Monday, September 17, 2018

NXP Semi.: Gushing Cash

NXP Semi slumped last week following a confluence of negative events.
The company has plans to improve operating margins in the range of 500 basis points.
The CFO forecasts aggressive stock buybacks with the stock trading in the $90s after already repurchasing 12% of the company.
Last week, NXP Semiconductors (NXPI) slumped to yearly lows around $85 following weakness in the semiconductor segment, fears over China and possibly some disappointment surrounding the Analyst Day on September 11. The solid bounce again confirms my investment thesis of owning this semiconductor on these dips to $90 as the company itself snaps up billions worth of shares.
Read the full article on Seeking Alpha. 

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

 

Sunday, September 16, 2018

Fitbit: Apple Watch Is No Threat

The biggest takeaway from the Apple event this week were the medical features on the Series 4 watches.
Fitbit has plenty of work in the process on FDA clearance for medical monitoring functions.
The stock dip back below $5.50 provides enormous value for a stock with an EV below $1 billion.
At the Apple (AAPL) event on September 12, the tech giant unveiled the new Watch Series 4 along several new iPhones. In response, Fitbit (FIT) dipped nearly 7% to the $5.50 range providing the long awaited opportunity to buy fear induced weakness on the smartwatch and fitness tracker stock. The catalyst to the story is that Apple ushered in the era of the smartwatch as a med-tech device that will ultimately boost the struggling Fitbit.
Read the full article at Seeking Alpha. 

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

Friday, September 14, 2018

American Airlines: Beaten To A Pulp

American Airlines has been beaten down this last year as investors incorrectly focus on net debt levels.
Reduced capital expenditures and pension payments will free up around $3 billion in additional cash flows.
The stock trades at half the P/S multiple of Delta Air Lines.
The airline is in the middle of a $4.2 billion initiative to improve revenues and lower costs.
The amazing decline in American Airlines Group (AAL) has left the stock at such a discount to the sector that a major Wall Street analyst actually called the stock undervalued due to the simple P/S multiple. The airline has a lot more going on to support owning the stock, but an easy bull case always helps.
Read the full article on Seeking Alpha. 

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

Wednesday, September 12, 2018

AMD: Just Let It Run

AMD has the capacity to surpass forecasted weak sales growth in Q3 and beyond.
The chip company appears poised to make the jump to 40%-plus gross margins due to higher margins from EPYC.
Look for the long-term EPS target to get hiked above the $0.75 estimate.
After a stunning rally to $30, investors might be shocked to find out that Advanced Micro Devices (AMD) already is at the end of the growth phase, according to forecasts. As per my previous research, the cyclical nature of the business should haunt the stock at these levels, but the business trends remain far too bullish to dump AMD and run away here.
Read the full article on Seeking Alpha. 

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

Tuesday, September 11, 2018

Verizon: Near Perfect Dividend Hike

Verizon made a near perfect dividend hike of 2.1%.
The forward dividend yield is now about 4.5%.
The wireless company has annual dividend payout obligations of nearly $10 billion.
Exiting the media business would allow Verizon to avoid the tech wars.
Last week, Verizon Communications (VZ) increased the dividend for the 12th consecutive year. Investors wanted a bigger hike due to higher cash flows from tax reform, but this dividend hike was the perfect amount to not lose shareholders while preserving cash for the coming tech war.
 Read the full article on Seeking Alpha. 

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

 

Monday, September 10, 2018

TipRanks - Top 25 Financial Blogger

Nice to make the top 25 though I don't regularly pay attention to the TipRanks rankings. With over 6,600 financial bloggers ranked, its a nice accomplishment. Maybe more impressive is reaching the #154 spot out of all financial experts.








Sonos: Not Sure What People Expected

Sonos (SONO) is trading down about 14% in after-hours trading. Not sure what investors were thinking in pushing this recent IPO stock up over $21 prior to the 1st earnings report. My original research was highly negative on the stock.

The speaker company actually slightly beat analyst estimates for FQ3'18. The key was the expectations for declining numbers. A recent IPO isn't going to hold up when revenues are down YoY by nearly 10%.

The company even has negative adjusted EBITDA. Just avoid Sonos in the competitive voice-assisted speaker market.

