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Nathan Worden's avatar
$338.8m follower assets
A good call by @paulcerro on Sweetgreen
Paul Cerro published a short thesis on Sweetgreen back on February 11th. The idea was that Sweetgreen tries to present themselves as a tech company when in reality all they do is sell overpriced salads.

Sweetgreen just lowered their forecast, announced layoffs, and office downsizing. The stock is down 22% after hours.

Check out Paul's memo here— $SG is down 38% since he posted it (and that's BEFORE this after hours drop)

You can also watch Paul give a 2 minute pitch on the stock at 'The Market' game back in February:
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It’s pretty ridiculous that they’re trying to bill themselves as a tech company… what was that basis on, the fact that they have an app? 😂. Gonna have to listen to this later!
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Josh Kohn-Lindquist's avatar
$24.8m follower assets
Help With a New Watchlist Position
With the market turning red today, it's time to start a new watchlist position.

I've found four businesses that fascinate me and will inevitably join my portfolio in time -- but I struggle with knowing when to add them.

So I will turn to the great community here and see who you all like and start a tiny watchlist position in the winner of the following poll.

I intend to hold this watchlist position forever (theoretically) to keep track of them and will gradually add to them over time (such as $TREX's addition today).

Thank you, friendly humans, and feel free to say why you like your pick if one of them catches your attention.
Which stock should I start a watchlist position in for the long term?
42 VotesPoll ends on: 08/12/22
Fat Baby Funds's avatar
$40.6m follower assets
What Moves the Stock? Opendoor
I've been watching $OPEN. It's a fascinating company, but I believe what will move Opendoor will be a little different than other stocks.

The market loves revenue growth for most companies, because extrapolating the growth out can lead to huge changes in future cashflows.

$OPEN has seen a huge revenue growth as they continue to scale their business, but the market doesn't trust that revenue growth will lead to future cash flows. Launching in new markets, etc... doesn't solve Wall Street's concerns.

I believe the biggest driver for $OPEN will be their contribution margins. $OPEN has proven that they have the ability to scale and aggressively grow revenue, but can they reliably make money? I still struggle to see the straightforward path to significantly raising contribution margins for $OPEN, but I still see indirect paths as a major possibility (aka optionality).

A secondary driver for $OPEN would be how fast they can turn their inventory. Management has discussed a 90 day turn as being possible, but current trends are nowhere close to that. Significant improvements on turning inventory would significantly reduce balance sheet concerns (leading to happy investors).
Christian's avatar
$18.2m follower assets
The Mouse is back
Disney earnings are here and incredible. Every questionable area killed it. Parks, streaming all on fire. Chapek and Disney a lot of heat lately but did they shut people up…I believe so. Streaming is king, ads are coming. Man I’m excited
Meta AI chatbot
$META recently released a new AI research project called BlenderBot 3, a sophisticated chatbot that can converse naturally with people, who can then provide feedback to the model on how to improve its responses. Basically, Meta released yet another improvement to its chatbots which are getting really good.

While the media is focusing on AI doomsday scenarios and debating if this neural network is sentient, I want to direct your attention to a very real use case for this AI: Monetizing WhatsApp

Have you ever wondered why Meta doesn’t simply slap ads on WhatsApp and be done with it? Well, there are valid reasons to keep away from this simple solution. Maybe the most important issue would be that to make the ad targeting really great, the platform would need to read user messages to serve relevant ads. This would most likely lead to a pretty big outcry, so that’s not the way to go.

Instead, IMO, WhatsApp will focus on B2B, offering businesses a platform for sales and support. There is already a business API for WhatsApp for Business that is priced on a tiered per-message basis. I’m expecting this to be extended, so every business can do automated tasks via the messenger. Imagine automated customer support, sales routines, and ordering products.

And here, Meta’s AI efforts come into play. Once the chatbot capabilities are advanced enough that it feels like you are talking with a real person, the possibilities are endless. If done correctly, this could be a fantastic win-win proposition. Customers get better and faster interactions with businesses, and businesses get more efficient support and sales capabilities.

With more than 2B monthly active users on WhatsApp, this could be huge for Meta.
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I think its a good idea from Meta to not generate Revenue in Whatts App via Ads. What people are writing is highly private and no one would like to see ads about things you recently wrote about. Also diversifying revenue streams from ad revenue is a good idea. But i wish i would see more execution in the monetization strategy of Whatts App. A simple money sending funktion would be a great addition as a start.
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$U is drama queen of the stocks world
Another day, another Unity drama. Unity seems like it can’t catch a break 😂. A few of the Unity dramas in the past month are:

I think $U needs a new CEO. The company has so much potential with their solutions, but the execution is quite bad
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Brett Schafer's avatar
$26.3m follower assets
Things that matter vs. things that don't
We all seem to be focusing on stuff that doesn't matter when crafting investing decisions. I find this really counterproductive.

