Thursday, December 29, 2016

Nvidia: Pump The Brakes

Nvidia hit a new high to start trading Wednesday to cap a remarkable run from the lows to start 2016.
Despite the excitement over end market opportunities, most of the stock gains came from multiple expansion.
The analyst community became too bullish allowing for a contrarian play by Citron Research to easily take down the stock.
When a stock soars and analysts upgrade the price target, one has to question if the positive momentum is too much. Such the case incurred with Nvidia(NASDAQ:NVDA) the last couple of weeks.
Read the full article on Seeking Alpha. 

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


Saturday, December 17, 2016

Transocean: No Reason For Excitement

Transocean reached yearly highs last week.
The recent production cuts agreed to by oil producers around the world shift drilling towards domestic shale producers.
The deepwater drilling market still remains far from a recovery as Transocean continues to face a declining backlog.
On the back of more oil production cuts, Transocean (NYSE:RIG) soared to multi-year highs this week. The news though has questionable benefits for the offshore drilling market.
The stock traded at a high of $16.66 to start the week, but Transocean is closing down for the week around $15. The question now is whether investors are rushing into the sector on false hopes.
Read the full article on Seeking Alpha. 


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

Wednesday, December 14, 2016

Amazon: First Drone Delivery

Amazon (AMZN) released the following video of the first drone delivery in the UK. The PrimeAir customer delivery is part of an initial test with some apparent limitations. Packages have to be less than 5.75 lbs and the test includes an area with large fields and limited homes. The package landed on a spot laid out in the yard far from the house. Very few homes in the US would offer such a landing spot.




The drone test is an interesting step. The question still remains at how viable drone deliveries are in congested towns were the majority of the population in the world lives.

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


Saturday, December 3, 2016

FinTech - Improved Regulatory Environment Is Bullish

Trump hasn't even taken office yet and the Federal regulators are already proposing regulations that will make it more efficient for FinTechs to operate. The Office of the Comptroller of the Currency proposed allowing FinTech firms to obtain a national bank charter.

Wednesday, November 23, 2016

Why Freeport-McMoRan Isn't Expensive Even Above $20

Copper prices have rocketed above even the targets used in the copper miners' presentations.
Freeport-McMoRan is highly cash flow positive at copper prices around $2.50 pound.
The stock offers interesting value even after the huge surge in the stock price.
The recent copper rally apparently caught most investors and analysts off guard. Analysts are either scrambling to upgrade the stock or discredit the rally.
The long misunderstood story with Freeport-McMoRan (NYSE:FCX) was that the copper miner needed higher prices in order to clear the debt issues. In reality, the current copper prices might be enough for the company to thrive. The question now is when to lock in gains.
Read the full article on Seeking Alpha.

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


Tuesday, November 8, 2016

Allergan: One Impressive Plan

Allergan recently missed Q3 estimates that should mostly be ignored.
The growth pharma has a huge capital return plan that overrides current earnings weakness.
The net payout yield will push into one of the top yields in the current market.
Allergan (NYSE:AGN) hit our radar screen due to the combination of two key signals: plunging stock price and massive capital return plans. The market typically runs away from a stock at the wrong time and these contrary positions can signal the market has the situation wrong.
The stock closed last week around multi-year lows of $195. With politicians increasingly attacking drug pricing and the costs in the healthcare system, are the capital return plans enough to consider buying the massive dips in Allergan from a high near $340 back in 2015.
Read the full article on Seeking Alpha. 

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


Sunday, October 30, 2016

Disney: The Problems At ESPN

Based on Nielsen's November estimates, ESPN owned by Disney (DIS) is collapsing faster than expected. The networks of ESPN, ESPN2, and ESPNU all lost over 600K subscribers for November alone.

Friday, October 28, 2016

Weatherford: Recovery Starts Now

Weatherford reported disappointing Q3 results.
The company has left the stock for dead while the market is starting to rebound.
The stock remains a speculative play in the sector for a catch-up trade.
As other industry players trade near multi-year highs, Weatherford International (NYSE:WFT) is still trading at the lows. The recent quarterly results weren't the best, but the market appears stressed out for no reason.
Read the full article on Seeking Alpha. 

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


Alphabet: Path To $1,000

After another strong earnings report, Alphabet (GOOGL) is up $12 today to $829. The stock appears on a path to $1,000. RBC Capital Markets tech analyst Mark Mahaney places a $1,025 target on the stock.

