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- 👉 I Trimmed 18 Positions in My Portfolio
👉 I Trimmed 18 Positions in My Portfolio
& Google made it's largest-ever acquisition ($32B).
Austin Hankwitz
23 Mar
Together with Betterment
Happy Sunday.
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Let’s dig into this week’s biggest takeaways.
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Now let’s dive right in.
Portfolio Updates (YTD Performance):
As you all know, I’ve very much been in a “sell the rip” mentality over the last few weeks. I originally shared this strategy shift with you all once both the S&P 500 and Nasdaq-100 broke below their respective 200-day moving averages.
Remember, nothing good happens under the 200-day moving average. This simple philosophy, if followed correctly, will help you preserve gains and avoid unnecessary losses in your portfolios. Below is one of my favorite illustrations of the “Stage Analysis” that I try and follow myself.
Essentially, the stock market is in Stage 3. The S&P 500 and Nasdaq-100 are both trading below their 200-day (30-week) moving averages, many of the large-cap single stocks that make up these indices are also trading below their 200-day moving averages (Microsoft, Nvidia, Apple, etc.) — which could be a sign that more index-specific weakness is around the corner.
With that being said, I’ve been adamant about “selling the rip,” which in my experience means cashing in on my 100%, 200%, 500%+ winners that have carried my portfolio higher over the last couple of years. As we saw a market rebound this week, I’ve begun to do just that and will continue to over the coming weeks as the markets hopefully trend higher into the summertime.
I did not exit these positions, I’ve simply taken some profit off the table. Specifically, 50-100% of my profit depending on the stock. I still have these positions, they’re just smaller now.
Crowdstrike
Apple
Google
Cloudflare
HIMS
Microsoft
Nvidia
Monday.com
Amazon
Shopify
VGT
Salesforce
Palo Alto Networks
Meta Platforms
On Holdings
Broadcom
Costco
William Sonoma
Here’s what I hope the market does — the S&P 500 / Nasdaq-100 reclaim their 200-day moving averages, trade above them, retest them as support, then continue to climb higher. If we’re able to put in a new all-time high, we could very well be off to the races (which is why I didn’t completely exit these positions).
If we’re unable to put in a new all-time high, that will be enough proof for me to know this bull run is in the books and it’s time to sell the strength and position my portfolio for continued volatility. Remember, the average bear market lasts 13 months. I look forward to helping you all navigate this continued volatility together!
I’m not in a hurry to deploy this ~$17K of cash. I’ll of course keep you all posted as to how I deploy this capital over the coming weeks. Likely in some international ideas, value stocks, and more defensive names. Stay tuned!
Week in Review —TLDR:
FedEx is expected to deliver 100% FCF conversion this year, Nike’s turnaround story is still in the early innings, Ollie’s authorized a $300M share repurchase program, Google acquired cybersecurity firm, Wiz, for $32B, the SEC has officially dropped its four-year lawsuit against Ripple, StubHub files to go public on the New York Stock Exchange, the Fed kept interest rates steady, the Conference Board Leading Economic Index declined by -0.2% in February, and home sales in February hovered around a 14-year low.
Key Earnings Announcements:
FedEx is expected to deliver 100% FCF conversion this year, Nike’s turnaround story is still in the early innings, and Ollie’s authorized a $300M share repurchase program.
FedEx (FDX):
Key Metrics
Revenue: $22.2 billion, an increase of +2% YoY
Operating Income: $1.3 billion, an increase of +4% YoY
Profits: $909.0 million, an increase of +3% YoY
Earnings Release Callout
“The FedEx team delivered improved profitability, while navigating a very challenging operating environment, including a compressed Peak season and severe weather events. Federal Express segment operating results improved during the quarter, driven by cost reduction benefits from DRIVE, higher base yield, and increased U.S. and international export volume.
These factors were partially offset by higher wage and purchased transportation rates, as well as the expiration of the U.S. Postal Service contract.”
My Takeaway
FedEx reported an earnings miss and reduced their FY2025 guidance in line with that Wall Street was expecting after losing their USPS contract. A few key takeaways…
A profitability improvement inside their Express business segment was better-than-expected – with adj. margins coming in at 7.4%, up from 6.5% last year. Their 5% Express business segment volume growth was also the highest year-over-year improvement since 2021. Given their volume growth was mainly driven by strong demand for FDX’s services, Wall Street is wondering if market share dynamics are beginning to shift in a positive direction for the company.
Despite the headwinds associated with weather ($70M), the postal service contract expiration ($180M), and continued weakness with FedEx Freight — Wall Street was impressed to see the company deliver +17% growth in earnings-per-share (EPS). Suggesting management can continue demonstrating structural cost savings across the business throughout 2025.
Finally, Wall Street is expecting FedEx to deliver 100% free cash flow conversion on their net income during 2025 — the highest in company history.
