD, Intel, ASICs, and cloud services for machine learning. The new version of anything in technology is usually cheaper and better, so why shouldn't another company come eat their lunch? I would deserve to lose money in something I didn't understand.

    When Tesla made the first Model S I went into a newly opened Tesla showroom and asked the employee about any cons the car had. The stock was probably a thousand times cheaper than it is now.
    I just figured I didn't know anything about cost to make a car vs the profit and that the auto industry was a terrible place to invest.

    Apple during the time of the release of the iPhone and iPad. Surely it can't go much higher. The company is already hyped and just about the most valuable company in the world. How much bigger can the company get? Today it's at least a ten times return since the iPad came out.

    On and on. Bitcoin was ten dollars when I first heard about it. It went to one hundred and I figured that was the top of the pump. Bitcoin was promoted so much by the criminal financial press I figured it was just another one of their schemes. I didn't look at the inner workings. I had already seen them pump and dump Dot Com stocks and the housing market derivatives.

    Now, I would have kept my money parked in all of these companies if I had more than I knew what to do with. In the past five years I've been nearly broke twice. If I had more conviction about the stocks I would have fought harder to stay in them.
    I guess I'm asking how I can get a closer look at a security and get a firmer 'yes' or 'no'. These are the companies I felt strongest about and I don't get bullish about stocks like Groupon. I don't do a deep dive on companies because I'm not really sure how. I kind of fear if I did look deeply at a company I would just bias myself in favor of it. Also, I'm skittish about putting money in a company I don't fully understand.
    And, we used to have Bear Markets that would last four years. In the early and mid 2010s it felt like we were due for a long bear market to start. It's all been going up and up for so long you think you don't want to put money in and watch it slowly go down. I know five years and ten years are when you get 10x or 100x returns, but I don't have time for this. I'm aware of the stock every day and six months or two years of the stock doing nothing is like an eternity. I know short term stock prices are bullshit, but seeing a stock go up, and than back to where it was after a year or two feels like a failure of an investment.

    submitted by /u/user_00000000000001
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    Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.

    Posted: 06 Feb 2022 06:37 PM PST

    I'm bullish on sleep apnea stocks. Over a billion people have sleep apnea worldwide, it goes undiagnosed in 80% of cases, and increases the risk of the leading causes of death such as heart attack, stroke, cancer, accidents, and diabetes. I personally believe this sector will do well as millennials age and awareness increases on social media. The sleep apnea devices market is expected to have a CAGR of 6.2% from 2021 to 2028. Resmed is the world's top CPAP manufacturer. CPAPs are the most effective treatment for sleep apnea.

    Resmed (RMD) is my number one holding in my portfolio. I think they have a decent chance of growing to be as large as a company like Eli Lilly within the next 10-20 years. It all depends on whether or not the US Government decides to pursue a mass screening approach for sleep apnea. This is currently being debated in the US Preventative Services Task Force. To reiterate, about a billion people worldwide have sleep apnea and it goes undiagnosed in about 80% of cases. Check this article on pub med.

    My mid cap holdings:

    1) Resmed (RMD).

    2) Phillips (PHG). Also a CPAP manufacturer.

    My higher risk growth plays are below:

    1) Inspire Medical (INSP). They created an implant for sleep apnea, analogous to a pacemaker, to keep airways open at night. I think they have a good shot long term.

    2) LivaNova (LIVN). UK equivalent of Inspire Medical, but their business is more diversified.

    3) Nyxoah (NYXH). Super risky and less proven than Inspire, but less invasive of a product. Some of their startup capital came from Resmed.

    4) Vivos Therapeutics (VVOS). Ultra small cap and could go bankrupt, but more risk more reward if their business pays off. They have a product that's like a mouth guard, that expands airways to help prevent sleep apnea. They rely on dentists to diagnose and sell the product.

    5) Sleep Number (SNBR). There's some press that the company will develop more sleep tech to help with sleep apnea. My hope is that the company tries to acquire #3 or #4 to have a more integrated sleep solution.

    I own all these companies with Resmed and Inspire being the bulk of my portfolio. I'm bullish on the space, but recognize that some of the small caps could have issues if not out right bankruptcies.

