Category Archives: Stocks

by | June 16, 2016 · 9:00 am

Oracle can be in the midst of a tectonic shift to the Cloud

Microsoft acquired LinkedIn for $196 per share, and this will not be the last deal in the tech industry I think. The M&A will continue, but who are in the position to push the M&A activity any further?

Blue chips are. So are Oracle Corporation which is scheduled to report fourth quarter of fiscal 2016 earnings results on Thursday, June 16. The company have had a lot of problems lately but what can we expect now?

 

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Oracle lost its high-profile copyright fight with Google, and they are named in a $3 billion suit by the former HP Enterprise. Hewlett-Packard claims Oracle «breached a clear contractual obligation to HP and acted in bad faith, with the intention of driving hardware sees from HPs Itanium to Oracles sun servers.»

The two used to be business partners but a split deepened when Oracle Corporation acquired HP rival Sun Microsystems and later hired HP ex Mark Hurd as co-president. On top of that; former senior finance manager is suing, saying she was terminated in relation over complaints about accounting practices in its cloud services business.

Management pushed Svetlana Blackburn to «fit square data into round holes» to make the business look better, she claims. The stock have been declining since 2014, but BofA/Merrill Lynch views the quarter as a turning point in the cloud segment.

The cloud business is still «only» 6,5 percent of total revenue, but this business segment is growing. The stock price look undervalued with the price just below $40, and many investors are waiting for the stock price to breakout from its consolidation between $35 – $45.

Oracle is the world`s largest provider of enterprise software and a leading provider of computer hardware products and services. Oracle the database software giant in the midst of a tectonic shift to the Cloud.

Cloud is beginning to come into play. Last quarterly results authorized cloud transition with step-like increases in Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) sales growth rates. It`s difficult to see how their gross profit can decline as their SaaS/PaaS revenues probably will increase in fiscal year 2017.

Oracle is coming off a better than expected third quarter in which they beat on the bottom line but missed sales estimates. The continued transition from licensing, where revenues are booked upfront, to a cloud subscription model, where it is realized month to month, will hurt top line growth as witnessed this past quarter.

Oracle enjoys a leading position in enterprise and database management systems. They are also gaining ground in the rapidly growing cloud sector, which is one of the fastest growing sectors in technology and that has without doubt benefitted Oracle.

Its expected to see an earnings of $0,82 per share on $10,5 billion in revenue, and thats one penny higher than Wall Street on the bottom line and in-line on the top. YoY comparisons are now projecting a 5% increase in profitability with sales actually decreasing 2%.

Oracle reports on Thursday, June 16.

asphalt

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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by | June 14, 2016 · 9:00 am

Microsoft will integrate LinkedIn into Dynamics and Microsoft Office 365

LinkedIn is a small company compared to Facebook, and the stock had fallen out of favor after a cautious outlook earlier this year. The stock plummeted more than 40% in just one single day in February this year.

That was then. Now, the went straight up on good news, and the stock skyrocketed 46% in one day. Investors jumped in on the news on monday. Microsoft announced that it has agreed to acquire the professional networking platform in an all-cash deal worth $26,2 billion.

 

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Microsofts CEO Sataya Nadelia said The deal would «bring toghether the worlds leading professional cloud with the worlds leading professional network», and LinkedIns CEO Jeff Weiner will remain at the helm of the social network.

Microsoft is paying $196 a share for LinkedIn.

What company could be better than LinkedIn in terms of their position and opportunity for growth? The price Microsoft paid was fair, and this acquisition will make LinkedIn more valuable under Microsoft`s umbrella than a standalone company.

Microsoft is still one of the worlds biggest companies, and this acquisition was brilliant. Its not difficult to see what Sataya Nadelia is thinking. He will probably integrate LinkedIn into Microsoft Office 365 and Dynamics.

Marketers and professional networks will still use the platform and integrate it in their sales process. They will be more willing to pay for training and to keep on building marketing campaigns their new CRM.

Microsoft will improve the Dynamics CRM software and Office 365 enterprice offerings, and there is no doubt that Microsoft is interested in more market shares in the CRM business. They want to build out their Customer Relationship Management to compete with Salesforce.

