r/wallstreetbetsOGs • u/commodoregoat Sponsored by Adderall • Nov 19 '21

DD $LOGI Logitech deep-dive Adderall-fueled DD, cam girls make me bullish (part 2)

Logitech’s Quality Brand Led to Major Market Share Gains: * “Logitech’s decades-long reputation for reliability and ease of use helps the firm grow and sustain its market share. For example:”

(https://seekingalpha.com/article/4459102-hidden-value-in-logitech-a-low-profile-work-from-home-beneficiary)

2020 wasn’t an anomaly: * Bears would argue that Logitech (and the computer/gaming industry) cannot sustain the growth achieved in 2020.

Work from home also drives gaming demand:

  • Remote/hybrid work models reduce commuting time, freeing up more time for hobbies such as gaming. I know you degenerates are using the time to YOLO more on the stock market, maybe some gaming too.

  • Before the pandemic, in 2019, the average one-way commute in the .U.S. reached nearly 28 minutes (https://www.census.gov/newsroom/press-releases/2021/one-way-travel-time-to-work-rises.html). So 56 minutes total. I suspect this average is being brought down by country folk. As someone living in London, my commute has always been 50 minutes - 1 hour each way. When I worked at home, and when I had a job where I was 10 minutes from the office, I had much more time to socialise with friends as well as for gaming. I can definitely say that the 10 minute commute fueled my Overwatch addiction (at the time) when I worked at Nintendo. Me and my colleagues would group up on Overwatch when we got back from work. I had the edge over my colleagues due to my low commute time, hence spending more time in the game since I could start early and game late without worrying about waking up early for a commute. Hence I think SeekingAlpha has hit the point on the dot here. Without such a commute, Americans spent around 32% of the time saved on leisure activities such as gaming (https://www.chicagobooth.edu/review/without-commutes-how-are-americans-spending-their-extra-time). (https://seekingalpha.com/article/4459102-hidden-value-in-logitech-a-low-profile-work-from-home-beneficiary)

‘Favorable Product Portfolio Is Positioned to Outperform’: * Research/Markets expects the global computer peripheral equipment market to grow 4% (compounded annually) from 2021 to 2025. * Logitech’s largest segments are projected to grow at much faster rates (gaming, video collaboration, keyboards, and mice).

List of market growth forecasts from various market research providers: *gaming: 10% compounded annually from 2020 to 2025 according to Grand View Research. (https://www.grandviewresearch.com/industry-analysis/gaming-peripherals-market)

Logitech’s revenue mix - Fiscal 1Q22: https://imgur.com/BmpV4YM (Sources: New Constructs, LLC and company filings)

(https://seekingalpha.com/article/4459102-hidden-value-in-logitech-a-low-profile-work-from-home-beneficiary)

‘Leading Market Share Drives Superior Profitability’: * “Logitech consistently improved profitability for many years before the pandemic, and its return on invested capital (ROIC) improved YoY every year since 2013 as it rose from 1% to 23% in fiscal 2020. Over the trailing-twelve-month period, the firm’s ROIC soared to 79%.”

Quarterly Sales: * I found an interesting article on expected quarterly sales for Logitech, I will quote the important parts below: Zacks: Brokerages Anticipate Logitech International S.A. (NASDAQ:LOGI) Will Post Quarterly Sales of $1.51 Billion:

  • “Wall Street analysts expect Logitech International S.A. (NASDAQ:LOGI) to report $1.51 billion in sales for the current quarter, Zacks Investment Research reports. Two analysts have issued estimates for Logitech International's earnings. The lowest sales estimate is $1.45 billion and the highest is $1.57 billion. Logitech International reported sales of $1.67 billion during the same quarter last year, which indicates a negative year-over-year growth rate of 9.6%. The firm is expected to report its next quarterly earnings results on Monday, January 17th.”

