Seeking Alpha

Bachar Samawi

View as an RSS Feed
View Bachar Samawi's Comments BY TICKER:
Latest  |  Highest rated
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    Yes short ratio is high again, even higher than before, as stated in the article, and hence I cautioned against shorting Tesla. On the other hand, the macro environment can provide headwinds, which was not the case in October 2013. Hence, the high valuations along with the negative macro environment along with the dilutive nature of the convertible notes somewhat offset the allure of the potential for another short squeeze to develop. If Tesla shares drop further from these levels, then there will come a point where there may be a favorable entry point again....
    Mar 31 06:07 PM | 2 Likes Like |Link to Comment
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    The article is very specific to its purpose, as is stated in its title. TSLA was previously recommended whereby several bullish factors, accompanied by a sizable short ratio, increased the likelihood that in case of any unexpected additional bullish news, a short squeeze would develop and shares would trade higher. That is exactly what happened, and as a follow-up, as such event has materialized, and given resulting gains and rising risks, from a risk/reward perspective, the current article recommends being flat again.
    Mar 31 05:59 PM | 2 Likes Like |Link to Comment
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    tech01x you may wish to ignore the stated risks and remain long TSLA. That is your ultimate decision. Throughout my 26 year trading career I've learned that whenever I have reaped substantial appreciation on a position, while negative risks start accumulating, that it is typically wiser to book profits and either look for a lower entry point, or possibly seek an alternate investment. You are welcome to examine my 90 or so SA articles that I have published during the past 3 years or so, and you will notice that they provide a rather good track record.... TSLA may very well keep appreciating from these levels without providing a further pull back, however, given the stated risks and current gains, I would prefer to book profits and find a better investment opportunity... If you consider this sophomoric, then I am happy to achieve superior returns in a sophomoric manner.... the position has already achieved as much as 47% since its recommendation, depending on investors' exit point, and currently are showing over 19% gain....
    Mar 31 05:45 PM | 3 Likes Like |Link to Comment
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    These shares have had substantial volatility and sizable peak to trough cycles and vice versa. Although you make a good point stewpified, I do believe in market timing, especially for shares that exhibit such characteristics. Furthermore, I often follow-up previous analysis I have written about, as I do not believe in the eternal buy-and-hold forever strategy, although there are very few stocks that I would favor holding for an extended period of time.
    Mar 31 02:53 PM | Likes Like |Link to Comment
  • Apple's Dividend Will Hit $20 Within 5 Years [View article]
    Although I certainly believe that Apple is a good investment proposition, the author's analysis lacks some depth; how about stock and stock option based compensation, has the issuance of such additional shares been taken into consideration in the calculations?
    Mar 29 12:18 PM | 3 Likes Like |Link to Comment
  • On The Way To Higher Stock Prices, Something Suddenly Happened [View article]
    You have to realize that as the market was trading higher, technology shares outperformed on the notion of a stronger economy.

    As signals emerged of slowing down, during the past two days, a rotation has taken place out of technology and into financial shares. For example, on Friday, BofA, GS traded higher, while high risk Tesla, Lnkd, nflx, gmcr, etc... traded lower.

    If such rotation is indeed taking place, then it is not surprising that markets have made new highs on Friday buoyed by financial shares gains. However, once the dust settles, and if indeed the economy is slowing, then ultimately selling pressures will materialize across the board.

