Friday, January 31, 2014

Enjoying The High Yields Of AT&T


Earlier this week, AT&T (T) reported Q4'13 earnings that generally disappointed the street. From low wireless subscriber additions to concerns about cash and empowered competitors, the second largest domestic wireless provider got hit hard initially. Ironically though, the stock snapped back on Wednesday to finish virtually even with the large 1% losses in the major averages.

AT&T is the classic example of a difficult to value large cap. The company is embroiled in a new war for 4G wireless network supremacy with Verizon Wireless (VZ) and facing pricing pressure from suddenly viable Sprint (S) and T-Mobile (TMUS).

Read the full article at Seeking Alpha.


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




Thursday, January 30, 2014

Baidu: Focus On Mobile Search Market Share, Not SEC Posturing


The recent SEC announcement that it had banned the Big Four accounting firms' Chinese joint ventures from auditing US listed stocks sent chills through Chinese ADRs. From Baidu (BIDU) to Ctrip.com (CTRP), investors fled the stocks to the tune of losses in the 6% range. With limited political will and possibly years of appeals and reviews, investors should focus more on the prospects of the individual stocks instead of unlikely SEC sanctions.

In the case of Baidu, high-speed mobile networks are replacing the previously spotty Internet connections in China. One of the prime reasons that Chinese people prefer the larger screen size phones, or phablets, is the lack of good Internet access at home or even a reliable PC. All of this adds up to a huge pressure to obtain market share in the mobile sector with China Mobile (CHL) ramping up implementation of a 4G LTE network providing its customer base of 750 million subscribers access to the fastest Internet speeds around.

Read the full article at Seeking Alpha.


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



The Market Is Overreacting to the Export Ban on This Copper Miner


Last week, the Indonesian Ministry of Finance announced a punitive tax on the export of ore concentrate mined within its country. Considering Freeport-McMoRan (NYSE: FCX  ) operates a massive mining facility in the country that produces substantial copper and gold ore, the impact is very concerning to the bottom line for shareholders. The decree also impacts mining operations of Newmont Mining (NYSE: NEM  ) so Freeport-McMoRan will have some extra help in lobbying for a reprisal of the proposed new law.

For numerous reasons highlighted in the recent earnings conference call, investors shouldn't be so quick to dump the stock. Jefferies recently named Freeport-McMoRan a top franchise pick, and this the type of scenario where investors can pick up long-term winners at bargain prices.

Read the full article here.


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



Wednesday, January 29, 2014

High Margins at Verizon Wireless Unlikely to Last


For the fourth quarter of 2013, Verizon Communications (NYSE: VZ  ) reported a surge in operating margins in the wireless sector due to lower subsidies for new accounts. The question is whether the wireless provider can continue generating these higher margins with Sprint Nextel  (NYSE: S  ) and T-Mobile (NYSE: TMUS  ) in customer-acquisition mode.

While Verizon is generating solid gains in FiOS Internet and video segments, the company is increasingly dominated by its wireless division. In total, fourth-quarter revenue only gained 3.4%, but the company was able to hold expenses down. The combination sent operating margins surging, but the lack of spending to attract new customers could hurt growth in 2014 and beyond.

Read the full article here.


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



Monday, January 27, 2014

Apple: China Plus Icahn Equals No Brainer Valuation


The confluence of the startup of the China Mobile (CHL) relationship, Carl Icahn pushing for corporate moves, and the December quarterly earnings report places Apple (AAPL) stock on a high alert for Monday. Investors appear reluctant to give the stock a market multiple on fears that it is losing its technological lead though it appears to have several catalysts to propel it forward in the next few years. In fact, it's very possible that the Icahn proposal would solve the major issue of large numbers that might be holding the stock back as much as anything.

China Mobile
The pre-order sales for China Mobile weren't nearly as many as expected, but the recent speculation that Apple is preparing larger display phones combined with news from the Apple CEO that it maintains a 57% mobile browser market share sets it up for a large ramp in China by fiscal year 2015.

Read the full article at Seeking Alpha.


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



Sunday, January 26, 2014

Cost Cuts Aren't Enough for Potash Corp.


