Showing posts from August, 2013

IB Net Payout Yields Model

Vodafone Surge Pushes Net Payout Yield Model Higher

The recent speculation that Vodafone (VOD) will sell the 45% stake in Verizon Wireless it doesn't own sent the stock surging 8%. As a prime member of the Net Payout Yields model due to a large dividend and a smaller buyback, the gains in Vodafone helped push the model up to over 21% gains for the year. This compares favorably to the 14.9% gain in the S&P 500 and places the model on a path for three straight years of easily surpassing the index. The below data comes from the model managed on Covestor . Annualized since inception (nearly 3 years now), the model has outperformed the market on average by 6.5% not including fees. Naturally future performance can not be guaranteed, but the model is a consistent grower as it consistently shifts into high net payout yielding stocks. Disclosure: Long VOD. Please see the disclaimer page for more details. 

Investors Are Misguided On The Legacy Of Ballmer

The common perception by investors is that Steve Ballmer was a complete failure while CEO of Microsoft ( MSFT ) . Sure he could've done better at developing a mobile software strategy. Sure he could've done better at developing products to compete with Apple's ( AAPL ) slew of consumer gadgets that made billions over the last decade. Investors miss the point, though, that not only did Microsoft perform in line with the other technology powers from the 2000 technology bubble, but it wasn't a product design firm like Apple. Most investors forget that Apple designed the most appealing computer at the time so it was only staying within its core competency by building a iPod, iPhone and iPad. Microsoft though got distracted attempting to make products instead of focusing on developing software to dominate the mobile world. Instead, Google ( GOOG ) now dominates the mobile world with the Android even surpassing iOS from Apple. Read the full article at Seeki

Millennial Media Turns Extremely Cheap Again

Another quarterly report and another major sell-off of Millennial Media ( MM ) . Investors not reading the report would probably suspect that the leading independent mobile advertising company released earnings that didn't meet estimates. The nearly 19% loss on top of an 8% loss on the day earnings were released undoubtedly must have been due to extremely negative numbers. The sell-off was actually caused by a couple of factors, including the surprise merger of the second leading independent mobile ad network and revenue numbers that missed estimates. Considering the general weakness in the sector, it actually doesn't take much to send ad technology stocks down these days. Read the full article at Seeking Alpha. Disclosure: Long MM. Please read the disclaimer page for more details. 

Is Nuverra Environmental Really That Bad?

The recent article against Nuverra Environmental ( NES ) used personal attacks to distract from the real results of the company. Claims that the well-respected former CEO made an acquisition to escape or that the company creates a "distorted reality" by making adjustments to financials is absurd. The company is dedicated to the protection and enhancement of environmental solutions for the removal and disposal of restricted fluids primarily from shale drilling. As environmentalists fret over the safety of the fluids used in fracking, Nuverra was suppose to benefit from the need to safely dispose of the "dangerous" fluids. Read the full article at Seeking Alpha. Disclosure: Long NES and CJES. Please review the disclaimer page for more details 

NeoStem: Making The Transformation

NeoStem ( NBS ) is not only transforming the treatment of chronic disease, but the company is working to transform the stock as well. From the transition to the NASDAQ back in July to the hiring of new executives to help lead the next phase of development, NeoStem appears ready for the next growth stage. The company develops therapies for chronic unmet medical needs around a significant IP portfolio and operates a revenue generating service division with expertise in contract manufacturing and cell banking. With a market cap of only $150 million, the stock is largely unknown by the market, yet it has plenty of opportunities to address chronic diseases from cardiovascular disease to autoimmune disorders to regenerative opportunities. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer pages for more details. 

Will This Social Butterfly Ever Soar?