    What does all this mean? It means that volatility will increase surrounding sensitive economic releases, with sector rotations masking major directional moves until the dust settles, and the market clearly trends in one direction or the other, upon agreement on the true state of the economy.
    Mar 2 07:12 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: 9 Different Insiders Have Sold Shares This Month [View article]
    More important than insider selling, GMCR has substantial headwinds:

    A- consumers have been making coffee at home for over 1000 years, and hence GMCR's original coffee products were naturally in demand; on the other hand, demand for home made 'coke' related products is yet to be tested, and hence the value proposition is nothing but an experiment at this stage;

    B- with Fed tapering, high p/e ratio stocks are at substantial risk for extreme correction to the downside which can often exceed 50% to 70%;

    C- GMCR rallied not necessarily because of pending new Coke products, but possibly because of the possibility of being ultimately bought out by Coke. What many Bulls do not realize is that Coke's entry price for 10% stake is about 40% below current price. First, if demand for home made Coke related products proves limited, it is unlikely Coke will proceed with buying out GMCR, and Second, it is unlikely they would make such purchase at a price of 40% higher than original purchase - otherwise, they would have purchased a much larger stake to start with... But Coke itself knows the associated risks, and hence was simply buying an insurance, and was not interested in a larger stake until the concept of home coke-related products is proven....

    In essence, it is not surprising that insiders are selling, and GMCR can easily drop over 30% in the blink of an eye....
    Feb 14 08:22 AM | 1 Like Like |Link to Comment
  • 5 Simple Reasons The U.S. Market Will Go Straight Up From Here [View article]
    Your five reasons are quite weak...

    The market indices are at their current levels despite your reasons 1 to 4 having been there for many months.

    For such reason, downside risks are quite large in an era where money printing is decelerating.

    As for reason 5, it is quite hard to argue that there is too much fear, especially where many of the leading stocks trading at very elevated P/E: FB, Amazon, Google, etc.... Many such stocks will experience decelerating growth and have substantial wind that can be taken out in case reasons 1 to 4 reverse...
    Feb 5 05:44 AM | 4 Likes Like |Link to Comment
  • Twitter - Valuation Per User In Line With Facebook [View article]
    Facebook is under-priced relative to Twitter. Facebook revenues for year ending Dec 2014 are expected at $10.35 billion while for Twitter revenues are expected to be $1.14 billion (10% of Facebook). Meanwhile, FB EPS are expected at $1.12/share for year ending Dec 2014 for Facebook, while for Twitter they are expected to come in at a loss of 2 cents.

    As it is unlikely that Twitter shares will fall down substantially due to limited Float, and given the above metrics, then there is a substantial likelihood that Facebook shares can actually gap higher by no less than 30% to 50%.

    Remember, prior to Twitter's IPO, many analysts were claiming how Twitter would be fairly priced at about $23 relative to FB. Now that Twitter is priced at over $41, what does that say about Facebook?
    Nov 11 05:13 AM | 2 Likes Like |Link to Comment
  • IBM Has A Cash Flow Problem [View article]
    Given the overriding relatively muted economic environment for the last several years, IBM has actually done OK. As for the slowdown in China, this could be seasonal and related to China as opposed to IBM, while it can reverse itself in the coming months.

    Is it possible that IBM would have a pull back equal to your 6% target? Absolutely it is possible. As a matter of a fact, it is possible for the entire market to pull back by 6%. However, I do not believe the thesis is strong enough, and given IBM's reasonable P/E ratio, I would rather be long....
    Nov 10 05:01 AM | 6 Likes Like |Link to Comment
  • The Lack Of Profitability Is Structural [View article]
    Paulo lack of profitability is shown to be structural in your model because Amazon has not fully executed its strategy yet. To date, discounting, and selling at a price to undercut others even if it leads to losses has been their model, and yes, in a sense, as such strategy has been maintained, it is structural.

    Amazon investors who support Amazon believe that there will come a point where Amazon will be able to boost its profits simply by raising its prices by a small percentage or decreasing shipping subsidies. That point would come when it had driven most of its competitors out of business. Many believe believe that at such point Amazon would have achieved such scale that it would be difficult for others to compete.

    When such point comes, your model will no longer seem structural, as initially profits will boom. But then the decline in Amazon's stock price will become structural. At such point, their revenues would decelerate substantially, and as competition slowly re-enters, despite the scale barriers that Amazon has built, ultimately profits will be capped and will start declining again...

