August 2020 saw the Siren Large Cap Blend ETF (NASDAQ:SPQQ), gain 8.83% versus the S&P 500 at 7.01%.
We saw some carry through of earnings season in a few of our names, but overall 16 of our names were up more than 10% and only 4 were down more than 1%, with 43 names gaining, 6 losing and one being dead flat.
Tesla Inc (NADSAQ:TSLA) (1.66% weighting) was the largest percentage gainer for the fund with a whopping 74.15% move to the upside, following Julys gain of 32.5%. We mentioned last month that TSLA now has shown four consecutive profitable quarters, so it is eligible for inclusion in the S&P 500. Further, TSLA enacted their 5:1 stock split on August 31 which coupled with short covering created the outsized gains for the month. While we do not expect any further catalyst from the company in the near future, we continue to hold our breath on if the S&P will add TSLA to the 500.
Nvidia (NASDAQ:NVDA) (1.66% weighting) was the second largest percentage gainer in July with an even 26.00% move higher. NVDA announced second quarter earnings with record revenue of $3.87 Billion, up 50% from a year earlier. They also saw record Data Center revenue of $1.75 Billion, up 167% from a year earlier. Mellanox growth accelerated in its first quarter as part of NVDA and contributed 14% of revenue. “Adoption of NVIDIA computing is accelerating, driving record revenue and exceptional growth,” said Jensen Huang, founder and CEO of NVIDIA. “Growth in GeForce gaming accelerated as gamers increasingly immerse themselves in realistic virtual worlds created by NVIDIA RTX ray tracing and AI.
“Our new Ampere GPU architecture is sprinting out of the blocks, with the world’s top cloud service providers and server makers moving quickly to offer NVIDIA accelerated computing. Mellanox grew sharply, driven by the need for high-speed networking in cloud data centers to scale-out AI services. And Mercedes-Benz’s partnership with NVIDIA to power its next-generation fleet of luxury cars — from the computer to the AI software, and from the cloud to the car — is transformative.
“Despite the pandemic’s impact on our professional visualization and automotive platforms, we are well positioned to grow, as gaming, AI, cloud computing and autonomous machines drive the next industrial revolution around the world,” he said.
NVIDIA paid $99 million in quarterly cash dividends in the second quarter. It will pay its next quarterly cash dividend of $0.16 per share on September 24, 2020, to all shareholders of record on September 2, 2020.
Apple Inc (NASDAQ:AAPL)(3.33% weighting) rose 21.44% in August with a combination of carry through buying from their stellar earnings report in late July and a run up into their 4 for 1 stock split at the end of August. It’s an interesting time for AAPL if history holds. While they became the first company to top $2 Trillion in Market Cap, they do have a history of selling off within two weeks of a stock split.
We also saw 12% to 16% gains from Mastercard (NYSE:MA) at 16.1%(1.66% weighting), Facebook (NASDAQ:FB)at 15.58% (3.33% weighting), Adobe (NASDAQ:ADBE)15.55% (3.33% weighting), Booking.com (NASDAQ:BKNG)14.94% (1.66% weighting), Disney (NYSE:DIS) 12.77% (1.66% weighting), Qualcomm (NASDAQ:QCOM)12.77%(1.66% weighting),and Intuit (NASDAQ:INTU)12.74%(1.66% weighting).
The biggest loser for August was Cisco Systems (NASDAQ:CSCO)(3.33% weighting) dropping 10.36% after earnings. CSCO fourth quarter revenue fell 9% year over year to $12.2 Billion with adjusted earnings falling 4% to .80 a diluted share, both of which topped analyst estimates. The problem was their forward guidance. Sales are expected to fall by approximately 10% again, stopping in the neighborhood of $11.9 billion. Adjusted earnings were projected to be approximately $0.70 per share, down from $0.84 per share in the year-ago period. Here, your average analyst had been looking for earnings near $0.76 per share on roughly $12.2 billion in top-line sales. Cisco achieved a couple of long-term goals in fiscal year 2020. More than half of the company’s total sales came from software and services this year, reducing the importance of lower-margin hardware sales. And 78% of Cisco’s software revenues were collected in the form of subscription deals, exceeding a management target of 66%. The company is modernizing its business model with an eye on higher-margin operations and more predictable revenue streams.
