Newsletter 4:

WELCOME TO TIGER WOLF CAPITAL
We are a small private hedge fund. We are here to foster a community of growth in the trading / investment realm and teach anyone from the start. We provide educational material that is catered to teach beginners the basics of trading in the stock market as well as teach experienced traders more advanced strategies.
“The secret of change is to focus all your energy, not on fighting the old, but on building the new.”
– Socrates
TABLE OF CONTENTS
  1. PFIZER
  2. REVIEW OF LAST WEEK’S EARNINGS
  3. UPCOMING EARNINGS
  4. UPCOMING EVENTS & TALKS
  5. MERCHANDISE
  6. DISCORD RECAP
  7. STOCKS ON OUR RADAR
  8. EDUCATIONAL LEARNING SEGMENT
  9. BOOK OF THE WEEK
  10. VIDEO OF THE WEEK

MARKET LAST WEEK (11/9 – 11/13)

PFIZER ANNOUNCEMENT

Last week Pfizer announced that they had a vaccine candidate that was over 90%effective. PFE opened up 12% as a result of the news Monday morning before selling off and remaining flat on Tuesday. While Pfizer’s vaccine has seen tremendous success, it is far too early to celebrate success. The vaccine is expected to be in limited supply for the majority of 2021 and will not be available to most Americans.

The economic impact of a successful vaccine is expansive. This will benefit industries, ranging from restaurants to travel. Given the successful inoculation of the American people, we will see restaurants have an increased seating capacity as well as benefit from the reduced third party costs associated with delivery services. The travel industry specifically airlines and cruises can find their footing as people begin to trust traveling again. Brick and Mortar stores stand to gain the most from the vaccine as an inability to shop in person will lead to increased foot traffic. Corporate offices will reopen to the benefit of their landlords, although early reports indicate that many companies will shift entirely to remain working remotely to reduce overhead and increase productivity.

REVIEW OF EARNINGS WE COVERED LAST WEEK

Monday, November 9th

Canopy Growth Revises Beverage Launch Timeline
Canopy Growth Corporation – $CGC

The five states this election cycle with cannabis-related measures on the ballot all passed. This win is pivotal for the growth of companies like $CGC because it will aid in their legal expansion in other states. This specific quarter $CGC reported record net revenue. Partially, this may be due to growing sales in Canada during the pandemic period, but could also be the result of a more lean company. As noted below, $CGC has been able to cut legal expenses.

  • Increase in net revenue over 135 million 

  • Gross margin increased 19%

  • Selling, General Administrative expenses down 19%

  • Recreational net revenue business to business up 2%

  • Recreational net sales business to consumer up 43%

  • Canadian medical cannabis net sales up 7%

  • International cannabis revenue down 8%

Takeaways: 

The current CEO of $CGC is not relying too heavily on federal cannabis legalization in the United States to grow $CGC. Instead, the company is focusing on a line of products that the CEO described as cannabis 2.0. One of the major products in this lineup is a THC infused soft drink that $CGC hoops can legally export to states like California for legal consumption.

Join the Team - Beyond Meat - Go Beyond®

BEYOND MEAT – $BYND

BYND had a less than inspiring earnings performance but is doing relatively well, sitting in a position to experience some continued success in the future. The plant-based meat market is up 41%, as well as the buyer rate, which increased by 13%. This indicates that despite the challenges seen with COVID, on average more households are buying BYND products more frequently, and spending more. BYND certainly has challenges operating in the coming future as there is a general decline in their product category, but their significant part of the market space demonstrates that if the plant-based meat market withstands COVID, Beyond will find success.

BYND reported the following:

  • $94 million net revenue (Down from $113 Million in Q2)

  • BYND meat products up 63% Y/Y

  • Food service business declined 41% Y/Y

Takeaways:

Despite a bleak Q3, BYND has the potential to resume its halted success due to COVID in the future. While they neglected to issue Q4 guidance due to the volatile market space in this COVID environment, looking at their performance in context shows that they are still performing well overall. Their $19 million declines in revenue from Q2 to Q3, still represents a 2.7% increase in revenue for Q3 from the year-ago quarter.  The statement by their leadership to not misinterpret the near-term pandemic induced drop as weakening in their long term value holds weight and BYND will be an interesting stock in the coming future.

Norwegian Cruise Line Vector Logo | Free Download - (.SVG + .PNG) format -  SeekVectorLogo.Com
Norwegian Cruise Line Holdings – $NCLH

$NCLH, like many travel stocks, is trying to stay alive until a vaccine is widely available. Recent news specific to the cruise line industry stated that the CDC has recently permitted for crosses to resume sailing under the condition that social distancing guidelines are followed, but with the second wave of COVID likely, the question has yet to be answered. Will cruise-goers will have the same appetite as they did pre COVID-19? And if they do, at what price point will cruise lines like $NCLH be able to charge such cruise-goers?

