BACK ON THE BOAT

Captain Fly is back on his pirate ship, The SS BALT, out for extreme bounty.

I initiated a half sized position ahead of a potential dilutive financing, which may or may not be coming soon. Either way, the BDI, spearheaded by Capesize day rates, have been soaring as of late. The shippers are my favorite plays heading into November and December.

To finance this purchase, I liquidated my third largest position, CLR, for a 6% loss.

Every so often I feel comfortable playing earnings. For me, GPRO was a no-brainer, since I wanted to be long heading into the holiday season–one way or another. Back in the old days of refining resurgence, I had to own the WNR. Last year, in light of soaring BDI rates, BALT was my play. And now, I am entirely convinced in the prospects for TRN.

But that isn’t my earnings play. It is a name that is little known, since it’s a freshly minted IPO.

Name of the company is Arista Networks: ticker ANET.

Stifel came out with this note this morning:

Arista Networks upgraded to Buy at Stifel; tgt $95  (81.25)

Stifel upgrades ANET to Buy from Hold and sets target price at $95 as checks show that co continues to notch up big wins with large financial services companies. Firm’s checks also show that the company has started to make inroads into the channel, which is helping Arista diversify beyond the financial services vertical into the enterprise market. Other highlights:

• Partnership with IBM and potential opportunity with VCE
• One of the biggest variables and focus areas for investors going forward will be gross margins

At 10x sales, this stock isn’t cheap. At the same time, compared to other high valuation plays, it’s rather low key. Sporting a growth rate of 65%, expected to exceed analyst expectations for the foreseeable future, one can make the argument that ANET should and could trade up to 14x, just like PANW.

I hate doing that, by the way. Rationalizing high valuation stocks by comparing it to even higher valuation stocks is a great way to blow yourself up. However, during bull markets, that’s how the game works. So, you play the stupid game until it ends, very simply.

Last quarter ANET smashed estimates by .22, posting eps of .35, with revenues of $137.9m, well ahead of consensus estimates of $125.6m. Furthermore, they offered upside guidance of $142-150m, compared to consensus of $134.1m. They are scheduled to report earnings on November 6th, after the market close.

I will be holding my position though earnings, hoping for the best.

Capital IQ EPS consensus: 0.28
Capital IQ Rev consensus: 148.20 mln

We are done with the ambiguously gay month’s of the year. Tis’ is the time for Santa Claus sleds and Turkey Gods. They will descend upon you like 10,000 flaming arrows. Your little shield doesn’t stand a chance against the tidal wave of bullishness heading your way.

The recent V-shaped recovery in stocks is lining up perfectly with the 1st Annual iBankCoin Investors Conference. Under the cloak of darkness and anonymity, “The Fly” intends to treat his VIP members to the very best foods and drink available. After all, it’s a bull market. Isn’t it?

Very soon earnings season will be behind us and the fantasy can begin to fester again. The market will always prefer the hint of grandeur over grandeur itself–if you know what I mean.

Being down 14% for the year, I intend to give the ole college effort these last few months of the year, sticking swords into the abdomens of my enemies along the way. Without a doubt, it’s been an arduous year for Señor Tropicana. But the year is still young, isn’t it?

The crispness of the fall air invigorates me. The foliage and the specter of colder climes motivates me, as I am a northerner from birth and right, to succeed and excel at my trade. I intend to do that, for the benefit of all, heading down the stretch.

https://www.youtube.com/watch?v=A7qa26iEtkI

Let the festivities begin. Halloween is one of my favorite holidays, I’ll have you know.

This is the last weekend to sign up for the iBC Investors Conference. We have 15 seats remaining.

I sold nothing and hold it all into next week.

Ciao

Now that we’re all making money again, happy like fat, gluttonous, pigs, let’s discuss the shit you called a ‘portfolio.’

Most of you are rabbit skinners and gamblers. You are rank amateurs, masquerading about town, comporting yourselves in the most undignified ways imaginable. I can tell, just by reading your comments, that you, Sir, are setting up for complete failure.

Let’s avoid that, shall we?

Run along and fetch your account statements. Now, I want you to tell me how your investments are weighted, across asset classes. Before you do, I will share my weighting.

Basic Materials: 14%

Consumer Discretionary: 11.5%

Staples: 8.2%

Tech: 23%

Healthcare: 16.5%

Finance: 10%

Industrials: 12.5%

Utilities: 0%

Cash: 5%

Amongst my holdings, almost 2/3rds of them are of a larger cap nature. Within the ranks, I’ve dedicated X amount of dollars for short term ideas, most of which you see me here on there blog, sashaying (no homo) in and out with space alien magician precision.

