Tuesday, December 31, 2013

Following Lee Cooperman Into SandRidge Energy Could Be Rewarding


Anytime a legendary investor pounds the table that a stock is worth double its price, investors ought to take the time to review the prospects. In this case, Lee Cooperman of Omega Advisors continues to be bullish on the reorganization progress at SandRidge Energy  (NYSE: SD  ) . With the stock trading in the $6 range, Cooperman recently repeated claims that his analysis values the company at over $10.

SandRidge Energy is an oil and natural gas exploration and production company focused on the Mississippian formation in Oklahoma along with Gulf of Mexico and West Texas assets. The stock has long struggled due to Wall Street's lack of understanding of the deal made by the previous CEO Tom Ward.

Read the full article here.


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



Don't Buy Alaska Air for a Delta Buyout


At the end of last week, Alaska Air Group, (NYSE: ALK  ) jumped on speculation that Delta Air Lines (NYSE: DAL  ) was interested in buying the airline. Investors should not buy the stock based on these rumors; instead, the shares of Alaska are attractive based on the company's strong fundamentals and value proposition.

While the stock popped due to the actions of typical momentum investors jumping in and hoping for a quick buck, the long-term investor should ignore the hype. After the regulatory issues surrounding the American Airlines Group merger, it appears highly unlikely that the regulators would allow another merger involving the three major legacy airlines consolidating the industry.

Read the full article here.


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




Seagate: Pay Attention to Stock Buyback Signals


Stock buybacks often get a bad name in the financial press, but evidence continues to mount that, outside of a few glaring issues, the concept rewards shareholders. One recently unlikely success was the massive 2012 stock buyback programs by Seagate  (NASDAQ: STX  )  a leading supplier in the commodity enterprise storage sector that has seen its stock soar in 2013, along with fellow storage player Western Digital (NASDAQ: WDC  ) .

With the PC market in decline, the storage business, and new methods of storage lurking to overtake the historical disk-drive-based systems of Seagate and Western Digital, the tandem thrived anyway. At the time, EMC (NYSE: EMC  ) was the dominant stock to own in the storage space. Ironically, that stock hasn't seen any gains in the last couple of years, despite better growth. Ironically, the lagging stock is now ramping up buybacks.

Read the full article here.


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




Higher Natural Gas Prices Could Hurt These Stocks


With natural gas prices jumping over $4.40/btu, not all stocks will benefit from the gains. The first two articles focused on the two sectors that will benefit from higher prices: oil services and exploration stocks. On the flip side are the manufacturers and companies building transformational products to benefit from lower natural gas prices. These firms include Clean Energy Fuels (NASDAQ: CLNE  ) , Cheniere Energy (NYSEMKT: LNG  ) , and Westport Innovations (NASDAQ: WPRT  ) .

The problem these stocks face is that the products being built are taking until 2014, 2015, or even beyond to reach customers. Will natural gas prices remain low until then for these stocks to take advantage of these extremely low prices? The latest EIA inventory report for the period ending Dec. 12 showed a substantial decline of 285 Bcf, bringing the inventory levels to over 7% below the five-year average.

Read the full article here.


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




Monday, December 30, 2013

NASDAQ-100 Index Removals to Watch


Plenty of studies show that the stocks removed from the NASDAQ-100 index typically present great buying opportunities. Normally the stocks have been beaten down for the last couple of years, making them candidates for removal. On top of that, the removal process causes forced selling in underlying products that attempt to benchmark the index, creating a market-event-generated bottom.

In December, the index makes an annual adjustment, which this year includes the removal of five stocks, effective as of Dec. 23. The stocks include Fossil (NASDAQ: FOSL  ) , Microchip Technology (NASDAQ: MCHP  ) , and DENTSPLY International (NASDAQ: XRAY  ) . One has to wonder whether the usual buying opportunity will materialize.

Read the full article here.


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




Higher Natural Gas Prices Could Hurt These Stocks


With natural gas prices jumping over $4.40/btu, not all stocks will benefit from the gains. The first two articles focused on the two sectors that will benefit from higher prices: oil services and exploration stocks. On the flip side are the manufacturers and companies building transformational products to benefit from lower natural gas prices. These firms include Clean Energy Fuels (NASDAQ: CLNE  ), Cheniere Energy (NYSEMKT: LNG  ), and Westport Innovations (NASDAQ: WPRT  ).

The problem these stocks face is that the products being built are taking until 2014, 2015, or even beyond to reach customers. Will natural gas prices remain low until then for these stocks to take advantage of these extremely low prices? The latest EIA inventory report for the period ending Dec. 12 showed a substantial decline of 285 Bcf, bringing the inventory levels to over 7% below the five-year average.

Read the full article here.


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




NASDAQ-100 Index Additions to Ignore for Now


The data is undeniable -- being added to or removed from a major index has a dramatic impact on stock prices over the next six months to a year. The NASDAQ-100 index is doing its annual update effective Dec. 23. Based on research from Schaefer's and raw numbers from the 2012 updates, investors clearly do better investing in the group removed from the index over the short run.

