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.