Saturday, April 30, 2016

NXP Semi: Minor Disappointment With Hidden Upside

NXP Semi reported solid Q1 numbers that were a minor disappointment from original post merger expectations.
The company is aggressively buying stock again despite forecasts that aren't so positive.
The stock is a bargain with some hints that the company is low-balling the upside potential.
While NXP Semiconductors (NASDAQ:NXPI) generated Q1 results that exceeded analyst estimates, the general tone of the results were a minor disappointment. At the time of the merger, analysts expected significantly higher numbers in 2016 and beyond.
Read the full article on Seeking Alpha. 

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


ConocoPhillips - Cash Flow Neutral Isn't Bullish

ConocoPhillips reported a large Q1 loss, but the market was impressed with the earnings beat. 
The independent E&P is still struggling towards reaching cash flow neutral as the debt load soars. 
The company lacks a credible plan for lower oil prices with a focus on flat production and keeping a dividend. 
My last article remained neutral on ConocoPhillips (NYSE:COP) from a prior bearish stance throughout 2015, as the independent oil exploration firm has cut cash outlays to the point that a future cash crunch wasn't likely. Since the original neutral call in early February, oil prices and hence the stock have rallied, providing big returns for those willing to take the risk.
Read the full article at Seeking Alpha. 

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


Thursday, April 28, 2016

Freeport-McMoRan: The Company Is Proving Its Mettle

Freeport-McMoRan reported mixed Q1 results.
The copper miner made huge strides toward becoming free cash flow positive as the oil and gas division becomes less of a drag.
The stock is likely heading higher as the cash flow position turns very positive heading into 2017.
The investment theme at the lows in the stock was that Freeport-McMoRan (NYSE:FCX) was in a substantially better cash flow position than predicted by the stock price. The solid Q1 results confirm the simple path to reach positive free cash flow this year.
Read the full article on Seeking Alpha.

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

MasterCard: The Struggle To Break $100

MasterCard reported mixed Q1 results on surging costs.
The stock continues struggling to trade above $100 as surging incentives stall earnings growth.
The risk remains to the downside though the history is that investors are willing to overpay for the sector.
Before the open, MasterCard (NYSE:MA) reported that Q1 earnings declined from last year but beat analyst estimates. The reason to like the company remains intact, but the reason to own the stock is still questionable.
Read the full article on Seeking Alpha.

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

Baker Hughes: A Jumbled Mess Ultimately Presents Opportunity

Baker Hughes reported highly confusing Q1 results.
The oilfield services company remains constrained by the pending merger with Halliburton.
The solid balance sheet and termination fee will ultimately make the stock a very strong buy.
Due to the lingering and possibly failed merger with Halliburton (NYSE:HAL)Baker Hughes (NYSE:BHI) is a jumbled mess. Q1 resultsconfirmed this position, but the stock rallied anyway following the bad news.
Read the full article on Seeking Alpha. 

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


Wednesday, April 27, 2016

AT&T: More Signs The Rally Is Over

AT&T easily slid past analyst EPS estimates that failed to incorporate merger benefits.
The wireless giant saw a few negative trends surface that might cap future growth.
The stock is likely to plateau at the current level where shareholders collect a 5% dividend yield while waiting for the next catalyst.
Q1 results from AT&T (NYSE:T) back up my investment thesis that the company would continue to push EPS towards $3 on the backs of the DirecTV merger. The theory back when the stock traded around $32 throughout 2014 and most of 2015 was that the stock was extremely cheap with plenty of catalysts. Now with AT&T trading at $38, the valuation equation isn't as clear with user growth slowing and synergies somewhat in place.
Read the full article on Seeking Alpha.

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

Zions Earnings Remain Robust

Zions Bancorp missed analyst estimates for Q1, yet earnings rose YoY.
The bank continues to face higher credit losses in the energy sector, but higher NII is allowing the company to thrive.
Despite the recent rally, the regional bank stock still trades below book value.
Over the last year, Zions Bancorporation (NASDAQ:ZION) has provided a good gauge for regional banks and the general impact of energy loans on the financial sector. On Monday, the bank again provided an update on the energy sector after reporting Q1 earnings that could provide clues for other banks and the market in general.
 Read the full article on Seeking Alpha.

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

Tuesday, April 26, 2016

Will Alkaline Water Company Finally Overcome Its Acidic Past?

Alkaline Water Company reported strong sales growth for March and positive financial expectations for the current quarter.
The company is riding a trend away from acidic beverages toward those high in pH.
The past and recent dilution of investors has left a bad taste with the market.
The recent retail agreements could finally reward shareholders as the company is on pace to reach cash flow neutral.
After years of fits and starts, Alkaline Water Company (OTCQB:WTER) is finally making some great headwinds into the growth phase despite missing original targets. The stock remains a high risk with lots of skepticism in the market, but a unique opportunity exists.
Read the full article on Seeking Alpha.