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


Snap: Headed To $5

Snap continues to face incredible competition from Instagram that even challenges the dominance in the under 18 crowd.
The stock currently trades at a higher EV/S multiple in comparison to dominant peers.
Snap price target lowered from $7 to $5.
As Snap (SNAP) falls to new lows, investors need to understand that the stock doesn't offer any value. This isn't a stock to buy on dips other than for a quick dead-cat bounce. My previous target of $7 is lowered to $5 for a market valuation of roughly $7 billion.
Read the full article on Seeking Alpha. 

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

 

Thursday, September 6, 2018

The Power Of Twitter

CEO Jack Dorsey testified in Washington D.C. alongside Facebook COO Sheryl Sandberg.
One day Twitter will have a market value that matches the influence of the platform.
Revenue estimates and digital ad forecasts have missed the turnaround at the social platform.
As the social networking sites appeared in Washington D.C. to testify in front of the Senate Intelligence Committee, one noticeable distinguish occurred. Twitter (TWTR) leader Jack Dorsey became the center focus of the discussions with Congress including an additional committee meeting showcasing the power of Twitter even in comparison to Facebook (FB) and Alphabet (GOOG, GOOGL).
Read the full article on Seeking Alpha. 

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


Monday, August 27, 2018

Apple: Still Cheap At $1 Trillion

Despite surging past a $1 trillion market cap, Apple remains cheap trading at roughly 14x FY19 estimates, ex-cash.
Active iPhone device growth continues to provide a boost to service revenues.
Apple remains on pace for a 10% net payout yield.
Due to huge free cash flows in the December quarter, the tech giant will hardly reduce cash balances in the 2H at the $25 billion quarterly capital return pace.
Now that Apple (AAPL) has crossed the $1 trillion market cap threshold, the capital returns need to be reviewed again to derive whether value still exists in the stock. The famous plan for a $100 billion boost to stock buybacks was impressive at much lower values. My investment thesis that the stock wasn't still priced for the EPS boost still stands.
Read the full article on Seeking Alpha. 

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

 

Tuesday, August 21, 2018

SodaStream: Thank You Pepsi

SodaStream recently hit all-time highs following strong Q2 results.
Pepsi agreed to buy SodaStream at $144 per share in cash.
The premium valuation offers an ideal time to exist a winning position.
Only a few weeks ago, SodaStream (SODA) exploded above $100 after strong Q2 results. The manufacturer of home beverage systems benefited from strong quarterly sales and incredible leverage in the system to boost earnings. The company has now accepted an offer for $144 in cash allowing investors an opportunity to quickly exit on the top after a massive rally from the 2016 lows.
Read the full article on Seeking Alpha. 
Disclosure: No positioned mentioned. Sold SODA on the deal announcement. Please review the disclaimer page for more details. 

 

Monday, August 20, 2018

Shopify: Competition Knocking On The Expensive Door

Shopify recently hit a double top around $175.
Adobe Systems entered the sector with the purchase of Magento to compete for the e-commerce platform of large brands.
The alarming rate of sales deceleration is a major red flag for an expensive stock trading at a forward P/S multiple of 10x.
One of the ramifications of a massive market valuation is that competitors want a piece of the action. Shopify (SHOP) faces this exact scenario as investors rewarded the company with P/S multiple of 10x '19 revenue estimates.
Read the full article for more details. 
Disclosure: No position mentioned. Please review the disclaimer page for more details. 
 

Wednesday, August 15, 2018

Synergy Pharma: Sales Ramp Ignored

  • Synergy Pharma continues a slow ramp of Turlance prescriptions.
  • Significant cost controls helped cut the quarterly loss my nearly $10 million.
  • The Express Scripts deal for 2019 places the biotech on a path to a huge sales ramp by Q2'19.
Synergy Pharma (SGYP) has made several rallies towards $2, but the biotech stock hasn't held any gains despite improving prescription numbers for Trulance that treats IBS. The business developments during the last few months sets the stock up for a sustainable rally. 

Read the full article on Seeking Alpha. 

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

 

Saturday, June 9, 2018

Allergan: Unwelcome Guests?

Appaloosa and Senator sent letter to company requesting corporate changes that are rearview mirror leaning.
The activists are right that a more focused and nimble company is needed to achieve better results.
The company already has a plan that needs focus and any disruption from activists could be a negative on the existing plan for higher EPS targets in 2019/2020.
Allergan (AGN) is down 50% from all-time highs back in 2015 so understandably activists are agitating for changes. The time to make those moves was a few years back while now the biopharma needs to execute on the initiatives already set forward by the CEO.
Read the full article on Seeking Alpha. 

