A brief note on recent trading, or at least what I’ve noticed.
There were two stocks, Symbotic (SYM) and Kohls (KSS) that were each up by about +60% over the past week, both apparently triggered by positive earnings reports. I’m not saying they shouldn’t have been up, but that’s an awful lot in a short period.
I know a little about SYM, whose shares I own, thanks to my son Brendan. The company makes robot-run warehouses. What caught my eye was that a while ago Walmart, the long-reigning king of logistics, stopped its internal robot warehouse efforts and essentially outsourced this effort to SYM. I didn’t think there was that much new in the earnings conference call. The only difference I saw between this and prior calls, which I’d read but not listened to, is that the company gave a more organized and complete outline of what it does–along with the observation that it expected earnings growth to accelerate in the second half of 2026. Same facts, better communication.
Not, I think, enough for +60%. My guess is that the stock had, for whatever reason, been heavily shorted–and this conference call made it clear that the company has good products and that profit momentum is building. Nothing really new, but better expression of facts.
KSS? I don’t know. What I’ve read suggests that new management has injected life into a long-time blah brand. I’ll admit to not having been in a Kohl’s store in a loong while. Here again, though, my guess is short-covering. How so? I’ve just finished a jargon-filled (never a good sign, in my view) conference call transcript. It seems that, although KSS targets less affluent customers, sales are flattish, inventories are under better control, the company is making good progress in financial deleveraging and, with its Sephora partnership, is more efficient in its use of floor space and online. Plucking a number out of the air, KSS is, I think, trading at 12x forward earnings. And the thesis that the company may crash and burn in the coming year is probably off the table.
If my description is correct, this is very aggressive behavior for what I think is an unusually uncertain time.