    *Not financial advice. This is for entertainment/educational purposes only. Do your own research and consult with a financial professional if necessary. Be skeptical of everything that you read online.

    submitted by /u/sleepapneainvestor
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    Thoughts on LVMH

    Posted: 07 Feb 2022 10:27 AM PST

    I would love your opinion on LVMH or Louis Vuitton Moët Hennessy.

    I personally love the company.

    Based on the FCF of 13,5B € in 2021 I ran my numbers:

    Assuming a FCF growth of 15% it seems okay-ish valued. I think they can keep up the momentum and 15% FCF growth over the next 5 years seems possible.

    I personally find this company interesting because there will always be people that want luxury goods. Also, I think, that the disparity between rich and poor gets bigger. Yet on the other side we see a growing middle class. Both of those factors lead to more customers for LVMH.

    I would love to hear your thoughts about this company and the stock.

    (Also: Would you buy at the current valuation?)

    Thank you and kind regards

    Edit: I hold 1 stock (720€)

    submitted by /u/alexios_gav
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    Is Starbucks a good buy right now?

    Posted: 07 Feb 2022 04:43 AM PST

    Why is Starbucks down right now? It's just starting to get big in places like China and India and still has huge growth potential, has it dipped over 18% in the last three months because of Covid or something else? Is it a good buy or am I missing something?

    submitted by /u/Meancleanpeen
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    How much do you put in ETFs, how much do you put in safe companies and how much do you put in risky companies?

    Posted: 06 Feb 2022 09:28 PM PST

    Let's say, for example, that you have a total liquidity (in cash) of $60,000 after putting a full years worth of salary in a savings account and want to be a bit more risky.

    How much of this do you:

    A. Keep in cash.

    B. Put into index ETFs (VOO, SPY)

    C. Put into more risky ETFs

    D. Put into safe companies (MSFT, APPL, AMZN, GOOGL)

    E. Put into riskier companies.

    ​

    Another question: How much of your portfolio do you usually keep as one stock?

    EDIT: I'm not worried about retirement at all, only worried about the next 10-20 years, so 401K, all of that stuff is irrelevant.

    submitted by /u/Apatosaurusss
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    Thoughts on Big Lots?

    Posted: 07 Feb 2022 09:57 AM PST

    Market Cap (intraday)1.26B

    Enterprise Value3.00B

    Trailing P/E6.46

    Return on Assets (ttm) 4.63%

    Return on Equity (ttm)19.59%

    Total Cash Per Share (mrq)2.31

    Total Debt (mrq)1.81BTotal

    Current Ratio (mrq)1.27

    Book Value Per Share (mrq):34.38

    Current short interest is currently sitting on 20%

    Company has been aggressively executing buyback since August of last year. 9.3 million shares were bought at an average price of $53.49 apiece under the August 2020 authorization. Additionally new plan to buy back up to $250 million in shares was initiated mid December.

    Am I missing something here? Revenue have been sitting around 5.25 billion annually from 2018 to 2020. 2021 is a huge outlier at 6.2 billion.

    2019 EPS : 3.83

    2020 EPS: 6.16

    2022 EPS : 16.46

    Even excluding the outlier of 2020 and 2022 EPS and assuming perpetual EPS of $3.5 (for safety sake) . The aggressive buyback would reduce share count by drastic amounts going forward making this stock less than 13 PE (being overly conservative )

    submitted by /u/IQisbae1
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    Can someone explain to me why $DIS is a streaming company now?

    Posted: 07 Feb 2022 11:46 AM PST

    So checking every analyst article on the incoming ER, everyone is talking about Disney Plus and comparing it to $NFLX and other streaming services. I got it, it is a big part of Disney effort during the pandemic, but are we just gonna ignore everything else $DIS owning: theme parks, resorts, merchandises, ESPN, Star Wars, Marvels, etc.

    The theme parks and resort revenue definitely took a hit due to COVID, but was slowly climbing back. I was at Disney World in December, and it was absolutely packed and there is very little crowd control if any, everyone was spending money like they never been to a theme park. I can name 20 families on my block went to Disney this past winter break, and I am not even in Florida.

