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  • Writer's pictureJL

Plays To Consider Summaries Week of Sept 1st

American Eagle Outfitters (NYSE: AEO)

General sentiment, which has historically been positive, has been rather depressed recently due to the brooding rain cloud that is China tariffs and the wider negative sentiment blue chip retailers have been entertaining lately as a whole. Poor price action the past few months has not helped, but correspondingly if earnings presents any hint of upside there could be a decent rally to buck the trend.

Smartsheet Inc (NYSE: SMAR)

General sentiment is trending negative with a sense that the SP is unjustifiably overvalued. Some of the driving factors being that the SP is currently trading at over 20x revenue and that ~150% of the current share float is outstanding. A recent offering 3 months ago seems to also give credence to continuing dilution fears given the high O/S.

Cloudera Inc (NYSE: CLDR)

General sentiment on Cloudera is optimistically positive, this company more-or-less missed out on the general run-up of its cloud computing peers, and there's a sense that a strong beat in earnings could see a substantial gap up in SP. Volume has also been relatively low coming into earnings which makes it an interesting sleeper play. Additionally, institutional investors have been ramping up their percentage owned this year, especially ICAHN which has made a series of significant purchases since August.

SecureWorks Corp (NASDAQ: SCWX)

General sentiment is currently neutral to negative, volume has dropped off significantly over the past few months and SP has seen a haircut of 50% since Feb. Analysts and influencers alike have all but shunned this stock since 2018, and it has historically been seen as a sluggish contender in terms of growth when put in comparison with its peers in the cyber-security industry.

Docusign Inc (NASDAQ: DOCU)

General sentiment has been trending negative but optimistic long-term. Their product-line dominates the market and is almost universally known, but there is frustration that the management is out-of-touch and not living up to the company's fullest potential. Adding to these frustrations is languishing SP this year along with a sharp decline starting late July, and a distinct lack of communication from company chief officers regarding the downward trend or steps being taken to rectify. Even so, a decent earnings beat could see a rebound and potential reversal in trend.

Genesco Inc (NYSE: GCO)

General sentiment has been negative, which is an unsurprising development given the overall downward trend for retailers of the brick-and-mortar variety this year. YTD SP has seen a 20% loss, and high profile insiders have been unloading over a $1M worth of shares consistently for the past two years. One only needs to look at how their net income has been trending to the negative to get an idea as to where this is headed. Iconic shops such as Lids no longer have the same sort of draw they used to, especially with the accelerating domination of e-commerce behemoths such as Amazon, and GCO does not appear to be adapting well to this quickly evolving climate.

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