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Adam Levine-Weinberg

 
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  • BlackBerry: Supporting Evidence For 6 Million BB10 Units Per Quarter [View article]
    I'm not sure we'll see 6 million BB10 sales this quarter; I think it will depend heavily on how many Q10 units BlackBerry sells into the channel. I expect Q10 to sell more units than Z10 because more to most of the BB user base, whereas the Z10 is designed more to attract current iPhone/Android users. However, it's possible that Q10 is supply constrained this quarter (say, 2 million or something like that).

    On the other hand, I think 6 million is definitely manageable in future quarters. This doesn't even count future BB10 smartphones, which the company has already confirmed for later this year. Those will probably include a lower-margin midrange phone for developing countries like India, Indonesia, etc. There are obviously huge markets there, although BlackBerry will be competing with much cheaper Android phones.
    Apr 30 03:55 PM | 1 Like Like |Link to Comment
  • Why $100 Brent Will Not Last Through 2013 [View article]
    I don't want to declare victory too early, but it seems like we are reaching a moment of truth. Brent has already crossed below $100, and we are still near the beginning of the seasonally weakest period of oil demand. U.S. production continues to grow, and pipeline capacity is continuing to come on line. We might see a little rebound in the summer, but only after further declines in the next couple of months. I would say Brent is more likely to hit $90 than $110 between now and the end of the year.
    Apr 17 11:14 AM | 2 Likes Like |Link to Comment
  • Hewlett-Packard Is Likely To Miss Estimates [View article]
    HP's PC business is almost all variable cost, since the manufacturing is done on contract basis in Asia. It's incredibly unlikely that PCs had negative margins for HP. In fact, it's possible that HP's PC margin will improve sequentially, if management just decided to stop chasing low margin/unprofitable sales. A relatively small improvement in operating margin could fully offset a 20%-30% decline in revenue. Lastly, industry sources have stated that January and February were much worse than March; HP's January results were already reported last quarter.

    I actually think HP will beat estimates again, largely driven by strong printing margins (because of the weak yen).
    Apr 11 01:30 PM | 1 Like Like |Link to Comment
  • Who Will Win Amazon's Next Generation Kindle Fire? [View article]
    I don't know the particulars of what happened in 1983, but just-in-time manufacturing has come a long way since then. I doubt the contract manufacturers in Asia are building OMAP chips more than 3 months before they go into OEM products. Just my two cents; I don't have any inside info here.
    Apr 9 10:37 AM | Likes Like |Link to Comment
  • Who Will Win Amazon's Next Generation Kindle Fire? [View article]
    I'd be pretty surprised to see anything other than a TI OMAP5 chip in the next gen Kindle Fire. I'm sure AMZN will get a very good price from TI, since to the best of my knowledge, TI isn't actively developing the OMAP platform further. Any money that TI can squeeze out of OMAP is a positive, so I would expect management to accept very low GMs to get the deal.
    Apr 5 05:48 PM | 1 Like Like |Link to Comment
  • US Airways Investors Hoping For Merger Bailout May Be Disappointed [View article]
    I'm not sure there's any point in discussing this further. My airline investments as a whole (HA and DAL) outperformed LCC since July 13, and since this article was published in early December. But there's nothing wrong with us both making money!

    Obviously, HA took a beating in January/early February, but I had actually taken profits on half of my position when it was closing in on 7. I'm looking to expand that position again, and I do think it's a much better long-term investment than LCC/American, for reasons that I've elaborated elsewhere.
    Mar 23 11:53 AM | Likes Like |Link to Comment
  • US Airways Investors Hoping For Merger Bailout May Be Disappointed [View article]
    Thanks for the comments. LCC is up about 35% since I wrote this post, but I would still argue that my thesis was correct. LCC dropped after the initial merger announcement, and indeed since Dec. 2 (when this piece was published) DAL is up about 75% and UAL is up 65%. So what's happened is simply that the valuation of the entire industry has gone up.

    I've been bullish on airlines for two years, and have been long at least one airline stock for that entire period of time (and I went long LCC back when it was sub $5, but took profits too early; don't see how I could have an "inherent bias" against the stock). I am surprised at how fast sentiment has changed on airlines; I think some of the lower performing airlines (United and possibly also the new American) are due for a correction. On the other hand, I think Delta may have a little more room to go.

    P.S. As mitchad1 said, I'm writing for Motley Fool now, but I still do check comments here from time to time.
    Mar 22 07:39 PM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    Interesting article. There are two bigger picture issues that I think you are missing. First: what would be the effect on growth of raising the price to $9.99. There are plenty of people who expect the NFLX domestic subscriber base to increase at a CAGR of 15%-20% over the next five years. If raising the prices reduces that to 10% or less, then you are boosting today's profit at the expense of tomorrow.

