Sunday, March 29, 2015

Merck: Buyback Plan Not As Impressive As It Appears


Summary

  • Merck announces another large stock buyback.
  • Though Merck has a solid net payout yield, the yield doesn't match the highest in the market.
  • The smaller buybacks plan than two years ago along with the higher stock price is a big negative for the stock going forward.
Merck (NYSE:MRK) made headlines this week with the announcement of adding $10 billion to the stock buyback program. The large pharma has a long history of returning cash to shareholders, but the company made a perplexing statement regarding shares outstanding that convolutes the benefits of the buyback. On top of that, the stock has a market value of $163 billion making one wonder if the announced capital return is enough to make the stock interesting after a few years of strong stock gains.

Read the full article on Seeking Alpha.


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




Saturday, March 28, 2015

Yelp Has A Solution To The Google Problem


Summary

  • Yelp trades at multi-year lows due to user problems and an unflattering documentary.
  • Mobile app provides a solution to the user problem, but it requires execution.
  • Yelp remains an extremely attractive valuation with plenty of upside potential if it can execute on the mobile potential.
Though claims continue to persist that Yelp (NYSE:YELP) extorts business owners to extract advertising spending, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) remains the biggest issue. While the Kickstarter documentary is a headache and a concern that could plague Yelp for a while, the company actually has a solution to the Google problem, if it executes.

Read the full article on Seeking Alpha.


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




Friday, March 27, 2015

Twitter: Livestreaming App Provides User Catalyst


Summary

  • Twitter bought Periscope for under $100 million.
  • The app in beta provides livestreaming in a similar manner to the Meerkat app that stole the show at SXSW.
  • The livestreaming engagement metrics are very promising and could provide a huge boost to the struggling user metrics at Twitter.
The news of the month is that Twitter (NYSE:TWTR) is taking the next step to becoming a real-time broadcast service with the purchase of live-streaming app Periscope for under $100 million. The new app will allow the social media service to provide users the ability to broadcast the news, instead of just reporting on it in 140 characters or a short video clip.

Read the full article on Seeking Alpha.


Disclosure: Long TWTR via GSVC. Please review the disclaimer page for more details. 




Potbelly: Rebound Potential


Summary

  • Potbelly continues a trend of beating estimates while the stock bumps along the bottom.
  • Despite the large stock decline after irrational trading following an IPO, the stock trades at an exceptionally large forward PE ratio.
  • Investors need to keep the stock on a watch list due to the long-term growth potential, but one shouldn't expect the stock to rebound now.
After writing about Noodles & Company (NASDAQ:NDLS) earlier in the week, this article focuses on Potbelly (NASDAQ:PBPB). Both restaurant concepts had hot IPOs in 2013 and share similar less-than returns, though Potbelly has traded better than Noodles over the last 9 months.

Read the full article at Seeking Alpha.


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




Thursday, March 26, 2015

Qualcomm: Wait For The Accelerated Buyback To Kick In Before Buying


Summary

  • Qualcomm announced a large buyback plan with an accelerated portion to start during FQ3.
  • While the headline is attention grabbing, stock option grants could dilute the impact.
  • Research suggests only loading up on a stock based on buybacks after they occur and not prior.
The recent major stock buyback announcement by Qualcomm (NASDAQ:QCOM) obtained a lot of attention. The headline grabbing news was exciting for shareholders, but the real news is whether the company spends the money without granting a ton of stock options in the process.

Read the full article at Seeking Alpha.


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



Wednesday, March 25, 2015

Glu Mobile: Aligning The Stars


Summary

  • Glu Mobile signs the Jenner sisters to the celebrity game platform.
  • The sisters have a social media following similar to when the Kim Kardashian game was announced back in late 2013.
  • Along with the Katy Perry game, Glu Mobile appears set to yet again smash conservative revenue forecasts for 2015.
Going over nine months after watching the stock soar to over $7.50, Glu Mobile (NASDAQ:GLUU) now trades substantially below that level. The stock initially hit those highs on the basis of the Kim Kardashian game success, yet months later the game has remained relevant and Glu Mobile has other celebrity stars lined up. The fear that the game and concept aren't repeatable should continue to disappear as the year progresses.

Read the full article at Seeking Alpha.


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



Saturday, March 21, 2015

Should Visa, MasterCard Fear IBM?


Summary

  • IBM is reportedly working on a digital cash technology to work with global currencies.
  • Such a digital payments network could have major repercussions for the high margins of Visa and MasterCard.
  • The technology concept has an interesting twist considering the partnership IBM is forging with Apple and the ability to connect this network with Apple Pay.
Last week, Reuters broke news that IBM (NYSE:IBM) was working on adopting bitcoin technology to potentially develop a form of digital cash for a payments system. The details are sketchy at this point, but the news should give pause to a few high-priced stocks in the payments processing sector.

Read the full article on Seeking Alpha. 


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