Munson on CNBCs Power Lunch: Three Stock Lunch from Carnival to Amazon

Let's break down what is going on here. Carnival is one of those "hope" stocks. You hope it will be okay but they needed to raise more equity, diluting shareholders this year (diluted 86% since the pandemic!!!) and then borrow another billion today. Not my thing.

Then we get over to Micron, which continues to have issues selling DRAM in computers and consumer electronics - not the place you want to be right now. Today they say production will be cut by 20%. I understand some will say that means higher prices and profits once the glut becomes scarcity, but if you play that game, why not buy it at a cheaper price to book - you know, when they bang the garbage cans and you can hear "bring out your dead."

Then there is Amazon. A broken down FANG stock that hasn't been this beat up since 2008. They are cutting 3% of their corporate workforce, freezing hiring, closing down unprofitable parts of the business and getting ready for leaner times. I like that. I like buying a big blue chip cheap that nobody wants to own. All the froth from Covid has come out of the price. Sounds like a deal to me.

3 Stock Lunch: Bulldozers, burgers, and bloated valuations

My best hit on 3 Stock Lunch to date. Let's get into it.

CAT - great earnings, China is less than 10% of earnings and wasn't a disaster, and no complaining about the strong dollar. This is an example of improved sentiment - which is why it's an interesting stock to look at. Notice that they went from reducing inventory by 300million to dealers to increasing to dealers by 700million? And a bears didn't bring that up. They just sold a bunch on the books stuff that is sitting in a showroom. Clearly people are just happy they are making money.

MCD - increased the dividend by 10%, no complaining about the dollar - even with 66% of sales coming from outside the US. Even European stores did well. Plus, the got Russia off the books this quarter. I guess adult Happy Meals worked out. NOW - nope. Classic example of why eventually valuations matter.

Service NOW had great numbers, growing at 20%, but it's a 400 buck stock making less than a buck in earnings. Come on, most big firms in America are already clients. Sure, I don't think people will stop paying for their HR software, but they are not a new fresh thing anymore. In this environment, investors aren't going to put up with high P/Es - because it could take a lot longer to reach the pot of gold at the end of the rainbow.

As you can see, you can learn a lot about the overall market by checking out individual stocks and how they react to earnings.

Three Stock Lunch: Breaking down busted up stocks

Killing it on CNBC today. We broke down Splunk, the Fox/Newscorp merger, and Robolux - put it this way, I love companies that are restructuring or are out of favor. Splunk had a chance with the Cisco merger and now it's down to cost cutting. Fox only broke themselves up after the phone hacking scandal 10 years from now, so today it's still about cost cutting, but what will be the collateral damage? The Robolux is a total hot stock, hard to value, loses a little money - but isn't fundamentally broken and seeing their users spend more time, more money over time. With everything going on in the world, I'd rather take my chances speculating on a firm that has a beat up stock price rather than beat up fundamentals.

SHOW LESS

September Sell-Off: Back to the Scene of Crime of June Lows

Fun hit with Dave Briggs and Rachelle Akuffo - keeping it fresh over at Yahoo! Finance. I talk about what I'm buying, what past period this reminds me of, and what is totally different.

Put it this way - markets are difficult when they are oversold because you have to be a contrarian, to zig when others zag.

It's also worth noting that many people in the industry have never seen inflation before, let alone the experience of investing through it.

Lee Munson on FBN’s ‘The Claman Countdown’ Talking Bank Earnings

Just a fun interview talking about my favorite areas of the market. While I like big banks stocks - they are really an example of large and small firms beat up from inflation pressure, but great long term prospects going forward. Do you want to invest going forward, beyond the current bear market towards firms that need evermore cash to keep the doors open, or firms that already make money today, pay dividends, and can survive and thrive from overall higher rates and higher inflation than the last 10 years? I say the latter.