Critiquing my own holdings, I realize my basic material and tech weightings are too high and need to be reduced. I also understand that healthcare is a bit out of control too. At some point, I intend to tweak it and reallocate into staples and finance. But healthcare and tech is where the money is flowing now and I want to be there for the turn in oil, whenever that does occur.

In short, you’ve been fortunate to be a part of such a forgiving market, one that V-shapes off of every downtick. But remember that pain and the agony you felt just a few short weeks ago, when you were ‘fag-boxed‘ into what seemed like an untenable position.

See to your affairs when times are good, so that you can relish in the pain and agony of others when the worm turns.

I started a small position in TRIP.

I heard a stat that said for every penny decline in gasoline, the US consumer will save $1.1 billion dollars. With oil careening through the floor boards, ask yourselves, where will this money go? I had this same conversation with Jeff Macke, who will also be in attendance for the 1st Annual iBankCoin Investors conference, and he agrees that retail should enjoy a tailwind here–especially casual dining. If you didn’t know, Jeff’s father used to head up Target back in the day.

The problem with retail is that it’s filled with retailers. All of these stores are undercutting one another, making it hard to realize eps growth. Only a select few know how to sell product, like JWN, M and TJX. WSM is also a decent play. In casual dining, PNRA, CMG and ZOES look good. We can only pray to the Gods for a Shake Shack ipo, sooner rather than later.

Look, GPRO is where it’s at. I know you haven’t come to grips with it yet and you despise the stock because it goes up so much. But, heading into our beloved pagan holidays, there are only a handful of items that will make it onto Santa Claus’ wish list.

1. Apple products

2. GoPro cameras

3. Video games

So, my question to you is this: how are you preparing for the holiday shopping season, now that October is out of the way and The Turkey Gods beckon?

Gents, this isn’t going to be drawn out. It’s too late for a long post.

When you die, the details of your demise will be unimportant. All that will matter is that you perished on so and so date and what you left behind, in terms of legacy.

This is pointed directly at the bears, no one else.

It is my life’s mission to destroy you. I am the Bear Killer. I got Big Magic.

Tomorrow you will die and the details of your extermination will be nothing more than a footnote in the history of Wall Street.

Sleep tight. I’ll see all of you in the AM.

Oh, by the way, Godzilla has emerged from the Sea of Japan to stomp out speculators who went short the NIKKEI. She’s up nearly 800 points, or 5%.

GPRO is a top 3 position of mine, so I want it to trade up. In the event I am gifted with a sell off tomorrow, I will double my position. Let me tell you why.

The company just guided way up for Q4, to $550-$590 million from $500 million. They are looking at eps of around .65-.69–again significantly above estimates. But the big kicker is gross margins of 44.3%, up from a consensus of 42%. Last year margins were 33%.

This speaks to pricing power, efficiency and feverish demand. Mind you, they have barely any international exposure.

Going into earnings, this was the most hated stock I’ve ever seen. 99% of the gurus on Stocktwits were ejaculating all over each other, discussing how much they were going to make on their short positions. In the end, everyone gets what they deserve and they get NOTHING.

Good day to you, Sir.

But they weren’t the only clowns who were bearish. The majority of the analyst community missed this call.

Why?

Because they are not in tune with the US consumer, who is fixed on high quality electronics. Do you want to know where that excess gas savings will go this holiday season?

iPhones and GoPros.

Look for the following analysts to eat crow and upgrade GPRO tomorrow.

Barclays

Jp Morgan

Stifel

Baird

Oppenheimer

With earnings out of the way and the Turkey Gods just around the corner, look for GPRO to hit new all-time highs, AND MORE.

The oil sector was liquidated today. It was surreal to watch all of the ancillary names get hit too. The rails (ARII, GBX) were pummeled and the frac sand plays (EMES, SLCA, FMSA, HCLP) were eliminated from the league of nations.

Across the board, oil stocks were down 5%+ for the day. Maybe it had something to do with COP’s earnings and cuts in spending, due to cheap crude.

Or, maybe, just maybe, we are pricing in the soon-to-be untimely demise of the Red Menace, General Vladimir Putin–ravaged by a school of sharks or a pack of wild cougars–no doubt.

I’m a buyer of the blood.

Where’d I put my kerosene lamp?