Great Stuff Roasting on an Open Fire
Happy holidays, Great Stuff readers!
I’m in not-so-sunny Florida today for the annual Banyan Hill Christmas party!
No ugly Christmas sweater contests at this shindig. (Although I was invited to one this week. Thank you, Erinn!)
Just good friends, good music, a few drinks and excellent conversation. Banyan Hill expert Ted Bauman — a good friend and editor of The Bauman Letter — and I are sure to go a round or two on the Fed and the repo market.
Yes, I discuss the Fed for fun. Thrilling, isn’t it?
Unfortunately, since science has yet to invent teleporters or flying cars — Hollywood lied to me big-time in my youth — I’ll be in the air while today’s lovely edition of Great Stuff is being delivered to your inbox.
But that doesn’t mean I don’t have some Great Stuff set aside for you today … oh no! I’ve pulled together some hot takes on this week’s biggest stories.
Let’s get right to it, shall we?
- Pedal-Pounding Peloton: I’m feeling a bit dirty today. That’s because, for the first time that I can remember … I agree with Andrew Left of Citron Research. In the past, I’ve disagreed with Left on everything from Tesla Inc. (Nasdaq: TSLA) to Shopify Inc. (NYSE: SHOP) to Revolve Group Inc. (NYSE: RVLV). (Incidentally, I was right on RVLV, which is down about 59% since I panned the stock and Left came out as bullish.)
- This time, however, Left may have hit the mark on Peloton Interactive Inc. (Nasdaq: PTON). He compared the company to GoPro Inc. (Nasdaq: GPRO), saying Wall Street’s giddiness over this new “must-have” product will fade as competition ramps up. Left cited the low barrier to entry for competitors that’ll undermine Peloton’s long-term bike sales. No mention of large bay windows, though.
- While I don’t see PTON plunging to Left’s target of $5 per share anytime soon, if the company faces the same stiff competition that sunk GoPro (and there’s no reason to think it won’t), current valuations are way too high.
- Tourists … in … Spaaaace!: Some people call me the space cowboy. Some people call me the “Great Stuff gangster.” Nobody calls me Maurice, though. Today, I’m speaking on the “pompatus” of space travel. Privately held Blue Origin LLC just successfully launched its New Shepard spacecraft — a reusable, suborbital rocket that it plans to use to ferry tourists into space … for a price.
- Blue Origin joins Virgin Galactic Holdings Inc. (NYSE: SPCE) in a quest to launch you (or anyone who can plunk down enough credits) into space next year. Virgin says a round-trip ticket to space will run you $250,000. Blue Origin has yet to announce pricing.
- Discounted Yoga Pants: If you missed out on Lululemon Athletica Inc.’s (Nasdaq: LULU) stunning 18-month-long rally, you may be in for a treat today. LULU shares are falling after the company’s fourth-quarter guidance missed analyst earnings and revenue expectations.
- And by missed, I mean … not really. The company’s third-quarter results beat both top- and bottom-line consensus targets, while same-store sales rocketed 17% higher on the quarter.
- But Lululemon put fourth-quarter earnings at $2.10 to $2.13 per share, versus expectations for $2.13 per share. It also said revenue should arrive in the $1.32 billion to $1.33 billion range, compared to the consensus target for $1.32 billion. (In what world are these “misses”?)
- The thing is, LULU is a hot stock. It’s a serious momentum play right now, and the company is knocking it out of the park with sales growth and earnings. What we’re seeing today is profit-taking and panic selling. If you were looking for the right entry point for LULU, today is your chance.
That’s it for today…
Until next time, good trading!
Joseph Hargett (devoted editor, committed do-gooder, real nice guy)
Great Stuff Managing Editor, Banyan Hill Publishing