Friday, November 4, 2016

Short Pick Noodles Misses

Last night after the close Noodles (NASDAQ: NDLS) reported a weak 3rd Quarter sending the stock down at the open this morning 5%.

Equities Research Summer Newsletter Short Picks are all down significantly over the 4 months since the picks were made, while the Standard and Poors 500 Index remains flat.

Under Armour Reported 3rd Quarter Financials last week sending stock down $7 for the week.

Next up will be Titan Machinery reporting 3rd Quarter financials either the last week of November or early December. Unlike Noodles and Under Armour, which are just over valued stocks with weakening fundamentals,  Titan Machinery may find themselves out of business soon unless they are able to raise capital. 

Warning on Titan Machinery 

Thursday, November 3, 2016

Under Armour Stock Down 36%

Check out this chart from for UA

          Visit to see more great charts.

Under Armour (NYSE: UA $30.79) closed yesterday down 36% since closing @ $48.20 (adjusted for split) on November 2,2015. Over the Same 1 year period the S&P500 Index which closed yesterday @ 2097 is down a mere 7 points from November 2,2015 close @ 2097 (is flat.) 

The company filed their 3rd quarter 10Q with the Securities and Exchange Commission yesterday.

Highlights from 10Q 

  • DEBT INCREASES to Over $1 Billion

  • Related Party Transactions : CEO Kevin Plank entity Sagamore Development Holdings sold property for $70.3 million to Under Armour. According this news story the sale price was more than twice what Plank paid for the property in 2014.

  • Allowance for Doubtful Accounts As of 9/30/16 $33.6 million, 12/31/15 $5.9 million 9/30/15 $6.3 million.

  • Under Armour trailing 9 qtrs (aggregate) Negative -($280 Million) operational cashflow. $1 Billion/debt

  •  Company Improved EPS growth due to lower Q3 2016 (32.6%) tax rate vs Q3 2015 (38.8%)
  • Company enjoys higher gross profit margins because they record shipping and handling fees as net revenue but expense the cost as selling and general administrative expenses vs cost of revenue. The $25.7 million in Q3 charged in SG&A helped gross profit increase from 45.7% to 47.5%.
  • Company Recorded more than $65 Million of Net Revenue from shipping and handling fees for the first 9 months of 2016 up from $40 million attributed to net sales in first nine months of 2015

Equities Research Warning on Monday October 24th, the day prior to the 3rd Quarter Earning press release.

Below is the performance of the October Put Options from Monday the 24th to Friday October 28th.

Put Prices on Friday October 28
Put Prices on Monday October 24,2016 (below)

Monday, October 24, 2016

Short Pick: Under Armour Hype Will Take Back Seat To Weak Fundamentals This Week

Under Armour (NYSE: UA) will report 3rd quarter financials on Tuesday and Wall Street continues to be Bullish.

Equities Research continues to Warn Investors to stay away from this high flyer and focus on the weak fundamentals and not the Hype! At end of day the rising debt, high interest expenses and declining operational cash flow will be reflected into a lower stock price.

Trade Card from Capital Market Laboratory


Performance of Recent Short Picks from EQUITIES RESEARCH

Wednesday, February 10, 2016

DISNEY Up 1100% Since Being Added to Dow

On May 6, 1991 the Dow Jones Industrial Index added The Walt Disney Company (DIS) , Caterpillar (CAT) and J.P. Morgan.

May 6,1991 vs February 9,2016
DJIA  2,941.64    16,014          444%   7.1%    annually
DIS    $7.77         $92.32        1088%  10.5%   annually
CAT   $3.50         $63.93        1726%  12.4%  annually
JPM   $3.06         $56.20         1736%  12.5% annually

10 Year Return
February 9,2006
DJIA 10,883    16,014     47%    3.9%  annually
DIS   $22.70    $92.32   306%   15.1% annually

Since Stockdiagnostics Upgrade February 14,2005 , Disney has gained 269% (12.6% annual) in 11 years vs a 50% (3.8% annual)gain for  the Dow Jones Industrial Average over the same time frame.

click to DIS Stockdiagnostics OPS chart
click to DIS GFNN news story

DISNEY Stock Returnes

Sunday, January 31, 2016

Under Armour Cash Flow Should Have Investors Running Away

"Stocklemon believes that is one of the best stock advisory sites on the web.  It judges companies based on a proprietary OPS rating and covers both long and short positions."---------September 22,2003 Andrew Left founder of Citron Research

(my former twitter handle was @GFNNStock)
"From time to time I'm asked about analysts, diggers whose work I really respect, who do things well. Tom Renna, @GFNNstock, is a must follow— Roddy Boyd (@BoydRoddy) September 7, 2013

Feb. 5,2015 -- Under Armour CEO Kevin Plank talks about why he's buying the MyFitnessPal and Endomondo apps for a total of about $560 million.
         Equities Research Looks at Under Armour

*Negative Cash Flow (~goodwill $472 million)
*Class Action Lawsuit Settlement
*CEO New Stock Trading Plan
*Series Class C Shares
CFO/COO Departure
*Morgan Stanley Downgrade $62 (1/30/16) 

On Thursday morning Under Armour (NYSE: UA) reported FY2015 earnings sending the stock $20 higher from $65.58 to close the week @ $85.43. Up 30% in two days.

Record Sales and earnings were super impressive, but a close look at the cash flow statement raises a RED FLAG.

note: As of Sunday (1/31/16) Under Armour has not yet filed their 10K annual report with the Securities and Exchange Commission as of this morning so we are not able to dig deep into footnotes and other exhibits at this time.