    IMO $DIS is a hybrid of value/growth stock, the growth part was probably beat down due to streaming and metaverse, but the value part of $DIS is incredibly resilience unless there is another lockdown coming.

    submitted by /u/kirinoke
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    In light of Meta crash, how does the new price get decided so quickly

    Posted: 07 Feb 2022 11:02 AM PST

    First, just wanted to clarify that this post isn't about why Meta crashed. Rather the question is that how does a large crash in terms of dollars ($200B) get decided in a matter of minutes.

    I don't think retail can play such a big role. So that leaves it to institutions. How do they converge upon the new price so quickly? Given the short time window I believe it must be based on some formula or algorithm. But what make's it tricky is that the eps wasn't that bad. The bad news was more subjective about long term growth but there was no number to it. So how do you quantify it for an algorithm? How come all players come to the same equilibrium? Given the large amount, the losses incurred are also non trivial even for large players.

    submitted by /u/randompermutation
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    Request: European company that counters military signal interference

    Posted: 07 Feb 2022 07:06 AM PST

    Russia is known for successfully deploying signal interference. It is becoming a critical capability, with insiders reporting that Russia is training its soldiers to use offline communication methods (like flag waving).

    Examples:

    Spouses of Dutch fighter pilots deployed in the Baltic states reportedly received harassing phone calls from callers with Russian accents in 2019.

    Norway said it proved Russian GPS interference during NATO exercises in 2019.

    With Russia amassing troops near Ukraine, the neighbouring countries are on edge. The rest of Europe realises that an army isn't a nice-to-have.

    Thesis: Europe is already boosting military spending, and with Russia being the main concern, hardening communications is presumably high on the priority list. Whether for a cold cyber war or, much less likely, a hot war.

    I am looking for a publicly-traded company that specialises in military IT hardware to counter such threats. Preferably in Europe as, while boosting spending, European countries will prefer European companies.

    Currently, I am looking at the Swedish MilDef that IPO'd in the summer of last year. I cannot, however, find any indication that their tech is geared towards combating malicious signal interference.

    If anyone has any feedback on the thesis, or MilDef or can suggest another company, please do.

    submitted by /u/breadslice_BE
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    Was Jan 24th a canary in the coal mine?

    Posted: 06 Feb 2022 10:27 PM PST

    On January 24th, 2022, the S&P 500 was falling hard and more and more puts were bought on the way down, exacerbating the already heavy negative gamma situation from the LEAP options expiry on the 21st. Many people have since claimed that the supposed Plunge Protection Team (PPT) stepped in and sold $50B in puts to force market makers (MMs) to hedge by buying up shares, halting the drop and squashing the VIX (which was damn high apparently).

    Tapering of Quantitative Easing (QE) by the FED caused the bond purchasing minimum to be 50% in Feb as compared to Jan. The monthly options expiration for Feb is coming up and after the FAANG earnings vs. stock price debacle recently, stocks in FAANG are trading below their max pains. Also, the put to call ratio on the SPY is only going up as one looks through options expirations over the next two weeks.

    After the December Federal Open Market Committee (FOMC) meeting, Powell gave his speech outlining rate increases coming in 2022 and 2023. Nothing happened with the market. Three weeks later when the minutes for the SAME MEETING were released, the market dumped a bit. Similarly, Jan 25-26th meeting, Powell gave his press conference and even an early text release of his speech and the market was fine. The meeting minutes for that meeting will be probably released on Feb 16th (as they tend to lag 3 weeks before releasing them). What will the market do?

    The supplemental liquidity deposit period for monthly options expiration, under old rules, starts on Feb 16th. The newer rules allow new requests to be made through to two trading days after expiration, so Feb 23rd (21st NYSE holiday). BTW, this also applied to Jan 24th and 25th.

    So, Jan 24th could have been a massive correction (technically the S&P500 was down $400 from $4600 to $4200 or so during the SLD period around Jan 21st options expiration) but was supposedly stopped. A crisis averted, but a canary no less?

    What do you think about February monthly options expiration Feb 18th, where this all appears to be poised to repeat? What about March? QE is supposed to baseline to $0 minimum purchased bonds and (commercial) mortgage backed securities, and the first (of four in 2022) expected rate hike of 0.25% is probably slated for March.

    I have no background in finances or financial practices and nothing of what I say is advice, just some observances and questions for others who have more experience in this stuff.

    submitted by /u/WhyBotherChecking665
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    Do I have this right?

