More October trades – Nokia disappoints big time

Zoom continued down to its next support level so I bought another 150 in the real world at 63.90. Mentioned to an ex client with landed estates – he already uses Zoom to videoconference what is happening on his farms and woodlands, while his day job might see him in London, New York, or any other major centre for the arts.

As for Nokia, a huge disappointment as earlier guidance withdrawn, dividend suspended – that’s a 100% cut while new guidance for 2020 looks like 40% down. That sounds like the ADR is headed for USD3 or thereabouts – Travis on Stock Gumshoe sold his at 3.90 and I followed him the next day at 3.79. To me the whole spectacle of a telecoms equipment company losing its way reminds me of GEC in the U.K., a company built over many years by Lord Weinstock only to be trashed by new management during the internet boom around 1999/2000.

Good news that Microsoft has been awarded the Pentagon contract. $10 billion over 10 years will not make a huge amount of difference to earnings, but is a great advertisement for their cloud business, second only to Amazon at the present time. And if we are worried about Green New Deal then Microsoft sits well given Bill Gates’ philanthropic interests.

Another Roku trade

The target for my recent addition to Roku was the 115 to 120 range. So when the stock price jumped into this range at the close 9th October a sale was imminent . The following opening took the price just North of 120 so I took my profit at 120.56.

This gave me the opportunity to sell in the real world subject to capital gains tax – the purchases of the two lots of 50 shares were in the tax free world of ISA and SIPP.
My rationale was that sooner or later the stock price may be much higher, and I do not wish to have my profits diminished by tax. As things stand this is not the case, as I have a few losses that I can take to bring gains inside the annual tax free allowance in the UK where the tax year ends 5th April.

Thanks for this trade must go to Knox Ridley, a very smart chartist who predicted the rally.

Recent trades

At the end of September Roku dipped below $100 and two lots of 50 shares were purchased at 98.90 and 99.13. The intention was to trade 100 shares out on a rally, so perhaps a sale will follow soon.

My Zoom holding was also doubled buying 150 at 74.97. While Zoom has a long runway and very high valuation, it would be a shame to miss out on the disruption of the video conferencing space worldwide.

You may remember that Snap provided a profitable trade over the last quarterly figures. Now analysts are becoming a bit more bullish, yet the share price is weak again.
So I bought 1000 @ 14.31 early October. Not sure whether this is another trading opportunity or a longish term holding. Can’t make head or tail of their Snapchat app but apparently it has appeal to millennials and might start making money soon.

Adding on weakness

The US tech sector has been weak of late, so a couple of holdings were increased.

Added to Slack at 25.43 and Mongo DB at 126.56. Both closed lower, but time difference prevents me from dealing in the afternoon NY time. Both of these companies have a long runway, but neither are affected by the present trade war between the US and China. The same applies to many high growth US tech stocks and good numbers should continue whether or not there is a recession in the US.

On the consumer side Roku enabled smart televisions are to be sold by Walmart under their own brand which is usually bargain priced. If there is a recession, I think more people would cut the cord and move to the cheaper internet alternative. And Roku now has its own output (with advertisements) for free, so user numbers should continue to grow even if subscription channels like Netflix experience a period of slow growth given the competition from Disney and others. All the subscription channels are available with a Roku TV or box.

Early September trades

I finally sold out my remaining position in Premier Oil. The holding has moved in and out of profit, so pleased to take a gain of 10p per share.

Roku has continued its upward path, so reduced a bit more at 167.43. This is still my largest holding, but it never hurts to take some profits along the way. The cash went into a new holding of Workday (WDAY) at 175.16, and as there was adverse reaction to Slack’s first earnings statement since it became a public company I was able to double my holding at 26.6.

Alibaba (BABA) has just announced the acquisition of another Chinese e- commerce company for 2 billion dollars. Kaola will strengthen its position in the growing Chinese import e- commerce market which is still in its infancy and offers good long term potential as standards of living continue to rise in China. Initial market reaction on Thursday was good, but the stock ran into profit taking Friday.

End August Review

August has been dominated by the ‘so-called” trade war with China in the US, and Brexit in the U.K. So it is hardly surprising that equity markets have been choppy.