For 2012, the stocks added to the index gained in line with the NASDAQ-100 over both the six-month and 12-month periods. The removals from the index actually smashed the index with an average six-month gain of 43.5% versus 8% for the index. The 12-month numbers were not as impressive, but still very strong at nearly 69% versus 32% for the index.

Read the full article here.


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



Sunday, December 29, 2013

Potentially Good News For American Capital Agency


With yet another dividend cut, American Capital Agency (AGNC) actually did something surprising. The stock didn't hit new lows, and in fact it ended higher two days later. As a fundamental investor, over time the learning curve has led to more focus on how stocks handle bad news. The fascinating situation with American Capital Agency has been the extreme weakness of the stock over the last year. With the drop from over $35 to below $20, the recent trading suggests the dividend cuts might finally be built into the stock.

American Capital Agency is a mortgage real estate investment trust, or mREIT, that focuses on investing in a levered portfolio of agency backed mortgage securities.

Read the full article at Seeking Alpha.


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



1 Follow-On Offering to Dump


After large gains following successful IPOs, it is common for a company to do a follow-on offering, allowing for pre-IPO shareholders to cash out. Recent history in hot Internet follow-on offerings have signaled a top in the stock, at least temporarily.

While most would debate if the IPO was really successful, currently hot Facebook (NASDAQ: FB  ) announced plans to sell 70 million shares by the company and its shareholders. The leading social media firm follows other hot social media stocks, including LinkedIn (NYSE: LNKD  ) and Yelp (NYSE: YELP  ) that had similar offerings. Those stocks have underperformed the markets in the months following the related offerings.

Read the full article here.


Disclosure: Short FB. Please review the disclaimer page for more details. 




Saturday, December 28, 2013

Vodafone Still Offers Intriguing Value


Despite a huge run-up in the stock following the sale of Verizon Wireless, Vodafone (VOD) still offers a lot of value to shareholders. The stock has long been associated with the 45% investment in the successful American wireless company, but Vodafone has a whole European business to offer investors that is often overlooked.

Though Vodafone can be difficult to value considering all the moving parts with the deal, it appears one can value the company based on removing the assets being returned to shareholders and the forecasted free cash flow for the remaining businesses in 2014. The valuation might surprise investors considering the large run over the last few months based on the $130 billion offer from Verizon (VZ).

Read the full article at Seeking Alpha.


Disclosure: Long VOD and T. Please review the disclaimer page for more details. 



Friday, December 27, 2013

Has Chuy's Turned Tasty Now That Investors Are Fleeing the Stock?


Chuy's Holdings (NASDAQ: CHUY  ) stock launched out of the IPO gate due to the excitement over the potential for the Southwest regional chain to expand nationally. The Austin, Texas-based Tex-Mex chain only operates 48 full-service restaurants and recently expanded into the Carolinas and Ohio.

In the past month, the stock has faced selling pressure after the third-quarter earnings report showed declining margins. However, other successful restaurant chains have had periods of weakness followed by huge returns. Fellow Mexican chain Chipotle Mexican Grill (NYSE: CMG  ) and industry leader Darden Restaurants (NYSE: DRI  )  share another theme: strong restaurant-level margins while maintaining restaurant growth. Is the recent margin decline a blip for Chuy's due to absorption of all the new restaurant growth or has the company bitten off more than it can chew?

Read the full article here.


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




Tuesday, December 24, 2013

Vodafone: Betting on an Economic Rebound in Europe


Back in September, Vodafone (NASDAQ: VOD  ) agreed to sell its 45% stake in Verizon Wireless to majority owner Verizon Communications (NYSE: VZ  ) for the astonishing amount of $130 billion. The deal has sent Vodafone soaring to a valuation of $180 billion, and in the process, reduced the dividend yield to around 4.2%.

Outside the Verizon Wireless investment, Vodafone is a large wireless provider in the major European countries of Germany, the Netherlands, U.K., Italy, and Spain along with select investments in Africa and Asia. The company has roughly 500 million wireless subscribers around the world making it one of the largest mobile carriers. With the Verizon Wireless deal heading toward completion, the market is starting to wonder if Vodafone can justify its current price.

Read the full article here.


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



Monday, December 23, 2013

1 Company Still Feeding Off of Wal-Mart

Oddly, Green Dot (NYSE: GDOT  ) spent the last year trying to counteract large competition from American Express (NYSE: AMX  ) at top customer Wal-Mart Stores  (NYSE: WMT  )  only to end up more entangled with the top retailer. While the largest provider of prepaid debit cards has successfully survived the onslaught of new prepaid competitors, Green Dot hasn't progressed at all in de-linking itself from Wal-Mart.

Read the full article here.


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




Bombay Stock Index At All Time Highs?

