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Hotline Sample Report

This report is a sample for information purposes only. These recommendations are closed.
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5/9/2017 9:10:56 AM Eastern Time

Let Me Play Among the Stars
By Charles Payne, CEO & Principal Analyst

 Click here to download PDF version

Fly me to the moon
Let me play among the stars
Let me see what spring is like
on a, Jupiter and Mars
In other words, hold my hand
in other words, baby, kiss me

-Frank Sinatra

The technology moonshot keeps going and going, living up the fanciful lyrics to the Frank Sinatra classic “Fly Me to the Moon.”

Yesterday, late buying lifted the S&P 500 to a new all-time high; it was all about the NASDAQ Composite Index that surged to another record high carried by the usual suspects. The virtuous cycle of these tech names has indeed created the perfect storm.  The higher the rally, the more big money managers must step up and own these names.

Already, the institutional ownership of these names is significant:

  • 70% (GOOGL) Google
  • 71% (FB)  Facebook
  • 64% (AMZN) Amazon
  • 61 %(APPL) Apple

Market winners continue to mask anxiety in the market as there were 40% more losers than winners on the NASDAQ and the NYSE; the volume was even more lopsided. The big money managers can continue to chase performance, but they are spying fresh ideas as any other investor.

The Coiled Blue Chips

The Dow Jones Industrial Average eked out a small gain after seesawing most of the session. The Blue Chip Index is becoming a coiled spring, ready to leap with the right catalyst; one catalyst could be establishing new highs.

It’s a proven fact that new highs beget new highs; the challenge for the Dow is not forming a double top, and then retracing.

DJIA

With the so-called “fear index” near an all-time low point, many purists are saying there is too much complacence.  Of course, the purists have been saying this for years. I’ve never been a big fan of the index, but you’ll hear how this is a red flag- it’s not.

Current Summary

S&P 500

  • 14th new all-time high since inauguration
  • 23nd new all-time high since Election Day

NASDAQ

  • 23nd new all-time high since inauguration
  • 37th new all-time high since Election Day

Today’s Session

The major indices are relatively flat with a slight positive bias.  The earnings parade continues as does Fed speak from several members.

Long Idea: RH (RH) @ $58.18
Industry: Consumer Discretionary; Specialty Retail
Click here to view the trading alerts that followed this recommendation

Trading Parameters
Status Closed
Entry Price$58.18
Entry Limitsee comments
Stop LossN/A
Target$69.50

BACKGROUND: RH, formerly Restoration Hardware Holdings, Inc., is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, fittings, fixtures, surfaces, accessories and home decor. The Company's business is integrated across its channels of distribution consisting of its stores, Source Books and Websites. The Company also owns a controlling interest in Design Investors WW Acquisition Company, LLC, which owns the business operating under the name 'Waterworks'.

SKINNY: RH breaks out @ 60.00; through there we see room to $69.50, in the longer term.


Key Fundamentals
PEG  1.83
Book Value  22.53
Institutional Holdings  65.53
Price/Sales  0.98
Average Daily Volume  2.1M
Shares Outstanding  35.9M
Market Value  2.08B
Insider Activity  
52-week High  59.43
52-week Low  24.41
Annual Earnings Estimate  2.16

Analyst Coverage
 Gordon Haskett Initiated  HOLD
 Buckingham Research Upgraded  UNDERPERFORM
 Citigroup Initiated  BUY



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