When Jive Software ( JIVE ) came public back at the end of 2011, the stock promised huge potential to become the social business platform of choice to rival Facebook's ( FB ) consumer network. The cloud software firm instead has floundered as other cloud based software firms have soared. Does this social butterfly have the potential for a similar rebound to what Facebook recently made? Jive Software offers a cloud-based collaboration network that connects employees, customers and partners. It also offers the only pure-play option with the other leading competitor bought by Microsoft ( MSFT ) a while back. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Seadrill Newbuild Program To Benefit From Mexico Demand

Whether directly or indirectly, the aggressive newbuild program at Seadrill ( SDRL ) could benefit the most from the potential opening up of Mexico to international oil service firms. While still too early to get overly excited, Merrill Lynch suggests the potential is for Mexico to add 50 onshore rigs and 20 floaters in the next two years to pull the struggling industry out of decline. Seadrill is a leading offshore deepwater drilling expert with a fleet of drillships, jack-up rigs and semi-submersible rigs operating in Northern Europe, U.S. Gulf of Mexico, Mexico, South America, West Africa, Middle East and Southeast Asia. The company owns positions in numerous other drilling oil services firms including 75.7% of Seadrill Partners ( SDLP ) that alone is worth nearly $1 billion. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Silver Bay Is Finally A Bargain

After a lot of hype about the single-family rental market, the Silver Bay Realty Trust ( SBY ) IPO turned into a major bust. The REIT went public back in December at $18.50 and quickly shot up to over $22, but any investors buying that hype have felt nothing but pain in 2013. In fact, the stock now trades below NAV near all-time lows around $15.50. Could it finally be time to buy the REIT? Silver Bay focuses on acquiring, leasing, and maintaining a portfolio of single-family homes in select attractive markets in the U.S. It plans to operate under a REIT where substantially all of future income is returned to shareholders. For investors that follow Stone Fox Capital, a big warning was issued when the REIT started trading due to the expected weak financials and lack of an initial dividend. In the early days, investors were confusing bargain housing prices with operating profits Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Market Continues To Deny The ExOne Flaws

Typically missing earnings estimates on every report as a public company would cause a stock to plunge. In the case of industrial 3D printer manufacturer ExOne ( XONE ), the market has surprisingly overlooked every misstep. Naturally lots of potential exists in the sector and of a stock that reported 97% growth, but the company mentioned some disturbing issues in the earnings call that questions the 200% gain in the stock and sky-high valuation. ExOne is a 3D industrial printer company focused on manufacturing and selling 3D printing machines and parts via printing service centers (PSCs) around the world. It sells machines such as the S-Max pictured below that cost up to $1.5 million causing lumpy sales and unpredictable results. Investors though don't appear concerned by less than expected numbers. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Green Dot: Banking On The Boroughs

The stock action in Green Dot Corporation ( GDOT ) isn't exactly matching the recent results of the company suggesting that investors are placing a large bet on the GoBank and check cashing initiatives. The actual results haven't improved much over last year, but the general perception has been they were better than expected after facing an onslaught of new competition in its market leading prepaid card segment. Green Dot is focused on providing affordable banking for the masses. Its primary product is a reloadable prepaid debit card that is available at more than 60,000 retail stores nationwide and online. It has several new initiatives including the recently launched GoBank, Project Outreach and another wave of retailers expanding the retail locations by another 20,000 stores. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

A Great Time to Buy This Oil & Gas Company

Last week,  Halcon Resources (NASDAQ: RAM ) announced a secondary offering of up to 43.7 million shares that caused the stock to crash. The stock traded at $6 for a few days prior to offering announcement, though typical of any “surprise” secondary, the plunge provides an opportunity to scoop up shares of a good company. The company is a growing oil exploration and production firm heavily indebted from an asset more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Buy Smaller Airlines as Consolidation Looms

The shocking announcement that the Department of Justice filed a lawsuit to block the merger of American Airlines and US Airways (NYSE: LCC ) caused most of the airlines to drop. While the blocking of the merger could have a significant impact on American Airlines, it could create opportunities for the smaller airlines to either be bought out in smaller consolidation deals or gain from the interruption and potential cutbacks at more » Disclosure: Long LCC. Please review the disclaimer page for more details. 

Did Baidu Suddenly Solve the Mobile Problem?