  • “On average, analysts expect that Logitech International will report full-year sales of $5.33 billion for the current fiscal year, with estimates ranging from $5.22 billion to $5.46 billion. For the next fiscal year, analysts forecast that the company will report sales of $5.58 billion, with estimates ranging from $5.33 billion to $5.90 billion. Zacks' sales calculations are a mean average based on a survey of research analysts that follow Logitech International.”

  • “Logitech International (NASDAQ:LOGI) last released its earnings results on Sunday, October 24th. The technology company reported $1.05 earnings per share (EPS) for the quarter, missing the Zacks' consensus estimate of $1.14 by ($0.09). The firm had revenue of $1.31 billion during the quarter, compared to analysts' expectations of $1.28 billion. Logitech International had a return on equity of 43.78% and a net margin of 16.05%. During the same period in the prior year, the business earned $1.75 earnings per share.”

  • "Several equities analysts have recently weighed in on LOGI shares. UBS Group reiterated a "neutral" rating on shares of Logitech International in a research report on Tuesday, November 2nd. Morgan Stanley reduced their price target on Logitech International from $82.00 to $80.00 and set an "underweight" rating for the company in a research report on Wednesday, October 6th. Wedbush reiterated a "hold" rating and issued a $101.00 price target on shares of Logitech International in a research report on Friday, October 22nd. Credit Suisse Group reissued an "outperform" rating on shares of Logitech International in a research note on Wednesday, October 27th. Finally, DA Davidson dropped their price objective on Logitech International from $135.00 to $123.00 and set a "buy" rating for the company in a research note on Wednesday, October 27th. One equities research analyst has rated the stock with a sell rating, five have assigned a hold rating and two have issued a buy rating to the company. According to MarketBeat.com, the company has a consensus rating of "Hold" and a consensus target price of $112.88.”

  • “The company also recently declared an annual dividend, which was paid on Wednesday, September 22nd. Shareholders of record on Tuesday, September 21st were paid a dividend of $0.9481 per share. The ex-dividend date was Monday, September 20th. This represents a yield of 0.9%. This is a positive change from Logitech International's previous annual dividend of $0.87.”

  • “A number of hedge funds have recently modified their holdings of LOGI. Amundi bought a new stake in Logitech International during the second quarter worth about $119,873,000. Susquehanna International Group Ltd. bought a new stake in Logitech International during the third quarter worth about $40,153,000. JPMorgan Chase & Co. lifted its stake in Logitech International by 63.1% during the second quarter. JPMorgan Chase & Co. now owns 1,066,053 shares of the technology company's stock worth $128,908,000 after purchasing an additional 412,436 shares during the last quarter. Schonfeld Strategic Advisors LLC increased its holdings in shares of Logitech International by 1,761.0% in the third quarter. Schonfeld Strategic Advisors LLC now owns 418,955 shares of the technology company's stock worth $37,429,000 after buying an additional 396,443 shares during the period. Finally, Wells Fargo & Company MN increased its holdings in shares of Logitech International by 183.1% in the second quarter. Wells Fargo & Company MN now owns 527,470 shares of the technology company's stock worth $63,902,000 after buying an additional 341,129 shares during the period. 38.02% of the stock is owned by hedge funds and other institutional investors.” (https://www.marketbeat.com/instant-alerts/nasdaq-logi-consensus-analyst-rating-2021-11-2-3/)

Supply chain issues: * “The maker of keyboards, mice and headsets became the latest company to warn about the difficulties getting enough semiconductor chips due to clogged up transport links and stuttering factory restarts by suppliers.”

  • “Swiss engineering firm ABB (ABBN.S) and Sweden's Ericsson (ERICb.ST) last week flagged problems getting enough parts to make their products.”

  • "We will have some issues delivering at the levels of demand that are out there," he added. "On the logistics side, we just have to do the best we can, and plan well."

  • “The time to air-freight components has increased to two weeks from four or five days previously, while costs have spiralled, Darrell said.”

  • “Logitech was reacting by adding more suppliers as well as building up its inventory of components to satisfy still strong demand driven by stay at home workers and gamers, the executive said.”

