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Michael Fu  

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  • Is Amazon A Buy Or Sell In 2013? [View article]
    tiger, my mistake, you are absolutely correct. it should be 200mm total active members and 10mm prime members. thanks for catching it!
    Jan 2, 2013. 06:28 PM | Likes Like |Link to Comment
  • Is Amazon A Buy Or Sell In 2013? [View article]
    Again, I wouldn't reference yahoo numbers very often. It's too inconsistent what numbers they show on each page (whether GAAP or Wall Street adj. EPS). Also, given it's beginning of a new year of 2013, they sometimes are slow to adjust that "next" year which use to be 2013 is now 2014.

    Again, WS adj. EPS (which is what I use), adjust for non-recurring expenses/etc.. Yes it looks even worst if you look at GAAP EPS, but Adj. EPS is what the markets trade off of (you can't be blind to how the Bulls are looking at the valuation). Plus, even at Adj. EPS, the valuation is still very high.

    Anyways, here is the Adj. EPS and GAAP EPS for your reference:

    Adj. EPS: 2010 $2.98, 2011 $2.40, 2012 $1.58, 2013 $3.13, 2014 $4.68

    GAAP EPS: 2010 $2.53, 2011 $1.37, 2012 $(0.04), 2013 $1.18, 2014 $2.39

    Good luck.
    Jan 2, 2013. 06:20 PM | Likes Like |Link to Comment
  • Is Amazon A Buy Or Sell In 2013? [View article]
    Hi Gene, yes I completely agree with you, given my conclusion in the end is to Sell AMZN. But I wanted to be as objective as possible and see how Bulls may be valuing AMZN as well. I'm not short AMZN currently, but I have shorted AMZN in the past (when they've hit above $255 and put option pricing is fair). Also, market currently in mini-rally given fiscal cliff mini-resolution, so I'm just waiting and seeing at the moment. good luck if you're short though.
    Jan 2, 2013. 11:59 AM | 2 Likes Like |Link to Comment
  • Is Amazon A Buy Or Sell In 2013? [View article]
    yes you are correct, they did miss earnings last quarter. the stock actually did not get crushed that much until they started trading down along with the market (which speaks to KenGold's comment of it's dangerous to short AMZN). anyways, hopefully this article helps to point out that you can make your own estimates of EPS, by looking at their past net profit margins of 1-4% (EPS = net profit / shares), and remember that other retailers in the industry only achieve 2-5% margins, and you can comfortably project your own EPS based on your margin assumption.
    Jan 2, 2013. 11:47 AM | 1 Like Like |Link to Comment
  • Is Amazon A Buy Or Sell In 2013? [View article]
    davel, i hope you do not look at P/E multiples from Yahoo's "summary" page. It's notoriously wrong most of the time (in this case, it shows 3,000 P/E for example) because they use trailing twelve months and don't adjust for company specific items that analysts will adjust for. If you want to use Yahoo going forward, it's better to look at the "Key Statistics" page (http://yhoo.it/MUSbq9) and look at the Forward P/E (which they source from Reuters). good luck.
    Jan 2, 2013. 11:40 AM | 1 Like Like |Link to Comment
  • Is Amazon A Buy Or Sell In 2013? [View article]
    Hi, if international sales accelerate faster than expected, it will help the company's overall margins. at noted above, North America operating margins are 3.7%, but International is -1.7%, dragging down the overall average. Remember also that they are having some tax issues over in Europe related to funneling sales through low tax jurisdictions. good luck!
    Jan 2, 2013. 11:34 AM | Likes Like |Link to Comment
  • Corning: A Rebound Play With A 2.6% Dividend Yield [View article]
    i think the catalyst is LCD prices finally have turned the quarter in the past few months, and hopefully the 7-8 year TV replacement cycle that peaked in 2007, will start to kick in (or markets start to price it in) in 2013. the downside is it doesn't kick in til 2014-2015, but at least you get a 2.6% dividend yield (that hopefully continues to go up) while you wait. good luck.
    Jan 1, 2013. 05:44 PM | Likes Like |Link to Comment
  • McDonald's: A Dividend Dream Stock That Has Growth Potential [View article]
    great article, here's one i did recently that provides a little more on the fundamentals of MCD: http://seekingalpha.co...
    Dec 31, 2012. 02:14 AM | Likes Like |Link to Comment
  • 5 Dividend Stocks For 2013 [View article]
    yes most stocks listed is more around 4.5% than 5%, but the title of the article is catchy right?

    anyways, i do apologies if it was misleading. hopefully the article was still helpful. do keep in mind that often times, the quality of the stock (and potential stock appreciation or at least downside protection) more than offsets the dividend yield difference. checking all the other fundamental metrics helps paint a fuller better picture than just focusing on yield. good luck!
    Dec 27, 2012. 11:21 PM | Likes Like |Link to Comment
  • Corning Offers Q1 Window Of Opportunity [View article]
    GLW is a cyclical play on LCD demand and LCD prices finally stabilizing (LCD is 45% of sales, Gorilla Glass only 13%). LCD prices have declined for 18-24 months, so hopefully finally stabilizing. LCD TV demand is driven by TV replacement cycle (unfortunately TVs get replace every 7-8 yrs) and new possibly home sales (you move from apt to home, you tend to upgrade or buy additional TVs for basement, bedroom, etc.).

