Tuesday, December 29, 2015

Fitbit: Why Insiders Sold Out Prior To The Holidays

  • Fitbit tops the iOS app charts following an apparently blowout holiday sales.
  • The stock saw a muted reaction reinforcing the insider sales and highlighting fears of a repeat of the GoPro year.
  • The strong ecosystem makes the Fitbit story compelling, but the recommendation remains to wait until the holiday enthusiasm falls off.



My previous investment research highlighted the concerns with insiders rushing to dump shares of Fitbit (NYSE:FIT) prior to the promising holiday season. Activity-tracking devices were expected to be a top holiday gift so why would anybody want to sell shares at the lows following the June IPO?

Read the full article at Seeking Alpha.


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



Sunday, December 20, 2015

Halcon Resources Offers Clues On Oil Stabilization

  • Halton Resources cut capital spending levels again, marking dramatic reductions from the original 2015 levels.
  • The oil producer remains in a distressed position, requiring a reverse stock split.
  • The recommendation is to avoid the stock, but investors should watch oil production from the company for key indications on price stability.



The initial headline that Halcon Resources (NYSE:HK) was cutting 2016 capital spending in half yet maintaining flat production levels was very troubling. If the distressed oil producer can maintain production levels while undergoing a reverse split, the oil market is in big trouble next year.

Read the full article on Seeking Alpha.


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


Saturday, December 19, 2015

Why General Motors Heads Higher

  • General Motors continues trading in a small range below $35.
  • The fundamentals of the company continue to improve allowing for large capital returns in comparison to the market cap.
  • The stock remains a solid buy providing a dividend yield over 4% to pay investors while waiting for the stock to bounce higher.



For the last two years, the stock of General Motors (NYSE:GM) has flatlined. The market has worried endlessly about waning demand in China and liabilities from the ignition switch issue amongst others.

Read the full article on Seeking Alpha.


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



Why Is Delta Air Lines Still Trying To Kill The Boeing Party?

  • Delta Air Lines continues to tell anybody that will listen the purchase prices for used 777s. 
  • Along with a downgrade, Boeing is down sharply on the news. 
  • The recommendation is for investors to continue focusing on the order book for narrow-body planes and ignore the noise generated by a customer looking for cheaper planes. 



In an interesting news twist, Asia's largest carrier agreed to purchase 110 Boeing (NYSE:BA) airplanes, yet the market appeared more interested in the cost of one used plane. The news bits continued a spate over the last several months regarding a glut in the airplane market and specifically the wide-body jets. See my original research on the issue here.

Read the full article on Seeking Alpha.


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



Friday, December 18, 2015

Why All The Hate On Zoe's Kitchen?

  • Zoe's Kitchen trades back to support near $30 as the stock attracts a lot of shorts and a lethal downgrade.
  • The stock trades at a compelling valuation to the growth rate compared to a peer group.
  • The investment thesis in Zoe's Kitchen is only enhanced by the lack of a compelling reason for the negative thesis on the stock.


Suddenly the fast-growing concept of Zoe's Kitchen (NYSE:ZOES) isn't seeing any love. Short interest is soaring and a negative analyst call sent the stock down to recent lows.         

Read the full article on Seeking Alpha. 


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


Update: Stock provided an incredible buying opportunity hitting a low of $25.86 on Friday. 

Thursday, December 17, 2015

Spirit Airlines Headed For A Rebound In 2016

  • Spirit Airlines shareholders are glad to see 2015 end.
  • The airline is set for better traffic metrics in 2016 due to reduced capacity growth.
  • The stock is highly attractive at extreme lows compared to the long-term growth rate.



My investment thesis on Spirit Airlines (NASDAQ:SAVE) for a while now is that the airline caused self-inflicted wounds by growing capacity too fast. The stock is currently trading near multi-year lows, down roughly 50% from all-time highs.

Read the full article at Seeking Alpha.


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



Wednesday, December 16, 2015

Glu Mobile: Katy Perry Pop Game Targets

With the soft release of the Katy Perry Pop game yesterday,  Glu Mobile (GLUU) investors need to keep in mind the following records set with the release of Kim Kardashian: Hollywood. A lot of the milestones provided by Glu Mobile aren't specific numbers so some difficulty exists in matching up the success of the two games. Guess the ultimate key is reaching the #5 top grossing position on the iPhone.

Glu milestones include:
  • Single-day total company revenue record
  • Highest single-day DAU in company history (10M+)
  • Glu overall single-day revenues exceeding the previous one-day record each of the last 18 days
  • Dino Hunter: Deadly Shores and Kim Kardashian: Hollywood simultaneously achieved #1 and #3 chart position on U.S. App Store Top Free for iPhone
Dino Hunter: Deadly Shores milestones include: 
  • Single-day Glu record of (1.5M+) downloads globally from an individual Glu title
  • Glu record (5.7M+) downloads in first 5 days of global release
Kim Kardashian: Hollywood milestones include:
  • Record single-day revenue from an individual title, surpassing previous record set by Deer Hunter 2014
  • Single-day revenues have exceeded Deer Hunter 2014's previous single-day revenue record for 16 of the last 18 days
  • Reached #5 U.S. App Store Top Grossing chart position for iPhone
  • Highest sustained ARPDAU for a single Glu title in its initial 18 days of worldwide release


The iPhone installed base is significantly lager nearly 18 months later so a similar top 5 grossing position will generate more revenue. KKH ultimately produced $43.4 million in revenue during the first full quarter last Q3. 

Glu Mobile is an extremely cheap stock if KKP can follow that path. With the official launch tomorrow, the stock should start heating up. The game is now the #5 downloaded in the Adventure category and around the top 50 for all games. 