Alphabet trades at a meager 20 forward P/E multiple making one wonder if the inability to obtain a higher multiple is related to the market cap of nearly $560 billion or the potential problems in Europe. Either way, it appears the stock is on a path to $1,000.

More research:
Alphabet: Only Takes Minimal Financial Discipline

Alphabet: EU Problems


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


Thursday, October 27, 2016

Acacia Plunges To New Lows

Acacia Comm (ACIA) is down a substantial 12% to below $80 for the first time in months. This move comes ironically after the company rushed out a secondary offering at $100 to allow insiders to dump shares.

Per Benzinga, the stock is down as top customers ZTE and ADVA Optical Networking issued soft guidance. ZTE reportedly accounts for 40% of revenues and the weak revenue numbers isn't a good sign for Acacia.

Twitter: Re-Accelerating User Growth Keys Q3 Results

Twitter reported that Q3 results beat estimates, but the market focused on a lack of revenue guidance for Q4.
The social-media giant generated further growth in key user metrics that is far more important than revenues at this point.
The stock remains one to own around the recent lows.
After an initial positive reaction to Q3 results, Twitter (NYSE:TWTR) is trading mostly flat. The market appears more focused on the lack of revenue guidance for Q4 over the key re-accelerating user growth.
Read the full article on Seeking Alpha. 

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


Freeport-McMoRan: Proving The Cash Flow Thesis

Freeport-McMoRan missed Q3 analyst estimates.
The copper miner made huge strides in proving the cash flow thesis.
The stock trades at an attractive valuation now that cash flows are set to pay for debt reduction.
Freeport-McMoRan (NYSE:FCX) spent the last year cutting capital expenses and reducing costs to improve cash flows. The biggest story in the next few quarters is to see whether the copper miner makes the necessary progress towards those solid cash flows and current copper prices.
Read the full article on Seeking Alpha. 


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


Wednesday, October 26, 2016

Weatherford: Bottoming Process

Weatherford International (WFT) reported some horrible Q3 numbers, but the stock rebounded solidly on the news. The daily low of $5.26 test the lows for the last few months to only see the stock rebound near the highs of the day.



The interesting part of the story is that the industry sees the market bottoming out. Maybe even more important, a competitor like Halliburton (HAL) is shifting back towards focusing on profits over market share. This should help reduce some pressure on the bottom line at Weatherford.

More research:
Halliburton: Some Perspective


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


Tuesday, October 25, 2016

AT&T: Glimpse At The Realities Of Another Deal

AT&T reported Q3 numbers that fail to prove out the benefits of the DirecTV deal.
The bundling of services has failed to add the most important subscribers.
The large debt load makes the synergies in the Time Warner deal a must and the outcome of the DirecTV integration highly questions a positive outcome.
In the midst of agreeing to buy Time Warner (NYSE:TWX), AT&T (NYSE:T) rushed out Q3 earnings a few days early. The biggest issue is that the synergy benefits from DirecTV aren't showing up in the results.
Read the full article at Seeking Alpha. 

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


Analysts Optimistic On AT&T-Time Warner Deal

According to a survey conducted by Bernstein (via Benzinga), most buy-side analysts expect the deal between AT&T (T) and Time Warner (TWX) to eventually obtain approval. An amazing 84% of the participants in the survey expect AT&T to close the deal, yet Time Warner trades far below the $107.50 offer price.



Monday, October 24, 2016

Visa: FQ4 Quick Thoughts















After the close, Visa (V) reported the following numbers according to Briefing.com:

United Airlines: No Need For A Pause

United Airlines continues to post massive profits in relation to the market cap.
Even at a slower pace, the airline is still repurchasing a large amount of outstanding shares.
The recent rally only brings the stock up to more normal levels from which to launch another rally.
Amazingly, the recent rally in United Airlines (NYSE:UAL) only brings the stock back up to levels from late 2015. In general, the airlines is seen in a better light now after strong results and new CEO Oscar Munoz gains momentum.
Read a full article on Seeking Alpha. 

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


Sunday, October 23, 2016

Twitter: Softbank Nothing But Trader Chatter











Twitter (TWTR) surged 7% on what appears (via Barron's) was trader chatter about a rumor in a likely move to run the stock up. While it wouldn't surprise me that SoftBank would have interest in buying Twitter, the firm recently closed on a sizable $32 billion deal for ARM Holdings.

