Pandora: Possible Acquisition Target? [View article]
CPEisen, That is a great question. It is difficult to find a comparable company to gauge valuation. I have seen a few reports that use price/revenue or subscriber growth rates, however the companies in comparison (Linkedin for example) don't seem to fit the internet radio industry. I have read other analyst theories and the range is $15-$20 a share.
As far as bidding wars, I would not expect that to occur. The purchase price is not very large and the ability for any competitor to internally create internet radio is realistic.
doc, Again, I cannot disagree about the earnings growth of Apple. You are correct in using the PEG ratio and it certainly shows more value in shares of Apple vs shares of IBM. But putting all your capital in one company is a very risky idea, even if they have a promising future like Apple. I wish I had the answer as to why AAPL does not trade at a higher earnings multiple. There are multiple theories out there, but I haven't found one that makes sense.
doc, Thanks for your comments. As I mentioned in the last paragraph in my article, if you want a higher growth stock, Apple would be the one for plus-sized returns. I think Apple is an great company to own and agree with you about the very low valuation. However it doesn't take an "otherwise educated so call analyst" to understand the benefits of diversification within your portfolio. If you are only investing in one stock, Apple, then don't be surprised to see your portfolio experience some serious volatility down the road. If you are looking to build a portfolio of high quality securities then maybe you should consider adding IBM to your mix.
Jon, You make a very good point about slowing revenue growth, however given the slowdown in economies worldwide this is somewhat expected. If you get an increase in business confidence from Europe and corporations begin spending you will likely see a bump in revenue as orders that were "put off" due to the uncertain future, begin to filter in. Additionally I think as emerging economies grow the need for improved technology will benefit IBM's top and bottom line in the years ahead.
Smacster, I don't own this stock, but as I mentioned above, would like to own it in the future. After the recent run up in price a pullback appears likely and gives long term investors an attractive entry point.
What Is Going On With Vera Bradley? [View article]
Astro,
I don't think I mentioned bankruptcy anywhere, nor did I hint at it. The company is struggling, and doing what they can to mask these problems, that is the main point of this article. With regards to believing management, you are on your own for that one. Management will always spruce up their outlook for the future quarters to hide the current problems.
Is Under Armour Due For A Pullback? [View article]
Shiner, Good comments. It has been a challenge for investors shorting Under Armour. Given the current market conditions and challenges we face over the next few months ( both in the US and abroad), the high beta names will likely pull back much further if we experience and volatility. Additionally, if the company suffers and slowdown investors may be quick to flee this momentum stock.
Beta, Thanks for your comment. I appreciate the insight you shared with regards to Kors clothing. My concern as a long term investor is that they may lose the image as a "luxury" retailer if they continue to sell lower priced clothing. Currently they enjoy very high margins, however if consumers adapt to the lower end product this will erode overtime and wall street doesn't treat companies with declining margins very kindly.
Heico And Aircraft Suppliers: Why You Should Care [View article]
Koshien,
While I agree with adding Harris or Eaton to the list, I was focusing more on companies that derive a larger portion of their revenue from aircraft replacement parts. For added diversification and less direct exposure to the aircraft replacement parts industry they would be attractive options. Regarding the credit worthiness of Heico's customers, I would point to the operating cash flow this company continues to produce (table above). This gives us a better idea of how well the company is collecting cash. Additionally, A/R makes up just under 10% of Total Assets and does not appear to be problematic.
Don't Expect Starbucks To Be A Large Source Of Alpha [View article]
Great research, I think you highlighted one of the most compelling aspects of this company, cash flow generation. Increased dividends and share buybacks appear likely over the next few years. Any pull back in the share price (especially below $40) would prove to be a favorable entry point.
Book Review: 'Financial Statement Analysis: A Practitioner's Guide' [View article]
I am just about to finish reading this book and would certainly recommend it to anyone who wants to dive deeper into financial statement analysis. I do agree with Chris's last paragraph in which he describes the book as somewhat elementary to sophisticated security analysts. However don't let that discourage you from reading, there is certainly a lot to learn in the text.
Mobile Commerce And Why You Need To Own eBay [View article]
chirp,
Thanks for your comments. eBay has certainly emerged as a challenger to Amazon, it will be interesting to see what direction eBay's management takes to challenge the online retail giant. The eBay app for iPad's has continued to grow the auction side of the business as well. Management continues to make reference of the positive response and increased user rates of the app.
