More of Bear's earnings reflections

All of my companies have now reported except Splunk. Since they don’t weigh in until 8/24, I wanted to go ahead and share my overall reflections on earnings season:

I don’t know if the market is going through some kind of correction in any official way, but I am certain that it has at the very least rotated out of tech stocks in a big way. Check out these numbers:

Stock     PS on 7/31       PS on 8/10
SHOP         18.8            16.4
HUBS          8.9             7.6
SQ           13.0            11.4
NVDA         13.8            11.7  (11.0 per the AH price)
MELI         13.3             9.5

Those range from 12% to 28% lower than they were just a week and a half ago. Now, the share prices are down too, but not quite as much, because the PS is reduced thanks to all these companies producing more sales in the quarter just reported. My point is, that usually sends the share price up. We are seeing a contraction. This isn’t all bad. Prices can’t go up forever or there will be a crash. A temporary sale just gives us a chance to buy at lower prices, and checks the price a bit so it doesn’t get carried away. I think that’s what we’re seeing.

Anyway, I rambled about most of my companies earlier this week:…

The only ones to report since then are Twilio (TWLO), LGI Homes (LGIH), and The Trade Desk (TTD).

I would give Twilio and The Trade Desk perfect scores. Twilio reported base revenue (recurring) sans Uber grew an insane 65%! And they added 2,735 customers in the quarter, which handily beats the 2,132 they added in Q2 2016. After the bedlam of today’s selloff, they’re about back to where they were before they reported. Big buying opportunity in my book. Likewise, The Trade Desk reported this afternoon, and in AH trading the shares are pretty much back up to where they were first thing this morning.

LGI Homes falls into the “Solid” group, not because they didn’t hit it out of the park, but because everyone already expected they would, and the shares had already appreciated significantly. Their 1.39 in earnings was a record, and awesome, but would have been even higher if they’d closed more in the Northwest. So maybe there’s still even better things to come with LGI.

Just a thought on Nvidia (NVDA). I’m guessing the bad reaction was due to the guide for Q3 – for something like 18% revenue growth. Well I checked before earnings, and per Yahoo the market was only expecting 6% revenue growth in Q3! Even though that’s a big beat, I still think it wasn’t enough for the market. Maybe the market was anchoring on the huge revenue increases the past 4 quarters. Maybe I’m out in left field. Either way, it’s reasonable to me that this stock would come down a bit unless there’s an expectation that revenue growth rates will start to accelerate again.



A new fan of this discussion board, but I don’t understand some acronyms. What is PS?

PS= Price to sales ratio.