Sunday, June 30, 2013

Continue Buying the Smoking-Hot Cigarette Stocks


The cigarette stocks remain hot as high yields and steady growth have led to strong stock gains. Many an investor has overlooked the sector due to perceived negatives of the industry, but for an investor looking for yields and growth the sector should not be ignored.

Right now the leading domestic cigarette stocks of Altria (NYSE: MO), Lorillard (NYSE: LO), and Reynolds America (NYSE: RAI) all maintain dividend yields of more »


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



Friday, June 28, 2013

Marin Software: Not Ready For Prime Time Yet


Small Cap Insight

Any time a stock falls 50% shortly after an IPO one has to wonder if the market isn't offering a bargain now. Currently the IPO process is so subjective to market forces and short-term market momentum that a stock can move 50% in either direction irrationally. Typically the process of deriving the offering price is built for obtaining a reasonable price though it usually leaves money on the table for those buying at that price.

In the case of Marin Software (MRIN), investors at the IPO price haven't seen much to smile about as the stock peaked at nearly $20 on the opening day and has done nothing but drop to $10 in the three months that it has been public.

Read the full article at Seeking Alpha.


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




3 Energy Producers to Buy on the Next Taper Tantrum


As the Federal Reserve hints at tapering the bond buying program over the next year, cyclical stocks including energy exploration and production firms should become interesting buys. These stocks have underperformed the market rally over the last year as investors have piled into high yielding stocks as bond yields hit extremely low levels. Now that money should flood out of those stocks and bonds into growth stocks.

The main reason more »


Disclosure: No positions mentioned. Read the disclosure page for more details. 



Wednesday, June 26, 2013

3 Large-Cap Tech Stocks to Buy on the Taper Tantrum


As the Federal Reserve hints at tapering its bond buying program over the next year, cyclical stocks, including technology, should become interesting buys. Tech stocks have underperformed the market rally over the last year as investors have piled into high-yielding stocks to counter low bond yields. Now that money should flood out of those stocks and bonds into growth stocks.

The main reason the Fed would stop bond buying would more »


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




Is Chuy's Worth a Bite?

After a recent visit to the local Chuy’s (NASDAQ: CHUY) restaurant, it became clear that the company is on a successful path. Even arriving after 1pm for lunch, the restaurant had a five-minute wait, an unheard of scenario in this area. The most disappointing part of the lunch was missing that the stock went public last summer and has already gained more than 170% before even putting together the more »


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



Tuesday, June 25, 2013

Shanghai Collapse

The Chinese stock market has absolutely collapsed during June and especially the previous couple of days. The composite has dropped from 2,300 to 1,963 in less than a month. Not very often does a major index trade with an RSI of 15.





This drop has hurt most commodity and emerging growth stocks during this month. Some interesting buying points might have been reached for coal and copper stocks. Those stocks are at least worth a look.



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



Does Jack Know Qdoba?


Recently Jack in the Box  (NASDAQ: JACK) disclosed that it would close 67 Qdoba stores for a cost of $40 million in impairment and severance charges. With a turnaround at the Jack in the Box concept, one has to wonder if management knows how to operate Qdoba.

The company operates and franchises Jack In the Box restaurants with more than 2,250 restaurants in 21 states. Additionally, the company operates more »


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



3 Tech Stocks to Buy on the Taper Tantrum


As the Federal Reserve hints at tapering the bond buying program over the next year, cyclical stocks including technology should become interesting buys. Tech stocks have underperformed the market rally over the last year as investors have piled into high yielding stocks as bond yields hit extremely low levels. Now that money should flood out of those stocks and bonds into growth stocks.

The main reason the Fed would stop more »


Disclosure: Long INVN and MM. Please review the disclaimer page for more details. 



Monday, June 24, 2013

The Overlooked Nuverra Environmental Solutions

Small Cap Insight


Nothing like a name change to make the market forget about a previously hot stock. Back in May, Heckmann changed its name to Nuverra Environmental Solutions (NES) to more accurately reflect its focus on environmental solutions in the energy sector. The stock has done nothing but plunge since the beginning of June whether due to the sector weakness or the market losing focus on the 'new' company. Either way, the stock is trading at lows not seen since the revolutionary merger that combined Heckmann with Power Fuels back in the summer of 2012.