    Second, while content costs are not related to subscriber numbers in the short term, I don't think that's the case in the long term. This whole internet VOD market is new, and so nobody really knows how much content is really worth. With Amazon Prime growing at an astronomical rate and other competitors entering the market, I think we will naturally see an upward bias on content prices. If NFLX is earning hefty streaming margins in a year or two because of a price hike, content owners will raise their ask when the rights come up for renewal.
    Mar 3 11:11 AM | 1 Like Like |Link to Comment
  • J.C. Penney Store Leaders Give Positive Feedback On Q4 Sales [View article]
    Are you serious? Every quarter, Ron Johnson has talked about "learnings", positive momentum, sales trends improving, and it's been one horrible result after another.

    Just to break even, J.C. Penney needs sales growth off almost 30% (holding gross margin constant), or gross margin growth of 870 basis points (holding revenue constant). Thus, there will be another big loss this year, and J.C. Penney is running out of tricks to boost its cash (and cash is really $850 million because the company deferred payment to some of its vendors until after the quarter ended).

    Bottom line: we will probably see some sort of mezzanine financing or new stock issuance this year, because the cash will be gone and you can't realistically make long term investments by borrowing against a revolving credit line.
    Feb 27 08:48 PM | 2 Likes Like |Link to Comment
  • J.C. Penney Store Leaders Give Positive Feedback On Q4 Sales [View article]
    And today we see the problem with relying on anecdotal data for estimates: particularly when it comes from people who are probably trying to save their own jobs. Same store sales down more than 30%, gross margin of 23.8%, and a bigger adjusted loss than in the first three quarters combined.

    I think it's finally time to break out the B word (bankruptcy).
    Feb 27 04:47 PM | 2 Likes Like |Link to Comment
  • Nvidia's Apple Win May Disrupt Traditional Seasonality [View article]
    It's obviously good for NVDA if Apple buys higher-end GPUs, as it will have a higher profit per unit. The mix will depend on customer preference; the 21.5" iMac starts with the 640M and the 27" iMac starts with the 660M.

    However, my point was more geared to the gross margin as a percentage of sales. While the high-end products would normally be high margin, OEMs always get favorable pricing. I think Apple could get VERY favorable pricing based on the volumes it will order. We'll see where gross margin goes this quarter and next, and that should provide a good sense of whether Apple is getting a big discount.
    Feb 5 04:48 PM | 1 Like Like |Link to Comment
  • Nvidia's Apple Win May Disrupt Traditional Seasonality [View article]
    Thanks for the article. I wonder just how high margin the Apple sales are. Apple will certainly pay for quality, but I don't think it would overpay. With Apple buying more than 5 million GPUs, I wouldn't be very surprised if the gross margin gets pushed down to something like 30%.

    Also, you have to remember that Nvidia's Q4 probably covers Apple's December-February production. That lines up more with Apple's Q2 than Q1. So I'm not sure Apple's seasonality would show up in NVDA's results.
    Feb 5 09:21 AM | Likes Like |Link to Comment
  • Amazon Buyers: Did You Read The Report? [View article]
    I agree that it was a bad earnings report. That said, the EPS miss was due to a heavy tax rate due to some non-deductible losses. Operating income beat expectations/guidance. Wall Street is cheering because this is the first tangible evidence that Amazon can grow its gross and operating margins as it comes out of the current investment cycle.

    Also, it's not quite fair to compare capex to sales or fulfillment to sales, because Amazon is seeing a mix shift towards third-party sales, which are low revenue but 100% gross margin.
    Jan 30 10:46 AM | 1 Like Like |Link to Comment
  • Nvidia's Upcoming Earnings: What You Need To Know [View article]
    The question is: at what price point? It may be that an i7 (or whatever it is called) can replace a discrete GPU for most gamers, but that an i3 + discrete GPU is cheaper and provides better gaming performance. NVDA's management has said as much in the past (referring to the company's success in China).
    Jan 27 03:29 PM | Likes Like |Link to Comment
  • Netflix Rebuilding Its House Of Cards [View article]
    Of course the percentage is not the key. My point is that the absolute growth rate will slow down. It's already dropped from 9.6 million at the peak to 5.5 million. Next year it will probably drop below 5 million, the year after below 4 million.

    Netflix doesn't report churn any more, but it's clearly pretty significant. The larger the subscriber base, the more customers will leave every month, making it harder to generate high growth. With new competitors jumping in, and existing ones (i.e. Amazon) rapidly growing their offerings, I think Netflix's domestic streaming business will reach market saturation in the 40-45 million range.
    Jan 27 02:21 PM | 1 Like Like |Link to Comment
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