A few weeks ago, Microsoft was the first bidder for Marketo which is part of the automated marketing space. And they have enough cash to buy them all. But they are not interested to spend some cash on this acquisition. They will make a loan to avoid a 35 percent tax bill.

Just like Apple last year. They have $180 billion overseas, but borrowed $6,5 billion to pay shareholders a dividend. We still have low rates, and that`s why we have seen a huge activity in M&A recently.

It would be stupid not to do that.

Many big tech companies have a lot of cash. Alphabet Inc, Apple, Microsoft and Facebook have hundreds of billions of dollars in cash and you can imagine their opportunities in the future. But I must admit it was a surprise that Reid Hoffman sold his «baby» to Bill Gates.

What I expected was to see Twitter in that position. Not LinkedIn. But for all I know, maybe Twitter is the next takeover? It`s beginning to be cheap with a market cap of about $10 billion. If this continue, the share price can drop down to about $5.

Twitter should sell before they are worthless. If Google or other media companies wants the platform, they can have it for almost «free» if they wait any longer.

 

asphalt

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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by | June 9, 2016 · 6:49 pm

Flying Cars – What appears in the next 5 to 10 years will be incredible

Many lone-wolf investors have tried to make their flying-car dreams come true, but so far they have all ended up very disappointed. Not only with the cars but also with an empty bank account. Now, everything seems to have changed.

Flying cars have been a dream for a long time, but when will it be a reality? Google`s Co-founder Larry Page can make the dream come true. He had funded the new company that is working with those new flying cars which is Zee.Aero.

Zee-Aero is not a part of Google or its holding company called Alphabet Inc. Zee-Aero is funded by Larry Page since the company’s launch in 2010. Zee-Aero started right next to Google`s headquarters in Mountain View in California.

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Zee-Aero started to work on a small, all-electric plan which in now a flying car. Larry Page have many similarities to Elon Mush and Jeff Bezos. They are all spending their own money to make a better and safer world based on their own childhood dreams.

So far, Larry Page has spent more than $100 million on Zee-Aero, and the company has its airport hangar in Hollister where a pair of prototype aircraft takes regular test flights, according to Bloomberg. Zee-Aero also has a manufacturing facility on NASA`s Ames Research Center campus at the edge of Mountain View.

It`s more easy to build flying cars now than it was a decade ago. The technology is better, materials are better, and autonomous navigation systems are better. All this together can make the flying car dream come true within a few years from now.

Zee-Aero was led by Kroo, the Stanford aerospace professor. He wrote the original Zee-Aero patent, No 9,242,738, which shows a strange-looking one-seater aircraft. Now, the employees are experts in motor and battery hardware.

The company has hired some of the brightest young aerospace designers and they all come from places like NASA, SpaceX and Boing. But they are not alone. A handful of similar companies work on different types of flying cars.

In May E-volo from Germany conducted manned flights of its Volocopter, which is a two-seat aircraft powered by 18 propellers. Other companies in the same business with a different model are AeroMobil, Aviation, Lilium, Airbus and Terrafugia.

One of the co-founders of Pinterest, Paul Sciarra said that electric motors and batteries appeared to have applications well beyond the auto industry. He said:

«The goal is to build a product that impacts the lives of lots of people. Not just folks that are amateur pilots or wealthy, but everyone.»

An aeronautical engineer who`s spent his career designing advanced aircraft at NASA, Mark Moore, said that «over the past five years, there have been these tremendous advances in the underlying technology.»

«What appears in the next 5 to 10 years will be incredible.»

 

asphalt

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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by | June 7, 2016 · 10:53 pm

Lululemon Athletica Inc must remain aggressive to stave off competitive threats from Nike, Under Armour and Gap`s Athleta brand

Lululemon Athletica`s stock price was very low in 2009, trading at only $2,25 in March. That was the bottom, and the stock followed all other stocks on the way up. Belive it or not, but Lululemon Athletica is trading at about $68 right now. What a ride.