    I'm long GLW, it's really cheap at 7x P/E after adjusting for net cash on books. But just don't when this stock and sector will turn (hard to time cyclical plays). Could take 3-6 months or 1-3 years. Good luck!
    Dec 27, 2012. 12:43 PM | Likes Like |Link to Comment
  • McDonald's: 8-9% Total Return A Year [View article]
    YUM started in China 4-5 yrs before MCD (1986-87 vs. 1991-92). That may not sound like a lot of a head start, but China has done most of its development in only 20 years. (so 5 yrs out of 20 yrs is alot).

    I think there is also a local preference for chicken over beef (vs in the US, americans probably still prefer burgers for fast food). KFC brand is known for all chicken menu (MCD also has chicken products on their menu, but just not 100% known for chicken).

    Pizza Hut (for YUM) also does well in China. But their stores are much bigger than KFC stores. And I think alot of YUM's prime real estate locations (b/c they entered China so long ago) are probably near end of their lease (10-15 yr leases), and they will either be forced out or rent per sq meter will increase significant (by 2-3x). MCD tries to buy/own their real estate more than YUM, which is a strategic long term advantage.

    YUM also trades at higher multiple than MCD (18.5x vs. 15.5x). YUM is getting a China premium (50% of sales from China), but I think their past success in China will start to slow down somewhat (their valuation too dependent on China). YUM has recently turned to acquisitions in China (vs organic growth of existing brands) to keep growing (bought Little Sheep for $600mm).
    Dec 27, 2012. 12:32 PM | Likes Like |Link to Comment
  • The U.S. Debt Crisis Explained In Layman's Terms [View article]
    yes, it's not 100% accurate to simply the US as a stock. yes, i agree since Nixon took the U.S. off the gold standard in the 70s, we've effectively had an unlimited printing press.

    however, my point is that just like companies that borrow too much money, or run several years of losses, will get punished by the markets, countries should also have the same accountability and responsibility to balance their equivalent budgets and balance sheets.

    i disagree that the U.S. can freely print money without consequences. eventually, foreign countries will stop lending to us, demand significantly higher interest rates, or US dollar weakens tremendously (our purchasing power goes down). yes the US Dollar is the world currency and we can and have gotten away with alot (borrowing alot, weak economy, unbalanced budgets, but people keep buying treasuries because they think it's "safe"). But you can only push it so far before things start turning the opposite way.
    Dec 26, 2012. 01:48 PM | 4 Likes Like |Link to Comment
  • The U.S. Debt Crisis Explained In Layman's Terms [View article]
    i agree, it's never going to be apples and apples. i was viewing the market value more from the perspective of our U.S. govt, where the federal tax revenue is dependent on the overall economic activity or GDP (consumption, investment, spending, etc.), or around 16% of GDP. From the U.S. govt perspective (as the "stock"), the govt cash flow is more like zero or negative cash flows, because spending > revenue.
    Dec 26, 2012. 01:34 PM | Likes Like |Link to Comment
  • The U.S. Debt Crisis Explained In Layman's Terms [View article]
    the one thing about social security is that it's not about just matching contributions and benefits for 1 person (simple to match for that), it's matching for an entire population of millions of contributors and millions of beneficiaries, which is much more complicated. right now, there are more young/middle age workers in the U.S. (contributing to SS) than there are older retired individuals (withdrawing from SS). However, over the next few decades, the average age of U.S. demographics will shift older (because generation x/y will start to retire in 20-30 yrs). And when that happens, there will not be enough young/middle age workers in our demographic to contribute to SS, to offset the larger number of people retiring then and withdrawing from SS. The demographic age shift will break our social security system, if we don't reform it.
    Dec 26, 2012. 11:44 AM | 1 Like Like |Link to Comment
  • Why Phone Subsidies Are Here To Stay In The U.S. [View article]
    Great article! This helps to support long Apple investors as well and address their gross margin concerns:

    http://seekingalpha.co...
    Dec 26, 2012. 05:31 AM | Likes Like |Link to Comment
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