Thursday, March 17, 2016

FedEx: Fantastic Bargain

FedEx smashed FQ3 estimates on solid volumes and higher margins.
The stock sold off on unwarranted expectations that Amazon could somehow disrupt the delivery sector so quickly.
The stock is a bargain at the current valuation based on historical prices.
Despite ongoing worries about a future entrant into the delivery sector, FedEx (NYSE:FDX) continues to produce solid results that aren't impacted by competitive threats. The stock price though suggests a big impact is on the way from Amazon.com (NASDAQ:AMZN).
Read the full article on Seeking Alpha. 

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


Saturday, March 12, 2016

Southwest Airlines: Don't Read Too Much Into Capacity Growth

Southwest Airlines reported astonishing capacity growth for February.
The fears about capacity growth are overblown.
The stock is a buy as it trades favorably compared to other stocks in the transport sector.
The market sold off most of the airline stocks midweek due to the traffic reports for February showing astonishing capacity growth. The combination of capacity growth and lower revenue metrics continues to scare the market that the airline industry of the past will return.
Read the full article at Seeking Alpha.

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

Thursday, March 10, 2016

Chevron - Another Missed Opportunity

Chevron affirmed production goals and updated capital spending targets for 2017 and 2018.
The company missed an opportunity to set production targets reflective of the current market reality.
The plan to cover dividends in 2017 from cash flows remains in doubt.
With Analyst Day today, Chevron (NYSE:CVX) had another opportunity to take a step forward by making production cuts or at least making contingent plans for reducing production. The energy markets are over supplied with product and Goldman Sachs is warning that the recent rally has no merits. Chevron though isn't heeding this warning.
Read the full article at Seeking Alpha. 

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

Is Viacom Really An Ailing Company?

Viacom reported a mixed FQ1 earnings report with EPS in line with estimates.
The stock plunged to new multi-year lows despite some positive turnaround signs.
The company trades at an incredibly low multiple of cash flows, and now offers a substantial 5% dividend with strong coverage.
News headlines, including this one from Fortune for the FQ1 earnings report of Viacom (NASDAQ:VIA) (NASDAQ:VIAB), included the message that the company is somehow ailing. With all of the stress in energy companies and bank stocks, one has to wonder if an extremely profitable media company is somehow sick.
 Read the full article on Seeking Alpha.

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

InvenSense: Not All Apple And Samsung

InvenSense trades near lows as the smartphone market weakens and primary customers shift premium focus.
Opportunity outside of smartphones continues to provide a potential catalyst for the next rally.
The stock is too cheap with an enterprise value dipping below $600 million.
Ever since going public at the end of 2011, InvenSense (NYSE:INVN) has seen their stock spend a considerable amount of time retesting the $10 level. The motion sensing technology leader continues to struggle to move from a level of developing a market into consistent and profitable growth due to binary decisions with big customers.
 Read the full article at Seeking Alpha.

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

Wednesday, March 9, 2016

United Airlines: Take Advantage Of Ignored Capital Returns

United Airlines is generally seen as the weakest legacy airline highlighted by the activist moves.
The large stock buybacks isn't accurately reflected in EPS estimates and stock valuation.
The recommendation is to use any dips to load up on the airline.
Despite generally considered the worst of the legacy airlines further highlighted by the battle over the BOD, United Airlines (NYSE:UAL) is now a cash flow machine. The airline even announced a bigger intention to repurchase shares as the stock plunged during Q1.
 Read the full article on Seeking Alpha.


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

 

Tuesday, March 8, 2016

Twitter: No Respect

Similar to other growth stocks, Twitter bounced sharply off recent lows.
The stock gets no respect in comparison to the metrics and valuation assigned to other social media companies.
TWTR remains an attractive buy at current levels.
The more one reviews the results produced by Twitter (NYSE:TWTR), the more obvious that the social media company doesn't get due respect. The company has clear issues with growing the platform beyond 300 million active users, but it doesn't alter the successful business and the ignored positives.
Read the full article on Seeking Alpha. 

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


Shake Shack: Let's Get Real About Valuation

Shake Shack reported Q4 numbers that beat estimates, but the numbers didn't surpass the high-end estimates. .
The high comp sales growth that hit 13.3% during 2015 will cause a big headwind for 2016 growth. .
Investors still need to get real on the valuation multiples paid for the stock. .
After the close, Shake Shack (NYSE:SHAK) reported that Q4 result surpassed analyst estimates. The beat was hardly surprising considering the top analysts on the stock at Estimize predicted an extremely positive earnings outcome. The actual surprise is that the beat was a minimal $0.01 versus the typical beat by far larger levels.
 Read the full article on Seeking Alpha.

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

Monday, March 7, 2016

Habit Restaurants: Market Leader At A Discount

Habit Restaurants trades toward the lows following market disappointment with comp sales guidance.
The company remains a leader in the premium burger category primed for long-term store expansion.
The stock is a bargain trading at a discount to other top restaurant chains.
After the recent market rebound, Habit Restaurants (NASDAQ:HABT) offers one of the few stocks still trading close to the lows. The premium burger chain disappointed the market with discussions on the earnings call around promotional activity in the sector and higher labor costs.
Read the full article at Seeking Alpha.


