The Broad Market Index was up 1.33% last week and only 27% of stocks outperformed the index.
Letters, conferences and more on hedge funds in the third quarter of 2021
BlueMountain’s losses increase with fund liquidation
BlueMountain Capital was founded in 2003 by two former Harvard Law School students and was once one of Wall Street’s largest hedge funds. Letters, conferences and more on hedge funds in the third quarter of 2021
Very few updates to financial statements in these first weeks of a quarterly update from the Securities and Exchange Commission (SEC), so it is dangerous to draw market- or macro-scale conclusions from a few observations only. The concern of the last quarters exceptionally strong rebound The low of the virus last year is that it is a one-quarter wonder and growth will drop again in the next few quarters.
What we have seen repeating itself in the data recording is a well-defined consumer durables cycle. Demand for expensive consumer goods (cars and homes) follows a demand cycle that is influenced by interest rates and the availability of credit. These great industrial / cyclical advances have been associated with higher inflation and every cycle peak in these industries since the end of WWII has been forced by higher interest rates and tighter monetary policy with inflation rising.
A new cycle begins
There is no difference in this cycle of economic growth. The lead is only three-quarters ahead and the cycle’s uptrend has historically been 8 to 12 years from trough to peak. Inflation and commodity prices have risen and central banks are reluctant to act due to global health concerns. This is also a typical response from monetary authorities. There is enormous resistance to higher interest rates and the politicized US central bank (the Federal Reserve FED) is unlikely to change policy so close to the midterm elections.
The keepers of the currency
The slowness of the monetary response means that higher inflation is expected in the future. This is a very likely outcome and this is why it is essential for us to defend the portfolios against the negative influence of higher interest rates. The best defense is to own growing companies. Look for MoneyTrees with a large dark trunk (increasing sales growth), a large green globe (higher profitability), and a golden hourglass pot (higher profit margins and leverage).
Investors don’t wait. Get ready for active management now!
Now is the time for investors to integrate quantitative tools to strengthen their portfolio management. Any change in the direction of any of the major components of profit growth, such as sales growth, gross margins, operating or financing costs, can be an important indicator of the future direction of the rate. growth of the company. Micron Technology’s (NASDAQ: MU) financial statement data shows a clear fundamental trend.
How to spot potential growth!
- Higher sales growth
- Low to increasing gross margin
- High SG&A costs and interest to decrease
- Decrease in inventories and receivables
- Evolution of the trend of capital expenditure (CAPX)
Micron Technology Inc. (MU) $ 69,100 BUY This Rich Business Getting Better
Micron Technology, Inc. (NASDAQ: MU) has been a profitable company with a consistently high cash return on total capital averaging 10% over the past 21 years. Over the long term, shares of Micron Technology Inc have fallen 38% relative to the general market index.
Stocks have been strongly correlated with trends in financial condition factors. The dominant factor in the Financial Condition group is shareholder capital which has been negatively correlated (-84%) with the share price with a lead of five quarters.
This company’s sales growth appears to be very cyclical with a strong uptrend currently. Sales growth was negative last year, but is now positive again at 29.3%; which is high on the company’s record and higher than last quarter.
The company has a high and rising gross profit margin, correlated to 69% to the share price. Inventories to sales continue to decline, which contributes to the gross margin. Costs also continue to decline, as evidenced by the direction of SG&A spending. This implies that the company has an additional margin of cost containment and that the decrease in costs feeds the growth rate of EBITDA relative to sales. Higher gross margins and lower selling and administrative expenses produce an acceleration in EBITDA to revenue which correlated 61% to the direction of the share price. Interest charges are also very cyclical but have stabilized and are currently low on the company’s balance sheet. Higher interest charges are a risk because they not only slow the growth of cash flow, but are often associated with a lower valuation.
More recently, shares of Micron Technology Inc are up 15% from the low in May 2019. Shares are trading at the lower end of the volatility range in a relative upward trend in stock prices over 29 months.
The currently depressed stock price offers a good opportunity to buy shares in this obviously accelerating company.
The more stable the pot appears, the better the attributes. Green and gold are good. Red is bad and the more intense the red, the more urgent the call to action is.