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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Tesla Elon Musk Wants Apple-Sized Market Cap

    Tesla Motors Elon Musk

    Tesla Motors Elon Musk Wants an Apple-Sized Market Cap in 10 Years

    Tesla CEO Elon Musk: 'We're Going to Spend Staggering Amounts of Money in Capex' by GreenTechMedia

    Musk aims for an Apple-sized market cap in 10 years.

    Tesla Chairman Elon Musk had to launch a rocket today, so the 2014 year-end earnings call for his electric car company was moved forward a few hours. It was a strong quarter -- the company met its target of producing 35,000 vehicles in 2014 and has an outlook for 70 percent growth to 55,000 vehicles in 2015.

    Highlights of the quarter included:

    Non-GAAP revenue was $1.1 billion in the fourth quarter

    The company delivered 9,834 vehicles and had record quarterly production of 11,627 vehicles

    Tesla's Supercharger network now covers the U.S. coast to coast, as well as most of Europe

    The company is aiming for 70 percent growth in vehicle deliveries in 2015

    The Model X falcon-wing minivan is slated to begin shipping in six months

    Depending on whether you keep score by GAAP or non-GAAP methods, Tesla expects to grow either big or really big. In fact, Chairman Musk, during the week that Apple became the most highly valued company in the history of companies at $700 billion, said, "I mean, if you take this year's revenue, around $6 billion or thereabouts, and if we are able to maintain a 33 percent growth rate for 10 years and achieve a 10 percent profitability number and have a 20 P/E, our market cap would be basically the same as Apple's is today," adding, "Obviously, getting there requires some significant capex."

    Figure: Model S Margin and Revenue Growth

    Crude Oil Shale Oil

    The positive outlook for 2015 is helped by the 10,000 Model S orders on the books and 20,000 Model X reservations. Model X development remains on plan for initial customer deliveries starting in Q3. There were a record number of Model S orders in the quarter.

    Giga factory

    Construction "is proceeding to plan at the Giga factory near Reno, Nevada. Significant steel fabrication of the structure started about two months ago."

    Tesla looks to start its battery pack production in 2016.

    Crude Oil Shale Oil

    China

    Recent news (120 cars sold in China last month) and management departures have suggested that Tesla was having some sales trouble in China. Musk said, "This was blown way out of proportion." The Tesla investor letter reports, "Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities." Musk said that despite news to the contrary, "It is not difficult to charge your car in China."

    There are a total of nine Tesla stores spread across six Chinese cities.

    Stationary storage

    Musk said that Tesla's consumer battery for homes and businesses will be on the market "fairly soon," adding, "We have the design done."

    Musk expects production to begin in six months.

    JB Straubel, Tesla's CTO, added that the company is "bidding on lots of stationary storage, talking to lots of utilities," and "getting an increasing amount of attention."

    2014 revenue details

    Musk suggested that non-GAAP accounting produces a more accurate picture of Tesla's cash flows by recognizing lease income and revenue timing more appropriately. Non-GAAP revenue was $1.1 billion for the quarter, up 44 percent from last year, while GAAP revenue was $957 million.

    Regarding GAAP methods, Musk said, "Our financials are better than they appear, not worse."

    Given that admonition, Tesla finished the year with $3.198 billion in revenue and $294 million in losses. Revenue was $1.997 billion last year with $74 million in losses.

    Q4 total company gross margin was 27 percent on a GAAP basis. Q4 automotive gross margin excluding ZEV credits was 22.0 percent. In the previous quarter, Tesla's gross margin was 22.6 percent excluding ZEV credits.

    Automotive revenue for Q4 includes $42 million of powertrain sales primarily to Daimler. It also includes $86 million of total regulatory credit revenue, of which $66 million came from the sale of ZEV credits.

    About 55 percent of Tesla's vehicles reached customers in North America.

    Crude Oil Shale Oil

    2015 guidance

    Tesla looks to deliver about 55,000 Model S and X vehicles, 60 percent of those in the second half of the year

    First-quarter production is expected to be about 10,000 units

    Tesla expects Q1 non-GAAP automotive gross margin to be about 26 percent

    The company expects a 30 percent gross margin on Model S in Q4 of 2015

    A few more tidbits from Chairman Musk

    "We were production-constrained. We look forward to getting demand-constrained in the future."

    There "are a lot of cars in transit."

    Faced with increasingly larger factories and workforces, Musk said he is "not sure where 100,000 people are going to park."

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    Feb 24 6:47 PM | Link | Comment!
  • This Weeks Free Stock Pick - Savings & Loan

    Meridian Interstate Bancorp Inc

    This Weeks Free Stock Pick - Investing in Savings & Loans Earnings Growth

    I shoot a lot of pool. Being a pool shooter you meet a whole lot of characters. These characters are often very colorful in this fraternity of misfits. One thing you hear of lot of is chatter. But chatter like you've never heard before. Everyone's got their own way to talk trash. One of my favorite things I like to say to somebody when I'm about to pull off a great shot is to look up, smile, and bashfully say, "I didn't want to have to show you this one."

