Seeking Alpha
  • Monday, January 26, 2015

  • 7:15 PM
    • It was a great day for energy stocks in at least one group of high-yield dividend dogs, as the five energy names making up the top six stocks in David Fish's Dec. 31 composite list of Champions, Contenders and Challengers list all enjoyed substantial gains: EVEP +10.7%, BBEP +21.5%, VNR +12%, CLMT +6.1% and WPZ +0.4%.
    • So far in January, most results for the energy stocks in the group are still lower: EVEP -24%, BBEP -6.3%, VNR -0.7%, CLMT +16.2%, WPZ -2.5%.
  • 2:36 PM
    • BofA/Merrill's Daniel Heyler has named Himax (NASDAQ:HIMX) his top 2015 pick among display IC vendors, and upped his target to $12.50. He cites growing demand for 4K TV sets (they require more powerful LCD driver ICs), spurred by falling panel prices.
    • The call comes ahead of Himax's Feb. 12 Q4 report. Shares +24% since Microsoft showed off HoloLens last Wendesday.
  • 12:58 PM
    • ConocoPhillips (NYSE:COP) headlines BofA Merrill's list of five favorite large-cap energy stocks, after recently raising the stock to a Buy rating as the company has somewhat dampened earnings and growth expectations for a time even though it is cash rich.
    • Occidental Petroleum (NYSE:OXY) faces the oil price correction with the strongest balance sheet in the sector, the firm says, with net cash at year-end 2014 estimated at $1.7B and a whopping $11/share of cash available for buybacks.
    • Chatter about takeover speculation has resumed around Hess (NYSE:HES); with a market cap falling to just north of $21B, Merrill says the company could fall prey to larger integrated as a quick bolt-on acquisition to boost growth.
    • Also recommended: XOM, PXD
  • 6:42 AM
  • Saturday, January 24, 2015

  • 8:26 AM
    • "I don’t see how the Fed can justify hiking rates when economic growth will disappoint, employment growth will fade, and inflation will overshoot on the downside," says Felix Zulauf at the Barron''s Roundtable. He wouldn't be shocked to see 2016 also pass by without tighter policy.
    • The iShares 20+ Year Treasury Bond ETF (NYSEARCA:TLT) is the largest position in his portfolio (the 30-year yield was 2.53% when the Roundtable took place earlier this month; it's 2.37% today). "The U.S. bond market is mispriced," he says, noting long-term yields on these shores tower over those in Europe (they tower far more after the ECB's QE this week).
    • Zulauf is also bullish on the dollar (NYSEARCA:UUP) - not exactly a contrarian view - but he says most don't understand the real reason for the greenback's strength: Basically the world is massively short greenbacks thanks to dollar weakness policies pursued by the Greenspan and Bernanke Feds. When the dollar corrects later this year on realization the Fed won't be lifting rates, it will be a good spot to get long.
    • Expecting a correction in U.S. stocks, Zulauf would then put money to work in the Market Vectors Retail ETF (NYSEARCA:RTH) - a strong dollar allows retailers to benefit by buying their overseas supplies cheaper.
  • 8:25 AM
    • In a low-yield world, the newly launched iBillionaire High Dividend Index - which tracks the trading moves of 25 investing-savvy billionaire investors such as Stanley Druckenmiller, James Dinan and Nelson Peltz - actually lives up to its name with a dividend yield of 5.34%.
    • At 24%, the index has a high allocation of energy shares, including OXY, TRP, CNP, COP, BP, ATLS, CVI, WMB, APL, RIG and ARP.
    • Also worth noting is that the index contains some high-yielding mortgage REITs, an area most investors hate right now but where billionaires seem to find value; examples are NRF, AGNC and CIM.
    • No mutual fund or ETF tracks this index, but it offers a fishing pond of income investment ideas to research further.
    • The top 20 holdings: TLM, CVC, GM, TIME, AEE, D, STAY, KMI, TROX, EXC, STNG, PPL, IRM, PFE, KKR, KAR, F, MIC, LO, ABBV.
  • Friday, January 23, 2015