    As I have said it before, they have a very simple model, full of embellishments and whistles; they are merely undercutting prices and selling below cost when incorporating shipping and other administrative expenses, counting on drowning the competition.

    This is not a viable long term business plan....
    Oct 29 04:05 AM | 3 Likes Like |Link to Comment
  • I Concede Defeat In [View article]
    Inkyx my insight into Amazon is based on my own experience at launching an internet business in the late 90's and failing. Naturally, I did not have nearly the scale of Amazon but what I learned is simple:

    1- when selling products on the internet, it is very difficult to overcome the cost of shipping and advertising, if you are competing on price with other internet businesses and brick and mortar businesses

    Amazon is learning it the long way. First they had assumed they can only have a few shipping centers in the US. Later they realized they need more than a hundred fulfillment centers. Guess what they may learn next? They will possibly also need brick & mortar Amazon shops, which will provide them exposure and free street advertisement. At the end of the day, I believe Amazon will come a full circle and will be either a retailer or a wholesaler such as Costco/Sam Club.

    Now if you want to look forward 5, 10, 15 years, then their model is even less compelling. Energy prices in the future are sure to go much higher, and cost of shipping will become even more prohibitive....

    From the consumer perspective, I love Amazon! It's cheaper than everyone else... As a consumer, I also hope they will always be in business.... As an investor, I would not touch them with a 10 foot pole....
    Oct 25 03:28 PM | 9 Likes Like |Link to Comment
  • I Concede Defeat In [View article]
    Paulo there is a difference between conceding defeat and being wrong. You were not wrong about Amazon. You were defeated and lost a battle, but the war will end when one day Amazon falls off a cliff.

    Amazon's business model is unsustainable. It has been able to gain market share and increase revenues by undercutting everyone else's prices, and selling at a loss. In international trade there is a term for that; it is called 'dumping' and it is illegal.

    If I was to offer something for free, say a free coke, wouldn't I generate phenomenal revenues and lose money? Or if I was to offer it under everyone else's price, wouldn't everyone want it and I would still generate revenues and lose money?

    The Amazon story is a simple story. They undercut everyone else, lose money, and once the competition exits, Amazon hopes to start to make money, either by charging true cost of shipping, or raising their prices. As soon as they start doing that, their revenues will decelerate, and Amazon will fall off a cliff, because their margins would still not justify Amazon stock valuation.

    Timing is everything. I believe Amazon shares will fall off a cliff one day. I do not know when, but I certainly am not interested in owning Amazon shares while it happens.
    Oct 25 09:29 AM | 44 Likes Like |Link to Comment
  • Why Not To Buy Boeing On Strong Q3 Results [View article]
    Given Boeing's earnings release where it beat estimates by quite a bit, and has done so previously, it is very clear that such beat was not reflected in its price. Furthermore, their current forward p/e ratio of 17.7 will likely drop once analysts revise their earnings estimates higher. Boeing's earnings blew most estimates away, and their outlook is even better than anticipated.

    Boeing has a duopoly on passenger aircraft (with airbus), and its market cap of about $97 billion can grow phenomenally.

    Boeing shares can easily add another $30-$50 to reach $160 to $180 within a very short time span. You simply cannot bet on the aircraft industry through GD and LM.....
    Oct 24 05:26 AM | 5 Likes Like |Link to Comment
  • Will Google Beat Apple To $1 Trillion? [View article]
    Thank you for your comment bjnflicks. You make a good point that Apple makes most its money from being able to sell its products to customers, as opposed to giving them away for free... It is a different business model: one that generates revenues from selling advertisements, vs. another that sells products (and pays for advertisements...) .

    Yet Google's model is still a compelling one, and aside from private email data mining (which I find controversial), Google has done an incredible job and will have a great future; I just don't think it will overtake Apple in revenues and profits within the next 5 to 8 years, if at all, while Apple continues to be under-appreciated based on its adjusted forward p/e ratio ...
    Oct 23 04:15 AM | Likes Like |Link to Comment