I like a nice sale. I’m loading up on more at a tidy discount. Thank Mr. Market – sometimes your wild volatility creates lovely opportunities like this one!
Cheers,
Wot
Downgraded to Negative from Mixed at OTR Global apparently.
8 Likes
Nothing else seems to be down like ZScaler is down today. Is this truly merely volatility? I’m not seeing any news, but I’d love to hear if anyone sees anything to explain this move.
An outfit called OTR Global downgraded Zscaler to negative this morning.
No other information as of now.
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Downgraded to Negative from Mixed at OTR Global apparently.
Thanks. I was wondering why it was selling off but added anyway since I couldn’t find any material news.
dave
Downgraded to Negative from Mixed at OTR Global apparently
It seems odd that ZS falls 11% because a no-name firm downgrades them. If it were 4-5%, I would understand, but 11% is ALOT for just a downgrade.
Maybe its because ZS’s EV/S ratio was high to begin with? Maybe it was something specific in the report? Or maybe I’m just wrong and its just weak hands looking for a reason to sell?
CloudAtlas
3 Likes
Perhaps the author is short the stock and is simply trying to drive FUD. This is not the first negative atricle the firm has posted. Author also states they are an the sidelines waiting for a better entry point, so do thay like the stock or not???
5
5 Likes
Downgraded to Negative from Mixed at OTR Global apparently
It seems odd that ZS falls 11% because a no-name firm downgrades them. If it were 4-5%, I would understand, but 11% is ALOT for just a downgrade.
Wall Street analysts and fund managers work under a completely different set of rules that we (as individual investors) do. Their grading changes only pertain to what works in their environment and not necessarily ours. Also, their incentives are completely different from ours. They may have a grading changes that pertains to window dressing for the end of a quarter. We would never do that. So take all of these things with that understanding.
And what did the rating of “mixed” even mean in the first place??
Jeb
Long ZS
Explorer Supernaut
You can see all my holdings here: https://discussion.fool.com/profile/TMFJebbo/info.aspx
7 Likes
I know insider sales may not matter, but these are probably not helpful to the cause…
https://finance.yahoo.com/news/zscaler-inc-zs-cto-evp-231517…
CTO & EVP of Eng/Cloud Ops of Zscaler Inc (30-Year Financial, Insider Trades) Amit Sinha (insider trades) sold 44,982 shares of ZS on 08/01/2019 at an average price of $84.96 a share. The total sale was $3.8 million.
Directors and Officers Recent Trades:
Chief Strategy Officer Manoj Apte sold 95,544 shares of ZS stock on 08/01/2019 at the average price of $84.91. The price of the stock has decreased by 1.68% since.
Chief Legal Officer Robert Schlossman sold 55,000 shares of ZS stock on 08/01/2019 at the average price of $84.72. The price of the stock has decreased by 1.46% since.
Director Karen Blasing sold 1,000 shares of ZS stock on 08/01/2019 at the average price of $84.87. The price of the stock has decreased by 1.64% since.
CTO & EVP of Eng/Cloud Ops Amit Sinha sold 44,982 shares of ZS stock on 08/01/2019 at the average price of $84.96. The price of the stock has decreased by 1.74% since.
6 Likes
I have to admit that I broke down and added a little at $72.40 even though it was already my largest position. A 10.6% fall because some analyst moved it down a notch just made no sense to me. Of, course, adding to a very large position probably didn’t make sense either.
Best,
Saul
18 Likes
I have to admit that I broke down and added a little at $72.40 even though it was already my largest position. A 10.6% fall because some analyst moved it down a notch just made no sense to me.
Agree. I increased my position by 60% this morning (though it was only 4% of my portfolio to begin with). If its actually just some random analyst downgrading it, 11% is a gift.
CloudAtlas
I agree that we probably got a gift this morning. I have been actively trading ZS and ZS options this morning. Here is the thinking behind my actions.
Stock dropped quite a bit on no real news. I too was looking for news that could justify a 10% drop when the other SaaS stocks were mostly up.
My ZS position size was at around 12% which was a few percentage points lower than I was shooting for recently.
ZS earnings is on Sept 10th and the main annual user conference is Sept 16-18.
I think it’s highly likely that there is no real news (unknown reason to me) for the 10% drop. I think the stock price can retrace back to $80+ in short order. I think that the earnings may well be very good in a continuation of the recent past earnings reports. I think they could announce some new things at the user conference.
Based on the above, I did the following:
-
sold a little CWRD to buy more ZS in my tax deferred account. I took from another security company to buy ZS. I didn’t really like reducing CRWD but I saw ZS as a good deal. I cut CRWD from 5% to 4.5%. I may switch back depending on how well each company’s stock moves in the coming weeks.