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



Tuesday, December 15, 2015

Avoid Cheniere Energy As Executive Shuffle Causes Uncertainty

  • Cheniere Energy votes to replace the founding the CEO after Carl Icahn upped his stake last week.
  • The exact same scenario played out on another Icahn position that hasn't rewarded shareholders.
  • The recommendation is for investors to pay attention to the industry problems and not the executive shuffle. 

Over the weekend, Cheniere Energy (NYSEMKT:LNG) replaced founding CEO and Chairman Charif Souki. The move follows the path of another Carl Icahn position that hasn't worked out very well this year.

Read the full article at Seeking Alpha.


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



Monday, December 14, 2015

Twitter: Here Comes The Logged-Out Audience

  • Twitter is moving forward with the plan to monetize the logged-out user base that exceeds 500 million people.
  • The revenue opportunity exceeds $1.3 billion providing a significant boost to a revenue base currently around $2 billion.
  • The recommendation remains to start building a position in the stock around $25 with cash held back for any dips to previous lows.



For a while now, the market has generally downplayed the fact that Twitter (NYSE:TWTR) has a substantial logged-out audience. The company noted the considerable number of users who view tweets without logging into the service over a year ago, but Wall Street has generally only focused on the stalling MAU totals.

Read the full article on Seeking Alpha.


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



Sunday, December 13, 2015

ConocoPhillips Didn't Deliver The Goods

  • ConocoPhillips provided investors with the 2016 capital budget and operating plan.
  • The company remains solidly focused on paying the dividend with no intent to curtail production.
  • The recommendation remains to avoid the stock until the priority is to focus on the business and not sending cash to shareholders that isn't earned.



With the new competitive environment in the commodity energy business, a company needs ultimate flexibility to build for the future. One of the biggest problems with capital intensive businesses is that volatile commodity prices make dividend payments to shareholders difficult during the lean years. A company must either borrow debt, sell assets at the bottom of the cycle, or cut capital spending to the bone to cover the cash payments. Neither is a good option and the latter two hurt the business over the long run.

Read the full article on Seeking Alpha.


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



Thursday, December 10, 2015

T-Mobile Remains Entertaining For The Holidays

T-Mobile (TMUS) CEO John Legere posted the following video to Twitter (TWTR). As usual, the message is extremely entertaining and a prime reason the wireless carrier has gained share on the mega carriers.






Jingle Bells, Verizon (VZ) smells, Go90 laid an egg... Clever and entertaining. Not sure if it helps the stock though. 


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



Tuesday, December 8, 2015

Follow This Apple Trend For Now

With the stock struggling to gain any momentum, Apple (AAPL) actually continues seeing the earnings estimates riding higher. The previous investment research on the stock recommended owning this stock as long as the earnings trend remains positive.



Trading at roughly 9x the '16 estimates ex-cash, Apple is too cheap. At the current price of $118, the stock appears ready to surge higher into year end.


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


What To Do With Williams Now?

  • The stock price continues plunging ahead of the finalization of the merger with ETE.
  • The deal complexity and required cash portion of the transaction were signals to avoid the stock.
  • Williams doesn't trade at enough of a discount to warrant owning the stock prior to the merger closing in early 2016.



The energy sector, and especially the infrastructure space, is in the midst of a massive collapse. One stock caught up in the carnage is Williams Cos. (NYSE:WMB), with the stock down 13% on Monday and nearly $10 in the previous four trading days before a rebound on Tuesday.









Read the full article on Seeking Alpha.


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



Saturday, December 5, 2015

Don't Rush Into Chipotle Mexican Grill

  • The CDC continues to report new cases related to the E. coli outbreak.
  • The new cases are related to the original outbreak dates that ended November 7.
  • Previous health illness cases and valuation concerns suggest avoiding Chipotle Mexican Grill even on the selloff predicted for Monday trading.



After the close on Friday, Chipotle Mexican Grill (NYSE:CMG) updated investors and the news wasn't very good. The restaurant chain that prides itself on serving quality food is having a difficult time shaking the recent E. coli outbreak.

Read the full article on Seeking Alpha.


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



Friday, December 4, 2015

Ambarella: Ongoing Timing Issues Will Erode Confidence

  • The forecasted timing issue with action camera revenues pulled forward in FQ2 is rolling over into the next two quarters.
  • The stock trades at healthy multiples for a company facing stalling revenue growth.
  • With the expectation that the market will lose confidence in Ambarella, the recommendation remains to hold off on buying the stock.



As presented in my previous research in early September, Ambarella (NASDAQ:AMBA) was likely to struggle in the short term as the company transitions away from a reliance on action cameras from a prime customer. Due to timing issues pulling revenues forward, the company previously predicted that FQ3 results would miss original high expectations.

Read the full article on Seeking Alpha.


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



Tuesday, December 1, 2015

Target - Cyber Future

The news from Target (TGT) appears to confirm that Black Friday is no longer crucial to most retailers. With the retailer starting to generate strong online momentum, the future is in the cyber world.

The data as well continues to confirm a electronic holidays. The top selling items game consoles, TVs, an iPad, and the interesting addition of the Nest thermostat. Guess Google (GOOG)(GOOGL) might have a decent business with that purchase.

Among the top sellers on Target.com’s top-selling day were:
  • Xbox One 500GB Gears of War: Ultimate Edition Bundle was the #1 selling item
  • Target sold two 48” Samsung 4K Ultra HD TVs per minute  
Other top sellers included:
  • Apple iPad Air 2
  • Graco 4Ever All-in-One Car Seat
  • Barbie Dream House
  • Nest Learning Thermostat
  • Pampers Baby Dry Diaper Super Size Pack

Without any hard numbers, it's difficult to get a read on the impact for Target. The retailer is finally making some inroads into claiming an online future. The stock trades at a middle of the roads valuation at 14x forward earnings. Not much of a bargain unless the Cyber Monday numbers suggest the company can actually survive against Amazon (AMZN) in the future. 


