Out Fox The $treet

Stocks to watch on Friday: Aurora Cannabis (ACB)  - the large Canadian cannabis company continued the pattern of horrible September quarterly numbers. The company made steps to curb supply, but Aurora Cannabis still produced 41K kg in the quarter and only sold 12K kg. The market valuation is still a rather high $3.6 billion with quarterly revenues of only $57 million. The FQ1 results were the first big signs of rationalization in the sector, but also only a small step before Aurora Cannabis becomes a buy with an Adjusted EBITDA loss of C$40 million.  AMD (AMD)  - RBC raised the price target to $50 from $44. AMD remains in a major breakout towards $50, but the recent rally appears stretched. The stock might retest $36 here.   Fitbit (FIT)  - worth watching here with the stock trading down to $6.80. Some skepticism exists on whether the government allows  Alphabet (GOOG)  to buy Fitbit. The merger arbitrage is only about $0.55 now, but some...

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....

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 ...

Fitbit announces a major program with the Singapore Health Promotion Board. The deal has an initial value listed at $5 million with a CEO prediction that it would reach up to $120 million annually. The stock won't continue trading at a 0.15x EV/S multiple with substantial services revenue growth. The market is so negative on  Fitbit  ( FIT ) that a transitional deal with a foreign government only led to a 2% daily gain for the fitness tracking stock. The company remains in the process of shifting to a medical device and premium services company while the market completely ignores the move due to recent weak sales. My  investment thesis  remains very bullish on the stock due to the deep value and potential for services revenue growth that leads to multiple expansion. Read the full article on Seeking Alpha.  More commentary - Fitbit Relaunch Disclosure: Long FIT. Please read the disclaimer page for more details. 

After reporting Q4 results, Fitbit (FIT) is down substantially. In not a huge surprise, the wearables company failed to satisfy the market with 2019 guidance after the stock had a big run up to nearly $7.

Wearables have the potential of moving the needle at Apple. Adding health monitoring to AirPods expands the potential shift to medical devices. Medical device stocks trade at much higher valuations. Anything driving sales higher is a plus for a stock only trading an EV/S multiple of 10x. For a company with a revenue base of over $250 billion,   Apple   ( AAPL ) struggles to find opportunities that will move the needle. One potential revenue source is in medical devices as the tech giant moves into wearables that function as tech devices and health monitors. My   investment thesis remains bullish on the stock around $150. Read the full article at Seeking Alpha.  Disclosure: Long AAPL, FIT. Please review the disclaimer page for more details.   

Alphabet made a small smartwatch technology purchase. The company has a long history of hardware failures and a smartwatch push will likely be no exception. Alphabet continues losing substantial amounts of money on Other Bets and generates low margins on hardware. The stock is incredibly cheap based on ex-cash, 2020 non-GAAP EPS estimates of up to $71. On Christmas Eve, my   previous research   extolled the benefits of buying   Alphabe t   ( GOOG ,   GOOGL ) despite doubts that the company would successfully transition to material hardware sales. The company appears to have an unhealthy appetite for hardware with the latest purchase suggesting another losing push into smartwatches. Regardless, the stock remains a buy even after a $115 rally in under a month to over $1,100. Read the full article on Seeking Alpha.  Disclosure: Long AAPL, FIT. Please review the disclaimer page for more details.   

As predicted here, Fitbit ( FIT ) was an easy purchase below $5 last year. The stock was insanely cheap with the cash balance and revenue stream. The move toward medical devices offered a huge upside catalyst.

Fitbit (FIT) completed another successful holidays where their app ranked in the top 5 locations on the iPhone in 6 countries. In the Health & Fitness category, the Fitbit app reached the top rank in 29 countries.

The recent Gartner forecast on global wearables shipments is ultra-bullish for Fitbit (FIT) . The research firm forecasts shipments to triple from 141 million in 2017 to 453 million in 2022. Fitbit is a big player in the Smartwatch category and Gartner specifically points out the promises of medical devices what the fitness tracking company is just now entering. The best story for investors is that the stock only trades at a market value of $1.3 billion with a sizable balance sheet. Risk always exists with a stock, but Fitbit offers an incredible reward, if the company gets the wearables trend correctly over the next few years. Disclosure: Long FIT. Please review the disclaimer page for more details. 

