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  • 13.1% Dividend Agency RMBS Investor CYS Investments Is Likely To See A Large Pop In Book Value [View article]
    Interesting stock and of course the yield and discount to book are very enticing. I can't seem to get over the ephemeral nature of these things. They seem very leveraged and since they don't actually do anything it feels like you could see a big increase in BV or be stock with a huge decline and suspended dividend if things go against them. It's just not a situation I can totally get my head around in terms of whether they have a recurring high *risk adjusted* return model or it's just a question of having a good run which could reverse anytime.
    Dec 14, 2014. 02:09 PM | Likes Like |Link to Comment
  • GoPro: I Know Which Analyst Is Right [View article]
    I'd love to see one huge leg up in GPRO to hit big new highs, off CES and maybe what I'm sure will be a big Q4. If capitulation on the short side happens then it'll be a slice of heaven. Gotta be mighty careful with a stock like this though - big moves can buffet you.
    Dec 14, 2014. 02:04 PM | Likes Like |Link to Comment
  • Apple Stock Becoming The Ultimate Safe Haven [View article]
    Company has a great brand, good product management, proprietary core technology, best-in-class software, distribution and solid overall execution. All with a reasonable valuation. I don't see much company risk here although I do take the point that as a big percentage of the market itself it will be harder for AAPL to deliver huge percentage returns, especially if the market is weak.
    Dec 13, 2014. 09:58 AM | 9 Likes Like |Link to Comment
  • Apple: Facing A Challenge From Google's Android [View article]
    I have to admit I don't understand analysis based on incremental technology inside the product cycles of established competitors. I could write the reverse of this article with a headline staying "Android about to face tougher competition with the debut of Apple Watch."

    Apple has been competing intensely with the Android ecosystem for years now. Nothing new to see or talk about here. Apple has a proven model that combines their stores with software and a robust ecosystem around their proprietary architecture.

    The Apple customer doesn't make purchase decisions around bits or performance - they buy it for design, software, content, function, support, and brand. I think the technology-based arguments might apply to the Android versus Microsoft market but that's a whole other question and one that seems pretty minor (at least for now.)
    Dec 5, 2014. 05:26 PM | 9 Likes Like |Link to Comment
  • Insider Selling And No Path To Profitability Should Weigh On Zendesk [View article]
    I understand your desire to be short this given the valuation. I agree that it's too high. However $ZEN is sitting in a very good spot in what I consider the "new stack" of cloud-based software. Yes there are some bubble-like behaviors out there by investors but I think Zendesk is a winner. It might even be worth a sale with an eye to buying back on a stumble (just meeting expectations would be good enough I suspect.)

    But that game can leave you not owning a stock that you want to hold long term. I suppose other options like having some puts might also help but they get expensive in a hurry.
    Dec 2, 2014. 07:54 AM | Likes Like |Link to Comment
  • Will Volvo's Plug-In Electric SUV Make Life Difficult For Tesla's Model X? [View article]
    At the most basic level I just can't see wanting to have two separate systems to drive my car. It's like putting in radiant heat and also a forced air system. Double the cost, double the worry and double the work. In the case of the Volvo I have to plug in *and* get gas along with oil changes and all that.

    It is a compromise that will appeal to some people. However I'm more intrigued by something like a Prius or adding stop/start technology to radically improve gas mileage without having to do any charging. Conventional vehicles can get much better in terms of performance and gas mileage which is a good thing. For example I believe Volvo just announced the first 4-cylinder engine that generates 300hp using two chargers. A mid-sized SUV could get 40+mpg highway which is pretty good.

    But pure electric is a very different experience - no gas, no oil, no noise, great performance and no polluting (if you care about that.)
    Dec 1, 2014. 04:27 PM | 4 Likes Like |Link to Comment
  • The Elephant(s) In The Room In GoPro's Business [View article]
    Hmmm. The drone angle is interesting, not just in air but also under water, etc.
    Nov 2, 2014. 06:16 PM | Likes Like |Link to Comment
  • The Elephant(s) In The Room In GoPro's Business [View article]
    Excellent article. I've done a little work on $GRPO and expect the stock to "settle" into a range close to what you've outlined here. I think our intrinsic valuation model pointed to the mid-$40's if memory serves.

    There do seem to be quite a few alternatives to the Hero from white label makers and branded firms like Sony. It remains to be seen if Hero can become the "iPod of the action camera space" to preserve both share and margins.

