Editors Note:

Given the severe drop in the futures overnight the damage could have been worse. The Russell ETF was the only position that posted a material decline and this should be temporary. Monster and Nutanix both posted decent gains even in an ugly market. I will take a market crash like this every time.



Current Portfolio


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Full updates on all plays on Wednesday and Saturday. Only closed plays are updated on other days.


BULLISH Play Updates

IWM - Russell 2000 ETF - ETF Profile

Comments:

The Russell made a new high intraday on Tuesday but then gave back more than 20 points since then. This should be temporary.

Original Trade Description: June 30th

The iShares Russell 2000 ETF seeks to track the investment results of an index composed of small-capitalization U.S. equities.

The small cap stocks have been the strongest group because they are mostly immune from tariffs. They get most of their revenue was the USA and should be relatively safe in a volatility headline market. The Russell has been the strongest index for the last ten weeks. The pullback last week is a buying opportunity on expectations for the market to rally into Q2 earnings.

However, even if they are mostly tariff proof they are not market proof. If we get additional negative headlines that sink the broader market, the Russell is likely to fall as well although hopefully not as badly.

I am using September options to retain value if we do have some volatility but I do not expect to be in this position for more than 3 weeks. I fear the normally bearish Aug/Sep period. This year could be worse if the tariff problems are not solved.

Position 7/3/18:
Long Sep $170 call @ $2.62, see portfolio graphic for stop loss.


MNST - Monster Beverage - Company Profile

Comments:

No specific news. Shares broke out to a new 5-month high in an ugly market.

Original Trade Description: June 30th

Monster Beverage Corporation, through its subsidiaries, develops, markets, sells, and distributes energy drink beverages, soda, and its concentrates in the United States and internationally. It operates through three segments: Monster Energy Drinks, Strategic Brands, and Other. The company offers ready-to-drink packaged drinks, non-carbonated dairy based coffee and energy drinks, and non-carbonated energy shakes primarily to bottlers and full service beverage distributors, as well as sells directly to retail grocery and specialty chains, wholesalers, club stores, drug stores, mass merchandisers, convenience chains, food service customers, and the military; and concentrates and/or beverage bases to authorized bottling and canning operations; and ready-to-drink packaged energy drinks to bottlers and full service beverage distributors. Monster Beverage Corporation sells its products under the Monster Energy, Monster Energy Ultra, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, Muscle Monster, Punch Monster, Juice Monster, Ubermonster, BU, Mutant Super Soda, Monster Hydro, Espresso Monster, Caffe Monster, Nalu, NOS, Full Throttle, Burn, Mother, Ultra Energy, Play and Power Play(stylized), Relentless, BPM, Gladiator, and Samurai brands. The company was formerly known as Hansen Natural Corporation and changed its name to Monster Beverage Corporation in January 2012. Company description from FinViz.com.

Coke already owns 18% of Monster. The company already uses Coke's distribution network and Monster drinks are the only growth area in the highly competitive drink market. They have a 43% market share in the energy drink sector. Coke has been rumored to be acquiring the rest of Monster at least twice a year. Under the new tax law with money coming back from overseas, this may be the year.

Last week Jefferies made the case for this to be the year and raised the "bull case" price target on Monster to $85, up from $63. The stock is currently $57.

Monster bought back $250 million in stock in Q1 and announced another $500 million buyback on May 30th. Monster is debt free and has over $500 million in cash. For Q1 earnings rose 23.1%.

Earnings August 7th.

The stock barely reacted to all the market volatility and that suggests nobody wanted to sell. Shares closed at a two-month high on Friday.

Position 7/2/18:
Long Aug $60 call @ $1.59, see portfolio graphic for stop loss.


NTNX - Nutanix - Company Profile

Comments:

No specific news. Shares posted a nice gain despite the ugly market.

Original Trade Description: July 7th

Nutanix, Inc. develops and provides an enterprise cloud operating system software. It offers enterprise applications, virtual desktop infrastructure, virtualization and cloud, big data, remote and branch office IT, and data protection and disaster recovery solutions; and hardware platforms and software options; and support and services. The company's products include Acropolis, a hyperconverged infrastructure solution to run any application; Prism, an infrastructure management solution with one-click operations; Nutanix Calm, an application-centric IT automation solution; Xi cloud services; Nutanix Xpress that eliminates the need for clunky SANs, expensive hypervisor licensing, and complex data protection and management software; and tools and technologies. It serves education, energy and utilities, financial services, healthcare, retail, and service provider industries, as well as state and local government, and the United States federal government. Nutanix, Inc. was founded in 2009 and is headquartered in San Jose, California. Company description from FinViz.com.

Back in May Nutanix reported a loss of 21 cents that missed estimates for 19 cents by 2 cents. Revenue rose to $289.4 million and beat estimates for $278.7 million. They guided for the current quarter for a loss of 20-22 cents on revenue of $295-$300 million. Shares were up 57% this year and posted a minor loss on the news.

Shares quickly recovered and raced to a new high before crashing again with the Nasdaq in late June.

The future is bright for Nutanix. Just last week they scored a $45 million contract with the Air Force. This is their largest deal ever and show how large companies and agencies are valuing the Nutanix suite of products.

Earnings August 23rd.

Position 7/9/18:
Long Sept $57.50 call @ $4.20, see portfolio graphic for stop loss.
Optional: Short Sept $70 call @ $1.35, see portfolio graphic for stop loss.
Net debit $2.85.


ROKU - Roku Inc - Company Profile

Comments:

No specific news. Only an 8 cent decline in a negative market.

Original Trade Description: July 7th

Roku, Inc. operates a TV streaming platform. The company operates in two segments, Player and Platform. Its platform allows users to search, discover, and access approximately 500,000 movies and TV episodes, as well as live sports, music, news, and others. As of December 31, 2017, the company had 19.3 million active accounts. It also provides advertising products, including videos ads, interactive video ads, audience development promotions, and brand sponsorships; and manufactures, sells, and licenses TVs under the Roku TV name. In addition, the company offers streaming media players and accessories under the Roku brand that allow users to access its TV streaming platform; and sells branded channel buttons on remote controls. It provides its products and services through retailers and distributors, as well as directly to customers through its Website in the United States, Canada, the United Kingdom, France, the Republic of Ireland, and various Latin American countries. The company was founded in 2002 and is headquartered in Los Gatos, California. Company description from FinViz.com.

Roku is disrupting regular TV viewing and hastening the cord-cutting trend. Last week Oppenheimer upgraded the stock to outperform (buy) saying the new advertising platform would increase revenue and viewer hours were increasing rapidly. The Roku channel is now the 12th most watched app by viewing hours with 9 million hours per month after debuting only 9 months ago. They believe the rapid adoption of the Roku Channel app will quickly allow for adoption on other platforms like Samsung devices. The analyst said this will allow Roku to monetize their viewing streams much quicker than previously expected.

DirecTV is now offering a Roku Streaming Stick with their service for $35 a month for 60+ live channels. The next package is $50 for 80 live channels, $60 for $100 live channels and $70 for 120 live channels. Channels like HBO and Cinemax are $5 a month. Roku is now appearing on nearly all smart TVs being sold and is taking over the OTT market.

The odds are increasing daily that somebody will make a run at acquiring the company. Disney would be a potential acquirer because they have the content to stream in addition to the live channels. If there are no acquisition attempts, Roku's profitability is going to accelerate as it becomes the Netflix of live programming.

Earnings August 8th.

Position 7/9/18:
Long Aug $50 call @ $3.00, see portfolio graphic for stop loss.



BEARISH Play Updates (Alpha by Symbol)

No Current Puts




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