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



Monday, November 30, 2015

Glu Mobile: Celebrity Theme Shows Encouraging Promise

  • Glu Mobile is a bargain trading below $3.50 even without a hit.
  • The celebrity games offer the promise for another big hit with several opportunities in the pipeline.
  • The surprising success of celebrity games over the Thanksgiving holiday should spark interest in the stock.



The prime reason my investment thesis on Glu Mobile (NASDAQ:GLUU) didn't change after the disappointing Q3 results was the upcoming lineup in celebrity games. The combination with the lower stock price offered a very compelling entry point considering the primary 2H games weren't released yet. The market though wasn't pleased with the delays of these games and indiscriminately sold the stock.

Read the full article on Seeking Alpha.


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



NXP Semi: Stay Prepared

  • NXP Semi has rebounded following positive regulatory news surrounding the Freescale Semi merger.         
  • Investors should patiently await further dips as the inventory correction and volatile merger integration will no doubt lead to more hiccups in the quarterly financials.
  • The stock remains a prime purchase on future dips due to the synergies from the merger and the benefits to the EPS picture.



The recent news events surrounding NXP Semi (NASDAQ:NXPI) and the associated stock action highlights why investors need to stay prepared. The inventory correction in the semiconductor space and the upcoming completion of the Freescale Semi (NYSE:FSL) merger makes for a volatile few months.

Read the full article on Seeking Alpha.


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



Thursday, November 26, 2015

Schlumberger: The Prime Reason To Wait On Owning The Stock

  • The Department of Justice approval sets Schlumberger up for completing the Cameron merger on time.
  • The deal remains on path to provide a boost to Schlumberger's EPS estimates.
  • A big concern remains that the market won't appreciate the lower margins from the Cameron business.
  • The recommendation remains to hold off on owing this stock until after the company releases the merged financials.



The recent approval of Schlumberger's (NYSE:SLB) purchase of Cameron (NYSE:CAM) sets up the deal to close in Q1'16. The oilfield service giant faced limited regulatory impact from buying the Cameron business that has little overlap.

Read the full article on Seeking Alpha.


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



Wednesday, November 25, 2015

Is Mobile The Solution For Yelp?

  • Yelp continues running into search engine issues with Google.
  • The stock has surged this month to top $30.
  • The mobile app continues to offer a long-term solution to the Google problem that makes Yelp a long-term investment when the stock cools off.



After another search results issue with Google (NASDAQ:GOOG)(NASDAQ:GOOGL), Yelp (NYSE:YELP) is firmly on a path to work on solutions to bypass the Internet search giant. Mobile appears the easy and quick solution though uptake remains muted.

Read the full article on Seeking Alpha.


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



Skyworks: Cheap With Or Without Accretive Deal

  • Skyworks terminates PMC-Sierra deal after the target accepts a higher bid from Microsemi.
  • The company was expected to match the minimal increase in the deal price.
  • The stock remains an attractive investment based on organic growth targets not reliant on a deal for PMC-Sierra.



In a surprise move, Skyworks Solutions (NASDAQ:SWKS) stepped away from the bidding war for PMC-Sierra (NASDAQ:PMCS). Or maybe the move wasn't surprising, watching PMC accept a bid last week where Microsemi (NASDAQ:MSCC) only increased the bid price by $0.18.

Read the full article on Seeking Alpha.


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



Tuesday, November 17, 2015

PayPal: Improving Leverage Outweighs Industry Threats

PayPal is making strides to improve leverage after the split from eBay.
Apple Pay, along with other payment options, are viable threats that are likely to cause volatility in the stock.
The stock trades at an attractive valuation compared to the potential for digital payment growth that includes emergent mobile and P2P.


The interesting part of the PayPal (NASDAQ:PYPL) story is the digital payments provider has a business similar in size to MasterCard (NYSE:MA). The payments network provider is generally seen as a bigger company due to the market valuation of nearly $110 billion, but both companies are on pace to soon pass an annual revenue run rate of $10 billion.

Read the full article on Seeking Alpha.


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



Friday, November 13, 2015

Fitbit: Avoid The Sector With Founders Cashing Out

  • Fitbit prices the secondary offering at a substantially lower price.
  • Fossil buys competition Misfit for a relatively small valuation.
  • The founders of the sector companies are all dumping stock into weakness providing a clear warning sign on valuations.



After a strong Q3 and promising guidance for the important shopping season, Fitbit (NYSE:FIT) dropped a bomb on the market with a proposed large secondary offering. Not surprising, the stock plunged during a weak stock market heading into the offering.

Read the full article on Seeking Alpha.


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



Seeing Opportunity In The Disaster At Macy's

  • Macy's trades at multi-year lows following weak holiday guidance and other strategic decisions that disappointed investors.
  • The stock offers surging yields with a huge stock buyback plan.
  • The highly profitable department store offers a compelling investment after the recent disaster.


It is rare for a stock with a market cap in excess of $15 billion to lose 14% in one day. Macy's (NYSE:M) managed to accomplish that on Monday, following a huge guide down for the seasonally important Q4. The department store operator provided two key data points that disappointed investors and traders alike.         

Read the full article on Seeking Alpha. 


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



Monday, November 9, 2015

Skyworks: Cheap Based On Organic Growth Alone

  • Skyworks Solutions continues to deliver exceptional results.
  • The company has now set a realistic target of $8 of annualized EPS based on organic growth.
  • The recommendation remains to own the stock based on the strong fundamental business with the PMC deal providing an extra catalyst for shareholders.