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


Friday, June 8, 2018

Under Armour: Rock Solid

Under Armour has quickly learned how to market footwear to generate buzz.
The footwear segment is where the athletic apparel company has the most growth potential.
The stock remains cheap at 2x forward sales estimates.
Under Armour (UAUAA) made a huge mistake while trying to grow too fast. The move into discount stores hurt the brand value and the recent release of shoes for "The Rock" shows the company has finally regained a marketing edge that will reward shareholders now and in the future.
Read the full article on Seeking Alpha. 

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



Thursday, May 24, 2018

Chipotle: Corporate Disruption

Chipotle announced the restaurant is moving their headquarters from Denver to Newport Beach.
The company is shutting down the Denver office and facing substantial re-organization costs.
The move does nothing to improve the food with integrity concept desired by customers.
Expect EPS estimates to collapse as the company has limited corporate personnel to implement new strategies.
Only a few months ago, Chipotle Mexican Grill (CMG) announced that Brian Niccol would take over as the new CEO from the co-founder. The stock has surged on this news rising $100 now, but my investment thesis has maintained that investors need to dump shares on this rally as the most likely outcome is disruption of the business model and cultural change from the hiring of an exec from Taco Bell that was at odds with the people at Chipotle. Today, the new CEO fired the first warning sign on this disruptive period.
Read the full article on Seeking Alpha. 

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


Friday, May 18, 2018

Baidu: Another Gift

Baidu trades down $25 due to the departure of the COO from daily activities.
The company has a long history of growth without the involvement of Qi Lu.
The stock continues to trade favorably to domestic peers despite massive margins.
Despite being a dominant player in the fast-growing internet space in China, Baidu (BIDU) consistently trades at a discount to American peers. The departure of a key executive and an analyst downgrade provide another gift to own this stock on a $25 dip and at levels from back in 2014.
Read the full article at Seeking Alpha. 

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

Thursday, May 3, 2018

Snap: $7 Target Turns Optimistic

Snap reported disastrous Q1 results.
The company faces DAUs turning negative in Q2.
Snap continues to produce larger free cash flow loses.
A previous $7 price target is now far too optimistic.
All of the indications pointed toward Snap (SNAP) disappointing the market with quarterly results. The social messaging stock did not disappoint with a disastrous Q1 report that places our previous $7 price target as now highly optimistic.
Read the full article on Seeking Alpha. 

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


Tuesday, April 24, 2018

NXP Semi.: Failed Merger Discount

NXP Semi. trades back below the original Qualcomm takeover price of $110.
The stock has far trailed the SOXX ETF since the merger agreement in October 2016.
A flood of stock buybacks in the sector due to failed mergers will lift all boats.
The Chinese regulator delays provide a unique play on NXP Semiconductors(NXPI) that has a long-term growth opportunity tied into a potential short-term quick gain. Investors that step in now appear set to win either way.
Read the full article on Seeking Alpha. 

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

Wednesday, April 18, 2018

Spotify: Streaming Discount

Spotify trades at a discount in the streaming sector due to the direct listing dynamics.
The streaming music service continues to expand leadership in the sector over Apple Music.
The stock trades too cheap at 4x sales estimates.
Oddly, Spotify (SPOT) trades near the post direct listing lows, while Netflix(NFLX) surges on a bullish earnings report. The streaming services for music and video aren't exactly the same, but the opportunity is similar; making the case for owning the laggard of the group.
Read the full article on Seeking Alpha. 

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


Tuesday, April 10, 2018

Glu Mobile: Home Run Potential

Glu Mobile successfully launched the latest version of the Tap Sports Baseball franchise.
The company still offers the home run potential of new games though recent history has been disappointing.
The stock is extremely cheap based on existing franchises trading at only 1.35x forward revenue estimates.
Despite the volatile market for the tech sector in 2018, Glu Mobile (GLUU) has generally held up well. The stock started the year around $3.60 and currently trades near $3.70 due to the extreme value in the stock and the stability provided by franchise games like Tap Sports Baseball.
Read the full article on Seeking Alpha. 

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

Tuesday, April 3, 2018

Synergy Pharma: One Perplexing Biotech With Upside

Synergy Pharma management caused the current stock weakness by not accurately forecasting reduced cash burn levels.
Trulance continues gaining market share and generating record prescription levels.
The small biotech has a better financing position due to willingness for partnerships and licensing deals.
All of these factors correlate to a stock that shouldn't trade at the lows.
Synergy Pharma (SGYP) reported Q4 numbers that deviated from guidance in a positive manner. The investment thesis in the stock is further enhanced that better transparency from management would've prevented the crash in the stock to new lows below $2 in the first place.
Read the full article on Seeking Alpha. 

