Category Archives: Stocks

by | May 13, 2014 · 2:06 pm

Micron Technology Inc +158,1% (1 YR)

Micron Technology Inc (MU) is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory. Micron is the largest U.S memory company and the company provides memory solutions for computing, communications, consumer and industrial applications, and serves both wireless and embedded applications.

micron logo

I feel a big enthusiasm toward chip makers that offer DRAM (dynamic random-access memory) products. Other producers are Samsung (OTC:SSNLF) and SK Hynix (OTC:HXSCF). Micron shows merit as an investment and will probably buy back its stocks in the future.

Maintaining its relationship with Apple (AAPL) will help the stock. DSG (DRAM Solutions Group) sales are up 198%, in part due to the acquisition of Japan`s Elpida Memory. One of the compelling things about Micron is its $615 million takeunder of Elpida Memory.

Elpida is a producer of DRAM for mobile devices. Net sales for the Q1 of 2014 increased 120% Y/Y. The devalued yen also helps pricing and cost of the overall transaction. DRAM is responsible for 69% of net sales and that is up 39% in 2013.

Micron was founded in 1978 and is headquartered in Boise, Idaho. The stock is up +26,5% so far in 2014. Up +158,1% (1 YR). So, what now? Is Micron still a buy? Micron has an extremely low PEG ratio of 0,86.

This is one of the best performers of all S&P 500 companies last 12 months. The stock is up +158,1% (1 YR), while S&P 500 is up only 17%. Micron stock still have room to rise up and seems to have strong earnings growth prospects.

One thing to consider is the high amount of insider activity. Some big stakeholders have diluted their stake in Micron, and heavy insider selling is a point of worry, but despite the selling activity, the stock is not volatile. It seems like the investors don`t care about that.

Reports today:

08:30 a.m EST Core Retail Sales m/m
08:30 a.m EST Retail Sales m/m
08:30 a.m EST Import Prices m/m
10:00 a.m EST Business Inventories m/m

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 | May 12, 2014 · 12:44 pm

Human Capital

 

I watched Eurovision Song Contest on Saturday. Denmark was the winner last year, so the show was sent from Copenhagen live on Saturday. They had a great song last year and followd up with a great song on Saturday too. Once the Danish song started I thought to my self that I have heard the song before.

220px-YouToMeAreEverything

Basim represented Denmark on Saturday and Basim and the rest of his crew did a great gig, but the song called Cliche love song is a plagiat. I mine opinion, this song should be banned, but NOBODY IS TALKING ABOUT IT! Have a listen to the song and make up you mind. Click the link below.

Basim – Cliche love song

This song is similar to a great hit from a group called The Real Thing. They had their first hit on the UK charts in July 1976, with the song called You to me are everything. This was on top for three week in the U.K but peaked at nr 64 on Billboard top 100. It didn`t reach the top in the US because the flood of the coversongs. Have a listen to the link below:

 

The Real Thing = You to me are everything

 

Have a listen to both songs and make up you mind. It is very similar. You can listen to them on the headphones made by Dr Dre`s company called Beat Electronics which is in talk with Apple Inc. Nobody understand why Apple is trying to buy Beat Electronics but it is probably something there which is not released yet.

 

In addition to the brand I think Apple is buying knowledge like Dr Dre and the music mogule Jimmy Lovine. Apple is not buying the physical products, but the brand and a human capital. This is the future of the business. How much is a brain wort? How much is an idea worth?

 

Facebook did the same when they bought WhatsApp. What did they really buy? Not the physically app, but the brand and the human capital. The question is how much is it worth? I really look forward to the value of the app WhatsApp. What about Beat Electronics? Apple want to compete with Spotify and start a streaming business, because iTunes sales are declining.