AT&T/Time Warner Merger Thoughts

As reported on Friday, AT&T (T) agreed to purchase Time Warner (TWX) for $107.50 per share. The deal brings together a distribution leader in the form of the wireless network operated by AT&T and the content owned by Time Warner.

The deal could be a big victory for the Net Payout Yields model on Covestor where Time Warner has been a long-term holding. The company has long repurchased a large portion of the outstanding stock while paying a decent dividend that recently yielded nearly 2%.

The big question is where the stock will trade on Monday with 50% of the value based on whether AT&T breaks the downside collar. As well, the market will likely fear whether the regulators will approve this merger of mega-media giants.

Ultimately, a decent price on Monday provides an opportune time to exit a long-term position at the top. Here is hoping to a big pop at the start of trading. Below are links to more detailed reports on my opinions on the merger.

WhoTrades
Time Warner Accepts $107.50 Offer

Seeking Alpha
AT&T: Beware Of Another Deal 


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


Thursday, October 13, 2016

CSX: Traditional Earnings Beat Doesn't Add Value

CSX beat Q3 EPS estimates while missing revenues yet again.
The company remains on pace for negative trends despite help from lower share counts.
The recent rally in the stock already prices in any potential upside from higher earnings in 2017.
After the close, CSX (NYSE:CSX) reported the traditional earnings beat and revenue miss. The railroad operator has a history of strong operations even despite the multi-year headwinds in the macroeconomic and specifically the energy sector.
Read the full article on Seeking Alpha. 

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


Wednesday, October 12, 2016

Yum Brands: About That Capital Return Plan

Yum Brands recently announced a huge increase to the capital return plan.
The details of the stock repurchase plan are highly misleading considering the purchases of stock prior to the split of the Yum China business.
Once the split takes place, yield investors can better evaluate the deal offered to investors.
In the midst of plans to split the China business into a separate company, Yum Brands (NYSE:YUM) plans massive capital returns to shareholders. Unlike other typical large-scale capital return plans, the stock actually trades near all-time highs.
Read the full article on Seeking Alpha. 

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




Bank Of The Ozarks: Defying Skeptics

Bank of the Ozarks reported strong Q3 results.
The bank completed two more acquisitions during the quarter but the market is focused on the cycle lows in asset quality metrics.
The stock is both cheap and expensive depending on the valuation metric making the trading action around $40 crucial for the path forward.
Before the open, Bank of the Ozarks (NASDAQ:OZRK) reported strong quarterly results. Lots of critics question the strategy of the regional bank, but one can't argue with the results.
Read the full article on Seeking Alpha. 

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


Monday, October 10, 2016

Twilio: Why Haven't You Sold Already?

Twilio proposed a secondary offering of $400 million led primarily by selling shareholders.
The valuation of the company is now $6 billion based on the fully diluted share count while revenue expectations are only $255 million.
Investors should not buy from insiders dumping shares at inflated valuations.
After the close on a Friday, Twilio (NYSE:TWLO) snuck out a proposed secondary despite only completing an IPO about four months ago. The communications software provider has seen the stock rocket since going public.
Read the full article on Seeking Alpha. 

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


Thursday, October 6, 2016

Twitter: No Deal, No Problem

Twitter is down 20% as bidders disappear from making premium bids for the social media service.
The company has plenty of catalysts with live-streaming deals and the emergence of generous video ad revenue sharing with content creators.
The dip below $20 provide opportunity as either the video catalyst will launch Twitter back into growth mode or the company will accept likely bids in the mid-$20 range.
Twitter (NYSE:TWTR) is in freefall today as the market comes to the realization that a deal isn't imminent. Despite constant media rumors, the company never really signaled that the social media site was for sale and definitely not at prices anybody would pay.
Read the full article on Seeking Alpha. 

Disclosure: Long TWTR. Please see the disclaimer page for more details. 


Thursday, September 29, 2016

Stratasys: Reason For A Potential Breakout?