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


Saturday, March 24, 2018

iQIYI: A Mostly Overlooked Chinese IPO

iQIYI expects to go public next week.
The Chinese online video leader seems overlooked by the market in comparison to other high-profile IPOs.
The proposed offering price is attractive and the focus on Chinese tariffs could hold back the IPO excitement.
As the market focuses on streaming video and music services in the U.S., a fast-growing opportunity is opening up in China. The potentially under the radar IPO of iQIYI (IQ), majority-owned by Chinese search giant Baidu (BIDU), provides an opportunity as the market focuses on more high profile public offerings and Chinese stocks face tariff related weaknesses.
Read the full article at Seeking Alpha. 

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

Wednesday, March 21, 2018

Don't Dump These Airlines


The airline stocks took a hit today due to some weaker than forecast numbers from Southwest Airlines (LUV). Investors need to avoid the urge to dump airlines like American Airlines Group (AAL) and United Airlines (UAL).

Tuesday, March 20, 2018

Social Media Dip


Social media stocks are down significantly this week as Facebook (FB) comes under extra scrutiny due to data and privacy issues. The opportunity remains in Twitter (TWTR) on this dip.

Friday, March 16, 2018

Novavax: Disappointing Stock Sales


Investing in a biotech goes far beyond whether or not the company can get key drugs approved. How the company finances the cash burning trials is very crucial to long-term valuation and that is where Novavax (NVAX) is crushing shareholders.

Wednesday, March 14, 2018

3D Systems: Turnaround Takes Shape


After the close, 3D Systems (DDD) reported the delayed Q4 results. The 3D printing company has finally completed a turnaround and returned to growth though the stock trades far off the lows already.

Square: More Crypto Insanity


Square (SQ) hit new all-time highs following a segment from Jim Cramer focusing on the stock. The Mad Money host made the odd claim to buy the stock on Bitcoin weakness when Square trades at the highs in part due to cryptocurrency insanity.

Tuesday, March 13, 2018

GSV Capital Struggles


The struggles of GSV Capital (GSVC) are no more obvious than the NAV results for Q4 and 2017 in general. Heading into several high profile IPOs in 2018 and the investment company can't generate much in the way of momentum.

Caterpillar: Peak Sales Cycle


Before the open, Caterpillar (CAT) reported monthly sales figures. The data continues to support that this cycle is peaking.

Sunday, March 11, 2018

Fitbit: Opportunity Persists


The story surrounding Fitbit (FIT) remains one of getting the growing wearables market in tune with product development. The stock remains one worth the gamble after reviewing Q4 market data.

Saturday, March 10, 2018

Shopify Deserves To Fall Off Best Idea List


Shopify (SHOP) has done everything to deserve dropping off an analysts Best Ideas list. The company recently sold shares in a secondary offering and has a new CFO, but the prime reason to avoid the stock now is a completely different reason.

Friday, March 9, 2018

Yext: The Next Cheap Tech Stock

Yext (YEXT) is quickly becoming one of the best ways to play AI powered services. The small tech stock has been a solid buy on dips to $12 since going public about a year ago.


Qualcomm: 4% Dividend

Qualcomm (QCOM) increased the quarterly dividend by 9% to $0.62 per share. The annual dividend yield jumps to over 4% on this hike. More importantly, this sets the wireless tech giant up for a rally as the Broadcom (AVGO) buyout comes to a head.

Thursday, March 8, 2018

IBM: Long-Term Model

Anybody following my research knows that IBM (IBM) has been an attractive stock to own below $150 as the market missed the turnaround story and shift into new technologies like blockchain. The company issued a long-term model today at an Investor Briefing that should help the stock gain from here at $155.

Wednesday, March 7, 2018

Snap: Will Layoffs Be Enough?


Cheddar reported that Snap (SNAP) plans another layoff. This one actually appears meaningful and further signals that the company has major financial problems. Good companies don't conduct layoffs.

Tuesday, March 6, 2018

FireEye: No Margin Of Error

FireEye has vastly improved financial results in the last couple of years.
The cybersecurity company still isn't predicting generating large cash flows and profits.
The stock won't rally much farther until FireEye shows that the business isn't structurally low margin.
Last year, FireEye (FEYE) became a compelling turnaround story as business under the surface improved from a shift to subscription services while the cost structure was finally aligned with the revenue stream. Unfortunately, the company is still running into some of the legacy cost issues that will hold the cybersecurity specialist's stock back.
Read the full article on Seeking Alpha. 