With so much negative news surrounding emerging markets and the strong gains in the US market, it is interesting to see India slowly climb to multi-year highs. In the last couple of months, the Bombay Sensex Index has climbed over 21,000. The index originally reached over 20,000 in December 2007. Since that point it has gone virtually nowhere. See the chart below:




The best that I can tell the index actually reached an all-time high after spending the last six years consolidating. India appears set for a major breakout and maybe the best stock to play that move in the US would be ICICI Bank (IBN). The major Indian bank with a market cap in excess of $20B actually hit a peak of over $70 back in early 2008. The stock has lost 50% of its value during those nearly 6 years (sounds like the NASDAQ bubble from 2000). It might be a good stock to own in 2014.


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




Sunday, December 22, 2013

Higher Natural Gas Prices Could Pump Up These Producers

The prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs around $4.40/btu. At the same time, most of the domestic exploration and production firms sit below the highs from back in 2011 when the S&P 500 was at considerably lower levels. The combination could present a buying opportunity for the domestic natural gas producers including Chesapeake Energy (NYSE: CHK  ) , SandRidge Energy (NYSE: SD  ) , and WPX Energy (NYSE: WPX  ) to name a few that are intriguing.  

Read the full article here.


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



1 Company Cheering on the Twitter Rally


Investors in GSV Capital (NASDAQ: GSVC  ) should be applauding the recent surge in Twitter (NYSE: TWTR  ) shares. The leading platform for instant communication recently hit new highs, surging to $52, which should propel the NAV of GSV higher.

GSV Capital is a publicly traded investment fund that provides individual investors the opportunity to invest in a basket of high-growth, venture-backed private firms. The stock surged initially in early 2012 based on the Facebook excitement, but it eventually plunged along with Facebook and the other social media stocks.

Read the full article here.


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



Thursday, December 19, 2013

Unexpected Curves From Glu Mobile Won't Impress the Market


Following another quarter of disappointing game releases, the mobile gaming developer Glu Mobile (NASDAQ: GLUU  ) has again thrown investors more curves. This time the news items were actually pleasantly surprising, including the announcement of plans to develop a game based on curvy Kim Kardashian, and the ultimate surprise of releasing a game developed for Google (NASDAQ: GOOG  ) Glass.

Both developments are particularly intriguing considering the previous delay of games considered important for the fourth quarter. Neither of these games appear overly material to 2014 results, but it's notable that some considerable time was undertaken to develop these concepts and questions the ability to focus at the firm. Though impressive on the resume, will having the first game developed for Google Glass really provide any competitive advantage going forward?

Read the full article here.


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



Higher Natural Gas Prices Could Pump Up Oil Services Demand


Don't look now, but the prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs above $4/btu. At the same time, most of the domestic oil services stocks have slumped to multi-month lows. The combination could present a buying opportunity for the domestic oil service firms of Baker Hughes (NYSE: BHI  ) , Weatherford (NYSE: WFT  ) , and C&J Energy Services (NYSE: CJES  ) to name a few that are intriguing.  

A major reason for recent weakness in the stocks has been less-than-robust capital expenditure plans by exploration firms to end the year. The general guidance for the fourth quarter wasn't overly robust, but the recent cold weather and reduction of natural gas inventories has pushed levels below prior years. The latest weekly report from EIA showed inventory levels 3% below the 5-year average levels. Also, the inventory number is already a substantial 7.2% below the levels of last year.

Read the full article here.


Disclosure: Long CJES and WFT. Please review the disclaimer page for more details. 



Monday, December 16, 2013

Is Volaris Aviation the Best Way to Invest in Mexico?


A recent IPO might provide the a great opportunity to invest in Mexico's air travel boom. Volaris Aviation (NYSE: VLRS  ) , a leading ultra-low-cost-carrier (ULCC) in Mexico, provides access to leading manufacturing hubs, and it could make a great play on the general overall growth in Mexico's economy and air travel.

Like most of Latin America, the majority of Mexicans travel around the country on buses. While the country's highly inefficient highway network makes bus travel time-consuming, the nation's many lower-income travelers prefer buses' cheaper fares, helping the system stay in business. But now, Volaris Aviation promises the ability to match bus fares in some areas, providing consumers with a much better travel alternative.

Read the full article here.


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




Sunday, December 15, 2013

Clean Energy: 2014 Stock Of The Year Candidate


After another news release, Clean Energy Fuels (CLNE) again appears setup for a big run yet the stock continues to languish around $12. The largest provider of natural gas fuel for transportation in North America offers catalysts that could push the stock on a huge run in 2014. Most investors are still concerned that the 'hype' won't ever be met with reality.

Clean Energy falls into a group of stocks set to benefit from the abundant supplies of natural gas that have led to a glut of the cheap fuel. Other stocks including Cheniere Energy (LNG) and Westport Innovations (WPRT) are building products that benefit from this cheap energy source. Oddly these stocks continue to diverge though all are still in the process of proving out their respective business plans. In fact, none of the three stocks is even expected to be profitable next year making the divergence perplexing. Considering the huge gains in Cheniere, Clean Energy could be set up for a strong 2014 once it hits full stride.

Read the full article at Seeking Alpha.