Lululemon Athletica Inc is a designer, distributor and retailer of technical athletic apparel. The company offers a line of apparel and accessories for women, men and female youth. Its apparel assortment includes items, such as pants, shorts, tops and jackets designed for healthy lifestyle activities and athletic pursuits, such as yoga, running, other sweaty pursuits and athletic wear for female youth.

 

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Athleisure continues to be one of the fastest growing segments throughout the apparel industry, with retail otherwise hitting some major roadblocks this quarter. Many trace this trend directly to Lululemon.

Despite a strong holiday quarter, with results even surpassing raised corporate guidance, expectations for Q1 are muted as competitors with lower price points begin to steal market share.

This part quarter was highlighted by a 17% increase in revenue supported by growth in key channels including comp store sales and directs to consumer revenue. Lululemon remains focused on undertaking new investments and initiatives to strengthen its position in the burgeoning athleisure space.

In particular, the revamped women’s leggings segment and the introduction of men`s clothing has accelerated same store sales and improved margins.

Lululemon remains well positioned to sustain its high income core customers but must remain aggressive to stave off competitive threats from Nike, Under Armour and Gap`s Athleta brand. As consumers become more value-focused, LULU is losing out to those with lower price-points, although their core remains very loyal.

The Estimize calls for EPS of $0,31, wich is one cent above Wall Street. Revenue expectations from Estimize are also slightly higher at $488,6 million as compared to the Street`s $487,55 million. Earnings estimates have decreased by 11% over last three months, now expected to show a YoY decline of 6%.

Revenues estimates have remained flat during that time, and are still projected to show 15% YoY growth for the quarter.

Watch out for reports on June 8, 2016, before the open.

 

asphalt

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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by | June 1, 2016 · 10:00 am

Michael Kors opened 34 new stores last quarter while foot traffic are declining

Michael Kors peaked in early 2014 and have since then declined in month after month. The stock is trading at about $42 on the last day of May 2016. The outlook for luxury goods has been very disappointing and it still is.

It seems like the consumer spending has been transitioning away from luxury goods to technology and experiences such as food and travel. Michael Kors is a strong brand and still has a strong appeal to the consumers, but the luxury space is struggling to come back.

 

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Long investors think this is a short blip and that the stock will come back, but many people out there belive what we see right now is the new normal. The market for luxury goods have been very disappointing so far this year.

British luxury brand Burberry has declined, and they blame on weak demand in Hong Kong and a drop in tourist spending in Europe. Gap Inc is not better, and their performance can be an indication of incredible softness in the retail industry worldwide.

Nordstrom is also removing Michael Kors handbags from its stores at a rapid space, according to a report from Wedbush. Managers at Nordstrom said declining interest from shoppers for MK products led to the decision.

Not only that. Macys is offering discounts on MK handbags due to oversupply. Furthermore, both Nordstrom and Macys reported weak Q1 earnings due in part to a drop in foot traffic at stores. Just like last year, 2016 will be a challenging year for luxury goods.

Luxury goods sales are expected to rise about 3,5%, from $317 billion to $328 billion.

So far this year, we have also seen losses from luxury retailer Tiffany`s, setting the stage from weakness from Michael Kors, Vera Bradley, and Lululemon over the next week. In an effort to drive top line growth, MK has focused on opening new stores.

Last quarter the company opened 34 new stores, consisting of 15 in the United States and the rest in International markets.

While the new stores will increase operating costs and contract margins, they should help generate higher revenue in the near term.

Global stores should continue to see adverse impacts from weak currency conditions. Regardless, MK continue to deliver positive growth in key financial metrics including revenue, net sales, profits and net income.

The Estimize consensus is calling for earnings of 98 cents per share on $1,156 Billion in revenue, 2 cents higher than Wall Street on the bottom line and right in line on the top. Since the holiday season earnings estimates have fallen 3% while revenue has dropped only 1%.

Year over year comparisons are now projecting a 9% increase in profitability with sales anticipated to grow 11%.

Michael Kors is expecting to report on June 1, before the open.

 

asphalt

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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