Here are some things that don't matter:

  • what inflation was last month
  • What a stock did over the last 30 days
  • What a stock does the 30 days after you buy it

Here are some things that matter:

  • The FCF yield you bought a stock at
  • Growth in FCF/s

What did I leave off either list?
Different things matter to different people, especially with goals in mind. Are you investing or trading? A trader would heavily disagree if they’re swinging news plays. That being said, at large I agree. Headlines are meant to rile emotions, and markets are a product of people and emotional decision making.
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What Moves Air Products and Chemicals $APD?
Air Products and Chemicals ($APD) is currently the third best performing stock in my portfolio with a return of 17.9% since starting the position in March. $APD’s price action, like most of the market, was tough for the first half of this year. However, their bounce back in the last month has caught my attention as the stock has moved higher with more strength than my other positions. They had a stellar Q3 earnings report where sales jumped by nearly 22% year-over-year, however, their net income margin fell by about 2% as inflationary pressures continue to challenge the business. The company issued guidance for maintaining their full year EPS guidance of $10.20 - $10.40 which is a 14% increase on last year. Great guidance, great sales growth, a nice dividend, healthy balance sheet, it all looks good! But being the macro-nerd that I am I felt like I needed to understand the business and industry more in order to grasp what’s behind this movement.

$APD sells industrial gases (nitrogen, hydrogen, oxygen, helium, carbon dioxide and monoxide, and other general and specialty gases) and the equipment involved in the production, refining, and processing of the gases. These types of gases are essentially commodities. These gases are usually a small fraction of the costs of supply chain and manufacturing businesses and for that reason those consumers are often willing to pay a premium for long-term contracts for sustained production. Demand for industrial gases are obviously strongly related to industrial production. These gases are used everywhere in all types of applications like cooling, heat treating, melting, welding, pH control, oxygen enrichment, liquefaction, fueling, blanketing, aeration, and many many more. The industry continues to grow with industrial production and has promising future growth potential in the form of gasification, green hydrogen, and carbon capture.

These gases are heavily used in industrial manufacturing. The above chart shows the stock price of $APD with overlays of the Industrial Production: Total Index. That data comes from a Federal Reserve statistical release and is updated on a monthly basis. The index measures the output of manufacturing in the US and can generally be used to gauge consumer spending, inflation, and economic growth. The index measures the change in the production output of major market groups and industry groups including factories, mines, and utilities. As you can see in the graph, in times of economic growth, the index is well above the price action of $APD. However, in economic downturns such as the Great Recession and the COVID crash, you can see that the industrial production index falls sharply underneath the stock price of $APD. The index last crossed under $APD in February of 2020 and only recently crossed back above two years later in February of 2022. If history is any indicator, when the Industrial Production index trends upwards, $APD follows suit by a small distance. Now that we are a few months past the last parity, it looks as if that trend may be in a position to continue!

Obviously, there’s a lot more going on in the macro environment of our economy and this stock, however I thought this trend was interesting and worth sharing! Would love to hear your thoughts and questions in the comments!
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A tale of 2022, if you have a long enough time horizon, macro BS dosent matter
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Amen to that! And according to someone, there was no inflation in July :p
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Lester Leong's avatar
$20.5m follower assets
Pouring though statements to see if $C is a good buy
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I would say a decent buy, but let me know after your research!
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Cameron McFarlane's avatar
$16.6m follower assets
2022 Vanguard Index Chart
If you invested $10,000 in 1992 in U.S shares it would be worth $182,376.00 (10.2% p.a)*

Plenty of hiccups and buying opportunists along the way…
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David's avatar
$17.3m follower assets
The inevitable rise of investment gurus
Be careful with the inevitable rise of investment gurus that is going to happen in the short/medium term. Everyone starting to invest/trade right now will have incredible returns to show in 1-5 years and they will come up with strategies, threads and courses, Im sure most people hear are aware but if you are just getting started please DONT get fooled! 🙏🏽 Also, if youre getting started trust me, even if you get a couple 3x, 5x, or even 10 baggers that does not make you a genius! Unless you've been beating the market for 20-25 years + you should not attribute any of your performance to anything more than luck.
Sentiment shift
Finally after a nice rally, then a brief pullback yesterday everyone seemed to believe it was going to gap back down to 3600 in two days just like last time. Both cpi metrics seemed to have peaked and were lower than expected!! Markets love this, and hopefully sparks new energy for this rally to continue. Let’s finish strong.
Ben's avatar
$17.5m follower assets
UPST loans
A lot of confusion about $UPST taking on loans on its balance sheet and if in poor economic times will UPST cont to be able to sell those loans.