The amazing part of the Skyworks Solutions (NASDAQ:SWKS) story is that the stock traded at $80 last week before the executives discussed guidance for $8 EPS in a reasonably short period. Or maybe the amazing part is that this target doesn't include the accretive deal for PMC-Sierra (NASDAQ:PMCS).

Read the full story on Seeking Alpha.


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



Friday, November 6, 2015

Finally An Opportunity To Invest In Drones

  • U.S. investors have genearlly had limited opportunities to invest in the drone sector.
  • The recent collapse of GoPro and Ambarella stock and entries into the drone sector provide attractive entry points.
  • Drone Aviation offers a speculative play as it builds a business in the defense and commercial sector.



While drones became one of the hottest market segments in the last couple of years, U.S. investors have had limited investment opportunities in the public markets. Some of the big government defense contractors that produce drones are so large they don't provide much growth opportunity, while the public companies moving into the consumer and commercial drone arena were richly valued and had limited revenues from drones.

Read the full article on Seeking Alpha.


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



Did SodaStream Really Fizzle?

  • SodaStream reported mixed Q315 results.
  • The results were hit hard by currency headwinds and a domestic transition.
  • The stock trades at a compelling valuation, especially considering the likelihood that currency eventually turns into a tailwind.



A day after a big bounce from Q3 results, SodaStream International (NASDAQ:SODA) gave back all of those gains. The perception is that some analysts were not happy with the holiday sales forecasts after recalculating the numbers. The reality is that the home-beverage maker had some solid results for a stock only worth $320 million.

Read the full article on Seeking Alpha.


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



Wednesday, November 4, 2015

Did Sprint Really Reach An Inflection Point?

  • The Sprint CEO claimed an infection point with the FQ2 earnings results.
  • The company added postpaid phone customers while still burning large amounts of cash.
  • The recommendation is to continue avoiding the stock.



Anybody following Sprint (NYSE:S) over the last few years is probably completely confused on where the wireless operator is heading. Under the previous CEO, Sprint was attempting to build the best wireless network in the country due to a large spectrum position. Under the current CEO, the company has veered in several directions with a partial attempt to build the best network, but mostly a focus on providing consumers with the lowest costs. In the process, CEO Marcelo Claure has ushered in cost cuts and reigned in capital spending that make it difficult to compete with the wireless leaders, AT&T (NYSE:T) and Verizon Communications (NYSE:VZ).

Read the full article on Seeking Alpha.


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



Tuesday, November 3, 2015

Why Does Fitbit Want To Dump Shares Below $40?

  • Fitbit registered a secondary offering of nearly 10% of the outstanding shares.
  • The strong Q4 guidance apparently wasn't enough to entice insiders to delay share sales.
  • Without a major balance sheet need, Fitbit is cashing in on what the company sees as an inflated stock price.



After the market close, Fitbit (NYSE:FIT) surprised the market with the revelation of an extremely large secondary offering. The fitness device maker produced exceptional Q3 results and has a solid balance sheet, raising questions on the reason for dumping so many shares by the company and selling shareholders.

Read the full article on Seeking Alpha.


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



Tuesday, October 27, 2015

Too Much Love For Southwest Airlines?

  • Southwest Airlines exceeded Q3 estimates when excluding fuel hedges.
  • The airline is trading at all-time highs with a very attractive valuation.
  • The stock is not loved enough, especially considering the industry shifting down capacity growth heading into 2016.



Not long ago, Southwest Airlines (NYSE:LUV) helped trigger a major sell off in the airline sector. At the time, investors feared that the capacity additions of the airline were going to pressure profits. The fear that the industry was heading back to the one of irrational capacity additions of the past was foremost on investor minds.

Read the full article on Seeking Alpha


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



Monday, October 26, 2015

Does PMC-Sierra's Q3'15 Results Impact The Buyout?

  • PMC-Sierra reported solid Q3'15 results.
  • The strong results are supportive of a higher offer from Skyworks Solutions.
  • The best way to play the deal are the suitors with Skyworks offering the best valuation even if it fails to close the deal for PMC.



After the close PMC-Sierra (NASDAQ:PMCS) released Q315 earnings. The quarterly results of buyout targets are always worth viewing since a prime reason for a board of directors to relent on a buyout is weak results. The market got a prime example of this issue with Dialog Semiconductor (OTC:DLGNF) plunging on weak Q4 guidance following agreeing to buy Atmel (NASDAQ:ATML).

Read the full article on Seeking Alpha.


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



Sunday, October 25, 2015

Under Armour: Struggling To Justify Higher Prices

  • Under Armour generated strong revenue growth during Q3'15 that led to beating analyst estimates.
  • The company is working on numerous initiatives that are increasing revenues at the cost of margins.
  • The stock valuation isn't justified by growth path laid out by the company.



The quarterly results for Under Armour (NYSE:UA) were generally impressive, but the stock sank over 5% as the retailer couldn't match sky-high investor expectations. The stock has struggled over the last couple of months when it exceeds $100. Even bullish revenue targets released at the Investor Day a month ago were met with the stock hitting resistance around $105.

Read the full article on Seeking Alpha.


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



Saturday, October 24, 2015

AT&T: Still Cheap Despite The Confusion

  • AT&T easily surpassed Q3 2015 EPS estimates despite massive confusion regarding the revenue numbers.
  • The market continues to not appropriately value the stock based on synergy benefits that will kick in over the next year, whether or not the company achieves the ultimate $2.5.
  • The stock is cheap while paying a 5.6% dividend for investors to wait on synergy benefits.