At the moment, I don’t own shares of FedEx — and I’m not sure I’m going to. The company has been struggling a lot lately, and despite the positive developments concerning cost mitigation and free cash flow growth — their underlying business is stagnant.
Nike (NKE)
Key Metrics
Revenue: $11.3 billion, compared to $12.4 billion last year
Operating Income: $844.0 million, compared to $1.4 billion last year
Profits: $794.0 million, compared to $1.2 billion last year
Earnings Release Callout
“The progress we made against the 'Win Now' strategic priorities we committed to 90 days ago reinforces my confidence that we are on the right path. Our outlook for the second half of fiscal 2025 driven by our 'Win Now' actions remains consistent with what we communicated last quarter. The operating environment is dynamic, but what matters most for NIKE is serving athletes with new product innovation and re-igniting brand momentum through sport.”
My Takeaway
Nike’s earnings were better-than-feared, yet provided fuel for both bulls and bears.
On the positive side of the equation, management highlighted a strong response to new silhouettes despite elevated consumer uncertainty, encouraging execution on their “Win Now” strategy, fall order books being only slightly down, and a renewed focus on sports.
On the negative side, initial Q1 guidance implied earnings much lower than expected and management emphasized their focus on inventory liquidation which means lower gross margins in the short-term. With that being said, management stated Q1 will be the peak of the brand’s turnaround related pressure with sequential improvement expected going forward.
Don’t get me wrong, I love a good turnaround story. I just fear this turnaround won’t materialize for another 18-24 months as there’s still better areas in the markets to invest in. I’ll likely open a very small starter position in the name to have some exposure to this turnaround, but that’s it for now.
Ollie’s Bargain Outlet (OLLI):
Key Metrics
Revenue: $667.1 million, an increase of +3% YoY
Operating Income: $87.7 million, compared to $97.6 million last year
Profits: $68.5 million, compared to $76.5 million last year
Earnings Release Callout
“We were very pleased with our financial results and the underlying trends in our business. At a time when consumers need it most, we are delivering unprecedented value through an ever-changing assortment that combines quality, national brands, and pricing in a way that can only be found at Ollie’s.
This morning, the Company issued a separate press release announcing a new share repurchase authorization for the repurchase of an additional $300 million of the Company’s outstanding common stock, which was unanimously approved by the Company’s Board of Directors, and is effective through March 31, 2029.”
My Takeaway
Ollie’s Bargain Outlet is really beginning to resonate with stretched consumers in the US. The company reported earnings that fell in-line with Wall Street’s expectations, with a small uptick (+3%) in revenue catalyzed by more transactions and a larger basket size. Pressure from Big Lots’ recent liquidation was lower-than-expected in December, creating a surge in holiday demand, followed by a bit of a slowdown in January and February due to weather.
Management guided to +75 new stores opening in 2025, with 65% of them opening during the first half of the year. Early reads from initial Big Lots takeover openings have been positive with strong consumer conversion rates. Opening stores in old Big Lots locations is a genius move by this company — allowing Ollie’s to potentially gain incremental new customers. These locations have also been well-maintained — reducing the need for renovations.
The company continues to see strong growth and retention of high-income (more than $100K) customers, as well as increased customer acquisition in their lower-middle income cohort ($40-60K). I’ve shopped at these stores, and they know what they’re doing. This earnings call pushed me over the edge — I’ll be opening a sizable position in this company ASAP.
Investor Events / Global Affairs:
Google acquired cybersecurity firm, Wiz, for $32B, the SEC has officially dropped its four-year lawsuit against Ripple, and StubHub filed to go public on the New York Stock Exchange.
Google Acquired Wiz for $32B; Its Largest-Ever Acquisition
Source: The Times of Israel
Google is acquiring cybersecurity firm Wiz for $32 billion in its largest-ever purchase — marking a major investment in cloud security amid AI growth. The deal surpasses Google’s previous $12.5 billion Motorola acquisition, which ended in a significant loss. Wiz, founded by former Israeli cyber intelligence officers, has grown rapidly since its launch five years ago.
Talks between Google and Wiz previously stalled in 2023 when Wiz opted to focus on an IPO instead. The acquisition, subject to regulatory approval, ranks as the seventh-largest private U.S. company takeover. Some analysts see the deal as a potential sign of recovery in the M&A market after recent declines.
Alphabet Inc. (GOOG) Stock Performance, 5-Year Chart, Seeking Alpha
“Wiz has achieved so much in a relatively short period, but cybersecurity moves at warp speed and so must we. The time is now.”
Ripple Gets Long-Awaited SEC Victory
Source: Nathan Laine / Bloomberg News
The SEC has officially dropped its four-year lawsuit against Ripple, marking the end of its aggressive enforcement campaign against the crypto industry. The lawsuit, filed in 2020, accused Ripple of selling XRP as an unregistered security, but a 2023 federal ruling undercut the SEC’s case. Ripple’s victory signals a major shift in crypto regulation, especially under President Donald Trump, who has embraced the industry after receiving campaign support.