Only a month ago,  Baidu (NASDAQ: BIDU ) was struggling to stay above $90 as the company faced margin and competitive pressures from the shift toward mobile internet usage and more specifically, mobile search, that it doesn’t dominate like desktop search. The leading Chinese search provider has increased operating expenses in order to expand research and development and marketing in order to build out the mobile products and to publicize more » Disclosure: Long BIDU. Please review the disclaimer page for more details. 

Expert On American Airlines Merger

For those interested in the pending merger between US Airways (LCC) and American Airlines (AAMRQ) , Minyanville has an interesting interview with analyst Wayne Plucker at consultant firm Frost & Sullivan. The best part of the interview is the he discusses a bigger impact to job losses and not costs to consumers. In fact, he makes the claims that ticket prices aren't high enough. Though some of those costs are being made up for with ancillary charges, the DOJ has it wrong about higher costs to consumers. Heck, in some cases consumers need to pay higher prices and that's just the hard cold facts that airlines undercharged in the past. If the new American Airlines were to dramatically raise rates for any routes and existing rates are so attractive, other airlines will swoop in to take market share. After this consolidation, the industry is still left with Delta Air Lines (DAL) and United Airlines (UAL) as equal competitors and Southwest Airlines (LUV) , JetBlue (JBLU) ,

Infographic: Untangle Your Data Assets

The below infographic from Teradata (TDC) highlights why Stone Fox Capital has become increasingly bullish on ad-tech firms thought the results have been negative so far. The data-driven suggests that CMOs will outspend CIOs by 2017. Encouraging signs for firms such as Millennial Media (MM) , Tremor Video (TRMR) and even Marin Software (MRIN) . All of these firms will benefit from an increasing shift of advertising dollars to digital mediums where marketing analytic will be increasing important. Read more from Teredata here . Disclosure: Long MM and TRMR. Please review the disclaimer page for more details. 

Delta Air Lines To Benefit From American Airlines' Weakness

The shocking suit to block the AMR Corp ( AAMRQ.PK ) and U.S. Airways ( LCC ) merger roiled the market, sending Delta Air Lines ( DAL ) tumbling 7%. While a big part of the incentive for buying airlines has been the benefits of industry consolidation, it doesn't appear that the Department of Justice blocking this merger will prevent the intent of reduced competition. Over the last few years, the airlines appear more cognizant that focusing on profits is paramount over increasing competition. Does blocking this merger change that incentive? Ultimately, all of the airlines can probably be bought outside of American Airlines, whether based on the potential for further consolidation in the smaller, regional airlines or the potential that the third largest airline, American, struggles to emerge from bankruptcy. Delta could ultimately be the biggest beneficiary, as the airline won't face strong competition from the combined entity allowing it and United Airlines to

Is Google Really to Blame for Weak Ad-Tech IPOs?

The recent weakness in advertising technology-related IPOs has reached a level where other firms will likely delay IPO plans. Typically, companies don’t go public when pricing below the original mid-point, yet the sector has seen several IPOs price anyway. Even worse, these stocks have performed badly after pricing, further compounding the problem. While Bloomberg suggests the online ad dominance of Google (NASDAQ: GOOG ) is the leading cause of the more » Disclosure: Long TRMR. Please review the disclaimer page for more details. 

GSV Capital: Finally Realizing the Dream

Since going public over two years ago, GSV Capital (NASDAQ: GSVC ) promised individual investors the potential of investing in venture capital companies before those stocks go public in order to generate huge gains. Recently, the IPO market has very much favored investors owning the stock in the private markets or buying shares at the offering price if lucky enough to obtain shares. Unfortunately, this plan hasn’t worked out so more » Disclosure: Long GSVC. Please review the disclaimer page for more details. 

What Company Will Win The Race To $1,000?