After hitting new multi-year lows in February, Stratasys (SSYS) has slowly started trending up to where the stock might finally break the downtrend. One possible reason is this smooth robotic 3D printer that appears to be a game changer. Per the company:

Stratasys recently previewed its new Robotic Composite 3D Demonstrator at IMTS 2016. This game-changing additive manufacturing system combines Stratasys' advanced extrusion technologies with Siemens’ motion control hardware and PLM software. 



Wednesday, September 28, 2016

Alphabet: Odd Time To Downgrade

Alphabet was downgraded by Wedbush suggesting the companies search business faces an inflection point.
The stock trades at a relative value with plenty of opportunities for financial discipline to boost profits.
The suggestion is to let the stock tell you when the inflection point occurs, especially at these breakout levels above $800.
Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) is trading sideways near a new high today after an analyst downgrade. The decision is odd considering the stock is near a breakout and potential run towards $900 and possibly even $1,000.
Read the full article on Seeking Alpha. 

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


Pfizer: No Buy Signal After The Dip

Pfizer is down sharply over the last couple of months culminating with a decision to not split into two companies.
The company has a stock buyback plan, but chooses to use larger amounts of cash on making acquisitions such as paying $14 billion for Medivation.
Pfizer isn't a horrible stock to own, but the signals don't suggest outperformance for the next year.
At first glance, the multi-month drop in Pfizer (NYSE:PFE) appears to offer an opportunity. After all, the dividend is back to a respectable 3.5%.
Read the full article on Seeking Alpha. 

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


Monday, September 26, 2016

Zoe's Kitchen: That $24 Opportunity

After slightly weak guidance following the Q2 earnings report, Zoe's Kitchen (ZOES) has absolutely collapsed. The stock is now down from $38 to the $24 range providing a double bottom opportunity.



The valuation is reasonable at $475 million with revenues heading towards $333 million next year.  Check out these other research posts:

Zoe's Kitchen: Patience Rewards Investors With Dip Opportunity

Opportunities In Restaurant Stocks

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


Why Twitter Is Unlikely To Accept A Buyout Offer

Reports of interests in bidding for Twitter sent the stock to multi-month highs.
The difference between what bidders will pay and where Twitter values the social media site suggests a deal is highly unlikely.
Investors wrongly confuse exploring options with accepting any imminent bid.
The good numbers from week 2 in the NFL support buying Twitter on any dips if the buyout surge deflates this week.
Twitter (NYSE:TWTR) shot up 21% on Friday to a recent high of $22.62 on news that the social media service was moving closer to being sold. The CNBCreport suggested that Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) and Salesforce (NYSE:CRM) were seriously looking at making bids.
Read the full article at Seeking Alpha. 

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


Sunday, September 25, 2016

Is Nike Under Assault?

The success of the last decade is leading to increased competition.
Increasingly, Adidas and Under Armour are making strides in endorsement deals by ramping up spending.
Nike is an expensive stock for one facing a more competitive environment.
In the business world, the typical price of success is increased competition. A company that has seen huge stock gains or generates large profits can expect a flood of new competition.
Read the full article on Seeking Alpha. 

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


Friday, September 23, 2016

Twitter: Pump The Brakes

Twitter (TWTR) is soaring 20% today on news today that the company is in informal discussions regarding a sale of the business. According to the news, Alphabet (GOOG) and salesforce.com (CRM) are looking at a bid for the social media giant.



The big question is whether a Twitter shareholder even wants a deal. After the gains the stock has a market value of $15.7 billion. A decent value for the current revenue base, but the potential remains massive. What if the NFL streaming deal and the host of shows lining up for the site starts expanding the user base.

Facebook (FB) now has a market value of over $370 billion. Maybe it isn't possible to ever reach that level, but one could argue that these streaming deals with the likes of 120 Sports and Cheddar provide a compelling case for users to return to the service. If Twitter can really show that 800 million people view the site, than Twitter actually has half the user base of Facebook and no where near half the market valuation.

Thursday, September 22, 2016

Microsoft: Buyback Decisions Tell A Story

Microsoft announced new capital return plans including an 8% dividend hike.
The new stock buyback plan has limited ability to impact the stock considering the surging stock over the last few years.
The net payout yield is average for the current market.
After the close, Microsoft (NASDAQ:MSFTreleased that the company will add to the existing capital return program. The total of the share repurchase program is attention grabbing, but investors need to consider whether the amount is actual impactful to the stock.
Read the full article on Seeking Alpha. 