After several weak months of potash pricing caused by the collapse of the Belarusian Potash marketing arrangement, Potash Corp. (NYSE: POT  ) made a decision last month to cut costs in just about every corner of the company. Considering the apparent pricing advantage of Russian producer OAO Uralkali, will those cost cuts be enough to matter?

Potash is a Canadian-based fertilizer stock that controls a majority of the Canpotex marketing partnership. Both Mosaic (NYSE: MOS  ) and Agrium (NYSE: AGU  ) provide a smaller level of potash to what is commonly referred to as the Canadian potash 'cartel.' Besides potash, Potash Corp. mines other fertilizers including phosphates and nitrogen, but previously potash was the most important by far, providing gross margins approaching 60% and a majority of the gross profit generated by the company.

Read the full article here.


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



This Airline Outperformed the Industry During November


After reading the November traffic results from the major legacy airlines, one would've assumed that the month was a throwaway for all airlines. The timing of the Thanksgiving holiday pushed passenger return traffic into December. All of the major airlines reported declining load factors, with Delta Air Lines (NYSE: DAL  ) and US Airways, now part of American Airlines Group (NASDAQ: AAL  ) , blaming the late Thanksgiving and proclaiming that December will be strong.

But, along came Spirit Airlines (NASDAQ: SAVE  ) with some surprisingly positive numbers. The company did note a small decline in load factor, but the other traffic totals suggest that November was a normal month to the airline.

Read the full article here.


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



Is Home Automation a Smart Investment?

If it wasn't for the excitement over wearable devices, the "connected home" might have gotten significantly more attention at the Consumer Electronics Show. The purchase of Nest Labs by Google (NASDAQ: GOOG  ) for over $3 billion placed the sector in "overheated" mode. One company taking part in the CES excitement over this concept, and boosted by the Nest Labs purchase, was recent IPO Control4 (NASDAQ: CTRL  ) . The company has some interesting products and a surprisingly solid financial position for a modern technology firm, yet the valuation is very rich for the growth rate.

Read the full article here.


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



Friday, January 24, 2014

A Gift For Stratasys


For investors that love the long-term story of the 3D printing sector, the disappointing guidance from Stratasys (SSYS) has a silver lining. The stock and the sector were clearly overheating and anything that can cool off both without signaling an end to the long term of the sector growth helps provide an entry point for new investors.

Stratasys manufactures 3D printers and materials for personal use, prototyping, and production. The company is in the process of integrating the Objet and MakerBot acquisitions. Investors should expect some level of lumpiness in the financials from such major mergers so the news today isn't all that surprising unless an investor paid 50x forwarding earnings for the stock in the expectation of perfect numbers.

Read the full article for Seeking Alpha.


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



The Complicated State Of Social Media


The biggest issues facing social media stocks are the questions regarding longevity and deriving ways to monetize the massive amounts of data generated by users. Facebook (FB) already faces an issue where the original users are now abandoning the site while Twitter (TWTR) isn't grabbing the casual social media people.

One thing is probably clear by now is that users crave a certain level of social interaction via social networks. The real question is whether a constant shift in social networks will take place over time similar to the social hangouts and nightclubs that constantly rotate, as new concepts push old clubs into the rear view.

Read the full article at Seeking Alpha.


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




Thursday, January 23, 2014

Best Stocks For 2014: The Ns


This article follows previous articles listing stocks starting with a G , C , and S that are attractive stocks for 2014. Over the last several years, a lot of the small-cap, growth stocks struggled to achieve market returns. Typically these high beta stocks would outperform the market during strong periods, so Stone Fox Capital is focusing on several lists of these stocks that offer potential high returns.

When reviewing attractively priced stocks for 2014, groups of stocks happened to cluster into ones starting with the same letter. Instead of focusing solely on an industry or specific sector, this list will link far-flung sectors that might not typically attract the same investment crowd. The list of 'N' stocks is Annaly Capital Management (NLY), Nuverra Environmental Solutions (NES), and Nuance Communications (NUAN).

Read the full article here.


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



Apple: One Incredible China Stat


The official launch of the Apple (AAPL) iPhone products with China Mobile (CHL) provided some interesting and surprising stats. China Mobile has long been coveted as a supplier for Apple considering it has the largest mobile user base in the world at around 750 million customers. Considering the lack of market share in China, it was shocking to hear Apple CEO Tim Cook discussing a 57% share of mobile browsing traffic in that country.

