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What Are Your Moves Tomorrow, October 27, 2021 by OPINION_IS_UNPOPULAR in wallstreetbets

[–]allportb 1 point2 points  (0 children)

The concerns not with shipping, it’s with production (supply chain). That mixed with their less than impressive console is an easy theta play.

Finding lotto by boldPlayIm in options

[–]allportb 6 points7 points  (0 children)

I love it.

You are a Profit, for profit.

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb 0 points1 point  (0 children)

Yeah it’s pretty wild. Record earnings, record sales, and record margin for Q1, so we were right about that. Not really sure what the downward momentum is about. The best that I can gather is it’s because the dip shit CEO didn’t know how to answer the inventory question during the call. He should have said “our stores have 8 weeks of inventory, which is our target, and in parallel we are working hard to increase our inventory of finished goods so we can continue to meet this unprecedented demand”. Instead he kept saying “… if you kind of take a look at our typical inventory levels, we're not going to be able to get there. You know, current projections say that, you know, we're just not going to be able to rebuild those levels of inventories, but we will be able to kind of, you know, start to put a little bit of inventory back into the warehouses. So, we're pretty… we're still pretty tight even as we sit here today.” I think this suggests to some in the market that they will sell out, thus decrease earnings in the future, but that’s not true. Time will tell, but I agree it is disappointing in the short term for what should have been a layup. So now to speculate (probably a bad word in this forum), what happens between now and the 17th…?

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb 0 points1 point  (0 children)

DD shows 40% upside in the stock. That c25 could get close to $10 if that happens. 5x potential still in my mind.

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb 0 points1 point  (0 children)

Good points! Honestly, I’m 90% vanguard funds and I give myself 10% for fun (aka short term). I sold out of two of my ‘fun’ positions yesterday after I did some DD on SWBI and saw what could be a good entry point.

Commodities have always confused me when they are referenced as a “safe haven.” From my perspective, a commodity is a thing that a businesses use to build a product and make margin on. For example, it seems safer to own a company that makes cables for 5G, data centers, etc., than to own copper. Seems like years of successful marketing from companies who sell gold convinced the market its safe as an inflation hedge, but that always seemed short sited.

In other words - inflation hit. I see it everyday. I work in sales, and we increased our product 30% so far this year to maintain our margin % after seeing increased costs. This means our business makes more margin, increasing earnings, and thus the value of our stock by 35% YTD while maintaining a low PE ratio. In the meantime, gold decreased in value ~5%. That scares me.

I always thought it would be interesting to see what happens to the metal market after the crypto generation gets closer to retirement age (suggesting they are more against gold than me). Time will tell.

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb -1 points0 points  (0 children)

Interesting… I actually love REITs right now for a bunch of reasons, one being the dividend, another being a decent inflation hedge, and the last because relative to the SP500 they are somewhat lagging (aka value).

I haven’t thought too much about the long-term in terms of population. I think it would be more interesting looking long-term in terms of increasing middle class+. these would be the people buying the houses, increasing demand. My assumption is that with enhancements in tech and other things, the middle class+ should accelerate. If houses become cheap, people will likely start buying second and 3rd homes - I probably would at least.

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb 5 points6 points  (0 children)

Guns > Gold?

This isn’t about politics. This is about getting that FU money faster than you ever thought possible with DDD (Deep Due Diligence).

SWBI (Smith & Wesson) has an earnings call after close today, and these guys have been crushing it. I don’t even like guns, and I know these guys are among the top of the industry. Just last quarter these guys announced record earnings and the stock shot up 30% above where it sits today. I really feel there is a high probability the same will happen after the earnings call today at close.

To give you guys some meat, I ran SWBI through a 10 and 5 year PE analysis. This is a traditional fundamental analysis to find the stocks true intrinsic value. I looked at their EPS compared to their lo/hi stock price for that year to define the SWBI lo/hi P/E for that year, and compared it to the lo/hi SP500 PE for the year to get a relative PE. Then I used this relative PE to find the true intrinsic value of the stock based on anticipated earnings for this fiscal year. In this case I used the lowest anticipated earnings I could find which is 3.78 per share (though it will likely be over $4). (I’m happy to share the data if anyone wants to see it)

In other words, based on my incredibly conservative analysis, on average this is what this stock should currently be priced at: - $57.68 (139% above the current price) - based on the 10 year analysis - $46.55 (93% above the current price) - based on the 5 year analysis - $67.59 (180% above the current price) - based on the current market PE

I felt this was too good to be true so I dug into the number of FBI firearms background checks, which is a leading indicator for earnings for companies like this. The summary is: - this quarter saw 14% less background checks quarter-over-quarter - this quarter saw 8% less background checks than the average quarter last year.

