Strike Hard, Strike Fast
Welcome once again to Great Stuff’s Reader Feedback day!
Today is all about you. Even this opening section of Great Stuff is about you.
That is … unless you don’t trade the Great Stuff Picks portfolio. Then it’s not all about you. But them’s the breaks when you don’t take advantage of the free stock picks and knowledge I drop.
So, before we dive into the Great Stuff mailbag, let’s hit up our best-performing stock recommendation of 2020: CrowdStrike Holdings Inc. (Nasdaq: CRWD).
Last night, CrowdStrike delivered an impressive beat-and-raise second-quarter report. Quarterly earnings soared 126% year over year, while revenue spiked 45.7%. CEO George Kurtz attributed the company’s continued success to businesses adapting to pandemic restrictions.
In other words, the work-from-home market is still driving many information technology IT departments to secure their now geographically diverse networks. Even struggling industries (ahem, airlines) will transition their network security options to the cloud, Kurtz noted.
Here’s how CrowdStrike’s numbers stacked up to Wall Street’s expectations:
- Earnings: $0.03 per share versus the $0.01-per-share loss expected.
- Revenue: $199 million versus predictions for $188.6 million.
Due to the pandemic tailwind, CrowdStrike expects third-quarter results of breakeven to a $0.01- per-share loss. Revenue is targeted to arrive between $210.6 million and $215 million. Wall Street analysts currently expect a loss of $0.05 per share on revenue of $195.9 million.
CrowdStrike sits on two consecutive profitable quarters and now potentially a third — if earnings outperform once again. I love it when a plan comes together…
But CRWD was down about 10% today, Mr. Great Stuff. What gives?
Two words: profit-taking.
Anticipating stellar earnings, CRWD rallied more than 20% in the five days before last night’s report. Today, we saw investors take profits on the news. That profit-taking was exaggerated by a market-wide round of profit-taking on tech stocks, especially those that benefited from the pandemic.
If CrowdStrike had beaten lowered expectations and shown a decline in earnings and revenue year over year (like many other companies this earnings season), I’d worry and probably recommend taking profits as well.
However, the company not only beat analysts’ targets but improved massively over last year’s results. This round of nervousness will pass, and CRWD will once again resume its trek higher.
Currently, you should sit on a gain of about 130% from when Great Stuff recommended buying CRWD back on January 8. Congratulations!
However, if you’re nervous about the market, set a stop-loss near $120 or $125, which will automatically sell your shares if the stock falls to those levels. That way, you’re guaranteed to lock in a 100% plus gain regardless of what the market does.
The bottom line: Hold CRWD.
Finally, here’s a look at the rest of the Great Stuff Picks portfolio:
Overall, the Great Stuff Picks portfolio sports a total average gain of 47% since inception, with a win rate of 81%! Plus, we’ve got three triple-digit winners, with two or three more looking to break out. Just look at those Advanced Micro Devices Inc. (Nasdaq: AMD) gains!
Not too shabby for a free portfolio, huh?
If we see any more gains to bank or trades to make, you’ll be the first to know! Of course, if you’re looking for hands-on portfolio updates and more trades than you can shake a limit order at, we’ve got you covered there too.
And if you thought that the gains above were explosive, oh just you wait until you see what greatness is cooking up right here. Click me!
Now, let’s get right to answering your emails! If you haven’t written in yet, drop us a line at GreatStuffToday@banyanhill.com. We don’t bite … unless you ask nicely.
If you said you’d email me tonight, there would still be Great Stuff left to write.
What else could I do? I’m so inspired by you. That hasn’t happened for the longest time!
The last Reader Feedback issue was only a week ago, Mr. Great Stuff.
Yes, but the passage of time remains as fleeting as toilet paper in the rain. And speaking of segues, we’re about to dive into this week’s edition of Reader Feedback!
Beneath the Defaulting Waves
Do you have any thoughts on whether or not there is a wave of defaults that may come to fruition as a result of the pandemic?
And if so, will the defaults have an impact on the markets or will the FED continue to win the day? Best regards.
— John C.
I don’t like to be the bad news bearer (at least not this time), but corporate defaults are already on pace to eclipse the Great Recession … or they were before the Fed started buying corporate debt.
Small- and medium-sized businesses — i.e., ones that aren’t big enough to concern the Fed — are basically screwed unless they can finagle some sweet Paycheck Protection Program cash or pivot their businesses to somehow survive (if not thrive) through the rest of the pandemic.
On the investment front, these small businesses don’t move the markets, so investors like you or me won’t notice an impact other than, well, the desolate sights of endless “for lease” signs.
