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Bill Maurer
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I am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have... More
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  • Who's In Your Bracket?

    Okay people, March Madness time again. Let's take a few minutes away from the markets to have some fun. I want to see what everyone thinks for the tournament, so share your thoughts below. Fill in the teams you have for the questions below. Do this only once, and do it based on your MAIN bracket. Yes, everyone usually does multiple brackets, so do it on the one either you have the most faith in, or the one you have the most riding on. Post by Thursday at 12 noon Eastern, and I'll have mine in by then as well.

    Questions - just leave a team name:

    1. Who is your lowest seeded Final Four team (if you have two or more with the same seed, pick the one you have least faith in)?

    2. Who is your biggest sleeper (i.e. they would have the most upsets over a higher seeded team)?

    3. Who is your least confident Elite Eight pick?

    4. Who do you have losing the National Championship game?

    5. Who is your first #1 or #2 seed to lose, and who do they lose to?

    Mar 17 11:00 AM | Link | 1 Comment
  • My Editor's Picks

    I've heard some requests from readers looking to find past Editor's Picks articles easier. On this page, I will provide a link to all of my Editor's Picks, as well as a list of them with a brief summary.

    Link to All articles - Bill Maurer's Editor's Picks List

    Article titles and summaries:

    Intel: The Worst Case Scenario - Examines the worst possible scenario for Intel investors in 2014. Discusses revenues, EPS, and the company's capital return plan.

    Dendreon: The Time Is Now - Discusses what the biotech company was about to report with its Q4 report. Highlighted the major numbers investors should be looking at.

    Crocs: Missing The Big Picture - Discusses the Crocs deal to raise $200 million from the sale of preferred shares. While the company did announce a much larger buyback, Crocs also warned on Q4 and said it would not be focusing on revenue growth in the short term as it goes through a transition period with its CEO stepping aside. Important Note: This article was selected for Seeking Alpha Small Cap Insight and will be only available to Pro subscribers after a certain date.

    Apple: Please Quit Your Whining - Talks about the new iPhone launch and how Apple is criticized for everything it does. Discusses the double standard Apple was held to when it came to the iPhone 5C and several other matters.

    Apple: Analyzing the Icahn Buyback Potential - Discusses the progression of Apple's buyback. Article takes a look at the company's cash pile and foreign/domestic cash breakdown. Carl Icahn's proposal is discussed, and I talk about how much EPS improvement could be seen.

    Green Mountain Has A Revenue Problem - Discusses the slowing revenues at one of the most prominent momentum names. Revenue growth has fallen off a cliff. Also dives into the fiscal 2013 inflated cash flow numbers.

    Has Dendreon's Window Of Opportunity Closed? - Analyzes the latest quarterly report from the maker of Provenge. Shows why another sales disappointment and terrible guidance makes a capital raise even more likely, and why investors may need to bail. Discusses potential items that could send the stock higher as well.

    Boston Beer Continues To Deliver - Discusses how the beer maker's growth story continues to dazzle, sending shares to new all-time highs. Compares the names to others in the space, showing how further growth is still possible. Important Note: This article was selected for Seeking Alpha Small Cap Insight and will be only available to Pro subscribers after a certain date.

    Deckers: Potential Remains Despite Questionable Guidance - Discusses the latest quarterly report from the UGG maker. Analyzes why the pullback may be a good opportunity. Discusses the guidance raise and the true math behind it.

    Crocs: $20 Possible On Asia-Pacific Growth - Discusses the footwear retailer's potential upside on strong growth in the Asia-Pacific (ex-Japan) region. Shows how the company is striving to be a four quarter retailer, and why the valuation is reasonable. Important Note: This article was selected for Seeking Alpha Small Cap Insight and will be only available to Pro subscribers after a certain date.

    First Solar: Now Comes the Hard Part -Discusses the solar giant's recent stock sale and how it impacts the balance sheet. Discusses the timing of the event, and shows why the company needs to prove that the large dilution was worth it to shareholders.

    SodaStream: When Will The Madness End? - Discusses the recent round of events that have SodaStream shares up 48% in a month. Explains why this is a company with tremendous growth potential and opportunities, and why that would be the reason to invest, not because of buyout rumors.