Just last year Apple ( AAPL ) appeared set to win the race amongst a group of select tech stock to reach $1,000. Though the company had become the largest valued stock in the world, it still was competing with Google ( GOOG ) and Priceline ( PCLN ) to be the first to reach the magical $1,000 mark. Clearly reaching such a figure is partially the function of not splitting the stock, but it also is indicative of truly fast growth. With Apple plunging to below $400 in early 2013, most investors probably don't even consider it has having a chance to even reach $1,000 period much less beat Google to that number with it trading at $890. Typically those are the stocks discussed in that race to $1,000, but it actually appears that Priceline will easily win the contest with it now trading near $960. Time will tell so let's review the possibilities as the probability of reaching that magical figure is higher than most think these days. Read the full article at Seeki

Top 10 Net Payout Yield Stocks For August 2013

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started back in June, 2012 (see article ) and explained in August, 2012 (see article ). The series highlights the best stocks for the upcoming month. Please review the original articles for more information on the net payout yield concept. July Returns Below are two charts highlighting the monthly returns of the top ten stocks from July (see list here ). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists. Read the full article at Seeking Alpha. Disclosure: Long AMP, CTL, DTV, KSS, MSI, NLY, and T. Please read the full disclaimer page for more details. 

Load Up on InvenSense Now

Even after soaring following a great quarterly report and solid signals of signing up a major customer, InvenSense (NYSE: INVN ) doesn’t appear to be gaining much traction on the stock market. The stock soared the first day of trading following the report, but it has sold over the days since the report. Even after surging to new 52-week highs, the motion tracking stock trades with a valuation of only more » Disclosure: Long AAPL and INVN. Please review the disclaimer page for more details. 

Tremor Video Overlooked Due To Misperceived Industry Weakness

One of the biggest reasons given for overlooking the recent IPOs of video ad-technology firms has been the threat of competition especially from Google ( GOOG ). Stocks from Marin Software ( MRIN ) to Tremor Video ( TRMR ) to last week's IPO of YuMe ( YUME ) have suffered due to market misconceptions of weakness . In the case of Tremor Video, the company reported smashing Q2 2013 results that easily crushed analyst estimates signaling that competition exists, but no different than it has been in its nearly decade of existence. Tremor Video is a leader in providing technology-driven video advertising solutions enabling brand advertisers to engage consumers across internet-connected devices such as smartphones and tablets. The company along with the sector is surging as the availability of high-speed broadband network infrastructure capable of video consumption grows on a daily basis. Read the full article at Seeking Alpha. Disclosure: Long TRMR. Please revie

Zillow's Monetization Machine Surges

One thing that really stands out in the Zillow (NASDAQ: Z ) quarterly report is that the monetization of the Zillow real estate properties is finally taking place in full force. Whether the real estate collapse destroyed demand or it has just taken a while to develop a monetization strategy, and especially one that includes a site that is 70% mobile on the weekends, the company is finally hitting in full more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

This IPO Sprouted Too High

EDITOR'S CHOICE After the 123% gain following the IPO, Sprouts Farmers Market (NASDAQ: SFM ) appears to have sprouted too far for new investors. The company offers a compelling shopping experience and attractive pricing, but can it grow fast enough to justify a market cap exceeding $6 billion with revenue of only $2 billion last year. Sprouts competes in the fast growing and suddenly competitive natural and organic grocery sector against the likes more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Several Catalysts For Beleaguered Apple

Now that the majority of investors have given up on Apple ( AAPL ), new investors finally have an opportunity for a solid investment with plenty of catalysts . Several indicators including reduced trading volume and even a greatly reduced number of articles published on Seeking Alpha provide general indications that the investment community has largely given up on the smartphone and tablet leader. As investors lost interest in the stock at the beginning of 2013, the company finally generated numerous catalysts as the year heads towards the back to school and holiday shopping season. The major product catalysts include a much discussed China Mobile ( CHL ) deal, the updated iPhone 5 release, a cheap iPhone version, and several other initiatives such as a watch or a TV. Another mostly ignored catalyst is a dramatic reduction of the share count via the large stock buyback program. Most investors overlook the earnings kick from the reduced shares. Read the full article

