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Fitbit, AES and BGC thoughts ?2

09:44 06-Jun-18


Fitbit's CFO is leaving and Fitbit is promoting the current Chief Accounting Officer to the position.  Shares have backed off recent highs by a little over a percent, but I don't think this announcement should have any lasting material impact.  The CFO is 61 and shepherded Fitbit through its IPO, 3 years ago.  Many CFOs specialize in that process and it's pretty common for them move on a few years later, as well as at that age.

I've also been getting multiple questions about BGCP.  Although the stock is only 7% below my dividend-based current fair value, the lower it goes the more interested I become.  What I find interesting is that the put pricing even going out multiple months shows that the market considers current levels a pretty good purchase price even if the stock does go lower in the short term.  I've been seeing this more and more commonly in other high dividend stocks like CTL and CVA as well.  Play the game if you like, depending on your toolset and investment parameters; just be aware that it doesn't go on forever. 

Finally, I'll note that AES appears to be a converse situation.  The company's direction is on the right side of global developments, with renewable generation reaching record levels last year.  However, it's on the wrong side of American federal policy, though the more progressive states are mitigating that.  There is also a dichotomy in profitability with foreign projects typically having profitability with mid-teen percentages, as opposed to around 10% in the U.S.  New studies document the long-term danger I've been alluding to, terming it a carbon bubble, and I see underwhelming shale valuation as confirming the problem.  Consequently, I wouldn't be surprised if we've just seen a short-term high in AES shares.