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another pick list update ?2
09:29 01-Sep-17
The internet is awash this morning with articles on how Fitbit's
market share has declined.
They all stem from this IDC
report, which shows the company in a dead heat with Apple
and Xiaomi. The reality is that we always knew this was coming
in the form of new competition
from Apple, Samsung
and others. I've said all along that the fitness trackers will
cede ground all-purpose devices. The risks are real, but the
only thing that has changed about the investment thesis is the
price of FIT. The time to be bold was when shares were closer
to $5, and I think now is the time to be cautious.
That's because the risks are
still there. Yesterday saw robust market action, and futures
appear unfazed after a jobs
report that missed
expectations, but not so broadly as to really sound alarm
bells. The next report will probably be disregarded due to the
effects of Harvey unless it shows surprising
strength. What this says is that the only thing the
market truly cares about is the Fed's balance sheet, and to a
lesser extent, interest rates. Even so, there are other
things it could come to care about, some of them still mostly
unnoticed. One of them is the market itself. Markets
like this work on a feedback loop, and it does have the
potential to reverse dramatically.
If that happens, you'll want
stocks with good balance sheets. Fitbit actually belongs in
that category, and Westport is getting
there. I've continued to watch the progression of energy
markets, taking particular interest in a DoE
report that basically says that natural gas is solely and
justifiably responsible for the death of coal. It still looks
like a race between gas and solar, as nuclear continues its death
spiral. Regulation could make all the difference, and
there is every
reason to remove it entirely, but I doubt the U.S.
government is that capable. Some clarity would make AES a more
obvious
fit, but I still like its chances and pricing for the long
term.
Another area that is starting to see regulatory interest abroad is robotics. This morning's market pop in ABB seems to be currency-based and I would avoid buying into it. Like wearables, automation is seeing very broad competition. I continue to think that ABB is positioning itself well for the long term by developing not only automated machinery, but a platform that ties it all together. Even so, such environments can be very tricky, and I am content to wait for better pricing. That statement goes for a great many stocks at the moment.