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. 


Tuesday, January 2, 2018

Apple: Big Repatriation Hit

Apple faces a large tax bill from the mandatory repatriation of foreign earrings.
Investors shouldn't expect any special cash moves by the tech giant.
A continued focus on large stock buybacks is the preferred signal that the BOD sees a cheap stock and a bright future.
The recently passed tax plan by the GOP provides massive tax breaks to corporations. A key component of the tax plan is a provision to allow international companies to repatriate foreign earnings at a reduced tax rate.
Read the full article on Seeking Alpha. 

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