Portfolio Updates

My Stock Moves After Q2 2022 Earnings Season

Calvin Lo

I’ve learnt from past earnings seasons not to trade in the shares of a company in the run up to its earnings results. So now, most of the time I’ll hold off deciding whether to buy/sell/hold shares after the company has reported.

Corporate earnings season is one of the most interesting periods when investors get to see a snapshot of how companies are doing. Add to that the drama of whether earnings hit or miss Wall Street analyst predictions and the ensuing price action that follows.

I try to wait until after the majority of my portfolio companies or S&P 500 companies have reported in order to get a better feel of the overall market sentiment. Usually during earnings, I focus more on company-specific drivers unless there are bigger macro issues flaring.

Overall, I felt that this earnings season had a lot more positive energy than the last. As usual, there were winners and losers but in some cases even companies that missed expectations were still rewarded for positive guidance, i.e. the promise of better days to come.

Here’s a recap of our individual holdings (excluding ETFs and robo-advisor portfolios):

  • US: Tesla (TSLA), Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA), Sea Ltd (SE), Meta Platforms (META), PayPal (PYPL), Palantir (PLTR), Block (SQ), Airbnb (ABNB)
  • Singapore: DBS Bank (SGX:D05), Frasers Logistics & Commercial Trust (SGX:BUOU), Ascott Residence Trust (SGX:HMN), OCBC Bank (SGX:O39)

For more details on our portfolio, see my Portfolio page.

Buys

My only buy post-earnings was Sea Ltd (SE) for the Family Portfolio, and even that was just a small purchase to average down my current position which is deeply in the red.

I felt that although Sea’s pandemic-fuelled growth was slowing considerably, the headwinds they face in its 2 biggest segments gaming and e-commerce were pretty much felt across the industry even at other big players like Tencent (gaming), Amazon and Alibaba (e-commerce).

Read my detailed thoughts on Sea Ltd’s Q2 2022 earnings here.

Read my thesis on SE here.

Source: Tiger Trade app

I’ve been thinking long and hard about initiating a new position in Alphabet (GOOGL) for the Family Portfolio. I really like how the stability, diversity, and growth of this business. If I do decide to add GOOGL, I’m thinking I might swap out Meta Platforms (META) for it.

Sells

My only sell post-earnings was actually Tesla (TSLA) from my Personal Portfolio, but not because I was disappointed with their earnings (on the contrary, I was very happy with their results). I didn’t touch our position in the Family Portfolio.

I sold some TSLA after the recent rally because I felt that it might be a suckers rally. In addition, I’m anticipating TSLA to drop after its 3-for-1 stock split on 25 Aug. If it does indeed drop back to ~$800 range, I’ll probably backfill some shares.

Read my thesis on TSLA here.

Source: moomoo app

I’ve put 2 companies on watch for potential sell/trim in coming quarters – Meta Platforms (META) and Palantir (PLTR).

Meta is really struggling as companies pull back on ad spending, compounded by Apple’s privacy changes affecting their ad insights and effectiveness. After the name change from Facebook, Meta has not shown their leadership in building the metaverse. I still struggle to see Zuckerberg’s vision and how they plan to leverage their social network to gain the advantage vs so many competitors.

Palantir’s earnings were horrendous. Revenue growth is slowing while costs and stock-based compensation are still so high. I believe they truly have a unique and powerful product, but I’m seeing cracks in management and sales teams in convincing customers that they need it. I would still be happy to hold this company if not for the high valuation it is commanding even after a steep sell-off in high growth stocks. I have pretty high exposure to PLTR because I’m holding positions in both our Family Portfolio and my Personal Portfolio.

Holds

The rest of the companies in our portfolios reported at least decent earnings, so I won’t be touching them. Generally, I try not to fiddle around much with the Family Portfolio and reserve most of the trading or speculating for my Personal Portfolio.

The only exception here is DBS Bank (SGX:D05) which we have monthly regular purchases. I’ve also redirected most of the funds intended for REITs to Syfe REIT+ instead to reduce the pressure of having to monitor and keep up with the developments of individual REITs.

See my review of Syfe REIT+ here.

Closing Thoughts

During this bear market, I’ve been more focused on moving funds towards index funds/ETFs and trying out robo-advisors. In addition, I’m trying to automate investments into these funds so that I can spend less time managing our portfolios and focus on family and other interests.

That said, I would still want to retain a portion of the portfolio to invest into individual stocks. The challenge with individual stocks is following company developments. At the very minimum, I feel that I need to at least review quarterly earnings which provide a snapshot into the health of the business.

Disclosure: I’m long Tesla (TSLA), Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA), Sea Ltd (SE), Meta Platforms (META), PayPal (PYPL), Palantir (PLTR), Block (SQ), Airbnb (ABNB), DBS Bank (SGX:D05), Frasers Logistics & Commercial Trust (SGX:BUOU), Ascott Residence Trust (SGX:HMN), OCBC Bank (SGX:O39)

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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.

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