Too early to judge Lyft IPO, says PM | Going indep

Too early to judge Lyft IPO, says PM

Those giving Lyft a rough ride after its shaky IPO need to take a step back and let the firm prove its worth, according to a portfolio manager.

Chris Stuchberry, portfolio manager at the Stuchberry Group, Wellington-Altus Private Wealth, admitted he wouldn’t be going in on the unicorn tech firm at this stage but said the negativity over its initial price drop was too knee-jerk.

Lyft’s initial sheen wore off in the first 48 hours, with its price dropping below the $72 IPO. Calling it a classic risk-reward scenario for investors, Stuchberry said Lyft – like Facebook and Snapchat before it – now has to prove its business model to convince the market it can progress from the growth, cash-burn phase through to profitability.

But he said the naysayers have been too quick to judge the firm’s market debut, which has been interpreted as a worrying signpost for a host of other unicorns that plan to list this year, like its rival Uber Technologies Inc. and also Pinterest Inc., Postmates Inc. and Slack Technologies Inc.

Stuchberry told WP: “There is no question that buying something on opening day with minimal public history is a risk but, remember, short-term risk exists in every stock. I could name 100 stocks that you bought last Friday and might not be up on this Tuesday.

“It’s such a short time horizon that it doesn’t make much sense to jump to a conclusion right away. To sit here and look at a company that is trying to disrupt the entire transport business model and has been doing it very successfully for three years and just did a $2 billion IPO and then within days is down 9% … to say its business model is this and that, it’s too soon.”

He pointed to Facebook’s listing in 2012 as being “as bad as an IPO could go”, with its stock down 50% within six months. Just like Lyft now, Mark Zuckerberg & Co had to prove they could run the business and prove it was actually a money-maker. The rest, as they say is history. Snapchat also went through see-saw growing pains, having been priced at $17, opening at $28 and then sinking to $19 in its first month, although its current stock is a worrying $11.

Toronto-based Stuchberry said: “They are hyped because it’s [about] the idea. These companies are where the innovative ideas are. But it’s not like any of them have shown up on the market with this profitability. They are showing up in their massive growth phase, which seems to last longer for these companies.”

He added: “The big picture and most important thing for Lyft is not just proving they can run their business but proving their business model works.

“That’s something other companies don’t really have to do if you are yet another auto parts company, for example. We had Levi’s jeans [have its IPO] two weeks ago and it’s a proven business model and historic. It doesn’t have to prove they can run the business or that it works.

“Lyft, on the other hand, has to do both of those things. With these tech IPOs, there is significantly more risk but I would say quite a lot more reward.”

Personally, Stuchberry likes Lyft and is encouraged by its back-to-back years of 100% growth and $2.2 billion IPO. He urges caution, though, and said the first days of trading should be taken with a pinch of salt. Clients keen on a name must be able to handle the risk involved and from a team perspective, Stuchberry Group prefers to sit back and see how the market settles down.

“On the first day of trading, if you buy at the high you are the person who has paid the most ever for that stock … ever! And that’s always a difficult position to be in. Where possible, we endeavour not to be in that position in any investment.

“If you have a client whose risk tolerance it fits and it makes sense and they really want to, you can always dip a toe in the water and get a piece of what you might want as an initial position. But I don’t think you ever need to do that on opening day.”

Stuchberry hopes Lyft’s “ethical” mission to increase ride sharing and reduce pollution is a success but conceded there may by some overhang because people are still waiting on Uber to enter the IPO battleground. He thinks they can exist together, however, and that the unicorns waiting in the wings should not be concerned by this week’s events.

He said: “Each has to cross the path at some point anyways. The Facebook path, the Twitter path, the Snapchat path … at some point they all have to turn and create that validity.”

Rick Stuchberry on BNN – January 21, 2019

[vc_row][vc_column][ultimate_spacer height=”30″][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Rick Stuchberry returned for Market Call on BNN Bloomberg this week, on January 21st.

He discusses Canadian large caps and international ADR’s while providing his market outlook, top picks, and answering viewer questions.

