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Patrick Knittle  

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  • Qualcomm: What The Heck Happened? [View article]
    Thanks Ashraf. I am one of the underwater May 65 calls and got in expecting the beat after multiple refs seemed to indicate upside possibility (e.g. ARM results, Bernstein). Already hold some QCOM shares, and appreciate the INTC and BRCM insights too. What are your thoughts and outlook relative to the drop in QCT EBT % (i.e. Q1 2013 @ 25.9% dropped to 17.4% in Q2 2013) ???
    Apr 24, 2013. 10:08 PM | Likes Like |Link to Comment
  • Dow Doomsday: Why It Might Happen Soon [View article]
    I agree w DNorm - it looks like the chart on employment is saying we are at 1982 levels, and if you were an investor back then, you may be reading this from your yacht and enjoying a few Jagers. There was nothing convincing in this article about a downturn. Not that one isn't possible, it's just the evidence was not fully supportive. I mean, let's face it, Greenspan doesn't command nearly the respect he once used to - why? because he TOTALLY MISSED THE BOAT on housing!!!
    Apr 13, 2013. 07:31 PM | 2 Likes Like |Link to Comment
  • 2 Telecoms And An Information Services Company With Recent Intensive Insider Selling [View article]
    Regarding QCOM, is there any reason to suggest that insider selling under a Rule 10b5-1 trading plan, which happens to be all but one person's transaction type, is a basis for evaluating the potential direction of the shares?
    Apr 11, 2013. 07:57 PM | 1 Like Like |Link to Comment
  • Apple Has Become The Most Underrated Stock [View article]
    Valid, and you would have thought it would have been done already given that, but that's just a data pt in the forest - doesn't change the overall message.
    Apr 11, 2013. 09:29 AM | Likes Like |Link to Comment
  • Apple Has Become The Most Underrated Stock [View article]
    It took a personality with the cache of a Steve Jobs to be able to get deals done with recording studios and labels in order to launch an iPod and the integral iTunes service. As a visionary leader, Jobs commanded a level of respect few can match. When one thinks about an iTV possibility and what that might take relative to negotiating with content providers (e.g. studios, networks, etc.) and delivery (e.g. cable operators, broadcasting cos), Tim Cook does not appear to possess that same clout and genuine leadership it may take to convince, cajole, or otherwise cut deals among the diverse and vast set of constituencies. Let’s face it, Steve Jobs was Apple and Tim Cook is not – it does matter.

    The window is rapidly closing on any remaining market leverage Apple might have to call the shots in any negotiations, whether they are with China Telecom, Disney Studios, Deutsche Telekom, or Time Warner Cable.

    Apple could launch a TV or wearable device(s) solution, but given the unmet expectations for these concepts over the last several months, and the speed at which agile and accomplished competitors are innovating and executing ahead of them, such launches are rapidly losing their ability to materially drive Apple’s share price. In fact, they could even result in disappointment and a sell-off if the “wow” factor is not reminiscent of Jobs’ heydays.

    Apple’s $137B, or $145 per share, of cash garners a fair amount of attention when considering the value of its stock, but this is a one-time consideration. Not only that, $94B of that cash, or almost 70%, is held in foreign subsidiaries. 73% of the $15.9B of cash that was added to the balance sheet in the latest quarter was added to foreign subsidiaries, so any math in a cash value per share either has to incorporate a U.S. tax affect for repatriation, or incorporate costs for borrowing against it here in the U.S.

    Some estimates have suggested an iTV could add $13B+ of revenue and $4.50 a share of earnings, but that might only make up for the drop in earnings that stems from iPhones and iPad minis that are cannibalizing older, potentially higher margin models. For instance, recent estimates indicate this cannibalization is contributing a potential drop in overall iPad shipment forecasts from 100 million to 88 million iPads and iPad minis this year.

