Thursday, September 20, 2018

Cisco Systems: Change Of Heart

Cisco Systems is now more appealing than originally thought at lower levels.
The catalyst from the shift to software is still taking a long time backing the original bearish thesis.
The ability to boost the net payout yield via massive stock buybacks has changed the equation.
The stock offers a near 11% yield.
My view on Cisco Systems (CSCO) was rather harsh as the networking giant saw the stock surge in the last year, but the actual quarterly results didn't improve significantly. The aggressive use of cash repatriated from foreign locations combined with solid execution on recent earnings reports has my view turning more bullish now.
Read the full article on Seeking Alpha. 

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


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.