A look at the 8K filed on Thursday can be found here. 

Before I jump to the FY2015 Negative $44 Million Operational Cash Flow, lets look at 2 recent SEC filings that should make investors wonder how many total shares are really outstanding when including Class A, Class  B and Class C shares.

Shares Fall 8.5% in 1 day
On November 12,2015 Under Armour traded at $94.16 with volume of 3 million shares.
On November 13,2015 Under Armour traded at $86.08 with volume of 7 million shares.
What happened?
At 10am November 12th CEO Kevin Plank filed this SC 13D/A with the Securities and Exchange Commission.
"(Kevin Plank) entered into a pre-arranged stock trading plan to sell shares of the Issuer’s Class B Common Stock and, if and when issued, the Issuer’s Class C Common Stock."
"If the Reporting Person completes all the planned sales under this trading plan, he would beneficially own 35,700,000 shares of Class B Common Stock and Class A Common Stock, representing approximately 16.6% of the total shares of Class A and Class B Common Stock outstanding as of September 30, 2015 and representing approximately 66.5% of the combined voting power of the Issuer outstanding as of September 30, 2015". 

Consolidated Class Action Lawsuit
August 14,2015 this DEFA 14A filing with the Securities and Exchange Commission was filed.
"Under Armour currently involved in a consolidated class action lawsuit brought against the Company and the members of the Company’s Board of Directors on behalf of purported stockholders of the Company in connection with the creation by the Company of a new class of common stock, referred to as the Class C common stock, par value $0.0003 1/3 per share"
Shares declined from an all time high above $100 in October to a 52 week low in January 2016 

October 7,2015 8K Settlement

October 13,2015 8K COO/CFO Departure

Are You Still Long?
Operational Cash Flow for FY2015 was NEGATIVE $44 Million!
Operational Cash Flow FY2014 of Positive $219 Million.

Year over Year Operational Cash Flow declined by $263 Million

Operational Cash Flow
FY2010: $50 million
FY2011: $15 million
Fy2012: $200million
FY2013: $120 million
FY2014: $219 million
FY2015: NEGATIVE ($44 Million)

Cash Flow used in 2 Acquisitions during 2015.
$475 million for
$85 million for Endomondo
$560 Million total cost, 
$472 million GOODWILL 

Under Armour 
Stock Price has had a History of Following Cash Flow.
November 18,2005 IPO
 Under Writer: Goldman Sachs. 9.5 million shares @ $13 (adj for 2 (2 for 1)splits $3.25).

Shares went from $13 to $68 on August 21,2007.

Enter Equities Research

Equities Research went bearish (A-E) on UA at $68 to $15 before going Bullish.(F)

Short $68  (70% profit in 15 months)
Hottest Stock with Weakest Cash FLow August 21,2007 $68
B.Short $48  (58% profit in 1 year)
Large Caps May Not Always Be Less Speculative

C. Short $ 45 (55% profit in 9 months)
Love Your Valentine, Not Your Stocks

D. Short $38   (47% profit in 3 months)
Beware:  Standard & Poors Adds A Poor Quality Stock to Index

E. Short $33   (40% profit in 3 months)

F. long $15 GFNN news story upgrade

Tuesday, July 24, 2012

December 2012: Stockdiagnostics the Utility
Finding Stocks that Fall 30% to 99%

29 GFNN STOCKDIAGNOSTICS Portfolios created by Equities Research founder , Tom Renna

Thursday, January 28, 2016

Under Armour FY2015 Earnings Sends Stock Flying Up $15

Under Armour (NYSE: UA : $83.58 ) 2:06pm est.

Market Capitalization has increased by $3.3 Billion today to $19 Billion!

Shares of Under Armour are up 22% today on volume of 14 million.
The stock was down 15% year to date ($80.61 on December 31st close) as of yesterday's close @ $68.58.
As of 2pm this afternoon, the stock is up 3.6% year to date.

On September 17,2015 the stock hit an all time high of $105.89. and is off 21% over the past 4 months.

Operational Cash flow for the 4th quarter came in at $270 million up 35% compared to Operational Cash flow in the Fy2014 4th quarter of $199 million.

There is one Number that investors should be slightly concerned with though, 8k

Operational Cash Flow for FY2015 was NEGATIVE $44 Million!
Operational Cash Flow FY2014 of Positive $219 Million.

Year over Year Operational Cash Flow declined by $263 Million

Operational Cash Flow
FY2010: $50 million
FY2011: $15 million
Fy2012: $200million
FY2013: $120 million
FY2014: $219 million

FY2015: NEGATIVE ($44 Million)

Friday, January 15, 2016

SP500 Index Back to 1875 But Stocks Are HIGHER

On August 25,2015 the Standard & Poors 500 Index was at 1867.

Today the S&P500 is back to 1867 right now intraday , but..

Company      (TICKER)   August 25     January 15     Return
SP500           Index            1867.61           1867.61          0%
Facebook      FB                  $83.00            $94.36          13.7%
Google          GOOG           $582.06           $692.28          19%
Amazon        AMZN            $466.37           $569.75          22%%
LinkedIN       LNKD             $169.94          $192.08          13%
Priceline       PCLN             $1178.81        $1095.65         -7%
Disney           DIS                $95.28            $94.34             -1%
NetFlix           NFLX            $101.52           $102.96          1.4%