    Green Mountain: Starbucks Deal Hides Poor Report - Explains why an expanded partnership with Starbucks (NASDAQ:SBUX) led to a pop in Green Mountain shares. This, despite the company's extremely disappointing revenue quarter and revenue guidance for the next quarter.

    Deckers Pullback Could Present Opportunity - Examines the UGG maker's Q1 results. Discusses the Q1 beat, weak Q2 guidance, and why despite poor results, this stock could continue higher.

    Apple Earnings Preview: Playing The Analyst Game - Previews Apple's fiscal Q2 earnings report. Discusses why it doesn't matter what Apple reports, rather what the "analysts" think for the company.

    Philip Morris Pulls Back on Currency, Debt Worries - Examines the Q1 results from Philip Morris. Focuses on the company's earnings miss due to currency fluctuations, and discusses the ever increasing debt load. Shows why this may be the pullback investors were waiting for.

    Netflix: Why 4 Billion Hours Is Not An Investment Thesis - Explains why the Netflix announcement that 4 billion hours viewed in Q1 is not a reason to buy. An increase of 30% or so in viewing hours over the past three quarters is meaningless when Netflix is guiding to subscriber growth of 30% or so. Also, last time they announced something like this, they set the stock up to get crushed when earnings came out.

    Why lululemon Can Certainly Recover - Explains why the yoga and apparel maker can recover from their "pants problem". Discusses the company's growth potential and conservative guidance, plus an amazing balance sheet.

    Coinstar's Debt Raise A Problem For Netflix - Explains why Coinstar's debt raise will help the kiosk maker increase content spending for Redbox Instant, while also allowing Coinstar to buy back more shares. Discusses the launch of Redbox Instant and threats from Amazon Prime.

    Deckers: Not Good Enough Means Short Case Returns - Details the poor 4th quarter performance of the UGG retailer, and why continued underperformance means the stock is a short again. Important Note: This article was selected for Seeking Alpha Pro and will be only available to Pro subscribers after a certain date.

    SodaStream Is Here To Stay - Analyzes the soda maker's fourth quarter results. Previews what the company has in the pipeline going forward, and shows why the valuation is quite reasonable.

    Intuitive Surgical Remains Best of Breed - Analyzes the da Vinci Surgical maker's fourth quarter results. Shows why this growth company which has pleased investors in the past continued to do so, and why this is a great growth name to be in for the long term.

    Amazon's Circus: Good, Bad, and Ugly - Breaks down Amazon's fourth quarter results. Shows why despite missing estimates and providing poor guidance, Amazon's stock rallied higher on the news.

    Apple Earnings Preview: Can Shares Rebound? - A preview of Apple's Q1 earnings report. Breaks down the expected numbers by product, and figures out a base line for where Apple needs to report. Also analyzes themes between Q1 in comparison to past quarters.

    Why lululemon's Pre-Announcement Is Good News - Examines the early Q4 announcement from Canadian apparel maker lululemon. This was not a warning. They guided to the upper end of their revenue range and higher than range for earnings. Stock sold off because again, analysts expected way too much, providing a good buy opportunity.

    Netflix Gives Reed Hastings Huge Raise: Why? - Examines the latest folly from Netflix. Despite a dismal year with profits plunging 95% plus, margins falling off a cliff, and the company killing off its profitable DVD segment, the company gave CEO Reed Hastings a huge raise, which I feel is extremely undeserved.

    Should you Sell Cisco like CEO John Chambers Is? - Analyzes the under the radar announcement that Cisco CEO John Chambers plans to sell about a third of his position in the name over the next year or two. With Cisco trading near the high end of its range, is now the time to take some profits and look for a better entry point?

    Amazon's Smoke And Mirrors Are Fading - Discusses why a company that continues to not make money and decrease its margins cannot rally forever. Amazon is trading at 52-week highs, despite now losing money and a huge debt raise recently, a large part of which was to fund their new headquarters.

