Showing posts from 2019

Qualcomm: Forecast Signals Global 5G Launch

Qualcomm beat FQ4 analyst estimates that included sharp declines from last year. The stock is jumping due to solid FQ1 guidance despite ongoing disputes with Huawei and missing Apple chip sales. The company forecasts 200 million 5G device shipments in 2020. At $90, the stock remains a bargain with a $6-7 EPS target before the benefit of the global 5G launch. The quarterly results of Qualcomm (QCOM) remain extremely complex to analyze. The shifting payments of key license customers makes most of the results not comparable from period to period, but the stock is seeing a rally in initial trading following FQ4 results as the modem company sees a rebound in device shipments due to the 5G worldwide launch gaining major steam in FY20. The investment thesis remains bullish as the shift to 5G has considerable upside as the wireless giant will capture more content per smartphone. Read the full article on Seeking Alpha.  More commentary - Out Fox the $treet - November 11 Disclosure: Long QCOM, …

Zynga: Relative Bargain Trading Below Peers

Zynga reported a strong quarter and boosted '19 bookings by $46 million. The mobile game developer continues to boost revenues per share by acquiring gaming assets on the cheap with massive cash balances. The stock remains cheap at 3.1x EV/20 revenue estimates. Despite Zynga (NASDAQ:ZNGA) thriving in the last few years, the stock valuation still trades below peer stocks. The recent Q3 results were another prime example of the market virtually ignoring the improvements ongoing at the mobile game developer. The stock remains a bargain at 3.1x EV/20 revenues in an industry where larger, slower growing players trade at 5.0x valuation multiples. Read the full article on Seeking Alpha.  More timely commentary - WhoTrades Disclosure: Please review the disclaimer page for more details. 

Intel: Better Lucky Than Good

Intel beat the Q3 revenue estimates due to luck from sales pulled forward and the immaterial nature of a competitor's ramp so far. Analysts are only forecasting the chip giant grows revenues in the 1% range while market share losses to AMD and Qualcomm will make this minimal target difficult. The stock trades at 12.3x forward EPS estimates while investors should expect estimate cuts. Intel (INTC) has failed repeatedly over the last couple of years, yet the chip giant managed to crush analyst estimates in Q3. The company continues to prove it is better to be lucky than good as a prime competitor isn't able to ramp up supply of new chips fast enough to take meaningful market share in the near term. My investment thesis remains negative on the stock at the yearly highs despite the big quarterly beat. Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details. 

AMD: Shift Up To The Next Level

AMD might've slightly missed Q3 revenue targets, but the company confirmed a long-term bullish trend. Investors should focus on the Q4 revenue growth of 48% and annual run rate of $8.4 billion. The stock only trades at 20x a 2020 EPS target of $1.75. A realistic 2021 EPS target of $2.50 would help the stock achieve a $50 price target next year using a 20x P/E multiple. The stock didn't initially rally following Q3 results, but Advanced Micro Devices (AMD) generated the results and guidance reinforcing our investment thesis that the stock hasn't reached full value. While the market was focused on a slight revenue miss, AMD is poised to see revenues trend much higher over the next couple of years driving the stock price even higher. Read the full article on Seeking Alpha.  More commentary - OutFoxThe$treet - November 5 Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Pinterest: You Were Warned

Pinterest dipped 20% following investor disappointment over Q3 results. The company actually generated strong revenue and MAU growth showing the existence of a good business. The market remains partially offside on Pinterest by not using the fully diluted share count of 651 million shares. Based on the other social stock valuations, my ideal target remains ~$15. The general impression from the Q3 results for Pinterest (PINS) was a solid quarter. The stock fell up to 20% following the report as the problem was the valuation was priced for perfection. Even strong revenue growth wan't enough to keep the stock valuation above $15 billion and investors shouldn't expect much upside with the stock still at $20. Read the full article on Seeking Alpha.  More commentary - WhoTrades