Fitbit (FIT) is one of the top downloaded apps over the holidays as people get fitness trackers as holiday gifts. The stock is in a precarious position where Fitbit could close the gap from the surge following Q3 earnings, yet the related company is expecting a strong quarter. The amazing part is that those results signaled a turn in the business. The stock is exceptionally cheap here around $5. The key is knowing that any further weakness in the stock is technical in nature and not any signal of weak holiday sales. Fitbit could easily retest $4.50 based on this chart. The stock shouldn't trade at an EV 0.5x sales estimates while the company is shifting towards a med tech future. The stock would make a great stocking stuffer. Disclosure: Long FIT. Please review the disclaimer page for more details. 

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.   

The story surrounding Fitbit (FIT) remains one of getting the growing wearables market in tune with product development. The stock remains one worth the gamble after reviewing Q4 market data.

Fitbit has a pristine balance sheet to help the wearables company navigate a developing sector. The company bought the correct technologies to advance product development, but has failed to correctly integrate the assets. The opportunity still exists to grow on several fronts, making the stock a speculative buy on the Q4 induced weakness. My  investment thesis  on  Fitbit  ( FIT ) has long held that the stock was a worth a gamble around $5 do to the option to benefit from the potential in the wearables market. Based on  2018 guidance , the stock remains a solid gamble and far from trouble. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  

While the stock of Fitbit (FIT) has traded in the dumps for the last couple of years, The company has quietly acquired a lot of technology. In that regard, the fitness wearables company acquired Twine Health for the health coaching platform.

Fitbit easily smashed Q4 estimates due to a strong holiday season. The weak Q1 guidance is a mixed blessing by adding to worries over the fad nature of the business and providing a lower entry point. The valuation in the stock is finally compelling with the market no longer having any expectations from the company. Despite the strong holiday sales, Fitbit (NYSE: FIT ) trades near post-IPO lows due to the self-inflicted wounds and market fears  highlighted  in my  previous research . Unfortunately, for investors, the company has a long way to go to prove that the fitness tracking business isn't a fad and Under Armour (NYSE: UA ) isn't a competitive problem.  Read the full article Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Fitbit tops the iOS app charts following an apparently blowout holiday sales. The stock saw a muted reaction reinforcing the insider sales and highlighting fears of a repeat of the GoPro year. The strong ecosystem makes the Fitbit story compelling, but the recommendation remains to wait until the holiday enthusiasm falls off. My previous investment research highlighted the concerns with insiders rushing to dump shares of Fitbit (NYSE: FIT ) prior to the promising holiday season. Activity-tracking devices were expected to be a top holiday gift so why would anybody want to sell shares at the lows following the June IPO? Read the full article at Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Fitbit prices the secondary offering at a substantially lower price. Fossil buys competition Misfit for a relatively small valuation. The founders of the sector companies are all dumping stock into weakness providing a clear warning sign on valuations. After a strong Q3 and promising guidance for the important shopping season, Fitbit (NYSE: FIT ) dropped a bomb on the market with a proposed large secondary offering. Not surprising, the stock plunged during a weak stock market heading into the offering. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Fitbit registered a secondary offering of nearly 10% of the outstanding shares. The strong Q4 guidance apparently wasn't enough to entice insiders to delay share sales. Without a major balance sheet need, Fitbit is cashing in on what the company sees as an inflated stock price. After the market close, Fitbit (NYSE: FIT ) surprised the market with the revelation of an extremely large secondary offering. The fitness device maker produced exceptional Q3 results and has a solid balance sheet, raising questions on the reason for dumping so many shares by the company and selling shareholders. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Fitbit has soared this week on the bullish news of a new corporate customer. The stock has gained nearly $2.5 billion in valuation on a deal that has a maximum impact of $20 million in revenue. Investors need to pay attention to quality stocks and buy on dips and not after the stock soars. For investors wanting to get into the Fitbit (NYSE: FIT ) craze, the numerous stock drops toward the $30 level provided the ultimate entry point. With some good corporate news and bullish analyst coverage, the stock exploded higher this week providing another solid example of pouncing on dips of good stocks. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details.