Even as H-P (HPQ +15.6%) shares enjoy another big rally in the wake of last night’s quarterly results, Topeka Capital's Brian White sees only a "sugar high... not a sustainable trend." While the upside excites bulls in the short-term, the fact remains that H-P’s profits and sales have dropped for seven quarters in a row, he says, maintaining his Sell rating and $12 price target. [View news story]
Wasn't he the same knuckle head that put a $1000 price target on AAPL last September at the height of the bubble.
No wonder sell side analysts get looked down upon.
The broad selloff isn't touching H-P (HPQ +14.2%) following last night's earnings. Jefferies' Peter Misek weighs in with an upgrade from Sell to Hold. He praises H-P for having the discipline to sacrifice PC market share to retain profitability (unlike DELL; Whitman (transcript): "Maybe that's what you do when you're about to go private.") Misek also likes the cash flow guidance of $7.5B - "(it) materially changed our view of H-P margin, cash flow, and EPS prospects." [View news story]
Especially if you bought the shares around $12 last November after Aunt Meg kitchen sinked the quarter.
As I bought mine around $15, I was quite concerned about this last November. Guess it all worked out.
Slowing Growth Will Bring Lululemon Shares Back To Earth [View article]
Have you considered that the recent pop in the stock price is due to short covering? Most likely people who shorted the stock in the mid $60s when the whole "sheerness" issue surfaced.
By the way, I have to give management credit for the brilliant move. By blaming on the "sheerness" issue, they diverted the attention from the fact that growth is slowing and competition is heating up. Investors mistaken this for a one time event and thus the stock rallies on.
Can the stock rally from here? Sure, as rising tide lifts all boats. Over the intermediate / longer term, I agree with the author's conclusion. As to who will sell, find it interesting that you used AAPL as an example. It went from $700 to below $400 a share in a little over 6 months. This is how fast growth based institutional investors can turn when the company's growth began to slow.
Slowing Growth Will Bring Lululemon Shares Back To Earth [View article]
LULU is a $11.8 billion market cap company versus a UA, a more diversified company with a market cap of around $6.4 billion. While nothing is impossible, it's unlikely that LULU gets taken over as it's pretty much a niche and its niche is being copied by its competitors (Athleta, owned by Gap, for example). Someone looking to acquire a brand can buy UA for half the price and get much bigger bang versus LULU as the current valuation.
Retail analysts think a lucrative market exists for plus-sized yoga apparel and activewear for the first company to invest and market in the category. The early read: Gap's (GPS +1.2%) Athleta brand might have the upper hand as it already offers yoga clothing up to size 20 compared to Lululemon's (LULU +1.8%) biggest size of 12. [View news story]
Even With Extreme EPS Growth, LinkedIn Is Still A Loser's Bet [View article]
Watch this stock run up to $200 by the August earnings announcement.
Is it grossly overvalued? Sure, but so are quite a few other stocks in the S&P 500 Index. Everything is getting levitated by the central bank liquidity these day. It's not just the U.S. fed, but also Japan, Europe, Australia, South Korea, etc. So just enjoy it while it lasts.
By the way, how's your short position on HLF working out for you?
Linn Energy: Don't Believe The (Negative) Hype [View article]
There nothing wrong with hedging - in fact, most energy companies hedge. The issue is not the use of derivatives to hedge their book. The issue is buying deep in-the-money puts and capitalize such purchase price instead of m-t-m. The research you should be doing is whether any other MLPs or upstream E&P companies capitalize their derivatives and amortize such purchase price instead of m-t-m such positions.
Again, I'm not saying this company is another Enron or do I claim to be an expert in accounting practices for energy companies. However, my background is derivatives as I use to structure otc derivatives with corporates for a living. What's I read about this company gives me enough pause to just stay away.
Linn Energy: Don't Believe The (Negative) Hype [View article]
I have no position in either LNCO or LINE but have been following this company ever since I read Bronte's blog (as I'm a fan of his work).
What I find more interesting here are the responses than the article itself. Sometimes, people want to believe so badly that they overlook what turns out to be something fairly obvious when looking back.
By the way, saw similar reactions in blogs related to AAPL and GLD. For me, why take a chance on an upstream E&P employing aggressive accounting tactics when there are so many E&Ps out there that are trading at a fairly cheap price. Guess the answer has to do with the "juicy" dividend yield. This is the same reason why people buys SDRL and bought royalty trusts and mortgage REITs.
ECA Marcellus Trust - Distribution Falls 35% Sequentially [View article]
@Marketquant - I use to be long this name as well and was skeptical of MBAvalueinvestor's first piece when it came out. Did a little more digging and decided that he what right that these trusts are quite overvalued.
Sold my shares at around $13.50 a few weeks ago. If you want to play the optionality, sell this at the current price and re-establish your position below $10 as I think this is where these units are headed in the not too distant future.
