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Showing posts from 2017

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Amazon: Happy Loss Season

Amazon released strong metrics for the holiday season. The online retail giant again highlighted reasons that strong sales are likely to hit the bottom line. The stock likely continues rallying with sales growth, but the company is in a precarious financial position. To start the trading week,  Amazon  ( AMZN ) released  robust holiday shopping numbers . From strong device sales to impressive membership trials, the e-commerce giant saw a not so surprising big boost in sales. Read the full article on Seeking Alpha.  Disclosure: No position. Please read the disclaimer page for more details. 

International Blockchain Machines

IBM has longed focused on blockchain technology as a distributed transaction ledger of the future. The company continues to expand partnerships and develop a robust platform for enterprise customers. The tech giant is favorably valued for multiple expansion if blockchain becomes the hot technology of 2018. With all of the hype over cryptocurrencies and blockchain in the last month,  International Business Machines  ( IBM ) could make the name change to International Blockchain Machines and see a significant pop in the stock. Such a name change wouldn't be absolutely misplaced either unlike some of the small caps such as  Riot Blockchain  ( RIOT ) that recently made such moves and saw substantial stock gains in a matter of days, if not hours. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please read the disclaimer page for more details. 

Glu Mobile: Taylor Swift Is Only A Bonus

Glu Mobile released the long anticipated Taylor Swift app. The current value is justified by existing game lineup, especially the ongoing success of Design Home. Success of the new celebrity app would lead to significant multiple expansion. The long awaited release of  The Swift Life  by  Glu Mobile  ( GLUU ) has the investor base anxious. A big hit would no doubt send the stock soaring while another celebrity flop could sending the stock crashing. Read the full article on Seeking Alpha.  Disclosure: Long GLUU. Please read the disclaimer page for more details. 

Snap: Exclusive Engagement Isn't Enough

New report shows Snap has an exclusive user base. Snap must prove the business model though plenty of revenue upside exists with monetizing existing user base. Valuation is extremely stretched despite the opportunity to grow revenues due to unconstrained operating expenses. A new report backs the thesis that  Snap  ( SNAP ) has compelling user engagement that remains sticky. Unfortunately, user engagement is only one part of an investable business model that  my research  has questioned since the IPO. Read the full article on Seeking Alpha.  Disclosure: Long TWTR. Please review the disclaimer page for more details. 

LendingClub: Some Perspective

LendingClub plunged following disappointing Q4 guidance. Most of the impacts are short-term adjustments to the credit model or temporary market conditions. The fintech guided to record revenues for Q4 and expects further growth in 2018. LendingClub  ( LC ) plunged 16% in the first day of trading following  Q3 results after taking a hit leading into earnings. Despite record revenues, the market was highly displeased with projections even considering a highly attractive valuation. Read the full article on Seeking Alpha.  Disclosure: Long LC. Please review the disclaimer page for more details. 

Disney: Predictable Decline

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The FQ4 results for Disney ( DIS ) were predictably weak. The ongoing weakness in cable networks was hidden last year by the strength of movies and the media giant is now getting hit by weaknesses in both segments. Incredibly though, the stock still trades near $100 and at levels that mostly exceed the price last year. Is now really the time to own Disney as the company embarks on a digital shift? Disney missed both top and bottom line analyst estimates in a sign of how bad the times are now. The media giant has missed revenue estimates for five consecutive quarters, but the company didn't previous miss EPS forecasts. Disney faces multiple issues that can't offset the positive momentum from their parks and resorts division.

Sprint: Not Making A Good Case

Sprint reports improving FQ2 results. The highlights and CEO message aren't supportive of regulatory approval of a merger with T-Mobile. Net debt position remains a problem for stock gains absent a merger and industry consolidation. Along with  FQ2 results ,  Sprint  ( S ) released data points that aren't supportive of an industry needing consolidation. My  investment thesis  continues to suggest the stock isn't worth much more than the current price based on the results and the reported deal on the table with  T-Mobile  ( TMUS ). Read the full article at Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

GrubHub: No Competition Fears Here

GrubHub surges following strong revenue guidance for Q4. The market appears to misunderstand the inclusion of Eat24 numbers into the estimates. Solid financial metrics support the effective handling of competition. Stock valuation remains a question as EBITDA will trail sales growth in 2018. In no real surprise,  GrubHub  ( GRUB ) easily fought off competition during Q3. As the company integrates recent acquisitions, the bigger issue is valuation now that the online food order and delivery service added debt to the balance sheet and boosted sales. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Chipotle: $250 Is A Legitimate Target Now

Chipotle dips below $300 following highly disappointing Q3 results. The negative EPS trend still signals to avoid the stock. The downward shift in store opening growth will further impact the long-term potential. After the close,  Chipotle Mexican Grill  ( CMG ) reported highly disappointing  Q3 results . The numbers were so bad that my  previous article  questioned whether $300 would hold and now the focus can shift to the $250 level. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