 

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 | May 9, 2014 · 2:20 pm

Telefonica are expanding – profit falls – shares tumble

 

Telefonica`s Q1 earnings missed analysts expectations. Net profit slumped 23%, down to $957,5M. Revenue fell 14% to €12,2B. Sales in Spain are dropping down -8,2%. In Germany the sales are dropping down 8,8%, and in the U.K -0,3%.

telefonica

Telefonica has two-third of its customers in Latin America and their revenue plunged -18% in Brazil and -13% in the rest of the region. Operating income (OIBDA) dropped -14% to €3,93B. Shares are down -3% in Madrid.

 

They try to expand and has reached a deal to buy Spanich media giant Prisa`s 56% stake in pay-TV provider Canal+ for €725M ($1 B). Their stake will increase to 78%. The mobile service demand is declining.

 

Canal+ owns lucrative soccer broadcasting rights which is good for Telefonica. The deal could pave the way for them to include Canal+ offerings in phone/TV/broadband bundles. Telefonica is also waiting for regulators to sign off on its $11,9B deal to acquire German carrier E-Plus.

 

Regulators are worried about diminished competition because the deal will lower the number of German mobile network owners to three, and that is Telefonica, Deutsche Telecom and Vodafone. As the French government say, there is a growing willingness among continental regulators to support a measure of consolidation.

 

They hope that merging weaker players will create entities more willing to make big network investments. The EU plans to rule on Telefonica/E-Plus next month (June 23). Telefonica hopes to sign the deal in Q2.

 

This business need to thing different. Getting paid for phone calls and messages are out. Its only internet access left and its all about price. This industry has a huge potential for growing business, but the fact is that they don`t know it themself.

 

 

Reports today:

10:00 a.m EST JOLTS Job Openings

06:00 a.m EST FOMC Member Kocherlakota Speaks

 

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 | May 8, 2014 · 2:05 pm

Car war

 

Tesla (TSLA) produced 7,535 Model S units in Q1 (6,587 in Q4). Guidance was 7,400. The company delivered 6,457 units, slightly above guidance of 6,400. Tesla expects to produce 8,5K – 9K Model S units in Q2, and they expect to deliver 7,500 units.

960_bmw_i8_01

(Picture: BMW i8)

The company expects to be «marginally profitable» in Q2. The EPS consensus is at $0,27. Full-year free cash flow is expected to be slightly negative. Operating cash flow was $61M, and capex totaled $141M. The full-year capes forecast is $650M – $850M.

 

Gross margin was 25,4%. The stock will open down about – 8,5% today. It declined -2,86% yesterday. The stock price is $201,35, and the question is: Are Tesla stocks overvalued? They are doing it well but are Tesla`s market cap reasonable given the results and outlook?

 

Despite the success many companies have, its stock can be massively overvalued, and some investors can have unrealistic expectations going into earnings. They did probably not sell enough cars to satisfy the investors, and they need to sell plenty for the rest of the year to justify current price.

 

So far, they are still in a growth phase, putting cash back into the company to grow. The cost of batteries when they need to be replaced somewhere between 200,000 and 400,000 miles will be significantly cheaper in the future.

 

I think that Tesla is a good brand, but they are not alone on the market, and many other companies will follow. Take a look at BMW i8, which is a plug-in hybrid. The 2015 model has a 7,1 kWh lithium-ion battery pack that delivers an all-electric range of 37 km (23 mi).

 

BMW Vision Efficient Dynamics concept car is a plug-in hybrid with a three cylinder turbo diesel engine. The initial turbo diesel concept car was unveiled at the 2009 Frankfurt Motor Show, and deliveries in Europe are scheduled to begin in next month, and about a month later in the U.S.

 

The problem with Tesla is the limited time on the battery. With BMW i8 you have both, battery and gas, but the battery is in my opinion too small and limited. Anyway; this is just the beginning of a new era in the car industry.

 

Mercedes B-klass Electric Drive will be launched in the U.S soon. The engine is from Tesla, and they will fight against VW e-Golf, Nissan Leaf and BMW i3. The price for the Electric Drive will be $41,450.

