Wall Street Breakfast with Steven Cress (Intapp, Boot Barn, Costco, DoorDash)
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Why is today considered a witching day and how should long‑term investors react?
It's Friday, September 18th, and we are here with Mr. Steve Cress. Steve, I am going to start with a comment that was left. We posted yesterday's episode on our vaunted Wall Street Breakfast podcast. And John Boy commented: Friday the 18th is a witching day, one of four per year. Could be a little crazy.
Yeah, sometimes it is crazy. It is today. Um, sometimes it's not. It is a witching day for uh the SP options, for futures, for contracts. All three come today. And sometimes the market tends to be a bit overexaggerated on those days. Uh, I would say, as a long-term investor, just consider it like a grain of salt over the shoulder. Don't make any investment to decisions on it. Uh obviously if you're a short-term trader, it can impact your holdings. But what we do in the world of quant and with our Ciappa contributors, our recommendations tend to have uh life in more than a few minutes or hours. So I would say whatever happens today, take it with a grain of salt and on occasion there are swings down and look at the fundamentals of a company.
And if there's an opportunity and a stock really you like is off. And, you know, by example, say it has A plus grades for growth and for valuation and profitability, and the stock comes down and it's a strong buy, you want to take advantage of that. Uh, but for the most part, if you're a long-term investor, just sit back and watch it. I think the the markets aren't really reacting to Triple Witch now. I think there might be a little exhaustion in the markets. And uh we're seeing in the futures minutes before the open. Bell, the S P is basically unchanged. The NASDAQ is basically unchanged. I think people are ready for the weekend. T G I F So
T G I F. So our first piece of stock news this morning is INTAP. Take our I-N-T-A. Its shares have perked up just under one and a half percent in pre-market action after it revealed a new partnership with OpenAI. Steve, what do you have to say about INTAP?
Yeah, it tap is, you know, it's kind of one of these, it's a small software company. And when you scroll down on our stock page, you'll see sector information technology and the industry is application software. It's not really that big, it's 2.81 billion. Uh, but the company definitely has good metrics. And it's kind of had that classic software price performance. Transaction this year, you could see on the last 52 weeks, it's down about 18.32%. Year to date, it's down about 19%. And if you recall, like earlier in the year, a lot of investors and traders were speculating that it would be the death of software stocks. So many software stocks sold, and it sold off with like fairly attractive fundamentals.
But you know, I As we saw in recent weeks, many software companies were actually producing better than expected earnings and top line growth. And what they were finding is that AI was actually making them more efficient. And I've said this on past webinars and calls. I think it was just grossly over exaggerated earlier this year and late last year when people were saying Be the death of software stocks because of AI. And I've often made the reference that you're not going to have a plumber or a baker or an electrician trying to create their own software off of AI. They still need these softwares to operate their business. And in fact, what the software companies are finding is that they're being able to improve their user experience with AI, they're becoming more efficient.
And as a result, we've seen a couple good. Quarters from these companies. So in the recent uh month, even though the stock is down, let's look at the last five days, the stock is down as well. Um, I guess when we look at this full year experience, what happened is there was a big sell-off in software from December all the way uh through to February, and it hit a low of 21. Uh currently the stock is up to 36, so it's worked its way back and Uh especially I'd say um during the July period, there was really a heavy rotation out of semiconductors and within the sector of information technology, that rotation went into the software stocks as investors were realizing, you know what, earnings are going to be coming through better than expected.
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