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. 


Wednesday, February 14, 2018

Chipotle Longs Are In Denial

Chipotle Mexican Grill (CMG) is up about 15% today as the market cheers the hiring of a new CEO from Taco Bell. While CEO Brian Niccol was highly successful at Taco Bell, he isn't a good fit for the Chipotle culture. A shift from "food with integrity" will be disastrous to the stock in the short run. Don't forget that JCPenny (JCP) originally cheered the hiring of Ron Johnson and that about killed the retailer as he attempted to change the corporate culture.

Tuesday, February 13, 2018

Square: After The Bitcoin Craze

Square cooled off following another run towards $50 due to the Bitcoin craze.
The company is unlikely to attract large Bitcoin trading volumes as other services already corner the market.
The valuation remains stretched as revenues aren't even set to top $1 billion for 2017.
Square (SQ) was trading back towards the all-time highs near $50 due to more excitement around Bitcoin before the market collapse. The stock valuation remains aggressive considering the limited utilization of the Cash App and the crashing value of cryptocurrencies. Square has now failed on two runs at $50.
Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details. 


Fitbit Continues To Expand Platform

While the stock of Fitbit (FIT) has traded in the dumps for the last couple of years, The company has quietly acquired a lot of technology. In that regard, the fitness wearables company acquired Twine Health for the health coaching platform.

Monday, February 12, 2018

Is Facebook In Trouble?

eMarketer predicts that Facebook (FB) will actually lose users in the under 24 age group this year. And the social networking giant isn't losing small amounts.


Did The Broadcom CEO Make A Convincing Reason For Qualcomm To Accept Offer?

The CEO of Broadcom (AVGO) went on CNBC to discuss the $82 offer to buy Qualcomm (QCOM). Depending on the day, the offer is about a 30% premium above the current price.


Broadcom CEO: Our offer for Qualcomm is compelling from CNBC.


As Cramer points out, Qualcomm has a plan on the table to boost FY19 profits to about $7 per share. The offer isn't that compelling if the wireless giant can achieve that growth. Do you find the offer as compelling?

More research: Qualcomm: NXP Semi. Closure Is Key

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


Sunday, February 11, 2018

Qualcomm: NXP Semi. Closure Is Key

Qualcomm has multiple paths to a higher stock price.
Elliott makes strong case for a $135 deal price and Qualcomm can probably afford to pay the higher price.
Either way, the lingering NXP Semi. deal is holding back EPS growth as Qualcomm had additional path to boost EPS numbers.
As the outcome of the NXP Semi. (NXPI) merger lingers on, Qualcomm(QCOM) shareholders just want closure on the deal. The company has multiple paths to higher earnings, but the NXP Semi. deal must get out of the way first.
Read the full article on Seeking Alpha. 

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


Saturday, February 10, 2018

Twitter: Follow Engagement Higher

Twitter surprised the market with a big Q4 earnings beat.
The company continues a trend of double-digit engagement growth.
Higher monetization rates will propel revenue growth in excess of user growth.
The valuation remains attractive due in big part to the monetization gap with peer Facebook.
The amazing disconnect between engagement growth at Twitter (TWTR) and the stock price came to an end over the last month with the surging stock price after reporting Q4 numbers. The company has now unlocked the ability to tie engagement growth into a cash flow machine that will drive the stock even higher.
Read the full article on Seeking Alpha. 

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


Friday, February 9, 2018

Snap: Pump The Brakes

Snap reported improving revenue and user trends, but investors need to dig further into the financials.
The company hasn't figured out a way to reduce cash burn to acceptable levels.
The stock trades at a wild multiple of sales with the stock now worth nearly $30 billion.
Investors need to be careful following the analyst crowd.
Snap (SNAP) surged nearly 50% the day following Q4 results that beat analyst estimates. The important numbers though showed no significant improvements warranting a sudden positive change of opinion in the stock suggesting that investors need to hit the brakes on this rally.
Read the full article on Seeking Alpha. 

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


Friday, February 2, 2018

Synergy Pharma: Lack Of Transparency Hurts Stock

Synergy Pharmaceuticals hits cash target to obtain additional debt financing.
Management didn't clearly outline the path to achieving the target.
The company now has financing to reduce the investment risk and allow for negotiating an ex-US sales deal.
Synergy Pharmaceuticals (SGYP) got the financing news long awaited and the stock is still trading at the lows. My theory is that the lack of transparency with hitting the cash target to obtain additional financing is holding back the stock and might finally provide an opportunity to own the biotech now trading slightly above $2.
Read the full article on Seeking Alpha. 