Disclosure: No position 


Wednesday, September 14, 2016

Twitter Launches TV Streaming Apps In Time For NFL

Twitter (TWTR) launches TV streaming apps just in time to kickoff the NFL streams starting on Thursday. The apps will be available on Apple TV, Amazon Fire and Xbox One making the streams available to cord cutters with a TV.





The big unknown is how many people will tune into these non-exclusive deals. The stock trades at a reasonable valuation with tons of upside if these streaming deals like the NFL start driving users.

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



Under Armour: Value In The C Shares

Under Armour split the stock into a new class this year in order to allow the CEO to unload shares and maintain voting power.
The stock has traded weak over the last year as costs continue to pressure results.
A strong case can be made for value in the Class C shares.
Back in 2015, Under Armour (NYSE:UA) decided to split the stock into another class of shares. The deal was signaled as a stock dividend, but the real intent of the move was to allow the CEO an ability to unload shares without losing voting power.
 Read the full article on Seeking Alpha.

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

Twitter: Unleashing Professional Broadcasts

Twitter unleashes professional broadcasts this week with both Bloomberg shows and NFL games debuting this week.
The Periscope app continues to show high viewership of top content.
The recent dip in the stock provides another opportunity to own Twitter on the verge of officially becoming a media company.
One of the biggest issues with Twitter (NYSE:TWTR) is the randomness of the content posted on the site. A user logging onto the site may or may not see the interesting posts of the day.
Read the full article on Seeking Alpha

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


Tuesday, September 13, 2016

Freeport-McMoRan: Another Yard Sale

Freeport-McMoRan agrees to dump the Deepwater Gulf of Mexico assets once coveted.
The large copper miner is again dumping assets at the lows in the commodity cycle.
The company is now positioned for any upside in copper prices.
After the close, Freeport-McMoRan (NYSE:FCX) announced the move to unload oil and gas properties to Anadarko Petroleum (NYSE:APC). The move is consistent with plans announced by the copper miner to unload assets in a goal to reduce debt levels.
Read the full article on Seeking Alpha.

Long FCX. Please read the full article on Seeking Alpha.

Will The TBA Fertilizer Company Ever Exist?

Potash Corp. and Agrium officially announced a merger agreement.
The merger of equals will provide tons of benefits to shareholders including a dominant market position in crop inputs and $500 million in synergies.
An investment in the merger deal assumes regulators will approve the top two players in the fertilizer segment forming a dominant industry player.
In a time period when numerous large scale mergers have been blocked by government regulators, the decision of Potash Corp. (NYSE:POT) and Agrium (NYSE:AGU) to go forward with a merger is interesting. Even more interesting is that a large amount of the merger presentation appeared to highlight the very benefit as having the largest scale by far in the crop input segment.
Read the full article on Seeking Alpha.

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

Wednesday, August 31, 2016

Twitter: Video Ad Sharing Will Drive Content Growth

Twitter announced a plan to for sharing video ad revenue with content creators.
The company plans to top the split offered by YouTube.
The service is late to the game, but the numbers on Periscope show the potential of video to drive growth.
Twitter (NYSE:TWTR) made the big announcement that the company will provide content creators that includes individuals the ability to share in video ads. The plan is significant as it incentivizes content creators to post on Twitter where the site can share in the video ad revenue and benefit greatly from an expanded and engaged user base.
Read the full article on Seeking Alpha. 

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



Thursday, August 25, 2016

Stratasys - Cool New 3D Printers

While HP (HPQ) continues talking about 3D printers, Stratasys (SSYS) continues to produce new printers. The new Infinite-Build & Robotic 3D Demonstrator printers are very revolutionary looking. Now can Stratasys usher in the next growth phase?






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


Tuesday, August 23, 2016

Boeing: The Big Picture

Boeing has an order issue that most manufacturing firms would gladly accept.
The massive backlog over rides any concerns regarding short-term order issues.
The large capital returns suggest the stock remains undervalued.
Any manufacturing firm lives off of orders so obsessing over monthly and quarterly numbers has some validity. A problem though occurs when investors don't view the big picture of the magnitude of the backlog.
Read the full article on Seeking Alpha. 