    Lululemon Perhaps The Best Buy In Retail - Explains why retailer lululemon's (NASDAQ:LULU) third quarter results prove it is a great company. Blowout results, a great balance sheet, and plenty of growth ahead are discussed, as well as a valuation analysis to peers.

    Netflix Bulls Don't Get It - Explains why Netflix is still overpriced, as shrinking margins will lead to depressed profits for many years, and how the Disney (NYSE:DIS) deal isn't all its cracked up to be.

    Netflix Competitive Battle Heats Up - Discusses the new competition Netflix faces in Mexico, along with a widely anticipated US competitor getting closer to launch. Analyzes the impact of several smaller competitors eating away, instead of one large competitor.

    Apple's Valuation Is Very Reasonable - Shows how Apple's stock is fairly valued, perhaps even cheap. Uses two metrics to discuss. A backward looking price to earnings calculation, subtracting out the massive cash pile, and a forward looking price to sales number versus other names in the space.

    Green Mountain Remains A Short Candidate - Explains why coffee name Green Mountain still has several issues involved that make the potential for a short position likely. Items include an extra week throwing off growth numbers, a buyback vastly skewing numbers, and a stock rising 160% while expectations have decreased.

    Google Looking For Margin Rebound - Discusses the impact of Google's falling margins. Shows why it's not just about the cost of sales, and how the Motorola Mobility acquisition has changed things. Shows why Google's margin problem needs to turn around, given that shares traded at a significant premium to Apple currently.

    Amazon And The Issue of Debt - Explains why Amazon's recent decision to issue debt isn't the best one. Discusses the worsening balance sheet as well as poor profitability. Article also questions issuing debt versus equity.

    Deckers Headwinds And Potential Opportunities - Explains the tough conditions Deckers still faces and why the company is not out of the woods yet. Also discusses how the company can turn things around.

    Investors Don't Understand Apple's Math - A Mistake - Explains why Apple's recent fall could be related to the company's confusing guidance. Discussed are the impacts of a 13 week period versus a 14 week one, and low gross margin guidance.

    Zillow Fall Could Present Opportunity - Analyzes why real estate information site Zillow may be a buy after the recent fall post-earnings. While guidance was disappointing, it may be part of the company's long term strategy in shifting businesses.

    Dendreon Still Not There Yet - Analyzes why the post-earnings pop in biotech Dendreon was short lived. Provenge sales have fallen two quarters in a row. With the balance sheet getting worse, the company is having a hard time getting to the magic $100 million revenue mark.

    Philip Morris Pulls Back Again - Discusses the cigarette maker's Q3 results, which didn't meet expectations. Shows how the premium to the industry has come down, and on another $6 pullback, the name might be a good buy again.

    Microsoft Gets A Pass - Analyzes Microsoft's fiscal Q1 results that missed due to Windows 8 deferred revenues. Explains why the stock still is a great value, and the company should get a pass as we wait for the new product launch, like Apple always gets one.

    Sprint: Don't Forget The Fundamentals - Shows why Sprint has the ability to become profitable over the next few years after a fresh shot of capital could help them pay down debt to reduce interest costs. Also discussed is the possibility that Sprint gets the iPad.

    Netflix: Don't Buy Into A 40% Rally - Shows investors why buying into Netflix after a 40% pop on two analyst upgrades is unwise. Analyzes the contribution profit issue, competitive fears, and Amazon Prime.

    Cisco: Is Now The Time To Buy? - With Cisco at post-earnings levels again, should investors buy into the tech giant. Analyzes the dividend, buyback, and growth prospects in relation to other top tier techs.

    Research in Motion's Positive Surprise - Analyzes the second quarter report from the Blackberry maker. RIMM shares jumped after the company beat on both the top and bottom line. Although expectations were really low, the results weren't as bad as expected, and they even increased their cash position in the quarter.

    Intel Could Be The Next Dow Dog - Analyzes how Intel estimates have come down since the company's Q3 revenue warning. Describes how net income has been falling in recent quarters, which leads to lower operating cash flow, which will have a negative impact on the company's buyback plans, hindering EPS growth going forward.

