I am maniacal with my personal stock coverage universe. Although I won't be covering anywhere near the 60 companies as I did back in the day, 20 or so is a nice sweet spot to be in.
I didn't even realize that as of today, I am 75% bearish on a coverage list, comprised of retailers, tech, industrials and, yes, a homebuilder (Toll Brothers (TOL), Buy rating). Is this justified? Or, do I have a case of winter depression influencing my stock picking?
You are darn right the bearishness is justified. I am unsure what my Wall Street peers are smoking, but earnings results trickling in are bad, as is forward guidance. Not lukewarm. Not so-so. BAD. The stocks are getting hit and that is beginning to extend to peer comparables. There is no sign of this magical capex boom that was hyped up at the end of 2013 in numerous I-bank strategist bibles, certainly not in the financial statements of IBM (IBM), AMD (AMD) or Texas Instruments (TXN) yesterday evening.
Here are the three key trends I am seeing while navigating the only storm of relevancy in my life: earnings season.
Sequential fundamental trends: Underpinning the market's continued bullishness is an expectation that an accelerating U.S. economy feeds into the financial statements of Corporate America. To me, that means companies should have gained noticeable operating momentum in 4Q 2013 vs. 3Q 2013. I have not seen it yet, nor is it being baked into earnings guidance ranges that are falling below the lowered hurdle rates of the Street.