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Showing posts from February, 2020

Pinterest: Buy Now

Pinterest never provided the major selloff opportunity. The coronavirus fears offer an ideal entry point around $21. The stock now trades at only 5.7x forward EV/S targets despite 30% growth expectations. Sometimes stocks just run and investors have to pass on them while waiting for a better entry point. Pinterest (PINS) fit into this category following the substantial rally in early 2020, but the market dip following the coronavirus outbreak is providing another opportunity here. Read the full article on Seeking Alpha. 
Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Gilead Sciences: COVID-19 Tops Disappointing Results

Gilead Sciences rallied on potential COVID-19 treatment. The plan to remove stock-based compensation from non-GAAP EPS guidance provides a headwind in 2020. Due to a disappointing turnaround, the stock is a sell on any major rally based on the COVID-19 treatment. The ability of Gilead Sciences (GILD) to make a run at new highs must speak to bullishness surrounding the coronavirus because the biopharma is struggling to complete the expected turnaround. In addition, new management made the unwise decision to remove stock-based compensation from non-GAAP results going forward causing a headwind for EPS estimates. When combined with disappointing growth prospects for 2020, investors are probably lucky the stock is at yearly highs above $70 versus the yearly lows at $60. Read the full article on Seeking Alpha. 
Disclosure: Long GILD. Please review the disclaimer page for more details. 

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.