  • Loss of -2.35 earnings  per share (2020)

  • Net of +2.23 earnings  per share (2019)

  • Net income loss of 677.4 million

  • revenue of 6.5 million

  • 1.9 billion in revenue in 2019

  • 2.4 billion in cash equivalents

Takeaways:

At this current moment in time, $NLCH revenue is at an all-time low. The silver lining in these earnings is that $NLCH still has 2.4b in cash equivalents and may sell bonds as needed to secure more debt to prevent a default. Similar to the profile of other travel-related companies, it will be vital for $NLCH to remain financially lean long enough to experience an inflow of returning patrons now comfortable with traveling again. The CDC allowance of cruises to resume sailing may provide hope to the industry that in the not so distant future, they may be able to sail with a significant number of passengers on board.

Tuesday, November 10th

Lyft - Wikipedia

Lyft – $LYFT

Lyft has been hit hard by the Coronavirus since March. They did not have an “Eats” delivery service, so they could not immediately offset the ride-sharing coming to an almost complete halt and have struggled to recover since then. Their pilot programs for delivery services have done well, and they will need to expand and take the market share from other services to stay competitive.

  • Non-GAAP sales & marketing expense as a percentage of revenue < 15%reflecting rider incentives near historical lows

  • On track to realize annualized fixed cost savings of $300 million by Q4’20

  • Expect to achieve Adjusted EBITDA profitability by Q4’21 even with a slower ride recovery

  • Delivered Q3’20 Adjusted EBITDA loss of $240 million versus most recent outlook of $265 million

  • Active Riders grew 44% to 12.5 versus 8.7 million Q2’20

  • Revenue per Active Rider increased 2% versus Q2’20 reflecting an improvement in ride frequency

  • Contribution Margin of 50% was 15 percentage points higher versus Q2’20 and exceeded outlook of 45%
  • Revenue per Active Rider was $39.94 up $0.86 from Q2’20
  • Ride-share recovery in 2020 has recovered more each month but is slowing down. Sep’20 it was at -48.1% Y/Y and Oct’20 it’s -47.4% Y/Y

Takeaways:

Lyft will not be able to recover its full riding revenue for the foreseeable future. Its partnership with Grubhub is a nice stopgap to fill lost revenue, but it’s too small and only available to Lyft Pink members. With multiple lockdowns being reinstated locally throughout the United States, this will only hamper ride-sharing recovery. Lyft has a long march ahead to maintain its place in the market.

Thursday, November 12th

Walt Disney logo | Walt disney logo, Disney logo, Walt disney
Disney – $DIS

Disney has had a rough time with its parks, hemorrhaging the company’s cash from not operating during the pandemic. Disneyland, its largest park, has been closed since March due to the COVID restrictions in California. Disney World, however, has been able to come back into play as they’ve enacted safety measures to prevent the virus from spreading. Disney will be continuing dividends in the long term, but the short-term is reliant on the pandemic’s ending, and how much they want to fund Disney+ content.

  • Parks, Experiences and Products: $2.58 billion, down 61% year over year

  • Media Networks: $7.21 billion, up 11% year over year

  • Studio Entertainment: $1.60 billion, down 52% year over year

  • Direct-to-Consumer and International: $4.85 billion, up 41% year over year

  • Disney estimated that pandemic related costs will total roughly $1 Billion in their fiscal year 2021 subject to small changes in local restrictions.

  • Disney World capacity is increasing from 25% to 35% in Q4

  • ESPN+ subscribers doubled to 10 million

  • Hulu’s subscribers increased 28% to 36.6 million

  • Disney+ subscribers rose to 73.7 million from 60.5 in August

Takeaways:

Disney’s expansion of its subscriber base across all three platforms (ESPN+, Hulu, and Disney+) is putting it in a prime position to catch up to Netflix. Disney is more diversified in streaming content from Disney+ movies and shows to sports on ESPN and all content on Hulu. Conversely, its direct competitor, Netflix, is only able to obtain old shows and movies and make new original content. Disney’s holding back of theatrical movie releases due to closures of theaters is hurting their bottom line currently however, a return can be seen in 2021 when the pandemic can be expected to subside.

Friday, November 12th

Company Snapshot - DraftKings | Roundhill Investments
DraftKings – $DKNG

COVID-19 has created a unique challenge for companies in 2020; prominent among them is DraftKings. They rely heavily on a consistent sports schedule and a high level of fan interaction to see continued and significant success in their business model. Teams have had varying levels of success in containing outbreaks through team bubbles to be able to compete. Despite this hectic sports schedule and the pandemic, DraftKings has performed well and is poised to see continued success down the road with recent legal developments.

  • Monthly unique players surpassed 1 million, a 64% increase Y/Y

  • Loss per share: 57 cents, vs an expected loss of 61 cents

  • Revenue: $133 million, vs $132 million expected

  • The company also raised its fiscal year 2020 guidance to a range of $540 millionto $560 million, from a range of $500 million to $540 million.

