Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Stock Analysis

Stock analysis is the application of a method or set of criteria to evaluate a company’s stock. This analysis can fall into several areas; more broadly this encompasses fundamental analysis, technical analysis, and quantitative analysis. Fundamental analysis covers the research of a company’s financial statements, its management, the marketplace, the firm’s competitors, and forecasts for the future of the business. Technical analysis is the study of a stock’s chart. Someone using technical analysis wouldn’t look at the income statement, but would spend their time looking at the chart and indicators, such as volume, moving averages, and past market moves to forecast future stock moves. Quantitative analysis is when a computer is programmed to look for patterns using mathematics. Some examples of quantitative analysis can be found in statistical arbitrage or algorithmic trading.

Why I’m More Excited About the Food Sector Than Apple’s Latest Products

By for Profit Confidential

This Food Company More Deserving of Your Attention Than AppleWhile the entire world was waiting for and anticipating the next-generation “iPhone 6” from Apple Inc. (NASDAQ/AAPL) on Tuesday, General Mills, Inc. (NYSE/GIS) announced it was acquiring organic and natural food company Annies, Inc. (NYSE/BNNY).

Okay, the launch of the iPhone 6 was clearly more exciting, but so what? The launch was more hype than substance, unless you consider a new and bigger iPhone earth-shattering.

But I’m not here to talk about Apple. What I will discuss is the food sector, especially the makers of organic and natural food products, which appear to be in play, based on my stock analysis.

If you owned Annie’s before it was acquired by General Mills, congratulations on your 38% jump in stock price on the news! Go treat yourself to some fine wine and a great meal. If you didn’t get to profit from this deal, there are still some stocks in the same sector as Annie’s that have great potential.

One small-cap natural food products company that I like based on my stock analysis, and this is one that I have been covering for a few years now, is Inventure Foods, Inc. (NASDAQ/SNAK). The small company produces and markets specialty food brands, concentrating on the snack food market. Some of its product lines include nutritional and natural snacks.

Inventure Foods sells products under its own brand and other licensed brands, including the following: “Boulder Canyon Natural Foods,” “Jamba,” “Seattle’s Best Coffee,” “Rader Farms,” “T.G.I. Friday’s,” “Nathan’s Famous,” “Vidalia Brands,” “Poore Brothers,” “Tato Skins,” “Willamette Valley Fruit Company,” “Fresh Frozen,” and “Bob’s Texas Style.” The company’s manufacturing plants are located in Arizona, … Read More

Coffee Wars Intensify on Stock Market as Coffee Prices Rise

By for Profit Confidential

Top Three Stocks to Profit as Coffee Prices RiseIf you cannot get through the day without that cup of coffee, you may need to prepare to spend a little more to get it.

Coffee prices have been surging, up more than 30% year-over-year. The cost to have that morning cup of java has edged higher, but not at the same rate as the cash price of coffee.

The coffee industry is a multibillion-dollar industry in the United States and is a competitive marketplace, but at the top of the coffee heap is Starbucks Corporation (NASDAQ/SBUX), which has developed into an iconic brand both domestically and worldwide. In Asia, Europe, and Latin America, no matter where you are, it seems there’s a Starbucks near you. In China, the brand is rapidly growing, and the company plans to expand in this region with thousands of outlets.

Starbucks has also expanded into providing more menu alternatives and is involved in the tea market via its acquisition of the Teavana chain. The company is also marketing juices and operates a small chain of hamburger outlets in California.

For long-term investors, you cannot go wrong with Starbucks, which could serve as a good core holding in your portfolio.

 Starbucks Corp Chart

Chart courtesy of www.StockCharts.com

However, in the traditional coffee and donut market, the top player at this time is the “Dunkin Donuts” chain, operated by Dunkin Brands Group, Inc. (NASDAQ/DNKN). The company also operates the “Baskin-Robbins” ice cream chain. Unlike Starbucks, Dunkin is primarily a U.S. brand that doesn’t have much recognition outside American borders; albeit, the company is looking to expand to the United Kingdom via the planned opening of 50 outlets in Greater … Read More

My Top Stocks in the Mobile Gaming Sector

By for Profit Confidential

Why I Believe There Are Better Mobile Gaming Investments Than King Digital If you have ever played the Candy Crush Saga game on your mobile device, you’d realize that the game, along with others like Flappy Birds, are merely a mobile phenomenon that could easily fade away over time once the addiction washes away, based on my stock analysis.