    Posted: 07 Feb 2022 09:34 AM PST

    So tell me if I have this right..

    I have 400 shares of BJ's Wholesale Club trading at $60 right now. If I want to sell puts and collect the premium I can sell 4 contracts (400 shares) at anything below $60 and if the stock price doesn't fall below the strike price I keep the entire premium, right?

    So for example I could sell 4 of the Feb 18th puts with a strike price of $55 for the bid price of $0.30 and collect $120 in premium right?

    Now what would happen if the stock price does go below $55? I would be required to buy 400 shares at the strike price correct?

    Thanks for the help.

    submitted by /u/StrengthPuzzled9495
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    Can anyone explain why Ford's PE suddenly dropped to 4.01?

    Posted: 07 Feb 2022 07:57 AM PST

    Last week Ford had a PE ratio of around 25 today it dropped to 4. This isnt just a Google glitch my trading platform is giving me the same PE. Can anyone explain this anomaly? Is there something that changed in there financials that I missed?

    submitted by /u/bradimal
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    When releasing earnings, how/when is the “outstanding shares” part of the EPS calculation determined?

    Posted: 07 Feb 2022 11:02 AM PST

    I can't seem to wrap my head around this…So I understand that EPS is calculated by taking a company's net income and dividing it by the number of shares outstanding. But at what point is the number of shares outstanding determined for the calculation?

    For example like today when Alibaba released their Q4 Earnings, what date/time determines the outstanding shares for the EPS? Is the last day of Q4, the current number, or something else?

    submitted by /u/Krebsy13
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    r/Stocks Daily Thread on Meme Stocks Monday - Feb 07, 2022

    Posted: 07 Feb 2022 04:00 AM PST

    The meme stock scheduled posts will run Mon to Fri and won't be a sticky; you're probably seeing this because automod sent you here or you woke up early Wall St time; good morning!

    Welcome traders who just can't help them selves discuss the same exact stock that's been discussed 100s of times a day. I get it, you want to talk about what's popular, what's hot, and that 1.. single.. stock you like.. well here you go! Some helpful links just for you:

    An important message from our mod u/TCGYT regarding meme stocks.

    Lastly if you need professional help:

    • Problem Gambling: Call/Text: 1-800-522-4700 or chat online now.
    • Crisis Hotline (24/7): 1-800-273-TALK (8255) (Veterans, press 1) or Text "HOME" to 741-741
    submitted by /u/AutoModerator
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    PSA: The new app, "Titan Invest", that is being shilled in ads across all of the big finance Youtuber's channels is not something you need.

    Posted: 06 Feb 2022 09:15 AM PST

    Recently, there's been a lot of advertisements for Titan on YouTube. They've quite clearly been spending a lot on their marketing budget. Titan is an app where they take your money and invest it in their actively managed fund. Their marketing material will claim to earn a high return annually. They also tend to market towards younger, inexperienced investors (perhaps aged 20-35). Disclaimer, I am a huge critic of public actively managed funds and I hate them with a passion. I believe that they are one of the largest financial scam inventions of the past century.

    The track record of this "fund" only goes back to 2018, a year in the middle of one of the longest bull runs in history. A blindfolded monkey had a 50/50 percent chance of beating the S&P 500 over this time period (not a joke, google it).

    Let's pretend for a minute that the "advisors" at Titan have a magical ability to pick stocks that will outperform the S&P 500 every year. Even if this is true, the real enemy in the room is the fees. Titan charges 1% per year on the market value of your account (monthly charges). Commissions like this are absolute destroyers of wealth.

    Let's say your portfolio earns 9% per year. 1% goes to the fee. Let's say 3% to inflation (assuming inflation falls back to normal ranges eventually. Today, it's much higher) and maybe 3% to taxes and…..omg there's nothing left for you! Investment returns are very fragile and this model only hurts you.

    The evidence is clear that when you put your money in the hands of someone else, rather than the market, you will pay the opportunity cost of gains and compounding that the market could have given you. Just look at Cathie Wood's ETF's. Sure, they might recover, but imagine all of the people who trusted her "intelligence" and "magic". Nothing against her, but she has failed to outperform the market as she claimed she would. In fact, she's not only failed to match the market, but she has lost money for her shareholders.

