Tag Archives: LinkedIn

by | February 7, 2014 · 12:34 pm

Best day in 2014!

Market update

Wall Street rallies on labor market data. Dow Jones bounced 1,22%. S&P 500 rocketed 1,24%. The best day for stocks so far in 2014! Technology sector is up 1,39%, but Twitter suffered yesterday. They went in another direction. Not a surprice for the most expensive stock in our universe.

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Twitter (TWTR) -24,16%

Twitter stock plummeted yesterday, but I am not suprised. EPS: -1,69. The record high is 74,73 and that price was insane. Now the stock is trading at 50,03. Down -15,94 points only yesterday. It seems like the stock will open up in a red territory today too.

LinkedIn’s (LNKD) site traffic declines. The site traffic fell Q/Q in Q4. Unique visitors dropped by 3M Q/Q to 139M (rose by 23M Y/Y). Page views fell by 1B to 10,6B (rose by 800M Y/Y). User engagement for mobile app traffic aren`t going as planned. Only 25% of the revenue is coming from ads. LinkedIn is less directly dependent on site/app traffic than Twitter and Facebook.

They spent +57% Y/Y on Sales and marketing. 35% of revenue is spent and that is $157,2M. R&D is up to +46% to $113,1M. Registered users rose by 18M Q/Q to 277M. Stocks follow earnings, and if you don`t deliver EPS, you`re not going get any love from the market. This stock will open down about -7% today.

Yelp (YELP) +18,9%

Revenue rose by 72% Y/Y to $70,7 mllion in the quarter. Revenue from 2012 ($137,6) rose to $233 million in 2013. That is up 69%. Net loss is $2,1 million in the quarter. It`s adjusted EBITDA improved by 470% Y/Y to $10,4 million. 39% increase in average unique monthly visitors to 120 million. Local business accounts increased by 69% Y/Y, to 67,200.

Yelp Outlook for Q1 – 2014: Yelp expects revenue to be about $73,5 – 74,5 million. Growth will approximately 60% compared to Q1 in 2013. For the full year, Yelp projects net revenue to about $353 – $358 million. Shares are up 299,7% (1YR). That`s not bad for a company without any profit in 2013.

Reports today:

08:30:00 USD Non-Farm Payrolls Forecast: 185K Previous: 74K
08:30:00 USD Uneployment rate Forecast: 6,70% Previous: 6,70%

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 | November 20, 2013 · 1:35 pm

Price-to-earnings growth (PEG)

PEG ratio is used to determine the value of the stock while you look at the company’s earnings growth. This gives you a better picture and overview than P/E ratio. Take a look at LinkedIn. Price-to-earnings is just below 1000 now.

A high P/E like that may look like a good buy, but factoring in the company`s growth rate to get the stock`s PEG may tell you another story. A company with a lower PEG ratio may be undervalued given its earnings performance.

The PEG ratio tells you whether the stock is over or underpriced and that varies by industry and what kind of business it is. The accuracy of the numbers in the PEG depends on all the inputs used. If you use historical growth rates, you may provide an inaccurate PEG ratio because the future growth can deviate from historical growth rates. Some use the terms “forward PEG” and some use the terms “trailing PEG” to distinguish between the calculation methods using future growth and historical growth.

The most popular way to compare two different stocks are to look at the P/E. You simply calculate it by taking the current price of the stock and divide it by the EPS. It tells you whether the stock is high or low relative to its earnings.

A stock with a high P/E is often considered as overpriced and that is probably right. It signals that the traders have pushed the stock price too high and above any reasonable near term growth that is probable.

However, a high P/E can also signal a strong vote of confidence that the company still has strong growth prospects in the future. This tells us that the stock price can go even higher.

Investors are usually more concerned about the future than the present. That`s why it is better to look at future earnings growth or the PEG ratio. You calculate the PEG by taking the P/E and dividing it by the projected growth in earnings.

PEG = P/E ratio / (projected growth in earnings)

For example:

P/E in Company A is 100, and projected earnings growth next year is 20%. PEG in this case is 5 (100 / 20 = 5). Like all other ratios, the number five in this case is just a number you can compare in relationship to others. The lower the number, the less you pay for each unit of future earnings growth. A company with a high P/E and a high projected earnings growth may be a good value.

A company that is not growing any more with a P/E of 10, and a low or no projected earnings growth, gives you a PEG like the P/E. This can tell you that the investment in here is very expensive.