  • DraftKings said it expects $750 million to $850 million in revenue for 2021

  • DraftKings paid out about $15 million extra in bets this quarter

  • Total U.S. iGaming handle increased 335% Y/Y and represented around ½ of total online gambling revenue

  • Multiple states’ voters passed gambling legislation on ballot initiatives

Takeaways:

DraftKings can expect continued expansion as more states pass positive gambling legislation. This will increase active users over the next few years as bills, regulations, and licenses are enacted. Revenue is steadily increasing and will only hasten as legalization spreads to the entire United States.

UPCOMING WEEK 11/16 – 11/20

EARNINGS

Tuesday:

Walmart $WMT (Before Market Open)
Estimated EPS for Q3 is $1.27, revenue is expected to be $131.79B. With Covid cases rapidly rising, and stay-at-home orders being instituted, Walmart’s eCommerce will rise, and sales will continue to grow. Walmart is in a prime position for growth for the next quarter as we prepare for a harsh winter. More and more people will continue to shop for groceries, meaning revenue will increase.

$HD (Before Market Open)
Estimated EPS for Q3 is $3.08 and revenue is expected to be $31.44B. These are strong earnings estimates as people are still staying home and continuing to work on home improvements. The earnings call should provide steady growth and continued positive revenue moving forward.

$NIO (After market close)
Estimated EPS is -$.17 and Revenue is expected to be $628M. NIO is a stock we trade often and we will be paying close attention to their earnings call. Estimated Sales should increase as their sales figures have increased by up over 68% YOY.

Wednesday:

Nvidia $NVDA (After market close)
Estimated EPS is $2.56 and revenue is expected to be $4.42B. Nvidia is on the leading edge of graphic processors and data centers. We trade Nvidia frequently and will be keeping a close eye on the earnings call. The growth of gaming and data centers has led the great continued earnings for Nvidia.

Thursday:
Workday $WDAY (After Market Close)
Estimated EPS is $.67 and revenue is expected to be $1.09B. Revenue is estimated to increase by 16.2%, and as stay-at-home orders begin to come in Workday utilization will increase and revenue will continue to grow.

EVENTS & TALKS

Tuesday: GDP Growth Rate QoQ/YoY Final Q3

Wednesday: Durable Goods Order MoM

Thursday: Initial & Continued Jobless claims

DISCORD RECAP

On Monday we alerted our members to buy $ZM $350 puts for November 20th. When we bought them they were $360 per contract.

On Tuesday these contracts were valued at 1,082 and hit a high of $1,600.

On Average the team closed the contracts around 1,100 making a 200% return on investment.

Stocks On Our Radar
(November 16th  – November 20th)

$PLUG Plug Power

Reported strong earnings last week.

Currently has support at $22.26 and trading at $23.43.

We see it hitting $25 or $26 sometime this week.

$XLE Energy ETF 

In times of uncertainty we turn over the energy sector as a hedge and long term position.

President Elect, Joseph Biden, is in favor of clean and renewable energy, while current President Donald Trump is in favor of fossil fuel. No matter how we flip it, both parties are paying attention to this sector.

Currently trading at $33.88, we set a target price of $37.95

$CCL

After Pfizer announced a 90% effective vaccine, travel companies have become more appealing to investors.

We see Carnival Cruises ($CCL) to be one of those companies.

If stock price is able to stay above $16, we could see price move higher into $16.50and then $17.28.

 $17 calls for this week look good.

EDUCATIONAL LEARNING SEGMENT

The difference between who you are and who you want to be, is what you do

Cognitive dissonance is defined as “the state of having beliefs and thoughts that are inconsistent with your actions and decisions.” Everyone has experienced cognitive dissonance at some point in their life and the key to beating it is spending time reflecting on whether you are experiencing it. Many people claim they desire to learn about the market or want to be a skilled trader but haven’t put the time in to develop their skills. While this is counter-intuitive, it isn’t the end of the world. You may experience this many times. Be aware and make the necessary changes in your actions to meet your values and desires.

BOOK OF THE WEEK
Make your Bed by Admiral Williams McRaven
Contrary to last week’s book topic of financial literacy, Make your Bed advocates for thinking big while remembering to take care of the small steps necessary to achieve your goal and significant change. The book imparts anecdotal lessons, pushing discipline and positive daily habits which will in turn benefit your financial literacy and trading experiences. Admiral McRaven shares the ten lessons he learned from seal training, with the pinnacle lesson being “if you want to change the world..start off by making your bed”, a call to action signifying the large psychological effect seen by starting your day with accomplishing a task that motivates you to finish the next one. If you find yourself not heading in the direction of your goals, first start by breaking them down into their components and attacking it day by day.
VIDEO OF THE WEEK
Second Stimulus Checks | What Trump JUST Said!
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