Sunday market prep (#5)

Dear Reader,

Well then, there certainly is a whole lot of situation to monitor as of lately.

A quick note: I’m still deliberating what direction to take this blog and I’m not sure whether I will continue these weekly updates for much longer. As an active trader of illiquid securities and risky cyclicals, it’s difficult to translate my tactics to a weekly format.

Follow-up highlights:

• I sold my LULU 0.00%↑ and AEO 0.00%↑ stock for losses. It was as simple as another opportunity coming up mid-week, as I shall discuss. I could buy them back at any time.

• I didn’t get my hands on WEN 0.00%↑, but that was a pretty sweet swing for anyone who did

• I bought YELP 0.00%↑ on Friday near the lows — a ~1.5% position

• I’m getting clobbered on the titanium dioxide trade. I sold my VHI 0.00%↑ to add more NL 0.00%↑ and a little KRO 0.00%↑ .

Ideas for the week ahead:

• I sold my apparel stocks to buy GEOS 0.00%↑, an oilfield services (OFS) company, after they announced a new contract with Petrobras. In short, the business segment awarded the contract (offshore reservoir monitoring) has been trying to win another one of these contracts for over a decade now and shareholders have been very frustrated. Since I’ve discussed this name with my OFS coach over the years, I was prepared to act quickly on this news. I bought a 4%+ position right after the earnings came out then sold 20% at the end of the week. (Ironically, I sold this same name at a loss during the peak of the tariff panic.)

• TAP 0.00%↑ : With this recent pullback in Molson Coors and its dividend approaching 4%, it’s comping extremely well versus other beverage and consumer packaged foods names at ~8x forward earnings. Operations have benefited from the implosion of the Bud Light brand; it’s not clear how sustainable the benefit will be, but they’ve more or less been using the bottom line improvement to buy back shares. Somewhat intimidating debt load, but half of the debt is due in 2032 and beyond with 5% coupons or less. Furthermore, they are still charging ~$200mm a year in goodwill amortization and I’m skeptical that the market is giving full credit for that add back to earnings power. This is a compelling mid cap defensive play.

• ACCO 0.00%↑ totally bombed out, deep-value, leveraged trash. This company sells school and office supplies like notebooks, paper clips, fasteners, etc. Possibly worth a stab here @ 5.9x fwd ebitda for a scalp or even a deeper turnaround.

• CRWS 0.00%↑ earnings is coming out on Wednesday before the bell. I own a little (<1% position). The core business of baby products, in particular bedding, has been in decline, but recent acquisitions could carry the company at this tariff-ground-zero valuation.

• GOOG 0.00%↑ how can you not have your eye on Google here? I’m showing a 5.6% scalpavelli-adjusted earnings yield. In terms of current financials Google is heavily dependent on Search revenue, but Google is at the forefront of certain aspects of AI and I think YouTube is more valuable than all the other streaming platforms combined. Similar to Lululemon I think it’s a good idea to name your price here. I’ll throw out a number for myself: $155.

• Lindy Trading System (no strong opinion on either of these but FYI if these are already on your radar)

  • Health insurer CNC 0.00%↑ is trading at an 11% discount to the lowest street price target and an 8.0% scalpavelli-adjusted earnings yield

  • TMO 0.00%↑ is trading at a 12% discount to the lowest street price target and a 3.7% scalpavelli-adjusted earnings yield