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  • Update: RadioShack Seeking Emergency Financing To Stave Off Bankruptcy
    Wed, Aug. 27 RSH 8 Comments

    Summary

    • RadioShack is reportedly in talks with a large shareholder regarding a rescue financing package.
    • This confirms my opinion that RadioShack will be facing severe liquidity issues in the near future.
    • A new financing deal wasn't anticipated, but it also only fixes one of RadioShack's problems that I mentioned in my previous article.
  • Update: Best Buy's Profits Soar
    Tue, Aug. 26 BBY 6 Comments

    Summary

    • Best Buy's earnings disappointed the market, but adjusted profit soared.
    • Revenue issues are related to weakness in the consumer electronics industry, a temporary situation.
    • Best Buy is still highly profitable, and the stock is still undervalued.
  • The PC Can't Save Hewlett-Packard
    Tue, Aug. 26 HPQ 6 Comments

    Summary

    • HP reported revenue growth during the third quarter with its PC segment growing by 12%.
    • However, PCs contribute little to the bottom line, and 85% of HP's operating profit comes from printing and enterprise hardware.
    • HP appears cheap, but if earnings contract in the long run, HP is a value trap.
  • What To Expect When Staples Reports Earnings
    Tue, Aug. 19 SPLS 4 Comments

    Summary

    • Staples is set to report its second quarter earnings before the market opens on August 20.
    • Comparable store sales are likely to continue to decline, and the company is closing hundreds of stores as demand for office supplies wanes.
    • The commercial business should be much stronger, and look for online sales to grow.
  • Update: J.C. Penney's Comparable Store Sales Aren't Growing Fast Enough
    Fri, Aug. 15 JCP 14 Comments

    Summary

    • Shares of J.C. Penney surged on its second quarter earnings results.
    • While gross margin increased, comparable store sales growth actually slowed down compared to the first quarter.
    • J.C. Penney cannot return to profitability on just gross margin growth alone, a point I made in a previous article.
  • McDonald's Is Still A Fantastic Dividend Stock
    Thu, Aug. 14 MCD 9 Comments

    Summary

    • McDonald's is facing problems in both Asia and the United States.
    • However, the company's problems appear fixable, and long-term dividend growth shouldn't be adversely affected.
    • McDonald's is priced attractively for dividend investors, and the stock provides an ample margin of safety.
  • J.C. Penney Earnings Preview: Serious Growth Needed
    Tue, Aug. 12 JCP 23 Comments

    Summary

    • J.C. Penney is set to report its second quarter earnings after market close on August 14.
    • There needs to be serious growth in both comparable store sales and gross margin to show that the turnaround is working.
    • A lack of acceleration in these areas could lead to liquidity issues down the road.
  • Nvidia: Strong Earnings, Ample Growth Opportunities
    Mon, Aug. 11 NVDA 20 Comments

    Summary

    • Nvidia reported strong Q2 earnings, with revenue and earnings growing in the double-digits.
    • AMD's GPU issues have not affected Nvidia, with its GTX gaming GPUs growing by 10%.
    • Growth opportunities including a growing PC market, the automotive market and the enterprise market should lead to strong earnings growth going forward.
  • Buying Chipotle Is Almost Certainly A Terrible Idea
    Wed, Aug. 6 CMG 12 Comments

    Summary

    • Chipotle Mexican Grill is a wonderful company with fantastic margins and growth prospects.
    • However, the valuation has risen to nonsensical levels, and an investment at today's prices is unlikely to lead to satisfactory results.
    • A few possible scenarios show that Chipotle is best avoided at these levels.
  • Best Buy: Severely Undervalued With 66% Upside
    Wed, Aug. 6 BBY 7 Comments

    Summary

    • Shares of Best Buy collapsed at the beginning of this year as optimism faded.
    • This was a massive overreaction, and Best Buy is severely undervalued.
    • Despite all of the pessimism, Best Buy is a profitable company with a strong balance sheet, and the future looks bright.
  • One Simple Reason Why AMD Can't Compete
    Wed, Aug. 6 AMD 153 Comments

    Summary

    • AMD is very good at creating hype, but at the same time it's been slashing its R&D spending.
    • Intel vastly outspends AMD in R&D, and toward the end of last year Nvidia surpassed AMD as well.
    • In the long-term, there is no way that AMD can remain competitive given these R&D spending gaps.
  • J.C. Penney's Turnaround Is Still A Long Shot
    Tue, Aug. 5 JCP 33 Comments

