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Paul Zimbardo  

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  • Garmin Stock Navigating to a Huge Gain [View article]
    I am impressed that the margins are recovering so quickly but there is little else to get excited about in this report. While sales topped analysts estimates by $12M (~2%), they still tumbled by almost $250YOY.

    Obviously everyone expected for revenue to fall but the most alarming part to be was that outdoor/fitness fell by nine percent. If Garmin hopes to recover, it is going to have to focus on this niche area as other main-stream areas continue to get eroded.

    Also, GRMN was downgraded by JPM with a price target of $28.
    Aug 6, 2009. 03:12 PM | Likes Like |Link to Comment
  • Progress Energy (PGN): Q2 EPS of $0.64 misses by $0.05. Revenue of $2.3B (+3%) in-line. (PR)  [View news story]
    Slightly disappointing results but some key points that keep me optimistic long-term.

    - Received approval for rate increase effective July 2009
    - Can delay pension expenses
    - Major capital projects are still on schedule
    - Share dilution is larger than expected (~$.03/sh)
    - Higher interest expenses are a drag on earnings
    Aug 4, 2009. 10:43 AM | Likes Like |Link to Comment
  • An iTunes Subscription Could Subsidize the Apple Tablet [View article]
    I believe that Apple will follow its business model with the iPod Touch and offer just Wifi for the first generation, despite the lack of subsidy. Maybe even the possibility of tethering with an iPhone on AT&T?
    Jul 31, 2009. 10:42 AM | Likes Like |Link to Comment
  • American Express (AXP +0.9%) buys back $340M in TARP warrants, estimating that the government earned an annualized 26% on the investment.  [View news story]
    It is too bad for the average taxpayer that these amazing returns from the likes of AXP and GS are vastly overshadowed by the losses on AIG and others.
    Jul 29, 2009. 04:21 PM | Likes Like |Link to Comment
  • AT&T (T +3.3%) can't figure out if it loves the iPhone, or hates it. On the one hand, the iPhone continues to lure coveted subscribers from its rivals. On the other hand, the hefty subsidy it pays Apple (AAPL) for every iPhone sold is eating away at its bottom line.  [View news story]
    Another important point - all of those iPhone users consume a great deal of bandwidth which decreases the reliability for the other users. This will force AT&T to enhance its network or risk losing customers going forward; however, I am confident that AT&T will continue to grow long-term.

    The margins will improve when the subsidy hits slow down as each new customer is far more profitable due to the expensive data plans.
    Jul 23, 2009. 11:14 AM | Likes Like |Link to Comment
  • Conventional wisdom dictates the need for stock pickers grows during periods of market weakness. This time, though, Chuck Jaffe thinks 'market pickers' may have the upper edge.  [View news story]
    Excellent article but I believe that there is room for both schools to be successful. Asset allocation is absolutely critical as it is well documented that this is the source of most performance; however, why not narrow down on individual instruments/products within the asset class? For a purely hypothetical example, someone may decide to allocate 60% to stocks, 30% to bonds, and then 10% to cash/money markets. In this scenario, they decide to allocate their stock money evenly between technology and energy.

    Mr. Jaffe is correct that the investor could simply purchase ETFs for these sectors but with the correct "stock picking" skills and experience, it may be possible to outperform the ETF benchmarks by selecting individual stocks within the sectors.
    Jul 22, 2009. 11:26 AM | Likes Like |Link to Comment
  • Why I Still Like Apple [View article]
    I agree that AAPL is still a great long-term investment, I am hesitant about buying it at this price level. I have owed AAPL for years and enjoyed the ride but I would wait until it inevitably slips back into the $140s before its next earnings blow-out before adding to my position. My current strategy? Sell puts ~$145 and enjoy the premium while I wait.

