Netflix (NFLX) has generated great gains for those investors who bought before January 23rd of this year, when the stock price was around $100 per share. It seems like many investors have hopped on the optimism bandwagon, since it was a great opportunity to buy at those levels. Not anymore.

First off, let's analyze the company to understand what its strong and weak points are.

Revenue distribution

This is the distribution of revenue per business unit:

(click to enlarge)

Source: Netflix's Q4 2012 Report

As you can see, Domestic Streaming keeps being the pillar of Netflix's revenue driver, but International Streaming will be the key growth driver for the following years. The marketing efforts have been slowly paying off, as International Streaming revenues have doubled in just a year.

Domestic DVD's are slowly doomed to failure, and represented 10% less revenue during 2012 (compared to the other two business units),

For the past year, I have performed several DCF valuations on several companies and published them on Seeking Alpha.

In this article, I will share the results of such valuations, and recommend a course of action for the stocks that were analyzed. Keep in mind that this is an exercise of how the stock market reacts to a stock´s fundamental value, and whether this happens is subject to much debate.

For easier access, a link to each valuation article is available in its corresponding target price.

The 3 scenarios used in DCF valuation: basic concepts

As I explain in my articles, I use three scenarios for valuating each company in the most objective way possible.

I will start with the "Negative scenario", which, of course, varies for each company but assumes that the current risks its industry´s competitors taking some of its market shares, growth or deceleration of revenues (depending

When you talk about cloud computing, Salesforce (CRM) comes to mind, and its stock price is way above the fundamental value of the stock. As this industry is fairly new and seems to bring exiting possibilities and accelerated growth, many forget that a stock still needs to be able to generate positive cash flows to justify holding a stake in a company.

This stock has had an impressive run up, all the way up to $170 as of this writing. I will present the reasons why this stock is the short of the year. Data Source: Salesforce's financial reports.

Insiders are selling

Insiders have been selling stock as the share price has gone up these last couple of months: On January 15th, 2013, Graham V. Smith, Salesforce's CFO, sold 1,400 shares, with proceeds of $241,388, selling at an average price of $172.42. Parker Harris, EVP of Technology, sold 4,441

Today I present to you the leading consumer company in Latin America: Fomento Económico Mexicano, S.A.B. de C.V. (FMX), also known as FEMSA.

Get to Know FEMSA

This company is definitely a name long-term investors should have in their portfolio due to its diversified, recession-resistant businesses and its long-term focus on creating wealth for shareholders. FEMSA has its headquarters in Mexico, the No. 2 country in the world in terms of soda consumption. It is a Mexican-based corporation that has diversified into several sources of income.

Four Sources of Income

1. FEMSA is the majority holder of Coca-Cola FEMSA, owning 50% of the company and having 63% of the voting rights. Yes, Coca-Cola FEMSA is Coca-Cola's (KO) largest franchise bottler. It has 37 bottling plants in Latin America in countries such as Colombia, Brazil, Venezuela, Nicaragua, Panama, Argentina, and Costa Rica, with over 85,000 employees and over 1.8 billion points

Today, I present you an analysis of the Canadian-based Blackberry maker investors either love or love to hate: Research in Motion (RIMM).

First off, I'd like to say that next year is probably the most important one for RIM because it represents the unveiling of its Blackberry 10 smartphones, which has been delayed many times for over a year now.

If everything goes according to plan, on January 30, 2013, the Blackberry 10 devices will be available for customers, and all eyes will be on the sales numbers and of course, RIM's margins.

Let's start off with some historic sales and other relevant information considered in the discounted cash flow valuation, which will be followed by a specific target price depending on the scenario being used.

Subscriber Base

RIM's subscriber base was 77 million users by the end of fiscal 2012. The company's subscriber base is stabilizing around 80 million

Good day to you all. The reason this article is being published today instead of Sunday is because of today´s (Monday) Apple (AAPL) monster +16 point rally.

At the time of writing, I recommend selling iron condors again.

The call spreads we are selling are above two very important technical and psychological resistance areas. These are the 50 day moving average, which now sits at $594.27, and the psychologically-important $600 price.

The call spreads that we are selling now in our $1,000 options part of the portfolio, which now sits at around $1,250 after two profitable weeks, are placed as follows:

• Sell to open 3 $610 Apple weekly 610 calls @1.85
• Buy to open 3 $615 Apple weekly 615 calls @1.25

This is done for a credit of $0.60 each, which would give us $180 in credit if these options expire worthless.

"The other sides of the iron condor we

Good day, readers. This is the second week of our $1,000 portfolio dedicated to trading weekly options. Last week, Apple (AAPL) behaved like a company going bankrupt, touching $505.75 on expiration day, but finishing the day at $527.68.

So if you followed last week´s article, you know the spread went deep-into-the-money, something I hope never happens again. If, however, this does happen, a trader must be able to "roll" his position.