ECA Marcellus Trust - Distribution Falls 35% Sequentially [View article]
The question is whether or not you are overpaying for that optionality. Not too dissimilar to potentially overpaying for a long-dated way out-of-the-money call.
Apparently behind the mid-afternoon drop in the S&P 500 (SPY) (a not insignificant 10 points), the soaring dollar (UUP), and sinking commodities (GLD, USO) was the rumor of a Jon Hilsenrath article set to hit the WSJ claiming "tapering" of asset purchases is coming sooner rather than later. Thus far, nothing is up. [View news story]
That depends on the stock. Many of the momo names that got levitated because of the perceived "put" provided by the fed will see significant haircut to their valuations.
Even as H-P (HPQ +15.6%) shares enjoy another big rally in the wake of last night’s quarterly results, Topeka Capital's Brian White sees only a "sugar high... not a sustainable trend." While the upside excites bulls in the short-term, the fact remains that H-P’s profits and sales have dropped for seven quarters in a row, he says, maintaining his Sell rating and $12 price target. [View news story]
No wonder sell side analysts get looked down upon.
The broad selloff isn't touching H-P (HPQ +14.2%) following last night's earnings. Jefferies' Peter Misek weighs in with an upgrade from Sell to Hold. He praises H-P for having the discipline to sacrifice PC market share to retain profitability (unlike DELL; Whitman (transcript): "Maybe that's what you do when you're about to go private.") Misek also likes the cash flow guidance of $7.5B - "(it) materially changed our view of H-P margin, cash flow, and EPS prospects." [View news story]
As I bought mine around $15, I was quite concerned about this last November. Guess it all worked out.
VXX: Wall Street's One Click Bandit [View article]
VXX: Wall Street's One Click Bandit [View article]
If you're more adventurous, buy puts or put spreads on VXX.
Slowing Growth Will Bring Lululemon Shares Back To Earth [View article]
Slowing Growth Will Bring Lululemon Shares Back To Earth [View article]
By the way, I have to give management credit for the brilliant move. By blaming on the "sheerness" issue, they diverted the attention from the fact that growth is slowing and competition is heating up. Investors mistaken this for a one time event and thus the stock rallies on.
Can the stock rally from here? Sure, as rising tide lifts all boats. Over the intermediate / longer term, I agree with the author's conclusion. As to who will sell, find it interesting that you used AAPL as an example. It went from $700 to below $400 a share in a little over 6 months. This is how fast growth based institutional investors can turn when the company's growth began to slow.
Slowing Growth Will Bring Lululemon Shares Back To Earth [View article]
Retail analysts think a lucrative market exists for plus-sized yoga apparel and activewear for the first company to invest and market in the category. The early read: Gap's (GPS +1.2%) Athleta brand might have the upper hand as it already offers yoga clothing up to size 20 compared to Lululemon's (LULU +1.8%) biggest size of 12. [View news story]
Even With Extreme EPS Growth, LinkedIn Is Still A Loser's Bet [View article]
Is it grossly overvalued? Sure, but so are quite a few other stocks in the S&P 500 Index. Everything is getting levitated by the central bank liquidity these day. It's not just the U.S. fed, but also Japan, Europe, Australia, South Korea, etc. So just enjoy it while it lasts.
By the way, how's your short position on HLF working out for you?
Linn Energy: Don't Believe The (Negative) Hype [View article]
Again, I'm not saying this company is another Enron or do I claim to be an expert in accounting practices for energy companies. However, my background is derivatives as I use to structure otc derivatives with corporates for a living. What's I read about this company gives me enough pause to just stay away.
Linn Energy: Don't Believe The (Negative) Hype [View article]
What I find more interesting here are the responses than the article itself. Sometimes, people want to believe so badly that they overlook what turns out to be something fairly obvious when looking back.
By the way, saw similar reactions in blogs related to AAPL and GLD. For me, why take a chance on an upstream E&P employing aggressive accounting tactics when there are so many E&Ps out there that are trading at a fairly cheap price. Guess the answer has to do with the "juicy" dividend yield. This is the same reason why people buys SDRL and bought royalty trusts and mortgage REITs.
ECA Marcellus Trust - Distribution Falls 35% Sequentially [View article]
Sold my shares at around $13.50 a few weeks ago. If you want to play the optionality, sell this at the current price and re-establish your position below $10 as I think this is where these units are headed in the not too distant future.
ECA Marcellus Trust - Distribution Falls 35% Sequentially [View article]
Apparently behind the mid-afternoon drop in the S&P 500 (SPY) (a not insignificant 10 points), the soaring dollar (UUP), and sinking commodities (GLD, USO) was the rumor of a Jon Hilsenrath article set to hit the WSJ claiming "tapering" of asset purchases is coming sooner rather than later. Thus far, nothing is up. [View news story]
Lululemon Is Too Streched [View article]