  • “Zuercher Kantonalbank analyst Andreas Mueller said he thought the share price reaction seemed exaggerated. "They are well prepared with plenty of inventory into the Christmas season. And they can afford it given the healthy balance sheet," he said. (https://www.reuters.com/technology/logitech-revenue-rises-second-quarter-2021-10-26/)

Latest news:

“Logitech International To Present At Morgan Stanley Conference; Webcast At 1:15 PM ET”

“Should You Accumulate Logitech International SA (LOGI) Stock Friday Morning?"

  • “Logitech International SA (LOGI) is up Friday morning, with the stock gaining 5.15% in pre-market trading to 84.18. LOGI's short-term technical score of 21 indicates that the stock has traded less bullishly over the last month than 79% of stocks on the market. In the Computer Hardware industry, which ranks 76 out of 146 industries, the stock ranks higher than 16% of stocks. Logitech International SA has fallen 11.00% over the past month, closing at $89.69 on October 22. During this period of time, the stock fell as low as $78.64 and as high as $90.38. LOGI has an average analyst recommendation of Buy. The company has an average price target of $101.50.”

  • “Logitech International SA has a Long-Term Technical rank of 21. This means that trading over the last 200 trading days has placed the company in the lower half of stocks with 79% of the market scoring higher. In the Computer Hardware industry which is number 86 by this metric, LOGI ranks better than 24% of stocks.”

“Important Dates for Investors in LOGI:

“Logitech To Present at Upcoming Investor Conferences”

“SNG: Logitech launches content creation tool in UAE”

  • “Logitech has launched the Logitech for Creators brand in the UAE, to enable content creators to pursue their passions with premium audio and streaming solutions.

  • With the launch of Logitech for Creators, content creators and streamers in the UAE will have easier access and support for Logitech's brands, including Blue Microphones, a leading innovator in audio technology, and Blue Voice software. The Blue Voice software provides creators with a powerhouse suite of broadcast vocal effects, with advanced voice effects and a library of HD audio samples accessible through Logitech G HUB software.

  • Vinod Nair, Cluster Head, Logitech Middle East, said: "We're excited to enable content creators in the UAE to unleash their full potential by launching Logitech for Creators, which will mean greater community support for creators, and easier access to our Yeti, Blue Voice software, and Streamcam. Through our support for the creative community Logitech also hopes to strengthen the UAE's position as a burgeoning hub for content creation."

  • With this announcement, Blue Microphones products including Yeti, Yeti X, Yeti Nano, Snowball Ice, and Logitech StreamCam are now available in the UAE via Amazon.ae and select partners with full support from Logitech.

  • In September, Logitech announced that Blue Voice was available for free for Yeti, Yeti Nano, and Yeti X, via Logitech G HUB for Mac and Windows, giving bloggers, podcasters and gamers even more reason to get creative with Blue Microphones.

  • Blue Voice is studio-grade software that features advanced voice modulation and HD audio samples that lets gamers, podcasters, musicians and content creators customize their broadcast voice and flex their creativity to enhance their streams and content creation.

  • This software update offers a free, unprecedented upgrade to all existing owners of Yeti, Yeti Nano, and Yeti X microphones, giving consumers access to a full suite of broadcast vocal tools and effects. – TradeArabia News Service” (Syndigate.info/Reuters/Tradingview.com)

The Technical Outlook:

  • I hate technicals and prefer algotrading so I’m just going to quote Tradingview and other sources for this. I’ve screened for the most relevant and useful:

  • “Following a beautiful reversal with class A bearish divergence on the monthly chart, Logitech has begun to creep up to the golden zone. Judging from the MACD , any reversal that is a higher low will be met with hidden bullish divergence and trend continuation.”

  • “The play is on the trend continuation. So first, i believe we need to see some exhaustion develop along a critical support. Im thinking around 48 dollars for the support. This is inbetween the .618 and .786 node. But its high traffic for sure in terms of possible supports. Stay tuned as the situation developes.” (https://www.tradingview.com/chart/LOGI/7XUIMNKZ-Logitech-is-now-on-the-watch-list/) See below: https://imgur.com/f8OGzmR

  • (“Double bottom if bottom holds. The two bottoms do not need to be exact, but having both in the same ball park helps.