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


Tuesday, January 30, 2018

Is Amazon A Legitimate Advertising Play?

Amazon stands to benefit from growing digital ad revenue.
Research reports support the digital ad market sustaining strong growth for the next few years.
The online retail giant doesn't offer the best way to invest in ad market growth due to substantial retail operations.
My biggest complaint that guides my investment thesis on Amazon (AMZN) is a lack of focus on running a profitable businesses. The thesis isn't exactly unique, but one area that provides an opportunity to change the equation is digital advertising leading Citibank to upgrade the stock with an incredible price target of $1,600. The numbers though aren't adding up to buying the stock for this reason.
Read the full article on Seeking Alpha. 

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


Wednesday, January 24, 2018

Johnson & Johnson: Expect Underwhelming Results To Continue

JNJ dipped after underwhelming guidance for 2018.
The stock has lagged the market rally due to a stretched valuation and limited growth.
The lack of additional capital returns is a negative signal for the stock.
Despite the gains of the last year, Johnson & Johnson (JNJ) hasn't actually outperformed the market. In fact, the stock has now vastly underperformed the market since the start of November and reinforces the valuation questions that exist with this healthcare stock and ongoing negative signals from the company.
 Read the full article on Seeking Alpha. 

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

 

Monday, January 22, 2018

Apple: Hope For A 'Normal' Dividend Hike

Apple finally announced the actual repatriation tax hit at $38 billion.
The company plans to spend aggressively on capital expenditures and hiring in the U.S., squashing any likely big-scale acquisition.
Investors should expect a standard 10% dividend hike each of the next two fiscal years in line with historical dividend hikes.
Any shift from the standard dividend hike and capital return plans would actually signal a negative view of the future.
Despite all of the recent debates regarding the repatriation tax including in the comments section of my previous article and forecasts of a ramped up capital return plan, Apple (AAPL) has so far not made any statements regarding changing existing plans. For numerous reasons, investors should want the tech giant to keep trucking along with the existing capital return plans and stick to a 'normal' dividend hike.
Read the full article on Seeking Alpha. 

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

 

Wednesday, January 10, 2018

Apple: Unlikely To Spend Large War Chest

Apple remains in an enviable position with a massive cash position.
The tech giant faces a large repatriation tax bill payable over eight years.
Previous capital allocation moves favored maintaining large cash balances contrary to analyst calls for large capital returns or a mega acquisition.
A strong war chest reduces investment risk.
A lot of discussion surrounds whether Apple (AAPL) will ramp up stock buybacks and acquisitions due to the repatriation of foreign earnings provision in the Tax Cuts and Jobs Act. A couple of analysts suggest a ramp up in stock buybacks while my previous research doesn't back this theory due to a big repatriation tax hit.
Read full article on Seeking Alpha. 

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


Synergy Pharma: Dilutive Financing Appears Likely Before Inflection Point

Cash position suggests Synergy Pharma needs to raise more money before next $100 million loan tranche.
New CEO has an opportunity to end financing risks to new investors.
The company is near an inflection point in sales and costs that will reduce cash burn going forward.
Synergy Pharmaceuticals (SGYP) continues to wade through a volatile drug launch due to questionable internal decisions. The company botched the drug launch financing, but the investment thesis isn't altered with the recent replacement of the CEO.
Read the full article on Seeking Alpha. 

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

Thursday, January 4, 2018

Cisco Systems: Repatriation Tax Hit

Cisco Systems faces a large tax bill from the mandatory repatriation of foreign earnings.
The tech giant has one of the largest cash balances impacted by the tax law.
The current capital return plan is solid, but the net payout yield fails to impress.
One company flying under the radar of the mandatory tax repatriation of foreign earnings is Cisco Systems (CSCO). The market constantly focuses on the other tech giants like Apple (AAPL) and Microsoft (MSFT) or new tech companies, but Cisco Systems actually has one of the largest balances of cash stashed in international locations.
Read the full article on Seeking Alpha. 

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