Knowing When To Hold'Em At Zynga

After another disappointing quarter, investors are dumping Zynga ( ZNGA ) for all the wrong reasons. The news that the company was not pursuing a gaming license in the U.S. for real-money gaming (RMG) was over focused on by the media. The stock dropped 15% after the news instead of focusing on the potential in the company to re-develop the social gaming dominance that is within reach. The company is a leading provider of social games recently passed by as the leading social gamer on Facebook ( FB ). While disappointing news, the growth in all of the mobile and social platforms should give Zynga investors hope that the future is stronger than expected even without the current potential of RMG. Disclosure: Long ZNGA and AAPL. Please review the disclaimer page for more details. 

Is This Pricey Grocer Worth It?

With the smashing success of the Sprouts Farmers Market (NASDAQ: SFM ) IPO, one has to wonder if the Natural Grocers by Vitamin Cottage (NYSE: NGVC ) stock is undervalued. Natural Grocers has a faster growth rate and the stock didn’t have the same IPO pop. The company competes in the quickly growing natural and organic grocery sector against the likes of Sprouts, The Fresh Market (NASDAQ: TFM ) and Whole Foods more » Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Did Weather Create a Golden Buying Opportunity in Nuverra Environmental Solutions?

Another quarter, and yet another disappointment from Nuverra Environmental Solutions (NYSE: NES ) . The company that promised an attractive environmental solution to the dirty energy sector has yet to deliver on that promise to investors. Most recently, the old Heckmann released preliminary Q2 2013 results that greatly disappointed the market. A major contributing factor was weather, but is that enough to create a golden buying opportunity after the stock plunged? The more » Disclosure: Long CJES and NES. Please review the disclaimer page for more details. 

One Airline to Avoid

As with most sectors, airline stocks generally trade in the same general direction whether up in bull markets or down in bear markets. Typically the better company in the sector outperforms, but for an investor picking the right group is the major battle. In the case of the airlines, the whole sector is gaining as historically strong profits and reduced competition from consolidation promises to continue the profits streak. In more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Does AT&T Provide the Ultimate Net Payout Yield?

After another quarter of reporting huge stock buybacks, does AT&T (NYSE: T ) provide the ultimate net payout yield (NPY)? The telecommunications, and specifically domestic wireless, giant already pays a 5% dividend yield and is now offering a huge buyback yield following a year of buying massive amounts of its own stock. For those not familiar, the NPY yield is the combination of the forward dividend yield and the trailing more » Disclosure: Long CTL and T. Please review the disclaimer page for more details. 

Will Zillow Become the Next $10 Billion Online Company?

As investors ponder whether Zillow (NASDAQ: Z ) is overvalued at $70, the big picture needs to be considered. The company has a market value of nearly $2.5 billion and revenue that won’t even cross $200 million this year. While it might be difficult to envision it being worth $10 billion at this point, the company appears to have all the makings of a future that big. The company more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Jive Software Remains Socially Awkward to Investors

When Jive Software (NASDAQ: JIVE ) went public back at the end of 2011, it had so much promise for providing a social platform for businesses. The stock shot up to $28 due to the excitement that social media brought at the time. After a weak quarterly report, the stock plunged over 20% to end back around $13. Stocks such as Facebook plummeted as well back in early 2012, but most more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Plunging Copper Inventories? Not So Much....

Copper inventories are finally dropping from multi-year highs at the LME, but the levels are still very elevated. As the chart below shows, the inventory levels are usually at the lows around the summer with building burning inventories the most during that time period. While copper prices remain strong at over $3/lb, Freeport McMoran Copper & Gold (FCX) remains a difficult stock to buy as high inventories could easily push prices lower. Freeport offers an attractive dividend at 4.3% so its definitely worth keeping an eye on at these levels. At some point, increased homebuilding in the US should help burn inventories. Until that happens, this stock might not go anywhere with the slowdown in China. Disclosure: No positions mentioned. Please review the disclaimer page for more details.