    As the Wall Street Journal points out, Apple is still strong, but it is near impossible for it to continue to double its market cap.
    Jul 22, 2009. 10:05 AM | Likes Like |Link to Comment
  • Starbucks (SBUX): FQ3 EPS of $0.24 beats by $0.05. Revenue of $2.4B (-6%) in-line. Operating margin of 10.6% vs. 6.9% in 2008. Delivered $175M in cost savings, exceeding its FQ3 target of $150M. Comps fell 5% vs. an 8% decline in FQ2. Shares +8.7% AH. (PR)  [View news story]
    I skimmed the press release and while it does seem as if things are improving at SBUX, I read nothing that would make me want to initiate a position. The cost reduction initiatives appear to be helping but the comp store slump is alarming. The catalyst of the revenue decline appears to the “foodservice and other” grouping: could this mean that Starbucks is returning to its core competency of selling coffee products? Investors should hope so; however, if that is the case, where is the “13 percent to 18 percent” non-GAAP EPS growth going to come from? Last I heard, Starbucks was closing stores, not expanding at a rate that would support that type of growth.
    Jul 21, 2009. 04:42 PM | Likes Like |Link to Comment
  • Apple Earnings Preview [View article]
    The trend recently (i.e. the past ten days) has been for companies with strong earnings to surge in the few days leading up to the earnings release and then rise only moderately after earnings. This has happened with Goldman, IBM, and many others (CAT is a notable exception but it had other factors in play). I have owned and witnessed AAPL easily surpass expectations in the past and I learned long ago to never bet against AAPL long-term but I do have to question how much room it has to the upside. It has pulled back the past couple of sessions but it is still well over its 20- and 50-day MA (also, RSI is on the high-end). With Apple’s volatility, it is usually easy to find attractive entry points when the strength wanes.

    My quick conclusion? You cannot go wrong investing in AAPL long-term but it is near impossible to guess where AAPL will go after-hours when it reports for trading purposes.
    Jul 21, 2009. 03:34 PM | Likes Like |Link to Comment
  • Palm Pre: Are Returns Slowing Growth? [View article]
    It is also important to mention that some of these returns could be due to Apple's move to lock-out the Pre from synching with iTunes. This was another strong selling point for the Pre that could be a catalyst for returns when removed.
    Jul 21, 2009. 12:49 PM | Likes Like |Link to Comment
  • Coffee Drinkers Not Necessarily Abandoning Starbucks [View article]
    "'Consumers are trading down, but not always away from Starbucks,' he said in a note Monday. 'Trade down remains a risk this summer due to the Frappucino platform, and deteriorating breakfast trends at restaurants.'"

    There is no doubt that consumers are trading down, either to less expensive Starbucks products or to DD or MCD beverages. The real question is whether Starbucks will be able to get those customers to trade back up to their more expensive products when the economy starts to recover. I cannot envision SBUX enjoying the success it has in the past with the heightened competition going forward.
    Jul 21, 2009. 12:14 PM | Likes Like |Link to Comment
  • 3 Must-Know Options Strategies for Dividend Investors [View article]
    I use both covered calls and cash secured puts to generate income and this is a well written article that is a great introduction for others.

    Good job.
    Jul 17, 2009. 10:24 PM | Likes Like |Link to Comment
  • Quite an earnings season so far, with 150 S&P companies to report next week, including Yahoo (YHOO), Apple (AAPL) and (AMZN). For this week, the Dow +7.3%. S&P +7%. Nasdaq +7.4%.  [View news story]
    The real question on my mind is how much more room does Apple have towards the upside even if it reports great earnings? It is already up 8.5% this past week, outpacing the NASD by 1% over that period.
    Jul 17, 2009. 09:30 PM | Likes Like |Link to Comment
  • CIT: A Win-Win Trade Idea [View article]
    Not a good day to have picked for shorting CIT. Currently up 110% right now.
    Jul 17, 2009. 01:50 PM | Likes Like |Link to Comment
  • Some Free Advice for Electronic Arts [View article]
    After reading numerous tales of developers’ difficulties with getting their games/apps approved by Apple for release in the app store, I think this is the bottleneck that EA should focus on.

    By serving as the publisher, EA can help smaller developers to expedite the process of getting their app approved for sale.
    Jul 16, 2009. 09:51 AM | Likes Like |Link to Comment