Category Archives: Stocks

Biotech boom only at stage 1

I wrote about the health-care boom on 8 January 2014. An article titled; Health-care bull. I talked about the health-care boom and the sector you should be in. I also talked about the oil price and said it could plunge and  Opec can face huge problems.

Saudi billionaire businessman Prince Alwaleed bin Talal said a few days ago that no one anticipated that the oil price was going to plunge, and people who said that the oil would plunge is not telling the truth, he said.

Prince Alwaleed bin Talal is an expert on oil. Not trading, I guess. Many saw that plunge coming.

But, I`m not gonna talk about oil today, because the oil sector is not hot now. What`s really hot is the health-care sector. Let`s take a look at a biotech stock today, which is Gilead Sciences Inc (GILD).

Gilead is a research-based pharmaceutical company that discovers, develops and commercializes medicines. Gileads`s primary areas of focus include human immunodeficiency virus (HIV)/AIDS, liver diseases, such as hepatitis B and C and cardiovascular/metabolic and respiratory conditions.

Gild2

(Picture: Gilead Sciences Inc)

The company has operations in North America, Europe and Asia-Pacific, and among the most known products they have is Tamiflu. They acquired Pharmasset Inc in January 2012, and on February 2013, they acquired YM BioSciences Inc.

Gilead signed an exclusive Hepatitis C deal with pharmacy-benefits manager EnvisionRx. Right before the deal it was a big price war between Gilead and AbbVie, but Gilead won. This is the fourth deal with PBM, and that`s three more than AbbVie which has only one.

EnvisionRx will be offering Gilead`s products called Harvoni and Sovaldi on its formulary. AbbVie`s product Viekira Pak will only be prescribed as an exception in rare cases. competitive price, the safety and efficacy profile of Gileads`s HCV products have solidified EnvisionRx`s choice to place Gileads`s products in an exclusive position.

Harvoni, which is an enhanced version of Gilead`s blockbuster drug Sovaldi, cost $94,500, while Viekira Pak costs $83,300. The price is for a 12-week treatment course, and both companies drugs have proven their efficacy, but Harvoni has least side-effects and requires lesser dosage than Viekira Pak.

Most of Gilead`s financial performance has been driven by the success of their products Sovaldi and Harvoni, but they have competition with AbbVie. A few weeks ago AbbVie signed a contract with the U.S`s largest pharmacy benefit manager Express Scripts (ESRX).

Harvoni`s easier compliance and better safety profile can give Gilead an edge over their competitor Viekira Pak. Data shows that their product has not had any major impact on Harvoni, and investors are still bullish. The stock is trading at $103,03 today. The price was about $16 in January 2010. Up over 543% since 2010. EPS is 5,65 and market cap is 164,34 billion.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Tech Rally today

Nasdaq had a bad day yesterday and slid -1,89%, but the major index is the only one that is in positive territory for the year. One of the biggest losers on Nasdaq yesterday was Microsoft. Down -9,25%.

Microsoft reported earnings of 72 cents per share on $26,47 billion in revenue for the second fiscal quarter, but the revenue was better than analysts estimations. The negative is the weaker than expected Windows non-Pro revenues which is down -13% YoY, and the commercial license declined 2%.

msft

(Picture: Microsoft down -9,25%)

CEO Satya Nadella said it doesn`t take much longer time to successfully transition from a licensing sales focused firm into a software as a service firm. Microsoft`s cloud business doubled and came in on $5,5 billion i sales. Xbox sales fell to 6,6 million units (from 7,4 million) in sales.

Caterpillar was another big company that slid yesterday. Down -7,18%. The company delivered a shockingly weak outlook for this year and investors got scared. It seems like Caterpillar is in big trouble.

Analysts expected earnings of $1,55 a share but it fell about 20%, landing on $1,23 a share. Its Q4 operating profit slumped 27% YoY. Lower oil prices is negative for their construction business. Caterpillar lowered its 2015 sales expectations for mining and construction equipment, and that was not music in investors ears.

Good news is coming later today. First of all; Alibaba is coming out with the second report as a public company. The Chinese e-commerce giant is expected to post a quarter of tremendous growth. EPS is expected to grow 39% YoY! It`s also expected a massive 48% improvement in YoY revenue!

It is expected to see Tmall and Taobao to deliver strong revenue momentum on the back of higher e-commerce penetration in China. Alibaba has an ongoing international expansion and the stock is up 3,3% in three months.