AT&T: Pay-TV Problems Mount

AT&T warned on Q3 results due to hurricanes. The company provided a secondary nugget that the pay-TV business faced even greater cord-cutting pressure. Investors should expect 2018 EPS cuts. Hidden within a  warning  for Q3 earnings,  AT&T  ( T ) detailed more weakness in the pay-TV segment. My research previously  warned investors  of troubles ahead as the NFL protests would only further hit a segment in decline. Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Citigroup: Don't Fight Capital Returns Tailwinds

Citigroup reported solid Q3 results. Capital returns provided strong tailwinds for the stock. Citigroup offers the best yield in the large financial sector. Prior to the open,  Citigroup  ( C ) reported another quarter of  solid earnings , backing up my long-held  investment thesis  that the financial was a huge value. During the quarter, the large financial ramped up capital returns, providing a large tailwind that the market keeps fighting. Read the full article at Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

Facebook: Does The Platform Really Face A Real Russian Threat?

Facebook provided Congress with data on Russian accounts that advertised on the platform. The scope and impact of the Russian ads are very minimal. The costs of additional ad reviewers is easily absorbed by the platform. Facebook  (NASDAQ: FB ) continues to face government and potentially regulatory pressure from allowing Russian ads that attempted to influence the 2016 U.S. elections. The stock has struggled to gain momentum in the last couple of months, making one question whether trouble is looming ahead. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Twitter: Seasonal Trends

Twitter introduced the concept of seasonal trends due to flat sequential MAUs in Q2. Signs emerge that some minor seasonal trends do exist. DAUs remain the key metric. The big issue with the Q2 earnings report that sent  Twitter  (NYSE: TWTR ) back down towards the yearly lows was weak user growth. The social media company had made decent progress in reviving user growth, and the market wasn't pleased with the flat sequential MAUs. Read the full article on Seeking Alpha.  Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Frontier: Reverse Split Fears Overblown

Frontier Communications completed a reverse split on Monday. The stock has been absolutely beat up due to this move and a dividend cut. The market needs to focus back on cash flows. Back in May,  my thought  was that  Frontier Communications  ( FTR ) was attractively priced below $1.50. My major concern in owning the telecom stock was a lingering shakeout from the dividend cut and reverse split that has the stock hitting new lows now. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please review the disclaimer page for more details. 

Wells Fargo: Weakest Capital Return Hike For Good Reason

Wells Fargo hiked capital return plans by over $3 billion. The large bank had the smallest hike of the large banks. The valuation thesis along with lingering fraud headwinds limit the relative value of the stock. At a time when most of the large banks approved massive increases to capital returns,  Wells Fargo  ( WFC ) had a not so surprising limited bump in  capital plans . The end result is the large bank that use to lead the sector in capital returns is now turning into a laggard confirming by previous  investment thesis . Read the full article on Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

Citigroup: No Stress Ahead

Citigroup passed the Fed stress test with flying colors. The large financial should announce a massive increase to capital returns this week. The stock remains cheap trading below tangible book value. Since last discussing the expectations for capital returns and specifically a dividend hike at  Citigroup  ( C ), the CFO provided some further details on expectations and the Fed stress tests results were released. The data points pivot towards some big capital return plans. Read the full article at Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

The Real Reason Bob Stoops Is Retiring

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After 18 seasons as the head coach at OU, Bob Stoops announced his surprise retirement last year. The speculation for the sudden retirement goes from health issues to wanting to spend more time with his sons that are seniors at Norman North HS.

CVS Health: Is The Amazon Threat Realistic?

Amazon continues working on initiatives to explore the pharmacy sector. CVS Health trades near multi-year lows in part due to the Amazon threat. The net payout yields offer a positive signal if the e-commerce giant isn't a problem. CVS Health  (NYSE: CVS ) continues to trade down towards multi-year lows as weak earnings and fears of  Amazon  (NASDAQ: AMZN ) entering the pharmacy space have weighed on the stock. The company though is raking in billions in free cash flow and returning that cash to shareholders, making the stock appealing on several metrics. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Under Armour: Can Curry 4 Make A Difference?

Under Armour is rallying due to positive data points from Steph Curry and his latest shoe. The stock suffered partly due to the failure of the Curry 3. Footwear remains a category where the company has tremendous growth opportunities, though the on-the-court numbers don't support a big uptick from Curry. Over the last couple of days,  Under Armour  (NYSE: UA )(NYSE: UAA ) has gotten a bid from excitement surrounding Steph Curry. The combination of his team on the verge of another championship and some excitement surrounding the launch of his new shoes in the fall naturally has investors perking up to the possibilities that the athletic apparel company has a bright future. Read the full article on Seeking Alpha.  Disclosure: Long UA. Please review the disclaimer page for more details. 

