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Guraaf  

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  • Netflix Nukes Itself [View article]
    Great comment, Slim. What P/E ratio would you assign to Netflix? 20? 25? I guess it wouldn't be in the 12-18 range given that they are indeed growing and have scope to increase their EPS by 10-30% for the next 2 years at least. I personally would give them 25 on trailing 12 month earnings.

    The thing is that they do have the ability to aggregate content from various sources and allow viewers watch it on various devices. They definitely have sorted out a few technological barriers and created a great brand. There is no real alternative to Netflix, IMHO, for getting access to movies and TV shows. The convenience and large library is way better than every other option today and cheap too. But that doesn't mean that they deserver a P/E of 75 because to me, a P/E of 75 implies that they will grow at 50% growth rates for the next 3-5 years. I don't see that happening.

    In summary - I love Netflix as a company but am short the stock. It is one of the 4 stocks out of a portfolio of 54 stocks on which I am losing money (others being HCBK, NTRI and DO).
    Jul 14, 2011. 12:43 PM | Likes Like |Link to Comment
  • Marine Harvest's Earnings Restatement Could Be Buying Opportunity; Use Caution [View article]
    Thanks for the article. I have long considered buying Marine Harvest and will probably buy it at these levels of $0.65 on the pink sheets. Or perhaps wait for another week and see the result first.

    I do wish they had a reverse split to take the price more than $2-3 mark. Psychologically, it would help and it might help that every 1-2 cent bid/offer difference will not be a huge percent of the stock price.
    Jul 14, 2011. 12:33 PM | Likes Like |Link to Comment
  • Watsco: Dividend Stock Analysis [View article]
    Are they spreading oversees as well? To Europe, Africa, Brazil, India, South-east Asia, China? One would assume that A/C was under used in these poorer economies but would be required as they scale up and construct new business parks and homes.

    Who is the leader in the developing world where most of the growth might be? Without top-line growth, I don't see how there can be dividend growth for than a few years.
    Jul 14, 2011. 10:09 AM | Likes Like |Link to Comment
  • How Netflix Just Became a Buy [View article]
    Quite a few of streaming movies do have subtitles. They are not closed captioned, i.e., the device will not output them as CC to the TV but would rather output them as subtitles. There is a subtle engineering and technical difference between the two.
    Jul 14, 2011. 09:34 AM | Likes Like |Link to Comment
  • 12 Industrial Strength Dividend Stocks With Annual Dividend Growth [View article]
    Thanks for the article. I am looking at RPM and WM. I already have LMT and may buy RTN if it falls on some news/rumor. I wouldn't include ADP in a list of industrials. If anything, MMM is more Industrial than ADP which is largely service sector, perhaps even financial sector.

    In the broad industrial segment, I also like PH, SNHY, LECO and DOV.
    Jul 14, 2011. 09:27 AM | 1 Like Like |Link to Comment
  • 12 Stocks That Could Make 30% This Year [View article]
    QCOM is best positioned to capitalize on the worldwide craze for tech equipment - tablets, smartphones, wifi equipment etc. Apple iPhone might end up using QCOM baseband chips instead of Intel's (erstwhile Infineon). Plus they bought Atheros - a great fit for them.
    Jul 13, 2011. 01:35 PM | 1 Like Like |Link to Comment
  • Broadcom Fundamentally a Winner [View article]
    I agree with almost everything your said about Broadcom. However, there is an issue in my humble opinion. That of future growth - Broadcom is too big and too diversified now. Their smaller acquisitions don't help much. $50-$200 million growth in some new line of business means nothing given that the company has approx $5 billion in annual revenues. Though in itself a $100-200 million business is super!

    So Broadcom went ahead and invested heavily in mobile business since that is perhaps the only line that can potentially generate $1-3 billion in revenue. However, they haven't been able to deliver. They pushed hard to win Nokia business and they won some but we all know what is happening to Nokia. The baseband business is hard to penetrate. Cellphone manufacturers just don't want to change their suppliers unless there is some major reason to do so. Scott McGregor just hasn't delivered on the cellphone story.

    Next comes the problem that there isn't a lot of growth in service provider side of business which is where Broadcom concentrated to get their 50% gross margins. Companies like DirecTV, Dish (Echostar), Verizon, Motorola etc. wouldn't question their chip prices because they were billing their customers $10-$100 every month. So BRCM was able to maintain their high margins. However, now Broadcom has had to enter consumer electronics business given some levels of saturation in service sector. Here, Broadcom is getting squeezed. Like in Digital TV and Blu-ray players. The ATI Digital TV group acquisition has been a disaster. 4 rounds of layoffs and no profits in sight. Mediatek and M-Star are eating Broadcom's lunch just like in Blu-ray space. Similarly, IP-settop boxes are becoming popular in Asia and Sigma Design, STMicro and other players are doing better.

