From Tech to Copper

In the most recent research letter to clients Allan Edwards and Andy Kibbens, the Co-CEOs of The Markets Are Open addressed the slew of technology companies that reported in the last week. “I love this I love I love this!” Kibbens exclaimed in an interview. “Tech is blowing away the numbers and [everyone is] selling.” In the research report, Kibbens mentioned Skyworks Solutions strong guidance of $0.37 per share for the next quarter. The stock is currently down $0.40 in after hours trading. “I was expecting no less from Skyworks, and they hit the mark. We have raised enough cash to by these earnings beats on the selloff.” He assured investors that he was buying into the weakness and rebalancing the portfolio accordingly to make room for these positions.

SanDisk was another stock that was mentioned in the research letter. Kibbens had just informed clients to purchase a small position in the company and wait for a pullback that he was expecting. “Haha I nailed it!” He said in an interview. “Buy me 10,000 SanDisk tomorrow morning.” Sandisk earned $258 million or 1.08 a share consensus estimates for the stock came in at $0.89 per share with the top analyst estimate at $1.02. Kibbens’ estimate came in at $1.05, “far more accurate but still conservative,” he added. There were whispers on Wall Street that pushed the stock down over 7% after hours, as this 20% earnings beat was the smallest earnings beat in over a year. When asked about this Kibbens continued, “So now we’re buying and selling based on the earnings beat spread? This was actually the best quarter for the analysts - they were only off by 20% this time as opposed to 60% or 300% a year ago. It’s a good thing they don’t know anything or else I wouldn’t be able to make any money. Anyone who thought SanDisk was going to earn less than $1 this quarter is [off their rocker].” In Kibbens’ latest SanDisk analysis he explained that the stock should trade at a 13x multiple. With the current quarter, he estimated that the stock should be much higher. He hinted that an upgrade was on its way.

In further market commentary, Andy Kibbens circled back to Quadra FNX Mining, symbol QUX on the Toronto Stock Exchange, and reassured investors about his decision to include Quadra FNX Mining as a vast part of his portfolio. “It’s like defying the laws of physics – it just doesn’t work. Copper inventories can’t keep falling along with the price of copper. […] Eventually the supply and demand model finds its footing, which is why copper is rebounding alongside China’s demand and QUX will blast upward with it.” He reiterated his Conviction Buy on the stock. “I called Allan the other day and told him to scoop up some QUX for me. It was non-cents but dollars.” Kibbens uses this expression often when the stock price travels exactly opposite to the fundamentals, creating a profitable opportunity to buy when things don’t make sense in the market.