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

American Airlines: Insulated Bargain

American Airlines generated huge Q1 pre-tax profits while the market focuses on PRASM declines.
The airline continues to dramatically reduce the share count as the low stock valuation greatly enhances any share repurchases.
The stock is insulated from a large earnings decline at this valuation.
On Friday, American Airlines Group (NASDAQ:AAL) dropped 4.5% after reporting Q1 earnings. The market again appears obsessively focused on short-term PRASM (passenger revenue per available seat mile) issues and missing the big picture.
 Read the full article on Seeking Alpha.

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

Monday, April 25, 2016

Visa: No Incentive To Own

Visa reported FQ2 earnings that repeated a trend of slower-than-expected growth.
The payments processor faces negative trends of brands, requiring higher incentives in contract negotiations along with delayed international expansion.
The stock remains too expensive with stock gains on the backs of multiple expansion and not earnings growth.
Quarter after quarter, Visa (NYSE:V) churns out single-digit growth metrics. The market though values the payments processor at high-growth multiples, questioning the reasons for chasing the stock.
Read the full article on Seeking Alpha.

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

Friday, April 22, 2016

Verizon: Don't Get Too Negative

Verizon reported in-line Q1 numbers that provided limited catalysts for a stock rebound.
The net customer numbers in wireless and FiOS support that the prime business segment is reaching peak levels.
The stock becomes attractive on further dips as the P/E multiple and dividend yield offer solid support.
My investment thesis starting toward the end of March was that Verizon Communications (NYSE:VZ) likely would trade weak for a period of time. The combination of the big rally from $44 to $54 in a few months and the bidding process for Yahoo (NASDAQ:YHOO) weren't agreeable to higher stock prices. The recent union strike only added fuel to the pullback while the following strategies for growth are going to take time.
 Read the full article on Seeking Alpha.

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

Alphabet: Sunk By Hidden Costs

Alphabet reported Q1 results that highly disappointed Wall Street.
The Internet search giant generated amazing revenue growth and operating margins considering the currency headwinds.
The recommendation is to own the stock on any big dips due to some hidden costs that sunk the quarterly results.
After the close Thursday, Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) sank as the company widely missed analyst targets on the top and bottom line. Looking at the numbers though, some hidden costs appear to be impacting the numbers without the attention of the market.
Read the full article on Seeking Alpha.
 Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Thursday, April 21, 2016

Qualcomm: More Noise To Ignore

The quarterly results for Qualcomm include lots of noise including typical weak guidance for the wireless chip giant.
The company continues to use the strong balance sheet to reward shareholders including the recent 10% dividend hike.
The stock remains a buy at $50 with several business related catalysts supported on the downside by strong stock buybacks.
After the close on Wednesday, Qualcomm (NASDAQ:QCOM) did the standard beat and guide down for the next quarter. The stock traded down back to the key $50 threshold, but investors shouldn't necessarily lock onto the claimed weak guidance.
Read the full article on Seeking Alpha.

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

Wednesday, April 20, 2016

Williams: Life Without Energy Transfer Equity

Williams' investors need to start considering the financial picture of the company on a standalone basis.
The news flow regarding the merger with ETE suggests both sides want to terminate the deal without the related party paying termination fees.
Williams is intriguing with the partnership not requiring an equity raise this year to fund the reduced capital plan.
The latest news seems to confirm that Energy Transfer Equity (NYSE:ETE) and Williams Cos. (NYSE:WMB) are doing everything possible to terminate the merger. In those regards, investors need to shift the mindset back to valuing Williams as a standalone entity with a majority position in Williams Partners (NYSE:WPZ).
 Read the full article on Seeking Alpha.
   Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Johnson & Johnson: Don't Get Too Excited

Johnson & Johnson reported generally good Q1 results though sales continue to struggle due to currency impacts.
The stock rally has the yields shrinking to levels usually signaling a top.
The current valuation of Johnson & Johnson provides limited upside and the company isn't signaling any reason to own the stock at these levels.
Before the open, Johnson & Johnson (NYSE:JNJ) reported Q1 results that generally excited the market and sent the stock to new highs. The numbers though weren't that great and investors might need to curb there enthusiasm.
Read the full article on Seeking Alpha.

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

Tuesday, April 19, 2016

Verizon: Dump Bid For Yahoo

Verizon continues making progress with building new media assets while wasting time on a bid with old media Yahoo.
The latest earnings results from Yahoo show a business in secular decline that keeps getting worse.
Verizon's stock will continue trading weak due to the ongoing bid for Yahoo and the union strike.
The latest news has Verizon Communications (NYSE:VZ) as the likely top bidder for old media Yahoo (NASDAQ:YHOO) while buying a new media company. After the close Tuesday, Yahoo reported Q1 results that again question why Verizon wants to buy the core business of the company that's in big-time decline.
Read the full article on Seeking Alpha.