    The hedge funds (btw, Titan is not a real hedge fund even though they use that slang in their marketing) that actually could outperform the market (Buffett's early years, Soros, Medallion Fund, etc) were private. You don't find ads on YouTube for these types of funds.

    There's nothing wrong with buying individual stocks if you want to play the game. It's fun, I do it too (I'm a total WSB freak), but when it comes to the bulk of your money and long term wealth, why not just buy the market? Just go SPY or VTI and pay barely any fee and get better performance.

    More reading on why investment advisors are toxic:

    https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/

    P.S. F*** the YouTubers who shill this crap even though they preach index fund investing on their channels.

    submitted by /u/Zachincool
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    (2/7) Monday's Pre-Market Stock Movers & News

    Posted: 07 Feb 2022 06:10 AM PST

    Good Monday morning traders and investors of the r/stocks sub! Welcome to the first trading day of this week and a frrrrrrrrrrresh start! Here are your pre-market stock movers & news on this Monday, February 7th, 2022-

    Stock futures rise slightly after S&P 500 posts best week of the year

    U.S. stock index futures turned slightly positive in early morning trading on Monday after the S&P posted its best week of 2022, boosted by quarterly earnings reports and a better-than-expected January employment report.

    Futures contracts tied to the Dow Jones Industrial Average rose 57 points, or about 0.2%. S&P 500 and Nasdaq 100 futures ticked up roughly 0.3% and 0.4%, respectively.

    Investors will be watching more earnings reports this week, though the blistering pace of the past few weeks will slow.

    Big inflation news also is on the horizon, with the Labor Department on Thursday set to release consumer price index data for January. The report is expected to show that inflation rose at a 7.2% pace from a year ago, which if accurate would be the fastest gain since February 1982.

    Markets have been bracing against the fallout from inflation and are now pricing in about a 35% chance that the Federal Reserve will hike its benchmark short-term borrowing rate by half a percentage point, or 50 basis points, in March.

    Government bond yields were little changed Monday after racing higher following Friday's unexpectedly strong nonfarm payrolls report for January. The benchmark 10-year note most recently yielded 1.92%.

    Peloton shares surged in premarket trading Monday on reports that Amazon and Nike are lining up as possible suitors for the interactive fitness equipment maker. The stock surged 25% on the news, which comes just a few days after activist investor Blackwells Capital urged the company to consider a sale and to fire its CEO.

    Spotify saw its shares decline 1.3% after the company said it condemns past use of racial slurs by controversial podcast host Joe Rogan but would not remove him from the streaming site. Artists including Neil Young, Joni Mitchell and India.Arie have asked Spotify to remove their music in protest over Rogan.

    Elsewhere, shares of Spirit Airlines jumped 11% after Frontier Airlines announced a deal to merge with its low-cost competitor. The news appeared to boost sentiment among airlines generally, with shares of United and Delta Air Lines rising nearly 2% premarket.

    The S&P and Nasdaq Composite advanced on Friday for their fifth positive session in the last six, and the indices also posted their best week since December. The Dow slid 0.06% on Friday, but still managed to post a 1.05% gain for the week. The Russell 2,000 meantime posted its first positive week in five and best week of 2022.

    "Investor psychology is shifting almost week-to-week, meaning sticking to one's investment convictions is about as hard (or painful) as ever, but also never more important in driving outperformance," Raymond James strategist Tavis McCourt said in a note to clients. "Our conviction remains that economic strength will keep EPS keeps going higher along with interest rates, as we suspect we remain a long way from higher rates materially slowing demand in the economy."

    Earnings reports and the jobs report pushed the major averages higher. The Labor Department said Friday that 467,000 jobs were added in January, well ahead of the 150,000 economists polled by Dow Jones were expecting.

    Last week's gains follow a rocky start to the year for the major averages as rising rates prompted investors to shed growth names in favor of value-oriented areas of the market.

    "It has been a raging bear market for high multiple stocks and for anything speculative in nature. It's just been taken out to the woodshed. So there's probably some value being created there now," Morgan Stanley's Mike Wilson said on "Squawk Box." The strategist said he still recommends a tilt toward more defensive areas of the market and thinks the indexes may not have hit a bottom yet.