    If the trajectory of declines in margins and channels fail to be reversed, a P/E of 10 might be grossly understated. Estimates for 2014, which once approached the $60-$65 per share range, are trending back to 2012 levels. That’s zero growth in earnings over the 2 years!
    Apr 10, 2013. 01:09 PM | 2 Likes Like |Link to Comment
  • 5 Stocks To Watch For Gains This Week [View article]
    Thanks, my key point was that AAPL's not cheaper if earnings estimates continue to tank, which in turn drives up future P/E ratios and then it becomes overvalued. Technology refreshes alone don't engender long-term survival, and Jeffrey Gundlach at DoubleLine gave a great assessment of AAPL on CNBC back on Jan 23rd where he called the $425 level when the price was in the low $500's.
    Mar 25, 2013. 12:09 PM | Likes Like |Link to Comment
  • 5 Stocks To Watch For Gains This Week [View article]
    My only concern about AAPL P/E references are that they usually don't contemplate earnings falling rapidly. Estimates of AAPL's 2013 and 2014 estimated earnings over the last 90 days have dropped by 10% and 13%, respectively - that's just in the last 90 days! Estimated earnings growth has dropped in that same 90 days from 17.3% to 12.6%. Selling low priced phones may contribute $5B, but what was already being modeled/assumed previously by analysts with an expectation AAPL would cut a deal and sell higher priced phones via China Mobile?
    Mar 25, 2013. 08:49 AM | Likes Like |Link to Comment
  • Ensco Poised For A Run? [View article]
    Thanks Jan, appreciate the note. I went in and out of SDRL myself last summer realizing 15-20% returns, but worry a little about the debt vs ESV. The relatively low avg age on ESV jack-ups was one of my points, and I think that still offers some potential value and flexibility for the longer term.
    Mar 24, 2013. 10:23 AM | Likes Like |Link to Comment
  • Ensco Poised For A Run? [View article]
    Thanks Pedro. My comparison was 2011 to 2013 estimates for U.S. oil demand. Economic conditions have certainly contributed to that change and my main point was the pace of Asian demand will eventually outstrip the U.S., especially as global GDP rates gain further traction and China's middle class expands. Regardless, I would see this as more reason to be bullish on ESV and oil exploration in general. Thanks for your note.
    Mar 22, 2013. 02:57 PM | Likes Like |Link to Comment
  • Ensco Poised For A Run? [View article]
    Thanks for your comments and views.
    Mar 21, 2013. 05:26 PM | Likes Like |Link to Comment
  • Qualcomm Impresses At Mobile World Congress 2013 [View article]
    Ashraf - you mention QCOM's "patent portfolio that spans nearly everything wireless" so what company has or will have the chip(s) that go into my water heater and oven appliance that will communicate with my smartphone apps?
    Mar 5, 2013. 01:52 PM | Likes Like |Link to Comment
  • Qualcomm: Clarifying My Stance [View article]
    Ashraf - moving beyond smartphones, and this was touched upon by Paul Jacobs during the last cc, how do you see the growth of QCOM chips technology in the other devices that will/might communicate more easily with smartphones in the future (e.g. appliances, home networks, wearable technologies, etc.)?

    I mean, from a market potential and growth rate perspective, this seems like a huge opportunity, but could it move the needle in the next 2 yrs?

    Appreciate your thoughts.
    Feb 18, 2013. 11:20 AM | Likes Like |Link to Comment
  • Why The S&P Will See 1400 (Or Lower) Before 1600 [View article]
    Mike - do you think GDP for Q4 was a viable read given Sandy and gov't spend driven? With 70% of GDP being consumers who are getting more confident and starting to drive more home & auto volumes, I would debate your call. I would just add that with retail investors starting to shift funds from fixed and cash to equities, it may be time to start mapping our way out the door soon, but it seems ultimately that Treasury yields need to come up a little more (100 bp) to start scaring equities (I mean, look at what higher rates will do to the deficit!!).
    Jan 31, 2013. 05:39 PM | Likes Like |Link to Comment
  • 6 Key Recession Indicators [View article]
    Good analysis - have you backtested relative to past recessions or identified some correlation between recessions and some combined weighting of the 6 indicators you've noted?
    Sep 13, 2012. 04:33 PM | Likes Like |Link to Comment
  • Considering REM? Invest Directly In Mortgage REITs For Higher Yields [View article]
    1) Interest rates don't move materially overnight, so there will be writing on the wall telling you to bail on mReits
    2) AGNC mgmt focuses more on 10 yr loans that have a lower prepayment/refinance probabilities
    3) the fed is committed to keeping rates low for 2 more yrs
    Aside from a federal default on Fannie and Freddie (& Ginnie), what' the real near-term risk aside from sitting on the sidelines?
    Jul 7, 2012. 09:06 AM | Likes Like |Link to Comment