Munson on CNBC The Exchange Talks Nike, Micron

Another hit where I crush it. Forget that I'm talking about individual stocks versus a well diversified ETF. Nike is a metaphor for beat up large growthy companies, I mention the dogs of the dow theory - which was an old trading strategy that doesn't work as well today were investors would buy the highest yielding stocks in the DJIA, hoping that they hit bottom and would bounce hard over the next 12 months. It worked well for years until people started to copy the strategy and then like all things the effect got diluted and stopped working. Bottom line: you can buy stuff in a blown up bear market - with higher prices ahead, but timing is uncertain.

Micron is different. It's a crap shoot. It's a speculative trade I wouldn't do. Would I like to buy the semi conductor sector cheap? Sure. But at 1.1 times book it just isn't cheap enough to pay me for the risk. Why not wait until literally nobody wants to own this firm and it's selling at half book value. Then I might be tempted.

Let's get down to the heart of the matter: investors are waiting around to see earnings estimates drop. I don't care about some junior analyst caught like deer in headlights with their young unprofitable firm - unable to revise revenue. I'm talking about the whole market.

Sure, we have built in slower growth since last year going into 2023, but there hasn't been a massive shift down in expectations. Is everyone on vacation? Maybe. But you also have to consider 2 trillion in government stimulus, strong balance sheets with cheap debt, and a US consumer that despite high gas prices isn't going through an energy crisis like Europe.

Earning revisions are important since this market won't move forward until peak inflation is behind us or the Fed signals a policy change. I make some comments about what I hate - young unprofitable firms that may not come back - and what I like, bit cheap firms that have a future and can make both cash flow and profits.

Then Dagen tells a story about money losing Casper and her experience. Another example of firms that can't hit the market even in good time. The Millennial corporate subsidy of money losing firms is coming to a close.

Munson on CNBCs Power Lunch talking stocks with a past

All three names today were stocks with a past - and not in a good way. Boeing, Wells Fargo, and Bausch Health.

I simply point out what the catalyst for a company that is fighting to overcome bad PR, sins of the past, poor governance issues. One has supply chain issues and has to deliver their planes to market. If they can do that, great. Then another has to shrink its low profit margin business and invest in growth areas as their handcuffs from regulators come off. The last one is just a dumpster fire behind a dive bar at the end of the street of broken dreams...

Enjoy!

3 Stock Lunch - growth, value, and crap

Great segment fro CNBC were I comment on the three core stocks Oppenheimer selected as their best restaurant stocks for a recession. They based their analysis on same store sales back in 2008-2009 recession. Here is my quick take. And for the record, I’m not suggesting anyone buy these stocks - they are just a great example of how different types of stocks act in various environments.

Chipotle is just a growth stock that has taken a hit, lost over 70% in the GFC 14 year ago, but has a few things going for it. Much different mix of customers, not the lowest wage earnings who are being squeezed, and ability to raise prices over a place with a 99 cent menu. I see them like homebuilders - volatile and you buy here because you think it's cheap, not recession proof.

McDonalds is the ultimate recession stock. It made money in 2008 along with Wal-Mart and Dollar General. It's a poverty play. They are huge, control their suppliers not the other way around, and have been able to capture the market of those that downscale spending - remember the premium salads that took business from places like Chipotle years ago?

Papa John's, in my humble opinion is just a trading stock for the Covid lockdowns. they don't have an edge, their customers are running out of money - and this time around customers have a choice on where to eat and how it's delivered. I like to avoid prior hyped up stocks.

Memorial Day Market Thoughts with Charles Payne

I love this video for so many reasons. First off, I love Charles Payne. I can't help retell how I used to pay for his earnings tip sheet back in the 1990s - he would fax it to us each day. Second, I was planning to be at a BBQ at a friends house down in Las Cruces, so when the produces asked if I could do it, I said "hell yeah, let's do a full on remote hit." Kudos to them to trust me to pull it off. My wife was not impressed and thought it would be a disaster - but disaster it was not! The best part was telling people what I was sharing at the party - just some straight talk on my off hours as people corner me at the BBQ to ask my thoughts on the market.