  • 7:00 PM
    • Though Tableau's (NYSE:DATA) 2015 revenue consensus is only at $554M, and its license revenue currently ~2/3 of total revenue, Cowen's Jesse Hulsing thinks the business intelligence/analytics upstart can deliver $1B/year in license revenue by 2019.
    • Hulsing: "We think the business intelligence market is inflecting due to a confluence of cultural infatuation with data, more relevant data, cheaper infrastructure and better tools. We call this Measurement Mania." He sees Tableau as a major beneficiary (so do others), and believes the company can grow its BI license market share to ~30% in four years.
    • Nonetheless, Hulsing only assigns the richly-valued software vendor a Market Perform rating, and notes competition is growing. "While we think Tableau still has a lead over its competitors in the market, we think recent competitive responses have closed the gap (e.g., Qlik Sense) and new entrants create some threat of incremental competition ('s analytics cloud)."
    • Q4 results arrive on Feb. 4.
    | 1 Comment
  • 6:38 PM
    • "Similar to the 2012/13 bear raid on FB where the street was over-obsessed with 'declining engagement' only to see shares triple in a single quarter, we think the debate around Twitter’s (NYSE:TWTR) MAU adds should eventually move to the background in favor of new product initiatives the company is working on," says Deutsche's Ross Sandler, reiterating a Buy and steep $60 target for the microblogging platform ahead of its Feb. 5 Q4 report.
    • Sandler: "Consumer internet stories that have: 1) improving core products, and 2) are heavily undermonetized, tend to work themselves toward much higher valuations, and the best time to add to positions is when they are most out of favor. Twitter could be one of the best mean-reversion ideas for 2015."
    • He does admit the catalyst that propelled Facebook higher (soaring mobile ad sales driven by ad load and advertiser growth) isn't available for Twitter, given its platform is demand-constrained and has less than 5% of Facebook's advertiser density, but sees other possibilities. "The catalyst could be any of: 1) instant timeline (non-curated Twitter-light), 2) international subs, 3) video, 4) logged out experiences, 5) messaging, 6) a partnership with Google, or non-disclosed product innovations."
    • Co-founder/ex-CEO Evan Williams recently made a case for why MAUs provide an incomplete view of Twitter's value.
  • 12:37 PM
    • Copper puts are Goldman Sachs' favorite global macro hedge, as derivatives strategist John Marshall notes that options prices on copper remain at long-term average levels even as the 12-month copper price has declined 12% over the past month.
    • Freeport McMoRan (NYSE:FCX) provides the opportunity for a single-stock trade, as its options are 94% correlated with options on the underlying commodity; Goldman suggests buying FCX March $20 straddles for $2.79 when the stock was at $19.70.
    • The firm estimates three-month implied volatlity for FCX is 43%, below the 45% implied by oil, copper and gold options, and FCX volatility would surge to 65% if copper volatility surges as expected.
    • Earlier: Goldman gives in on mined commodities
  • 6:40 AM
  • Thursday, January 22, 2015

  • 8:58 AM
    • Arista Networks (NYSE:ANET): Price target $95 vs. current $64.28. Implied upside: 48%.
    • Stratasys (NASDAQ:SSYS): PT of $110 vs. current $75.19. Implied upside: 46%.
    • Ingram Micro (NYSE:IM): PT of $35 vs. current $25.49. Implied upside: 37%.
    • Synaptics (NASDAQ:SYNA): PT of $87 v. current $63.78. Implied upside: 36%.
    • FireEye (NASDAQ:FEYE): PT of $45 vs. current $34.22. Implied upside: 31.5%.
    • (NYSE:CRM): PT of $70 vs. current $57.71. Implied upside: 21%.
  • 6:40 AM
  • Wednesday, January 21, 2015