    Summary

    • J.C. Penney appears to be executing on its turnaround.
    • However, the company returning to profitability any time soon is still a long shot.
    • Huge interest payments will act as a barrier to profitability, and the company's guidance comes with serious caveats.
  • Microsoft's Xbox One Is Failing
    Tue, Aug. 5 MSFT 39 Comments

    Summary

    • Microsoft introduced a version of its Xbox One video game console in June without the Kinect peripheral.
    • This removed the price advantage that the PlayStation 4 had, but it has done little to close the sales gap.
    • The Xbox One is still selling far worse than the competition, and it may be time for Microsoft to consider spinning off or selling the division.
  • Why Apple's iPad Is Floundering
    Mon, Aug. 4 AAPL 71 Comments

    Summary

    • While Apple's iPhone continues to grow, sales of the iPad have declined for two straight quarters.
    • Tablets are becoming a commodity, much like PCs, and the best that Apple can hope for in the long-term is a Mac-like market share.
    • The iPhone representing more than half of Apple's revenue is the biggest risk facing the company.
  • AMD: Mullins APU Gets A Win, But Battery Life Is A Problem
    Fri, Aug. 1 AMD 38 Comments

    Summary

    • Advanced Micro Devices' low-power Mullins APU has its first design win, a $250 notebook from HP.
    • The device has abysmal battery life, however, comparing poorly to devices powered by Intel's Bay Trail chips.
    • If this turns out to be the norm for Mullins, AMD won't be competitive in either the low-end notebook market or the tablet market.
    • Intel has been winning low-end notebook market share from AMD already, and Mullins doesn't appear to fix the problem for AMD.
  • Microsoft's Bing Is No Longer A Money Pit
    Fri, Aug. 1 MSFT 29 Comments

    Summary

    • Microsoft's Bing search engine is expected to be profitable in fiscal 2016.
    • Bing has lost billions since it was first launched, but has been gaining market share over the years.
    • Profit growth from Bing could accelerate from the combination of higher market share and higher ad prices.
  • Update: RadioShack's Cash Crunch Confirmed By Moody's
    Thu, Jul. 31 RSH 54 Comments

    Summary

    • On July 30, Moody's issued a warning stating that RadioShack will face a serious cash crunch by November of 2015.
    • This warning solidifies my opinion that RadioShack is going to go bankrupt.
    • Moody's agrees with my original thesis that RadioShack cannot cut costs fast enough to survive collapsing comparable store sales.
  • RadioShack Really Is That Bad
    Wed, Jul. 9 RSH 166 Comments

    Summary

    • With RadioShack trading at a tiny fraction of sales and near book value, investors may be tempted to bet on a turnaround.
    • Cost cutting is limited by a credit agreement that prevents RadioShack from closing more than 200 stores. Operating costs are now nearly half of the company's revenue.
    • Sales are collapsing, and costs cannot be cut fast enough for RadioShack to avoid bankruptcy.
    • Book value is plummeting, and the liquidation value is likely already negative due to large amounts of inventory. Equity investors will be wiped out in the event of bankruptcy.
  • J.C. Penney Is Not The Next Best Buy
    Oct. 22, 2013 JCP 51 Comments
  • Staples Is Taking The Battle To Amazon
    Oct. 15, 2013 SPLS 4 Comments
  • Best Buy Is Worth At Least $50 Per Share
    Oct. 9, 2013 BBY 15 Comments
  • Microsoft Has Made A Smart Acquisition
    Sep. 5, 2013 MSFT 31 Comments
  • Nvidia: Value And Growth In One Inexpensive Package
    Sep. 2, 2013 NVDA 4 Comments
  • Cisco Has Entered The Bargain Bin
    Aug. 16, 2013 CSCO 34 Comments
  • Alcatel-Lucent Bonds Yielding 11%
    Dec. 19, 2012 ALU 5 Comments
  • GE: One Step Closer To Dividend King
    Dec. 17, 2012 GE 13 Comments
  • Apple Is Priced For No Growth
    Dec. 14, 2012 AAPL 57 Comments
  • Best Buy Bonds Yielding 9%
    Dec. 5, 2012 BBY 5 Comments
  • Ignore The Hate: Buy Microsoft!
    Dec. 3, 2012 MSFT 56 Comments
  • RadioShack Bonds Offer Extraordinary Yields
    Nov. 27, 2012 RSH 27 Comments
  • Nvidia: 2 Ways To Buy This Bargain Stock For Even Less
    Nov. 14, 2012 NVDA 1 Comment
  • Navistar: Buy The Bonds, Not The Stock
    Editors' Pick • Nov. 11, 2012 NAV 11 Comments