🗞️The Wrap: Shipped

The hidden costs of last week’s sales, financials vs tech, and your chance to ask our CEO anything you like in an AMA. Read on for the details. 

5 stocks making 52 week highs

  • Jounce Therapeutics (JNCE) +51.39% in the last week
  • AVX Corp (AVX) +34.6%
  • Xenon Pharma (XENE) +16.5%
  • Global Blood Thera (GBT) +15.1%
  • Sibanye Gold (SBGL) +7.2%

Shipped

Behind the dozens of Black Friday and Cyber Monday emails clogging your Promotions folder, promises of next day or even same day delivery come at a cost. MarketWatch ran the figures. A small overnight shipment from Philadelphia to Pittsburgh costs about US$118; a cost mostly absorbed by the merchant, usually. If you’re buying pet food or tennis balls, that’s a loss on the sale. Buying a new smartphone, though? They still cash in, attract your business and promote customer loyalty.

Whether this is a sustainable business model is still in question but the actions of some huge companies suggests so. Wal-mart (WMT) has invested US$215m in the space while Target (TGTacquired delivery service Shipt for US$550 in 2017.

Look Inside

Naturally, traders compares their return to the market; it’s the opportunity cost of trying to beat the index. But what are you actually competing against?

Let’s take the S&P500, up 24.8% in 2019. Around 21% of the 500 is tech stocks; that’s a pretty big weighting and can explain why the market has been rallying this year. S&P500 Tech is up 41.8% YTD. Healthcare and financials are the next biggest constituents at 14% and 13% respectively

The ASX200 is big on financials; approximately 30% of stocks are in the sector. Interestingly, only 2 stocks in Stake’s top 100 traded in November are in this sector: Paypal (PYPL) and Westpac (WBK). It is very light on tech. 

Why does this matter? It’s important to be aware of if you’re buying index ETFs; you need to know what you’re actually buying. It also indicates that comparing results by sector gives you a better indication of how you’re performing. Sure you may be “beating the market”, but if you’re FAANGs based portfolio is up only 15% when tech is up 40% it’s not so sweet. Of course, the volatility and beta of a portfolio can matter just as much as the returns.

How about the Dow Jones? We don’t like giving the Dow too much air time. It’s price weighted, meaning the highest priced stocks, no matter the market cap, affect the change the most. So Boeing (BA) at US$373 is the biggest driver of movements.

Top 5 Gainers

  • Quorum Health Corp. (QHC) +55.2% in the last week
  • Jounce Thera. (JNCE) +51.4%
  • Adaptimmune Therapeutics (ADAP) +39.8%
  • Hexindai Inc (HX) +39.9%
  • GTT Communications (GTT) +37.7%

Top 5 Fallers

  • Aqua Metals Inc (AQMS) -48.5% in the last week
  • Evolent Health Inc (EVH) -39.2%
  • Cara Therapeutics (CARA) — 31.0%
  • Just Energy (JE) -28.0%
  • CBL & Associates Properties (CBL) -23.3%

Winner, Winner

The Hathaway Giveaway, the promotion to celebrate the listing of BRK.A on Stake, came to a close last week. We’d like to wish a huge congratulations to our winners: David N, Sam X and Samantha L, each who took home (well, not home but to their Stake accounts) US$1,000 each.

We want to thank each and everyone of you who participated. 

AMA

Tonight, our CEO Matt will be going live on Reddit. It’s your chance to ask anything and everything you want to know about Stake. The AMA will be hosted on the r/AusFinance subreddit from 6-8pm AEDT. Check out our Twitter for a link to the forum this afternoon.

What we’re listening to | Value Investing with Legends 

A product of Columbia Business School’s greatest minds, this podcast interviews some of the most accomplished investors of our time.

Industry giants recount their stories of success before focussing on one aspect on their investing style they believe differentiates them from the rest. It’s a bit like Jack Schwager meets a microphone.

For me, it’s a real introduction to the true essence of value investing; a step away from balance sheets and income statements and a deeper look into what else differentiates business like a great executive team and good culture. It also introduces some real strategies fund managers use to consistently beat the market (or should I say to beat sectors?).

Trader Teaser

A couple has 2 children. What is the probability they were both boys born on Tuesday?

Best Buy | Progyny (PGNY) +68.7%

This fertility benefits management stock is building a huge family of followers post IPO. Following the disappointment of some of the biggest IPOs of 2019, Progyny bucked the trend and powered to a 70% gain in a month.

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