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

Fitbit: Unlikely Deal Below $10

Alphabet made an offer to buy Fitbit with no announcement of a finalized deal. Fitbit is shifting into Premium Service and medical devices, making the stock more appealing. Fitbit is unlikely to accept a deal for under $10, making an agreement unlikely. The stock likely trades lower again on a failed deal. Fitbit (NYSE:FIT) surged Monday on reports that Alphabet (GOOGGOOGL) is looking to acquire the fitness tracking company in order to get into healthcare wearables. The stock ended up above $5.50 for a 30% gain on the day, but investors have to question whether CEO Park will accept a deal at these prices and whether one even wants a deal below $10, if at all. My previous research has highlighted the reasons the stock has the potential for far more value. Read the full article on Seeking Alpha.  More commentary - WhoTrades Disclosure: Long FIT. Please review the disclaimer page for more details. 

Apple: 2025 Upside Potential

Apple TV+ will contribute to strong gross profit growth through 2025. China remains the biggest short-term threat and is likely to eventually hit the stock. Katy Huberty is under-estimating the potential in Apple TV+ as price hikes for the service are likely to push base revenues to $11.4 billion by 2025. The stock is best bought at dips after reaching an all-time high near $250. My investment thesis has me recommending that investors avoid buying Apple (NASDAQ:AAPL) shares at an all-time high as the China risks are real in the short term. In the long term, the tech giant is poised to benefit from a further surge in services driving the business towards higher total margins. My 2025 view is now included in my estimates to provide an overview of the upside potential over the next five years for Apple. Read the full article on Seeking Alpha. 
Disclosure: Long AAPL. Please review the disclaimer page for more details. 

Out Fox The $treet - October 28, 2019

Stocks to watch on Monday: AT&T (T) - Not convinced on the financial projections for 2022, but do like these commitments: - no major acquisitions for 3 years.
- pay off 100% of acquisition debt from TW (should be more)
- 50%+ of post-dividend FCF used to retire stock (would prefer more debt payments). The stock is up nearly 5% on these promises along with financial projections of a 2022 EPS target of $4.50 to $4.80. Naturally, AT&T would surge, if EPS grew up to $1 during 2021 and 2022.  Fitbit (FIT) - the stock continues to rally as the fitness tracking company slowly moves into the medical device market. Investors only have to compare the valuation of Fitbit to Garmin (GRMN) to see where the stock could've headed in just making the current company profitable. The medical device segment should lead to revenue growth and the ability to capture an even higher forward P/S multiple.  Spotify (SPOT) - the music streaming and now podcast company is still trading near the direct lis…

Gilead Sciences: The Turnaround Is Here, Finally!

Gilead Sciences continues a recent trend with limited revenue growth in Q3. The biotech has the pipeline to generate decent growth over the next 5 years. A boost to the capital returns could yield a 4% dividend and 10% EPS growth. For years, Gilead Sciences (GILD) has been plagued by declining sales form their crucial HCV drug franchise causing a painful few years for shareholders. The stock topped $120 back in 2014 and the company finally appears poised for a sustainable turnaround, albeit a minor one. Read the full article on Seeking Alpha. 
Disclosure: Long GILD. Please review the disclaimer page for more details. 

Acreage Provides Path Into Canopy Growth

Acreage offers a path to owing double the current position of Canopy Growth while offering a better valuation. The Acreage/Canopy Growth deal signaled a peak in the market while the ensuing collapse might signal the bottom. Acreage offers a solid standalone value assuming the deal never closes. The decision for Canopy Growth (CGC) to pay $300 million for a call option to purchase Acreage Holdings (OTCQX:ACRGF) has been a complete disaster. Not only has the cannabis market collapsed, but the stock market doesn't even see the deal closing in a reasonable enough time. Despite all of the mistakes of Canopy Growth, the Canadian cannabis giant has a pristine balance sheet to support future growth and reward shareholders that purchase the stock on the cheap via Acreage. Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details.

Twitter: Just Relax

Twitter (TWTR) failed to deliver on revenues, but the reaccelerating of DAUs will lead to the eventual stock rebound. DAUs surged by 21 million over last Q3 to 145 million versus 139 million in the prior quarter.. 