It is almost mind boggling that Apple could generate a market leadership in actual Internet usage considering the lack of direct phone sales in China due to not having China Mobile as a customer. Business Insider provided a recent chart showing that the global mobile web browser market share was roughly that same 57%, even though Android has an 80% market share of smartphones sold.

Read the full article at Seeking Alpha.


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




Schlumberger Results Provide Hope for Weatherford

Within every sector, the difference between the winning and losing stocks can be very dramatic. In the case of the oil services sector, the drastic valuation differences between Schlumberger (NYSE: SLB  ) and Weatherford International (NYSE: WFT  ) are at the extremes. Though the sector has four domestic heavyweights, Schlumberger and Weatherford are the most focused on the international scene, providing a clear example for investors that the right geographical focus isn't enough. Over the last few years, Weatherford has lacked execution due to tax issues and costs overruns, which have hurt the stock.

Read the full article here.


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



Tuesday, January 21, 2014

Just How Solid Is American Airlines' First Operational Report?


After recently finalizing the merger between U.S Airways and AMR Corp., the December traffic results were the first operational release of the new American Airlines Group (NASDAQ: AAL  ) . Investors were naturally able to add the individual traffic numbers together, but this release provides more convenience and gave a glimpse to whether the merger is already providing any benefits.

Considering both that Delta Air Lines (NYSE: DAL  ) and United Airlines (NYSE: UAL  ) had already provided traffic results for December, some of the positive numbers weren't a surprise. Investors need to recall that November's numbers were weak due to the return trip from the Thanksgiving holiday. The associated revenue and traffic numbers were counted for December.

Read the full article here.


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




NASDAQ-100 Index Removals To Buy

Historical analysis from Schaeffer's suggests that the annual adjustments in the NASDAQ-100 index typically provide buying opportunities for the stocks that are removed. As an example, the stocks kicked out last year averaged 57% returns for the year compared to only 34% for those added to the index last December. See the table below. The index makes a yearly adjustment at the end of December to rerank the top 100 non-financial stocks that are listed on the NASDAQ exchange.

Read the full article at Seeking Alpha 


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



Monday, January 20, 2014

Facebook Teen Issues Magnified


The leading social network site continues to trade near all-time highs despite another report that magnifies the teen issue. According to a updated demographics study from iStrategyLabs, Facebook (FB) has an expanding teen issue magnified by the results of the report. Considering the thesis isn't new, investors aren't taking these studies seriously though the threat is very real and possibly unavoidable at this point.

As highlighted a couple of weeks back in How Much Is Facebook Worth As An Internet Utility, the issue isn't whether Facebook remains a viable social network, but whether it is worth the current valuation of nearly 19x revenue.

Read the full article at Seeking Alpha.


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



Wendy's Makes a Habit of Beating Earnings


Even though the Image Activation program has only begun to start in earnest, Wendy's (NASDAQ: WEN  ) has already generated a habit of beating expectations. In reality, the restaurant chain hasn't generated mind-boggling comps growth yet, but Wendy's has been performing better than management's plan expected. When the investment community has confidence in a company's plan, the company's stock tends to perform better.

In 2012, Wendy's undertook its Image Activation plan to modernize the look of its restaurants and spent heavily to innovate new products that included the pretzel bun. The 6,550-store restaurant chain has seen its stock appreciate roughly 100% in the last year on improved results and excitement over the updated corporate strategy.

Read the full article here.


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



Is the Market Excitement Over iRobot Overblown?


The recent news that Amazon.com (NASDAQ: AMZN  ) wants to pursue delivering packages via drones and the decision of Google (NASDAQ: GOOG  )  to purchase several robotic companies have pushed investors into iRobot (NASDAQ: IRBT  ) . The company most famous for the robotic vacuum has yet to move significantly beyond home robots after several cutbacks in spending on military robots. Investors might want to be careful about rushing into the stock based on the robotic theme.