Full Episode | 46:08

See clips below:[/vc_column_text][ultimate_spacer height=”50″][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1473″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-market-outlook~1468097″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Rick Stuchberry’s Market Outlook 4:26

Rick discusses his outlook on the markets | 4:17[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1502″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-top-picks~1468425″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Top Picks – January 21, 2019 

Rick discusses his Top Picks:  Tencent, Alibaba and Teck Resources | 6:57[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1503″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-past-picks~1468334″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Past Picks – January 21, 2019

Rick reviews his past picks: ING Groep, Royal Bank of Canada and SpinMaster | 4:56[/vc_column_text][/vc_column_inner][/vc_row_inner][ultimate_spacer height=”30″][vc_column_text]Click on the links below for Rick’s outlook on select company stocks:

Canadian Tire | 1:21

Maxar Technologies  | 1:20

Crombie REIT| 1:23

AltaGas| 2:52

Magna International| 1:15

Franco Nevada | 0:44

Crescent Point Energy | 3:20

Open Text | 1:05

HSBC | 0:45

Precision Drilling| 1:21

Lloyds Banking Group | 1:47

Pizza Pizza Royalty | 2:09

BCE| 1:19[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][ultimate_spacer height=”30″][vc_column_text]If you have investment-related questions, feel free to give us a call, always happy to chat.

The Stuchberry Group

647.484.3111[/vc_column_text][/vc_column][/vc_row]

Market Retesting the Bottom

Hi folks,

The last update we said we didn’t think it was over, even on that rally we thought it was a bit light, but we think we are closing in on the bottom this time.  We are going to re-test this old bottom which is very close and likely the selling will be done after US thanksgiving.  Right now all the leading stocks are under pressure and our cash positions have sat safely on the sidelines. We may begin to deploy a bit of capital if we have a successful bounce off the October lows.

The gap down today, hasn’t had any panic in it, but think a bit more fear and volatility and we will have ashed this out.


The leading stock in the world is arguably Amazon these days and it looks like the leader is attempting to break trend and move higher, this is a vote of confidence.


We will be looking for an intraday reversal in the near future.  Markets aren’t fun, but no surprises here.

Regards,
Chris
Rick
Rebecca

 

Chris Stuchberry on BNN – November 7

[vc_row][vc_column][ultimate_spacer height=”30″][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Chris Stuchberry returned for Money Manager on BNN Bloomberg this week, on November 7th.

He discusses looking to the US markets for where the TSX will go.

Full Episode

[/vc_column_text][ultimate_spacer height=”50″][vc_row_inner][vc_column_inner width=”3/4″][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”3/4″][/vc_column_inner][/vc_row_inner][ultimate_spacer height=”30″][vc_column_text]Click on the links below for Chris’s outlook on select company stocks:

Chartwell Retirement | 1:26

CI Financial | 1:17

Square| 1:04

AltaGas| 1:32

HSBC| 1:06

Alcanna | 2:19

Bausch Health | 1:54

Pembina Pipeline | 1:08

Dollarama | 1:35

Shopify | 2:21

Manulife | 2:08

Canadian Tire | 1:36

SNC-Lavalin | 1:24

Enbridge | 2:23

First Quantum Minerals | 2:47

Scotiabank | 1:38

Lloyds Bank | 1:21

CN Rail | 1:18[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][ultimate_spacer height=”30″][vc_column_text]If you have investment-related questions, feel free to give us a call, always happy to chat.

The Stuchberry Group

647.484.3111[/vc_column_text][/vc_column][/vc_row]

Rick Stuchberry on BNN – November 6, 2018

[vc_row][vc_column][ultimate_spacer height=”30″][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Rick Stuchberry returned for another market call on BNN Bloomberg this week, on November 6th.

He discusses Canadian large caps and international ADR’s while providing his market outlook, top picks, and answering viewer questions.

Full Episode | 46:08

See clips below:[/vc_column_text][ultimate_spacer height=”50″][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1473″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-market-outlook~1468097″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Rick Stuchberry’s Market Outlook

Rick discusses his outlook on the markets | 4:17[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1502″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-top-picks~1468425″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Top Picks – November 6, 2018

Rick discusses his Top Picks:  Teck Resources, Bank of America and Home Depot | 5:10[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1503″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-past-picks~1468334″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Past Picks – November 6, 2018

Rick reviews his past picks: Royal Bank of Canada, Tencent Holdings and Alimentation Couche-Tard | 4:52[/vc_column_text][/vc_column_inner][/vc_row_inner][ultimate_spacer height=”30″][vc_column_text]Click on the links below for Rick’s outlook on select company stocks:

Loblaw | 1:10

Banco Santander | 1:09

Maxar Technologies| 1:06

AltaGas| 2:12

Scotiabank| 0:54

Vermillion Energy | 1:50

Lloyds Bank versus ING Groep | 2:16

WSP Global | 0:41

Dollarama | 2:06

Pembina Pipeline| 1:21

Keyera | 1:25

Spin Master | 1:35

Citigroup | 1:28

National Bank | 1:26

Bombardier | 1:03

Interest Rates and Utility Stocks | 1:58

Marijuana Stocks | 3:14

Shopify| 1:03[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][ultimate_spacer height=”30″][vc_column_text]If you have investment-related questions, feel free to give us a call, always happy to chat.

