Sunday market prep (#4)

Dear Reader,

It sure looks like we will have an interesting week ahead.

Follow-up highlights:

A quick note: I am a fidgety trader and often scalp for just a few percent, plus I’m very dynamic with position sizing. It is not feasible for me to give complete updates, but I’m happy to answer any questions.

• Retail: Bag-holding AEO 0.00%↑ after Friday’s rug in retail names. I also picked up LULU 0.00%↑ too early last week and I’m down several percent on that. I scalped ZUMZ 0.00%↑ for a quick, small gain, to partly fund my Lululemon purchase

• REGN 0.00%↑ got close to buying this a few times but was ultimately more interested in other names

• I took small gains in B 0.00%↑ and MGPI 0.00%↑

My titanium dioxide positions VHI 0.00%↑ NL 0.00%↑ KRO 0.00%↑ are off to a rough start, but I’ve done more research and I’m satisfied to be slowly adding here

Ideas for the week ahead:

• As mentioned above, I added a 3%+ position in LULU 0.00%↑. Lululemon trades at 15.2x 2026 earnings with net cash on its balance sheet. The market is concerned about the slowdown in North America, with competition from Allo and Vuori. Tariffs are also a headwind, obviously. Bulls are counting on strong international growth (in particular, China — ~13% of trailing revenue) to continue. Frankly, street consensus could still be too rosy, baking in 7% top-line growth and just 100bps of gross margin compression. I should have built up my position more slowly/conservatively, but I think this brand still has good times ahead and that this is a top stock to be watching right now. Name your price.

• I’m normally trying to scrape the bottom, but I’m flirting with the idea of adding to ISSC 0.00%↑ on this breakout. It looks like the F-16 is going to be in active use for quite some time after a proposal to slash F-35 funding substantially.

• TAYD 0.00%↑ Bespoke shock absorption specialists (aerospace, defense, construction) with a new CEO as of 2019. Approved supplier/contractor at the highest levels, including for NASA. Supplier for General Atomics’ reaper drone program. I see this as the most interesting small cap defense laggard at the moment with a massive cash balance and a recent street initiation — the analyst has the stock trading at 14.5x 2026 earnings.

• YELP 0.00%↑ Yelp continues to deliver and the market continues to give no credit. With this pullback in the stock price after another excellent quarter, I’m very interested to put on a position again, but given that we are now intra-quarter and therefore without any significant news for a while, I think it’s probably worthwhile to see if it takes collateral damage alongside the index first. It just feels like nothing is going to shake the market sober on this name in the immediate term. It’s just going to take continued execution (i.e., quarterly results), buybacks, and time.

• COLD 0.00%↑ for REIT enjoyooors and replacement cost enthusiasts, I think it’s worth taking a stab at a turnaround in cold storage here

• WEN 0.00%↑ why not? Same logic as a couple weeks ago applies. Looks good for another scalp.