Diamonds and Dogs

1/24/19

What chip downturn? Semiconductor company, Xilinx (XLNX) is up 18% to an all-time high following better than expected earnings while revenue rose 33.6% to $800 million, 4% above expectations. Xilinx also raised current earnings estimates by 10% and sales estimates by 5%. Lam Research (LRCX) is jumping 15% and Texas Instruments (TXN) is up 6% on lackluster earnings. At least theses chip companies aren't lowering guidance further. In-line earnings and in-line guidance is now good news.

Canada Goose (GOOS) gets clipped by a downgrade. The trendy winter wear company is down 7% not far from a seven month low after Wells Fargo downgraded the to stock to market perform. The analyst concedes the fundamental story remains intact, but the risk/reward today is not as compelling as it once was as the valuation is going to become more relevant as the brand matures. Even with the stock down 34% in the last two months, the stock still trades for 71 times earnings and 10 times sales. Even with the downgrade, the analyst has a $68 price target which is 37% upside from yesterday's closing price. I hope they had a great fourth quarter because sales will slow in a couple months.