The excitement over the recent news from Amazon.com and Google sent iRobot spiking higher, but the initial enthusiasm will fade until the company can show a revolutionary product beyond the vacuum series. A few recently released robots which include an update to the popular Roomba vacuum line offer some promises, but the robots might not provide the revolutionary technology envisioned by investors.

Read the full article here.


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




Sunday, January 19, 2014

Xooming Money Transfer To Higher Margins

Small-cap Insight


The recent 10-for-1 split announcement by MasterCard (MA) should highlight the extreme profitability of facilitating financial transactions around the world. In fact, the market appears desperate for lower fee, cross border alternatives with the sudden rise in popularity of the Bitcoin, yet for investors very few growth companies exist that offer the opportunity to participate in the internet and mobile financial transaction arena. The previous mentioned MasterCard and competitor Visa (V) have already reached market values around $100 billion and don't exactly offer new opportunities.

Read the full article at Seeking Alpha.


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



Saturday, January 18, 2014

No Rush to Buy Potash Stocks


Last summer, fertilizer stocks plummeted on fears that the Russia-Belarus potash dispute would flood the market with cheap potash. The issue sent shares of Mosaic (NYSE: MOS  ) and Potash (NYSE: POT  ) plunging and didn't help Agrium (NYSE: AGU  ) either.

Fertilizer stocks have been interesting investments over the last few years with the long-term theme of demand from emerging markets not playing out. On the flip side, the dispute between Russia and Belarus brought to the surface the pricing structure in the potash market that might not be sustainable.

Read the full article here.


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




Zynga: Limited Progress Keeps Investors Looking Toward 2014


After replacing the founding CEO in July with a star executive, Don Mattrick, from Microsoft, the best way to describe the year for Zynga (NASDAQ: ZNGA  ) has been one of little-to-nothing in the way of external progress. The maker of social games for Facebook  (NASDAQ: FB  ) and mobile devices was able to stop the slide in quarterly revenue and, hence, share price, but Zynga has provided very little in the way of progress to external investors.

At this point, investors must stick with new management and the hoped turnaround, or take the recent stock gains and run. Remember, Glu Mobile (NASDAQ: GLUU  ) took roughly a year to complete its turnaround. Glu Mobile now sits with a strong game release lineup and a new platform for monetizing those games with tournaments and rewards. In a more interesting move, Glu Mobile even ported the popular Deer Hunter 2014 game from mobile to Facebook, providing solid evidence that good games can prosper on any platform.

Read the full article here.


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




Thursday, January 16, 2014

SandRidge Sells Value Destroying Assets


About two years after announcing the surprising purchase of Gulf of Mexico producer Dynamic Offshore Resources, LLC, SandRidge (SD) is announcing the sell of those related assets at a fraction of the original cost. The good news is that though the deal was value destructing, the company did pay a large portion of the original deal for stock at higher prices.

The deal highlights the importance of focusing on core competency and questions why the new management team is willing to dump the assets at such low prices. Reading the recent presentations from the company it is apparent that the new management team wasn't exploring the development of the Gulf of Mexico assets. Oddly, the team appeared willing to dump these assets without even attempting to spruce them up.

Read the full article at Seeking Alpha.


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




Load Up On SodaStream Especially If It Drops To $30


Anybody following the market on Monday probably saw that SodaStream International (SODA) had an ugly warning that sent the stock plunging 26% for the day. The manufacturer of home beverage carbonation systems continues to struggle to obtain investor confidence, even though, it generated nearly 30% growth for 2013.

The stock is down roughly 50% from the early 2013 highs so is now the time to load up on the stock at around $37?

Read the full article at Seeking Alpha.


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



Stock Split Could Doom MasterCard


The upcoming stock split could interrupt the relentless gains by MasterCard (MA). While performing a split technically has no financial impact on investors, the mechanics of the split greatly impacts the psyche of investors.

As most everybody knows, MasterCard operates a payments processing network, connecting consumers, financial institutions, merchants, and businesses in more than 210 countries around the globe. The company competes against Visa (V) in a near duopoly for the processing of credit card payments.

Read the full article at Seeking Alpha.


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



Tuesday, January 14, 2014

Are Noodles & Company and Potbelly Growing Fast Enough to Match Their IPO Hype?