Rolling

"Rolling" your position is essentially buying back your current position and re-opening at another strike price and/or expiration date, for credit or debit, depending on how the market values your current position and the one you are trying to open again. The great advantage of "rolling" is that it gives you more time for your trade to work. For example, taking last week´s trade -- when we were short two Apple weekly 520 strike-price puts and long

Hello readers, in this article I will focus on the advantages that weekly options offer to option sellers. This one is aimed at short-term traders who can keep up with the intra-day fluctuations of the market.

As you may know, the most liquid stocks and ETFs offer the possibility of trading options that expire every Friday of every week (at 4 p.m. Eastern) called "weeklies," instead of the third Friday of the month.

What you might have figured is that this trading style is "conservative" because it looks for low-possibility price movements, and I will focus solely on selling put and/or call spreads that are deep out-of-the-money, which means they are further away from the current stock or ETF price at the start of the trade.

It is very important to choose your stock or ETF correctly for this trading style, which is spread option selling. To be able to

These past few weeks, the Standard & Poor´s 500 ETF (SPY) has been moving up relentlessly, and has now reached a critical price juncture.

Some factors have been lining up for a big move. Let´s look at some recent and upcoming economic events that will move the markets for the next couple of weeks.

Many market participants expect QE3 in the U.S. and/or more easing by the ECB.

It looks like ECB will ease, but QE3 will not be announced in the next meeting at the Jackson Hole.

Here's why I think the ECB will ease:

Mario Draghi, the ECB chief, has been aggressively pushing for more monetary easing, as the Manufacturing PMIs for most European countries are well below 50, which indicates a contracting economy.

European GDP printed -0.2% today (in line with expectations) but worse than the 0.0% in its last report, putting additional pressure on the Central

Sodastream Share Valuation

Hello readers, due to a special request in my last article's comment section by fellow SA Contributor Josh Krause, I will be valuing a company with a very interesting product.

Sodastream (SODA) is an Israel-based manufacturer of home beverage carbonation systems that enable its users to transform ordinary tap water into carbonated soft drinks and sparkling water.

Get to know Sodastream

Sodastream manufactures and sells soda makers and exchangeable carbon-dioxide (CO2) cylinders, as well as consumables, consisting of CO2 refills, reusable carbonation bottles and of course, flavors to add to its water. There are more than 50,000 retail stores in 42 countries which currently distribute Sodastream 's products. About 10,000 of those 50,000 retail stores were added during 2011. This includes more than 9,500 stores in the U.S., where its expansion plans are just beginning.

Growing in hand with retailers

Sodastream's growth has been fueled by

Coinstar Share Valuation and Target Price: Eating off Netflix and Spare Change

Hello readers, today I will review some of the most relevant facts about Coinstar (CSTR) before doing a DCF Valuation and giving out my target price for this company. Coinstar also happens to report today, July 26th.

Meet the Brands

Coinstar has two core brands, Redbox DVD and video game rentals and Coinstar coin counting.

Redbox

There were over 35,400 Redbox kiosks at the end of 2011 in 29,300 locations, where consumers can rent or purchase movies and video games; 5,200 were installed that year.

The Redbox kiosks are installed primarily at leading grocery stores, mass retailers, drug stores, restaurants and convenience stores including Walgreens (WAG), Walmart (WMT) and McDonald's (MCD).

The following graph, made with information from Coinstar's 10-k illustrates the vendor relations as a percentage of its revenues for both Redbox and Coin business:

The

Amazon Share Valuation and Target Price

I have seen discussions about Amazon (AMZN) and its share price so many times, I think it's about time to perform a valuation on its share price and a view of important financial metrics.

This comes at a great time, since Amazon reports earnings on Thursday, July 26.

Get To Know Amazon

Amazon is one of the leaders in the Internet retail industry, and being so, there are some things that the company expects about the future that might raise some red flags to stockholders.

Taken from Amazon's 10-K:

We expect a disproportionate amount of our net sales to occur during our fourth quarter. If we do not stock or restock popular products in sufficient amounts such that we fail to meet customer demand, it could significantly affect our revenue and our future growth. If we overstock products, we may be required to

In my previous article, I detailed the valuation for Chipotle Mexican Grill (CMG) by DCF and other methods. It is now time to make a very short-term trade disregarding fundamentals and focusing on the impact the reported EPS relative to expectations have had on its share price and how to profit from it.

Chipotle reported $1.97 EPS for Q1 of 2012, up from $1.46 in Q4 of 2011. This represents a 34.7% increase in its net income quarter over quarter. Its cash flow, however, changed from a positive $58.1 million to a negative $31 million, mainly due to its stock-based compensation and no positive effect of maturities of investments, which helped by almost $80 million to the company's cash flow last quarter.

Earnings surprise history for the last 4 quarters (Click to enlarge)

Quarterly Earnings Surprise History

This weekend I finally had the time to look into one of the leading casual dining restaurants in the U.S.: Chipotle Mexican Grill (CMG). Of course, there's nothing really Mexican about it, unless you count some of the folks who work there.

