Showing posts from October, 2019

IB Net Payout Yields Model

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  ( GOOG ,  GOOGL ) 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 tradin

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 ✔ @RichLightShed CHART: Daily use of Twitter accelerating globally -- fastest growth qtr yet $ TWTR # engagement -- monetizable daily active user (mDAU) growth up 17% against a 9% comp in Q3 ‘18 123 6:19 AM - Oct 24, 2019  ·  Manhattan, NY Twitter Ads info and privacy 54 people are talking about this A 20% decline here is far too much. The stock has seen the EV collapse to only $20 billion. Buy on dips starting next week.  More commentary - WhoTrades More research - Twitter Stubs Its Toe Disclosure: Long TWTR. Please review the disclaimer page for more details. 

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 ✔ @RichLightShed Snapping Back: Initiating Snap at BUY with $20 Price Target $ SNAP @ Snap @ Snapchat https:// pping-back-initiating-snap-at-buy-with-20-price-target/  … Snapping Back: Initiating Snap at BUY with $20 Price Target - LightShed Partners Google and Facebook dominate mobile advertising, but there is plenty of room for other “winners” as mobile time spent continues to scale (link). Brands and advertisers are looking for more ways to... 31 7:59 AM - Oct 21, 2019  ·  Valley Stream, NY Twitter Ads info and privacy See Rich Greenfield's other Tweets The stock

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 t

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 -

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  S titch 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 $ W It Doesn't Matter Until it Matters https:// er-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... 46 1:07 PM - Oct 1, 2019 Twitter Ads info and privacy 22 people are talking about this Wayfair still appears in a down tr

Aurora Cannabis: Positive Market Data With Several Catches

The Canadian cannabis industry saw a big boost in July sales of dried cannabis. The sales increase was swamped by additional supply pushing inventory levels in 30.5 times total sales for the month. Aurora Cannabis recently dumped a large amount of inventory on the wholesale bulk market at a low gross profit. The stock made a nice bounce off $4, but my stock view still remains bearish with a market cap of $4.5 billion and weak financials. The cannabis sector has taken a beating in the last few months as sector sales and regulatory issues have taken out some of the hot air in the bubble. The July sales and inventory data from Canada finally provides some positive data points for investors, but the market still faces supply rationalization issues not adequately addressed in the recent  Aurora Cannabis  ( ACB )  corporate update . The stock has made an initial bounce off the recent lows below $4, but the  investment thesis  is still tilted towards a bearish view until the c

FireEye Beat Q3 Guide Down

After the close,  FireEye (FEYE)  released preliminary FQ3 revenues above the previous guidance while bookings were inline with guidance. The numbers aren't that impressive considering the company originally guided revenues below a consensus for the quarter of $229 million.  -The company posted early estimates for Q3 revenue "at or above the high end" of previous guidance for $217M-$221M, and billings to be within the range of $245M-$255M. -The consensus expectations for Q3 revenues of $219.5M.  The stock is worth about $3 billion with slow growth and prospects of generating only $50 million in free cash flow this year. The cybersecurity company continues to go nowhere fast. FireEye likely rallies to $16-17, but the stock isn't going to $22 anytime soon as UBS recently speculated. Investors should look to unload on any pop on these numbers.   More research: FireEye: Struggler More commentary - WhoTrades Disclosure: No position.  Please  rev