  • 3:59 PM
    • Credit Suisse thinks it is still too early to buy E&P equities but the picture should brighten by late in Q1, when the firm suggests the time could be right to make a play for the strong balance sheets offered by the likes of Anadarko Petroleum (NYSE:APC), Devon Energy (NYSE:DVN), EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO) and Pioneer Natural Resources (NYSE:PXD).
    • E&P stocks historically have been highly anticipatory, the firm says, with the stocks moving ahead of crude oil, adding that the key leading indicator of U.S. drilling and completion activity is U.S. drilling permits.
  • 11:37 AM
    • To make the list, the stocks must be rated Outperform by the Baird team, have average or lower risk suitability, a dividend yield at least 1.5% above the 10-year Treasury rate, and an AFFO payout ratio under 100%.
    • Armada Hoffler Properties (AHH +1.3%) is a diversified REIT, owning and managing office, retail, and multifamily properties throughout the country.
    • Franklin Street Properties (FSP -1.1%) is an office property owner.
    • STAG Industrial (STAG +0.2%) owns 248 industrial properties in 36 states with about 47M square feet.
    • DuPont Fabros Technology (DFT) is a data center REIT with a current 4.6% yield.
    • BioMed Realty Trust (BMR +0.1%) has biotech and pharmaceutical companies as tenants, and owns or has interests in properties totaling 17.5M rentable square feet.
    | Comment!
  • 6:42 AM
  • Tuesday, January 20, 2015

  • 12:23 PM
    • Barrington Research's Ted Moreau, Jr. has upgraded Rudolph Technologies (NYSE:RTEC) to Outperform ahead of its Feb. 2 Q4 report, and set a $12.50 target.
    • Moreau: "When we updated our thoughts on our two semiconductor capital equipment stocks two weeks ago, we expressed continued concern about lingering softness for their back-end business. Since then, TSMC raised their 2015 capex budget by nearly $2 billion and we have grown more confident of Samsung's 14nm position in 2015. As such, we believe 2015 will be a good year for Rudolph's front-end business and so are raising our 2015 estimates."
    • Previously: Chip equipment makers take Intel/TSMC's capex budgets in stride
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  • 11:28 AM
    • Believing T-Mobile (TMUS +1.4%) will see "an inflection to positive and rapidly growing [free cash flow] in 2015," Goldman's Brett Feldman has upgraded the Un-Carrier to Conviction Buy from Neutral, and hiked its target by $10 to $37.
    • Feldman also thinks T-Mobile will provide strong 2015 EBITDA guidance, thanks to slowing expense growth and higher MetroPCS synergies. He forecasts 2015 EBITDA of $7.7B (above a $7.09B consensus), and has upped his 2015 net postpaid subscriber add estimate by 500K to 3.5M (implies further share gains).
    • Meanwhile, in comments that might be aimed at U.S. politicians and regulators more than investors, Deutsche Telekom (OTCQX:DTEGY) CEO Tim Hoettges insists T-Mobile's current approach isn't sustainable, and that a merger is the U.S. subsidiary's best long-term hope for achieving needed scale. "I was intrigued by the idea of having a combination with Sprint and being the ‘super-maverick’ in the market. I hope that the political environment will change at one point in time."
    • T-Mobile and (especially) Sprint plunged last year after Sprint abandoned its merger efforts in the face of FCC/DOJ opposition. T-Mobile's recent postpaid share gains likely influenced regulatory thinking.
    | Comment!
  • 6:42 AM
  • Monday, January 19, 2015

  • 7:22 AM
  • Sunday, January 18, 2015

  • 1:32 PM
    • Whereas the front cameras on smartphones have historically featured resolutions of 2MP and lower, CES saw the unveiling of a slew of phones with high-res front cameras (5MP-13MP) optimized for selfie shots. OEMs also rolled out (to some social media mockery) "selfie stick" accessories that make taking shots easier, and (in Lenovo's case) a $29 selfie flash that plugs into a phone's audio jack.
    • Rosenblatt's Brian Blair observes image sensor vendor OmniVision (NASDAQ:OVTI) benefits from this trend, as more powerful front cameras bring with them higher sensor ASPs and gross margins. "We expect to initially see this [trend] at the high end of the market, but we anticipate the trend will quickly filter into mid-tier models as well."
    • Blair, who recently launched coverage on OmniVision with a Buy rating, expects the company to post calendar 2015 revenue of $1.4B and EPS of $1.81, well above a consensus of $1.33B and $1.54. OmniVision closed on Friday at $27.40, and has over $10/share in net cash/investments.
    • For its part, OmniVision used CES to show off: 1) Image sensors containing an advanced eye-tracking software platform (provided by partner SMI). 2) A solution that pairs a 23.8MP image sensor with a high-speed (MEMS-based) autofocus from startup Wavelens. 3) A partnership with 3D imaging processor firm Intuitive to create "a reference design for building compact modules that enable 3D imaging in consumer electronics."
    | Comment!
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