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

Yelp: Will The EU Help?

Yelp remains an attractively priced stock as the market got too negative on its prospects.
The EU could sanction Google, and that might provide relief for Yelp.
The recommendation is to own the stock as international remains a greenfield with any growth providing upside to Yelp.
For a long time, Yelp (NYSE:YELP) has struggled to gain traction in international markets as Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) utilizes search and the mobile operating system to steer users toward Google reviews. The latest news continues to suggest the EU squeezing Google to open up their networks.
Read the full article on Seeking Alpha. 

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

Monday, April 18, 2016

IBM: Transformation Beating Skeptics

IBM reported solid Q1 numbers as the company continues a transformation to analytics, cloud and mobile.
The market focuses too much on toppling numbers, missing the huge cash flow benefits to shareholders.
Ignore the skeptics and use any dips caused by the tax benefits as an opportunity to buy a stock with a high yield in the middle of a transformation.
The skeptics keep telling investors to ignore the results at IBM (NYSE:IBM) as the company is dying a slow death. Barclays even slapped a $125 target on the stock prior to earnings, suggesting the recent rally would dissipate on weak revenues.
Read the full article on Seeking Alpha.

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

Delta Air Lines: Imperfectly Cheap

Delta Air Lines posted another solid quarter in Q1.
The earnings call did little to eliminate the concerns of Wall Street, keeping the stock back.
The company faces a ton of variables making a valuation analysis imperfect, but Delta Air Lines remains extremely cheap.
The quarterly results for Delta Air Lines (NYSE:DAL) were solid as usual. The airline continued a string of record results going back three years now.
Read the full article on Seeking Alpha.

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

Sunday, April 17, 2016

Ensco: 2 Offerings Make A Right

Ensco completed a surprise secondary, sending the stock down sharply.
The offshore driller continues to easily surpass estimates due to strong operations during the severe downturn.
The company has improved the balance sheet after completing a below-market debt offering making the stock trading far below book value appealing to new investors.
In an interesting move, Ensco (NYSE:ESV) placed a secondary offering to raise cash to cover corporate needs during this downturn in offshore drilling. The offering is somewhat peculiar considering analysts forecast the company remaining profitable even in 2017, but the news follows a similar amount spent to repurchase debt at a large discount.
Read the full article at Seeking Alpha. 

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



Saturday, April 16, 2016

Verizon: Is The Union Strike A Threat?

Two major unions go on strike against Verizon disrupting new service installations.
At this point, the strike is mainly isolated to the wireline business insulating the investment impact.
Verizon will continue trading weak as the strike and the Yahoo bid impact shareholder sentiment.
Due to the market focusing on the Yahoo (NASDAQ:YHOO) bid, Verizon Communications (NYSE:VZ) isn't getting much attention regarding the union strike. The Communications Workers of America and the International Brotherhood of Electrical Workers went on strike on Wednesday and even had Democratic presidential candidate Bernie Sanders attend a rally.
Read the full article on Seeking Alpha. 

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


Friday, April 15, 2016

Verizon: Is The Union Strike A Threat?

Two major unions go on strike against Verizon disrupting new service installations.
At this point, the strike is mainly isolated to the wireline business insulating the investment impact.
Verizon will continue trading weak as the strike and the Yahoo bid impact shareholder sentiment.
Due to the market focusing on the Yahoo (NASDAQ:YHOO) bid, Verizon Communications (NYSE:VZ) isn't getting much attention regarding the union strike. The Communications Workers of America and the International Brotherhood of Electrical Workers went on strike on Wednesday and even had Democratic presidential candidate Bernie Sanders attend a rally.
 Read the full article on Seeking Alpha.

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

Bank Of America: Nothing To Fear Here

Bank of America survived the weak Q1 with solid earnings and growth in TBV.
The bank continues to protect the downside while offering a big catalyst for future NII growth.
The stock is incredibly cheap as the market fears a repeat of the last crisis that isn't in the cards.
The quarterly results for Bank of America (NYSE:BAC) were not perfect, but the valuation doesn't require spotless numbers. The large financial continues to trade below book value though the number grew nearly 10% for the year.
Read the full article on Seeking Alpha.

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

Chevron: Curious Rally

Chevron now trades at the highs in nearly a year.
The company still needs a substantial rally in oil prices in order to meet capital spending and dividend targets.
The rebound in the stock price far exceeds the slight rebound in the price of oil.
The latest rally in the energy firms is very curious. A stock like Chevron (NYSE:CVX) now trades at the highs going back for nearly a year while oil is only creeping above year-end lows.
 Read the full article on Seeking Alpha.

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