As I’ve written before, at current valuations, NTNX is my highest conviction stock. I’ve been accumulating heavily for the last two weeks, and while I always appreciate a great company at a discount, I am cerainly perplexed at the recent price action.
So this weekend I decided to do a little digging, and found an interesting tidbit that may or may not mean anything. I also spoke with Bert about NTNX (he is a great guy and highly recommend his Ticker Target service).
Seems like each of the last 3 quarters, it has fallen on significant volume on the 15th (after earnings), and continued downward for 7-10 trading days. I’m fairly confident this coincides with option grants / stock cash out period for employees & directors: https://www.nasdaq.com/symbol/ntnx/sec-filings
Also given the recent departures (co-founder), this may be causing a temporary supply/demand imbalance. The good news is that it tends to rise after this period for 15 trading days. So my best guess is we may drift down for another 2-5 days, and then slowly rise back towards mid to upper end of the trading range. And on positive Q1 earnings or Xi news, we may finally break out of the current trading range ($46-$64).
I did not get Bert’s permission to share his feedback, but suffice to say (which he shares publicly on SA) he is bullish on Xi as being on-schedule and a potential gamechanger, and extremely perplexed at the current valuation (and agrees it is an anomoly/great opportunity in the current market).
Vey negative Downgrade from Susquehanna -4.7% as Susquehanna moves Negative
Buying opportunity? I bought more last week now I am not sure new price target $33
I just saw this link this morning about Susquehanna being negative about Nutanix.
Nutanix -4.7% as Susquehanna moves Negative https://seekingalpha.com/news/3392338?source=ansh $NTNX, $VMW, $NTAP
Nutanix Holder Files to Offer 2.45m Shares
(Bloomberg) -- Shares down 5.3% pre-market on 7k shares traded
- 132.5m shares outstanding (125.4m-share float) as of May 31
- Shares have fallen 18% in the past month
- 50-DMA $53.66
For those interested in the analyst making the call: https://www.tipranks.com/analysts/mehdi-hosseini
54% success rate.
Compared to others on this board, I think we are all in the middle of an opportunity.
I’ve bought 5 positions in NTNX since August 1, and all are underwater, two lots by 30%. I’m not selling but I refuse to buy more at this point. As the Fool says, we don’t double-down, we buy up. I’m looking to get into more shares of my winners. Only thing I have not decided is at what point would I sell my NTNX off for a better opportunity.
Interesting pro-NTNX article here:
But this quote near the end makes me pause: “Nutanix is a company that is difficult to understand… Hopefully, the market will catch on soon.” I’ve heard before that hope is not an investment strategy.
Seems like this may be contributing to the sell-off as well: 2.4m shares for sale via Mainframe acquisition. All in all, not sure there is a fundamental reason for the recent price action. Seems a supply/demand issue with shares, coupled with misunderstood/hidden growth in the q4 report, has trigged a large selloff. But at this point, we’re talking about a trailing EV/S of 5.8 and a forward EV/S of 4.5-5, for company growing at 50%+ and firing on all cylinders.
10-K released today as well. Planning on glancing it over tonight. Will circle back if I see anything interesting.
“For those interested in the analyst making the call: https://www.tipranks.com/analysts/mehdi-hosseini
54% success rate.
Compared to others on this board, I think we are all in the middle of an opportunity.”
The longer I’m an investor the more I’m learning how useless analysts really are. It also boggles my mind how the market reacts sometimes to one analysts “expert” (strong air quote) opinion.
Might as well literally flip a coin.
The funny thing is, we’ve probably all benefited from analyst upgrades and celebrate when it happens. I mean it sucks when you’re on the negative end but I think we know our companies well enough to see an opportunity. Thank you mister Hosseini!
With the additional 8% drop today in NTNX from the analyst downgrade, I added at $42.50 to bring this one up from 4th position to 3rd position for me (behind SHOP and NVDA). If the market “sees the light” that most here think it should after the next ER or two, and the price gets back up toward 52 week highs or above, this one may very well jump to my #1 holding at that time (assuming SHOP and NVDA haven’t also climbed as much), we will see.
My holdings aren’t as high of a percentage as most others here, as I still have between 25-30 stocks instead of only 10+ like many on this board (I think the last time I checked in had 40 stocks, so I’m working on it). The plan is to continue cutting down and I can easily see getting under 20 over the next few months. SHOP (my #1) varies from 7-8% depending on it’s price, since I have more holdings.
OT: sorry, stop reading…
The problem is there has been high volume on the sell off, inidicating institutions are happy to dump their shares instead of buying on the dip. The 50 day moving average is often a place where growth investors buy at support (thus creating support). This time is sliced through on high volume. The 200 dma can be considered a last-gasp area of support, but again stabbed through that on high volume. A sign that the big boys are selling an not buying.
That said, I am long, but not ready to grab the falling knife. If nothing else, wait until volume dries up. If you think it will see 60 again, then don’t worry about picking the bottom. If you wait until it moves and stays above the 200dma, then you are buying around $48, still a very nice run to $63.
So, if Saul reveals he was guying now, then it will definitely hit new highs in 6 months. If he did not buy any, then we will find that his gut was right again and it will wallow at low prices for a long time.
Sorry for the OT, don’t reply or Saul will get made. Shhh.
FWIW - I topped up yesterday and added another 0.3% to the holding. (Already top 5 for me). I might add more if I top slice Shopify after MJ legalisation in Canada and any uplift it can get from that.
Just to note that ‘the big boys’ you refer to are nowadays unthinking algorithmic robots, often designed to read words as well as figures.
There are several new features of the modern market which serve to aggravate or magnify the normal distortion of its valuable price-signalling action (and are therefore unwelcome) and this elephant in the room is one of them.