The Q3 results for AT&T (NYSE:T) were a mass of confusion with the inclusion of DirecTV for only a partial period. The company came out early and pointed out that analysts were miscounting DirecTV revenue while previously changing how commercial satellite subscribers were counted. At the same time, the shift in video and broadband revenues from legacy AT&T to a new segment mingled with DirecTV revenues and expenses made quarterly comparisons difficult.

Read the full article on Seeking Alpha.


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



Friday, October 23, 2015

Are Grownups Really Running Google, I Mean Alphabet?

  • Alphabet surges to new highs based on surpassing Q3'15 estimates.
  • A big rationale for the recent gains isn't so apparent in the Q3 details that suggest financial discipline isn't in place following the hiring of the new CFO.
  • The stock likely continues rallying based on momentum until year-end before the market wakes up to the higher levels spent on other bets.



The investment thesis about 150 points and a name ago was that the stock of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) would soar based on a grownup running the show. The prediction was that the stock had significant ability to not only grow earnings, but obtain higher multiples from the market with better financial stewardship.

Read the full article at Seeking Alpha.


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



Tuesday, October 20, 2015

Verizon: Low Churn Paving The Way For Huge Cash Flows

  • Verizon continues to churn out strong earnings as customers remain loyal to the wireless service.
  • The company is generating free cash flow of nearly double the quarterly dividends that alone yield 5%.
  • The stock remains cheap at 11.3x 2016 EPS estimates whether or not earnings plateau next year.



While the market focuses on the 2016 earnings plateau predictions of the company, Verizon Communications (NYSE:VZ) offers up attractive valuations now. The leading domestic wireless provider reported another quality quarter despite facing intense pressure from the other wireless providers trying to grab market share.

Read the full article on Seeking Alpha.


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



Sunday, October 18, 2015

The New Dogs Of The Dow - Q3 2015

  • The New Dogs of the Dow had substantial Q3 losses similar to the benchmark Dow.
  • The average stock in the Net Payout Yields based list has a yield of 9.1% to start Q4.
  • Even after a small gain in Q3, Travelers continues to top the list with a 12.1% yield.



This article will focus on the quarterly returns and changes in the new "Dogs of the Dow" strategy originally introduced (see The New Dogs Of The Dow - 2015) back in January. The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated. The more modern version involves using the Net Payout Yield (NPY) that adds the net stock buyback yield to the dividend yield. This yield more accurately reflects the modern corporate structure that utilizes a large amount of stock buybacks.

Read the full article on Seeking Alpha.


Disclosure: Long AAPL, CAT, IBM, TRV. Please review the disclosure page for more details. 




Wednesday, October 14, 2015

Verizon: Mobile Ad Dumpster Diving

  • Verizon is slowly building up a mobile-ad service.
  • The go90 mobile service offers a glimpse of the future though providing limited impact to current financials.
  • The wireless provider continues to pivot toward the future while providing investors a 5% yield to enjoy in the mean time.



Though the AOL deal didn't originally appear to offer much value to a wireless behemoth like Verizon Communications (NYSE:VZ), considering its lack of growth and small size, some opportunties emerged that made the service all additive. In a similar manner, the purchase of Millennial Media (NYSE:MM) for a meager $248 million doesn't appear to offer anything meaningful to a company worth over $180 billion.

Read the full article on Seeking Alpha.


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



Saturday, October 10, 2015

Shake Shack: Insiders Continue To Confirm The Price Is Too Rich

  • Shake Shack files an updated S1 allowing pre-IPO shareholders to dump up to 26.1 million shares.
  • Even at the recent lows, the stock remains incredibly expensive.
  • Shake Shack faces too much selling pressure to recommend anybody it under this scenario of likely relentless insider sells.



Prior to the open on Thursday, Shake Shack (NYSE:SHAK) filed a S1 allowing pre-IPO insiders to dump up to 26.1 million shares. The filing allows insiders to sell the shares from time to time at what amounts to over $1.2 billion at current stock prices of $47.

Read the full article at Seeking Alpha.


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



Friday, October 9, 2015

Under Armour: Fads Tend To End Badly

  • Under Armour continues to trade near all-time highs despite the market weakness.
  • The athletic apparel retailer trades at multiples considered stretched for other fast-growing retailers.
  • Investors need to carefully consider what might happen to the stock when the party ends.



While the market was all caught up with Under Armour (NYSE:UA) raising the sales target at its Investor Day, investors need to keep in mind that retail "fad" stocks don't typically end well. The market has a recent history of Lululemon Athletica (NASDAQ:LULU) to Michael Kors (NYSE:KORS) to even athletic apparel leader Nike (NYSE:NKE) as reasons for caution.

Read the full article at Seeking Alpha.


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



Saturday, October 3, 2015

Twitter: The Value Of The Influencer Network

  • Research continues to point to point toward Twitter having a very valuable network of users that influence the market.
  • The numbers suggest that Twitter could eventually monetize the user base at a higher rate.
  • The stock still has some warts on it before recommending it as a long-term buy.



While concerned about more downside for Twitter (NYSE:TWTR) in the short term due to a lack of a permanent full-time CEO and some valuation concerns, the long-term prospects are rock solid. More data continues to show that the company has a user base that is influential and potentially more valuable than the typical social media follower.

Read the full article on Seeking Alpha.


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



Tuesday, September 29, 2015

CyberArk: Free Cash Flow Opportunity After The Dip

  • CyberArk continues struggling to gain traction despite the cybersecurity focus of the Chinese President's visit to the U.S.
  • Several analysts have upgraded the stock after the recent dip below $50.
  • The privileged account specialist provides a compelling free cash flow story though short-term issues will impact the stock for now.



With the U.S. visit of the Chinese President, cybersecurity is back in prime focus. However, stocks of the related cybersecurity companies aren't trading as well. One stock getting a lot of analyst praise lately is CyberArk (NASDAQ:CYBR).