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



Higher Natural Gas Prices Could Pump Up Oil Services Demand


Don't look now, but the prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs above $4/btu. At the same time, most of the domestic oil services stocks have slumped to multi-month lows. The combination could present a buying opportunity for the domestic oil service firms of Baker Hughes (NYSE: BHI  ) , Weatherford (NYSE: WFT  ) , and C&J Energy Services (NYSE: CJES  ) to name a few that are intriguing.  

A major reason for recent weakness in the stocks has been less-than-robust capital expenditure plans by exploration firms to end the year. The general guidance for the fourth quarter wasn't overly robust, but the recent cold weather and reduction of natural gas inventories has pushed levels below prior years. The latest weekly report from EIA showed inventory levels 3% below the 5-year average levels. Also, the inventory number is already a substantial 7.2% below the levels of last year.

Read the full article here.


Disclosure: Long CJES and WFT. Please review the disclaimer page for more details. 




Friday, December 13, 2013

WPX Energy: Painfully Building the Foundation for Growth


WPX Energy (NYSE: WPX  ) continues to build the foundation for growth, yet the improvements aren't showing up in recent results. Like any oil and gas exploration and production company trying to turn around operations, any gains in the short term can quickly be offset by declining production from old wells. Until the company can drill enough new wells, the positive results can be hidden, as is the case with WPX Energy.

The first quarter sequential gain in natural gas production is a signal that WPX has finally turned the corner. Combined with a substantial increase in oil production, the company is set to benefit from the suddenly surging natural gas prices and stubbornly high oil prices.

Read the full article here.


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



Nuance: The Never Ending Shift to Subscription Services


After another weak quarter, Nuance Communications (NASDAQ: NUAN  ) continues to hammer away on the current theme that the shift to on-demand and subscription services is hurting short-term revenues while increasing development costs. The shift is occurring due to customers moving toward cloud services and per use charges for health care and mobile transactions instead of one-time perpetual licenses. This move shifts revenue from up-front payments toward receiving the revenue over periods of two to three years.

The maker of voice-recognition software most fondly known for Siri used in Apple products continues to underwhelm investors expecting better results and a quicker shift.The stock continues to plow toward new lows even with an exciting sector of developments for voice-recognition and natural-language software in the medical field and enterprise virtual assistants. The disruptive shift toward on-demand and subscription services isn't new, having already hit software stocks such as Adobe Systems and Intuit (NASDAQ: INTU  ) .

Read the full article here.


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




Tuesday, December 10, 2013

An Interesting Pure Play in the Permian Basin

It might sound counterintuitive to buy a company after it encounters multiple operational issues, but in some situations the quality of assets and management team warrant such a move. In the case of Laredo Petroleum Holdings (NYSE: LPI  ) , the company has fantastic acreage in the suddenly hot Permian Basin. Note that Pioneer Natural Resources (NYSE: PXD  ) has suggested the Permian Basin contains more than 50 billion barrels of oil equivalent, making it the largest domestic oil field. Laredo also has an executive team that has developed and successfully sold multiple exploration companies in the past.  

Read the full article here.


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




Don't Fear the Lands' End Spin-off


In a move long expected, Sears Holdings (NASDAQ: SHLD  ) announced plans to go forward with a spin-off of Lands' End. While a timeline wasn't provided, the announcement comes after a chaotic week for the stock. News of ESL distributing shares to investors and speculation that J.C. Penny Company (NYSE: JCP  ) is taking back market share hit the stock hard this past week.

With Sears Holdings down nearly $20, or roughly 30%, in a few weeks, it is good for long-term investors to take stock of the investment thesis. The important part to be considered is whether these transactions alter the previous investment thesis or whether the moves are only noise that impacts the fringes of any decision. The market has reacted with fear of a cash crunch, but is this fear logical?

Read the full article here.


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



Monday, December 9, 2013

Is Cheniere Energy Overheating Again?


Back at the end of March, Stone Fox Capital suggested that Cheniere Energy (LNG) was overheating and investors should be careful buying the stock. The stock quickly surged above $27.50 with numerous technical indicators flashing an over bought condition. The stock spent the next five months fractionally above or below that level.

The company is part of a group of high profile stocks attempting to benefit from low natural gas prices. The group includes the likes of Clean Energy (CLNE) and Westport Innovations (WPRT) that have had drastically different stock results over the last couple of years with Cheniere dramatically outperforming the group. Ironically neither stock has actually benefited from the advantageous situation yet due to the lengthy period it has taken to complete infrastructure projects.

Read the full article at Seeking Alpha.


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



The Perpetually Misunderstood SodaStream


The sky appears to be the limit for SodaStream (NASDAQ: SODA  ) , but investors would never know that based on the market average multiples applied to the stock. While SodaStream provides fast growth and unlimited potential, the stock trades at pedestrian multiples, including less than 19 times its 2013 earnings estimates and 13 times its adjusted EBITDA forecasts. Remember that beverage industry giant Coca-Cola  (NYSE: KO  ) trades at 20 times its earnings, and related home beverage market participant Green Mountain Coffee Roasters (NASDAQ: GMCR  )  trades at 21 times its fiscal year 2013 earnings.