First, we will review some important aspects of Chipotle's business for the valuation, such as current and expected revenue growth, anticipated restaurant openings, operating and net margins, ratios, and pretty much everything I have covered in my past valuation articles before actually getting to the DCF scenarios and my target price for December.

Getting To Know Chipotle

This information was taken from Chipotle's 2011 Annual Report:

Chipotle operated 1,230 restaurants at the start of 2011.

Last year, Chipotle opened 150 restaurants and its revenue grew 23.6% to $2.27 billion and comparable restaurant sales grew 11.2% for the full year.

Chipotle expects to open between 155 and 165

Hello readers, in this article I will describe the most neutral option strategy you might want to use this week, along with its potential return, cash requirements and scenarios that might arise.

I will first look into some consensus EPS forecasts and moves on IBM before presenting the trade ideas.

International Business Machines (IBM) reports on Wednesday, July 28th. The company is expected to report $3.42 EPS vs. $2.78 in the last quarter, a 23% increase. The high EPS forecast by analysts is $3.51, and the lowest forecast is for $3.31 EPS, with 20 analysts recording their estimates.

The company's "surprise" index is at 5.7%, meaning it usually reports 5.7% lower or higher than expected by the analysts who follow the stock.

In the graph below, we have the last four expected and reported EPS for IBM:

Next, we have a table that shows how the share value has

Hello readers, the time has come for me to do a share valuation exercise of a company that is currently one of the leaders in the technology sector, Apple (AAPL). This analysis is based on 3 methods of share valuation: The discounted cash flow model, the Graham formula and EBITDAx7.

I will also review the most important financial metrics to analyze if Apple is generating or destroying value with the capital it has invested. Before we get into the share valuation, I present relevant information regarding Apple and its closest competitors to get a better understanding of the company.

First of all, their main market continues to be the U.S. and Europe, with Asia gaining importance as Apple continues to expand strongly in that region.

Revenue per Region

This information was taken directly from Apple's 2011 10-k table 33 (Excel version):

(Click to enlarge)

Revenue per Segment

This information

Bearish Call Spread on SPY: How to set it up

In my last article, I mentioned a strategy for creating a core stock position by selling cash-secured puts on a stock until assigned, and then selling covered calls to generate income. I used (BAC) as an example, but that strategy applies to any stock.

In this article I will explain what a Bearish Call spread is, how to set up the trade and the possible scenarios you will face upon expiration Friday (the 3rd Friday of each month). I will use (SPY) as an example because it is representative of the stock market as a whole.

When should it be placed?

The Bearish Call Spread should be done when you expect:

1. The stock to drift sideways during the trade.
2. The stock not to exceed a certain level at expiration Friday.
3. To use this trade as a

How to Buy Bank of America at a Discount and Generate Income Using Options

Many investors think buying and selling options is more dangerous than playing with fire.

In this article, I will illustrate an example of building a stock position in a very cheap and safe way using options.

There are 3 steps to this process:

1. Identify a stock you would like to own, preferably a strong company with fundamentals favoring its upside, or having limited downside.
2. Buying your stock cheaper by selling "cash-secured" puts.
3. Once you get the shares assigned to you, how to generate income for the shares by selling "covered" calls.

Step One: Identifying a stock you would like to own

I will use Bank of America (BAC) for this example since their options have a lot of liquidity, trading millions of contracts daily. Their Average Option Volume is 2,654,872. I also chose Bank

Hello readers, the time has come for me to do a share valuation exercise of a company that is currently one of the leaders in the technology sector, Microsoft (MSFT). This analysis is based on 3 methods of share valuation: The Discounted Cash Flow Model, the Graham Formula and EBITDAx7.

I will also review the most important financial metrics to analyze if Microsoft is generating or destroying value with the Capital it has invested. But before we get into it, I'd like to mention some important information about Microsoft.

First of all, 2012 and 2013 will be very important for Microsoft's future. They have 4 major product launches coming:

1. Windows 8 Pro, which is expected to be released between Q3 2012 and early 2013. CEO Steve Ballmer predicts Windows 8 will have 500 million users by the end of 2013.

2. Office 15, which is expected to be

The time to compare these four companies -- Agco Corp. (AGCO), Caterpillar (CAT), CNH Global (CNH), and Deere (DE) -- and their stocks is now. They all provide agricultural solutions on different levels; some rely more heavily on the agriculture sector, some have a presence in the construction sector, and they all have a financial arm to help them with sales -- with different strengths and weaknesses.

But this is not a SWOT analysis; this is a stock valuation showdown. I will solely focus on the financial statements these companies provide, along with metrics for comparison purposes, my interpretation of them, and, of course, the three methods used to value the stocks. You can find explanations of metrics in my prior article on valuation, as I will only provide results and interpretations in this article.

Key Trends for 2012 :

Here are key trends, taken from CNH's 2011 20-F