The SEC, now led by Hester Peirce, is moving toward engagement rather than enforcement, including rescinding a controversial crypto banking rule. Trump has positioned the U.S. as a global leader in crypto, with his administration actively reversing previous regulatory barriers. With lawsuits against Coinbase, Kraken, and Binance also dismissed or stalled — the SEC’s retreat marks a turning point for the crypto industry.
Ripple (XRP), 5-Year Performance, Seeking Alpha
“Ripple stands alone as the company that fought back — and won on essential legal questions — throwing a major wrench into the SEC’s plans to destroy crypto in the U.S. through enforcement… The SEC has now abandoned its appeal in our case. In a fitting irony, Ripple was the first major case they brought and will now be the last one they walk away from.”
StubHub Files for IPO
Source: Getty Images
StubHub has filed to go public on the New York Stock Exchange under the ticker symbol “STUB” after delaying its IPO plans last year. The online ticket marketplace reported $1.77 billion in revenue for 2024 but recorded a net loss of $2.8 million, a sharp contrast to its $405 million profit in 2023. Originally acquired by eBay in 2007, StubHub was bought back by co-founder Eric Baker in 2020 for $4 billion. The IPO market, which had been stagnant since early 2022, is now showing signs of revival, with companies like CoreWeave, Klarna, and Hinge Health also filing to go public.
StubHub competes with rivals such as Vivid Seats, which went public in 2021, and SeatGeek, which has been considering an IPO. The return of venture-backed IPOs — including recent debuts by ServiceTitan and Reddit — suggests growing investor confidence in tech and online marketplaces.
"StubHub’s filing follows on the recent filings of other high-profile deals set to go public soon, including CoreWeave and Klarna. This indicates a recovering U.S. IPO market with owners seeing a window of opportunity to go public.”
Major Economic Events:
The Fed kept interest rates steady, the Conference Board Leading Economic Index declined by -0.2% in February, and home sales in February hovered around a 14-year low.
Fed Meeting / Rate Decision
The Federal Reserve kept interest rates steady at 4.25%-4.5% but maintained its forecast for two rate cuts later this year. Officials downgraded their economic growth projection to +1.7% for 2025 while raising their inflation forecast to +2.8%. Fed Chair Jerome Powell emphasized the central bank's willingness to keep rates elevated if inflation remains above target or ease policy if the labor market weakens. The Fed also announced a reduction in its quantitative tightening program — slowing the pace of bond runoff to support financial conditions.
Market reaction was positive, with the Dow Jones Industrial Average rising over 400 points on expectations of future rate cuts. Concerns remain over the economic impact of tariffs imposed by President Trump, which have increased inflation expectations among consumers. While some labor market weaknesses have emerged — spending data from Bank of America suggests the economy is still growing at a moderate pace.
“If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer… If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”
“Today’s Fed moves echo the kind of uncertainty Wall Street is feeling… Their expectations are a little stagflationary because GDP estimates came down as inflation inched higher, but none of it is very decisive.”
Conference Board Leading Economic Index
The Conference Board Leading Economic Index (LEI) for the U.S. declined by 0.3% in February 2025, continuing a downward trend, though the pace of decline has moderated compared to last year. The drop was primarily driven by worsening consumer expectations and a decline in manufacturing new orders. Despite the continued decline, the LEI’s six-month and annual growth rates have shown signs of improvement since late 2023.
Meanwhile, the Coincident Economic Index (CEI), which reflects the current state of the economy, increased by 0.3% in February, supported by industrial production, personal income, and payroll employment. The Lagging Economic Index (LAG) also rose by 0.4%, marking a positive six-month change for the first time in a year. Given policy uncertainties and weaker consumer sentiment, GDP growth is projected to slow to around 2.0% in 2025.
“Consumers’ expectations of future business conditions turned more pessimistic. That was the component that weighed down most heavily on the Index in February. Manufacturing new orders, which improved in January, retreated and were the second largest negative contributor to the Index’s monthly decline. On a positive note, the LEI’s six-month and annual growth rates, while still negative, have remained on an upward trend since the end of 2023, suggesting that headwinds in the economy as of February may have moderated compared to last year. However, given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.”
Existing Home Sales
Existing-home sales rose+ 4.2% in February 2025 to a seasonally adjusted annual rate of 4.26 million, though they remained -1.2% lower than a year ago. The median existing-home price increased +3.8% year-over-year to $398,400 — marking the 20th consecutive month of price gains. Housing inventory grew 5.1% from January to 1.24 million units, providing a 3.5-month supply at the current sales pace.
Regional trends were mixed, with the West experiencing the largest monthly increase (+13.3%), while the Northeast saw a -2.0% decline. First-time buyers made up 31% of February sales, up from 26% a year ago, while cash sales accounted for 32% of transactions. Despite higher inventory and steady mortgage rates, continued housing shortages and low mortgage default rates suggest a stable foundation for home values.
"Home buyers are slowly entering the market… Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”
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