SodaStream remains the unquestioned leader in home beverage carbonation systems, yet the market tends to stress on the smallest of details. In the last quarter, it was the lackluster reported flavor sales growth of only 7%. Remember that Coca-Cola would be happy with even 7% growth considering the expectation of a 2% sales decline this year. Investors should review the details of the earnings call and they might not be so quick to dump an innovative leader in the burgeoning home carbonation market based on that number. It was clear that logical reasons exist for a lackluster number, ensuring that SodaStream's growth plans remain intact.

Read the full article here.


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




Friday, December 6, 2013

3 Numbers to Remember as Yelp Crashes Back to Earth


The fundamentals of a company aren't always represented in the corresponding stock price and, vice versa, the stock price isn't always reflective of a company's true value. In the case of Yelp (NYSE: YELP  ) , the company has been firing on all cylinders, generating fast growth and expanding internationally. The stock, however, continues to experience extreme volatility, with price swings of more than 5% in both directions. Lately though, the stock has declined 20% after large gains earlier in the year.

Yelp competes in the heavily competitive online consumer review market and is attempting to grab the $133 billion spent on local advertising, particularly the $7 billion spent on Yellow Pages. It competes against other online companies such as Angie's List (NASDAQ: ANGI  ) and Facebook (NASDAQ: FB  ) for a share of not only Yellow Pages spending, but billions of other ad dollars spent on local avenues like television, billboards, and newspapers.

Read the full story here.


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



Thursday, December 5, 2013

3 GSV Capital Numbers You Shouldn't Miss


For investors that only read the earnings headlines, a ton of additional information can usually be gleaned from the related conference calls. The recent earnings call for GSV Capital (NASDAQ: GSVC) provided some interesting nuggets regarding Twitter (NYSE: TWTR) and the general IPO market.


GSV Capital is a publicly traded investment fund still going through its early stages, with investments in venture-backed private companies only now developing into public firms on a constant basis. The fund provides the small investor access to pre-IPO stocks where a Twitter stake can be obtained at a lower cost than the IPO price. Unfortunately, the positions also come with a high management cost and still unpredictable results. Chegg's recent IPO could provide more insight into whether the education technology theme plays out better than the initial trading of Violin Memory (NYSE: VMEM).

Read the full article here.


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



Wednesday, November 27, 2013

Cleared For Takeoff

Interesting video from American Airlines (AAMRQ) uploaded to YouTube saying the merger is "cleared for takeoff".





Anybody following this blog knows that Stone Fox Capital has been bullish on this merger with an investment in US Airways (LCC). As the largest airline in the world, the new American Airlines Group (LCC) should eventually claim the largest valuation as well.



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




Seadrill Dividend Hike: Will the Stock Price Follow?


Seadrill Limited (NYSE: SDRL  ) plunged over 6% when the company announced a quarterly dividend hike by $0.04 to $0.95, or 4.3%. Typically a dividend hike is greeted with positive stock returns, but in this case investors appear more concerned by other issues in the sector.

Seadrill is a global leader in offshore drilling with a fleet of modern, high-specification rigs. The company is a serial deal maker with a 77.5% ownership of Seadrill Partners (NYSE: SDLP  ) and a recent deal to acquire the majority of Sevan Drilling. The addition of Sevan during the quarter added operating costs that reduced the bottom line.

Read the full article here.


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




Tuesday, November 26, 2013

More Delays at Glue Mobile Sabotage a Great Deer Hunt


Glu Mobile (NASDAQ: GLUU  ) shares were absolutely clobbered after the third-quarter earnings report that easily beat estimates. On top of the beat, the mobile game developer increased guidance for the fourth quarter that would typically send a stock soaring. Why was the market so unforgiving this time?

The issue with Glu Mobile was twofold. The first issue was that investors had hyped up the release to the extent of expecting unreasonable guidance for the fourth quarter. The second issue and probably most concerning was the unexpected delay in the release of several titles forecasted to contribute highly to fourth-quarter numbers.

Read the full article here.


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




Monday, November 25, 2013

Silver Bay Realty Growing NAV Despite High Expense Levels

Investors still aren't convinced that the single-family rental house market provides an investable opportunity, and for good reason. The cost for a corporation to build up a portfolio of rental houses, renovate them, and lease the properties continues to be expensive. Missed by the focus on cash flows, Silver Bay Realty Trust (NYSE: SBY  ) continues to grow its net asset value (NAV) by seeing the valuation of its houses rebound. Fellow rental property owner American Homes 4 Rent (NYSE: AMH  ) has seen similar stock weakness.

Read the full article here.


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




Friday, November 22, 2013

3 Takeaways From Helmerich & Payne's Earnings


For investors who only read the earnings headlines, a ton of additional information can usually be gleaned by reading the details of the earnings report and comparing to competitors. For investors interested in the domestic land-drilling market, Helmerich & Payne (NYSE: HP  ) happens to be one of the better providers of useful numbers.