ATH is 119,15 which is from 10 November last year. The stock was down -1,01% yesterday, and there are some short interest in the stock right now. The opening trade is now $102,94. 52-week low is registered as $82,81. Outstanding shares are 2,465,006,000. The stock is priced richly with Alibaba`s market cap now over $250 billion, but the market is looking for huge surging numbers which could validate the company`S valuation.

Yahoo! Is set for a rally today, trading up about 8% AHT. The company is spinning off Yahoo`s $39 billion stake in Alibaba Group Holding. The anticipated decision announced yesterday will enable Yahoo to avoid paying billions of dollars in future taxes.

A newly formed entity called SpinCo will inherit ownership of the company`s 384 million shares in China`s Alibaba Group Holding when the tax-free spinoff is completed toward the end 2015. Owner of Yahoo shares will receive stocks in SpinCo, which is designed as an investment company.

The old giant is struggling to grow and the firm earned $166 million, or 17 cents per share. Down -52% from the same periode last year. Yahoo`s revenue dipped 1% to $1,25 billion, and investments in Alibaba and Yahoo Japan is the main reason Yahoo`s stock has more than trippled last years.

They have a 36 stake in Yahoo Japan, worth about $7 billion. The Alibaba investment is worth far more than their own online services, and their competitors like Facebook and Google have grabbed a big piece of the digital marketing budget.

Have a closer look at Apple today. The stock is also set for a rally. Up about 7% ATH. Revenue rose to $74,6 billion from $57,6 billion a year earlier. Profit of $18 billion is the biggest ever! Apple reported net profit of $18,02 billion, or $3,06 per diluted share, compared to $13,07 billion, or $2,07 per share a year earlier. Apple faced a clear headwind from a strong dollar.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Taco vs Burger

McDonald`s have underperformed for some time now, and the chain have also had some problems lately. Some of the critics have been that their menu is expansive and confusing. The employees at McDonald`s say their menu is too long which is leading to slower turnover times and longer lines resulting in lost business during meal rushes.

The latest problem is racism. Some black people were fired at McDonald`s being told that there were too many black people at work, lawsuit claims. A previous manager at McDonald`s said she was fired because she was black. She said one of her supervisors would regularly make inflammatory comments to her, such as “We need to get the ghetto out of the store.”

Another problem they have is people sitting there for hours. It could be unemployed people or poor people paying for their cheap burgers, and all this is not good news for McDonald`s Corporation. In addition; people tend to think that McDonald`s do have unhealthy food.

The company has seen declining company wide sales since the summer last year. Last month McDonald`s announced a menu overhaul to address its lackluster performance. The fast food joint also launched a massive marketing campaign to enhance its image.

U.S comparable sales were down 4,6% YoY in November and in October U.S comps dropped by 1% YOY. The past few monthly sales numbers have led to lower estimates for the upcoming quarter.

As the demand for McDonald`s is declining others are rising, and McDonald`s saw that many years ago. That`s why they bought shares at Chipotle Mexican Grill. Folks are flocking to the restaurant with their mexican taco food on the menu.

CMG 2015

As you can see on the chart above, the stock price has skyrocketed. I can understand why McDonald`s bought shares in that company. CMG`s stock price was $40 in 2008, and now it is $719,21. Up about 1000% in a few years.

People tend to think that Sushi is healthy food, but it isn`t. It is too much rice and sugar and that will make you fat. Rice and sugar are «No-food». Mexican food is «Yes-food». People want healthy food and that`s why they like CMG. That`s also why McDonald`s started to sell salad. Among the best thing you can eat on this planet, but McDonald`s is not a salad chain. Do they have an image problem?

CMG will report FQ4 results in Feb 03, and the conference call is scheduled to begin at 04:30 pm ET. Consensus view is EPS of $3,77 on revenue of $1,07B.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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Apple to acquire Sementric

Apple purchases a British startup company named Semetric, which is an analytic company that tracks the way people consume music across the internet. Sementric can give Apple vital information about the consumers to create a music service that gives artists better opportunities to interact with their fans.

This is a big deal for the UK`s cluster of music technology startups. Shazam is another London company that raised a new funding of $30 million, which values the company at $1 billion. I think it is party in London tonight. This is great for the British music industry.

