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April 2016
#11

Credit Suisse sees a lot of upside for Jinko (JKS):


Credit Suisse sees terrific upside in the following three solar stocks, which are the firm's "top picks" in the space:


Sunrun (NASDAQ:RUN): Target $21. Implied upside 201%. Reasons: differentiated multi-channel strategy: direct-to-consumer, partner network, strategic partners. CS likes RUN's "customized pricing approach." Demand is robust.

SolarCity (NASDAQ:SCTY): Target $89. Implied upside 218%. Reasons: SCTY is key beneficiary of two solar trends: lower costs to customer and lower cost of capital through financing vehicles. SCTY has 34% U.S. market share. Demand is robust, and the market is only 1% penetrated.

Jinko Solar (NYSE:JKS): Target $40. Implied upside 97%. Reasons: cost leadership in manufacturing, proven downstream execution capabilities, relative valuation and nearing opportunity to leverage a YieldCo/Growth IPP structure.

We're not so sure about SolarCity though, after the SunEdison (SUNE) debacle

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#12

Well, we had our thoughts on Skechers out yesterday:

Skechers still seems to pay a heavy price for an earnings miss two quarters ago. Much of that was due to one-time factors and currency headwinds. The stock is oversold, an inch above a major support level, and cheap. We think most of any possible bad news is already priced in and see a favorable risk-reward.

Skechers Is Oversold And Cheap - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha

And today there is another article:

Skechers is trading for attractive multiples and can be considered undervalued on both a relative and absolute basis. Skechers is trading for a forward P/E of 9.6, an EV/EBITDA of 9.6 and a forward EV/EBITDA of 7.9. Considering these metrics, Skechers is significantly undervalued as peer companies are trading for an average EV/EBITDA of 10.

Skechers USA, Inc. - Upside Ahead - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha

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#13

Some interesting tidbits..

"A strengthening yen signifies risk aversion ... generally when you see the yen strengthen that indicates that global equities are rolling over or about to roll over," Todd Gordon said in a recent CNBC "Trading Nation" interview. The Japanese currency has been on a tear of late, hitting a 17-month high versus the dollar on Monday. The yen and equities have an inverse trading relationship, when the currency rises, it usually corresponds with a dip in stocks.

Worried about stocks? Here’s one way to hedge: Trader

One look at the companies that made the new-high list last week, and Cramer saw a common thread. The list included Estee Lauder (NYSE: EL), Kimberly-Clark (NYSE: KMB), Coca-Cola (NYSE: KO), Church & Dwight (NYSE: CHD), Altria (NYSE: MO), PepsiCo (NYSE: PEP), Tyson (NYSE: TSN), ConAgra (NYSE: CAG), Constellation Brands (NYSE: STZ), General Mills (NYSE: GIS) and McCormick (NYSE: MKC). What do all of these companies have in common? They take raw commodities and refine, package and sell them. The concentration of these consumer-package plays told Cramer four things: First, raw costs are calm and behaved. Second, all packaging must be going down in price. Third, distribution costs are at a big low, thanks to oil and gas. And finally, the dollar has peaked versus currencies of trading partners, which means these companies could do quite well in the second half.

Cramer: Signs an earnings explosion is coming - Yahoo Finance

However, some think the dollar is going to rise again:

A Bank of America Merrill Lynch strategist on Wednesday predicted that the next big move in the currency market will be a resumption of the U.S. dollar’s rally as the Federal Reserve shifts to a hawkish outlook.

Bank of America thinks this will be the next big move in currency markets - MarketWatch

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#14

Sketchers had a blast, we wrote a timely article (here)

From the PR:

Record Quarterly Sales of $978.8 Million, an Increase of 27.4 Percent

Record Quarterly Earnings from Operations of $138.6 Million

Record Quarterly Net Earnings of $97.6 Million

Record Quarterly Diluted Earnings Per Share of $0.63

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)-- SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader and the second largest footwear brand in the United States, today announced financial results for the first quarter ended March 31, 2016.

First quarter 2016 net sales were $978.8 million compared to $768.0 million in the first quarter of 2015, an increase of 27.4 percent. Gross profit for the first quarter of 2016 was $432.2 million, or 44.2 percent of net sales, compared to $332.5 million, or 43.3 percent of net sales in the first quarter of 2015. Earnings from operations for the first quarter of 2016 were $138.6 million, or 14.2 percent of net sales, compared to net earnings from operations of $88.2 million, or 11.5 percent of net sales, for the first quarter of 2015.

“At no other time in the Company’s history have we been stronger across our many product categories, marketing initiatives and multiple distribution channels. The growing demand for our brand has resulted in record revenues of $978.8 million and earnings from operations of $138.6 million for the first quarter of 2016,” began David Weinberg, chief operating officer and chief financial officer. “These significant achievements are primarily the result of a 47.1 percent increase in our international wholesale business over the first quarter 2015, and a shift forward of some domestic and international orders into the first quarter due to the Easter timing. In addition, domestic wholesale sales increased 12.1 percent and our Company-owned retail sales increased by 23.2 percent with a 9.8 percent comp store sales increase over the prior year period. For the first time ever, our international business has grown to be our largest segment—with international wholesale representing 42.9 percent and international wholesale and retail representing 47.7 percent of our total sales. To meet the increased demand, we are investing in our infrastructure, including improved efficiencies in our European Distribution Center, which allowed us to achieve a record three million pairs shipped in a month during February. With the completion of our European Distribution Center expansion to one million square feet in the second quarter of 2016, and with the automation to be fully completed later this year, we expect to be even more efficient in our largest market outside of the United States.”

