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  • Square IPO: Strongly Consider An Allocation [View article]
    Square hasn't set terms yet so we don't know what price range they will propose. There's no point doing anything until you know what the valuation will be and what type of market conditions we will have when they price. The current market hasn't been too kind but things may improve.

    Once they set terms we can run an actual long term model and see where the shares may settle out post-IPO. It's true that popular companies like Square have a greater tendency for a "pop" but it'll all be very clear once the company starts marketing.
    Oct 3, 2015. 06:48 AM | Likes Like |Link to Comment
  • Has Ambarella Bottomed? [View article]
    These businesses go through a typical lifecycle. AMBA is no different.

    See for our writeup and model. (Might be here on SA as well...)

    The stock may be reaching some level of being oversold but the type of growth acceleration and margin expansion that drove it before will not be back.
    Sep 15, 2015. 08:06 AM | Likes Like |Link to Comment
  • History Says Ambarella Will Go Sideways From Here [View article]
    I acknowledge that the IPO was undersold and didn't price well. However I'm looking at overall performance, not the pricing and first day gains. But I agree that I should have selected my words there more carefully.

    I didn't expect (let alone know) that Q3 guidance would be a little weak. It could indicate that the thesis of a shift to "good" but not "great" results is already underway and with that a re-rating of the shares.

    When revenue growth remains decent but margins begin to decline the stock will have another leg down. From these levels it may be able to establish some kind of trading range for now.
    Sep 2, 2015. 09:25 AM | Likes Like |Link to Comment
  • Are You Aware Of The Danger Hidden Within IPOs? [View article]
    Excellent article on some key points IPO investors need to consider. I wouldn't throw the baby out with the bathwater though. Our database is pushing 1000 recently public companies and while some or many may be unprofitable, lean on stock-based compensation hard and/or insist on this "adjusted EBITDA" concept - many are solid, growing, and profitable businesses.

    Even some that are not are creating some potentially life-changing technologies. (I don't think any of the ones you mentioned above are.) That these companies choose and can go public while still in pre-commercial stages is a little surprising to me but the market has accepted it. In the case of drug development the smaller companies have taken over the discovery and approval of new drugs from the large pharma companies who often end up buying them to bolster their own pipelines.

    In any event this is a good article to help investors sort out the wheat from the chaff. Although they can be hard to short there are cases where this kind of analysis yields some good opportunities there as well, especially when lock-up agreements expire.
    Aug 26, 2015. 07:50 AM | Likes Like |Link to Comment
  • Accelerate Diagnostics - A Misleading Story Ripe For Decline [View article]
    I wonder if the competitors rely on genotypic or phenotypic techniques.
    Aug 25, 2015. 08:26 AM | Likes Like |Link to Comment
  • Why I've Been Wrong About Freshpet - So Far [View article]
    The chairman of the company is wildly bullish and promotional. Probably continues to suck people in. Stock is down but still at 5x sales. So is Blue Buffalo BUFF which came public more recently.
    Aug 21, 2015. 08:08 AM | Likes Like |Link to Comment
  • Radcom: Still An Owner, Still Bullish [View article]
    Good article here on this little company. I've been looking into it. Seems like the trend is large and in place. There are still some questions surround ROI of these "NFV" investments but at the same time they seem unavoidable.

    On a related note it does seem that the SMB market shift to IP-based solutions is accelerating. I don't have hard data on it but have heard it from several quasi-reliable sources. I think that keeps the pressure on the network owners to move forward with this type of technology.
    Aug 21, 2015. 05:45 AM | Likes Like |Link to Comment
  • Mobile Iron Transcript - Big Upside If Model Plays Out [View article]
    Glad we never put this one in the Folio. I wonder if at $4.30 it's worth bottom fishing? One has to assume management hasn't executed here so probably tastier fish to fry elsewhere!
    Aug 20, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Cautiously Optimistic About The Petco IPO [View article]
    Good article. I saw Freshpet present last week and boy they are good and quite bullish. I can see why investors like the story. I wonder about valuation on all these things too. Where I live there are a ton of dogs and three dedicated pet stores within a few blocks - an unleashed (petco), a Bark Palace (private) and the Polka Dot Dog Bakery (private). There has also been an explosion of dog food brands it seems to me. It's a bewildering array. That's where I see danger to Freshpet.

    I'm looking forward to getting into the Petco deal once more details like price and share count are available. We need that to do our IV.
    Aug 20, 2015. 10:14 AM | 1 Like Like |Link to Comment
  • Planet Fitness IPO Analysis And Why I'd Stay Away: A Member's Perspective [View article]
    It's funny that you're such a satisfied customer but fear competition. I agree though that competition in this segment will be intense. However PLNT is proving that they can generate very attractive margins even at their very low price point. I'm not sure the others can.

    Meanwhile our own work on the stock and valuation model is presented here:

    Net is the IV comes to $35/share which is very attractive compared to the current price.
    Aug 20, 2015. 10:00 AM | 2 Likes Like |Link to Comment
  • Taser's Stumble Sets Up A 33% Income Opportunity [View article]
    How now brown cow?
    Aug 20, 2015. 08:49 AM | Likes Like |Link to Comment
  • Can Planet Fitness Bulk Up Its Market Share? [View article]
    Good point on boomers reaching retirement age - lots of them will be on a limited budget but want something decent, clean, and easy.
    Aug 12, 2015. 02:34 PM | Likes Like |Link to Comment
  • Glu Mobile: Kim K Trips, New Games Disappoint, Key Insider Sells Amid Crazy P/E [View article]
    Personally I think sports will be what surprises on the upside. Good discussion here. At the current price it seems like not much success is priced in. Risk/reward probably better than it's been in a long time.
    Aug 9, 2015. 10:06 AM | Likes Like |Link to Comment
  • Can Planet Fitness Bulk Up Its Market Share? [View article]
    The health club business is a tough one. It also looks like many have identified this "entry level" class of member and are going after them with similar types of offerings.

    There's also something worrying about a model that is based on charging people an "immaterial" monthly membership fee and expect them to make very limited use of the club. After a few months of seeing the $10 on their credit card statement consumers might decide to cancel anyway. Last I checked PLNT makes this difficult by insisting that members have to physically come into the club to cancel. Maybe they have revised this policy. It does make members more "sticky" but probably pisses some of them off too.

    The advertising angle brought up here is an interesting one. The PLNT "brand" is not really set yet so they have an opportunity to do something here. It won't be cheap though so how the implement this will be worth watching.

    Soul Cycle will be coming out soon and I bet private companies like the one behind the in-home Peloton will be raising money too. The general trends seem favorable.
    Aug 9, 2015. 10:04 AM | Likes Like |Link to Comment
  • Malibu Boats: Don't Let The 100 P/E Fool You [View article]
    Wow next year?

    Anyway we're wrapping up some work on MBUU (and MCFT too) and these stocks do look undervalued...
    Aug 7, 2015. 03:56 PM | Likes Like |Link to Comment