Apple bought Beats for $3 billion last year, and nothing have happened since then. They didn`t buy Beats because of their headphones? If so, Beats headphones are this planets most expensive headphones. I think they are working on their new music streaming platform to vipe out Spotify.

musicmetric

As you may know, iTunes has seen a steep declines in music sales because consumers don`t want to buy music. They want to stream the music and as the iTunes sales are plummeting, people are flocking to steaming platforms like Spotify, Deezer and YouTube.

Apple bought Semetric behind Musicmetric which runs an analytics tool that help record labels, artists and others track the digital consumption of their music. It tracks the consumers behavior on YouTube, BitTorrent downloads, sales on iTunes and streams on Spotify.

Musicmetric is a six-year-old company which is well established, and they raised about $5 million (inkluding a $4,7 million round) in 2013. The deal is much like Spotify`s acquisition of Echo Nest in 2014. Spotify bought Echo Nest for $100 million.

It`s not clear to me whether Apple will close the brand Beats and roll it into iTunes. They were early on the market with iTunes, but not with their new streaming service. So, why should people change the streaming service?

Apple have a huge market out there and some of their opportunities can be first of all their platform. They need to come up with a new and innovative platform. They will also integrate Beats Music directly into the next version of their iOS mobile operating system, according to New York Times. In addition; they may drop the price of the subscription music service from the industry-wide standard of $10 per month.

The tool is also for TV-shows, films, e-books and links to social media, so Apple may have other plans than just their music streaming, because this is vital information for marketers. The tools are turning big data into big opportunities, and they can tell you all you need to know.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Low oilprice is good for oil tankers

The oil price continue to decline and brent oil is now trading at $47, and that is bad for someone and good for others. The supply in the oil-market are pushing the prices down and China will profit from that drop.

China said that the first phase of its oil inventory buildup is over. They revealed that they have 91 million barrels stored at four different sites, and it doesn`t stop there. Now they have a second phase of oil inventory accumulation, and has already stockpiled an additional 80 million barrels.

They have revealed that they want to have a reserve of at least 500 million barrels of oil in the next five years. USA`s oil reserves has a capacity of 700 million barrels. It`s good to know their strategic oil reserves because someone will benefit from that.

Oil tanker companies are happy for the declining oil prices and only a few months ago many of them couldn`t even cover their operating cost which is about $20,000 a day. Rates on the Asian route have gone straight up, trading at an average near $100,000 per day. Spot rates is about $60,000 to $70,000 a day.

This is a level not seen since 2008, and some of the world largest oil traders are hiring supertankers to store crude at sea, Reuters reports. In 2009 at least 100 million barrels of oil ended up being stored at sea. Some of the biggest trading firms have booked crude tankers for up to 12 months.

Storage

Some shipping sources consider the flurry of long-term bookings unusual and suggest that traders could use the vessels to store excess crude at sea until prices rebound. A strategy that was popular in 2009, trading gambit when prices last crashed.

The oil is floating at sea and it`s all stored on oil tankers that is waiting for the oil prices to go up again. When will the oil price turn up again and how long will those tankers wait out there in the sea?

Frontline (FRO) is up 243% in just three months amid speculation that a plunge in crude prices is spurring demand for the vessels to store cargoes. Nordic American Tankers (NAT) is up 65,1%, which owns 20 Suezmax crude oil tankers.

fro

If you think that the oil prices will go up again, then you must set a stop-loss on your Velocity Shares 3X Inverse Crude ETN (DWTI), which is up 380,5% in three months. An ETN you should buy in July last summer, trading at $22,25. It`s up 2,38% so far today, trading at $185,32. This is one of my favorite ETN`s.

Frontline Ltd is a shipping company that is engaged in the ownership and operation of oil tankers and oil/bulk/ore, or OBO, carriers, which are configured to carry dry cargo. It operates oil tankers of two sizes; VLCC`s and Suezmaxes. The stock is down -11,23% so far today, so when to jump in is the big question.

It can be too early right now. The selloff in oil was sparked in part by lower estimates from Goldman Sachs, which slashed its 3 and 6 months Brent forecasts to $42 and $43 a barrel respectively from $80 and $85. Goldman also cut its longer-term estimates on Brent.

Goldman sees crude bottoming in Q2, which means jumping in now could be too early. In a report, they said $2 trillion of future oil investments are threatened due to falling crude prices. That`s up 100% from December 2014.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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