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


Tuesday, February 27, 2018

Fitbit: More Gamble Than Trouble

Fitbit has a pristine balance sheet to help the wearables company navigate a developing sector.
The company bought the correct technologies to advance product development, but has failed to correctly integrate the assets.
The opportunity still exists to grow on several fronts, making the stock a speculative buy on the Q4 induced weakness.
My investment thesis on Fitbit (FIT) has long held that the stock was a worth a gamble around $5 do to the option to benefit from the potential in the wearables market. Based on 2018 guidance, the stock remains a solid gamble and far from trouble.
Read the full article on Seeking Alpha. 

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


Synergy Pharma: Important Numbers

Synergy Pharma continues to grow extended prescription units for Trulance.
Competitor drug Linzess produced a highly profitable Q4.
Trulance prescription growth appears to lag the revenue estimates, especially in Q1.
With financing in place and a spring ramp in prescriptions, the stock is positioned for buying any weakness related to missing revenue targets.
With all of the drama surrounding executive leadership and cash burn at Synergy Pharma (SGYP), the market hasn't focused as much on the prescription data of Trulance. The stock has held close to $2 suggesting healthy investor appetite for the biotech at this level, but meeting 2018 targets could create further weakness in Synergy Pharma providing an opportunity to own the stock at lower prices.
Read the full article on Seeking Alpha. 

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


Tuesday, February 20, 2018

Glu Mobile: Don't Miss Out

Glu Mobile should turn profitable in 2018.
Consistent growth from live operations of franchise games has turned the company around.
The stock still trades at an extremely low valuation.
The quarterly results came and went, yet Glu Mobile (GLUU) outlined a solid 2018 plan that hardly includes the recently released Taylor Swift game. As my previous research presented, the mobile-game developer has a growth plan that doesn't rely on new games that will drive the stock price higher. Any future big hit is only a bonus.
Read the full article on Seeking Alpha. 
Disclosure: Long GLUU. Please review the disclaimer page for more details. 

Novavax: Watch For Delays

Novavax (NVAX) is expected to provide data this week for the Phase 1/2 flu study. The only problem is that the results were originally expected by the end of 2017.


Friday, February 16, 2018

Zynga: Finally A Real Company

Zynga has started generating consistently solid cash flows.
The company maintains a large cash balance and other valuable assets.
The stock valuation remains cheap with a large gap between a leader in the sector.
For the longest time, business TV hosts have joked about a company being the next Zynga (ZNGA) in reference to a stock that was overhyped and should've never gone public. The joke is finally on the TV hosts that haven't kept up on the emerging story. As long as the market view doesn't adapt to the new realities of a nicely profitable company, value will exist in the stock.
Read the full article on Seeking Alpha. 

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

The Next Chipotle

As Chipotle Mexican Grill (CMG) becomes a shell of itself by hiring the CEO from Taco Bell and struggling to recover from the health scare, the restaurant concept with the attractive growth prospects now is Shake Shack (SHAK).

Thursday, February 15, 2018

Baidu: Hidden Value

Baidu remains a hidden tech giant in a market of $500 billion global giants.
The Chinese search leader is returning to 30% revenue growth.
The company has several hidden assets that the market is currently not ascribing any value.
After a few years in self-imposed purgatory due to surging costs on new initiatives, Baidu (NASDAQ:BIDU) is finally back to generating the massive profits from substantial revenue growth of the past. The combination of dumping the high-cost services businesses and a return to a healthy search market has the internet search giant of China back onto a path to higher stock prices.
Read the full article on Seeking Alpha. 

Disclosure: Long BIDU. Read the disclaimer page for more details. 

Under Armour: Turnaround In Place

Under Armour reported Q4 results that beat the worst fears.
Margins remain under pressure, but the market missed the turnaround story and ultimate value of the brand.
New footwear platform has a promising start while the stock trades at a compelling valuation in comparison to peers.
Most importantly, the chart and P/S ratio suggest the stock heads higher.
Investors missing the opportunity to own Under Armour (UAUAA) below $15 the last few months completely overthought the story. The company now has a turnaround in place and the opportunity exists to invest in the founder attempting to make the athletic apparel maker great again.
Read the full article on Seeking Alpha. 

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