The driller had some encouraging signs on new rig orders and increasing rig revenue per day, but the numbers show more stability than growth. As with Patterson-UTI Energy (NASDAQ: PTEN  ) and Nabors Industries (NYSE: NBR  ) , the troubling sign continues to be that customers want the new rigs at the expense of idled rigs.

Read the full article here.


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




3 Sprouts Farmers Market Numbers You Shouldn't Miss


Shareholders who only read the earnings headlines for the stocks they own are missing out: A ton of additional information can usually be gleaned from the related conference calls. For investors interested in the increasingly highly competitive fresh and organic market, Sprouts Farmer Market  (NASDAQ: SFM  provided some solid numbers to digest during its recent third quarter.

The organic chain, mostly located in the Southwest, has ample opportunities for a regional to national expansion plan. The stock, however, faces short-term pressure from a significant stock sale from its largest shareholder, Apollo Global Management (NYSE: APO  ). Additionally, mounting pressure continues to build in an industry that is becoming overly competitive based on reduced guidance from organic leader Whole Foods Market (NASDAQ: WFM  ).

Read the full article here.


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



3 Key Takeaways From Zillow's Earnings Call


Zillow (NASDAQ: Z  ) is facing increasing pressure for the leadership position in the online real estate marketplace. The recent purchase of Market Leader by Trulia (NYSE: TRLA  ) places it in a more comparable position based on revenue. Move (NASDAQ: MOVE  ) continues to make long-needed enhancements to realtor.com, but it has fallen far behind the monthly unique users, or MUUs, of Zillow and Trulia.

The previous week's earnings call for Zillow provided several key numbers that suggest the leadership position isn't as much in question. While Trulia made a big step forward on the professional agent aspect of the business, it fell even further behind on traffic to its core sites. In addition, Move recently got approval to become more competitive via quicker updates to the primary website, but the consumer traffic levels suggest it might be too far behind to catch up. After all, President Obama chose Zillow to participate in a discussion on the real estate market, but not the other two companies.

Read the full article here.


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




Why the Defense Sector's Yields Are Shrinking?

Though investors had every right to expect the defense sector to struggle over the last year, the way defense stocks Lockheed Martin (NYSE: LMT  ), Northrop Grumman (NYSE: NOC  ), and Raytheon (NYSE: RTN  ) spent their precious shareholder capital sent other signals. Coming into 2012, these three businesses poured substantial amounts into share buybacks. In addition, all three pay solid dividends, providing astute investors signs that their ability to generate strong cash flows might have exceeded the market's expectations.

Read the full article here.


Disclosure: Long LMT and NOC. Please review the disclaimer page for more details. 




Thursday, November 21, 2013

2 Stocks To Buy Using The Chipotle Example


After reviewing the top gainers in the S&P 500 since March 9, 2009 provided by Bespoke Investment Group, one stock really stuck out. Chipotle Mexican Grill (CMG) generated one of the largest gains at nearly 1,000% during that period. What really stood out is that Chipotle unlike other stocks on the list was considered a high quality company all along yet it presented several extreme-buying opportunities over those years.

Using that same general concept of buying quality stocks on dips, a couple of top performing companies with huge opportunities really stick out. Both Yelp (YELP) and Zillow (Z) have very desirable, market leading models. The issue is that the stocks trade at high multiples that make the stocks difficult to purchase at the current levels. Following the Chipotle example, the market will provide several opportunities in the future to buy these stocks at lower multiples. The key is whether investors are prepared and ready to pounce when it occurs.

Read the full article at Seeking Alpha.


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




Saturday, November 16, 2013

3 HomeAway Numbers You Shouldn't Miss

Investors often read only the earnings headlines, but a ton of useful information can usually be gleaned from the related conference calls. For those interested in the online travel industry, HomeAway (NASDAQ: AWAY  ) provided some useful information on last week's earnings call on the developing marketplace for vacation rentals. The sector is starting to cross over into the traditional online travel industry with a pilot test with Expedia (NASDAQ: EXPE  ) , and the company is starting to face tough competition from TripAdvisor (NASDAQ: TRIP  ).

Read the full article here.


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



3 Important Numbers from the American-USAir Settlement


The surprising announcement on Nov. 12 that the Department of Justice, or DOJ, had agreed to a settlement allowing the merger of US Airways (NYSE: LCC  ) and AMR Corporation (NASDAQOTH: AAMRQ  ) to form the new American Airlines Group, with an expected close in December 2013. With this settlement in place and the merger proceeding, investors can now review three important numbers for the new American Airlines, which place the new company at very favorable multiples against industry leader Delta Air Lines  (NYSE: DAL  ) .

Slot pairs manageableThe DOJ agreement obliges US Airways and AMR Corp. to give up 52 slot pairs at Washington Reagan National Airport, or DCA, and 17 slot pairs at New York LaGuardia Airport, or LGA. The new American also has to divest two gates and related support facilities each at Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport.

Read the full article here.


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



Friday, November 15, 2013

Riverbed Impacted By Government Shutdown


Typical of the quarterly reports over the last couple of years, Riverbed Technology  (NASDAQ: RVBD  )  easily surpassed earnings estimates. The concerning part for investors are that the WAN optimization specialists failed to meet revenue numbers. On top of that, the primary Steelhead product had virtually flat growth from the prior year.