Something just doesn't appear right with Noodles & Company (NASDAQ: NDLS  ) . The hot IPO from the summer of 2013 surged to over $52.50 on the promises of a strong restaurant concept growing from a regional chain to a massive national operation, but the reported financials don't deliver on that promise.

The fast-casual restaurant chain that focuses on noodles and pasta dishes had investors envisioning a Chipotle Mexican Grill (NYSE: CMG  ) type of story, but the numbers never added up. The company only operates 372 systemwide locations in 29 states, offering the long-term potential growth that initially excited investors similar to fellow hot IPO Potbelly (NASDAQ: PBPB  ) . At a fraction of the size, though, neither chain is able to match the growth of Chipotle, which has a vastly larger network of restaurants. Do these companies have the ability to eventually grow into their valuation and provide growth opportunities?

Read the full article here.


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



Sears Holdings: Don't Ignore the Balance Sheet

When Sears Holdings (NASDAQ: SHLD  ) announced weak earnings after the market closed on Jan. 9, investors panicked again ignoring the facts of the company. Investors need to understand that Sears only reported the income statement numbers. If one remembers Accounting 101, the actual valuation of a company is based on the balance sheet or the assets minus the liabilities. The income level each quarter adds or subtracts from the equity on the balance sheet, but a large loss doesn't necessarily destroy assets forever. In the case of Sears, the balance sheet is littered with hidden assets that are overshadowed by these weak retail results.

Read the full article here.


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



Monday, January 13, 2014

Five Below Is Looking Up Again

Any hot growth stock that trades at lofty valuation multiples typically becomes more attractive after a cooling-down period. One such company is Five Below (NASDAQ: FIVE  ) , whose stock doubled after a successful IPO. Following a quarter that disappointed most investors, the company's stock recently plunged around 25%; this provides a potentially ideal entry point for long-term investors.

Five Below is a specialty value retailer that offers teen- and pre-teen-targeted merchandise. The company offers products priced at $5 and less, providing a general comparison to the dollar-store concepts. The retailer is growing exceptionally fast, with its 2013 store openings increasing 25% over the previous year. Five Below also recently opened an incredible 11 stores in the Dallas market on the same day in September, generating the largest single-day grand opening in company history.

Read the full article here.


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



Sunday, January 12, 2014

Coal Stocks Could Surge With the Plunge in Natural Gas Inventories


The biggest beneficiary of plunging natural gas inventories might not be a company in the natural gas industry. The coal industry took a big hit due to the suddenly abundant and cheap energy source developed over the last decade. Coal stocks are arguably among the most hated stocks on the planet.

Stocks such as Peabody Energy (NYSE: BTU  ) and Arch Coal  (NYSE: ACI  ) will benefit, however, the most from a switch back to coal as a fuel source for electricity production. Alpha Natural Resources (NYSE: ANR  ) might provide the most upside, especially if investors see a global rebound that increases the demand for metallurgical coal used in steel production. In general, the sector has been crushed so much in the last couple of years that any snap-back in demand will raise all the stocks in the sector.

Read the full article here.


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



1 Coal Stock to Own Even if Natural Gas Doesn't Soar

Alliance Resource Partners, L.P. (NASDAQ: ARLP  ) might have the best set of coal assets for the current regulatory environment. The company engages in the production and marketing of coal and operates 11 underground mining complexes in the Illinois Basin, Central Appalachian, and Northern Appalachian regions. The key to success is the lower costs of the Illinois Basin coal that has a cost advantage now that electric utility scrubbers allow for the use of the high-sulfur coal to meet EPA regulations.

Read the full article here.


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



Saturday, January 11, 2014

Coal Still Isn't Cool, But Don't Count Out These Companies


After another week of bearish natural gas reports, most coal stocks were hit by negative analyst reports. Even though a lot of the news suggests a more bullish environment for coal, the market isn't finding the stocks appealing.

The quarterly coal report from the EIA and the weekly natural gas inventory report should remind investors that not only is coal still alive, but it could have a surprisingly strong future. Domestic focused producers in the Western U.S. and Illinois Basin will benefit the most, providing some upside potential for Cloud Peak Energy (NYSE: CLD  ), Arch Resources (NYSE: ACI  ), and Alpha Natural Resources (NYSE: ANR  ).

