Varonis (VRNS) Moves to Sell. MSFT, FTAI, AAPL, SN up next.
My thinking at this time is that if a relatively new position that we don’t have a gain on (i.e. not a lot of wiggle room) reports and the stock doesn’t respond well, I’m more likely to consider selling than being patient.
This is partially due to concerns about the election and Fed meeting next week driving some volatility. But also because we have a very solid portfolio of well-performing positions, so we have the luxury of being quite selective with what we choose to hold on to.
That’s the background for why I’m stepping away from Varonis (VRNS) today.
To be clear, the company beat expectations in Q3 (reported after the close yesterday). And while the Federal business underperformed (resulting in a management shakeup of this line of business), management said deals related to Generative AI are starting to close, SaaS adoption is accelerating and there has been an uptick in demand for data protection solutions driven by Microsoft Co-Pilot.
In other words, there’s nothing really “wrong” here.
Still, shares are trading down today. And right now, I’d rather stick with strength.
So, we’ll exit at about our entry price from September 20 and I’ll keep an eye on VRNS for potential inclusion in the future.
Upcoming Earnings
Microsoft (MSFT) reports after the close today. If you’re a glass half full type, Google’s (GOOG) uptick in cloud activity and Varonis’ disclosure of momentum in Co-Pilot-related demand are positive for MSFT. BUY
FTAI Aviation (FTAI) reports after the close today. I’m not expecting fireworks, just more of the same – good, solid momentum. HOLD
Apple (AAPL) is up tomorrow with Q4 fiscal 2024 results. Word on the Street is that iPhone 16 sales started slow but are picking up, albeit still slower than the iPhone 15 last year. It doesn’t help that Apple Intelligence wasn’t ready at the time the 16 came out, but it is now. This means management’s guidance for Q1 Fiscal 2025, which includes the holiday period, is big. We’re in Apple because it’s a great company, we nabbed shares at a good price (+20% since) and because we should see a big AI-led upgrade cycle into 2025. BUY
SharkNinja (SN) is up tomorrow. The company has been putting out new products and news flow has been positive. The stock has been a beast. We go into earnings with a hold rating. HOLD HALF
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