The company dedicated to the protection and enhancement of environmental solutions for the removal and disposal of restricted fluids primarily from shale drilling activities isn't exactly benefiting from the boom in production from shale. As environmentalists fret over the safety of the fluids used in fracking, Nuverra was suppose to benefit from the need to safely dispose of those 'dangerous' fluids. Unfortunately, the boom came to an end in 2012 and the stock only trades at a value of $730 million or less than 4x EBITDA estimates.

Read the full article at Seeking Alpha.


Disclosures: Long CJES and NES. Please review the disclaimer page for more details. 





Friday, June 21, 2013

More Under the Radar Chinese Internet stocks to Follow

As last weeks article presented, Chinese Internet stocks have struggled over the last two years. Leaders such as search giant Baidu have seen losses while the S&P 500 has seen a meaningful 34% gain. Outside of the major Chinese Internet stocks, the previous group of ChinaCache, Renren, and SINA Corporation had seen losses over the last two years closer to 50%. The new group hasn’t seen the same more »


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




Why the CEO Had to Go at SandRidge Energy

On first thought, the announcement of the resignation of the CEO at SandRidge Energy (NYSE: SD) appears nothing to get excited about. Even if the market can blame Tom Ward for the stock weakness over the last few years, losing the founder of the company can’t be a good thing. The interesting part of this news is that the market has another prime example to follow. Not only did more »


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




Wednesday, June 19, 2013

Big Gas Discount

Kmart is really on a roll with these commercials if they don't turn off consumers that lack a sense of humor. After the "Ship My Pants" commercial, this new "Big Gas Savings" is humorous. Now if it would only drive consumers to the stores.





Remember that Kmart is an arm of Sears Holdings (SHLD).



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



Playing Jenga With Sears Holdings

A recent analyst note compared the slow dismembering of Sears Holdings (NASDAQ: SHLD) to playing the popular Jenga game. As most people know, Jenga is a game where players take out pieces of a structure hoping that the overall structure doesn’t collapse. The goal is to not be the player that causes the structure to collapse, and in the case of Sears Holdings, you don't want to be more »


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




Tuesday, June 18, 2013

Ship My Pants - Too Funny

Not sure this commercial adds any sales for Kmart.com, but it sure is funny.





Remember that Kmart is a part of Sears Holdings (SHLD). Any commercial that attracts users can't be bad at this point.



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




More Pep From Manny, Moe & Jack

For years, the brothers Manny, Moe, and Jack have toiled away as a hybrid failure in the auto sector. The combination of auto replacement parts store and service center hasn’t worked in years as auto parts focused firms built store after store closer to the Do-It-Yourselfer [DIY] mechanic. That left Pep Boys - Manny Moe & Jack (NYSE: PBY) with an expensive combination of auto parts and service not in demand more »


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



The Ultimate Beauty Solution

While reviewing Ulta Beauty (NASDAQ: ULTA), the constant realization is that the company has no comparable competition. The beauty sector is a massive industry yet the majority of the products are sold via direct marketers, department stores, or drug stores. Neither group offers a focused, easy to visit store format. For a consumer that wants quality products, they previously had to travel to a distant mall. Enter Ulta Beauty into more »


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



There's Huge Potential Growth in the Americas for SodaStream


With all the recent news regarding the potential buyout of SodaStream (NASDAQ: SODA) by the beverage industry giants PepsiCo (NYSE: PEP) or Coca-Cola (NYSE: KO), one needs to keep an eye on whether or not that is even desirable. The home beverage machine maker still has tremendous growth left in the Americas, where soda consumption per-capita leads the world and greatly exceeds its home base of Western Europe.

SodaStream’s more »


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



Monday, June 17, 2013

More Gains Ahead For InvenSense


Even after gaining 7.7% on Friday based on rumors that Apple (AAPL) is ramping with its products, InvenSense (INVN) still has more room to run. The stock is approaching 52-week highs around $16 and only spent a few weeks in the last year above the current price of $14.65.

