Archive for August, 2009

Petsmart (PETM) Q2 July 2009 Earnings Notes

August 19th, 2009 No comments

Press Release
-revenue $1.31 billion (+5.4%), EPS 31c, comp sales +0.8%
-guiding Q3 EPS 20-24c comp sales flat, FY $1.37-1.45 comp sales low single digits
-$180.65 million cash, $553.96 million long-term capital leases
-125.5 million diluted shares

Conference Call
-comp transactions -0.5%
-large benefit from food inflation last few quarters has slowed significantly
-gross margin declined 130bps to 28.2%
-anticipate continue gross margin pressure back half of the year
-traffic is flat to slightly down
-consumer is spending less on higher margin hard goods (wet food, treats, toys, beds)

-expect flat inflation, not deflation
-weak guidance due to both lower margin and lower sales trends
-Q4 is the biggest hard goods quarter
-going to be promotional on specific traffic driving SKUs. Overall pricing won’t change much
-CA, FL, and AZ were weak before. Southern California is improving, while FL and AZ remain weak. TX and northwest has caught up in weakness with those others due to high unemployment

-food inflation benefit/headwind is disappearing. Guidance is weak at 20-24c EPS next quarter vs. 26c street estimate
-comp store sales are decelerating from 3.9% Q1 to 0.8% Q2, guiding to 0% Q3

Categories: News

NPD U.S. July 2009 Videogame Sales

August 13th, 2009 No comments

Software: $436.99M (-26%)
Hardware: $280.94M (-37%)
Accessories: $130.97M (-12%)
Total Games: $848.9M (-29%)

Nintendo DS: 538,900
Wii: 252,500
Xbox 360: 202,900
PSP: 122,800
PlayStation 3: 121,800
PlayStation 2: 108,000

Title / Publisher / Units
1 Wii Sports Resort w/ Wii MotionPlus (Wii) / Nintendo / 508,200
2 NCAA Football 10 (X360) / EA / 376,500
3 NCAA Football 10 (PS3) / EA / 237,400
4 Wii Fit w/ Balance Board (Wii) / Nintendo / 164,300
5 Mario Kart Wii w/ Wheel (Wii) / Nintendo / 156,600
6 Mario Kart DS (DS) / Nintendo / 132,200
7 Pokemon Platinum (DS) / Nintendo / 116,400
8 Fight Night Round 4 (X360) / EA / 116,400
9 New Super Mario Bros. (DS) / Nintendo / 101,800
10 EA Sports Active (Wii) / EA / 96,800

Categories: News

1971-1976 Market Analogue

August 12th, 2009 No comments

1971-76 analog.jpg

Tom Demark at MarketStudies. Source: Minyanville

Categories: News

Paul Tudor Jones August 2009 Investor Letter Excerpts

August 7th, 2009 No comments

In its market outlook, the firm takes the view that the run-up in stocks over the last 100 days is a “bear market rally.”

“The bottom line is that we are not inclined to aggressively chase the market here,” the firm said in the letter.

“Rather, we eye a better opportunity to be long equities into year-end on a potential autumnal pullback.”

Slowing growth in China and the return of front-page stories on swine flu may be “further catalysts for global equity markets to pause in September

“Impressive counter-trend rallies are a feature, not an oddity, of secular bear markets,” Tudor said. “We are not inclined to aggressively chase the market here. Many doubts remain about the sustainability of this recovery, most prominently the weakness of household income growth.”

On the issue of inflation, the firm said in its report that “the lack of understanding by both markets and policy makers of the impact of the mix of large fiscal deficits and quantitative easing policies has increased volatility and generated fears of uncontrolled inflation.”

The firm said that policy stimulus will peak around the first quarter of 2010 and liquidity facilities and credit guarantees will be discontinued. At that time, “markets will have to assess the sustainability of growth.”

His main fund is up 10% YTD after losing 4.5% in 2008.

Source, Source 2

Categories: News

Sun Tzu Art of Trading

August 2nd, 2009 No comments

I’ve been reading Sun Tzu on the Art on War and found that many of his insights are applicable to trading and investing.

“Now the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.”

“Ponder and deliberate before you make a move”

Think deeply and have a rational plan before you trade. Don’t act impulsively or recklessly.

“It is the rule in war, if our forces are ten to the enemy’s one, to surround him; if five to one, to attack him; if twice as numerous, to divide our army into two. If equally matched, we can offer battle; if slightly inferior in numbers, we can avoid the enemy; if quite unequal in every way, we can flee from him.”

“He will win who knows when to fight and when not to fight.”

Only trade (attack) when the conditions are right and you have the edge. When you are over-matched, out-gunned capital-wise, and things don’t make any sense, do nothing and go play videogames. Deciding on when to fight and not to fight is the critical element in victory or defeat.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

Know your own strengths and weaknesses before the battle. If you can’t take volatility and tend to panic puke, lower your position size to a point where you can stay in the battle.

“Disciplined and calm, to await the appearance of disorder and hubbub amongst the enemy:–this is the art of retaining self-possession.”

When you are buying know why the other side is selling and why they are wrong. If the other side is selling because they can’t take the pain or due to margin calls, all the better. If they other side is selling due to temporary short-term news, all the better. If the other side is selling due to false news, all the better.

“He wins his battles by making no mistakes. Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.”

“The consummate leader cultivates the moral law, and strictly adheres to method and discipline; thus it is in his power to control success.”

99% of trading is about having steel hard emotional control and not making dumb mistakes. Most losses come from errors in judgement and throwing good money after bad (averaging losers) when the battle is already lost. When your initial thesis is wrong, just GET OUT.

“There are five dangerous faults which may affect a general:
(1) Recklessness, which leads to destruction;
(2) cowardice, which leads to capture;
(3) a hasty temper, which can be provoked by insults;
(4) a delicacy of honor which is sensitive to shame;
(5) over-solicitude for his men, which exposes him
to worry and trouble.
These are the five besetting sins of a general, ruinous to the conduct of war.”

After a hard loss don’t go into emotional levered gambling mode (”on tilt” as they say in poker). Be brave when the right opportunity comes to attack. Don’t care about what other people think of your strategy. It’s not about how brilliant or smart your method is, it’s only about making money. Just win baby.

If you liked this, be sure to check out some of my other recommended posts.

Categories: Articles

Sony (SNE) Q1-09 June Quarter Earnings Call Notes

August 1st, 2009 No comments

$16.7 billion revenue (-19% y/y) vs. $19.2 billion estimate, -39c loss vs. -69c estimate
PS3 units 1.1M vs. 1.6M last year, PSP units 1.3M vs. 3.7M last year
PS3 games 14.8M vs. 22.8M last year, PSP games 8.3M vs. 11.8M last year, PS2 games 8.5M vs. 19.3M last year
25.78 billion yen profit ex-Ericsson losses
LCD TV units up 3% y/y to 3.2M units, sales -24% y/y

PS3 cost reduction now at 70%
Adding the games business into the Networked Product and Services division

Categories: News