    So believe me when I tell you about this off the radar stock that, "I didn't want to have to show you this one." Sometimes I reach down into my bag of tricks and find a little gem that's been flying low so you can load the boat and make a few bucks ahead of the crowd. Today I'm talking about Zacks Rank #1 (Strong Buy) Meridian Bancorp (NASDAQ:EBSB).

    Meridian Bancorp, Inc., a Maryland corporation was established in 2014 to be the fully public stock holding company for East Boston Savings Bank. Meridian Interstate Bancorp, Inc., the former bank holding company, merged into Meridian Bancorp, Inc. and now ceases to exist following the completion of a "second-step" conversion from a two-tier mutual holding company structure effective July 28, 2014. That's where the EBSB comes comes in.

    East Boston Savings Bank is a Massachusetts chartered stock savings bank originally founded in 1848. They operate twenty-seven full-service branch locations and a loan center in the greater Boston metropolitan area.

    Meridian Interstate Bancorp Inc

    The stock has been riding higher on the back of several earnings surprises to the upside. Over the last four quarters the company has crushed consensus by an average of 83%.This latest streak of wins began before 2010. Take a quick look at the price and earnings surprise chart above and you can see the effect these surprises have had on the stock price.

    Analysts have been increasing their expectations for the stock recently, jacking up their estimates for the current quarter, current year and next year. Our Zacks Consensus Estimate for the current year has jumped from 7 cents to 10 cent, while the current year consensus has risen from 28 cents just 90 days ago to 44 cents today. The estimate revisions coupled with the recent surprises are a big reason for its Zacks Rank #1 (Strong Buy).

    Meridian Interstate Bancorp Inc

    Speaking of the price, EBSB has a very nice bottom left to top right steady incline over the last several years. The slow and steady ascent has been met with very few pullbacks. Lately there have been a couple of very bullish spikes in price. The most recent run off the 100 day moving average took the stock from $11 to nearly $12.75 I just a few short days. Currently the stock is setting up a bullish triangle pattern just below the recent 52 week high. Investors who get in ahead of the next earnings report could be in for some very bullish price action in the near future.

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    Feb 24 6:37 PM | Link | Comment!
  • This Weeks Free Stock Pick - Healthcare

    Kindred Healthcare

    February 17, 2015 - This Weeks Free Stock Pick - Investing in Healthcare Facilities Earnings Growth

    Kindred Healthcare (NYSE:KND) is a Zacks Rank #1 (Strong Buy) and has an outstanding valuation. Let's take a deeper look at KND as it is the Bull of the Day.

    Kindred Healthcare is a Zacks Rank #1 (Strong Buy) and has an outstanding valuation. Let's take a deeper look at KND as it is the Bull of the Day.

    Company Description

    Kindred Healthcare provides healthcare services via four divisions: Hospital, Nursing Center, Rehabilitation, and Care Management. As of February 20, 2014, Kindred Healthcare, Inc. provided healthcare services in 2,280 locations, including 101 transitional care hospitals, 5 inpatient rehabilitation hospitals, 100 nursing centers, 22 sub-acute units, and 104 inpatient rehabilitation units. The company is headquartered in Louisville, Kentucky.

    Earnings History

    We will get to the impressive valuation in a minute, but first let's take a look at the recent earnings history. The company is on a streak of four straight beats of the Zacks Consensus Estimate.

    The most recent report was in November of 2014, and it was a beat of $0.01 when the company reported $0.11. This is down in absolute terms from the two cent beat in the June 2014 quarter, but up in terms of postive earnings surprise percentage. The June quarter saw a 6.25% positive earings surprise while the September quarter was a 10% positive earnings surprise.

    Estimates

    2014 Zacks Consensus Estimate has held pretty steady, ranging only a penny on either side of the current $1.04 since August.

    The 2015 Zacks Consensus Estimate has recently seen a big move higher from $1.15 to $1.28. That is what is driving it to the higher Zacks Rank of #1 (Strong Buy).

    Valuation

    The valuation for KND is something that you would expect to see from a value play, but I tend to focus more on growth names. The 15x forward PE vs a 17x industry average is just the start of the good looking numbers. A 1.1x book multiple is great, but even better when the industry average is 2.3x. Even price to sales of 0.2x is great, but still at a discount to the industry average of 0.5x

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    Dedicated to cutting edge, high quality professional educational investing trading programs for traders and investors providing a road map for financial freedom. The finest investing trading education in the financial universe. Dr Van Tharp is one of the orginal Market Wizards, and referred to as the Traders Coach.

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    Quickly identify candlestick patterns without thinking. With Track 'n Trade, you have the ability to click, and select your favorite candle patterns, and have Track 'n Trade find, identify, and even auto-trade each signal through our famed Autopilot Trading System.

    Candle Charting Intensive Training

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    for Profitably Trading Stocks Forex Futures Commodities

    Use the CandleScanner trading software to automatically scan for profitable trading setups on any timeframe. Stock forex and futures candlestick trading courses to throughly understand how to profit from candlestick chart patterns. Free newsletter and live trading webinars. Steve Nison is the authority on trading and profiting using candlesticks.

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    Stock Option Forex Futures Training Seminars Webinars Workshops
    Click Here For The Complete 2015 Schedule

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    Trading Softwares available to improve your investment returns.

    Feb 17 8:12 AM | Link | Comment!
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