The only problem (at first sight) is perhaps this:

       Skechers USA sees Q2 2016 revenue of $875-900 million, versus the consensus of $913.55 million.  

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#15

Their international business grew by a whopping 47%. Where do you get this much topline growth in a stock that is this cheap? A 9 cents earnings beat to boot..

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#16

Yes, we mostly agree with this. Comparing Skechers to Kors:

With that said, any time a retailer seemingly comes from nowhere with incredible growth, its stock is always punished. I know that sounds crazy, but the reason lies in the market's desire to look ahead, and bet on a high flying retailer's eventual collapse, whenever that may be. After all, consumers are trendy, and the hottest brands never seem to last. The best example that comes to mind is Michael Kors (NYSE:KORS).
With that said, there is one big difference between KORS and SKX: Skechers is nowhere near the end of its growth line -- its first quarter results and second quarter guidance proves that -- and it has a much better chance to maintain its growth rate long-term. For one, Skechers operates in a footwear space that is far larger than a niche industry like luxury, high-end handbags. Despite Skechers reporting upwards of $900 million per quarter, it is still a small player relative to the footwear industry as a whole. At last tally, Skechers's market share was less than 5% according to SportsOneSource, thereby giving it room to gain more share down the road.

Skechers Is Here To Stay - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha

Only if there is a substantial derailment from the present growth path, or a general market selldown will the stock buckle, in our view.

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#17

We're buying 500 shares First Solar (FSLR) at $57.85. The 7% drop seems overdone to us:

For this year, the company affirmed its outlook for revenue of $3.8 billion to $4 billion, but raised its gross profit forecast to a range of 18% to 19% from a prior range of 17% to 18% . It also raised the lower end of its earnings per share forecast, to a range of $4.10 to $4.50 from a prior $4 to $4.50.

First Solar Drops 9% on Q1 Earnings: Rev Misses; CFO Becomes CEO - Tech Trader Daily - Barrons.com

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#18

Darn, we were considering it, shorting ELLI at $94, but they have a habit of beating with a huge amount. They didn't do so this time, and the following shows just how expensive the stock is:

For the full year 2016, revenue is expected to be in the range of $325.0 million to $329.0 million, up from the previously provided range of $317.0 million to $321.0 million. Net income is expected to be $23.5 million to $25.5 million, or $0.74 to $0.80 per diluted share, up from the previously provided range of $22.2 million to $24.2 million, or $0.71 to $0.76 per diluted share. Adjusted net income is expected to be in the range of $58.4 million to $61.4 million, or $1.84 to $1.92 per diluted share, up from the previously provided range of $56.1 million to $59.1 million, or $1.79 to $1.86 per diluted share. Adjusted EBITDA is expected to be in the range of $93.0 million to $97.5 million, up from the previously provided range of $90.0 million to $94.5 million.

Ellie Mae Reports First Quarter 2016 Results | Seeking Alpha

That's roughly $0.80 eps for a $90 stock.. Ok, if you add in the stock based compensation you get the $1.90 or so, but even then it's expensive..

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#19

Here's one reason why we bought FSLR today:

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#20

A little summary to date (end of April 2016)

Dec 21 15 b500ELLI $60.40 Feb 19 s500ELLI $82 +$10,800
Jan 5 16 b1000INVN $9.40 $7.68 -$1720
Jan 5 16 b500SKX $29.20 $33.06 $1930
Jan 7 16 b500JKS $22.16 $22.22 $30
Jan 11 16 ss1VIX July $22.35 Feb 19 b1VIX July $23.00 -$750
Jan 14 16 b500JKS $18.90 $22.22 $1660
Jan 15 16 ss1VIX July $23.00 Feb 19 bVIX July $23.00 0
Jan 20 16 ss2VIX July $23.90 Feb 3 b2VIX July $21.95 +$3900
Jan 28 16 b1000MU $9.90 $10.75 $850
Feb 4 16 b300DATA $55.51 $51.75 -$1128
Feb 4 16 b200DATA $52.40 $51.75 -$130
Feb 5 16 b300DATA $42.87 $51.75 $2664
Feb 19 16 ss2VIX Sep $23.10 Mch 18 b2VIX Sep $20.45 +$5300
Feb 24 16 b500IOC $25.97 $33.47 $3750
Feb 25 16 ss1000ELLI $86.75 March 2 b1000ELLI $82.52 +$4230
Mch 17 16 b500CTRP $40 $43.61 $1805
Mch 30 16 b500AMBA $45 $41.10 -$1950
Apr 7 16 b500SKX $27.14 $33.06 $2960
Apr 28 16 b500FSLR $57.85 $55.86 -$995
Apr 30 Unrealized $9726
April 30 Realized $23,480
TOTAL $33,206

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