Judging by the swing in futures prices between last night and early this morning as I write this, it appears as though the market may be rethinking the punishment it will dole out today following Donald Trump's victory, or "Clexit" (Hillary Clinton's exit from politics). It's still way too early to tell what today will bring, but suffice it to say that the market is not too fond of surprises and for many market participants, this election was a big one. There will be a lot of coffee consumed today and a lot of unhappy people slogging their way through; of course, the same would have happened if the outcome had gone the other way.
I'm not sure what to expect in today's trading or in the days ahead, but I suspect that any pullback, if there is one, may be short-lived. I am also well-aware that any hit the market takes will be of the flight-to-quality variety. Smaller, more value-oriented or distressed names may go on sale, providing opportunity to deploy some of that dry powder.
I'll be watching the "double-nets" today (companies trading at between 1x and 2 x net current asset value) to see if any of them are pushed significantly closer to net/net territory. There are a handful with market caps above $200 million that currently trading at less than 1.5x net current asset value, including CSS Industries (CSS) , Titan Machinery (TITN) , Movado Group (MOV) , Benchmark Electronics (BHE) and Xcerra (XCRA) .
I'll be watching some of the names that have been on my radar, but which I've yet to close the deal on. These include Manchester United (MANU) , one of the few opportunities to get exposure to a major sports franchise, and Fogo de Chao (FOGO) , one of the few cheap restaurant names, in my opinion. Earlier this week, FOGO put up better-than-expected third-quarter numbers and is up 12% over the past four sessions, and in classic form, I feel as though I missed taking advantage of that one.
I'll be watching some of the newer positions I've been staggering into, such as American Farmland (AFCO) , FreightCar America (RAIL) , Corrections Corp. of America (CXW) and TravelCenters of America (TA) , which put up some worse-than-expected third-quarter numbers yesterday.
I'll be watching, with great anticipation to see how the market behaves, the first day post-Clexit.
