RyanAir's CEO complained about Boeing's management in latest earnings call
While the $RH CEO is touting a potential recession on the horizon, the $RYAAY CEO is complaining about $BA's management.

The main complaint that RyanAir's CEO had about Boeing was that they kept delaying the delivery of their planes. From the CEO's perspective, Boeing already built the planes and kept them for two years for a variety of reasons. Since time is money, RyanAir is looking to buy planes from the second-hand market.

Other airline CEOs have complained about Boeing's management, but they were using less offensive words compared to RyanAir's CEO.
What are your own thoughts on $BA's management? I can see that may be reasonable to expect supply chain delays for aircrafts being manufactured but for ones that are already built do you think the hold up is due to internal administrative struggles?
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New trade $RH
$RH is a new addition to my portfolio. Very excited about this company at these prices. Looking to keep averaging down my entry hopefully. I’ll post a full analysis on this stock soon!!
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Last Week's Buy Ratings & More: MDA, RH, IIPR, RY, WSM, plus JPM Earnings Analysis
Hey everyone,

Below are our most recent buy ratings from the past week, which are free to read.

Besides the buy ratings, check out our JPM article from last week titled “Using JPMorgan's Earnings Call For Recession Clues” where we break down the biggest bank’s earnings to determine if a recession is coming soon or not.

Note: This is NOT professional financial advice.

Most of these Buy ratings are in downtrends, meaning that the chances for more short-term downside are high (as traders, we know this to be true). The ratings are not based on technical analysis. They are meant for long-term investors that have a long-term time frame.

Anyways, here they are:

  1. MDA to the Moon, Literally (TSX: MDA)

MDA is an established Canadian space technology company with a long history of success and innovation. It’s been around for more than 50 years. We are bullish due to its successful history, high efficiency, and good valuation. It is roughly 50% off its all-time highs.

  1. RH Stock: More Resilient than Investors Think

$RH, also known as Restoration Hardware, sells furniture, lighting, textiles, decor, and more. It has been beaten down as well, currently 57% off its highs. This offers a decent entry point for long-term investors.

  1. IIPR Stock: Sell Short at Your Own Risk

Innovative Industrial Properties ($IIPR) is a triple-net-lease cannabis REIT. Essentially, it makes money from owning cannabis properties and leasing them out to other cannabis companies. It is HIGHLY profitable and pays a nice, quickly-growing dividend.

This stock has done very well historically, but now, it is about 45% off its highs. It got pushed down even lower by a short-seller report that is likely to not have much merit to it (similar to a 2020 short-seller report on the company).

  1. Royal Bank of Canada: Does Valuation Outweigh Headwinds?

Royal Bank of Canada ($RY) is Canada’s largest bank in terms of market capitalization. We believe that big Canadian banks have competitive advantages due to the oligopoly they enjoy, and we believe that RY stock is undervalued.

  1. Williams-Sonoma: Dividends, Buybacks Offer High Return Potential

Williams-Sonoma ($WSM) sells home products like furniture, bedding, lighting, rugs, and more. Currently 39% off its highs, we believe this is another good stock for the long term. Its low valuation allows the company to buy back many shares on top of having a respectable, growing dividend. It also has high returns on capital, steady growth, and record profit margins despite high inflation.

Thanks for reading! If there are any stocks/topics you’d like us to cover, hit us up!
And subscribe to our free substack here, where we send out our buy ratings, market analysis, and more.
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"A Freight Recession is Imminent" says Freightwaves
Amid the supply chain crisis, transportation companies have been firing on all cylinders. With a flood of orders, transportation companies have been able to charge more for their services.

For the railroad companies like $UNP and $CNI, they've been able to charge clients storage fees since they didn't have enough space in their trains to transport all the goods that needed to be shipped.

As for the cargo ship companies, they were able to charge a lot more for contracts. $RH CEO was notable for talking about it in his earnings call about inflation.

And for the truckers, it's a mixed situation. With a tight labor market, they have more negotiating power than ever. However, with higher fuel prices, more routes are becoming unprofitable for truckers and companies are either stepping up and offering more pay for truckers or are choosing to wait out for a possible freight recession.

Freightwaves, a notable blog that covers the transportation sector, has a great track record of predicting the future movements of the sector. They're predicting another freight recession coming soon. Here are a couple of quotes that explain their thesis:

"The typical trucking cycle is three years and usually what kills it is oversupply – too many trucks chasing high-paying spot freight and high load volumes."

"The problem is that capacity expansion always continues well past the peak and can even continue for a time after the market has entered a recession."

The core of Freightwave's recession call is the tender rejection rates. This measures the willingness of truckers to accept or reject a load. If the rejection rate declined, it means that capacity is loosening.