    The media and social networking angle is interesting. At first easy to dismiss but the company has done better at this than I thought they might. On one hand companies like Under Armor figured out how to leverage this type of strategy to win in a market against the likes of Nike. But $GRPO feels closer to $SKUL in that they must face the reality of the CE business which you point out is a tough place to make money. I love the buffet quote.

    I think he also said he'd rather invest with a mediocre management team in a great business then a great management team in a lousy business. He's not perfect but deserves to be listened to.

    Thanks again for this analysis and article. Makes me want to own $AMBA but I expect they'll get some stiff competition from somebody soon. Maybe a second source opportunity for $GRPO?
    Oct 25, 2014. 09:06 AM | 4 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    Very good discussion on $SZYM. I do think this is a case of a company with very promising technology that is taking longer than expected to ramp up to volumes that would put profits in sight.

    We published a fairly lengthy report on the company back in May of 2011 which you can download at -

    The key point I'd raise here though is we built a model at the time that projected $350M in revenue for 2014 with a $51M operating income. As it stands today analysts project $75M in revenues for 2014 with a ($140M-ish) loss. The "hockey stick" is out there in 2015/16 based on estimates of $600M in revenue and $50M-ish of net income for 2016. Given the past this feels (still) optimistic.

    Our past work makes us think that the management team of Solazyme is high quality and taking a long-term (maybe too long-term) view of their positioning and market opportunity.

    Also one last point of clarification - the company has $285M in cash but also $200M in debt so net cash is only $85M. So I would put this company in the "risky" category despite having what I think is a very solid management team.

    I'd point to substantial negative gross margins as the primary risk. If they can't prove/demonstrate that what they do can generate substantial profit margins at scale then the financing pipeline will stop flowing and they will be looking to sell the company for IP value and some written down assets.

    At the moment I have no position the stock and not contemplating one right now.
    Oct 19, 2014. 09:16 AM | 3 Likes Like |Link to Comment
  • Zillow: Time To Run Away [View article]
    I agree with the short case on this one but have had a hard time getting the timing right and sticking with it. Google doesn't control their content either but obviously makes a good living as a middle man because people find it easier to go to one place to search for things. Doesn't seem crazy to think that will be true for real estate. I've got no dog in the hunt right now.
    Oct 19, 2014. 08:27 AM | 1 Like Like |Link to Comment
  • GT Advanced Technologies' Sapphire Wind-Down A Game Changer For Wafer Prices, Rubicon [View article]
    When I took a quick look at $RBCN I think the gross margin was actually negative. In any case a quick look at the financials made me wonder why in the world you'd want to own shares in this business. If you have a case for sapphire prices being wildly higher in a way that can be sustained then load up. I've got no idea.
    Oct 16, 2014. 01:31 PM | 1 Like Like |Link to Comment
  • Did GT Advanced Technologies Mislead Investors? [View article]
    I am not a legal expert but I would bet that the management team is going to be on the hook for some serious crime. There's no question that they "painted a picture" that was very different than what their business metrics were indicating. If a few emails surface then these guys are in some serious trouble. My 2c but that's all.
    Oct 7, 2014. 11:35 AM | 18 Likes Like |Link to Comment
  • Glu Mobile: Coming Unglued ... [View article]
    Good article but I think it's a trifle one-sided. That's what makes a market. I've noticed some dropoff in KK but to me that's not unexpected. We play games and get tired and move on. I think $GLUU management gets that.

    The insider selling I think is a red flag as are more shares that may come out as acquisition lock-ups expire.

    Having said that these guys have an incredible opportunity to build a real company (like an ERTS) on the mobile platform and I tend to believe they know that. Won't happen in a quarter or even a year but I'd be shocked if they let it go.
    Oct 7, 2014. 11:32 AM | Likes Like |Link to Comment
  • Update: Seadrill Subsidiary To Raise $250 Million In Equity [View article]
    Goldman downgrades $SDRL to "Sell" this morning. Guess they weren't on the deal? Or something bad is going on...
    Sep 26, 2014. 06:39 AM | 1 Like Like |Link to Comment
  • Metabolomics Company Calithera First In Sector To IPO [View article]
    Interesting article. $TINY remains undervalued but the market has a hard time giving them the credit they are due. It's weird that D-Wave is listed on the chart as a "biology" play. Doesn't seem right to me.
    Sep 25, 2014. 01:26 PM | Likes Like |Link to Comment