Green Mountain Coffee: Bet Against The Herd [View article]
Thanks for the comments, glad to see other investors are moving away from the herd.
Pandora: Possible Acquisition Target? [View article]
That is a great question. It is difficult to find a comparable company to gauge valuation. I have seen a few reports that use price/revenue or subscriber growth rates, however the companies in comparison (Linkedin for example) don't seem to fit the internet radio industry. I have read other analyst theories and the range is $15-$20 a share.
As far as bidding wars, I would not expect that to occur. The purchase price is not very large and the ability for any competitor to internally create internet radio is realistic.
IBM: Portfolio Anchor Stock [View article]
Again, I cannot disagree about the earnings growth of Apple. You are correct in using the PEG ratio and it certainly shows more value in shares of Apple vs shares of IBM. But putting all your capital in one company is a very risky idea, even if they have a promising future like Apple.
I wish I had the answer as to why AAPL does not trade at a higher earnings multiple. There are multiple theories out there, but I haven't found one that makes sense.
IBM: Portfolio Anchor Stock [View article]
Thanks for your comments. As I mentioned in the last paragraph in my article, if you want a higher growth stock, Apple would be the one for plus-sized returns. I think Apple is an great company to own and agree with you about the very low valuation.
However it doesn't take an "otherwise educated so call analyst" to understand the benefits of diversification within your portfolio. If you are only investing in one stock, Apple, then don't be surprised to see your portfolio experience some serious volatility down the road. If you are looking to build a portfolio of high quality securities then maybe you should consider adding IBM to your mix.
IBM: Portfolio Anchor Stock [View article]
You make a very good point about slowing revenue growth, however given the slowdown in economies worldwide this is somewhat expected. If you get an increase in business confidence from Europe and corporations begin spending you will likely see a bump in revenue as orders that were "put off" due to the uncertain future, begin to filter in. Additionally I think as emerging economies grow the need for improved technology will benefit IBM's top and bottom line in the years ahead.
Lululemon Athletica: Patience Required [View article]
I don't own this stock, but as I mentioned above, would like to own it in the future. After the recent run up in price a pullback appears likely and gives long term investors an attractive entry point.
Lululemon Athletica: Patience Required [View article]
Well said. This stock moves around quite a bit, pullbacks are likely the best time to add to your position.
What Is Going On With Vera Bradley? [View article]
I don't think I mentioned bankruptcy anywhere, nor did I hint at it. The company is struggling, and doing what they can to mask these problems, that is the main point of this article. With regards to believing management, you are on your own for that one. Management will always spruce up their outlook for the future quarters to hide the current problems.
Is Under Armour Due For A Pullback? [View article]
Good comments. It has been a challenge for investors shorting Under Armour. Given the current market conditions and challenges we face over the next few months ( both in the US and abroad), the high beta names will likely pull back much further if we experience and volatility. Additionally, if the company suffers and slowdown investors may be quick to flee this momentum stock.
Michael Kors - Timely Or Timeless? [View article]
Thanks for your comment. I appreciate the insight you shared with regards to Kors clothing. My concern as a long term investor is that they may lose the image as a "luxury" retailer if they continue to sell lower priced clothing. Currently they enjoy very high margins, however if consumers adapt to the lower end product this will erode overtime and wall street doesn't treat companies with declining margins very kindly.
Michael Kors - Timely Or Timeless? [View article]
Thanks for the comment. Coach has appears to have a very promising future ahead.
Heico And Aircraft Suppliers: Why You Should Care [View article]
While I agree with adding Harris or Eaton to the list, I was focusing more on companies that derive a larger portion of their revenue from aircraft replacement parts. For added diversification and less direct exposure to the aircraft replacement parts industry they would be attractive options.
Regarding the credit worthiness of Heico's customers, I would point to the operating cash flow this company continues to produce (table above). This gives us a better idea of how well the company is collecting cash. Additionally, A/R makes up just under 10% of Total Assets and does not appear to be problematic.
Don't Expect Starbucks To Be A Large Source Of Alpha [View article]
Book Review: 'Financial Statement Analysis: A Practitioner's Guide' [View article]
Mobile Commerce And Why You Need To Own eBay [View article]
Thanks for your comments. eBay has certainly emerged as a challenger to Amazon, it will be interesting to see what direction eBay's management takes to challenge the online retail giant. The eBay app for iPad's has continued to grow the auction side of the business as well. Management continues to make reference of the positive response and increased user rates of the app.