That being said, the first-quarter guidance targets came in low due to COVID-19 impacts on top of a difficult comparison against the year-ago period’s unusually strong results.
“So comparing to Q1 of ’20 right now, we still have some tougher compares. But they do get easier as the year goes on, assuming that the pandemic ends,” CFO Kelly Kramer said in Cisco’s fourth-quarter earnings call. “We forecast based on what we see, based on the order rates, and we feel this is a pretty accurate guide.”
Kramer also chose this moment to retire from her CFO role. Cisco won’t be left without a financial leader, though. Kramer will stay until the company has found a suitable replacement and will also get her successor up to speed before stepping away, and it was moderately up until the close on July 23rd when they announced earnings. While they beat EPS and revenue estimates, their guidance was awful. Management announced that their 7-nanometer chips would be delayed and be at least a full year behind schedule.
Exxon Mobil (NYSE:XOM) (1.66% weighting) also had a poor month, dropping 5.09%. Not only was XOM removed from the Dow Jones Index, but it continues to be pressured by supply/demand dynamics in the global market.
August began on the tailwinds of the big tech announcements from after the market closed on July 30, and had stellar monthly numbers, and we hope for more carry forward in September.
Holdings are subject to change on a quarterly basis. The mention of any security should not be construed as a recommendation to buy or sell a security.
Market Commentary August 2020
August 2020 saw the Siren Large Cap Blend ETF (NASDAQ:SPQQ), gain 8.83% versus the S&P 500 at 7.01%.
We saw some carry through of earnings season in a few of our names, but overall 16 of our names were up more than 10% and only 4 were down more than 1%, with 43 names gaining, 6 losing and one being dead flat.
Tesla Inc (NADSAQ:TSLA) (1.66% weighting) was the largest percentage gainer for the fund with a whopping 74.15% move to the upside, following Julys gain of 32.5%. We mentioned last month that TSLA now has shown four consecutive profitable quarters, so it is eligible for inclusion in the S&P 500. Further, TSLA enacted their 5:1 stock split on August 31 which coupled with short covering created the outsized gains for the month. While we do not expect any further catalyst from the company in the near future, we continue to hold our breath on if the S&P will add TSLA to the 500.
Nvidia (NASDAQ:NVDA) (1.66% weighting) was the second largest percentage gainer in July with an even 26.00% move higher. NVDA announced second quarter earnings with record revenue of $3.87 Billion, up 50% from a year earlier. They also saw record Data Center revenue of $1.75 Billion, up 167% from a year earlier. Mellanox growth accelerated in its first quarter as part of NVDA and contributed 14% of revenue. “Adoption of NVIDIA computing is accelerating, driving record revenue and exceptional growth,” said Jensen Huang, founder and CEO of NVIDIA. “Growth in GeForce gaming accelerated as gamers increasingly immerse themselves in realistic virtual worlds created by NVIDIA RTX ray tracing and AI.
“Our new Ampere GPU architecture is sprinting out of the blocks, with the world’s top cloud service providers and server makers moving quickly to offer NVIDIA accelerated computing. Mellanox grew sharply, driven by the need for high-speed networking in cloud data centers to scale-out AI services. And Mercedes-Benz’s partnership with NVIDIA to power its next-generation fleet of luxury cars — from the computer to the AI software, and from the cloud to the car — is transformative.
“Despite the pandemic’s impact on our professional visualization and automotive platforms, we are well positioned to grow, as gaming, AI, cloud computing and autonomous machines drive the next industrial revolution around the world,” he said.
