January 31, 2020
The Week’s Biggest Winner & Loser
After spending what felt like forever in the doldrums following losing a star CFO, Square (SQ) finally seems to be returning to greatness, earning +4.99% in the middle of the biggest market-wide selloff we’ve seen in months and landing the Biggest Winner spot.
Xilinx (XLNX) reported a terrible quarter. How bad was it? It was SO bad that the company laid off 7% of its massive workforce!
It was SO bad that it won this week’s Biggest Loser spot!
It was SO bad I swapped XLNX for Skyworks Solutions (SWKS)!
Target Position Size
Current Position Performance
1st Buy 2/14/2012 @ $79.58
Current Per-Share: (-$624.66)*
1st Buy 4/18/2013 @ $56.38
Current Per-Share: (-$158.51)*
1st Buy 8/5/2016 @ $11.10
Current Per-Share: (-$43.58)*
1st Buy 2/14/2012 @ $26.71
Current Per-Share: (-$54.91)*
1st Buy 2/14/2012 @ $41.70
Current Per-Share: (-$6.43)*
1st Buy 9/6/2016 @ $63.10
Current Per-Share: (-$46.12)*
IDEXX Lab (IDXX)
1st Buy 7/26/2017 @ $167.29
Current Per-Share: $116.86
JP Morgan (JPM)
1st Buy 10/26/2017 @ $102.30
Current Per-Share: $90.97
1st Buy 11/11/2016 @ $24.20
Current Per-Share: $31.72
1st Buy 10/26/2017 @ $74.06
Current Per-Share: $56.80
1st Buy 5/24/2018 @ $29.53
Current Per-Share: $18.71
1st Buy 1/31/2020 @ $113.60
Current Per-Share: $113.60
1st Buy 5/13/2019 @ $53.18
Current Per-Share: $47.03
GW Pharm (GWPH)
1st Buy 7/25/2018 @ $142.28
Current Per-Share: $118.92
1st Buy 5/13/2019 @ $111.57
Current Per-Share: *CLOSED*
* Indicates a position where the capital investment was sold.
Profit % for * positions = Total Profit / Original Capital Investment
This Week’s Moves
Citigroup (C): Added to Position
On Friday, the market’s fears over the coronavirus sent the indexes down yet again, this time triggering a buy order I had in place to replace some shares I sold in Citigroup in December at an average price of $78.53.
The order filled at $75.60, capturing a small -3.73% discount and increasing my per-share cost 3.84% from $54.70 to $56.80. Given Citigroup’s 2.69% dividend yield and the sizing I’m choosing to use, I’m comfortable adding to my position.
My next buy order is $70.50 where I will replace additional shares I sold at higher levels.
C closed the week at $74.41, down -1.57% from where I added Friday.
Dow Chemical (DOW): Added to Position
Although Dow Chemical (DOW) saw a bounce this week when it reported a decent quarter and news came out about how its chemicals will be used to kill the Chinese coronavirus, Dow sold off with the rest of the market on Friday.
Dow slid through my per-share cost, where I added a few more shares using a trailing stop order which filled at $46.93, leaving my per-share cost unchanged.
My next buy order for Dow is $45.25 where will I add to this position which carries an astounding dividend yield of 5.923% where I added on Friday.
DOW closed the week at $46.07, down -1.83% from where I added Friday.
Nike (NKE): Added to Position
After a spectacular run into the low $100s, Nike (NKE) got slammed thanks to the coronavirus this week. Although Nike (NKE) has significant Chinese exposure (the majority of its growth is coming from China now), I wanted to replace the shares I sold back in December at $97.39.
My buy order filled at $97.19 which earned me nearly nothing (0.21%) but allowed me to fix a mistake – taking profits in a company that has a high likelihood of going much, much higher.
With a per-share cost of -$54.91 (each share I own carries a profit of $54.91 that I have taken out of the position over time), I have less concern about risk when it comes to Nike, although I am still being conservative.
My next buy order for the stock is at $94.85 with no sell targets at this time.
NKE closed the week at $96.30, down -0.92% from where I added Friday.
Skyworks Solutions (SWKS): * Position Swap *
This week, I swapped one 5G play for another. Xilinx (XLNX) reported a terrible quarter and announced it would lay off 7% off its workforce. That, in combination with significant ties to blackballed Chinese company, Huawei, caused me to lose faith that Xilinx would be the Best-of-Breed play for the upcoming 5G wireless rollout.
Fortunately, when the market sells off systematically as it did this week for the Chinese coronaviruses, there are other opportunities to swap into. In this case,
Skyworks Solutions (SWKS).
SWKS builds a significant portion of all the parts that go into mobile and handheld devices including amplifiers, antenna tuners, circulators, power converters, demodulators, detectors, diodes, and much, much more.
In addition to being the potential Best-of-Breed play for 5G, Skyworks also sports a 1.55% dividend yield at these levels, paying out $1.76 per share.
Thanks to virus fears, SWKS’ has pulled back -11.58% from its all-time high at $128.48, set just last week after reporting earnings.
I opened my position with a small buy when SWKS bounced off its 50-day average with my order filling at $113.60. My next buy will be much more substantial should SWKS pull back below $100 to a key level of support at $96.
SWKS closed the week at $113.15, down -0.39% from where I opened Friday.
Xilinx (XLNX): *Position Closed: -13.39% Loss*
Following a very disappointing quarter and announcements that it would cut 7% of its workforce, Xilinx (XLNX) was slammed for a nearly 10% loss on Wednesday alone. The losses were compounded the rest of the week as negative news headlines about the Wuhan coronavirus pounded the markets.
Xilinx is struggling as the 5G rollout is moving slower than initially expected and the company’s business with Huawei Technologies has been severely limited due to the U.S.-China Trade War.
However, after reviewing additional news reports, looking at the company financials, and looking at historical price action, I decided to swap out of Xilinx into Skyworks Solutions (SWKS) a play with many more customers and little to no exposure to Huawei which also sports a 1.51% dividend yield.
My stop-limit sell order closed my Xilinx position on Friday at $85.03 per share, taking a -13.39% loss on the position and a -0.36% loss to the portfolio.
XLNX closed the week at $84.48, down -0.64% from my closing price.
Want Further Clarification?
As always, if you have questions about any of my positions or have positions of your own that you’re curious about – feel free to leave a comment below!
See you next week!
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