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Showing posts from 2020

Apple: Not Priced For COVID-19 Impact

Apple warned on FQ2 revenues missing estimates due to coronavirus impact. Analysts remain very bullish on the company's prospects long term. The stock only trades $8 away from all-time highs. The stock isn't a buy until more realistic expectations emerge for the COVID-19 revenues impact. In no real surprise, Apple (AAPLwarned on revenue estimates for the current quarter only about three weeks since the company provided robust expectations for FQ2 despite some fears on the coronavirus. My previous research had warned the stock wasn't appealing in the $320 range due to low yields and the virus issue in China and this warning reinforces this thesis. Read the full article on Seeking Alpha. 
Disclosure: Long AAPL. Please review the disclaimer page for more details. 

Aurora Cannabis: Finally, The Needed Reorg With A Major Catch

Aurora Cannabis announced a major reorg which includes the CEO retiring and cutting over 50% of operations expenses. The company guided to substantial revenue misses for FQ2/FQ3 and provided no indication Cannabis 2.0 products are meeting sales goals. The cannabis company plans to launch a value brand. Even at $1, Aurora Cannabis would still trade at 3x updated sales targets for FY21. Following news Aurora Cannabis (ACB) was planning to cut 10% of the workforce, the company came out on February 6 with the announcement of a major reorganization. The Canadian cannabis company has finally made a move to rationalize the business with the market realities, but the cuts are so massive that my investment thesis is still on hold due to the risks of meeting updated loan covenants and limited cash balances to execute a complicated corporate pivot. Read the full article on Seeking Alpha. 
Disclosure: No position. Please review the disclaimer page for more details. 

Alphabet: Ignore Revenue Fears

Alphabet missed Q4 revenue estimates by $790 million. The tech giant grew revenue at a 19% rate at constant currency. My price target remains $1,700 based on an EV/E of 20x '21 EPS estimates of $76. Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) appeared headed towards our $1,700 price target until the company disappointed the market with Q4 reported revenue growth of only 17%. The digital ad giant generates volatile revenue growth making the stock a buy anytime the Alphabet dips despite constant currency growth at 20% annual growth rates. Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details. 

AMD: Good Enough

AMD slightly beat analyst estimates for Q4. The market is disappointed with Q1 guidance and the projected growth rates for exiting 2020. The stock trades below 25x a realistic 2020/2021 EPS target of $2. The initial dip following the Advanced Micro Devices (AMDQ4 results tells the main part of the story for the stock. Both bulls and bears will like the report, but the long-term story still favors the bulls. The investment thesis remains bullish as the chip company moves to capture market share in 2020 and beyond while the market desires higher growth rates exiting the year. Read the full article on Seeking Alpha. 
Disclosure: No position. Please read the disclaimer page for more details. 

Aurora Cannabis: Legitimate $1 Target

Aurora Cannabis is attempting to sell a facility once planned to produce 105,000 kg of cannabis. The major Canadian cannabis stocks don't trade at distressed levels. The stock has a legitimate reason for trading at $1 per share or 2x FY21 sales estimates. My constant warning on Aurora Cannabis (ACB) has been the risks associated with the stock still trading on elevated expectations. Despite large declines, most of the Canadian cannabis stocks don't trade at distressed levels. The stock could very easily hit the $1 price target prescribed by Piper Sandler last week. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

AMD: Possible Three-Peat In 2020

AMD topped the S&P 500 with a nearly 150% gain in 2019 after leading the index in 2018. Investors shouldn't bet on a three-peat performance, but the stock has the possibility for another strong year. My 2020 EPS estimate remains $10 billion revenues, $1.50 EPS plus a longer term $3+ EPS target. One of my favorite picks in 2018 and 2019 ended on a strong note last year. The prospects of Advanced Micro Devices (NASDAQ:AMD) repeating the strong gain a third year wouldn't appear high, especially topping the S&P 500 for a third consecutive year. After all, Nvidia (NASDAQ:NVDA) followed huge gains in 2016 and 2017 with a down 2018. Investors shouldn't bet heavily on a three-peat with AMD, but the stock remains poised for a strong run in the '20s decade. Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details.

Pinterest: Biggest 2020 Bet On IPO Flops

Pinterest ended the year down over 20% from their initial trading price of $23.75. A lot of high profile 2019 IPOs flopped. The social media stock has the most promising valuation and path to profits. My target is still $15 with a forward EV/S multiple of 5.3x. A broken IPO can be one of the best ways to buy a great company at a reasonable price. With 2019 being a year where prominent IPOs failed to live up to expectations, Recodehighlighted the stocks that struggled in 2019 and unfortunately most of the stocks on the list aren't appealing after their busted IPO due to weak financials. One stock stands out with my negative investment thesis about to turn bullish. Read the full article on Seeking Alpha. 
Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Aurora Cannabis: Problematic Profit Picture

Aurora Cannabis still has a long road to reach profitability. Without cutting costs, the company has to grow quarterly revenues by over $50 million while hitting 60% gross margins. The departure of the Chief Corporate Officer is another red flag and could indicate a planned restructuring in the works. Avoid the stock until Aurora Cannabis can improve the profit picture. Over the last week, Aurora Cannabis (NYSE:ACB) has seen a couple of key persons flee the company. The lack of a catalyst from Cannabis 2.0 products has to question the profitability picture of the Canadian cannabis LP in 2020 and beyond reinforcing my negative investment thesis. Read the full article on Seeking Alpha. 
Disclosure: No positions mentioned. Please review the disclaimer page for more details.