NVIDIA paid $99 million in quarterly cash dividends in the second quarter. It will pay its next quarterly cash dividend of $0.16 per share on September 24, 2020, to all shareholders of record on September 2, 2020.
Apple Inc (NASDAQ:AAPL)(3.33% weighting) rose 21.44% in August with a combination of carry through buying from their stellar earnings report in late July and a run up into their 4 for 1 stock split at the end of August. It’s an interesting time for AAPL if history holds. While they became the first company to top $2 Trillion in Market Cap, they do have a history of selling off within two weeks of a stock split.
We also saw 12% to 16% gains from Mastercard (NYSE:MA) at 16.1%(1.66% weighting), Facebook (NASDAQ:FB)at 15.58% (3.33% weighting), Adobe (NASDAQ:ADBE)15.55% (3.33% weighting), Booking.com (NASDAQ:BKNG)14.94% (1.66% weighting), Disney (NYSE:DIS) 12.77% (1.66% weighting), Qualcomm (NASDAQ:QCOM)12.77%(1.66% weighting),and Intuit (NASDAQ:INTU)12.74%(1.66% weighting).
The biggest loser for August was Cisco Systems (NASDAQ:CSCO)(3.33% weighting) dropping 10.36% after earnings. CSCO fourth quarter revenue fell 9% year over year to $12.2 Billion with adjusted earnings falling 4% to .80 a diluted share, both of which topped analyst estimates. The problem was their forward guidance. Sales are expected to fall by approximately 10% again, stopping in the neighborhood of $11.9 billion. Adjusted earnings were projected to be approximately $0.70 per share, down from $0.84 per share in the year-ago period. Here, your average analyst had been looking for earnings near $0.76 per share on roughly $12.2 billion in top-line sales. Cisco achieved a couple of long-term goals in fiscal year 2020. More than half of the company’s total sales came from software and services this year, reducing the importance of lower-margin hardware sales. And 78% of Cisco’s software revenues were collected in the form of subscription deals, exceeding a management target of 66%. The company is modernizing its business model with an eye on higher-margin operations and more predictable revenue streams.
That being said, the first-quarter guidance targets came in low due to COVID-19 impacts on top of a difficult comparison against the year-ago period’s unusually strong results.
“So comparing to Q1 of ’20 right now, we still have some tougher compares. But they do get easier as the year goes on, assuming that the pandemic ends,” CFO Kelly Kramer said in Cisco’s fourth-quarter earnings call. “We forecast based on what we see, based on the order rates, and we feel this is a pretty accurate guide.”
Kramer also chose this moment to retire from her CFO role. Cisco won’t be left without a financial leader, though. Kramer will stay until the company has found a suitable replacement and will also get her successor up to speed before stepping away, and it was moderately up until the close on July 23rd when they announced earnings. While they beat EPS and revenue estimates, their guidance was awful. Management announced that their 7-nanometer chips would be delayed and be at least a full year behind schedule.
Exxon Mobil (NYSE:XOM) (1.66% weighting) also had a poor month, dropping 5.09%. Not only was XOM removed from the Dow Jones Index, but it continues to be pressured by supply/demand dynamics in the global market.
August began on the tailwinds of the big tech announcements from after the market closed on July 30, and had stellar monthly numbers, and we hope for more carry forward in September.
Holdings are subject to change on a quarterly basis. The mention of any security should not be construed as a recommendation to buy or sell a security.
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Market Commentary November 2020
November 20, 2020 the Siren ETF Trust closed their acquisition of three ETFs from Reality Shares, the Nasdaq NextGen Economy ETF (NASDAQ:BLCN), DIVCON Dividend Defender ETF (CBOE:DFND) and DIVCON Leaders Dividend ETF (CBOE:LEAD) All three acquired funds began trading on the same exchanges as Siren ETFs at the open of trading on Monday November 23, 2020.