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It’s 11am, do you know where your car is? If not the stock we’re adding this week probably does

It’s 11am, do you know where your car is? If not the stock we’re adding this week probably does

Last week, as the latest issue of Tematica Investing was being delivered to you, I was literally being wheeled into the operating room for knee surgery. It was nothing too major, just the repair of a small meniscus tear I suffered on the basketball court. Fortunately for you (and for the performance of the Tematica Select List) the issue was completed early that morning — well in advance of that surgery — as I was pretty loopy afterwards!

A week later, things are feeling pretty good, but I am looking forward to getting the stitches out so I can get back in the pool and get some relief from the extra humid conditions here in DC this week!

 

In this week’s Tematica Investing:

 

  • We’re placing shares of CalAmp Corp. (CAMP) on the Tematica Select List as part of our Connected Society investing theme with a Buy rating and a $21 price target. We would be comfortable adding the shares up to $17.50, at which point we see upside of 20% vs. the current 35% upside to be had at the last night’s closing share price. Read More >>
  • Updates on Alphabet (GOOGL), Amazon (AMZN), Physicians Realty Trust (DOC), Nike (NKE) and Under Armour (UA). Read More >>
  • We also dig into where we are with our position in The Walt Disney Co. (DIS) after their earnings announcement last night. Hint, we need to have the same patience as a the line at Space Mountain. Read More >>
  • Check your accounts! Dividend payments have been made over the last few days from Starbucks (SBUX) an PetMeds Express (PETS). Read More >>

You can click below to download the full report.
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Adding a splash of color to Rise & Fall of Middle Class

Adding a splash of color to Rise & Fall of Middle Class

Welcome to another weekly issue of the Weekly Tematica Investing. It’s been a wild week of market moves, earnings reports and economic data all at once.

In addition to my regular visits with the Charles Payne on his Making Money with Charles Payne show on Fox Business, I had an opportunity to sit down with the folks at Boom-Bust on RT (the new home of The Larry King Show) to dig deep into our thematic-driven approach and discuss why most investors are investing wrong. That of course is NOT the case with us!

You can click on the image below to watch the whole interview.

In this week’s Tematica Investing:

  • Closing the books on July, the Tematica Select List had a number of positions that handily outperformed the S&P 500, which rose 3.6% for the month. Read More >>
  • We are issuing a Buy rating paint and coatings company Sherwin Williams (SHW) with a $350 price target as we add a splash of color to our Rise & Fall of the Middle Class investing theme. This is a new position and we are holding off with a protective stop loss for now. Read More >>
  • Updates, Updates, Updates – Recapping earnings from Alphabet (GOOGL), Amazon (AMZN), PetMeds Express (PETS) and Under Armour (UA). Read More >>
  • Housekeeping! – Here’s what we’re watching when Physicians Realty Trust (DOC) and Walt Disney (DIS) report quarterly earnings. Read More >>

You can click below to download the full report.
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☀ During this summer heatwave, what better move to make than this?

☀ During this summer heatwave, what better move to make than this?

Dog in front of fanHere at Tematica Research, just outside of Washington, DC, we are “enjoying” a good old fashion summer heatwave. The hottest summer in four years, yesterday marked the 6th straight day of highs at or above 90 degrees.

Now for those in the Midwest and Southwest, you’re probably thinking, that’s nothing!

The magic we have here in DC to throw into the mix of steamy temperatures is the fact that the city is built on what was once swamp land, and with that comes humidity — lots of it! So temps in the 90’s can easily climb up into the 105 degree heat index range, and with that comes that little bead of sweat that starts on the back of your neck, rolls down between your shoulder blades, further down to your lower back and then . . . well, you know where that story is going.

All of this reminds us of what put athletic apparel manufacturer Under Armour (UA) on the map — moisture-wicking synthetic fabric. The company that started in the basement of CEO Kevin Plank’s grandmother in 1996, has grown into a nearly $4 billion company that specializes in making sure all that sweat we humans produce is evaporated away rather than ending up where the sun don’t shine.

The heatwave across much of the country allows for this cheeky opening narrative to this story. The real reason we’re talking about Under Armour now is, given the pull-back in shares after the company’s 2nd quarter earnings announcement, we’re using the opportunity to make a move and add them to the Tematica Select List.

In this week’s Tematica Investing:

  • We are adding Under Armour (UA) shares to the Tematica Select List as part of our Rise & Fall investing theme, with a $55 price target. There is no recommended protective stop loss at this time.
  • Given the robust movie slate for 2H 2016, we are keeping Content is King Regal Entertainment (RGC) shares on the Tematica Select List, despite a modest $0.01 per share earnings miss for the June quarter.
  • We have earnings from Amazon (AMZN) and Alphabet (GOOGL) later this week, and we preview what’s expected and what we’ll be looking for in those reports.
  • Starbucks is added to Goldman’s Conviction List, more confirmation for our position in the coffee giant.
  • AT&T (T) loses the Yahoo! (YHOO) bid to Verizon (VZ), and we are rather happy with that.

