Stocks in Play - November 27th 2024

TLDR Stocks in Play: AMBA, URBN, NTNX, CRYPTO

Welcome to today's Stocks in Play report. Below are the key stocks to watch, along with brief x-ray and analysis. Sending this early as I will be away from tomorrow morning. There will be no newsletter for the remainder of the week. Have a great Thanksgiving Everyone!

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1) Ambarella (AMBA) (Rating: B, Multi-Day)

Industry Group: Semiconductors, Market Cap: $3.4b, Float: 38m, Short Interest: 3.5%, Days to Cover: 2.5, Exchange: NASDAQ

Catalyst: Strong EPS Beat ($0.11 vs est. $0.04), EPS Swing Positive YoY, Small Beat in Revs, 63% YoY Rev Growth, EDGE AI Represented 70% of Revs. Growth in IOT & Auto expected in FY25/26. Gross Margin Guide 61.5% to 63.% (inline). Strong Guide for EPS & Revs above Analyst Estimates. Guiding for Operating Income well above Analyst estimates. The Stock is still well off it’s 2021 Highs. Good growth and management pushing the AI narrative. Strongest reaction After Hours of all the major stocks reporting. Could easily run tomorrow and certainly a good candidate for a delayed reaction.

2) Nutanix (NTNX) (Rating: C+, Multi-Day)

Industry Group: Packaged Software, Market Cap: $19.12b,  Float: 246m, Short Interest: 1.8%, Days to Cover: 2.1, Exchange: NASDAQ

Catalyst: Solid EPS Beat ($0.42 vs est. $0.31), Slight Revs Beat, Strong Operating Margin Beat, ARR slight miss, Guide is a slight beat on Revs, Op Margins. NTNX was very much considered a GARP name for growth investors (Growth at a Reasonable Price). The stock is now trading on a higher multiple which may hamper a big move however I think it is a solid candidate for a Delayed Reaction.

3) Urban Outfitters (URBN) (Rating: B+, Multi-Day, Top Picks November 😼)

Industry Group: Apparel Retail, Market Cap: $3.72b, Float: 57m, Short Interest: 9.05%, Days to Cover: 3.25, Exchange: NASDAQ

Catalyst: Big EPS Beat ($1.10 vs est $0.86), Slight Beat on Revs, Strong results for Anthropologie Bran, all other brands broadly in line. Very Strong Gross Margins Beat. Relatively Low Float, 10% Short Interest, Retail stocks have been running well (GAP etc.) and URBN has been essentially going sideways for 20 Years! A push above $45 could start a big move. We are in a speculative environment so I would watch this stock closely for a potential ANF type run.

Honorable Mention to: IREN - Reported earnings tonight. Having seen the success of the MSTR Ponzi Scheme other companies are keen to find new and wonderful ways to investors and turn their company into a Cult stock. IREN tonight have raised the idea of offering their shareholders dividends, apparently in the form of Bitcoin. A noble cause indeed and possibly signals a bullish day in Crypto.

Market Awareness

Tomorrow will be a super quiet day in the markets. As I’ve said all week you will see some whacky moves. My advice is do what the Pros are doing and don’t even bother trading tomorrow or Friday. Take a break switch off for a few days and enjoy Thanksgiving. If you’re not in the US like myself then either do some study or just refresh for next week as things will come back in FULL SWING for the run into the end of the year. So best to be ready and not hurting from any needless losses before that. I’m off to London for a few days.

Wishing Everyone a Happy & Peaceful Thanksgiving wherever you are in the world.

Cheers 🦃 ,

Born Investor

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_{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.}