    So far 56% of S&P 500 companies have posted quarterly earnings, with 79% beating earnings estimates and 77% topping revenue expectations.

    Individual performance has been different, however. Amazon shares added 13.5% on Friday, while Snap surged 58.8%. Facebook-parent Meta dropped 26% on Thursday after its quarterly update. The social media company is coming off its worst week on record.

    Another busy week of earnings is on deck with 76 S&P 500 companies set to post results. Three Dow components will provide quarterly updates, including Disney and Coca-Cola. Amgen, Take-Two Interact

    STOCK FUTURES CURRENTLY:

    (CLICK HERE FOR STOCK FUTURES CHARTS!)

    LAST WEEK'S MARKET MAP:

    (CLICK HERE FOR LAST WEEK'S MARKET MAP!)

    TODAY'S MARKET MAP:

    (CLICK HERE FOR TODAY'S MARKET MAP!)

    LAST WEEK'S S&P SECTORS:

    (CLICK HERE FOR LAST WEEK'S S&P SECTORS CHART!)

    TODAY'S S&P SECTORS:

    (CLICK HERE FOR TODAY'S S&P SECTORS CHART!)

    TODAY'S ECONOMIC CALENDAR:

    (CLICK HERE FOR TODAY'S ECONOMIC CALENDAR!)

    THIS WEEK'S ECONOMIC CALENDAR:

    (CLICK HERE FOR THIS WEEK'S ECONOMIC CALENDAR!)

    THIS WEEK'S UPCOMING IPO'S:

    (CLICK HERE FOR THIS WEEK'S UPCOMING IPO'S!)

    THIS WEEK'S EARNINGS CALENDAR:

    (CLICK HERE FOR THIS WEEK'S EARNINGS CALENDAR!)

    THIS MORNING'S PRE-MARKET EARNINGS CALENDAR:

    (CLICK HERE FOR THIS MORNING'S EARNINGS CALENDAR!)

    EARNINGS RELEASES BEFORE THE OPEN TODAY:

    (CLICK HERE FOR THIS MORNING'S EARNINGS RELEASES!)

    EARNINGS RELEASES AFTER THE CLOSE TODAY:

    (CLICK HERE FOR THIS AFTERNOON'S EARNINGS RELEASES!)

    FRIDAY'S ANALYST UPGRADES/DOWNGRADES:

    (CLICK HERE FOR FRIDAY'S ANALYST UPGRADES/DOWNGRADES LINK #1!)
    (CLICK HERE FOR FRIDAY'S ANALYST UPGRADES/DOWNGRADES LINK #2!)
    (CLICK HERE FOR FRIDAY'S ANALYST UPGRADES/DOWNGRADES LINK #3!)
    (CLICK HERE FOR FRIDAY'S ANALYST UPGRADES/DOWNGRADES LINK #4!)
    (CLICK HERE FOR FRIDAY'S ANALYST UPGRADES/DOWNGRADES LINK #5!)

    FRIDAY'S INSIDER TRADING FILINGS:

    (CLICK HERE FOR FRIDAY'S INSIDER TRADING FILINGS!)

    TODAY'S DIVIDEND CALENDAR:

    (CLICK HERE FOR TODAY'S DIVIDEND CALENDAR LINK #1!)
    (CLICK HERE FOR TODAY'S DIVIDEND CALENDAR LINK #2!)

    THIS MORNING'S STOCK NEWS MOVERS:

    (source: cnbc.com)

    Spirit Airlines (SAVE) – Spirit surged 11.4% in the premarket after announcing it would buy competitor Frontier Airlines in a stock swap deal valued at $6.6 billion including assumed debt. Shares of Frontier's parent company Frontier Group (ULCC) fell 2.4%.

    STOCK SYMBOLS: SAVE

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Peloton (PTON) – Peloton rocketed 28.5% higher in premarket trading, following reports that both Amazon.com (AMZN) and Nike (NKE) are mulling possible bids for the fitness equipment maker. The reports come a few days after activist investor Blackwells Capital urged Peloton's board to consider a sale of the company.

    STOCK SYMBOLS: PTON

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Energizer (ENR) – The company best known for its batteries saw its stock surge 5.7% in premarket trading after reporting better-than-expected quarterly results. Energizer beat estimates by 8 cents share, with a profit of $1.03 per share. Revenue also topped Wall Street forecasts. Energizer warned the current operating environment remains "very volatile."