You can click below to download the full report.

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It’s looking increasingly like the calm before the earnings storm

It’s looking increasingly like the calm before the earnings storm

MgdKy65If we learned anything from the disappointing Netflix (NFLX) earnings announcement on Monday evening, it’s that the current market is going to flip-flop day by day, earnings report by earnings report for the near-term. Of course, we’ll have a much clearer picture of the overall health of June quarter earnings by the time the closing bell rings this Friday, when 35 percent of the S&P 500 will have reported earning. Those same reports are going to give us a preview of the likelihood of the 13 percent earnings increase required to meet expectations for the second half of the year, or as we expect, many firms will be adjusting earnings downward.

Let’s just say we feel like we’re nearing the crest of the rollercoaster ride.

 

In this week’s Tematica Investing:

  • Earnings start to take a toll on the market and with much more to be had we are holding steady with the Tematica Select List
  • Introducing our S&P 500 beating Thematic Index, which is comprised of 170 companies and reflects all 17 of our proprietary investment themes.
  • Tematica Select List earnings on tap this week – AT&T (T) and Starbucks (SBUX)
  • Updates, Updates, Updates


Click the link below to download the full report.

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Caution ahead even as the S&P 500 hits record highs

Caution ahead even as the S&P 500 hits record highs

Screen Shot 2016-07-13 at 9.33.51 AMEven as the market continues its melt-up, we still maintain our cautionary approach. We’ve been asked if we feel a little bit like Chicken Little screaming that the sky is falling. The answer to that is an emphatic no.

As we always maintain, we let the data do the talking — not the headlines — and when we dig into the specifics in the earnings we’ve received thus far, what we see is not good news. While we have to tip our hats to these companies for doing what they can to generate the EPS headlines, it’s not the underlying health of their business that’s driving these results.

In this week’s Tematica Investing:

  • As we march hip deep into 2Q 2016 earnings season, the S&P 500 has climbed to a new all-time high despite a smorgasbord of uncertainties that lay ahead.
  • The earnings reports we have received for the June quarter are a mixed bag, favoring EPS misses and recast outlooks. This reinforces our view that earnings expectations for the second half of 2016 are overly robust and there is a high probability they will be reset over the coming weeks.
  • Even those few reports we’ve received and were ahead of expectations do not paint a vibrant picture of what’s to come in the coming months. As an example, we break down Alcoa’s (AA) 2Q 2016 results.
  • Given a risk to reward outlook that at least for the near-term favors more risk than reward, we will sit on the sidelines with new additions to the Tematica Select List as we instead roll up our sleeves to identify new contenders and digest the coming earnings deluge.

Click the link below to download the full report.

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Continued market uncertainty after Brexit has us tightening up our positions

Continued market uncertainty after Brexit has us tightening up our positions

While we did come in from the beach long-enough last week to share our views on the Brexit vote, it’s good to be back in the saddle full-force with this week’s Tematica Investing.  So let’s get right down to it . . .

In this week’s Tematica Investing:

  • Renewed Brexit fallout uncertainty and Italian banking concerns have tipped the market mood back to cautiousness. Recent earnings have been disappointing and likely set the stage for what is to be a challenging June quarter earnings season. We remain very comfortable with the Tematica Select List holdings given the mix of defensive business models and thematic tailwinds.
  • We are adding iShares Barclays 20+ Yr Treasury Bond ETF (TLT) shares to the Tematica Contender List and look to revisit the shares closer to $134-$135.
  • We are boosting our price target for AT&T shares to $45 from $42 and raising our protective stop loss to $39 from $36. We will continue to keep T shares on the Tematica Select List, but we would not recommend adding to your T shares at current levels.
  • We are also raising our price target and protective stop loss for our Physicians Realty Trust (DOC) shares. Our new price target is $25, up from $18, and our new stop loss is set at $18, up from $16. Much like T shares, we will continue to keep DOC shares on the Tematica Select List, but advise against committing fresh capital at current levels.
  • Nike (NKE) reported quarterly earnings last week, which were essentially in line. As expected the liquidation sales at Sports Authority and Sports Chalet will be a short-term disruption, and we continue to like the shares given our longer-term perspective. We continue to have a Buy on NKE shares and our price target remains $66.

Click the link below to download the full report.

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Wading deeper into earnings reports reveals growth expectations not living up to expectations

Wading deeper into earnings reports reveals growth expectations not living up to expectations

It’s earnings season, and with anywhere from a few hundred to more than a 1,000 companies reporting their results, this certainly makes for a volatile time with investors shooting first as results hit the tape and asking questions over the quality of those earnings later.

As we navigate the maze of earnings reports to be had in the coming days, we’ll continue to refine our thematic shopping list and look to pounce on opportunities that offer a compelling risk to reward trade off.