The application performance company is still busy wrapping up the integration of the OPNET acquisition from the end of last year. So far the deal isn't generating the revenue synergies expected, but that could be due to a staggering slowdown in government spending. The company obtains a large portion of revenue especially during the third quarter of the year so a rebound in government spending could benefit Riverbed more than most.

Read the full article here.


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




Wednesday, November 13, 2013

Chegg: New Issue To Follow

The ability to revolutionize the education process in the US and maybe even the world could make the education technology sector an interesting sector in the next decade. Chegg (CHGG) started off as a textbook rental firm, but it is quickly moving to the digital world of making a platform for high school and college students.

This is an interesting stock that Stone Fox Capital owns via an investment in GSV Capital (GSVC) that has it as a top 5 investment. Potential investors should listen to this interview with the CEO on CNBC this morning.






Chegg has slumped some 20% from an IPO pricing above the range at $12.50. The market doesn't appear ready for the education tech sector and especially a stock losing tons of money. This company offers the future potential of being the financial and social platform for higher education students.


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




3 Clean Energy Numbers You Shouldn't Miss


For investors that only read the earnings headlines, a ton of additional information can usually be gleaned from the related conference calls. For those interested in the development of the natural gas transportation fuel market, Clean Energy Fuels (NASDAQ: CLNE  ) happens to be one of the better providers of useful numbers.

The leader in providing both CNG and LNG transportation fueling solutions in North America typically loads up the earnings call with numerous useful numbers. The numbers range from the development of the Cummins (NYSE: CMI  ) Westport (NASDAQ: WPRT  ) engines to margins per gallon to trucking fleets transitioning to natural gas for fuel.

Read the full article here.


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



Nuverra: On the Cusp of a Rebound?


After yet another disappointing earnings report for Nuverra Environmental Solutions (NYSE: NES  ), investors need to remain focused on the long-term picture. Sure the company announced plans for a reverse split, and reduced EBITDA brings debt covenants into question, but investors always need to keep cool and research all the facts.

You can't deny that Nuverra has been a serial disappointer, on the path to becoming a complete environmental solutions provider to customers in the energy and industrial end-markets. The promise of providing environmental solutions for the dangerous materials produced by hydraulic fracturing once provided enormous potential.

Read the full article here.


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




Tuesday, November 12, 2013

Weatherford Is Finally on Track for Success



After a few rocky years with major accounting issues regarding taxes and major losses from an Iraqi contract, Weatherford International (NYSE: WFT  ) finally appears on a path to success. The oil services firm famously shifted headquarters to Switzerland back in 2009 to reduce taxes and ended up paying a higher effective tax rate, then ran into issues requiring a restatement of taxes. All of those issues led to a major slump in the stock as 2012 ended.

In the latest quarter, the company showed improvements in operations with a focus on margins; the effective tax rate also dropped to an incredible low rate of 20%. Finally, Weatherford is on track and could achieve numbers comparable to other top oil service firms such as Halliburton (NYSE: HAL  ) and Baker Hughes (NYSE: BHI  ) . The inability to operate efficiently and generate strong margins has left Weatherford trading at industry-low revenue multiples, but a new plan to focus on core operations and debt reduction should close that gap.

Read the article here.


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




How Delta Air Lines and Lower Fuel Costs Could Equal Huge Returns


When reviewing the numbers of Delta Airlines (NYSE: DAL  ) , you might be shocked that it's, well, an airline. The domestic airline with the largest market cap is starting to act like a real corporate citizen: paying down debt, paying a dividend, and actually buying back company stock. And amazingly, it's achieved this success despite stubbornly high oil prices.

Just last year, Delta bought a refinery in an attempt to dramatically reduce the costs of jet fuel. What originally looked like a desperate, ill-conceived move has become almost an afterthought, with Delta and other airlines reporting strong profits despite the high price of fuel. Even bankrupt AMR (NASDAQOTH: AAMRQ) and its prospective partner US Airways (NYSE: LCC  ) are generating huge gains, despite fuel costs and a merger blocked by the Department of Justice.

Read the full article here.


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




Monday, November 11, 2013

After a Juicy Sell, Is Fifth & Pacific Worth More?


Anybody following Fifth & Pacific (NYSE: FNP  ) knows the stock trades based on the prospects of the fast-growing Kate Spade brand. Not surprisingly, the company recently unloaded the Juicy Couture brand to focus on further growing Kate Spade. The deal was for what appears to be a sizable discount, and Lucky Brands could be next. Will this streamlining of Fifth & Pacific into solely Kate Spade provide more value, or did management sell Juicy at a pittance to the detriment of long-term shareholders?

