Seeking Alpha
View as an RSS Feed

Stone Fox Capital  

View Stone Fox Capital's Articles BY TICKER:
  • Sears Holdings: Don't Undervalue The REIT Plans
    Today, 6:57 AM SHLD 9 Comments

    Summary

    • Sears Holdings is quickly moving towards a REIT transaction to unlock value.
    • The company has provided limited information on the up-to 300 stores included in the transaction.
    • The mall REIT space remains on fire, with related stocks hitting multi-year highs.
    • Previous well-documented analysis appears to now underestimate the real estate holdings of Sears.
  • Merck: Buyback Plan Not As Impressive As It Appears
    Yesterday, 3:44 AM MRK 12 Comments

    Summary

    • Merck announces another large stock buyback.
    • Though Merck has a solid net payout yield, the yield doesn't match the highest in the market.
    • The smaller buybacks plan than two years ago along with the higher stock price is a big negative for the stock going forward.
  • SeaDrill: Plan Playing Out Provides Major Long-Term Catalyst
    Sat, Mar. 28 SDRL 95 Comments

    Summary

    • Competitors scrapping rigs continues playing out as expected.
    • SeaDrill remains best positioned for a rebound in oil.
    • The stock remains extremely cheap with the potential for a major catalyst, if the deepwater demand rebounds as originally forecasted.
  • Yelp Has A Solution To The Google Problem
    Sat, Mar. 28 YELP 20 Comments

    Summary

    • Yelp trades at multi-year lows due to user problems and an unflattering documentary.
    • Mobile app provides a solution to the user problem, but it requires execution.
    • Yelp remains an extremely attractive valuation with plenty of upside potential if it can execute on the mobile potential.
  • Potbelly: Rebound Potential
    Fri, Mar. 27 PBPB Comment!

    Summary

    • Potbelly continues a trend of beating estimates while the stock bumps along the bottom.
    • Despite the large stock decline after irrational trading following an IPO, the stock trades at an exceptionally large forward PE ratio.
    • Investors need to keep the stock on a watch list due to the long-term growth potential, but one shouldn't expect the stock to rebound now.
  • Twitter: Livestreaming App Provides User Catalyst
    Fri, Mar. 27 TWTR 3 Comments

    Summary

    • Twitter bought Periscope for under $100 million.
    • The app in beta provides livestreaming in a similar manner to the Meerkat app that stole the show at SXSW.
    • The livestreaming engagement metrics are very promising and could provide a huge boost to the struggling user metrics at Twitter.
  • Freeport-McMoRan: Finally Interesting After Positive Stock Reaction
    Thu, Mar. 26 FCX 23 Comments

    Summary

    • Freeport-McMoRan cut quarterly dividend by 84% to $0.05.
    • The stock had a positive reaction to a very negative corporate event.
    • The positive action in copper prices turns us to a tentative bull on the stock.
  • Qualcomm: Wait For The Accelerated Buyback To Kick In Before Buying
    Thu, Mar. 26 QCOM 17 Comments

    Summary

    • Qualcomm announced a large buyback plan with an accelerated portion to start during FQ3.
    • While the headline is attention grabbing, stock option grants could dilute the impact.
    • Research suggests only loading up on a stock based on buybacks after they occur and not prior.
  • Chesapeake Energy Is Sill Producing Too Much Despite Capital Cuts
    Wed, Mar. 25 CHK 9 Comments

    Summary

    • Chesapeake Energy cuts capital budget by $500 million.
    • Carl Icahn added to an already substantial position in the stock to now control 11% of the outstanding shares.
    • The company unfortunately continues growing production when cuts are needed to protect prices.
  • Noodles And Company: Rebound Potential
    Wed, Mar. 25 NDLS 8 Comments

    Summary

    • Noodles & Company continues struggling with low comp sales in a strong market for fast-casual concepts.
    • The stock is down significantly since the IPO back nearly two years ago though several catalysts exist for a higher long-term stock price.
    • The company needs to increase the marketing budget and improve the development plans in order to grow the band awareness needed to make the stock a core holding.
  • C&J Energy Services' Hidden Value
    Wed, Mar. 25 CJES 1 Comment