In this week’s edition of Tematica Investing:

  • Wading deeper into March quarter earnings finds growth expectations are not living up to expectations. As we’ve said before, it sometimes takes time for the market to react to the fundamentals, but the fundamentals eventually catch up with expectations.
  • While we expect no-action from the Fed’s FOMC meeting later today, expect Wall Street to parse the commentary on the economy and inflation to determine the Fed’s next course of action.
  • Earnings reports for companies on the Tematica Select List are starting to trickle in, and we see no reason to alter our position in AT&T (T) or American Capital Agency (AGNC) shares at this time.
    Checking in on Chipotle Mexican Grill (CMG) shares, we find more patience is required before pulling the gun on this Food with Integrity contender.
  • We’ve got the latest thematic supporting data points that ripped from the headlines around us.
    Finally, we’re re-introducing an old feature called “What We’re Enjoying” and this week it’s the new Echo Dot from Amazon.

Click the link below to download the full report

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Content continues to be king as we add another position to Tematica Select List

Content continues to be king as we add another position to Tematica Select List

While Sumner Redstone claims to have coined the phrase, it was Bill Gates who over two decades ago brought “Content is King” into the common vernacular when he wrote on the Microsoft website:

Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting . . . When it comes to an interactive network such as the Internet, the definition of “content” becomes very wide. For example, computer software is a form of content-an extremely important one, and the one that for Microsoft will remain by far the most important. But the broad opportunities for most companies involve supplying information or entertainment. No company is too small to participate.

We are seeing a new era of content given the entrance of companies like Netflix (NFLX), Amazon (AMZN) and Hulu as well as the growing influence of gaming, which has already spawned several cross platform properties. New technologies bring challenges, but at the end of the day no matter where consumers are with whatever device they have in their hands, content is what they will be consuming in one form or another.

It’s at this inflection point where we focus our investment strategy on one of the oldest content producers in the business, the Walt Disney Company (DIS).

In this week’s edition of Tematica Investing:

  • March Housing Starts disappointed, but given its multiplier effect a slower than expected spring housing season probably means a lackluster economy in the June quarter
  • We are adding Content is King company Disney (DIS) to the Tematica Select List with a price target of $125. We would be comfortable adding to the position up to the $106 level, and we are also instating a protective stop loss at $87. As you’ll read in our detailed comments, we are very upbeat about this new recommendation. Investors desiring an alternative strategy to invest in DIS shares could consider Consumer Discretionary Select Sector SPDR Fund (XLY) which counts Disney as its third largest position at 6.7% behind Amazon.com (AMZN,10.4%) and Home Depot (HD,7.4%).
  • The best domestic movie box office in years means we remain upbeat on our position in Regal Entertainment Group (RGC) shares.
  • Kudos to us for not recently adding Nike (NKE) shares to the Tematica Select List, but we continue to watch the shares.

Click the link below to download the full report

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See, fundamentals do matter

See, fundamentals do matter

Welcome to this week’s edition of Tematica Investing. As you recall, this is the publication that replaces my old Growth & Dividend Report newsletter. Each week in Tematica Investing we’re going to provide you with investment ideas and strategies based upon our proprietary thematic investing framework, and takes a long-view approach to investing based upon documented trends that are uncovered while analyzing the intersection of economic, demographic, psychographic, regulatory and technological factors.

Now, in this week’s edition:

  • There are no new additions to the Tematica Select List today, however, we continue to examine new opportunities for it and the Tematica Contender List . . .read more.
  • As we expected, volatility is back on Wall Street as the herd once again begins to focus on fundamentals.
  • Looking at what’s up with the Tematica Select List as Physicians Realty Trust (DOC) makes a big transaction
  • We’re not taking it easy, we’re adding a new theme to the Tematica stable – The Fountain of Youth.
  • All that and more thematic confirmation ripped from the headlines

Click the link below to download the full report

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Nike: Just Do It? Maybe not quite yet

Nike: Just Do It? Maybe not quite yet

Here we are again, another update to Tematica Investing, your weekly service that replaces the Growth & Dividend Report.

In this week’s edition, we tackle:

  • Expectations for GDP in the current quarter fell even further this week.
  • As expected Fed Chairwoman Janet Yellen pushes out potential rate hike timing
  • Dividend stocks come back into vogue as Yellen’s comments reverse hawkish comments last week and that’s good news for several of our holdings.
    Examining Nike ([stock_quote symbol=”NKE”]) and Under Armour ([stock_quote symbol=”UA”]) shares, but only one gets on the Tematica Contender List
  • More thematic confirmation ripped from the headlines…
  • Other securities mentioned in this report include: Alibaba (BABA), Apple (AAPL), AT&T (T) Dick’s Sporting Goods (DKS), Facebook (FB), Finish Line (FINL), Foot Locker (FL), General Mills (GIS), Lions Gate Entertainment (LGF), ParkerVision (PRKR), Physicians Realty Trust (DOC), Qualcomm (QCOM), Regal Entertainment Group (RGC), Shoe Carnival (SCVL) and Target (TGT).

Click the link below to download the full report

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