Chewy: Your pet investment portfolio is unlikely to find a better game (NYSE: CHWY)

Pgiam/iStock via Getty Images

The main focus of this article is the upcoming stock prices of Chewy, Inc. (NYSE: CHWY).

Investment thesis

Think back to the changes your grandparents went through since childhood: Atomic energy, radio replaced by television, computers, discovery of DNA biology, the evolution of the internet, cordless phones…

Technological progress has not slowed down, rather it seems to be increasing and we strive to stay up to date. As investors, our progress depends even more on anticipating future technological change and human behavior in an increasingly complex environment.

The forecasters who can help us are the pros who every day “fry the fish” that we want to “eat” in our investment portfolios. They have to contend with huge and erratic anticipation appetites from “institutions” with multi-billion dollar portfolios demanding transactions to fit their current anticipation of technology. Expectations likely to emerge soon for us ten or hundred stock investors, maintaining the continued demands for open interest seen in exchange bids and offer quotes.

These professionals employ well-educated and continuously informed researchers and information gatherers, active worldwide 24 hours a day, 7 days a week, 365 days a year, necessary to carry out the essential tasks of market creation and business transactions.

But they don’t want us in front of them in the lines of appetite for buying and selling which they intend to take advantage of by their disturbances. This is what pays their rents and pensions and those of their salaried supporters. Thus, efficient market transactions must be fast and clean.

What makes them so are “insurance” speculators of stock price movement who are willing to protect market makers during the temporary risks that need to be taken during brief periods of disruption. The costs of this protection reveal the future price expectations of this community, on both sides of each transaction.

For these derived price predictions, we rely on how active markets subsequently reward or punish the expectations of past experiences. It is the job of this article to present alternative investment choices for the uncertain near future of the next 3-5 months.

Description of the lead investment candidate

Chewy, Inc., together with its subsidiaries, engages in pure electronic commerce in the United States. The Company provides pet food and treats, pet supplies and medications, and other pet health products, as well as pet services for dogs, cats, fish , birds, small pets, horses and reptiles through its retail site www.chewy.com. Website, as well as its mobile applications. It offers approximately 100,000 products from 3,000 partner brands. The company was founded in 2010 and is headquartered in Dania Beach, Florida.

Source: Yahoo Finance

Street analyst estimates

Yahoo finance

Present the return and risk prospects of alternative investments

Figure 1

MM heging forecast

blockdesk.com

(Used with permission.)

The expected rewards for these securities are the largest gains over the current market closing price, which is worth protecting short positions. Their measurement is on the horizontal green scale.

The risk dimension is that of actual price declines at their most extreme while being held in the previous pursuit of upward rewards similar to those currently seen. They are measured on the red vertical scale.

Both scales are percent change from zero to 25%. Any stock or exchange-traded fund (“ETF”) whose current risk exposure exceeds its return outlook will be above the dotted diagonal line. The attractive buying capital gain issues are found in the down and right directions.

Our primary interest is in CHWY at the location [3]halfway between [8] and [1]. A standard “market index” of reward~risk trade-offs is offered by SPY at [8]. Most attractive (to own) by this Figure 1 view is CVNA at location [2] but closer examination will show why this may not be so.

Comparison of characteristics of alternative investment stocks

The Figure 1 map provides a good visual comparison of the two most important aspects of every short-term stock investment. There are other aspects of comparison that this chart sometimes doesn’t communicate well, especially when broad market outlooks like SPY’s are involved. When questions about “likelihood” are present, other comparative tables, such as Figure 2, may be helpful.

The yellow highlighting of table cells emphasizes factors important to stock valuations and CHWY stock, the most near capital gain prospect as ranked in the column [R]. Filling pink cells indicates inadequate proportions of competitive critical performance requirements, as in [H], [L-N] and [T].

Figure 2

detailed comparative data

blockdesk.com

(Used with permission.)

The price ranges implied by the day’s trading activity are in columns [B] and [C]usually surrounding the day’s closing price [D]. They produce a measure of risk and reward that we call the Range Index [G]the percentage of forecast range B to C that falls between D and C.

Today’s G’s are used for the last 5 years of each stock’s daily forecast history [M] count and average before [L] experiences. Less than 20 G or an M history of less than 3 years is considered statistically inadequate.

[H] indicates what percentage of L positions have been completed profitably, either at prices above the range or at the market close above the next day’s entry costs of the expected closing prices. The net realization of all the L’s is shown in [ I ].

[ I ] fractions are weighted by H and 100-H in [O, P, & Q] suitably conditioned by [J] to provide a ranking of investments [R] in CAGR units of basis points per day.

The pink cell highlight provides fatal investment valuation conditions for several candidates, including the market index ETF (SPY). Additional market perspective is provided by the more than 3,300 stocks for which price range predictions are available. They currently suggest that while the market rally is underway, it is still far from generally attractive.

On the other hand, the R column scores for CHWY and the top 20 predicted populations support the competitive ability of the lead applicant.

Recent trends in Price Interval Forecast for CHWY

picture 3

daily forecast trends

blockdesk.com

(Used with permission)

This IS NOT a typical “technical analysis chart” of simple historical observations (only). Instead, it represents the Daily Market-Maker price range forecast updates implied by real-time live real capital commitments. Its communicative value is present here by visual comparisons at each forecast date of the proportions of price change expectations of the upward and downward vertical lines by the community of market makers, influenced by the actions of a community of interested and involved institutional investors.

These forecasts are typically resolved in time horizons of less than six months, and often in two months or less. This one indicates that out of the 45 previous forecasts like today’s, all (out of nearly 800) were realized in 20 market days (4 weeks) profitably with average profits of +18%, a 700+% CAGR rate. No promises, just fun with the story and an awareness of the current need for active investment, frequent need to reevaluate opportunities.

Conclusion

Comparison of the performance of Market Makers forecasts in the short term for Chewy, Inc. with similar predictions of other technologically active stocks being chased by investor referencing, it seems clear that this stock may be an attractive investment choice for investors pursuing short-term capital gain strategies.