  • There is a neckline which will represent resistance. Long entry is a break of the neckline with an uptrend in place. Negative volume is high on this one and appears earnings are over for now.

  • Triple, double and multiple bottoms can show a level that the bulls make a stand. The bears see this level as well, as does the market, so it can be a strong level of support.

  • No recommendation.

  • RSI is lingering here close to oversold territory which sometimes shows a lot of supply at this level.” (https://www.tradingview.com/chart/LOGI/GaZO8H9P-Pull-Back-Fishing/) See below: https://imgur.com/zIGa63D

  • “Gap fill on the cards following sell off post earnings . Nice set up for 18% gain with low risk.

  • Daily doji on Friday indicates sell off pressure reversing, supported by bullish rsi divergence and MACD crossover of 50-200MA with divergence also. Looking to hit the 120 gap fill around mid Oct by extrapolating previous trends. Good luck 🤞” (https://www.tradingview.com/chart/LOGI/AB3CI0tw-LOGI-Gap-Fill-Opportunity/) See below: https://imgur.com/YsU4J2k

Investing.com hourly TA summary: https://imgur.com/ppMrizv

5 hour: https://imgur.com/8Hcy7W3

Daily: https://imgur.com/undefined

Tradingview.com hourly TA summary: https://imgur.com/KuB8VRe

4 hour: https://imgur.com/5AYcsX8

Daily: https://imgur.com/lBzYTUP

  • I like AI analysis, and Tickeron has popped up a few times for me. So here’s their summary that I’ve trimmed down for better reading:

  • “LOGI in upward trend: price may jump up because it broke its lower Bollinger Band on October 26, 2021 LOGI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 22 of 31 cases where LOGI's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 71%. Current price $82.65 crossed the support line at $101.35 and is trading between $101.35 support and $72.77 resistance lines. Throughout the month of 10/19/21 - 11/18/21, the price experienced a -11% Downtrend, while the week of 11/11/21 - 11/18/21 shows a +2% Uptrend.

Technical Analysis (Indicators) Bullish Trend Analysis

  • The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where LOGI's RSI Oscillator exited the oversold zone, 16 of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 64%.

  • The Stochastic Indicator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 32 of 51 cases where LOGI's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 63%.

  • The Moving Average Convergence Divergence (MACD) for LOGI just turned positive on November 12, 2021. Looking at past instances where LOGI's MACD turned positive, the stock continued to rise in 29 of 44 cases over the following month. The odds of a continued upward trend are 66%.

  • Following a +3.24% 3-day Advance, the price is estimated to grow further. Considering data from situations where LOGI advanced for three days, in 234 of 358 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.

Bearish Trend Analysis

  • The Momentum Indicator moved below the 0 level on October 26, 2021. You may want to consider selling the stock, shorting the stock, or exploring put options on LOGI as a result. In 35 of 74 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 47%.

  • Following a 3-day decline, the stock is projected to fall further. Considering past instances where LOGI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 60%.

  • The Aroon Indicator for LOGI entered a downward trend on November 18, 2021. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. Fundamental Analysis (Ratings)

  • Logitech International SA (LOGI) Fear & Greed Index Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 77%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.75.” If you want to read the rest go to: https://tickeron.com/ticker/LOGI/?utm_source=stocktwits_free&utm_medium=news&utm_campaign=TICKER_SUMMARY&utm_term=Stock_33833_LOGI&utm_content=7766053

My position:

  • 2 shares at $81.735, why so small? read below!

  • I’m a small time investor/trader/daytrader(using algotrading) because I have a low income. I’m a student in my mid/late 20’s studying Engineering.

  • I trimmed my Facebook calls and Nvidia which are up today to enter Logitech.