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


Wednesday, August 17, 2016

Home Depot: Small Raise Isn't Enough

Home Depot had a surprising quarterly report with only in line numbers.
The home improvement retailer has seen a period of strong EPS growth topped by further multiple expansion.
Several signs are starting to point towards the end of the glory days.
Home Depot (NYSE:HD) continued a recent tradition of raising EPS estimates, but the stock is trading down on the news. After years of outsized stock gains, one has to wonder if the glory days are over.
Read the full article on Seeking Alpha. 

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


Wednesday, August 10, 2016

LendingClub: Platform Investors Reengage

LendingClub reported mixed Q2 results.
The online lending platform made progress in reengaging investors that left after the founding CEO was forced out.
The stock remains appealing below $5 as the platform rebuilds.
For LendingClub (NYSE:LC), the best hope on for Q2 results were some sort of stability that the company could build on going forward. The departure of the founding-CEO left the online lending marketplace on shaky ground.
Read the full article at Seeking Alpha. 

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


Wednesday, August 3, 2016

Airline Investors Aren't Rational

The question investors need to ask is why are they sold the legacy airlines based on one number and not the complete picture. This interview with the Delta Air Lines (DAL) CEO should've had investors rushing back into the stock today. Ironically though, the stocks didn't gain until oil prices rose.




My Net Payout Yields portfolio continues to hold American Airlines Group (AAL) and United Airlines (UAL) due to massive stock buybacks. These dips in the sector are actually good for those stocks. The cheaper the better for the stock buyback plans.


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


Monday, August 1, 2016

Baidu Will Thrive After Difficult Period

Baidu reports mixed results for Q2 while the market focuses on the length of the regulatory impacts.
The stock continues to trade favorably to domestic Internet companies not facing short-term regulatory impacts.
A couple of catalysts will provide ultimate upside for the stock once this difficult period passes.
Tighter regulation in China continues to impact Baidu (NASDAQ:BIDU) at the same time that Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) are still experiencing explosive growth. The global economy continues shifting aggressively to digital and especially mobile advertising that should ultimately benefit Baidu.
Read the full article at Seeking Alpha. 

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


Tuesday, July 26, 2016

Mobileye: Small Research Budget Is A Problem

Mobileye easily surpassed Q2 analyst estimates.
Ending a partnership with Tesla Motors is a big red flag on whether Mobileye will maintain a technology lead.
The stock is richly valued, considering the profit margins are unsustainable due to the low spending levels.
The Q2 results for Mobileye (NYSE:MBLY) were phenomenal on all metrics. The assisted driver technology leader though faces some challenges going forward, especially in relation to stock value.
Read the full article on Seeking Alpha. 

Disclosure: No position

Qualcomm: More Upside

Qualcomm easily smashed FQ3 results as the market overlooked Chinese license deals.
The company has more hidden upside in the low-balled FQ4 guidance.
The stock remains incredibly cheap with a large cash balance, solid dividend, and several catalysts for revenue growth.
My investment thesis in Qualcomm (NASDAQ:QCOM) for a while predicted that the market was overplaying the negatives of the Chinese license issues and the impact of losing modem sales to the top smartphone company. The question now is whether the stock remains a buy as Qualcomm surges above $60.
Read the full article on Seeking Alpha. 

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


Friday, July 22, 2016

Chipotle: Avoid Chiptomania

Chipotle misses Q2 earnings estimates, but the restaurant concept does return to profits.
The company is seeing improving traffic trends from the Chiptopia loyalty program, but the program comes at a high cost.
The stock continues to trade at manic levels and far exceed the values of other strong restaurant concepts that don't face food safety issues.
Chipotle Mexican Grill (NYSE:CMG) remains a shell of its prior self in all ways except valuation. The company reported that Q2 earnings results missed analyst estimates, yet the stock is bouncing around in the after hours far above $400. The market is holding on to slight traffic improvements from the new loyalty program, when the reality isn't that impressive.
Read the full article on Seeking Alpha. 

Disclosure: Long ZOES


Friday, July 8, 2016

Zynga: Finally A Mobile Winner

The recent success of a mobile game ushers in a new era for Zynga.
A big mobile hit will change the market perception of the game developer.
The stock still offers a very compelling valuation despite trading at the 52-week high.
The biggest rap of Zynga (NASDAQ:ZNGA) since the peak of the Facebook (NASDAQ:FB) gaming platform was the lack of a solid mobile lineup. The game developer hired Don Mattrick to usher in the shift to mobile, but the company struggled to make the shift fast enough.