Rich Greenfield
CHART: Daily use of Twitter accelerating globally -- fastest growth qtr yet

-- monetizable daily active user (mDAU) growth up 17% against a 9% comp in Q3 ‘18

Snap: False Rally?

Snap (SNAP) soared the day prior to earnings as the new Lightshed Partners slapped a $20 target on the stock. The market got excited about the call but need to remember that Rich Greenfield had the same target on the stock at his previous firm, BTIG.

Rich Greenfield
Snapping Back: Initiating Snap at BUY with $20 Price Target @Snap@Snapchat …

Apple: China Remains The Biggest Risk

The company has a Chinese business worth in the $45 billion range in FY19 partially at risk due to these trade tensions. The 2018 holiday results were crushed by abnormal results in China, while numerous other countries hit all-time record revenues. Any China hit would place Apple EPS estimates at risk due to a cut to FY20 revenue growth. The stock doesn't offer the ideal value at all-time highs with these risks. As Apple (NASDAQ:AAPL) trades around all-time highs, the tech giant appears to have another China problem similar to last year. The U.S. government remains in a major trade war with the Chinese despite promoting major progress at negotiations last week. Several companies ran afoul of the Chinese government officials recently leaving a company like Apple vulnerable to losing one of the largest markets for the tech giant. My long-term investment thesis remains bullish, but buying the stock here while facing a China problem is a different story. Read the full article on See…

Twilio: Too Many Bulls

Hedge funds have built large positions in the stock. The average analyst has remained bullish on the stock for over a year now. Twilio is priced for perfection at nearly 12x '20 revenue estimates. The importance of paying the right price has hardly ever been more important than in the current stock market. The recent market has consistently overpaid for growth and gotten burned. In the case of Twilio (TWLO), the market had no business paying over $90 for the stock last November, and those buying on the surge to over $150 have already taken a beating.  Read the full article on Seeking Alpha.  Vote on the stock reaching $90 - WhoTrades

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

Out Fox The $treet - October 15

Stocks to watch on Tuesday: Glu Mobile (GLUU) - the stock is soaring from an addition to the S&P SmallCap 600 index. The stock is incredible cheap at slightly over 2x bookings estimates. Glu Mobile has a huge gap to close here. 

Aphria (APHA) - the stock is up over 20% on a relief rally following a big dip in the stock price since the start of September. The Canadian cannabis company saw revenues decline from the prior quarter and adjusted EBITDA from the cannabis operations drop. The key was the reaffirming of guidance: revenues $650 million to $700 million and adjusted EBITDA of ~$90 million. The stock has a market cap of only $1.3 billion or about 14x EBITDA estimates. Aphria should bounce from here.  Snap (SNAP) - the social messaging stock appears a good short, if the stock fails to break above $14 here. Snap shouldn't be above a market cap of $20 billion while still generating large EBITDA losses on revenues of $2.2 billion next year. 

More commentary - WhoTrades


Which Recent IPO Are You Buying This Week?

Renaissance provides this data on the IPOs within the last year that had the largest gains or losses in the last week. Some of the best places to look for future winners are IPOs that sell off. Stocks such as Beyond Meat (BYND) and Tilray (TLRY) are down significantly from big runs after the IPO so the 10% losses in the last week aren't necessarily appealing. The others are biotech and ETFs so not sure any stocks this week qualify as beaten down IPOs. Maybe the longs like Roku (ROKU)and Stitch Fix (SFIX) qualify as the most beaten down.  
Add a comment with the IPO that you are buying and why.  More commentary - WhoTrades Disclosure: No position 

Wayfair: Shaking Off Citron Call

Wayfair (W) is down about $70 from the all-time highs back in March to $105. The recent repeated negative calls by Citron Research on the online furniture stock actually could signal the bottom. The noted short seller isn't highly bearish on the stock where others he has claimed the stocks were virtually worthless. Citron just picks the stock to dip further to $70.  Citron Research@CitronResearch It Doesn't Matter Until it Matters … It Doesn't Matter Until It Matters - Citron Research With new market realities, Wayfair should quickly trade down to $70. Anyone who follows Citron knows that we have been bearish on Wayfair for YEARS as we never thought selling furniture online with...