So, out of our Trade of the Year finalists, INTC, IBM and GOLD have all held up pretty well the last few days - that's a good sign.
I think, as an overall trade (with great spread dynamics), INTC is the winner but it's really a two-year play due to their current investment cycle and profits will be off 1/3 this year so Q/Q comps will suck and traders are stupid so there's still a chance they trade lower - even if undeserved.
IBM, I think, is going to show positive trends in 2022 so the catalyst is better earnings off a stupidly cheap floor. IBM hasn't spend more than a few weeks below $110 since 2010 as that's about their 11x line. Generally IBM is more like $120-140 and we can make a conservative spread there I can be very happy with.
In the MTP, we already have GOLD, SPWR and VIAC. I'd go with T if not for the split (too complicated) so MO and WBA I guess are the other runner-ups. WBA made $457M last year and MO made $4.5Bn (people gotta smoke) and let's not forget their earnings were depressed due to that JUUL disaster ($12.8Bn down the drain) they stepped into. If pot is fully legalized, they will take over that industry too and they already own 45% of CRON, which they bought for $1.8Bn and they are down about 50% on that.
I guess WBA is not as safe as MO but they only just started doing vaccinations and that will be a huge business in 2022 and was our original reason for liking them long-term, as is their 10x valuation.
So I guess all 4 will be additions, just in varying degrees but IBM will end up being the Trade of the Year as it's the safest bet with the best chance of success.