Zynga: Game Tailwinds

The continual shift to mobile makes Zynga an attractive stock. The soft launch of a previous hit web game left for dead provides a catalyst for the stock. The strategy to recapture lost users of the decade could benefit operating metrics and boost the stock. The biggest issue with  Zynga  (NASDAQ: ZNGA ) over the last couple of years was the shift away from online platforms. All of the success on mobile was mostly hidden by the declines in revenues and users from games on  Facebook  (NASDAQ: FB ) and other web platforms. Read the full article on Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

Citigroup: Expect Another Big Dividend Hike To Move Stock

Citigroup has recently held up better than other large financials. A big dividend hike at the last CCAR was a catalyst for the stock. The large financial appears best positioned to hike the capital return this year, providing a catalyst for the cheap stock. Despite obvious value and still trading below book value,  Citigroup  (NYSE: C ) has struggled to move beyond $62. The large financial hasn't been hit by the general weakness in the sector, though one shouldn't see that as reason for the stock to not rally. Read the full article on Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

Albert Pujols: Why You Don't Sign A 32-Year Old To A Mega Contract

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As everybody celebrates that Albert Pujols joined the 600 home run club, the real news is the ultimate failure of the Los Angeles Angels during his tenure with that team. Back before the 2012 season, LAA signed Pujols to a mega 10-year, $240 million contract based on his massive success in St. Louis. He led the Cardinals to 3 World Series appearances, winning both in 2006 and 2011. His stats were phenomenal during that time period. Pujols was nearly a .330 hitter in STL and regularly led the league in key offensive categories like SLG and OPS due to his high batting average and power numbers.

BlackBerry: About That $20 Target

Citron Research published a $20 price target on BlackBerry. The stock is already up significantly off the recent lows and trades at a market multiple for a growth company. BlackBerry has upside potential on momentum, but the stock lacks the multiple expansion of Nvidia. Citron Research published a  report  placing a $20 target on  BlackBerry (NASDAQ: BBRY ). The opinion was shaped on the back of the incredible gains of  Nvidia  (NASDAQ: NVDA ) as the market made a sea change rerating of the stock, based on limited revenue growth and the recent buyout of  Mobileye (NYSE: MBLY ) at a lofty valuation. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Glu Mobile: New Era

Glu Mobile reported strong Q1 bookings and increased guidance for the year. The new CEO is correctly focused on building live operations for existing platform games to further reduce the need for a mega hit. The stock remains extremely cheap despite a recent 30% surge in price. The recent  Q1 results  for  Glu Mobile  (NASDAQ: GLUU ) were a huge departure from past quarterly reports. The new CEO actually delivered on smashing booking forecasts without having a mega hit for a one-time bump to results making my  investment thesis  for buying the stock at $2. Read the full article at Seeking Alpha.  Disclosure: Long GLUU. Please read the disclaimer page for more details. 

Twitter: Great Interview With Noto

Twitter (TWTR) COO Anthony Noto sat down with Emily Chang to discuss the new live video strategy. Definitely worth a listen as the social-media giant makes a big turnaround. Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Baidu: Embrace The Growth

Baidu reported Q1 results that beat estimates. The company returned to revenue growth after two quarters of declines following the new Internet advertising laws in China. The valuation gap with Alphabet has grown incredibly large suggesting the soon-to-be faster growing Baidu has plenty of upside. The  Q1 '17 results  prove that  Baidu  (NASDAQ: BIDU ) is finally emerging from a nearly yearlong bout with tighter Internet advertising regulations in China. The requirement to verify online marketing accounts set the business back nearly a year. Please see the full article on Seeking Alpha.  Disclosure: Long Baidu. Please see the disclosure page for more details. 

PayPal: About That Huge Buyback Plan

PayPal reported another solid quarter for Q1. The digital payments company produces consistently strong and growing free cash flows. The stock offers a reasonable value back by huge stock buyback plans. My  last recommendation  on  PayPal Holdings  (NASDAQ: PYPL ) over a year ago was to buy the digital payments stock alongside a $2 billion share buyback. After a big rally, the company still signals value even with the market cap soaring beyond $55 billion. Please see the full article on Seeking Alpha. Disclosure: No position. Please review the disclaimer page for more details. 

Wells Fargo: Is That What You Call Success?

Wells Fargo reported Q4 results that missed analyst estimates. The large bank still trades at the high end of sector valuations, despite a relative underperformance over the last three months. Investors should remember that success is all relative. Before the open on Friday,  Wells Fargo  (NYSE: WFC ) reported  quarterly earnings  along with a group of large financials. The troubled bank actually missed estimates while the sector had generally blowout numbers. Read the full article on Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

CenturyLink: The 9% Dividend Steal

CenturyLink ended 2016 down at the lows, as the market was unimpressed with the company's decision to purchase Level 3. The 9% dividend appears easily supported after the deal closes, based on free cash flow analysis. A recent analyst price target provides ample upside that is a bonus with the large dividend. CenturyLink  (NYSE: CTL ) ended 2016 in the dumps. The market didn't fondly view the company's proposed merger with  Level 3 Communications (NASDAQ: LVLT ), sending the stock down to the lows from the start of the year. Even after the 6.6% gain on the first trading day of 2017, CenturyLink still offers a nearly 9% dividend yield. Should investors rush into the stock at around $25 per share? Please read the full article on Seeking Alpha.  Disclosure: Long CTL. Please review the disclaimer page for more details.