Stocks in Play - December 19th 2024

TLDR Stocks in Play: KMX, LW, ACN

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Irish Born Investor
December 19, 2024 • Estimated Reading Time: 5 minutes

Stocks in Play - December 19th 2024

TLDR Stocks in Play: KMX, LW, ACN

Welcome to today's Stocks in Play report. Below are the key stocks to watch, along with brief x-ray and analysis.

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1) CarMax (KMX) (Rating: B+, Multi-Day)

Industry Group: Retail Trade, Market Cap: $12.6b, Float: 156m, Short Interest: 9.75%, Days to Cover: 7.5, Exchange: NYSE

Catalyst: Strong EPS Beat ($0.81 vs est. $0.61), Solid Revs Beat, Retail Sales Rose 5.4% YoY, Gross Profit expansion, Nice chart, stock has been going sideways for 2 years. A breakout of this area has room to run. Positive management commentary.

”Our solid execution and a more stable environment for vehicle valuations enabled us to deliver robust EPS growth driven by increases in unit sales and buys, solid margins, growth in CAF income, and ongoing management of SG&A.” 

CEO Bill Nash

2) Lamb Weston (LW) (Rating: B, Single-Day, SHORT)

Industry Group: Speciality Retail, Market Cap: $11b, Float: 141m, Short Interest: 5%, Days to Cover: 3, Exchange: NYSE

Catalyst: Awful earnings. Huge EPS Miss ($0.66 vs est. $1.02), Revs Miss Big Guidance miss on EPS and Revs, Operating Inc. Miss, CEO Change (Internal Hire, current COO so don’t expect a relief bounce.)

"Today's Disastrous Financial Results And Decision To Swap Its CEO For Another Long-Standing Lamb Weston Executive Complicit In Its Widespread Operational And Strategic Debacles Is Just The Latest Stick In The Eye From A Board That Has Completely Failed Shareholders. Enough Is Enough: Lamb Weston Requires Significant Board Change Or, In Its Absence, Should Be Sold."

Jana Partners

Honorable Mention to: ACN - Solid results, Beat on EPS, Beat on Revs, Slight miss on Operating Margins, Sales Guidance beat. Reasonable weekly chart. I am just not sure it will have a good move today, large market cap, low ADR. But worth watching in case it does as the fundamentals are solid.

Market Awareness

Yesterday we had a vicious sell off after the FED Meeting. VIX spiked 70% and the major indices closed down over 3%. This is a major event. T2108 is into initial oversold levels. I am skeptical however that we have a sustained bounce from here. I think there may be another fade or weak rally and more selling. That being said we are bouncing this morning. Like yesterday I expect a lot of stuff to move in Tandem. There may be a case for sticking to leveraged ETFs today to play that rather than individual names. For me we are not yet panicked enough to look at deviating from SIPS to attempt to play that Oversold bounce. As Stockbee tweeted yesterday, wake me up when T2108 hits single digits.

After Hours I’m Watching: NKE, FDX (Earnings)

Tomorrow Morning I’m Watching: CCL (Earnings)

Top Pick Watchlists:

Sources & Services I Use in my Trading:

PS: There are many ways to trade stocks in play. It does not have to be the one that keeps going straight up and sometimes it doesn’t even have to be day one of the catalyst. Everyone must find a setup, timeframe and method that works for them. This list is supposed to educate on the criteria I use and the methods in which I find Stocks in Play. Yours may differ and that is completely okay.

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