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

Friday, March 4, 2016

Ambarella: Back To The Lows

Ambarella guided down FQ1 numbers due to ongoing weakness at a key customer.
The chip supplier continues to participate in growth in new camera markets.
The stock is likely to retest recent lows providing the ultimate buying opportunity prior to a rebound in the sports camera market.
As with most speculative stocks this year, Ambarella (NASDAQ:AMBA) traded to new lows in February before a big rally the last couple of weeks. The rally isn't likely to last following FQ1 guidance issued with the FQ4 earnings report.
 Read the full article at Seeking Alpha.

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

Thursday, March 3, 2016

Ally Financial: Less Risky Than Previously Believed

Ally Financial now trades below the lows of 2015.
The financial doesn't lend to the high-risk drivers as presented by the media.
Ally appears on pace to grow TBV while the market applies an unwarranted discount to book value.
Typical of most financials, Ally Financial (NYSE:ALLY) trades far below the recent highs. The financial spun off from General Motors (NYSE:GM) now even trades far below book value.
The auto financing bank remains in the process of moving away from GM and has plenty of growth opportunities. The rebound to nearly $18 still leaves the stock below levels where the stock traded all of 2015 providing plenty of opportunity.
 Read the full article on Seeking Alpha.

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

Stratasys: Is The Rebound For Real?

Stratasys smashed Q4 EPS estimates providing another sign of a bottom in the 3-D printing sector.
Despite a big rally off the lows, the stock isn't expensive on valuation multiples.
The recommendation is to buy Stratasys on any dips as the recent rally is stretched.
After Thursday's rally, Stratasys (NASDAQ:SSYS) is only back to the levels where the stock started the year. In fact, my previous research discussed how the 3-D printer manufacturer was attractive at these similar levels in November though the stock would likely provide a better buying opportunity at the start of this year.
 Read the full article at Seeking Alpha.

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

Net Payout Yields - March Update

After a weak end of 2015, the Net Payout Yields model on Covestor has seen a big rebound in 2016. After a couple of days in March, the model is up 0.6% for the year while the SP500 is down 2.8%.



No trades took place in February with the last trade being selling Lowe's (LOW) and buying Qualcomm (QCOM) in early January. As Lowe's downsized buybacks and Qualcomm loaded up on buybacks with the stock selling off, the later became more attractive due to a higher net payout yield.

Please contact Stone Fox Capital at info@stonefoxcapital.com or contact Covestor to invest.



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



Stratasys: Is The Rebound For Real?


  • Stratasys smashed Q4 EPS estimates providing another sign of a bottom in the 3-D printing sector.
  • Despite a big rally off the lows, the stock isn't expensive on valuation multiples.
  • The recommendation is to buy Stratasys on any dips as the recent rally is stretched.

After Thursday's rally, Stratasys (NASDAQ:SSYS) is only back to the levels where the stock started the year. In fact, my previous research discussed how the 3-D printer manufacturer was attractive at these similar levels in November though the stock would likely provide a better buying opportunity at the start of this year.

Read the full article in Seeking Alpha. 


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



Zoe's Kitchen: Shorts Try Too Hard

Zoe's Kitchen surged after easily surpassing Q4 targets.
The Mediterranean-inspired concept remains a long-term growth story that attracts a lot of shorts for the wrong reasons.
My recommendation is to not chase the stock, which is already trading up at $36.
Despite consistently strong numbers and a reasonable valuation, Zoe's Kitchen (NYSE:ZOES)attracts a high number of shorts. The short theories including this latest one always claim margins are too low or the comp sales aren't high enough while ignoring the prime reason for any short falls.
 Read the full article on Seeking Alpha.


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

Wednesday, March 2, 2016

OnDeck Capital: Highly Misunderstood

OnDeck Capital remains a fast growing fintech with revenue growth projected at 30% for the next few years.
The stock trades at the lows due to a misunderstanding over the shifting impact of selling loans to institutional investors.
The recommendation is to scoop up shares bouncing off all-time lows.
The general consensus following the Q4 earnings report was that OnDeck Capital (NYSE:ONDK) provided weak guidance for Q1. The market though appears highly confused regarding the shifting revenues from the marketplace.
 Read the full article on Seeking Alpha.

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

Tuesday, March 1, 2016

Splunk: Follow The Momentum

The positive reaction to FQ4 results is a sign of turning momentum on a beat down stock.
The strong 2016 guidance along with the lower stock price reduced valuation multiples to more reasonable long-term levels.
Splunk is finally a long-term buy even for those missing the recent bottom.
Hopefully investors learned a lesson by the stock reaction of Splunk (SPLK) after the last two earnings reports. Despite generally strong results for both quarters, the stock had completely opposite moves.
 Read the full article on Seeking Alpha.

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