The maker of motion sensing technology has been long on potential ever since going public back in November 2011. The stock has struggled though due to the inability to correctly forecast earnings and a disconnect on the future of Apple as a customer. In fact, analysts have spent the last month dropping earnings estimates even though the noise in the market suggested a constant increase in a top producer of consumer goods as a customer.

Read the full article at Seeking Alpha.


Disclosure: Long INVN and AAPL. Please read the disclaimer page for more details. 



Sunday, June 16, 2013

Skill-Based Gaming Heating Up, Especially In Daily Fantasy Sports


With all the discussion heating up regarding the legalizing of online gambling, most investors have probably missed that skill based gambling is already legal in most states. Betting on fantasy sports and other skilled based games is legal in nearly all states and has a preferential carve-out on the Federal level under the Unlawful Internet Gambling Enforcement Act of 2006. According to Forbes contributor Marc Edelman, daily fantasy sports are insulated from federal liability if it meets three conditions as follows:
  1. The value of the prizes is not determined by the number of participants.
  2. All winning outcomes reflect the relative knowledge and skill of participants.
  3. No winning outcome is based on the outcome of the score of games or the single performance of an individual athlete in a single, real-world event.

Read the full article at Seeking Alpha. 


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




Saturday, June 15, 2013

Under the Radar Chinese Internet Stocks to Follow

Chinese internet stocks have struggled over the last two years. Leading stocks such as internet search giant Baidu have seen losses, while the S&P 500 has seen a meaningful 34% gain. Outside of the major Chinese internet stocks, the losses over the last two years have been closer to 50%. Some of these stocks have seen expectations drop from the outlandish forecasts a few years back, but strong long-term more »


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



Dang, This Stock is Hot!


E-Commerce China Dangdang Inc. (NYSE: DANG) might be a stock with a funny name to U.S. investors, but the company has been extremely hot recently. The provider of a business-to-consumer e-commerce platform in China has surged around 100% since opening at the beginning of May at around $3.80.

In general, Chinese internet stocks have struggled over the last year or so. The sector was hot during 2010 when more »


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



Friday, June 14, 2013

Synergies to Provide a Catalyst for Riverbed


The market for network performance appliances has become so competitive that Riverbed Technology (NASDAQ: RVBD) now trades at a below-market earnings multiple of 12. With the purchase of OPNET last year, the network performance company for globally connected enterprises is facing a weak market for network equipment while it still works to achieve the synergies promised as part of the merger.

The network equipment sector is facing a couple of more »


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



Wednesday, June 12, 2013

Top 10 Net Payout Yield Stocks For June 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.

May Returns
Below are two charts highlighting the monthly returns of the top ten stocks from May (see list here). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists.

The Top 5 stocks had a strong May after a weak April. American International Group (AIG), DirecTV (DTV), and Kohl's (KSS) had strong gains for the month that easily beat the 2.3% gain of the S&P 500. Seagate Technology (STX) though smashed those performances with a phenomenal 17.4% gain. The only disappointment was that L Brands (LTD) dropped 0.8% for the month.

Read the full article at Seeking Alpha.


Disclosure: Long AMP, DTV, KSS, LOW. Please read the disclaimer page for more details. 



Tuesday, June 11, 2013

Velti's Future Might Not Be That Cloudy


Small-Cap Insight


With the mobile advertising market booming, the continued collapse of Velti (VELT) has remained perplexing. The company famously faced a cash crunch due to extremely long payment terms to only collapse after seeing the EBITDA and income plunge after cutting that business. The question still remains why cut a profitable business because of slow payments.

The company is a global provider of mobile marketing and advertising technology and solutions that helps brands, advertising agencies, mobile operators and media to implement mobile campaigns.

While the decision to cut the slow paying customers that would not agree to faster payment terms appeared correct, it hasn't helped the company or the stock yet. The irony continues to be that those customers also accounted for a decent part of EBITDA and earnings pushing the stock down further from above $10 in September to spending most of the last few months below $2. Clearly the market misunderstood slow paying customers for unprofitable ones. The market has taught Velti an important lesson that it doesn't always want what it claims. The question now is whether the clouds hanging over Velti will eventually disperse as the new plan comes to fruition later this year.

