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Bachar Samawi

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  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    Thank you for your comment Zipper0. You provide some good points.

    From a longer term perspective, you are right, as provided in the article we published and referenced in the reply to .

    As a technology company, while in the past I do not believe Apple shares carried a "differentiation" PE adder, that is no longer the case today; an expansion in its forward PE ratio as well as in its free cash flow multiple have already occurred; although they may still have a little more room to go...

    Nevertheless, there are still some short term headwinds. Investors and traders often get carried away; when Apple had retreated in 2013 by over 45% from its previous high, dropping form over $100 in Sep 2012 to about $55 in April 2013, many were expecting it to drop even further... Yet now that it has appreciated by over 116% from its April 2013 low, many now are expecting Apple to possibly increase by over 20% to 50% in a relatively short period...

    There is one top, and one bottom, and thousands of trades, estimates and predictions. For such reason, I do not necessarily try to pick the top or bottom, but mainly evaluate based on risk/reward scenario. In the near term, current headwinds make a 10% drop more likely than a 10% appreciation. Furthermore, in case Apple does appreciate by 10% or more from current levels prior to dropping by such amount, I do believe that investors would still have the opportunity to purchase Apple at current levels, as any such appreciation would also raise the likelihood of a subsequent drop to current levels...

    Once again, from a longer term perspective, I agree with you, and I do believe that Apple is the best candidate out there to breach $1 Trillion market cap.
    Nov 27, 2014. 05:40 AM | 1 Like Like |Link to Comment
  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    Thanks you for your comment richbar. The market cap referenced in the article implicitly takes buybacks into consideration, as it is calculated based on current outstanding shares.

    As for the stock price, split or no split, no adjustment is needed for buybacks. Adjustments are typically made for comparison basis for dividends and splits only, which have economic effect on holders of shares.

    For example, suppose you buy a stock at $100 in 2012, and then the company engages in buybacks, but the stock price remains at $100 in 2014, with no dividends & no splits, then if you sell the stock in 2014 at its price of $100, you have no gains and no losses despite the buybacks.
    Nov 27, 2014. 01:41 AM | Likes Like |Link to Comment
  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    We typically don't. In this case, we are simply putting it in perspective of the Apple series of articles we had previously published, as referenced in the article, as a courtesy to those readers.

    This article provides both prices within (pre-split and post-split), and serves as transition for future Apple articles, which, as you suggest, would always provide post-split prices.
    Nov 27, 2014. 01:33 AM | Likes Like |Link to Comment
  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    For how they may get to $1T see article I referenced in reply to ritam2001
    Nov 26, 2014. 04:40 PM | 1 Like Like |Link to Comment
  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    From a longer term perspective, I agree, as per article I published on October 22, 2013: Will Google Beat Apple to $1 Trillion

    From the nearer term perspective, there are some headwinds, as per article...
    Nov 26, 2014. 04:37 PM | 1 Like Like |Link to Comment
  • Time To Sell Google And Buy Facebook [View article]
    Facebook valuation metrics have already incorporated increased display ad monetization by FB. Yet, despite such expectations, FB is still trading at a forward P/E ratio of about 44 for 12/2014 and 35 for 12/2015. Such ratios are too high, despite FB's expected growth rate, given the current macro environment, as well as FB's accumulation of substantial goodwill on its balance sheets due to its acquisitions (which can easily be written off at least partly in the future). Furthermore, FB can also be easily disrupted, while with a market cap of over $162 billion, it can easily lose half its market cap in a heartbeat.

    In summary, given macro risks, disruptive risks, excessive forward P/E ratio risks, future goodwill write-off risks, additional use of FB stock as currency for future acquisitions risks, Facebook is overpriced at these levels and can easily drop between 20% to over 40% in a heartbeat if any such risks materialize....
    Jun 4, 2014. 11:45 AM | 2 Likes Like |Link to Comment
  • 3 Reasons Apple Buying Beats Is Smart [View article]
    If this transaction takes place, it will have very profound implications on what Apple stands for, and can potentially raise a valid question about Apple's future.

    Apple is about creativity, innovations, design and marketing among other matters. As long as one believes that Apple is on top of its game in such regards, then one can justify current 1/2 Trillion Dollar market capitalization for Apple, and can possibly make a case for a higher forward P/E ratio x-cash for Apple.

    Beats is primarily about design, innovation within a limited scope, and some marketing. If Apple buys Beats, it is not about the $3 billion it will spend. It is about the message that can be interpreted by investors: is Apple losing its MOJO...

    It can easily be argued that if Apple buys Beats, it is an indication that Apple may be losing faith in its own ability to remain on top of its unique proprietary creativity, design and innovation game... That can cause serious erosion of investor confidence in Apple.

    What made Apple succeed is primarily Steve Jobs. When he passed away, many, including myself, felt that he must have left behind a culture that can continue strive on his legacy; whereby he may have been able to insititutionalize, or "Jobalize" Apple.

    Much of what he stood for is currently being challenged, and is slowly changing: a- bowing to specific investors, b- parting with substantial cash, c- pursuing inorganic growth, etc... If such trend continues, Apple will slowly evolve into becoming commoditized, both in terms of product, as well as in terms of a company and hence investment... In such case, Apple's lifespan will become greatly diminished...

    What Apple needs is a continuation of coming up with new, ingenious products, and to be the design trendsetter, not the design follower....
    May 9, 2014. 08:12 AM | 8 Likes Like |Link to Comment
  • 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 08:22 AM | 2 Likes 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, 2014. 05:44 AM | 4 Likes Like |Link to Comment