    Summary

    • C&J Energy is progressing towards completing the deal for the Nabors unit that should unleash value going forward.
    • The oilfield services company reduced the cash portion of the deal, but details suggest a less than favorable debt pricing.
    • The stock trades at a compelling valuation suggesting plenty of upside regardless of whether demand bounces back.
  • Glu Mobile: Aligning The Stars
    Tue, Mar. 24 GLUU 43 Comments

    Summary

    • Glu Mobile signs the Jenner sisters to the celebrity game platform.
    • The sisters have a social media following similar to when the Kim Kardashian game was announced back in late 2013.
    • Along with the Katy Perry game, Glu Mobile appears set to yet again smash conservative revenue forecasts for 2015.
  • Should Visa, MasterCard Fear IBM?
    Sat, Mar. 21 IBM 78 Comments

    Summary

    • IBM is reportedly working on a digital cash technology to work with global currencies.
    • Such a digital payments network could have major repercussions for the high margins of Visa and MasterCard.
    • The technology concept has an interesting twist considering the partnership IBM is forging with Apple and the ability to connect this network with Apple Pay.
  • Transocean - Rig Moves Aren't Enough
    Sat, Mar. 21 RIG 52 Comments

    Summary

    • Transocean plunged 7% on the news of scrapping more rigs.
    • The rig operator decided to stack four UDW ships built around 2000.
    • Transocean still has a large fleet of old rigs that will require more difficult decisions later this year and into 2016.
  • American Airlines: Is The S&P 500 Entry Only The Beginning?
    Sat, Mar. 21 AAL 17 Comments

    Summary

    • American Airlines joins the S&P 500 index after the close on March 20.
    • Research continues to suggest that the best investment is typically buying the stock removed from a major index over the hot stock joining the index.
    • American Airlines remains too cheap compared to other transport stocks including other airlines to unload based on the normal theory.
  • Qunar: Chinese Travel Market Potential Trumps Margin Concerns
    Fri, Mar. 20 QUNR Comment!

    Summary

    • Chinese travel market and competitor size provide plenty of opportunity for growth.
    • The online travel service continues to spend at an aggressive pace with operating margins hitting negative 55%.
    • Regardless of the large losses, Qunar has a very defined path to reach profitable growth and 30% operating margins.
  • Starbucks Stock Split Could Create A Better Entry Point
    Fri, Mar. 20 SBUX 14 Comments

    Summary

    • Starbucks announced a 2-for-1 stock split.
    • Stock is rallying to all-time highs based on the news leading to the stock closing in on $100.
    • The prediction is that the stock split contributes to a peak in the stock that lasts up to a year. .
  • Virgin America: Time To Load Up
    Fri, Mar. 20 VA 6 Comments

    Summary

    • A couple of events conspired to knock Virgin America down to extremely attractive levels.
    • The airline remains controlled by private equity groups that could hold back the stock in the short term.
    • Virgin America trades at a peer group low forward P/E multiple of only 7.2.
  • Goldman Sachs: How To Play The Mysterious Capital Return Plan
    Wed, Mar. 18 GS Comment!

    Summary

    • Goldman Sachs had to resubmit the capital return plan, leaving a lot unknown about the approved stock buyback plan.
    • The investment bank hiked the dividend by $0.05 to a yield of 1.4%.
    • Investors should pay less attention to the stock buyback plan and more attention to the cheap valuation.
  • ExOne Excuses Continue To Mount
    Wed, Mar. 18 XONE 5 Comments

    Summary

    • ExOne missed Q4 estimates by a wide margin.
    • ExOne continued a quarterly tradition of over promising and under delivering.
    • Investors have no reason to own this stock until it can prove an ability to meet financial objectives.
  • CyberArk Software: Buy The Dip?
    Wed, Mar. 18 CYBR 5 Comments

    Summary

    • CyberArk had blowout Q4 results.
    • The cybersecurity stock saw substantial gains in February due to high profile security threats and general excitement in the industry.
    • The potential for further insider dumping by pre-IPO venture funds could weigh on the stock.
    • The stable and profitable growth of CyberArk is a preferable method in the current market, but the current PS ratio suggests limited upside.
  • American Express: Business Under Attack, But Financials Remain Strong
    Tue, Mar. 17 AXP 2 Comments