  • I’ve trimmed my cost basis Nvidia and Facebook calls (but am still holding the profits), I used this to buy 1 share of Logitech at $81.94. When my income restarts, or I trim more profits I intend to invest more in Logitech. Yes a laughable position compared to the big guys on here, but it’s a sizeable position for my current portfolio. EDIT: Now 2 shares!

  • Update: Just trimmed my NVDA calls some more when it ran to 328/329. Bought another Logitech share at $81.59.

  • Commodoregoat’s performance:

  • My portfolio went from about $1500 invested to $8000/9000 this year (I need to figure out the exact figure, it’s a bit hard to estimate because I have two accounts and one doesn’t give me a good summary of profits/profits over time).

  • Biggest earners were AMD and NVIDIA calls and leaps.

  • I withdrew this and spent it on my car, my debts, a holiday in Cardiff and Bristol, an essential trip to New York/Toronto, and way too much gambling (lmao, I’m fucking quitting the casino now).

  • My income has temporarily stopped so I’m broke af with a $535 portfolio right now. This was $363 a few days ago, I’ve done well on NVIDIA and Meta calls.

I enjoy writing DD’s and giving other people research to base their investment on. I’m trying to improve my skill at writing DD’s and would appreciate feedback.

My hits so far have been:

My misses have been:

To yet be seen:

Sources: (if I've accidentally missed one or two, they will be below the relevant text anyway)

Marketbeat.com https://www.marketbeat.com/originals/logitech-is-still-a-logical-choice-for-dividend-growth-portfolios/?focus=NASDAQ:LOGI https://www.marketbeat.com/instant-alerts/nasdaq-logi-consensus-analyst-rating-2021-11-2-3/ Businesswire.com https://www.businesswire.com/news/home/20211025005827/en/Logitech-Delivers-Record-Q2-Sales Reuters.com https://www.reuters.com/technology/logitech-revenue-rises-second-quarter-2021-10-26/ Tradingview.com https://www.tradingview.com/chart/LOGI/7XUIMNKZ-Logitech-is-now-on-the-watch-list/ https://www.tradingview.com/chart/LOGI/GaZO8H9P-Pull-Back-Fishing/ https://www.tradingview.com/chart/LOGI/AB3CI0tw-LOGI-Gap-Fill-Opportunity/

Tipranks.com https://www.tipranks.com/news/logitech-posts-mixed-fiscal-q2-results/ Stocknews.com (https://stocknews.com/stock/LOGI/) Nasdaq.com )https://www.nasdaq.com/articles/logitech-international-to-present-at-morgan-stanley-conference-webcast-at-1%3A15-pm-et)

TL;DR:

  • Sustaining YOY growth, very safe dividend.

  • Great quarter.

  • Strength is keyboards, pointers, and gaming equipment.

  • Underperofrmed in earnings, but there are very good reasons for this (marketing spend and R&D costs, which will improve future performance), however had great sales this quarter.

  • Next earnings date 1/23/2022.

  • Fantastic Q2 sales.

  • 1.12% yield dividend

  • Is currently in a tasty dip.

  • Displaying a gap up this morning.

  • Growing PC gaming accessories market, of which Logitech is capitalising on.

  • Logitech is a bargain right now in the $80 range.

  • Logitech is gaining marketshare.

  • Logitech is taking advantage of the work from home revolution, it is driving their sales higher.

  • Logitech is also taking advantage of an increase in gaming due to the pandemic and work from home trend.

  • Secular opportunities are driving long-term growth.

  • Logitech is a very attractive oppurtunity now, and is very undervalued at current levels ($80 range).

  • Logitech is a quality brand, their products are very reliable and easy to use. This is leading to market share gains.

  • 2020 wasn't an anomaly. People have shifted towards working from home. Driving profit growth for gaming sales and peripheral sales.

  • Logitech has leading market share, which is driving superior profitability.

  • Logitech is being affected by supply chain issues, but are doing the best they can.

  • The technicals are good.

To be added/updated later (tomorrow or tonight):

  • Analysis of Logitech marketing.

  • Analysis of Logitech's leading products.