Read the full article here.


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



Friday, January 10, 2014

The Chart That Should Scare All 3D Systems Bulls


The combination of 3D printing projected to grow annually at 20% and the substantial stock gains in 3D Systems (DDD) should already concern longs. The sector is undoubtedly hot and growing sharply, but new investors are paying up front for years of 30% growth long into the future.

3D Systems is a leading provider of 3D printers, print materials, and on-demand customer parts for professionals and consumers. The company has a market value approaching $10 billion, but revenue is only set to reach $515 million in 2013. Even more concerning is the stock price sitting near $100 and earnings per share likely to not even reach a $1. The stock has even gained so much in the last few months that the chart below even shows it out of touch with fellow competitor Stratasys (SSYS).

Read the full article at Seeking Alpha.


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




Thursday, January 9, 2014

Facebook: Already Dead to Teenagers in the U.K.


It may not come as a surprise that Facebook  (NASDAQ: FB  ) has a teenager problem, especially in the more developed U.S. market. But the degree of that problem, as outlined in a recently released U.K. study, should shock even the most bullish of investors. Not only did the research find that Facebook has issues with teenagers, it found that teenagers in the U.K. find the site an embarrassment to use.

Facebook's monetization in Europe greatly lags domestic rates. If teens are ditching the site in droves, Facebook might have a difficult time monetizing the site in the U.K. and other countries. In no big surprise, teens are moving to SnapChat, WhatsApp, Instagram, and Twitter  (NYSE: TWTR  ) to fulfill the social functions once dominated by Facebook.

Read the full article here.


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



Did Goldman Sachs Just Call The Top In SolarCity?


After warning investors back during mid-May to not fall for the hype on the soaring SolarCity (SCTY), the stock spent the next five months in a downtrend. Only recently had the stock moved slightly higher than the warning level until Goldman Sachs (GS) issued an upgrade that caused the stock to soar over 11% at one point to a new all-time high at $67.14.

SolarCity is a leader in the rooftop solar panel market and famously has Elon Musk as the Chairman of the Board. For those living under a rock, Elon is a revolutionary investor and inventor that is the CEO of both Tesla Motors (TSLA) and SpaceX. SolarCity offers solar power directly to consumers, businesses and government organizations for less than they spend on utility bills while taking care of the design and permitting process to get the panels installed. In addition, it handles all the monitoring and maintenance to ensure the rooftop solar panels continue to work properly.

Read the full article at Seeking Alpha.


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




Tuesday, January 7, 2014

How Much Is Facebook Worth As An Internet Utility?


With more signs that the younger generation is fleeing Facebook (FB), including the recent UK study suggesting the leading social site is already dead to teens across the pond, it might be time to consider the proper valuation as Facebook becomes an Internet utility. Sure it has Instagram that is still hip, but in the social media sector it seems all but inevitable that a utility type service is the future for Facebook.

The good news is that the future could provide the next Yahoo (YHOO), while the downside is always lined with the remains of MySpace and others.

Read the full article at Seeking Alpha.


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




Monday, January 6, 2014

Best Stocks For 2014: The Cs


This article follows a previous one listing stocks starting with a "G" that are attractive stocks for 2014. Over the last several years, a lot of the small-cap, growth stocks struggled to achieve market returns. Typically these high beta stocks would outperform the market during strong periods, so Stone Fox Capital is focusing on several lists of these stocks that offer potential high returns.

When reviewing attractively priced stocks for 2014, groups of stocks happened to cluster into ones starting with the same letter. Instead of focusing solely on an industry or specific sector, this list will link far-flung sectors that might not typically attract the same investment crowd. The list of 'C' stocks is ChinaCache International (CCIH), Clean Energy (CLNE), and Chegg (CHGG).

Read the full article at Seeking Alpha.


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




Friday, January 3, 2014

American Capital Just Can't Resist Buying Cheap Stock


At the end of Q4, American Capital (ACAS) released quarterly buyback numbers. In what shouldn't be a huge surprise to investors, American Capital again repurchased a substantial amount of stock significantly below net asset value, or NAV. Based on the stock currently sitting in the $15 range, investors should expect even more buybacks going forward.

