UL Solutions (ULS) Reports; HubSpot (HUBS): Sell for Quick Gain
Heading into the afternoon, shares of UL Solutions (ULS) are trading about flat on the day, but they were up significantly this morning, briefly trading at an all-time high before settling down. To be fair, this isn’t the only stock that’s been a bit all over the place today. And in some ways, ULS should get a “pass” today given that it’s election day and traders are a bit on edge.
That all said, let’s look quickly at the results.
The company beat expectations by 3% on revenue (up 8% organically, to $731 million) and 26% on EPS ($0.49 beat by $0.10). Management guided for full-year revenue in the mid-to-high-single-digit range, which is better than prior guidance of up mid-single digits. M&A and portfolio “refinements” are likely to continue. Margins in Q4 should tick higher.
Management talked about continued strength in its end markets due to megatrends like electrification, safety and sustainability. AI integration is enhancing software offerings as well.
There were a lot more details discussed on the call, but the big picture is that ULS had a decent quarter, and the business is tracking well. Now, we move on to monitoring the stock to see if it continues to earn a position in our portfolio.
On that score, the jury is still out. I’ll give ULS a day or two to see how the stock digests the report and acts through the election results and FOMC meeting on Thursday. And we’ll go from there. For now, ULS remains a buy. BUY
HubSpot (HUBS) Moves to Sell – Lock in a Quick 7% Gain
I added HubSpot (HUBS) as a trade opportunity just three weeks ago, theorizing it was likely the stock would break above its 200-day moving average line and deliver an attractive, short-term return. As it stands now, the stock is up 7% from our entry point. With the election results, FOMC meeting Thursday and HUBS reporting tomorrow, there are three sources of short-term uncertainty.
I never intended for this to be a long-term trade, so let’s book the quick gain now. I’ll keep an eye on HUBS and consider adding it back to our portfolio. This sell will be a “mistake” if the stock surges on earnings (or election or Fed). However, we still have a good amount of market exposure, so in these scenarios we should benefit elsewhere. SELL
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