Read the full article on Seeking Alpha.


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



Ordering Pizza With An Emoji

Has anybody used the pizza emoji to order from Domino's Pizza (DPZ)?




If they take my kids away from me... Too funny!


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

Monday, September 28, 2015

FireEye: CFO Change Provides Opportunity

  • FireEye announced a new CFO who is expected to join the company on September 21.
  • The stock has failed to keep up with industry peers in a large part due to a lack of financial discipline.
  • Investors should keep an eye on the company with an opportunity to scoop up cheap shares if the new CFO can keep growth and instill discipline.


The hiring of a new CFO is a big step forward for FireEye (NASDAQ:FEYE). Normally, the abrupt exit of a CFO is a major red flag, but the hiring of a replacement doesn't garner much interest. Due to the unique situation of the cybersecurity stock and frustrations over financial discipline, this hiring has more than the normal relevance.

Read the full article on Seeking Alpha.


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



Sunday, September 27, 2015

AT&T: Questionable Synergy Prospects Don't Change Value

  • AT&T has questionable prospects for achieving the targeted DirecTV synergies.
  • Even coming up short on the synergies still leaves the company on track for pro-forma EPS estimates of $3.
  • The stock remains exceptionally cheap and offers a 5.8% dividend yield.



Back on September 16, AT&T (NYSE:T) CFO John Stephens spoke at the Goldman Sachs Communacopia Brokers Conference. The main crux of the conversation with the Goldman Sachs analyst was regarding the integration and synergy benefits of the DirecTV merger.

Read the full article on Seeking Alpha.


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



Saturday, September 19, 2015

Fitbit: Were You Paying Attention?

  • Fitbit has soared this week on the bullish news of a new corporate customer.
  • The stock has gained nearly $2.5 billion in valuation on a deal that has a maximum impact of $20 million in revenue.
  • Investors need to pay attention to quality stocks and buy on dips and not after the stock soars.



For investors wanting to get into the Fitbit (NYSE:FIT) craze, the numerous stock drops toward the $30 level provided the ultimate entry point. With some good corporate news and bullish analyst coverage, the stock exploded higher this week providing another solid example of pouncing on dips of good stocks.

Read the full article on Seeking Alpha.


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



Thursday, September 17, 2015

Vodafone: Enjoy The Dividend While Waiting

Liberty Global continues pursuing a deal with Vodafone despite regulatory concerns and disagreements on asset values.
The stock continues trading toward multi-month lows on market weakness and the lack of merger news.
Vodafone remains attractive with solid growth catalysts and a big dividend.
The unsurprising news of the week is that Liberty Global (NASDAQ:LBTYA) is finding it difficult to work out a deal with Vodafone (NASDAQ:VOD). To most investors it shouldn't be a shock that the companies are struggling to find common ground on a deal in the midst of stricter regulatory scrutiny of related mergers in Europe. The original investment thesis surrounding this potential deal back in June questioned some of the logic supportive of a workable deal.
Read the full article on Seeking Alpha. 

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


Wednesday, September 16, 2015

Williams: Some Answers

  • Williams finally issues Q3 dividend amount.
  • The company hasn't answered the long-term questions surrounding the impact of the fee cuts.
  • The stock remains difficult to own until more questions are resolved.



As the market was closing for the week, Williams Cos. (NYSE:WMB) left shareholders in the dark regarding the upcoming dividend and the strategic alternatives resolution. In Williams: Negative Implications Of Chesapeake Deal, the research highlighted some of the issues with the fee cuts from the Chesapeake Energy (CK) deal. Long after the market closed on Friday, the company and market news sources provided some more information.

Read the full article on Seeking Alpha.


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



Sunday, September 13, 2015

Williams: Negative Implications Of Chesapeake Deal

  • Williams agrees to fee cuts for higher volumes from Chesapeake Energy.
  • The auction process for the company remains in limbo placing the positive merger with Williams Partners and the promised higher dividends on hold.
  • The uncertainty around Williams makes the stock difficult to own despite the collapsing price.



In possibly a somewhat surprising move, Williams Cos. (NYSE:WMB) subsidiary Williams Partners L.P. (NYSE:WPZ) agreed to lower the gathering and processing costs for Chesapeake Energy (NYSE:CHK) for higher future volumes. The move is rare for the MLP sector and has some troubling implications despite the signaling by Williams that the move is a win-win for both parties.

Read the full article on Seeking Alpha.


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



Saturday, September 12, 2015

Workday: Multiple Compression In The Works

  • Workday has traded sideways for a couple of years as multiple compression takes over.
  • Investors shouldn't be fooled by high analyst price targets with the negative trend towards lower targets.
  • The stock faces more multiple compression going forward that will impact price gains.



The tech sector is littered with stocks over the last couple of years that came public at excessive valuations and headed higher for awhile. The market justified these sky-high prices due to fast growth rates and a new paradigm in cloud computing or social media.

Read the full article at Seeking Alpha.


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



Friday, September 11, 2015

Buffalo Wild Wings: Don't Chase It Higher

  • Buffalo Wild Wings is trading near an all-time higher around $200.
  • The wings concept has missed earnings in the last three quarters and is starting to face more aggressive competition.
  • The stock trades at a premium valuation considering the competitive environment and earnings misses.         


Back in June, research indicated that Buffalo Wild Wings (NASDAQ:BWLD) wasn't worth chasing higher. The company was poised to produce better results going forward, but the valuation wasn't very attractive.

Read the full article on Seeking Alpha. 


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



Thursday, September 10, 2015

Schlumberger: Troubles Of A Lower Margin Business Addition

  • Schlumberger paid a hefty premium for the low-margin business of Cameron.
  • A promising business combination isn't always financially rewarding to shareholders.
  • The recommendation is to stay away from Schlumberger until the merger integration starts achieving synergies by late 2016.


