Thursday, May 24, 2018

Chipotle: Corporate Disruption

Chipotle announced the restaurant is moving their headquarters from Denver to Newport Beach.
The company is shutting down the Denver office and facing substantial re-organization costs.
The move does nothing to improve the food with integrity concept desired by customers.
Expect EPS estimates to collapse as the company has limited corporate personnel to implement new strategies.
Only a few months ago, Chipotle Mexican Grill (CMG) announced that Brian Niccol would take over as the new CEO from the co-founder. The stock has surged on this news rising $100 now, but my investment thesis has maintained that investors need to dump shares on this rally as the most likely outcome is disruption of the business model and cultural change from the hiring of an exec from Taco Bell that was at odds with the people at Chipotle. Today, the new CEO fired the first warning sign on this disruptive period.
Read the full article on Seeking Alpha. 

Disclosure: Long AAPL. Please review the disclaimer page for more details. 


Friday, May 18, 2018

Baidu: Another Gift

Baidu trades down $25 due to the departure of the COO from daily activities.
The company has a long history of growth without the involvement of Qi Lu.
The stock continues to trade favorably to domestic peers despite massive margins.
Despite being a dominant player in the fast-growing internet space in China, Baidu (BIDU) consistently trades at a discount to American peers. The departure of a key executive and an analyst downgrade provide another gift to own this stock on a $25 dip and at levels from back in 2014.
Read the full article at Seeking Alpha. 

Disclosure: Long BIDU. Please review the disclaimer page for more details. 

Thursday, May 3, 2018

Snap: $7 Target Turns Optimistic

Snap reported disastrous Q1 results.
The company faces DAUs turning negative in Q2.
Snap continues to produce larger free cash flow loses.
A previous $7 price target is now far too optimistic.
All of the indications pointed toward Snap (SNAP) disappointing the market with quarterly results. The social messaging stock did not disappoint with a disastrous Q1 report that places our previous $7 price target as now highly optimistic.
Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 


Tuesday, April 24, 2018

NXP Semi.: Failed Merger Discount

NXP Semi. trades back below the original Qualcomm takeover price of $110.
The stock has far trailed the SOXX ETF since the merger agreement in October 2016.
A flood of stock buybacks in the sector due to failed mergers will lift all boats.
The Chinese regulator delays provide a unique play on NXP Semiconductors(NXPI) that has a long-term growth opportunity tied into a potential short-term quick gain. Investors that step in now appear set to win either way.
Read the full article on Seeking Alpha. 

Disclosure: Long QCOM. Please review the disclaimer page for more details. 

Wednesday, April 18, 2018

Spotify: Streaming Discount

Spotify trades at a discount in the streaming sector due to the direct listing dynamics.
The streaming music service continues to expand leadership in the sector over Apple Music.
The stock trades too cheap at 4x sales estimates.
Oddly, Spotify (SPOT) trades near the post direct listing lows, while Netflix(NFLX) surges on a bullish earnings report. The streaming services for music and video aren't exactly the same, but the opportunity is similar; making the case for owning the laggard of the group.
Read the full article on Seeking Alpha. 

Disclosure: Long AAPL, TWX. Please review the disclaimer page for more details.