    Some of their mobile chips like GPS, Bluetooth, WiFi are also extremely low margins. With Qualcomm buying Atheros there will be large competitive pressure in this area as well. Qualcomm has 1GHz+ ARM processors. Broadcom has none - they invested more behind MIPS which didn't go that well. They are late to ARM. And their central engineering uses libraries to be able to go to any fab in China, Taiwan. As a result the achieve clock rates far less than Qualcomm or other player routinely achieve.

    They also don't do well in analog designs that are becoming important again with so many handhelds and consumer electronics. Texas Instruments does much better there. Finally, the software at Broadcom isn't nothing to write about. Most of the chips today require and run on large amounts of firmware and software code and Broadcom ran themselves as an ASIC company with little regards for software processes and structured development. They also don't charge their customers for software thinking they are a chip company. But as a result of poor software managers and thought process and increasing software complexity, they have far more software engineers than hardware engineers. As a result their costs have gone up but now the ASP. Thus, the margins are under pressure.


    I could write more, but already too long. I am long BRCM but looking to get out in the next few months. Not in a hurry but between $35-40. Would reinvest funds in QCOM, TXN, XLNX, INTC and MOLX.
    Jul 13, 2011. 09:48 AM | 2 Likes Like |Link to Comment
  • Netflix to Subscribers: Stream This [View article]
    Yes, it sure sounds like one!! I think that the company and its product (service?) is great. But not the stock price. I have no alternative to Netflix. Amazon, Redbox, Hulu do not carry the movies that I watch (foreign and long-tail content). Plus I get from Netflix that I cannot get from others - ability to watch on PC (in the study), PS3 (in the living room), Wii (in the basement), Blu-ray player (in the bedroom) and iPhone (when on the move and waiting for kids soccer and Tae-kwon-do).

    I worked on some of their products and have looked at their programming interface and talked to their engineers at length about requirements etc. Especially when they switched video codec formats to allow widespread deployment beyond the PC. I found their engineers extremely competent and hard working.

    Having said all of that - I still feel that the stock has over-extended itself. End of the day, IMHO, it is all about cash flow and money in the bank. And I personally cannot value the company so high. I am short, bleeding and holding out for now.
    Jul 13, 2011. 09:32 AM | Likes Like |Link to Comment
  • Novartis: A Common Sense Approach to Biotech [View article]
    Thanks for the article. Novartis is the biggest holding in my portfolio. I really like their focus on vaccines, diagnostics and generics in addition to all the expensive patent drugs.
    Jul 13, 2011. 09:22 AM | 1 Like Like |Link to Comment
  • Netflix to Subscribers: Stream This [View article]
    I have been short Netflix for about a year. All my other stocks are dividend growth stocks so maybe I should have stuck to those!! This one is hurting.

    However, I am also a Netflix customer and I just now upgraded my membership to unlimited streaming and 2DVDs so that my monthly bill went up by about 40%. I am beginning to think that the rate increase was a wise move on Netflix' part.
    Jul 13, 2011. 05:41 AM | Likes Like |Link to Comment
  • 7 Companies Paying Large Dividends That Are Fully Covered by Earnings [View article]
    I bought STD today (same country, different beast). Have a buy order for TEF at $20.5 so that will not happen anytime soon.
    Jul 11, 2011. 12:29 PM | Likes Like |Link to Comment
  • 5 Undervalued Blue Chips With Above-Average and Growing Yield [View article]
    Wyatt,

    M* is Morningstar. Portfolio tracker is any tool to track the holdings in a portfolio. Ones available and popular online:
    morningstar
    smartmoney
    wikinvest
    tickerspy (very limited - more social)
    thestreet
    yahoo finance
    google finance
    ...
    and many more (i have tried all of the above at some point!)
    Jul 10, 2011. 08:08 PM | 4 Likes Like |Link to Comment
  • 5 Undervalued Blue Chips With Above-Average and Growing Yield [View article]
    Thanks BenH. M* is a great site. I had never tried the portfolio there. I spent the last few hours on it and have been updating my holdings and organizing it properly. I think this portfolio tracker will serve my needs well. Thanks a lot.
    Jul 10, 2011. 12:26 PM | 3 Likes Like |Link to Comment
  • 5 Undervalued Blue Chips With Above-Average and Growing Yield [View article]
    Thanks for your views - I appreciate them.
    Yes, I do look for total returns though I am heavy on dividend stocks, both yield as well as dividend growth. The comparison to SPY was an example but at the back of my mind, I do think that if say year after year, I am only achieving total returns lower than some index (or mutual fund or ETF for that matter) then maybe I should stop active investing and just use that single instrument.
    Jul 8, 2011. 10:16 PM | 2 Likes Like |Link to Comment
  • 5 Undervalued Blue Chips With Above-Average and Growing Yield [View article]
    Hi "Not the Boss",

    Such a list is available on seekingalpha itself. The link is:

    seekingalpha.com/artic...
    Jul 8, 2011. 10:12 PM | 4 Likes Like |Link to Comment
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