Yet for King Digital Entertainment plc (NYSE/KING), the maker of Candy Crush Saga, the company is clearly jumping with glee that it’s valued at more than $6.0 billion. The stock debuted with its initial public offering (IPO) on Wednesday priced at $22.50 per share, but it quickly fell to $19.17 after the open.

Make no mistake about it: my stock analysis is that King Digital is not worth $6.0 billion—or even half of that. The company generates about three-quarters of its revenues via the Candy Crush game. There are other games, but none have taken off to the degree Candy Crush has. While King Digital says it will look hard at developing another major game, there’s no guarantee that this will happen before interest in Candy Crush fades, based on my stock analysis.

What I suggest you do is look at more established developers of mobile games and applications that are much cheaper and not pumped up like King Digital, as my stock analysis suggests.

Based out of San Francisco, Glu Mobile Inc. (NASDAQ/GLUU) is an interesting small-cap gaming play that holds promise in the growing area of mobile gaming on smartphones and tablets, as my stock analysis indicates. Spending on mobile applications is estimated at around $56.0 billion by 2016, according to Forrester Research. With a market cap of … Read More

My Top Stock Pick in the Innovative Alternative Energy Sector

By for Profit Confidential

This Alternative Energy Company Has Great UpsideThe price action and euphoria towards battery-powered carmaker Tesla Motors, Inc. (NASDAQ/TSLA) clearly shows the demand for innovative companies that deliver a great story, as my stock analysis suggests.

Investors want to see less demand for energy produced by fossil fuels and more demand for the green energy movement, whether its wind, water, solar, or another form of green energy, according to my stock analysis.

A small company that I have been following for a while in the alternative energy space is FuelCell Energy, Inc. (NASDAQ/FCEL), which has a market cap of $421 million.

My stock analysis indicates that the company is very innovative, which is what we want to see in high-potential stocks.

FuelCell Energy, Inc. Chart

Chart courtesy of www.StockCharts.com

FuelCell provides alternative fuel cell solutions via its stationary “Direct FuelCell” power plants that are built to deliver ultra-clean, efficient, and reliable green power. The process involves harnessing the use of renewable biogas from wastewater treatment and food processing.

As my stock analysis indicates, the company’s clients include commercial, industrial, government, and utility companies. Sectors served include the food and beverage, manufacturing, hospital and prison, college and university, hospitality, utilities, and wastewater treatment areas.

According to the company, the energy produced is up to two times as efficient as fossil fuel plants. The plants range from smaller 300-kilowatt to larger 2.8-megawatt plants, and they are expandable to above 50 megawatts. FuelCell said the power plants it has built have generated more than 300 million kilowatt hours (kWh) of electricity in more than 50 installations worldwide.

A major and growing market for FuelCell is in Southeast Asia, specifically in South Korea. The company … Read More

Could Thousand-Dollar Stock Be a Bargain?

By for Profit Confidential

What Makes a High-Priced Stock a BargainGoogle Inc. (NASDAQ/GOOG) is showing why I think it’s one of the top technology growth plays at this time…and going forward.

No longer simply a web site and online advertising marketing company, Google has been spreading its wings into software and hardware, as it moves to the next level as a company, based on my stock analysis.

The stock may be trading above $1,100, but my stock analysis indicates that in the years ahead, Google may be one of those high-priced stocks that you may look back on as a bargain at $1,100. (See “When High-Priced Stocks Become Attractive Investment Opportunities…”)

No one seems to care that the shares of Berkshire Hathaway, Inc. (NYSE/BRK-A) trade above $169,000 a share, so what’s the big deal with Google at $1,100?

What I continue to like about Google is its constant tinkering of its strategy and business operations.

Google developed a self-driving car that has already driven itself some 300,000 miles or so and has only been in one accident—which Google claims occurred while the self-driving vehicle was being manually driven. Can you imagine self-driving cars on the streets of New York City or the crazy highways of Beijing? The company is all about innovation, based on my stock analysis.

Considering buying Google, according to my stock analysis, is akin to buying a technology-based private equity fund due to its constantly being on the lookout for innovative technologies and spreading out its technological patents.

In 2012, Google acquired the handset unit of Motorola for $12.5 billion; but after watching how competitive the smartphone market is, Google made the decision to … Read More

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