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bought a little ZS in my taxable account (used cash for the purchase). I intend on keeping this.
-
sold Aug 30th ZS $80 puts. I think the stock might quickly move back to $80 soon. If needed I can roll these forward every week.
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bought Sept 20th $75 calls and sold an equal number of Sept 6th ZS $75 calls for a net debit of around $2.45. This is a speculative trade on a good earnings result a possibly some announcements at the user conference. The short Sept 6th calls serve to lower the cost of the trade, and note that these options expire before the earnings release and before the user conference. The long Sept 20th calls expire after the earnings release and after the user conference.
The options are a tool to implement a combination of what I see as a bargain (short puts) and a bet that earnings and user conference may cause the price to increase (call spread). PLEASE DO NOT RESPOND TO THE BOARD WITH ANY COMMENTS OR QUESTIONS ABOUT OPTIONS as it’s off-topic.
Chris
19 Likes
SimpleS, when they say they are looking for a better entry point, it sounds to me the downgrade was due to valuation.
If that is all it is, this is a buy opportunity. They are not saying anything the market did not already know.
But I am only guessing. Where did you see that at? I could only find the IBD article about this and it gave no explanation for the downgrade.
I know insider sales may not matter, but these are probably not helpful to the cause…
https://finance.yahoo.com/news/zscaler-inc-zs-cto-evp-231517…
It would be great if people went to the source of the news:
Sinha Amit
Explanation of Responses:
(1) The sale reported in this Form 4 was effected pursuant to a Rule 10b5-1 trading plan adopted on June 29, 2018.
http://secfilings.nasdaq.com/filingFrameset.asp?FilingID=136…
Manoj Apte
Explanation of Responses:
(1) The sale reported in this Form 4 was effected pursuant to a Rule 10b5-1 trading plan adopted on September 28, 2018.
http://secfilings.nasdaq.com/filingFrameset.asp?FilingID=135…
June 29, 2018 and September 28, 2018 are not exactly news.
Denny Schlesinger
22 Likes
Insider sales from tech startups happen all the time. I think you’d be hard pressed to find one that does NOT have insider sales.
A lot of the compensation these days are stock options that they sell.
I don’t pay attention to insider sales of these types of companies and starting to think there’s little value in buys as well.
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These are the reasons for ZS’s downgrade from SA.https://seekingalpha.com/news/3492978-zscaler-slides-8_5-per…
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From “The Street”:
The stock price of Zscaler tumbled 8.31% to $74.19 after OTR Global downgraded shares of the company, which specializes in cloud-based web security, to negative from mixed.
Talk about poor reporting.
However, from the company`s own website:
“After almost 20 years in existence, OTR Global has become the industry’s most respected provider of marketplace and channel intelligence to institutional investors. The firm uses its global platform, channel research and client events to find intelligent, investable insights from around the world. OTR has integrated its sales and trading services to ensure its clients receive critical information in a timely and efficient manner. OTR prides itself on its focus on ingenuity, pioneering unique services for its dedicated institutional client base.”
Girdon
3 Likes
From “The Street”:
The stock price of Zscaler tumbled 8.31% to $74.19 after OTR Global downgraded shares of the company, which specializes in cloud-based web security, to negative from mixed.
Talk about poor reporting.
However, from the company`s own website:
“After almost 20 years in existence, OTR Global has become the industry’s most respected provider of marketplace and channel intelligence to institutional investors. The firm uses its global platform, channel research and client events to find intelligent, investable insights from around the world. OTR has integrated its sales and trading services to ensure its clients receive critical information in a timely and efficient manner. OTR prides itself on its focus on ingenuity, pioneering unique services for its dedicated institutional client base.”
Gordon
And from the Motley Fool (public post): https://finance.yahoo.com/news/why-zscaler-stock-heading-low…
It’s not uncommon for pricey stocks to swing up and down for no concrete reason. For Zscaler investors, these fluctuations don’t change the story.
3 Likes
Wall Street analysts and fund managers work under a completely different set of rules that we (as individual investors) do
You cannot club analysts and fund managers together. Analysts are sell side, and fund managers are on the buy side. They have other things that an individual investor doesn’t have to worry about.
And what did the rating of “mixed” even mean in the first place
Mixed means they have some positive and some negative thoughts. Not hard to understand. In names like this you can like their growth and not like their valuation. Even if you suspect a small decline in sales, in these names they shoot first and ask questions later. Imagine they report flat q-o-q growth in the next earnings, what do you think will happen to the stock price?
1 Like