#12 HAPPY MLK DAY

Friday, January 15th Closing Price

TABLE OF CONTENTS

Thursday (Before Market Open) (1/14)

BlackRock is a leader in asset management, alternative investments, and financial services.

• Quarterly profits increased by 19% 

• Profits of $1.5B and EPS of $10.02 beating expectations by over 10%

• They posted Revenues of over $4.5B for Q4

• Brought in $126.9B new investor money in Q4

• AUM YoY increased by 17%; Revenues increased by 11% YoY

Takeaway:
Large sums of money have flocked into BlackRock, and the majority of it went to Bond Funds, as the world’s largest asset manager just reached $8.68T (Yes T) in AUM. During Q4, BlackRock reflected a 5% organic asset growth and 7% organic base fee growth. While other banks have suffered throughout the pandemic, BlackRock, with its unique investments, could bring in billions of dollars in new investments.

Thursday (Before Market Open) (1/14)

In short, Delta’s earning releases is one of the ugliest financial reports we will see from 2020. Delta reports they expect airline travel to turn a corner for the year 2021 and expect revenue to begin to rebound.

Looking into the present

• Delta reported a net loss of $755M for Q4

• Yearly Net loss up to $12.4B total

• Quarterly EPS of -$1.19 and Revenue of $4B beatings expected of $3.4B

• Yearly EPS of -$2.53

• Full-year pre-tax loss of $15.6B and EPS of -$19.49

Takeaway: 
This is an extremely ugly earnings release as Delta has been bleeding cash for the last nine months of 2020. Delta ended 2020 with over $16B in liquidity on the brighter side of things, which can be viewed as a positive as there are still dark days ahead.

Thursday (Before Market Open) (1/14)

Chase produced a brighter outlook in their Q4 earnings report. They ended the year on a strong note heading into the new year with average deposits up 35% after posting a record profit of 12.1 billion dollars in 2020.

Looking into the present

• Chase Investment banking

  • Total Markets revenue of $5.9 billion or up 20%

  •  Fixed Income Markets up 15% 

  • Equity Markets up 32% 

• Chase Commercial banking

  • Gross Investment Banking revenue of $971 million, up 53% 

  • Average loans up 1%, and the average deposits are up 52%

Takeaway:
Chase reported increased assets across all frozen sections, positioning them to excel in the first quarter of the new year. With a reported 2.7 trillion in managed assets (up 17%) and increased financial stimulus arriving from the incoming administration. We can expect to see a continuation of their increased asset trend.

Thursday (Before Market Open) (1/14)

Citi produced a relatively uneventful earnings report that can be viewed positively given the tumultuous year. Earnings were flat throughout the year, and Q4 stayed within the trend, closely resembling 2019’s Q4 reported revenue and profit with a minor decrease.

Looking into the present

• Citi operating expenses increased 2% as they increased investment into the companies infrastructure

• Q4 net income 4.6 billion, a reduction of  7%

• Q4 cost of credit was 46 million, substantially down from 2.2 billion comparatively in Q4 of 2019

• 1.1 billion released to shareholders through dividends

Takeaway:
Citibank did not have a stellar Q4 report; they reported a 10% decrease in revenue than 2019. Although objectively, given the year experienced due to the pandemic, there is reason to be optimistic as share prices were up 5% on the year. At the same time, they increased investments in their infrastructure and risk management teams.

Tuesday, January 19th, 2021

(Before Market Open) Goldman Sachs 

Goldman is perceived as the world’s premier investment bank. They are a non-traditional bank because Bank of America operates with ATMs, Goldman has asset management, alternative investments, debt financing, and financial services. They have had a remarkable recovery following the initial market crash of Covid-19 and reaching all-time highs. The expected EPS of $7.68 and expected revenue is $9.47B, and the expected quarterly revenue to have decreased by -31.4%.

(Before Market Open) Halliburton 

One of the world’s largest providers of products and services to the energy industry. Halliburton’s two main segments are (Completion & Production) and (Drilling and Evaluation). The expected EPS of $.17 and Revenue is expected to be $3.23B, with a quarterly revenue expected to decrease by -37.8%.

(Before Market Open) Charles Schwab

A financial services company with 1.6M corporate retirement participants, 10.5M active brokerage accounts, 1.2M Banking accounts, and above $3T in client assets. They provide a full range of wealth management, brokerage securities, asset management, and financial advisory services. Expected EPS of $.75 and expected Revenue of $4.06B, with quarterly revenue expected to increase by 55.8%.

