Trade analysis : WC June 10th

$TEAM Analysis (Technology / Software) / Buy

Fundamental review

  • Passed all 4 fundamental screens (4Q, 3Q, 2Q and William O’Neil).
  • Earnings acceleration in each of the last 5 quarters (13%, 44%, 54%, 92%, 133%).
  • Earnings surprise at 17% for March 19.  Next earnings date is July.
  • Earnings guided up for the remainder of 2019.  EPS expected to be at an all time high.
  • Stable sales growth between 37-44% in each of the last 8 quarters.
  • Number of funds has steadily increased over the last 8 quarters.  Still only at 526 in March 2019.
  • Funds own 57%, management at 3%.
  • Ownership across the 526 funds is light, only 3 funds own more than 1% (Ax2 and A-).
  • 237M shares outstanding so price can be moved substantially by mutual funds increasing their position.
  • Industry group ranked 12/197.
  • $TEAM is the number 1 ranked stock in the industry group for EPS and Composite rating.  There are 33 stocks in the industry group.
  • Acc/Dis rating is 13/33.  Does this mean that there is upside yet to be realised by the funds?
  • RS rating is trending up.
  • Price is at an all time high.
  • 30 day Put/Call ratio at 0.4852 and falling.

Technical review

$TEAM June 10th

$MSFT Analysis (Technology / Software) / Buy

Fundamental review

  • Quarterly earnings surpassed same quarter last year for each of the last 3 quarters.  This is part of the $MSFT turn around driven by Sataya Nadella.
  • Earnings surprise at 14% for March 19.  Next earnings date is 17th July.
  • Earnings guided up for the remainder of 2019 and 2020.  EPS expected to be at an all time high and showing significant growth over prior years.
  • Stable sales growth between 12-19% over the last 7 quarters.
  • Number of funds has steadily increased over the last 8 quarters.
  • Funds own 43%, management at 1%.
  • Huge numbers of A+ funds have a position.  The top 10 funds own positions that put them in the top 40 on ownership terms.  Opportunity for additional ownership?
  • Industry group ranked 69/197.
  • $MSFT is the number 3 ranked stock in the industry group for EPS, RS and Composite rating.  There are 8 stocks in the industry group.
  • Acc/Dis rating is 4/8.  Does this mean that there is upside yet to be realised by the funds?
  • RS rating is trending up and is at an all time high. BLUE DOT.
  • Price is at an all time high.
  • 30 day Put/Call ratio at 0.631 and falling.

Concerns

  • Failed each of the 4 fundamental screens (4Q, 3Q, 2Q and William O’Neil).
  • Significant fund ownership at 6518.
  • 7.6 billion shares outstanding!

Technical review

$MSFT June 10th

$ZEN Analysis (Technology / Software) / Watch

Fundamental review

  • Passed 3 fundamental screens (4Q, 3Q & Q2).
  • Actual earnings per share have been increasing quarter vs same quarter last year for the last 4 quarters.  EPS has been positive for 6 straight quarters.
  • Earnings surprise at 33% for March 19.  Next earnings date is July 29th.
  • Earnings guided up for the remainder of 2019 and 2020.  EPS expected to be at an all time high.
  • Stable sales growth between 38-41% in each of the last 8 quarters.
  • Number of funds at an all time high in March 2019.
  • Funds own 70%, management at 5%.
  • 572 funds hold a position.  8 hold over 1%.
  • The top 10 funds rank within the top 29 in terms of position size.
  • 109M shares outstanding so price can be moved substantially by mutual funds increasing their position.
  • Industry group ranked 3/197.
  • RS rating is trending up.
  • Price is 1.3% it’s all time high.
  • 30 day Put/Call ratio is falling, moved from 1.49 to 1.08.

Concerns

  • Failed the William O’Neil screen as EPS rating is below 80 (currently 76).
  • Fund ownership has increased in 5 of the last 8 quarter.
  • Of the 64 stocks in the industry group, $ZEN has a Composite ranking of 10.
  • Acc/Dis rating is 21/64.
  • 30 day Put/Call ratio at 1.0803 but falling.

Technical review

$ZEN June 10th

$NOW Analysis (Technology / Software) / Buy (small position)

Fundamental review

  • Passed all 4 fundamental screens (4Q, 3Q, 2Q and William O’Neil).
  • Earnings surprise at 24% for March 19.  Next earnings date is July.
  • Earnings guided up? for the reminder of 2019 and up for 2020. for the remainder of 2019.  EPS expected to be at an all time high.
  • Stable sales growth between 30-42% in each of the last 8 quarters and appears to be accelerating.
  • Number of funds has steadily increased over the last 8 quarters.  Sits at 1608 as of March 2019 and appears to be accelerating.
  • Funds own 64%, management at 2%.
  • Only 6 funds own more than 1%.
  • 185M shares outstanding so price can be moved substantially by mutual funds increasing their position.
  • The top 10 funds rank within the top 29 in terms of position size.
  • Industry group ranked 3/197.
  • $NOW is the number 1 ranked stock in the industry group for Composite rating.  There are 64 stocks in the industry group.
  • Acc/Dis rating is 25/64.  Does this mean that there is upside yet to be realised by the funds?
  • RS rating is trending up and is at 96.
  • Price is within 2.6% of an all time high.
  • 30 day Put/Call ratio is falling, moved from 4.43 to 1.14.

Concerns

  • Earnings per share appears to be decelerating over the last 2 quarters (79% to 20%).
  • 30 day Put/Call ratio at 1.14 and falling.

Technical review

$NOW June 10th

Four steps to becoming a CPT

If I have any chance of becoming a consistently profitable trader then I really need to start working on 4 main areas;

Planning : I need to develop a consistent approach to evaluating markets and then be ruthless in my final stock selection.  Trading average to good set-ups is not ok at this stage of my development.  Instead I need to laser in on only the very best opportunities.

Execution : A great plan can be royally f*cked up by poor execution.  I need to develop an approach to execution that puts me in more profitable positions and doesn’t have me chasing the market.

Management : Entering a market is just the beginning.  I need to develop a set of rules that will allow me to manage a trade including; building on strong positions, exiting weaker ones with minimal losses and protecting profit without missing a major move if a market starts to trend.

Review : No trade is perfect so I absolutely MUST start reviewing every trade I make and look for opportunities to improve.

The good thing is I have this little slice of the internet to capture my thinking and hold myself to account.

Improvement starts now.

#letsdothis