Back in 2012, the three brands had roughly equal sales, but the success of Kate Spade offered greater potential. Also, the recent success and valuation of Michael Kors (NYSE: KORS  ) and the past success of Coach (NYSE: COH  ) encouraged a focus on Kate Spade. At the same time, though, both Juicy Couture and Lucky Brands provided the potential for major turnarounds. Unfortunately, as 2013 has progressed, the secondary brands haven't developed back into winners, while Kate Spade continues to explode. In the latest quarter, Kate Spade generated $167 million in sales, far outpacing the $109 million of the second biggest brand, Lucky.

Read the full article here.


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




Sears Holdings: More Value Unlocking Transactions

Though Sears Holdings (NASDAQ: SHLD  ) soared nearly 12% during the trading session last Tuesday on news of further transformational transactions to unlock value, investors shouldn't be surprised by the announcement. Sears is one of the largest retailers in the U.S., but most investors don't realize the numerous business units that are hidden under the surface. The media has mostly spun the plans for Lands End and Sears Auto Centers, or SAC, as "liquidation moves", but investors should note the proposals don't involve raising cash from these units.

Read the article here.


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




Tuesday, November 5, 2013

Facebook: Bored Teens Surface In Full Force

As mentioned many times in the past, Facebook (FB) executives appeared in denial over the teen usage debate. Over and over the executives have claimed that teen usage and engagement continues to grow while every credible report suggests teens no longer favor the social network. Most of the debate probably stems from semantics of what counts as teen usage. Sure teens still use the site on possibly a monthly or even daily basis and possibly even more kids use the site as parents become more and more comfortable allowing them access to it. In that essence, Facebook might technically have been correct all along that teen usage remained strong. Evidence all along continues to suggest that teen engagement and interest in using the service continues to decline. Piper Jaffray again disclosed that the teen survey it conducts places Twitter (TWTR) and Instagram as favorites. In fact, the below chart showcases how Facebook popularity has plunged in the last year.

Read the full article at Seeking Alpha.


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





High Growth Furniture Stock With Catalysts


In general, most furniture manufacturing stocks peaked at least a decade ago. That is, until the recent housing rebound and reduced competition led to a rebound in the space. Sector leaders such as Bassett Furniture (BSET) and Hooker Furniture (HOFT) continue to see rising share prices, but both stocks remain considerably below all-time highs. Upstart manufacturer Nova Lifestyle (OTC:STVS) trades close to all-time highs after several acquisitions have helped push up revenues and profits.

Even though furniture manufacturing has turned into a commodity business, most of these stocks are solidly profitable these days. Due to all of them having relatively small market capitalizations, none of these stocks obtains much in the way of analyst coverage either. With Nova Lifestyle, investors now have the opportunity to discover it before the market learns about it and its growth potential.

Read the full article at Seeking Alpha.


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




Westport: The Good, Bad, and Ugly


After another quarterly report, Westport Innovations (WPRT) had mixed results with good news for longs and bad news for shorts. Any investor checking back into the story after an absence should realize that since the last earnings release, the much-anticipated Cummins (CMI) - Westport, or CWI, joint venture's 400HP 12-liter engine hit production and the company completed a secondary offering to raise cash. The combination of news items sets the company up for positive results in the future.

Unfortunately, the leader of natural gas engines didn't provide details on the earnings report that helped the stock, though it shouldn't be hurt that bad either. The lack of details regarding CWI growth and the continued focus on new development projects again left the investment community with concerns about profitability.

Read the full article at Seeking Alpha.


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




Monday, November 4, 2013

Are These 3 Stocks Buyout Targets?


Recently, analyst firm Jefferies listed several retail stocks as top leverage buyout, or LBO, candidates. Basically, the analysts think the stocks have gotten so cheap that private equity will take them private via borrowing debt to restructure and hopefully create value.

Jefferies thinks that Aeropostale (NYSE: ARO  ) , American Eagle Outfitters (NYSE: AEO  ) , and Body Central provide interesting values with high internal rate of return, or IRR, and limited debt. The only problem is that the teen retail segment has become highly competitive, with numerous players that can easily compete online with cloud software tools and social media advertising.

Read the full article here.


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




Below the Surface at Carrizo Oil & Gas


With the recent run-up in Carrizo Oil & Gas (NASDAQ: CRZO  ), you are probably wondering if the stock has any room for future gains. Balancing long-term potential and the risk of losing 100% in gains can be a difficult task.

The company is a small exploration firm focused on the production of oil in the Eagle Ford Shale, Niobrara Shale, and natural gas in the Marcellus Shale. In addition, it recently completed the first well in the Utica Shale.

Read the full article here.


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




Saturday, November 2, 2013

Legacy Airlines Like the Look of Thanksgiving Ticket Prices


More signs of strong pricing discipline in the airline sector make the legacy stocks look worth pursuing. After well-documented decades of losses, the airlines appear more inclined to focus on profits than on passenger growth.

Recently, both Orbitz (NYSE: OWW  ) and Travelocity announced that Thanksgiving airfares were expected to be 7%-9% higher than fares from last year. This trend might not be welcome news to the people planning to fly over the holiday period, but it should be very encouraging news to airlines. Yet, online travel sites such as Orbitz might struggle if the higher fares push some travelers to seek alternative transportation.

Read the full article here.


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