    STOCK SYMBOLS: ENR

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Zimmer Biomet (ZBH) – The maker of orthopedic and other medical products reported quarterly earnings of $1.95 per share, missing consensus estimates by 3 cents a share. Revenue came in short of analysts' forecasts. The company said the ongoing pandemic continued to pressure its business during the quarter, and the stock slid 5.4% in the premarket.

    STOCK SYMBOLS: ZBH

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Hasbro (HAS) – Hasbro added 2.2% in premarket trading after the toymaker beat top- and bottom-line estimates for its latest quarter. Hasbro earned $1.21 per share, well above the 88 cents a share consensus estimate. Revenue in its television, film and entertainment business jumped 61% from a year earlier. Hasbro also increased its quarterly dividend by 3% to 70 cents per share.

    STOCK SYMBOLS: HAS

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Tyson Foods (TSN) – Tyson rallied 4.2% in the premarket following its quarterly earnings report. The company beat estimates by 97 cents a share, with quarterly earnings of $2.87 per share. The beef and poultry producer's revenue also beat analysts' forecasts. Tyson said it was on track to achieve $1 billion in productivity savings by the end of fiscal 2024.

    STOCK SYMBOLS: TSN

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Bumble (BMBL) – The dating service operator announced the acquisition of European dating app company Fruitz for an undisclosed amount, Bumble's first-ever acquisition deal. Fruitz is especially popular among Gen Z consumers.

    STOCK SYMBOLS: BMBL

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Ford (F) – Ford fell 1.1% in premarket action after announcing it will suspend or cut production at eight of its North American factories due to the global semiconductor shortage. Those changes will be in effect throughout this week.

    STOCK SYMBOLS: F

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Spotify (SPOT) – Spotify CEO Daniel Ek said he strongly condemns racial slurs used by podcaster Joe Rogan, but said removing his podcast from the Spotify platform is not the answer. A number of popular music artists have had their music pulled from Spotify amid the controversy over Rogan's comments on Covid-19. Spotify shares fell 2% in the premarket.

    STOCK SYMBOLS: SPOT

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    Snowflake (SNOW) – The cloud data platform provider's stock rallied 4.8% in the premarket after Morgan Stanley upgraded it to "overweight" from "equal-weight," saying investors are undervaluing Snowflake's potential for durability and quality of growth.

    STOCK SYMBOLS: SNOW

    (CLICK HERE FOR LIVE STOCK QUOTE!)

    FULL DISCLOSURE:

    /u/bigbear0083 has no positions in any stocks mentioned. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.

    DISCUSS!

    What's on everyone's radar for today's trading day ahead here at r/stocks?

    I hope you all have an excellent trading day ahead today on this Monday, February 7th, 2022! :)

    submitted by /u/bigbear0083
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    Companies affected by lower advertising budgets?

    Posted: 07 Feb 2022 04:31 AM PST

    Let's here some publicly traded companies that are most affect by less spending on advertising. Basically companies whose sole income is advertising. FB is one example. This can be advertising companies themselves or stocks. I think inflation will cause many companies to cut their budgets and one things they will cut is advertising so I think companies like Facebook will go down in value.

    submitted by /u/DonV71
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    Do you ever buy a stock just out of pure sentiment?

    Posted: 06 Feb 2022 07:21 AM PST

    So like many on this sub, I got into investing during the 2020 corona crash. After many initial failures I figured out a mixed ETF/stock strategy, which I now follow. A part of it is investing into companies with great outlooks and hold them for many years, thus actually investing.

    With some cash on hand I have seen many decent companies bleed out during the recent months. While the distance from fair valuation is still debatable, I couldn't help myself and bought some Spotify. Although the music industry might not be the most profitable one and profits are still to be made, I believe there is more money to be made in other sectors.

    Nonetheless I simply adore their product. For 5€ as a student I get access to basically all of the worlds music. The app is great and while expanding into podcasts they don't fail to innovate. So I just decided to open a small position after the recent dip. Don't expect to make a lot of money from it, but will hold for many years to come.

    What are your non-conviction positions you simply hold because you love the product?

    submitted by /u/Vitorex
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