    The Apple iPhone Frenzy Is Here - Talks about the upcoming launch of Apple's new iPhone. Analyzes the impact that unit sales will have on fiscal Q4 for the company, and shows how the stock could react after the announcement hits.

    QE3 Now Could Mean QE4 Later - Talks about the impact of the Federal Reserve launching QE3 during the September meeting, and how it might be too early for such a program. With the economy not in terrible shape, and the upcoming fiscal cliff, it is possible that QE3 now could lead to QE4 sooner than you think.

    Intel's Warning: Priced In Or Going Lower? - Analyzes the latest revenue warning for Intel (NASDAQ:INTC), and figures out the impact on the PC industry at a whole. Shows why there could still be downside for shares.

    Apple's Q4 Depends on iPhone Release - Examines why Apple's fiscal Q4 and Q1 results will be heavily dependent on the timing of the iPhone release. Also, how will Apple fend off the growing competition in the tablet space.

    Cisco's Dividend Hiding Larger Issues? - Analyzes why a huge jump in Cisco's dividend may be hiding some red flags in terms of growth and declining margins. Also, with shares up nearly $4 off the recent low, investors might not want to jump in at current levels.

    Sprint: Bold iPhone Move, Fitch Affirms Rating, Outlook Negative - Examines Sprint's (NYSE:S) move to cut the iPhone 4S price ahead of the new phone launch. Also, discusses the recent report from Fitch, which affirmed the company's debt rating, but left the outlook at negative due to several legitimate risk factors.

    Microsoft: Profiting From Windows 8 Launch - Examines how to make money in Microsoft (NASDAQ:MSFT), from both shares and options, through the Windows 8 launch period over the next few months.

    Philip Morris Still Going Strong - Examines the strength of the cigarette maker and discusses how to find a decent entry point.

    Google Remains Quite Unimpresive - Explains why Google's (NASDAQ:GOOG) internal metrics are breaking down and that it is in the prime trading range for a short opportunity.

    Netflix Continues To Stagnate - Details the continued troubles Netflix (NASDAQ:NFLX) has after reporting Q2 earnings.

    Deckers Will Rally If Guidance Is Good - Details how Deckers could jump after Q2 if they can assure investors that the second half of the year will be better.

    Research in Motion: By The Numbers - Analyzes how struggling Blackberry maker Research in Motion (RIMM) is doing. This time, it's all about some key numbers.

    Is Philip Morris Still Best of Breed - Examines Philip Morris (NYSE:PM), the cigarette maker, to see if it still is the best name in the space.

    Research in Motion: It Only Gets Worse - Examines the Blackberry maker after its terrible Q1 earnings report and BB10 delay.

    Facebook: The Real Fun Is About To Start - Why upcoming quiet periods ending, earnings reports, and lock up expirations will provide the true craziness in this name.

    Skeptical of Amazon At These Levels - Why Amazon (NASDAQ:AMZN) is a good short candidate after its Q1 earnings report and subsequent rally.

    Deckers: The Latest High-Growth Stock to Collapse - Analyzes how Deckers (NYSE:DECK), the company behind UGGs, has fallen after a warm winter, and how the problems may be more than just short-term.

    Will Apple Be Helped Or Hurt By Facebook? - Analyzes the impact on holding Apple (NASDAQ:AAPL) stock through Facebook's (NASDAQ:FB) IPO, expected sometime during 2012.

    Boston Beer: Flavor and Growth Make For a Winning Investment - Analyzes the Boston Beer (NYSE:SAM) company, producer of the flagship Samuel Adams brand.

    Apple: P/E Debate Rages, But Sales Growth Will Fuel Next Rally - Analyzes why Apple's sales have a bigger impact on stock price than earnings do.

    End of Crocs, Or Great Buying Opportunity? - Analyzes the position of footwear retailer Crocs (NASDAQ:CROX), after a bad earnings report and guidance sent shares down 35%.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: See Individual Articles for most updated disclosure(s). Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.