One of the most overlooked aspects of corporate combinations is the psychological impacts on stock multiples. A merger might be accretive to the acquirer, but if the combination reduces the growth rate or margins going forward, it could impact the valuation multiple assigned the stock. A stock that currently holds a premium multiple might suddenly lose that valuation due to lower growth rates going forward or less impressive margins.

Read the full article on Seeking Alpha.


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



Monday, September 7, 2015

Apple: Don't Overlook The Tablet Potential

  • The stagnating tablet market still has long-term potential.
  • The iPad product line still remains the best option for Apple to diversify away from the dominance of the phone products.
  • Apple remains an extremely cheap stock with the iPad Pro providing a potential catalyst for the stock.         


The market projections for the tablet market offer a disappointing future for a product originally expected to offset the weakness in computer sales. IDC actually projects some market share gains for Apple (NASDAQ:AAPL) by 2019, but the weakness in the overall tablet market is more the story.

Read the full article on Seeking Alpha.


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



Saturday, September 5, 2015

Verizon: Investment Thesis Enhanced

  • Despite a compelling valuation previously highlighted as the best in years the stock dropped to new multi-year lows.
  • Unfortunately the rhetoric regarding the domestic pricing wars are ongoing, but the damage appears easily contained.
  • The investment thesis isn't altered at this point with the volatile market providing a better entry point at an even higher dividend yield.

One of the most disappointing calls of the last few months was that Verizon Communications (NYSE:VZ) was set to rally. Having survived the domestic wireless pricing war, the company appeared poised to rally to new heights. The stock was deemed the "Best Value In Years", but Verizon hasn't gained in the last couple of months. In fact, the stock actually hit multi-year lows if one counts the flash-crash type trading that took place on August 24.

Read the full article on Seeking Alpha.


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



Wednesday, September 2, 2015

Ambarella: Timing Issues Impact Confidence

  • Ambarella trades down sharply after concerning statements regarding revenue growth.
  • The stock continues to trade at PS multiples that are lofty for decelerating revenue levels.
  • Even with the stock down $50, AMBA remains a difficult stock to own at these values.

After the close on Tuesday, Ambarella (NASDAQ:AMBA) again smashed analyst estimates, though it didn't help the stock. The stock was already down significantly since the warning in early July that it was already fully priced due to drone hype.

Read the full article at Seeking Alpha.


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



Tuesday, September 1, 2015

Motorola Solutions: Not Selling In The Dutch Auction

  • Motorola Solutions is embarking on a Dutch Auction to repurchase $2 billion worth of shares around the current price.
  • The stock continues to offer the highest net payout yield in the large-cap sector as the company aggressively returns capital to shareholders.
  • Follow the smart investors and hold onto the stock.

The recent stock action in Motorola Solutions (NYSE:MSI) again provides an example of what happens when the market becomes overly negative on a large company with a solid balance sheet. The stock collapsed back in April after the company failed to find a buyer, but it didn't change the appeal of the stock for investors.

Read the full article on Seeking Alpha.


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



Thursday, August 27, 2015

Avago: Business As Usual


  • Avago provided generally bullish commentary on the business environment including China.
  • The actual news didn't warrant the $50 collapse seen in the stock before the recent rally.
  • The stock is exceptionally cheap even with the merger synergies with Broadcom.
The recent collapse in the stock of Avago (NASDAQ:AVGO) would suggest something other than consistent end-user demand. The semiconductor company provides a great view into general demand in the wireless handset and enterprise storage markets with a quarter that ends in July. Not to mention, the guidance factors in actual August demand form a better picture of the market than an email from Tim Cook regarding one particular handset provider for the premium market.

Read the full article on Seeking Alpha.


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


                     

Monday, August 24, 2015

Apple: Best Tasting Bear Ever?


  • Apple trades down to correction territory with a loss in excess of 20%.
  • The data points don't suggest Apple has any growth problems in China.
  • With an enterprise value drop of nearly 30%, Apple is extremely tasty at below 9x EPS estimates.
The big shock in the market selloff is that Apple (NASDAQ:AAPL) had already reached bear market territory before the dramatic selloff at the open on Monday. Like other tech stocks, Apple has been hard hit by fears of a slowdown in China. The reality though suggests that the fears are overblown making the stock collapse perplexing.

Read the full article on Seeking Alpha.


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



Thursday, August 20, 2015

Ambarella: Too Much Drone Hype


  • Ambarella maintains a lofty valuation due to the potential for drones.
  • The excitement over the drone market doesn't match the potential near-term revenue.
  • Ambarella remains a good company with a stretched valuation that offers limited upside for investors.
Prior to the recent selloff in Ambarella (NASDAQ:AMBA), the market had gotten extremely excited over the potential of drones. The maker of high powered, video compression chips has been on fire over the last couple of years on the initial connection with GoPro (NASDAQ:GPRO) cameras and now drones.

Read the full article on Seeking Alpha.


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



Wednesday, August 19, 2015

NXP Semi: Another Gift Opportunity


  • NXP Semi has dipped back to recent lows following a major rally on the Freescale Semi deal.
  • The merger places the new entity as a leader in the growing connected car segment that provides a major growth catalyst with the recent hacking scandals.
  • The stock is decidedly cheap based on the benefits of the merger that is heading towards completion.
The weak stock market is providing opportunities to buy quality names at discounted prices. One such name is NXP Semiconductors (NASDAQ:NXPI) that helped spook the market with discussions of a reduction in order visibility when reporting Q2 numbers.

Read the full article on Seeking Alpha.