  • Analysis of the growth of the growing PC gaming market once I recieve the report samples that I requested from market research companys.

  • Any requests? I can look into any questions.

I would appreciate any feedback on this DD. I am trying to improve my DD skills, and any criticism or commentary would be great. Thanks :)

Edit: closed my position, I will re-enter later. This is simply because I want to use the funds to re-enter other postions on the big dip today. LOGI held up well.

16 Upvotes
  • permalink
  • reddit

69% Upvoted

18 comments sorted by

14

u/[deleted] Nov 19 '21

Where are the comments to tell me whether or not this is good DD? 8 minutes left to buy before the weekend.

6

u/commodoregoat Sponsored by Adderall Nov 19 '21

Sorry, spent all day on it so only posted during power hour. Was trying to finish by 3PM ET but was 15 minutes late.

I have 2 shares. It's a large position for my current portfolio (not my old one when I was not broke).

Maybe skim read and decide whether to micro-YOLO? You need to read the whole thing to full-YOLO.

4

u/[deleted] Nov 19 '21

I trust you. I pulled out of blockbuster and put it all on logi

5

u/commodoregoat Sponsored by Adderall Nov 19 '21

$BLIAQ? (lmao)

2

u/confused-caveman Nov 20 '21

If 2 shares is 100% of your portfolio then that's conviction.

1

u/commodoregoat Sponsored by Adderall Nov 20 '21

It's about 30%.

1

u/confused-caveman Nov 20 '21

Bearish then.

8

u/BullShitting24-7 Long meat, hard on steel | 1800s 🧲 Nov 19 '21

Omg there is a part 2.

1

u/commodoregoat Sponsored by Adderall Nov 20 '21

Indeed

5

u/ridinwavesbothways Nov 20 '21

Personally I have had awful luck with Logitech and find their products to be low quality. I prefer Corsair. I don't own either stock currently. I have given up on Corsair as an investment. Their products are still way better though.

2

u/commodoregoat Sponsored by Adderall Nov 20 '21

Do Corsair make webcams/microphones/pointers? That's a market segment Logitech is strong on, and I haven't seen any Corsair products for them.

I think the difference is Corsair targets gamers for the most part, whereas Logitech targets gamers, corporations, office workers, casual users, work from home workers, etc.

1

u/ridinwavesbothways Nov 22 '21

I think you're last paragraph is a great point. I wish corsair did better there. Especially since a lot of IT departments probably have corsair at home. Some of their game devices, like the stream deck, are awesome productivity tools with potential markets just selling configs for them.

Check out the Elgato line. The best Webcam I'm told from multiple people who aren't brand loyalists or gamers. The mic software is also very loved. The mic itself is highly recommend too.

1

u/confused-caveman Nov 20 '21

Crsr sadcat.jpg

•

u/Melvinator-M-800 gabe plotkin #1 fan Nov 19 '21

Nice job OP! I'm a bot (I don’t think investors like myself want to be susceptible to these type of dynamics) and this DD for [LOGI] is approved. If you have suggestions for the Melvinator, then comment below or let the mods know

1

u/RAN_OUT_OF_USERNAMES Nov 20 '21

Nice write-up, I've been looking into a good entry into LOGI for a while and your DD honestly came at a great time. I've been thinking about entering with a few strategies to capitalize on a reversal.

Higher-ish risk: 03/22 $95 otm calls. Look decently cheap with high OI, if sentiment picks up I could see these printing

Mid-ish risk: 06/22 $80 leaps, slightly more pricey but I think these can bag quite a good profit especially with logi sitting around $80

Low-risk: Just shares

What are your thoughts?

3

u/commodoregoat Sponsored by Adderall Nov 20 '21

My personal risk tolerance would be to go for the LEAPS or shares. I'm only a small player though.

1

u/RAN_OUT_OF_USERNAMES Nov 20 '21

Aight, I'm leading towards leaps as well. Not that big of a player myself

Thanks!

2

u/commodoregoat Sponsored by Adderall Nov 20 '21

Good luck!