 

Daimler are stock owner in Tesla and they are the factory that have developed the engine in the new car. The engine is fast and seems to be a great unit. It is a Tesla engine. Very good for Tesla and CEO Elon Musk, but are the Tesla stock price right?

 

CEO Elon Musk admitted several months ago that the stock price is more than they have any right to deserve. Tesla is overvalued using any reasonable valuation metric. Market cap is $27,000,000,000. This valuation will probably be repriced much lower, and that`s probably why it will plunge today.

 

Tesla have to increase its intrinsic value the next years. If not I think the stock price will decline to a lower level to reflect the company`s right valuation. A bearish commentary from Elon Musk is something long investors should take notice of.

 

 

Reports today:

 

08:30 a.m EST ECB Press Conference

08:30 a.m EST Unemployment Claims

09:30 a.m EST Fed Chair Yellen Testifies

 

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 | May 7, 2014 · 2:09 pm

How to buy Alibaba IPO shares

 

This will probably be one of the biggest IPO (Initial Public Offerings) of all time. The stock could double right after the opening for trading, but unfortunately, those shares will be impossible to acquire prior to the offering.

alibaba logo

So, what are you gonna do, if you want to get in on the Alibaba IPO? You can get in by walking in the backdoor into this offering. I think the best thing is to invest in Alibaba`s biggest shareholders like Softbank or Yahoo.

 

They own 37% and 24%. Because of the stake they both have in Alibaba, they are both up 76% (Yahoo) and 114% (Softbank). Last year have been good for both of them. Softbank`s outperformance of Yahoo can be attributed to its larger share of Alibaba.

 

Yahoo`s stake is worth $31 billion and that is about 80% of its market cap. Softbank`s market cap is $99 billion and its investment in Alibaba could be worth about $80 billion. Softbank paid $20 million for its investment in 2000. Now it is about $4 billion, and that is a good investment.

 

Softbank is probably a better investment than Yahoo because of its Alibaba holdings which is a smaller portion of its market cap. If Alibaba`s shares doubles the first day, the sum of Softbank`s shares will be worth about $150 billion, and that is above 50% higher than its market cap today.

 

You can also buy SPDR S&P International Telecommunications Sector ETF (IST), if you belive Softbank is a better investment than Yahoo. Softbank is the second largest weighting at 9,42% in this ETF mutual fund.

 

If you thing Yahoo is a better bet, you can buy First Trust Dow Jones Internet Index Fund (FDN) which have a weighting at 4,12%. Other investment opportunities to consider is Baron International Growth Fund (BIGFX) and American Funds New Economy Fund (ANEFX).

 

The last funds mentioned does not have a huge stake in Alibaba. American Funds New Economy are benefiting from tech and innovation, but their weighting in Softbank is just 1,42% and only 0,48% in Yahoo.

 

You can also consider Renaissance IPO ETF (IPO) which adds companies on the fifth day of trading and sells them about two years later. I think Alibaba will be added, but this will be a long-term investment and you need to wait before you jump in.

 

Krane Shares CSI China Internet Fund (KWEB) started its business in July 2013. They will start to buy after day 11 of trading. You have to remember that none of these investments are perfect. It`s risky to buy IPO stocks and I have never done that.

 

All this is just a scenario and I say the stock can double the first day, just to make an example. Alibaba`s decision to list in the U.S was a blow to the Hong Kong Stock Exchange. Former English schoolteacher and lead founder Jack Ma owns 8,9% of Alibaba, and he will be one of the richest in China.

 

Reports today:

08:30 a.m EST Prelim Nonfarm Productivity q/q

08:30 a.m EST Prelim Unit Labor Costs q/q

10:00 a.m EST Fed Chair Yellen Testifies

10:30 a.m EST Crude Oil Inventories

01:01 a.m EST 10-Y Bond Auction

03:00 a.m EST Consumer Credit m/m

 

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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