Read the full article at Seeking Alpha.


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




Glu Mobile Still Struggling to Monetize Mobile Games


For over a year now, Glu Mobile (NASDAQ: GLUU) has provided an interesting investment idea to benefit from the surge in mobile gaming due to the adoption of smartphones and wireless broadband. Along the way, though, the company continues to run into monetization and platform issues, even with seemingly popular games.

The company is a leading global developer and publisher of freemium games for smartphone and tablet devices focused on more »


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




Disagreeing With Analyst Downgrade on US Airways


Even with a fundamental shift in the airline sector, analysts are quick to downgrade US Airways Group (NYSE: LCC) at market low earnings multiples. Sure the airline industry has historically struggled to make profits, but the recent consolidation provides hopes for a liberated industry.

The company operates more than 3,100 flights per day and serves 198 communities around the globe. US Airways expects to close the merger with AMR more »



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



    Monday, June 10, 2013

    Buy the Financials Still Trading Below Book Value - Part 2


    Even after substantial gains this year, a number of financial stocks still trade below book value. While not covered back in January along with the insurers and airplane leasing firms, a cross section of other financial stocks continue to trade considerably below book value. While the fears from the financial crisis have mostly dissipated, the stocks continue to meander below book value even with strong earnings profiles.

    Stocks ranging from more »


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


    Baidu And China Internet Stocks Heating Up Finally

    After a disappointing year it appears that Baidu (BIDU) is finally waking up. The stock has been in a major downtrend since peaking last April over $150. The stock has been a favorite of Stone Fox Capital over the last couple of months as the it dropped below $90. It currently trades at only 16x greatly reduced forward estimates. With the China internet sector still in the early days, investors can purchase the preeminent search engine in that massive country on the cheap.

    For comparative purposes, BIDU is worth only $36B while Google (GOOG) now approaches $300B. No doubt should exist that BIDU will approach the valuations of GOOG as the China internet market grows up.





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




    Saturday, June 8, 2013

    Body Central Still Bouncing Off The Bottom

    Small-Cap Insight

    After an extremely weak year, has Body Central (BODY) finally hit bottom? The women's fashion retailer started off with good results in 2011 after an IPO at the end of 2010. The company though constantly revised down expectations in 2012 while competitors such as Francesca's Holdings Corp (FRAN) managed to continue growing at a fast pace.

    The company is a multi-channel, specialty retailer of woman's fashion providing quality apparel at affordable prices. It operates 281 specialty apparel stores in 26 states under the Body Central and Body Shop banners.

    With the stock plunging from near $30 at the peak back in 2012 to the current price of $12.50, the question remains whether the company can regain that stock price. With a market cap of only $200 million, Body Central appears destined for a significantly higher market valuation with any type of turnaround. As a sign of the potential, Francesca's has a similar revenue base, but the market valuation is nearly 6x the size at $1.2 billion.

    Read the full article at Seeking Alpha.


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



    Friday, June 7, 2013

    Investors Continue to Overpay for Splunk


    Even with Splunk (NASDAQ: SPLK) trading down substantially from the recent market weakness, the stock is still very overvalued. The stock was one of the hottest IPOs in 2012 and recently hit all time highs while trading at ridiculously high multiples.

    Splunk is a leading provider of software for real-time operational intelligence. The company forecast up to 38% revenue growth for the year, but is that growth enough to justify more »


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




    Suddenly This Becomes a Dividend Play


    Prior to June 5, Helmerich & Payne (NYSE: HP) was seen as a solidly run contract drilling firm with a small dividend. The company made a surprising announcement that it would dramatically increase the yield making the stock interesting for the yield now. Or maybe it wasn’t that surprising considering the expected influx of cash and a strong balance sheet.

