FLWS

1-800 Flowers.com

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-$24.73 -79.67%
A Bunch of Stocks Getting Blown Up
Here are a bunch of stocks getting absolutely blown up over the last couple of weeks/months:

Visit highsandlows.substack.com to see more
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Portfolio Update: 7 February 2022
The sell-offs this year prompted a lot of action in my portfolio. I've probably done more work this month than I did all year in 2021.

TBD on whether that's good or bad!

Here's what I've been up to so far this year.

Sold:

$ELP: Nothing wrong with the stock or thesis, just wanted to add more liquidity with other buying opportunities. The stock provided some very juicy dividends, and I was up around 6% when I sold. In addition, I wanted to limit my Brazilian exposure since I bought another very large Brazilian company (see below).

$PAM: Same story as $ELP; wanted to limit risk and lock in a gain. I was up nearly 30% when I sold, and I wanted to limit my exposure to Argentina, which is extremely volatile.

$BAH: I still love this company and didn't want to sell, but it has been aggravating to be a shareholder in this company. Management didn't make bad decisions per se, but I thought they would eliminate some risk by buying down some debt, but it seems their priorities lie elsewhere. Locked in around a 9% gain.

$BEPC: When I bought this stock, I was a bit more bullish than I should have been. This was the classic "did the research over a week and talked myself into it" purchase. There's nothing wrong with the company, I just wanted to invest in a company that I had more confidence in.

I broke even on this trade.

Bought:

$JOUT: Just like a lot of businesses right now, the company is having supply problems and slowing post-pandemic sales, which caused the stock to plummet. Over the last quarter, this company's stock has fallen below $90 a share.

I averaged down a bit during this period, but I haven't bought anymore since it's already a big chunk of my portfolio. I have no concerns here because the management is great.

$PBR: After doing my own research and reading an excellent report from Sven Lorenz at Undervaluedshares.com, I decided to buy some shares of Brazilian oil giant $PBR.

In the next five years, the company seems very well positioned to return tons of cash to shareholders through dividends. While elections in Brazil may prove volatile later this year, I believe I will benefit from shareholder-friendly dividends and a huge demand due to current and future energy shortages.

$FLWS: A week or two ago, $FLWS reported some pretty negative quarterly earnings, and the stock price got pummeled. Just like $JOUT, $FLWS is suffering from short term supply chain and labor costs.

As usual, I took advantage of the downturn by buying more. Management is firing on all cylinders despite supply chain problems.

$TROW: One of the top public asset managers. Due to the market overreacting to somewhat negative earnings, I consider this stock to be a steal under $200 per share. It has a great business model, stable growth, a flawless balance sheet, pays a decent dividend, and buys back its shares.

It may not be going to the moon, but $TROW is a solid cornerstone for any portfolio.

$NVR: similar to $TROW, with the exception of no price declines. It took me a long time to decide to buy stock, but now I'm happy I did. $NVR is the safest and most shareholder friendly homebuilder to take advantage of the housing boom.

$GOOGL: You can see my previous post on this I did last week, but it's the same story as $NVR; great business at a fair price. My fear of big numbers was preventing me from owning one of the best businesses in the world, but I quickly changed course.

$PYPL & $FB: Established (small) positions during the large sell off last week. I like both for the same reason: cash cow networks.

Even if both companies lose market share and their FCF declines, the risks (to my mind) are baked into these valuations. Providing the companies continue to hold decent market share, shareholders will receive significant cash flows for many years to come.

For me, everything else (metaverse, crypto, VR, etc.) is free chicken.
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Averaging Down on $FLWS
$FLWS delivered a terrific gut punch to me last week.

After doing more research and thinking about the company, I determined that $FLWS is mostly experiencing short term turmoil.

My long-term thesis is still intact.

So what did I do?

I bought more.

Investors like me live for drops like this. Reducing my cost basis over time leads to long-term compounding.
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Averaging down doesn’t feel great in the moment, but if you’ve done the research and believe in the company, averaging down is exactly the right move. Great visual illustration of this as well :)
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Gut Punch 👊
When your cost basis is ~$25 per share 🤕

$FLWS reported some less than stellar earnings results for thier last quarter. Supply chain problems and extra costs hampered profitability.

But these are short term problems.

Revenues still grew QoQ and YoY. What company isn't experiencing supply chain problems right now?

But I still have peace of mind. The company is still very profitable and have a strong balance sheet. Management is very aligned, and thier stake in the company is getting hit too.

Days like these are when the market truly is testing you. Seeing your position go down over 30% in a day is a swift punch in the gut.

But my don't worry, my gut is strong (I do a lot of core work 👍). I just get to lower my cost basis by buying more!

Conviction is what sets apart the good from the great.
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Managers at big public companies tend to have way more money than me so when the stock takes a hit--even though they may own shares--it usually doesn't provide me too much solace LOL! I looked at $FLWS in $2016--shares were around $8, and I recall being impressed by how they were embracing and integrating technology for the ecommerce piece...which is kind of funny since there's a phone number in their name. ;) Hang in there!
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Alberto Wallis's avatar
$22.4m follower assets
Big Week Ahead! (Oct 25-29 Earnings Calendar)
Next week will probably be the most interesting week for the stock market this quarter. The largest companies in the world are all reporting and we'll get a lot of very valuable insights.

Here's what I'm interested in:
  • More context on the slowdown in ad spending from $FB $GOOG and $TWTR. Let's see if these companies are experiencing similar issues to the ones $SNAP mentioned yesterday.
  • Comments on the global supply chain issues from $KMB $MMM $GLW $LOGI and others.
  • A general update from $AMD $TDOC $SHOP and$AMZN.
  • Perspectives on the energy market from $XOM $CVX

Comment below what earnings call you're looking forward to!

Remember you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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