    Dec 21 9:21 AM | Link | 4 Comments
  • Comparing Fantasy Football To Investing

    As we are in early August, we are one month away from the start of the NFL season. That means that millions of people will again be building their fantasy football teams, and I will be one of them. While not all of those reading this article will be familiar with how fantasy football works, I'll try to explain certain parts throughout this article. Today, I'm going to explain how you can build a stock portfolio using similar techniques to building your fantasy football team. I'll throw in some stocks as well to illustrate my point.

    Rule 1 - Diversification is Key:

    In fantasy football, you probably don't want to build a team that consists of players from the same team. For example, if you build a team composed entirely of players from the New York Jets, and they have a bad year offensively, you are done in your league. You usually try to spread your players from 5-10 teams in the NFL (or more, depending on how many players you need). That way, if one team has a down year, it doesn't affect all of your players.

    When you build a stock portfolio, you generally are looking for a couple of things. First, you are looking to make money. Second, you generally are trying to reduce your overall risk. So how do you do that? Well, generally speaking, the more names you own across various sectors, the less total risk you will have. It wouldn't be a wise decision to only own financial names, because as we have seen, that can have disastrous effects.

    When building your portfolio, think about it this way. If you have $100 to spend on your fantasy football team, of say 15 players, that's an average of $6.67 to spend per player. If you're building a stock portfolio of $10,000 with 15 stocks, it's an average stock purchase of $666.67. You'll put more money into some names, and less into others most likely, as you probably will favor certain holdings over other ones.

    Rule 2 - Pay attention to valuations:

    In fantasy football, there are two types of drafts. Regular drafts go back and forth. In a 10 team league, Team 1 gets first pick in round 1, but gets last pick in round 2, and first in round 3 and so on. Team 10 would get last pick in round 1, but first pick in round two, and so on. When it's your turn to pick, you can pick any player that hasn't been picked already.

    The second type is an auction draft. In this type of draft, a player is nominated, and that is the player currently available. Any team manager can bid on that player, and like a usual auction, whoever has the highest bid in the end gets that player. In this draft, you can get any player at any time, but for a price, and you have a limited budget, so you have to spend wisely.

    So for this example, let's use a real life example. Matthew Stafford is the quarterback of the Detroit Lions. He had a tremendous year in 2011, but in the two years prior, he was hurt a lot and only played 13 total games out of 32. In Yahoo! auction leagues, teams are paying an average of $30.40 for Stafford. On the other hand, we have Tom Brady, quarterback of the New England Patriots. Brady, except for one year when he was hurt, has been a top level quarterback for the past decade. He is one of the older quarterbacks in the league, but is on one of the best teams, and with him, you know that unless he gets hurt (which is possible with everyone), you are getting a top tier player. Brady is fetching an average of $37.20 in leagues right now, or a 22.4% premium to Stafford.

    So is the premium worth it? I say it is. But think about it this way. Let's compare Apple (NASDAQ:AAPL) to Cisco (NASDAQ:CSCO). When using GAAP earnings, Apple is trading at a 19.53% premium (on a trailing 12 month P/E basis) to Cisco. Would you pay a 19.53% premium to own Apple instead of Cisco? Right now, I think you would. Apple has two of the hottest products on the planet, and is basically Tom Brady. Cisco has had some rough periods over the last couple of years, and is a question mark like Stafford. When picking your team, you pay attention to valuations, and you should also do it when buying your stocks.

    Remember what I said before about putting more into certain holdings? Well, in Yahoo standard auction drafts (10 teams, $260 budget), the top 10 players are going for an average of about 17% of that budget, meaning teams are putting roughly 17% of their team budget into their top pick. That seems logical for a stock portfolio too, with 17% in your top holding. Likewise, the next 10 players are going for about 13% of the total, meaning 30% for your top 2. I think that most investors would say 30% for their top 2 holdings might be a decent starting point for any portfolio.

    Rule 3 - You Need a Stud:

    When it comes to fantasy football, you need to have that one player that just dominates the game. Having that one top guy, whether it is a star quarterback like Aaron Rodgers, Tom Brady, or Drew Brees, or even a top running back, like Arian Foster, Ray Rice, or Adrian Peterson, you want a guy you know that over the season, will score you a ton of points.