Investors where unhappy Q1 2022 when UPST took loans onto their balance sheet to “add liquidity to the market.” It was a small percentage of loans originated that quarter as you can see. Only 443 mil held for sale. Sold 50 mil worth. But originated and immediately sold over $3 billion in loans. Ending the Q1 2022 with 593 mil in loans which was up from loans on its balance sheet of 252mil end of Q4 2021.

In Q2 purchased an immediately sold $1.7 bil in loans. Also purchased 680 mil and sold 583 mil. So yes the ending loan balance did go up 26 mil qoq. But UPST is still involved in selling $3 billion in Q1 and $2.36 bil in Q2.
Lastly 2/3 of the loans on its balance sheet are R&D loans mostly for its car lending. “Our balance of loans at the end of the quarter were $624 million of which $484 million represented R&D loans principally in the auto segment” per CFO. So it only has left to sell 240 mil in loans which it had taken on in Q1 2022.
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Aren't all those numbers in thousands? It's not 623k in loans, it's 623 million in loans. The uproar from shareholders was that they went from a fintech middleman who had little credit risk so a bank that unexpectedly more than doubled their credit risk. It was bad enough that the CEO did interviews explaining what happened and that it wasn't a long-term thing. They had to reassure shareholders, like myself, that they weren't changing their business model.
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Just In Time $BBBY
Sold the last of my $BBBY shares after the runup over the last few days. Went from -67% to +5% in 6 days. My original thesis is broken so I have decided to watch from the sidelines as I am still somewhat interested in the turnaround story. But for now I am completely out.

Also I would like to add I timed this near perfect. Bought near the 52 week low ~$6 a share and sold at the high just under $12. Now $BBBY is down 15% today after I sold. Pretty weird to time it that well.
Benjamin Buchanan's avatar
$24.3m follower assets
Interesting population data I'm running across
Reading a book called Empty Planet which lays out a solid case around why population trends should slow sooner than anyone thinks and subsequently reverse. Writing down some of the most interesting bits as I go through it. Here's what I've got so far.

Fertility rates of various countries, keep in mind the rate needed to sustain a population is 2.1

Spain: 1.3
Brazil: 1.8
Mexico: 2.3
Malaysia: 2.1
Thailand: 1.5 (this surprised me on low side)
Niger: 7.4
Malawi: 4.9
Ghana: 4.2
Afghanistan: 5.3
Iraq: 4.6
Egypt 3.4
Israel: 2.9 (this one was surprisingly high to me)

In Brazil, there is a noticeable inverse correlation between access to television and fertility rates. Telenovelas portray having children as something you do to achieve personal fulfillment. Older generations saw having children as a duty to family, church and state. This is a big shift that is going on around the world.

The median age in Africa is only 19, compared to 35 in North America and 42 in Europe.

Baby boomers control 70% of disposable income in the US, and still have 15 Trillion to inherit.

More women over 40 give birth than women under 20.

Historically, spending more time around family led to higher birth rates as elders nagged youngsters to marry and reproduce. Due to the internet, the amount of time spent with elders is at record lows worldwide. Pressure from younger peers is often in the opposite direction.

Bangladesh and Iran have seen fertility rates drop from roughly 6 in 1980 to around 2 today - if other developing countries experienced something similar the world population could start dropping as soon as 2040.

Fertility rate of White Women in the US:
Early 1800s: 7
1850: 5.4
1900: 3.6
1940: 2.2
2020: 1.55

On a farm, a child is an investment - an extra pair of hands to milk the cow or shoulders to work the fields. In a city, a child is a liability, another mouth to feed. Social safety nets make this even truer.
Yegor's avatar
$183.5m follower assets
The not so deep (Shallow Dive) dive into SuRo Capital $SSSS is now available for all to read check it out:

U x APP
The deal:
  • Applovin to buy Unity in an all-stock deal worth $20B or $58.85 ps (18% premium)
  • John Riccitiello to be the CEO and Adam Foroughi to be COO of the combined company
  • If U x APP happens U x IS should be terminated

My thoughts on the deal
  • The proposal was result of U x IS
  • The premium of 18% is low
  • Devaluing standalone business

Conclusion
  • The deal looks good from the strategic point of view
  • From a financial point of view, the deal isn’t as attractive for a Unity shareholder

(Feel free to subscribe while you are there)
APP wouldn’t be buying U. APP just made the proposal. U shareholders would own 55% of the combined company so it’d be U buying APP.
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Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.