‘Tis the Season to be Bullish |
Written by Rob Goldman | ||||||||||||||||
Happy Columbus Day, the day we celebrate Columbus’ arrival in the New World. It is also may be the beginning of the season to be bullish. Woohoo! This and much, much more can be found in this week’s edition of The Goldman Guide. For example, there are lots of reasons to be bearish and one big reason to be bullish. ‘TIS THE SEASON TO BE HAPPY![]() There are some Nervous Nellies out there and with good reason. Stocks have been treading water for a couple of weeks now. Plus, external factors and forces seem to be weighing on the market. What are they? Take your pick. Mass sell-off in precious metals, weak jobs report, talk of interest rate hikes, and a virtually non-existent IPO market. Oh, and this month is October, everyone’s fearful month, with the commencement of Q3 earnings occurring this week. And, lest we forget that we are nearing election day where vote for the Dirty Old Thin-Skinned Man or The Lyin’ Cheatin’ Unethical Hag. Can we have a duel at twenty paces instead? Anyhoo...all of these proverbial arrows pointing downward may yet bode well for the market. Not to mention the end of the election season just weeks away. The trigger, however, is likely to be earnings. No, I am not talking about the 3Q16 earnings season. That is likely to be a bust, with another year-over-year decline, led by weak energy results. Instead, investors could be heartened by the end of this multi-quarter earnings decline, beginning in Q4. We may yet have to deal with some volatility for a spell, but the light is at the end of the tunnel as we approach the end of the month and reporting companies comment or provide guidance on future periods. On the other hand, if Q4 is a repeat of Q3, that would put a short term hurt on us. Let’s hope not. The Stock Market Today![]() Random Thoughts Small biotechs have had mixed activity in recent weeks in terms of performance and other factors. We have seen more coverage of microcap biotechs by middle market firms of late. Yet, we have seen steady (but not necessarily) large insider sales. There is no correlation but it could indicate a divide between those with solid prospects and those with catalysts further down the road. Consumer discretionary (CD) stocks ran for most of the year, then sold off. The group, including the casual dining category appears to have weathered the storm and even with a poor jobs report, offer good value and upside. By the way, the CD segment may enjoy the biggest year over year increase in earnings, as polled by Factset. When big names fall it can be ugly. The market is replete with examples every year. Aside from the spectacular Theranos disaster, Twitter (NASDAQ—TWTR) and FitBit (NYSE—FIT) just look bad. Monday could be a nice up day for the market with the bond market closed for the Columbus Day holiday. At least it won’t have a bond market-led economic overhang for a change.Say What?
The New York Post http://nypost.com/2016/10/08/americas-working-class-is-falling-behind/ Reasons for rebellion? Marketwatch http://www.marketwatch.com/story/5-things-to-expect-this-earnings-season-2016-10-07 The down and dirty USA Today http://www.usatoday.com/story/money/2016/10/08/oil-prices-rally-production/91745462/ Look like we will get a rest here. Bloomberg What does the future hold? ZeroHedge: Oh my. Should be entertaining. Notable Numbers AAII Sentiment Survey (figures rounded)
Well, the Bearish camps for both polls are the same but the similarities end there. The pros are more bullish than the individuals and while I agree that they should be favorably opinionated, we see moves higher in the offing, rather than around the corner. Interestingly, the Investors Intelligence figures indicate a marked return to Bullish from just 2 weeks ago. With mutual fund outflows seemingly in check, or not getting worse, perhaps bright skies lie ahead.
1498 Reisterstown Road, Suite 286 Baltimore Maryland 21208 Phone: 410.609.7100 [email protected] www.goldmanresearch.com Launched in May 2010, The Goldman Guide is a free weekly publication of Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. No companies mentioned in this newsletter are current sponsored research clients of the Company or its parent, unless noted, With some exceptions, all companies or investment ideas mentioned in this publication are publicly traded stocks listed either on the NYSE or the NASDAQ. Goldman Small Cap Research members and contributors’ bios, certifications, and experience can be found on our website: www.goldmanresearch.com Disclaimer This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co. The Firm’s non-sponsored research publications category, Select Research, reflects the Firm’s internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report. Goldman Small Cap Research analysts are neither long nor short stocks mentioned in this newsletter. Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored microcap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles. Goldman Small Cap Research has not been compensated for any content in this issue. All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data and information are derived from Yahoo! Finance and other websites or sources, as noted. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority. Statements herein may contain forward-looking statements and are subject to significant risks and uncertainties affecting results. Separate from the factual content of our articles about the company featured in this newsletter, we may from time to time include our own opinions about the companies profiled herein, their businesses, markets and opportunities. Any opinions we may offer about the companies are solely our own, and are made in reliance upon our rights under the First Amendment to the U.S. Constitution, and are provided solely for the general opinionated discussion of our readers. Our opinions should not be considered to be complete, precise, accurate, or current investment advice. Such information and the opinions expressed are subject to change without notice. ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION. For more information, visit our Disclaimer: www.goldmanresearch.com. |