Time to search the waiver wire. That's fantasy football talk about trying to pick up some bargains, players not signed by other teams that have turned out to be interesting prospects. It's a time-honored tradition, especially in a game where wide receivers get banged up pretty regularly, and as you can see from your screen, that's been the case both in the NFL and in stocks since this season began. Let's go hunting for some new wide-outs to augment your line-up because of the carnage.
I'm liking some that we picked last week -- Okta (OKTA) , ServiceNow (NOW) and Salesforce.com (CRM) -- as much as ever, especially because they have been hammered as part of the market-wide rotation.
But let's start with Starbucks (SBUX) . This one's been down and out ever since the company allegedly guided down numbers last week. I have parsed every word of what was said at Goldman Sachs and I come back with this: The company operating income growth model is intact and the issues that brought the stock down last week were below the line and tax related. I know CEO Kevin Johnson took a lot of heat for not disclosing this stuff when he was on Mad Money, but it was purely bookkeeping and what matters is the growth rate was kept unchanged.
And as far as the SEC issues that just came up relative to disclosure, a story that pulverized the stock late in the day? There were 200 other companies that were similarly flagged in a routine accounting inquiry. Only Starbucks got the headlines. This non-story also hurt others in the restaurant industry, including Chipotle Mexican Grill (CMG) and McDonald's (MCD) . It was a nothing burger plain and simple.
I think that Sanjay Poonen, the chief operating officer of VMware (VMW) made a ton of sense last night when he talked about how recent acquisitions, Pivotal for containers and Carbon Black for cyber security, would be great additions. I had been skeptical given that Pivotal seemed like a Dell castoff. I don't think that now. I also believe that the Dell-Crowdstrike relationship is going to be severely crimped by the Carbon Black acquisition. No wonder VMware has started to rally.
Finally, after parsing through all of the comments we heard last week from the Splunk (SPLK) CEO, Doug Merritt, I believe that we are getting a chance to buy a stock of a premier analyzer of data that would make a ton of sense as an acquisition, post the Tableau Software purchase by Salesforce, or just as an outright buy because of the need for as much analysis as possible. Splunk is real -- and this marketplace is acting as if it is fake.
Two other potential waiver-wire grabs: Shopify (SHOP) and Chipotle. Shopify just made a terrific acquisition, the $450 million purchase of 6 River, which is a fulfillment expert that can make delivering products for its small-to-medium-size customers equal to that of Amazon (AMZN) . But the stock's in a downtrend -- it has now given up 70 straight points -- and who knows when the bottom is reached, but you sure aren't buying it at the top.
Chipotle? When you are the number one performer in the S&P 500 and you hit a wall for no good reason other than a rotation, it is bound to scare people and foment reasons for the decline. There aren't any.
It's just been too hot in a market where Wendy's (WEN) gets hit on starting up breakfast and McDonald's gets hurt because it competes against Wendy's. Oh, and Chipotle also got caught up in this so-called SEC comment inquiry, the same inaccurate story that helped tumble the stock of Starbucks late in the day. Not only is there nothing wrong at Chipotle, its business seems to be accelerating from new menu items and advertisements.
When you get a chance to buy the best of the best down almost 10%, that's like stashing a wide receiver over a bye week. I know it can go lower, but does that mean it's getting cheaper?
Despite the $700 price tag, you bet it does.
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