Take a look at the chart below. I have compared Sony with Starbucks. People are not buying vinyl records or cd`s anymore. What do they buy? They simply buy coffee! Sony traded at $120 in year 2000, and now the stock is just below $20. By the way, do you know what company that is selling most cd`s in this world right now? Belive it or not; it is Starbucks!

SNE and SBUX

News today:

Core CPI & Retail Sales at 8:30am,

Existing Home Sales & Business Inventories at 10:00am,

Crude Oil Inventories at 10:30am,

Fed Meeting Minutes at 2:00pm.

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 | November 7, 2013 · 1:28 pm

Twitter IPO price at $26

Stock market is expensive. Twitter IPO is expensive (without profit). More expensive than Facebook and LinkedIn. But anyway, I think the stock will soar today. The question is: for how long? For all I know we will be forced to buy shares in the aftermarket if we want to grab some.

Twitter say this stock is more risky themselves and that is bad news for the investors considering what happend to Facebooks IPO in the aftermarket. The demand for this stock is huge, and we will probably see the stock skyrocket in the beginning.

Twitter is unprofitable at the moment and they are headed in the wrong direction. In the first six months of 2013, they increased the loss by 41% to $69,3 million. Like I have said before: Shareprice follow earnings, so what are you thinking about the Twitters share price? Based on the info we have so far, it doesn`t bode well for the Twitter shares.

Another ting is the market timing. Expensive shares in an expensive stock market is not a good mix. Everyone is buying into the Twitter IPO hype, and the analysts predict a target price as high as $50. Facebook and LinkedIn appear cheap at about twelve times forward sales, while Twitter is valued at about thirteen times forward sales. That`s not cheap with a company with so many losses.

It`s effective to look at the companys price to earnings if you wonder what price should be. What you really do is comparing the price of the company today to its ability to produce earnings in the future (cash). But the corporate earnings are very influenced by the business cycle.

The U.S experiences a boom approxomately once every ten years. At times like that, the companys will have higher price to earnings than other times because of the business cycle. That is the reason why we see high stock prices. Sometimes it all end up to build a huge bubble.

“CAPE” adjusts for this by measuring the stock price against the average of ten years worth of earnings adjusted for inflation. Doing it this way, you will better see the companys ability to produce cash in any economic environment.

CAPE is a good measurement for long term investors. It measures future stock returns. CAPE outperforms P/E ratio, Government Debt/GDP, Dividend yield, The Fed Model and many other metrics used to predict the market value.

Take a look at the chart below. It tells us that the S&P500 has a CAPE of over 24, which means that the market is trading 24 times its average earnings of the last ten years.

CAPE

In other words; if you bought the entire stock market today, it would take you about twenty four years to make your money back. Is that cheap? No way, but every time (only a handful of times in the last 100 years) we`ve been closer to a market top, then a new bull market run.

Important news today: Unemployment Claims, Advanced GDP and ECB press conference at 8:30am. ECB president Draghi speaks at 2pm.

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 | October 31, 2013 · 2:16 pm

Facebook slid

Nikkei fell 1,2% today. The index is so far down 0,9% in October but still up 38% so far this year. The broader Topix was down 0,9% today. 2,82 billion shares changing hands and that is down from a six-week high of 3,48 billion.

European shares is down today with the FED`s less-dovish-than-expected statment rainsing concerns the U.S central bank could start trimming its stimulus sooner than foreseen. Gold is trading at $1334, down -1,11%.

LinkedIn plummeted 9,32%. Facebook slid -0,78%. LinkedIn`s revenue growth per user is slowing down. LinkedIn Q3 revenues came in at $393,0 million, up 56% from last year. Losses came in at $0,03 per share. Earnings came in at $46,8 million, up from $25,1 million last year.

LinkedIn is probably overvalued. The stock is up 107,8% the last 12 months. Stockprice should be much lower than it is today. P/E is 852. LinkedIn is 22 times sales and 25 times book. How is that possible? This is a bubble and how big is it gonna be?

Facebooks (FB) earnings in Q3 beat the expectations as the number one website in social media continue to expand with their mobile ads. Revenues from mobile ads rose to 49%. That`s up 8% since Q2 this year.

Profit in Q3 doubled to $621M, and EPS is now at $0,25. Revenue came in at $2,02B, up 60%. Facebook will not increase the number of ads in user feeds, and Mr. Mark Suckerberg says that the teenagers were using the Web site less. That is not good new for the future. The shares went down and are now trading at 49,01.

News today: Unemployment Claims at 8:30am, Chicago PMI at 9:45am.

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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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