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




Monday, August 17, 2015

King Digital: Be Patient


  • King Digital continues to struggle to repeat the success of mega-hit Candy Crush Saga.
  • Though the stock offers an attractive value, it isn't likely to traded positively until the negative trends reverse.
  • Investors should patiently watch the stock for a better entry point and ignore the market that value doesn't exist in the mobile-game sector.
The mobile game industry continues to get a bad rap. The latest quarterly results from King Digital Entertainment (NYSE:KING) only seem to enhance that negative perception. What the market really misses is that stocks like King Digital and Zynga (NASDAQ:ZNGA) went public after a hit game or two spurred incredibly high valuations and revenues that weren't sustainable in the short run.

Read the full article on Seeking Alpha.


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




Saturday, August 15, 2015

Hartford Doesn't Need A Buyout


  • Hartford is too cheap to accept a buyout with a limited premium.
  • The consistent earnings profile and huge capital return plan position shareholders for solid returns going forward.
  • The recommendation remains to own Hartford based on value.
With an intra-day spike to near $51 on high volumes, The Hartford (NYSE:HIG) is under accumulation based on rumors of a buyout offer. Back when Chubb Corporation (NYSE:CB) accepted a buyout offer, Hartford was listed as a prime buyout target in the P&C space so this shouldn't be a big surprise.

Read the full article on Seeking Alpha.


Disclosure: Long HIG. Please read the disclaimer page for more details. 




Friday, August 14, 2015

Is Yelp Worth $100?

Gil Simon of Apex Capital predicts that Yelp (YELP) eventually plays out like Netflix (NFLX). The recent collapse mirrors the one like Netflix back in 2012. With the premium platform and content, Gil sees a significant rise for Yelp.




The video cuts off, but he reportedly suggested a significant rise in Yelp similar to the Netflix rally. Netflix has rallied from under $10 to over $120 now. It sounds like a ride to $100 would be only the start.


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



Thursday, August 13, 2015

Top 10 Net Payout Yields For August 2015


  • The top ten net payout yields outperformed the market in July due to several stocks with monthly gains in excess of 9%.
  • The top ten net payout yield stocks average yields of 14.7% to start August.
  • Motorola Solutions continues to hold the highest yield now at 25.7%.
This article is a continuation of a monthly series highlighting the top net payout yield (NYSE:NPY) 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 utilized in part to make investment decisions for the Covestor model that has beaten the S&P 500 for four consecutive years. Please review the original articles for more information on the NPY concept.

Read the full article at Seeking Alpha.


Disclosure: Long GM, HIG, MSI, NLY, NOC, NTAP, TRV, VIAB. Please review the disclaimer page for more details. 




Wednesday, August 12, 2015

CyberArk Can't Match Extreme Expectations


  • CyberArk continues to under promise and over deliver.
  • The company regularly smashes Estimize estimates though the valuation multiples suggests the market already has that expectation.
  • The stock is likely to struggle gaining traction until it better proves that demand is sustainable.
By all accounts, the Q2'15 earnings results for CyberArk (NASDAQ:CYBR) were a blowout. The security software firm easily exceeded both analyst and company estimates suggesting CyberArk has unstoppable growth. The stock though isn't showing the same enthusiasm for the strong results.

Read the full article at Seeking Alpha.


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



Tuesday, August 11, 2015

A Fitting Drop For Fitbit


  • As predicted, Fitbit dropped after the stock reached $50 despite strong Q2 earnings.
  • The company is building a strong network that compels customers to remain in the ecosystem.
  • The valuation proposition remains unappealing even after the recent to drop to $42.
As predicted after the IPO, Fitbit (NYSE:FIT) it a wall when the stock surged above $50 prior to the Q2 earnings report. At that price, the stock had a valuation in excess of $12 billion based on 248 million shares outstanding making it difficult for investors to see positive gains.

Please read the full article at Seeking Alpha.


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



Monday, August 10, 2015

Zynga: The Turnaround Is Now Firmly Planted


  • Zynga continues making progress in mobile due to the surprise success of two slots games.
  • The stability of core franchises on the web will eventually help propel bookings higher.
  • Zynga is an extreme value as the stock bounces off the recent lows.
While a lot of media debated the quality of the Q2 earnings report of Zynga (NASDAQ:ZNGA), the results were unquestionably stronger than presented. As investors absorbed the numbers, the stock eventually bounced off the lows of $2.45, near the all-time lows reached late last year.


Read the full article at Seeking Alpha.


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




Saturday, August 8, 2015

How Low Can Twitter Go?


  • The growth misperception continues at Twitter.
  • Fellow social media stock valuations provide different outcomes for the stock.
  • Twitter remains a great service in the need of a permanent CEO with a coherent strategy.
  • Though the stock offers an interesting value for its growth rate, the stock is likely headed lower.
As not much of a shock, Twitter (NYSE:TWTR) continues struggling to produce the user growth that Wall Street wants the company to generate. After all, former CEO Dick Costolo probably wouldn't have suddenly stepped down mid quarter if MAUs were surging like the market wants to see.

Read the full article on Seeking Alpha.


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



Wednesday, August 5, 2015

Glu Mobile: More Staying Power


  • Glu Mobile produced Q2 '15 numbers above analyst estimates.
  • The mobile game developer continues to see strong staying power from the top franchises.
  • The stock is incredibly cheap at less than 2x 2016 revenue estimates set to rock higher based on games slipping from 2015.         
Each and every quarter, Glu Mobile (NASDAQ:GLUU) produces improving results while the market focuses on the quarter to quarter game releases. After reporting a solid Q215 beat, the stock is trading down based on some disappointing short-term guidance that doesn't impact long-term expectations.

Read the full article at Seeking Alpha. 


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