This is the chart that Freightwaves posted. it looks like truckers are receiving less business now and could see themselves enduring conditions similar to that of the pre-pandemic and early COVID economy.

It's important to note that March is usually the time when truckers receive the most business. This March however hasn't been too hot. Retail stores seem to be less serious about stocking up their shelves for the summer. A weak March implies a weak economy for the rest of the year. That's how important March's data was.

To conclude, it's possible that we could be seeing a freight recession in the near future. Trucking companies are going to be the most impacted. Cargo ships continue to have pricing power as ports continue to deal with the massive line of ships and trains will be seeing less revenue from storage fees.
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Pretty frighting stuff! Let’s hope they’re wrong for all our sakes. What do you think it would take to prove their prediction wrong? What events would have to happen or what catalyst for change could take place that would turn this back on track?
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Paul Cerro's avatar
$18.4m follower assets
CGC Q1'22 Quarterly Letter - Can you relate?
Cedar Grove Capital released its Q1'22 letter last week and wanted to share it with you all here.

While the quarter was a challenging one, we ended the quarter with 18% in cash and are strategically positioned to continue the rest of the year deploying dry powder in opportunistic areas.

Our holdings are included below - would love anyone's thoughts on them if they have any to share.



Beware of the decline in the Dow Transports
According to Dow Theory, the decline in Dow Transports is followed by the decline in industrials. Currently, the Dow Transports index hasn't been doing too well and data from the transportation industry shows why:

High diesel prices make truckers less profitable and pickier on what routes they take. Higher employee turnover is making trucking firms less profitable as they have to dish out more money in recruiting and keeping drivers. Overall, these factors make trucking costs immensely high.

As for the cargo vessels, the lockdowns in Shanghai helped ease congestion in the LA and Long Beach ports. However, the ports on the East Coast are currently more congested than the ports on the West Coast.

Here are some charts to convey what's going on. All charts come from the Freightwaves blog.

$RH CEO mentioned in his earnings call on how ocean charter prices have more than doubled and that the time it takes to offload cargo off ships has increased. However, according to the charts above, there are mixed signals when it comes to the shipping sector. Most likely, Restoration Hardware is receiving most of its goods from the East Coast.

Once the Shanghai lockdowns get lifted, the Port of LA and Long Beach are expecting huge numbers of ships coming as many firms want to get as much inventory in as soon as possible before another lockdown happens in China.

When the economy is doing well, there's high demand for transportation services. Once the economy starts slowing down, transportation services decline as the industrial companies order less inventory. This could be what we're currently seeing.

At the same time, with cruise companies and airlines receiving some of the busiest booking seasons of their operating lives, we could be seeing a massive fundamental shift in the economy from being mostly based on physical goods to services.
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daily downtrend and weekly and monthly up trends......this is my technical level to watch, it is the weekly and monthly up trend anchor......the thick black horizontal line, the monthly up trend anchor is at the same place right now as the weekly up trend anchor.
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Pat Connolly's avatar
$110.7m follower assets
Searching for clues from management commentary
Investors tune into earnings calls in order to better understand the company, the numbers they reported, and the little details you can't get from just reading a 10-K. Investors also enjoy listening to management opine about the broader economy because they have access to proprietary data that can serve as a indicator of something larger.

Maybe investors look to $RH to gauge consumer strength & when the CEO makes bearish comments they begin to get nervous. On the other hand maybe the CEO of a luxury retailer can't speak for 'average' consumer...

@paulcerro is the resident bull on Restoration Hardware and while it's a company I never looked at until this Twitter spaces, I do find it really interesting. Warren Buffet also finds it interesting as he took a stake in the company in 2019. I think this video is a great overview of just how impressive their showrooms are, good luck to any competitors looking to emulate their physical presence.

@mos_capital + @youngmoneycapital joined me in the camp of questioning why these comments carried so much weight across FinTwit.
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Earnings call are a great source also to see the accountability of management. If they don't execute well and put all the blame on external macro issues than that is a red flag for me. We all make mistakes. It's important to acknowledge them and learn from them.
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Weekend Edition # 36
Hi all, The Weekend Edition is back.

Here's what I cover:
  • Recap - $SPX, SPR release, $VIX
  • Sector in Focus - Consumer Discretionary $XLY
  • Earnings - $NKE $RH
  • What I’m watching this week
  • Closing Thoughts - Mixed Signals
HAGW and week ahead!

Paul Cerro's avatar
$18.4m follower assets
Cedar Grove Capital Q1'22 Investor Letter
Hi all,

For anyone interested, Cedar Grove Capital will be releasing its first investor letter next week for Q1'22.

This letter will encompass our holdings, position sizing, returns, my thoughts for the portfolio going forward and select commentary for certain positions.

Click the link below to subscribe and get it when it comes out. cedargrovecapital.substack.com

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.