(After Market Close) Netflix

The world’s leading Internet television network with millions of subscribers and a vast library of all different types of media products (shows, movies, documentaries). They offer a unique platform to watch anytime, anywhere, on any internet-connected device. They have an estimated EPS of $1.57 and Revenue of $6.6B, with expected revenues to increase by 20.7% this quarter.

Wednesday, January 20th, 2021

(Before Market Open) Procter & Gamble

One of the leaders in consumer staples who produce millions of goods is used across the globe. The company operates under five business segments Beauty, Grooming, Health Care, Fabric and Homecare, and family care. They are seen as a blue-chip stock that is safe equity to invest in. Current expected EPS of $1.59 and revenue of $19.15B, with an expected growth revenue of 5% quarterly and annual earnings of 4.9%.

(Before Market Open) Morgan Stanley

A financial services company that is a leader in its’ three primary businesses: securities, asset management, and credit services. They provide investment banking, financial planning services, sales and trading, and on-line brokerage services. Expected EPS of $1.40 and $11.08B revenue, with expected quarterly revenue to decrease by -17.2%.

(After Market Close) United Airlines

United Airlines, much like Delta last week, will continue to have earnings releases that are not up to the mark. The travel industry has been significantly tampered down since the global shutdown of Covid-19. Commercial airlines have been bleeding cash for three straight quarters, and with new travel restrictions, this will continue into Q1. With an expected EPS of -$6.36 and Revenue of $3.54B, it is expected that revenue has declined this quarter by 67.5%.

Thursday, January 21st, 2021

(Before Market Open) Fuel Cell

An alternative fuel company specializing in Hydrogen production to be used in turnkey products (Forklifts, EVs, etc.) With the new administration putting a heavy focus on Climate Change, we will have to keep a keen eye on the alternative energy companies to measure their revenue growth and operating margins. Expected EPS of $.03 and revenue of $15.92M, expected revenue this quarter is expected to increase by 44%.

(Before Market Open) Citrix

Citrix is a digital workspace leader; they provide access to instant chat, video conferencing, and cloud environments. They developed and now lead the workspace as a Service industry by providing an innovative, adaptable, and easy to use program. Businesses who wanted to endure through Covid-19 had to use digital workspace, and many of them flocked to Citrix. Expected EPS of $.81 and Revenue of $778M, with an expected revenue decrease by 3.8%.

(After Market Close) Intel

The world’s largest semiconductor maker has stifled these last few quarters. They recently had a CEO change due to a continued loss of market share in key segments of their business. They produce some critical pieces for digital processors, data centers, smartphones, video game systems, etc. Their expected EPS is $1.10, Revenue of $17.44B, and we expect a decreased quarterly revenue of 13.7%.

Tuesday: Overall Net Capital Flows at 9:00 p.m. EST

Wednesday: President-Elect Joe Biden’s Inauguration 

Thursday: Jobless Claims 4-week Average at 1:30 p.m. EST

Friday: Existing Home Sales at 3:00 p.m. EST

When your drip becomes your life style. Get yours today!!! 

Many notable names and plays for this past week; however, we would like to highlight our Zoom $ZM, Penn National $PENN, and Facebook $FB trades.

Moving forward, we will be focusing on charts that give us opportunities for multiple trades.

We have been eyeing Zoom’s chart for the past week and have not traded it until Wednesday of this past week.

This week, having patience on this trade paid off.

We bought the $410 calls for $3.10 and then added more, around $2.15.

We then sold this position at $5.68, or a 120% return on investment.  

Penn National Gaming, $PENN 

In last week’s newsletter, we covered Penn National research report. You can read the report here: Penn National Gaming Inc (PENN), January 9th, 2021 – Tiger-Wolf Capital

On Monday, Penn’s opening price was $90.59, and through the week, it quickly went up towards $107 and then pulled back down towards $99. 

However, this allowed us to catch out 3 of the trades for 100% return on investment. We were in the $PENN 115 calls for 2/12, 120 calls for 2/19, and the 130 calls for 2/26.

Facebook, $FB 

We bought and sold the $245 puts three times.

First trade we bought at $0.90 and sold at $1.25, 33% return on investment

Second trade, we rebought at $0.90 and sold 1.20, 30% return on investment

Third trade, we rebought at $0.9 and sold at 1.78; someone, please do the math.

To find out more about how and why we were able to do this, join our discord.