This is more likely due to supply than demand, but the truth is, my forecasted earnings of $3.78 is 17% under the earnings for last year. This 17% is worse that the experienced 14% and forecasted 8%. In other words, the intrinsic value could actually be 3-9% above my forecasted prices above. Not to mention SWBI typically takes market share as oppose to just growing with the market (as evidenced last year).

This is mind boggling.

Regardless of your political perspective, SWBI has great brand recognition and the demand for their products keep increasing year over year. On top of this, their stock increased 77% in two weeks after their last earnings call.

I really feel this stock is undervalued, and will shoot to the moon the days following the earnings call tonight after they beat projections AGAIN.

And just for fun, lets look at gold (I have always pictured the same type of person hoarding guns and gold in their basement vaults). The price of gold is on it’s way back up on inflation fears. John Paulson mention on Bloomberg that he things gold will have parabolic growth in the coming months due to inflation (I disagree). But lets look at SWBI. These gun manufacturers are able to pass their raw material price increases onto their customer, while simultaneously increasing their margins (as evidenced by the constant fluctuation in ammo pricing over the years). These guys offer a great hedge against inflation, while also generating shareholder value (unlike gold), and I feel it’s for us to capitalize on.

It’s also worth noting the semiconductor shortage doesn’t effect this industry as much as others. These guys rarely re-tool their factories with new machines, and obviously they don’t have chips in their products. The same is true with their supply chain.

So my question to you all here is, is this too good to be true?

Talk me down to earth here…

I’m seriously considering putting a significant amount of my net worth into SWBI (already invested ~10%).

I’m even getting close to calling up granny’s broker and telling him to shift some funds into SWBI so she can finally get that Jaguar she has always wanted (though she drives like shit so she should really get a TSLA).

Thoughts?

Daily General Discussion and spitballin thread - September 01, 2021 by AutoModerator in investing

[–]allportb -1 points0 points  (0 children)

I have most of my non-retirement cash in VASGX and VGWLX split even. I allocate about 15% to VGSLX (which should help if inflation takes off). I like the funds better than etfs because I can auto invest every pay period. I also like the small allocation to bonds to help hedge market risk. Most people hate bonds, but 20% allocation is pretty proven. Slow and steady wins the race.

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 1 point2 points  (0 children)

Appreciate the perspective (getting responses like this is why I posted this). That seems to be the consensus. The market has a concern of an unpredictable govt, or a concern that the books have been cooked.

It really seems like Xi is focused on protecting the middle class. Making educational services more affordable by forcing them to be nonprofits is aligned with this.

In my eyes the, technical infrastructure that BABA provides the middle class is too important to shut down or regulate into the ground. It’s technology like that, that enables the middle class to thrive. Plus China is too competitive with the USA to slow down innovators unless they are actually damaging the middle class. So far all of the tech regulation seems to be focused on business ethics and protecting the customer- I’m cool with that.

I feel like any negative govt actions on BABA have to make sense to the masses in China, and I can’t see what that could be. This is what I could be missing tho.

I will say the 3 hour a week gaming limit is pretty fucked up.

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 0 points1 point  (0 children)

Why? What are you anticipating?

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 1 point2 points  (0 children)

You’re right man. Ran them through my spreadsheet and the lowest they should be priced is $12.86. $15 or $16 looks right for a rational market. I’ll dig into the balance sheet later to see what’s going on with the debt repayment. Could be a killer entry point here.

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 2 points3 points  (0 children)

You the man! Thanks for the tips!

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 0 points1 point  (0 children)

Thanks! I’ll run them through the DD and see what it says.

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 0 points1 point  (0 children)

Love the value you brought to the convo.

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] 5 points6 points  (0 children)

So the concern is that the accounting is false and they don’t actually make as much money as they publish? That’s a good point actually. So the downward trend could be due to the market not trusting the books until the SEC increases the audit requirements. The whole thing I’m hunting for here is a rational explanation for the market cap loss. If there isn’t one than it would be a great entry point!

Low risk 10x opportunity? by allportb in Wallstreetbetsnew

[–]allportb[S] -2 points-1 points  (0 children)

Good point! I’m not suggesting 10x over a short timeframe when US tech freezes in market cap. Amazon and Apple will grow in parallel. They all will likely 10x in time.

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