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Sunday, April 17, 2016

Two new entries in past post are closed. Going in on Skechers.

Exited out of the Sratasys position at around May 23rd. Caught a 4-5% pop up and was stopped out when it breached my trailing stop. Pretty good trade, I was hoping for better positive momentum.

Of course, not everything can go my way, but I think I set the trailing stop a bit too close as it did end up reaching 29 recently. However, given that it's been around a month now and the price movement has basically stagnated in the 23-29 range, I think it's fair to say that the opportunity cost of staying in the position would not have really been worth it.

The same thing happened with Barclays. I was exited out of the position at around May 22nd. Although I really would have liked to see stronger positive momentum in a longer term trade, again, the opportunity cost of holding onto it isn't really that satisfactory to me. Also, given that the reversal pattern I was hoping to happen isn't really panning out, as it is also stagnating at its current levels, I'm gonna move my money elsewhere. 

I still managed to also secure a relatively short term 5-6% pop from the trade, so I'm not too mad.

I'm still holding portions of SPY and XLP, which are going to be my benchmark market reflecting positions. They have done pretty well, the U.S. markets are again reaching stable footing and are trending upwards.

Tomorrow I will initiate a position on Skechers. Not only am I somewhat speculating on their earnings performance results on the 21st, which will be in 4 days at the time of this post, I really like their fundamental statistics and their growth projections.

Although I have my doubts about their ability to cement themselves as a market-leading athleticasual brand along the same level of prestige as NKE and LULU, they have gotten over some serious humps that have deterred many from investing into their business, like the cringe-worthy shape-ups that they used to market which would supposedly boost people's posture. (It only ended up yielding various lawsuits against them).

But in here, I like their relatively low PEG ratio, the strong EPS growth projected for next year, small Debt to Equity ratio, and moderate management effectiveness ratios. Margins are moderate as well.

Chart looks pretty decent for the next couple of quarters. My determination on the holding period I will pick will be determined by the market's reaction to their coming earnings release.

(click to enlarge)

It also doesn't take a genius to find that they are currently on track to boost their numbers and improve their business. Here's what the YOY performance of their statistics are.

(click to enlarge)

If you care about Analyst ratings, it recently was upgraded by Macquarie to a $45 target, a 55% possible upside, as well as "outperform".

The reasons they cited were

  • Growth domestically and internationally
  • Margins inching up
  • Scale bringing selling, general and administrative expense leverage
  • They said it was a "lean, mean, sneaker machine"
Now, their projections are nice, but I care about the numbers that get churned out. If the numbers over time don't fit the positive rhetoric of this post, I will drop it.

Probably not going to set a trailing stop for this one. I have conviction to make it at least a mid-term hold.

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