    Summary

    • American Express continues losing high-profile customers.
    • The EPS profile remains surprisingly positive with an expected return to double digit growth in 2017.
    • Company appears too optimistic with expected margin pressure to continue, but the strong capital return program will help overcome those pressures.
  • Zoe's Kitchen: Still Cheap
    Tue, Mar. 17 ZOES 5 Comments

    Summary

    • Zoe's Kitchen easily beat Q414 earnings estimates based on strong comp sales of 7.8%.
    • The fast casual concept trades at below average price to sales multiple compared to the other fast growing concepts.
    • Zoe's Kitchen remains cheap despite strong unit volumes for a relatively young concept with only 132 units at the end of 2014.
  • GSV Capital: Will The Discount To NAV Ever Disappear?
    Mon, Mar. 16 GSVC 14 Comments

    Summary

    • GSV Capital reported that the Q414 NAV declined sequentially.
    • The NAV survived a sharp decline to the valuation of the funds largest position in Twitter.
    • The successful exit of key positions suggests the risks are largely overblown providing an ideal entry point with the NAV trading substantially below NAV.
  • Bank Of America: Stressed Over Nothing
    Mon, Mar. 16 BAC 38 Comments

    Summary

    • The Fed only gave Bank of America a conditional non-objection to the capital plan.
    • The movement of the stock and the reality of capital plan shows that investors stressed out over the CCAR for no reason.
    • Bank of America continues to trade at an attractive multiple with plenty of remaining capital.
  • InvenSense: Don't Fear Short-Term Margins
    Sat, Mar. 14 INVN 33 Comments

    Summary

    • InvenSense sits close to multi-year lows due to margin pressure from obtaining business from Apple.
    • The company has several catalysts to push gross margins back toward the 50% target including China OEMs, IoT and wearables.
    • Stock is now cheap after the major sell-off following the FQ3 margin fears.
  • Annaly Capital Management: Ignore Book Value Discount For Now
    Sat, Mar. 14 NLY 30 Comments

    Summary

    • Annaly Capital Management continues to trade significantly below book value.
    • The stock typically doesn't trade based on book value with the focus on another key metric.
    • Company continues to project earnings benefits from higher interest rates that allow for layering on more leverage.
  • CF Industries: High Yields To Own For Now
    Fri, Mar. 13 CF 13 Comments

    Summary

    • CF Industries continues buying stock at a fast clip pushing outstanding shares to an all-time low.
    • The nitrogen fertilizer stock currently has one of the highest net payout yields in the market at 15.7%.
    • Despite recent highs, investors can own the stock with a keen eye on whether the company maintains a high level of buybacks.
  • Citigroup: Capital Returns Higher Than Expected
    Fri, Mar. 13 C 10 Comments

    Summary

    • Citigroup submitted a surprisingly large capital return plan that met no objections from the Fed.
    • The results show the other large financial institutions requiring adjusted capital return plans.
    • Previous recommendation to own the stock remains intact.
  • Sprint: Don't Follow Executives Into Stock
    Thu, Mar. 12 S 56 Comments

    Summary

    • Sprint insiders make large stock purchases at prices around $5.
    • The company hasn't resolved liquidity issues with a likely asset sale required.
    • The pricing war and liquidity situation haven't improved suggesting investors don't follow the insiders in purchasing the stock at $5.
  • Habit Restaurants: Keep It On The Menu
    Thu, Mar. 12 HABT 20 Comments

    Summary

    • Habit Restaurants reported Q414 growth of 46.7%.
    • The burger chain reported exceptionally strong comp sales of 13.2%.
    • The recommendation is to let the stock decline in price to more attractive levels before purchasing.
  • General Motors: Bullish Capital Allocation Plans
    Wed, Mar. 11 GM 8 Comments

    Summary

    • GM announces capital allocation plan after activist pressure.
    • Based on the targeted buyback plan, GM would reach a solid 8% net payout yield.
    • Stock is attractively valued compared to industry peers.