The Stuchberry Group

647.484.3111[/vc_column_text][/vc_column][/vc_row]

Quick update on Markets- We think we’re close to a bottom

Wish I could say the market decline is over, but we don’t think it is.  We do think we’re very close to bottoming out, but there is a sentiment potential to have another leg lower and an absolute washout.  Those are no fun, but healthy as they remove excess and we start fresh like a forest fire.  The market wants to rally today, but unfortunately, I think it is meaningless and will weaken until we washout…

So far, we’re down nearly between 8-11% on the indices from the highs and close to 10% for October.
Below is the S&P TSX, S&P 500 and Nasdaq, no mercy in any, all are down roughly 8%.

Here, the same three indices over the last 5 days, down 5%, and very unfortunately, and its kind of hard to see, we almost had an intraday reversal Tuesday, where you start the day low and end positive, those are always great signs of strength, but it failed and then yesterday we gave everything back to close at the lows, approaching negative 10% total correction.

Here is a bit of what we have done recently to take advantage of this dip and ideally swing strongly out the other side.
In August, we invested structural cash in treasuries, ensuring plenty of cash to navigate a period like this.
In September, an arbitrary stock came into our buy range and we dipped a toe in, as we like the company.
In early October, when the market started to show signs of weakness we took a large profit in a winner to increase cash and net out the arbitrary stock purchase to keep cash even.
October started to lose its grip, we filled out our arbitrary stock buy, and just yesterday added a new position in a promising stock, deploying about 3% cash, keeping cash balances comfortably in the teens.

In the last major bull market, after back to back positive years, its pretty normal to have a negative year.  If you look at 1988-89, you see 1990 was rough.  We think the major market is intact, but markets speak for themselves here.

Happy to discuss any thoughts or ideas. For younger investors, this is an opportunity to add to your savings and for older investors, you won’t need to dust off your resumes, we have cash to last years.

Chris Stuchberry on BNN – October 17

[vc_row][vc_column][ultimate_spacer height=”30″][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Chris Stuchberry returned for another market call on BNN Bloomberg this week, on October 17th.

He discusses various North American large caps and ADRs while providing his market outlook, top picks, and answering viewer questions.

Full Episode | 45:40

See clips below:[/vc_column_text][ultimate_spacer height=”50″][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1473″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-market-outlook~1468097″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Chris Stuchberry’s Market Outlook

Chris discusses his outlook on the markets | 5:28[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1472″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-top-picks~1468425″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Top Picks -October 17, 2018

Chris discusses his Top Picks: Couche-Tard, Box Inc and Banco Santander. | 4:25[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/4″][vc_single_image image=”1466″ img_size=”full” img_link_target=”_blank” onclick=”custom_link” link=”https://www.bnnbloomberg.ca/video/chris-stuchberry-s-past-picks~1468334″][ultimate_spacer height=”30″][/vc_column_inner][vc_column_inner width=”3/4″][vc_column_text]

Past Picks – October 17, 2018

Chris reviews his past picks: Facebook, Alibaba and ING Group | 4:47[/vc_column_text][/vc_column_inner][/vc_row_inner][ultimate_spacer height=”30″][vc_column_text]Click on the links below for Chris’s outlook on select company stocks:

Chartwell Retirement | 1:26

CI Financial | 1:17

Square| 1:04

AltaGas| 1:32

HSBC| 1:06

Alcanna | 2:19

Bausch Health | 1:54

Pembina Pipeline | 1:08

Dollarama | 1:35

Shopify | 2:21

Manulife | 2:08

Canadian Tire | 1:36

SNC-Lavalin | 1:24

Enbridge | 2:23

First Quantum Minerals | 2:47

Scotiabank | 1:38

Lloyds Bank | 1:21

CN Rail | 1:18[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][ultimate_spacer height=”30″][vc_column_text]If you have investment-related questions, feel free to give us a call, always happy to chat.

The Stuchberry Group

647.484.3111[/vc_column_text][/vc_column][/vc_row]