Former boutique PM not trader. My research, 100% transparency at https://xitter.cf/t.co/dvY4xeNeOh. This is not advice, my only promise: I do what I say I do.
Greater Vancouver
Joined April 2017
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I remember a couple of years ago when plenty of names faltered for various reasons whether poor margins on AI product, inventory correction, poor execution, etc.. $CLS stands out for consistently delivering best in class results.
2 of my favourite comments from $CLS 3Q26 call this morning:
Volatility traders love to smash $CLS after a run up on the notion of mean-reverting earnings.
But what if this earnings ramp isn’t mean-reverting? CLS isn’t just rising a wave, they’re leading and grabbing land that used to be the domain of others.
People think $CLS “10% margin” is a sign of weakness.
It’s not.
CLS isn’t charging economic rents and giving customers reason to look elsewhere, they’re providing excellent service at reasonable cost, giving customers reason to award more business.
The opportunity for $CLS isn’t to get to 40% margin, it’s to grab the $20bn or $40bn or $100bn or whatever amount of business they aren’t doing today at a reasonable margin and to do it better. This is why CLS leads in 200G+ switches.
That is some shockingly bad profitability guidance from $TTD to deteriorate that significantly and that abruptly is not confidence inspiring.
@KellyCNBC @SullyCNBC why does the 2y suggest 3 hikes? The 2y is 53bps above the 1m which is in the fed funds range. The curve should be normally shaped.
The Fed ONLY controls the level at the short end. The rest of the curve is up to market interpretation and market action.
@KellyCNBC it’s difficult to debate the intentions but the call for a hike did spook the markets which drove a selloff. And before the hike call, no hike was widely expected. So why the call? A hike didn’t make sense and the Fed made the right call.
And if we go back a couple of years to the Fed cuts, the curve was not normal. Absent those cuts to get to a normal shape, the curve would be much higher today and it’s not clear the economy would have absorbed that well.
@steveliesman we have a normally shaped curve today, that’s a good thing, it should be normally shaped.
If the Fed didn’t cut 2 years ago, yields would have had to rise by a lot more to get a normal curve.
@TheJudgeCNBC with the 1m yield at 3.67% after taking back the spike over the past few days, it stands in the fed funds target range of 3.5-3.75%, the curve is normally shaped. Let the market and economy work.
$NXPI traders are hell-bent on closing that gap up after strong 1Q and guide; strong 2Q and 3Q guide while at 17x CY EPS estimates looking attractive. They will recover the last down cycle in 3Q, sooner than other analog peers.
And it’s a bizarre dynamic that those traders think $NXPI has to cough up some gains because it got ahead of itself when it’s flat for 6 months and barely up for 1y while everything else that’s more expensive absolutely ripped.
$CLS beat and raise is one thing but indicating accelerating growth in FY27 (>65%) puts FY28 ests on deck. It’s around 16x next year’s EPS est of 19.27, at a massive discount to peers despite orders of magnitude better results.