Looking at the US holdings, the best by far has been Roku, up from 103.33 to 151.36. My new holding of Mongo DB rose from its purchase price of 142.83 to 152.31. My new holding of Slack fell from its purchase price of 30.67 to 28.64. Most other US holdings recorded small price movements, apart from Nokia ADRs down from 5.41 to 4.96 and Snap ((watch list holding with a view to repurchase) down from 16.80 to 15.83.

The U.K. market was generally poor, as I suppose international investors were selling. I think that Bango was the only riser, up from 124.5 to 129.5. Prudential were surprisingly weak, down from 1698 to 1368, and Superdry were down just under 10% at 395.4. Of the relatively recent investment trust purchases, Smithson held on to most of recent gains at 1256 and Fundsmith Emerging were down just over 4% at 1140 (not forgetting NAV which also moved down to 1263)

I will be looking to make further changes as opportunities come along, as I still own funds and equities that give cause for concern.

The biggest takeaway from recent movements has been to stick to an irregular rule of investment – “find smart people”. One from years ago is now retired, another from a few years ago has been dropped because I don’t like short term strategies on spread betting with stop losses. So I’m left with two – both of whom are a lot smarter than me.

Started a holding in Slack (WORK)

I mentioned that I had placed Slack on my watch list after the stock was listed a few months ago. In the event early prices up to 39 or so looked a bit too high for comfort.

I followed the price down to 30 at the close of last week, then saw a couple of articles about institutional purchases by Yale and BP Pensions over the weekend.

So I bought 400 at 30.67 shortly after yesterday’s opening – this starts a holding – like Mongo DB not a big position as yet.

Switch amid the turmoil

If you remember, Roku were about 103 at the end of July. During early August the upward momentum resumed. My shares are owned within two funds, and one fund has already reduced. So now it was the turn of my pension to reduce, as the valuation exceeded 10% of this fund. So I took a profit on 100 shares at 132.82 yesterday.

I was also looking to start a holding in Mongo DB, so I bought 100 of these at 142.83. Don’t actually know too much about Mongo’s software, but I’m told the stock is worth owning although averaging up or down will most likely be needed to put a holding together.

As regards Roku, this remains my largest holding – and I have been happy with the product too.

There has been market turmoil so far in August. As it is the holiday season the office juniors are in charge of the funds and markets. So do not be surprised- the stocks do not know that you own them.

End July update

Let me first tell you about my end month trades. Vodafone were down in the dumps but suddenly improved to just over 150p, so I sold my ISA holding at 151.29 p which gives a profit – put into ISA at circa 139p earlier this year. The improvement was put down to a merger of cell tower businesses in Italy and I am unsure about the effect of 5G on towers.

The other trade – in my ISA – was a purchase of Fundsmith Emerging Equities Trust (FEET.L) at 1195.25p. This is a small trust – market cap about £318m – standing at a discount to nav of approx 1300p. Not a great performer to date, but an internal change of management responsibility could be helpful.

Looking at month end prices, the main improvement came from the US stocks. BABA 173.11, NVDA 168.72, MSFT 136.27, SCHD 53.95, VIG 117.73, NOK 5.41 all up modestly and ROKU 103.33 up about 12%.

Despite the weakness in sterling to around 1.2120 today, UK stocks have had a much more difficult time. Improvements were seen in Smithson I T 1272p, Bango 124.5p, and Premier 84.04p. Prudential 1698p, Superdry 433.2p, and S4 155.5p were all down. Some stocks that I either used to own long ago or was thinking about before bad news came out have been very poor. Just look at the charts of Centrica and Metro Bank !

My watchlist includes SNAP 16.80 where my initial trade did well, and Slack (WORK) 33.42 while my cash position is about 20% on PA and 8% on Pension Fund.

Premier Oil /Roku

Did I tell you that I split my original Premier holding between two funds back in March. ?I used one fund for trading – and took a short term profit here – then bought back at an average price around today’s level. As this second trading attempt has pulled back from loss making to break even I have once again sold this part of my holding. That leaves the other half in my longer term fund, where the exposure is less than 3%. It also leaves the trading side with a nice overall profit on the two trades since March.

I am also wondering how the Roku share price will react to the next quarterly numbers due early August. Roku remains a pure streaming play – the only other one is Netflix who will need to spend more on creating content now that competitors are removing their toys from the playpen. The next wars will be all about content and getting people on the hook with low starting subscriptions, which should not harm Roku’s user numbers. However ARPU cannot be expected to rise while there is intense competition for new premium channel subscribers.