American Capital is a publicly traded private equity firm and global asset manager that manages $20 billion worth of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers. Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (AGNC) with approximately $10 billion of net book value and American Capital Mortgage Investment (MTGE) with approximately $1 billion of net book value.

Read the full article at Seeking Alpha.


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



Thursday, January 2, 2014

Does Devon Energy's Deal Signal a Top in the Shale Boom?


Back in November, Devon Energy (NYSE: DVN  ) announced a deal to acquire Eagle Ford assets from privately held GeoSouthern Energy. The company heralded in the new Devon concept along with the deal that included several positive financial metrics. Considering every deal involves a seller, one has to wonder whether the presented facts will materialize or what encouraged GeoSouthern to cash out of such valuable assets especially considering Blackstone Group (NYSE: BX  ) will exit its stake with this transaction.

Off the top, the biggest concern is the limited acreage of only 82,000 net acres acquired and the likelihood that GeoSouthern has already maxed out the potential reserves. Did Devon just buy these acres at peak prices?

Read the full article here.


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



Interesting Curved Phone From LG - G Flex

The new re/code technology website (the old All Things Digital group) had an interesting review on the new curved G Flex phone from LG. It might be a while before such a phone is available in the US, but it promises some interesting advances in technology that makes it easier to hold while talking on the phone and the flexibility to withstand pressure. The last part could save on damaged phones.







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




Wednesday, January 1, 2014

Hawaiian Holdings: Bigger Gains Ahead In Paradise

Small-Cap Insight


Historically, the airlines have been horrible operators and Hawaiian Holdings (HA) probably topped the list. In reality, the issue in paradise might have been a prime example of the industry issue times two. For a long time, it was cool to own an airline and probably double so to fly to the beautiful Hawaiian Islands. Even today in the midst of a dramatic turnaround, the airline lists receding industry capacity in Hawaii as a major benefit. The opposite was probably true of fellow West Coast competitor Alaska Air Group (ALK) that historically has the better operations. Did the lack of desire to fly to the cold confines of Alaska provide a natural competition eliminator that provided a significant advantage over any management skill?

Read the full article at Seeking Alpha.


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



Best Stocks For 2014: The Gs


The fallacy of the recent stock market gains are that all stocks have seen substantial gains this year. In reality, a lot of the small-cap, growth stocks struggled to achieve market returns. Typically these high beta stocks would outperform the market during strong periods, but the slow growing economy doesn't help these stocks.

With the economy picking up based on the strong Q3 GDP growth, 2014 could be the year where the market rotates into growth stocks. Too often, investors confuse a rising interest rate as negative for stocks.

Read the full article at Seeking Alpha.


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




Freeport-McMoRan Benefits From Staying Power of Copper


The ability of copper to maintain prices above $3/lb caught most Freeport-McMoRan Copper & Gold (NYSE: FCX  ) investors off guard, including this one. Stubbornly high inventories at the London Metals Exchange, or LME, combined with subdued China demand for copper should've crushed the prices of the red metal used in all kinds of building materials from plumbing pipes to electrical wires. One key to investing is noticing when a thesis doesn't play out and attempting to understand and adjust to the reasons.  

A prime reason for the stubbornly high price of copper could be investment demand in China, where people prefer to own hard assets versus cash in the distrusted banking system. Such investment moves wouldn't be listed in the inventories on the exchanges, but it could help support the price of copper.

Read the full article here.


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




Is Nimble Really a Better Storage Play Than Violin?


Recent IPOs in the enterprise flash-storage segment have had very different trading outcomes. The more recent IPO of Nimble Storage (NYSE: NMBL  )  performed much better than expected, while Violin Memory (NYSE: VMEM  ) pretty much tanked a few months prior.

The companies offer different paths to solve the growing complexity of data-storage requirements of enterprises and data centers. The traditional disk-storage systems aren't adequate enough to meet the storage and performance requirements of the modern data world. The data-storage industry is estimated by IDC and Gartner to reach approximately $63.8 billion for both storage systems and software by 2017. Nimble estimates that the addressable market for its services will reach more than $35 billion by 2017, based on IDC estimates.

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