Read the full article at Seeking Alpha. 

Disclosure: Long ZNGA


Thursday, June 30, 2016

Bank Of America: Stress Free Investment

Bank Of America passed the Fed stress test with flying colors.
The bank is set to substantially increase capital returns without stressing the capital ratios.
The stock is a screaming buy that now offers decent yield support.
Based on the chart of Bank Of America (NYSE:BAC), the market repeatedly stresses over the prospects of the large financial. The stock has taken repeated hits over the last year despite relatively stable earnings and strong capital ratios.
Read the full article on Seeking Alpha


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

Monday, June 27, 2016

Citigroup: Look For Capital Return Catalyst

Citigroup passes the 2016 stress test with flying colors.
The bank stock took a huge hit due to Brexit.
The bank is perfectly aligned to announce a big capital return increase as the stock hits recent lows.
Despite strong CCAR results, Citigroup (NYSE:C) ended down over 9% and is trading near recent lows around $40 due to Brexit. In essence, the bank is doing what it can but external events continue hammering the stock whether justified or not.
Read the full article on Seeking Alpha. 

Disclosure: Long C



Saturday, June 25, 2016

Is Potash Finally Ready To Run?

Potash trades around multi-year lows as the fertilizer markets fail to meet expectations.
Belarus and Russia signal a possible cooperation that might provide some relieve to the potash market.
The stock has limited upside as the company fails to produce enough earnings to cover the dividend over the next couple of years.
After nearly five years of declining stock prices, Potash Corp. (NYSE:POT) is finally showing some signs of stability. The foundations of any rally in the stock remain shaky as the long-term supply issues aren't resolved by production cuts.
Read the full article on Seeking Alpha.

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


Friday, June 3, 2016

Unprecedented Airline Industry

Jamie Baker, JPMorgan Chase senior airline analyst, discusses how the airlines are fundamentally different now. The market continues of focus on every hurdle while the legacy stocks are extremely cheap. One can almost throw a dart at Delta Air Lines (DAL), American Airlines Group (AAL), and United Airlines (UAL) and win at these levels.

Watch him take down the CNBC host on baggage fees.





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

Monday, May 30, 2016

Next Weeks Gamepaln

Forget the Fed and focus on the companies. both Zoe's Kitchen (ZOES) and Ambarella (AMBA) are on the radar for next week. Zoe's Kitchen has held up well despite the overall weakness in most restaurant stocks and Ambarella needs to show that the company has moved on past the weakness of previous top customer GoPro (GPRO).






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

Thursday, May 26, 2016

Twitter: Why Advertising Fatigue Doesn't Matter... For Now

Signs exist that Twitter faces brand advertiser fatigue.
Other signs exist that brands are taking a pause until the 2H of the year when the social media company has better video ad products.
User growth remains the key and competition from other media products won't ultimately steal advertiser dollars if Twitter continues to grow users.
Twitter (NYSE:TWTR) hit new lows this week as analysts downgraded the stock and suggested that brand advertisers were facing fatigue with the platform. While the competition from the likes of Instagram, part of Facebook (NASDAQ:FB), and SnapChat (Private:CHAT) are a long-term concern, the advertisers will always follow user traffic.
Read the full article on Seeking Alpha.

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

Wednesday, May 25, 2016

Bullish View On Twitter

Do you agree with this bullish view on Twitter (TWTR) shared by Brian Wieser of Pivotal Research? Brian doesn't actually seem like a raging bull despite the stock hitting new 52-week lows.





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

Tuesday, May 24, 2016

PhaseRx: IPO Slump Provides Surprise Opportunity

PhaseRx completed a recent IPO backed by strong venture funds to limited fanfare.
Investors can buy the early-stage biotech at prices equal to or below where the insiders bought in the IPO.
The company offers interesting therapy candidates targeted at unmet needs with urea cycle disorders.
The stock is a high-risk biotech only appropriate for investors willing to assume the risk that these therapies never reach the market.
The recent slump in the IPO market and lack of attention to the sector typically provides opportunity when new stocks hit the market. The market has a history of over- and under-investing in different markets, from private companies to IPOs.
Read the full article on Seeking Alpha.
        Disclosure: No positions mentioned. Please read the disclaimer page for more details.