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What are you buying today?


LowIQinvestor

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Mild form of mental illness is the most likely reason.  Charitable explanation: same reasons Buffett is buying BAC except I'm unfettered by public perception and/or a huge commercial banking relationship with Wells leading to additional regulatory hurdles.  I also think it has better franchises (or at least mix of businesses) and more hidden earnings power (like BAC in 2012, but maybe even more).

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Bought RTX (added) and L3 on Monday.

Fascinating the RTX break up delivered good value to UTC shareholders that decided to keep Otis and Carrier.

 

I also bought Barry Diller’s InteractiveCorp post-match spin-off.

It is the only internet company that is cheap from market value vs sum of the parts AND has a low base for growth.

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I've been buying Intel in the last days. The low price, high ROA and long term steadily-ish growing earnings was just too tempting. I have no idea if and/or how quickly AMD will continue to steal market share. But then again, that marked will probably continue to grow.

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I added a little to UI.  They should be releasing earnings soon and with everyone working from home and companies large and small upgrading networking equipment, I think the expected earnings are way too low.  Also they have been buying back shares and I expect they bought back a lot when prices were low.  Even if I'm wrong about this qrt this is a long term hold for me.

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I've been buying Intel in the last days. The low price, high ROA and long term steadily-ish growing earnings was just too tempting. I have no idea if and/or how quickly AMD will continue to steal market share. But then again, that marked will probably continue to grow.

 

Same, not to mention there are over a dozen segments which AMD doesn't compete with Intel in.

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I added a little to UI.  They should be releasing earnings soon and with everyone working from home and companies large and small upgrading networking equipment, I think the expected earnings are way too low.  Also they have been buying back shares and I expect they bought back a lot when prices were low.  Even if I'm wrong about this qrt this is a long term hold for me.

 

Thoughts on competition from cheaper producers (mostly foreign e.g. tp-link)?

 

Ubiquiti makes great products. And I think from an investment perspective they are attractive in certain lights (crackdown on Chinese networking gear, for example).

 

But ultimately how do you get comfortable paying 35-40x earnings for a networking hardware producer? That is what is keeping me from dipping toes in.

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I added a little to UI.  They should be releasing earnings soon and with everyone working from home and companies large and small upgrading networking equipment, I think the expected earnings are way too low.  Also they have been buying back shares and I expect they bought back a lot when prices were low.  Even if I'm wrong about this qrt this is a long term hold for me.

 

Thoughts on competition from cheaper producers (mostly foreign e.g. tp-link)?

 

Ubiquiti makes great products. And I think from an investment perspective they are attractive in certain lights (crackdown on Chinese networking gear, for example).

 

But ultimately how do you get comfortable paying 35-40x earnings for a networking hardware producer? That is what is keeping me from dipping toes in.

 

Yes the valuation has gotten a little rich.  I bought most of my shares in 2017 and have only added a little bit here and there since.  Basically I like the management and the products and how they run such a light operation, yet still manage to compete with the big guys.  If it's one mistake I make over and over again it is selling companies that are doing great with management I like because of valuation (like when I bought NFLX under $3 (split adjusted) and sold at $11).  I'm trying to learn to add to my winners not sell them every time they seem a little expensive.

 

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Thanks, I think BTI is interesting around these levels. I don’t have much experience with options, but always interested in learning. Is there a reason you chose that strike? My inclination would have been to go a little out of the money (but again I don’t really have any experience, that was based on an initial gut feel).

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