    Don't you want a stock like that? One that can return a nice profit? If you asked 100 people the "one stock to own", I'm assuming that Apple would be that stud investment. But if everyone owns Apple, then everyone will have the same performance. You need a stud that may not be as well known.

    I'll give you one here, Intuitive Surgical (NASDAQ:ISRG). This company makes the da Vinci system, which is a surgical robot system. The company sells the robots, along with plenty of accessories. But beyond that, this is a name expected to grow revenues at about a 20% pace combined for this year and next. It also has very little competition, and actually is partnering with large names such as Johnson and Johnson (NYSE:JNJ) in certain countries. The company boasts very high margins, has no debt, has more cash on its balance sheet than it has total liabilities, and is currently buying back stock. It also has dropped since its last earnings report, where it blew out estimates again, and that provides a tremendous buying opportunity. This may be the non-Apple stud you are looking for.

    Rule 4 - Look for Values:

    In fantasy football, after the first couple rounds of your draft, all of the top tier players will be gone. When you start getting into the middle rounds of the draft, you need to look for good players at the right price, or at the right spot (for regular drafts). A good example this year is Michael Turner, a running back for the Atlanta Falcons. This guy has been tremendous in recent years. In the past five years, he has missed five total games, all in the same season. Over those five years, he has been a top 5 running back in the entire league. This year, he's being drafted as the 15th best running back. Of the 14 going ahead of him, one is an unproven rookie, and 7 missed at least three games last year (out of 16), with most of those injured players coming off knee surgeries. When you have a guy that should up in the top 5-10 spots for running backs going as the 15th, that is a good value.

    So how about a good value stock? Well, how about Philip Morris (NYSE:PM)? This stock has a 3.35% annual dividend, which is expected to be raised in the next few months. The company plans to buy back $6 billion in stock this year, and a similar amount per year in the next 2-3 years. The company is an analyst favorite and has been a great name to own since it split off a few years ago. The company is still going strong, and I would advise buying on any pull backs.

    Rule 5 - A little speculation is not a bad thing:

    In investing, the general theory is no risk, no reward. You can't make any money if you don't risk any. Well, fantasy football is no different. Sometimes, you just have to take a little risk. Whether it is paying an extra couple bucks for that rookie who you think could be a star, or drafting an unknown player who could help you win the championship. A good example last year was Victor Cruz, wide receiver for the New York Giants. Going into the season, he was the 3rd or 4th best receiver on the team, so in many fantasy football leagues, he wasn't even drafted. In my one league, I didn't pick him up until after the 3rd week of the season (there are 17 weeks, 16 games played with one bye week for each team). What did Cruz end up doing? Well, he became one of the league's brightest stars and scored the 4th most points among all wide receivers. Including all offensive players at every position, he was ranked as the 21st best player in the entire National Football League. All for a guy who was barely drafted in any league, and in some cases, not even picked up after the first few games.

    So in the investment arena, it's okay to risk a small portion of your portfolio on a speculative name or two. Sure, these names could easily lose all their value, but over a couple of years, they could also return several hundred percent. I've provided a couple of names that could fit this category, some as trades and some as long term investments. Dendreon (NASDAQ:DNDN) is a great example. This is a biotech firm that makes a prostate cancer treatment called Provenge. Provenge sales are increasing rapidly over prior year periods, although the growth has been slightly disappointing in recent quarters. Dendreon trades for less than $5 now, and was in the mid $40s at one point last year. This is a good all or nothing name to be in. You'll either lose everything over the next couple of years, or Dendreon will return you several hundred percent.

    Like I said, I wouldn't bet the farm on any of these names, including Dendreon, but having a small piece of speculation in your portfolio isn't really a bad idea.

    Conclusion - Similarities do exist:

    You might not really think that fantasy football can be applied to investing, but it surely can be. I probably could come up with five more rules if I wanted to, but I think I've made my point. For those out there about to start building your fantasy football team or a stock portfolio good luck, and remember, if you've never done one or the other before, you can apply one's concepts to the others.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ISRG over the next 72 hours.

    Aug 07 12:05 PM | Link | 1 Comment
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