Meanwhile, the Fed buying corporate debt is one of the biggest reasons stocks have continued higher. It’s lessened the risk of corporate default to investors both big and small — such that you, me and the Robinhoodlums aren’t caught under a pile driving stream of defaults.
In other news … the Fed will win this one, hands down.
Impressive Impressions, Most Impressive
I agree with your falling Dominos theory and believe that they are already falling, but like the tree in the woods that falls, nobody hears them. There will be far greater financial damage to small independent businesses that either have or will be closed.
Commercial property vacancy rates will skyrocket, and there will be far less new businesses to fill the vacancies. Homeowners will begin to default as many will have no job or income, and the homeless population will increase exponentially.
Wow, Dick so much doom and gloom where’s the silver lining?
There will be niche market investment opportunities as the good, bad and the ugly continues to play out. Being patient and careful will be more important than ever. 😎
— Dick K.
Our unofficial award to best Mr. Great Stuff impression attempt is yours, Dick. (You tryin’ to stage a coup here, or something? Fisticuffs, right now! No fisticuffs? How about a bourbon drink off?)
Oh hey, here’s that small-business turmoil we just mentioned. And thank you for pointing out another disconnect about today’s climate.
We have huge swaths of Americans struggling to pay mortgages or stave off eviction. At the same time, new homebuilding is exploding, with hordes of folks fleeing to lower cost and sparser suburbs, taking advantage of the near-zero interest rate prime time.
The question is whether or not those new ventures and homeseekers stay solvent, which is a whole other can of worrisome worms.
We too will keep an eye on the silver linings — and the touches of grey therein!
Time of Your Life
This reminds me of George Gilder’s Time/Price Theory of money, in which he says that the REAL cost of money is the time you exchange for your money. Today’s Chart of the Day says that the average commute time in the U.S. is now 54.2 minutes. So now that people are saving that 54.2 minutes twice a day, they’re lowering their time cost per hour of work, which will result eventually in their hourly wage falling.
But, they’ll also gain an extra 1.81 hours of free time they would otherwise have spent commuting, which they might just be able to use to increase their time’s value in other ways, such as learning how to invest, which will increase their income over their lifetime.
If they’re 31 now, by over seven times by the time they’re 65 if their interest return, via the “Rule of 72” is 10% annually on their investments (assuming also that their investments aren’t “churned” by their investment broker). Simple math.
— Steve M.
You nailed it, Steve!
This is what everyone who’s saved all those commuting hours every week is really focused on: reinvesting that time. It’s like the personal-scale Domino effect, to harken back to Dick up there.
You did the math … awesome! But we don’t even have to think of regained time as solely a stock market win. An extra two hours or so a day — whether you use it to crunch data on stock moves or continue the never-ending alien slaying on Playstation Plus — makes the however-many hours you do work that much more productive.
I mean … at least in theory it should. And when you can tackle your job with a fresher, rested perspective, you just increased your worktime’s value as well. Rinse and repeat. BAM!
A Grab Bag of Greatness
And finally, like the leftover trails of glitter at the bottom of every single kid’s backpack — How? Where does it all come from? Who even buys glitter? — we saved some of your gleaming and grateful responses for last.
Y’all knocked that whole “Reader Feedback” shebang out of the park this week, and we appreciate every single one of you who wrote in! (Plus, it helps us look extra Great for the all-seeing watchers who govern the ‘Stuff you love … wink wink, nod nod.)
Why not write to us for yourself? Click here to hit us up!
Love the writing style/sense of subtle humor to go along with insightful market trends/happenings. Congrats to the group who think and scratch it out daily.
— Jerry C.
Thanks for the upbeat and splendid comic relief my friend. Never have I enjoyed more, than just now, reading up on all the news! Finally, someone made it refreshing and factual both at the same time.
Great Stuff, thanks.
— Larry T.
Enjoyed reading my first copy of Great Stuff. Looking forward to the next copy.
— Joe R.
It’s an overload of wholesomeness! Your words mean the world to the whole group here — honestly. It really goes to show that the Great Stuff isn’t just the gains you take, but the friends you make along the way…
And before the sudden saccharine sappiness gives me the dry heaves, thank you all and to all a good Thursday!
We’ll be back tomorrow to help you start off your weekend with a Friday Four Play. In the meantime, why not check out the one trading strategy you shouldn’t live without? Seriously, if you’re wondering how to spend your commute-less eve tonight, get a jump on investing for tomorrow. Click here!
Until next time, be Great!
Editor, Great Stuff