    The company operates primarily as a contract drilling firm with more »


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




    Thursday, June 6, 2013

    Don't Dump SodaStream Too Soon


    The old saying, "where there's smoke, there's fire" applies mightily to the news on SodaStream (SODA) today. According to an Israeli website, PepsiCo Inc. (PEP) is exploring a deal that values the company at nearly $2 billion.

    The company is a leading manufacturer of home beverage carbonation systems sold at major retailers around the world with a primary target on growing in the Americas where soda usage is significantly higher than in Western Europe.

    The reports suggest that SodaStream is attempting to engage in a discussion with Coca-Cola (KO) in order to obtain the highest potential valuation. With so many details, it suggests that some form of discussion must be taking place. Typically though, the real facts get confused during the rumor spreading phase so a denial by PepsiCo might just be an indication of confusion on the actual suitor instead of a lack of a deal.

    Read the full article at Seeking Alpha.


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



    Wednesday, June 5, 2013

    NeoStem: Built For Success In Regenerative Medicine


    NeoStem (NBS) might be a small biotech stock, yet it has numerous irons in the fire that could provide huge growth opportunities. Cell therapy has the potential to radically change how diseases are treated, and the company plans to be a leader in the area.

    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.

    NeoStem has several opportunities including a cardiovascular program, a very small embryonic like (VSEL) stem cell technology, a T cell program, and a contract development arm that all provide ample abilities for success individually. The key is developing a least one division into a money-generating machine to enrich shareholders.

    Read the full article at Seeking Alpha.


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



    Investors Still Overpaying for Palo Alto Networks


    Even with Palo Alto Networks (NYSE: PANW) trading down substantially after reporting weak earnings the stock is still overvalued. The stock was one of the hottest IPOs in 2012 and has always traded at lofty market multiples.

    Palo Alto Networks is a leading supplier of next generation network security for enterprises, service providers, and government entities to secure their networks. The company forecast up to 45% revenue growth in the more »


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




    Buy the Financials Still Trading Below Book Value - Part 1


    Even after substantial gains this year, a whole slew of financial stocks still trade below book value. As written about back in January, a good portion of the insurance stocks traded close to half of book value. While the fears from the financial crisis have mostly dissipated, the stocks continue to meander below book value even with strong earnings profiles.

    Investors continue to fear that either the balance sheet isn more »


    Disclosure: Long HIG and LNC. Please review the disclaimer page for more details. 




    Monday, June 3, 2013

    As Brent Stays Over $100, the Deepwater Drillers Remain Attractive


    While investors remain focused on surging domestic oil production, the market is missing that global oil prices remain high. With Brent trading over $100, the deepwater drillers provide attractive investment options with PE ratios below 10.

    Some of the leading drillers include Ensco (NYSE: ESV), Noble (NYSE: NE), and Atwood Oceanics (NYSE: ATW) along with speculative Pacific Drilling (NYSE: PACD).  Other investors may prefer the high yielding SeaDrill Limited or more »


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



    Hercules Technology Warrants More Attention

    Small-Cap Insight

    Investors looking for a stock that provides large yields from owning venture capital firms should look know further than Hercules Technology Growth Capital (HTGC). The company invests primarily in senior secured debt with floating interest rates of venture capital-backed companies in tech-related markets, including technology, biotechnology, life science, and cleantech industries at all stages of development.

    Investors typically see venture capital firms as raising equity so the concept of venture debt is unique in the public markets. With the need to raise more money as companies take longer to exit the venture path via an IPO, debt is used to lengthen the time before the next equity round and provides negotiating leverage for higher valuations. Even at average loan rates of over 14%, the venture firms can increase returns by avoiding a dilutive VC round as long as possible.

    Read the full article at Seeking Alpha.


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



    Sunday, June 2, 2013

    Two Companies Yahoo Should Buy Instead of Tumblr


    After snatching up Tumblr and now on the prowl for Hulu, Yahoo (NASDAQ: YHOO) should instead buy some established growth companies. At the end of last year, Yahoo suddenly became cash rich after cashing out of a large investment in Alibaba. The company is now using the cash to buy well-known growing brands, but will it work?

    Yahoo is following in the footsteps of the Facebook purchase of Instagram for more »


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