Friday, December 14, 2018

Under Armour: Don't Over-Read Into Baseline Targets

Under Armour provided 2023 financial targets at an Investor Day.
The athletic apparel company has long-term plans for 10%+ operating margins.
Based on company projections and peer margins, my 2023 EPS projection approaches $2.
In a much anticipated event where Under Armour (UA, UAA) discussed long-term growth targets, the market was apparently disappointed with the updated 2023 projections. My bullish investment thesis has long held that the athletic apparel company was under-delivering on margins, and their updated business model actually reinforces that thesis despite the initial 10% dip in the stock.

Read the full article on Seeking Alpha.

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

Qualcomm: Global 5G Unlocked

Qualcomm is well positioned for the global launch of 5G.
The wireless giant already has 20-plus license deals and expects to generate more revenue from additional RF front-end content.
The delayed launch of the Apple 5G iPhone plays to the advantage of Qualcomm.
The company remains on track for $7-plus EPS prior to 5G related growth.
The most important note from the Snapdragon Tech Summit last week is that 5G is a global rollout utilizing Qualcomm (QCOM) technology. A lot of the domestic wireless network providers are racing to become the first 5G providers, but anybody just focusing on the domestic market is missing the huge global market converging on 5G while other countries were far behind on 4G.
Read the full article on Seeking Alpha. 

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

Wednesday, December 12, 2018

Aurora Cannabis: Questionable Mexico Deal

Aurora Cannabis agrees to buyout distribution partner in Mexico after one business day.
The company has now formed an extensive global distribution and partnership network at the cost of major shareholder dilution.
A legitimate investor should question whether Mexicans will buy Canadian cannabis with readily available domestic supplies.
Maintaining key support at $5.40 is crucial for owning this cannabis stock.
When a company issues news seen as generally bullish by the investor community and the stock declines, investors should start asking more questions. Shareholders of Aurora Cannabis (ACB) find themselves in that situation with the stock trading down slightly on the news of buying the only licensed importer of medical cannabis in Mexico. The deal sounds too good to be true reinforcing my investment thesis of watching the price action in the stock for confirmation that a leader in the cannabis sector is headed in the right direction.
Read the full article on Seeking Alpha. 

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

Tuesday, December 11, 2018

Apple: Holiday Gifts

Analysts are providing a holiday gift with the constant price targets cuts on Apple.
The number of Buy ratings on the stock are at a low since the financial crisis.
The actual number cuts aren't that aggressive.
The stock trades at only 11.7x FY20 estimates before excluding a large cash balance.
Ever since Apple (AAPL) reported FQ4 results back on November 1, analysts have repeatedly come out negative on the stock. The company decided to quit reporting iPhone unit sales and the market hasn't stopped hammering the stock on feared sales weakness. One of the best ways to play analysts downgrading a stock in mass is to take a contrary view and the recent price cut of an ultra-bull is the likely signal that analysts are generally done cutting Apple targets.
Read the full article on Seeking Alpha. 

Monday, December 10, 2018

FedEx: Immediate Amazon Threat Overstated

FedEx gets hit by Amazon fears every couple of years.
The online retail giant isn't even a 3% revenue customer.
Analyst estimates shouldn't take a hit from the expected growth of Amazon Air.
The stock is too cheap trading at about 10.4x FY20 EPS estimates.
The time to buy FedEx Corporation (FDX) is when the market gets anxiety over Amazon (AMZN) expanding into the package delivery space. While the large online retailer is always a threat, FedEx should continue riding the delivery economy higher.
Read the full article on Seeking Alpha.