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.
The restaurant and fast food sectors are fickle, and can easily turn lower without much warning. It happened to burrito maker Chipotle Mexican Grill, Inc. (NYSE/CMG), when it got hammered between April and early October 2012 following its reports of soft results. The stock has since staged a steady rally back to above its previous high in April 2012.
The same thing happened to Ruby Tuesday, Inc. (NYSE/RT), with the stock plummeting around 16% after reporting a soft first quarter that saw continued declines in many key metrics, according to my stock analysis. Ruby could and will likely rally, based on my stock analysis, but it’s not in the same ballpark as Chipotle, so be careful if you are looking to trade the stock.
If you are looking for small-cap growth in the restaurant and fast food sector, you may want to consider a play like Denny’s Corporation (NASDAQ/DENN), as my stock analysis suggests. This sit-in family diner is known for its “Grand Slam” breakfast. The company has superior valuation to its peers, as my stock analysis indicates.
Take a look at the table below, and see how Denny’s sizes up:
The big Wall Street shops focus on the big-name stocks that bring up tons of investment banking and advisory fees. While McDonalds Corporation (NYSE/MCD) is clearly the “Best of Breed” in the restaurant and fast food group, my stock analysis suggests smaller companies, like Denny’s, offer an alternative for investors along with better upside potential; … Read More
The news broke out right after I wrote the first draft of this commentary on BlackBerry Limited (NASDAQ/BBRY): a surprise takeover bid emerged from Fairfax Financial Holdings Ltd. (TSX/FFH) offering $9.00 per share, or $4.7 billion, for the struggling smartphone maker.
It appears to be the correct timing for BlackBerry. (See “Research In Motion Had Better Be Right.”) And for BlackBerry CEO Thorsten Gerhard Heins, he could get a $20.0-million send-off for selling the company.
This was the situation prior to the takeover announcement to take BlackBerry private:
BlackBerry reported a massive fiscal second-quarter loss of $1.0 billion, highlighted by the write-off of about $930–$960 million of its inventory. The company also announced plans to axe 4,500 jobs, or 40% of its workforce, as my stock analysis indicates.
The inventory adjustment is frightening, based on my stock analysis. It implies the company cannot sell its “Z10” and “Q5/Q10” devices. Again, this isn’t a surprise, as my stock analysis notes that BlackBerry has consistently screwed up in its execution over the past few years to the point that it allowed rivals, such as Apple Inc. (NASDAQ/AAPL) and Samsung Electronics Co. Ltd., to bulldoze over BlackBerry, leaving just a pile of scraps.
BlackBerry said it sold about 3.7 million smartphones in the quarter. Honestly, that number really stinks, based on my stock analysis, especially considering Apple announced it had sold nine million units of its new ”iPhone 5S” and “iPhone 5C” in the first weekend.
The numbers are telling, but this has been the issue for BlackBerry for years, according to my stock analysis. In a never-ending battle to … Read More
If I had listened to my son, it would have been a great investment because Tesla was trading around $33.00 at that time in November 2012. The stock spiked to $133.26 on July 15 this year, up a whopping 272.64% over the past 52 weeks, according to my stock analysis.
Even as Tesla moved higher (as you can see in the stock chart above), I was still not convinced, as my stock analysis suggested that General Motors Company (NYSE/GM) and Ford Motor Company (NYSE/F) made more sense.
The reasoning behind my stock analysis was simple: the comparative metrics between Tesla versus General Motors (GM) and Ford easily favored the old Detroit icons. But I clearly underestimated the future expectations of the company.
Chart courtesy of www.StockCharts.com
Tesla fell 14% the day following its high after Goldman Sachs suggested the stock was worth only $85.00, based on the company’s stock analysis.
The stock rallied $16.00 after analyst Andrea James of Dougherty & Co. announced that it had estimated Tesla was worth at least $200.00 and perhaps as much as $300.00 if the company executed. (Source: Rosenberg, A., “Tesla will double again: Analyst,” CNBC web site, July 17, 2013.)
So while I was previously thinking of a short trade with Tesla, I’m now thinking the company—which is the brainchild of Elon Musk, who made hundreds of millions via tech ventures—may be worth a closer look, based on my stock analysis. The man is … Read More
The battle in the video streaming market is on, and based on recent developments, it will intensify, which ultimately is better for the consumer. As my stock analysis indicates, now is the time to take advantage.
No longer is Netflix, Inc. (NASDAQ/NFLX) safe as the current market leader, but the aggressive moves made by Amazon.com Inc. (NASDAQ/AMZN) to drive its streaming video business is already changing the landscape. (Read “Online War Begins: Netflix vs. Amazon.com.”)
And if you don’t believe me, consider that there is currently a bidding war for video-streaming provider Hulu and its three million subscribers. The company will sell for over $1.0 billion on bids from the likes of private equity AT&T Inc. (NYSE/T) and DIRECTV (NASDAQ/DTV).
My stock analysis suggests that while Hulu is interesting, the company is still largely a U.S.-only business with no international exposure, unlike Netflix and Amazon.com. Hulu is much smaller than Netflix, which has more than 36 million subscribers worldwide (source: Netflix, Inc. web site, last accessed July 10, 2013), and Amazon.com, which has 10 million users. (Source: Thomas, O., “Amazon Has An Estimated 10 Million Members For Its Surprisingly Profitable Prime Club,” Business Insider, March 11, 2013.)
But in the event of a takeover, Hulu will gain access to significant capital, with which it could expand its services to markets within and outside of the U.S. And if the AT&T partnership or DIRECTV bid wins, Hulu will have instant access to tens of millions of subscribers, based on my stock analysis. DIRECTV has about 35 million subscribers in the U.S. and Latin America.
The … Read More
There are only two methods to drive revenues: a company can increase its price to the consumer (but this doesn’t always come across as being prudent, especially given the current low interest rate and inflation period), and then there’s the more viable way, which is to expand into foreign markets.
Companies can expand nationwide or internationally like many of the world’s multinational companies. Just take a look around and see how many American companies are found outside of our borders and spread across Europe, Asia, and Latin America.
Whole Foods Market, Inc. (NASDAQ/WFM) has the majority of its stores in the United States, but also has a small presence in Canada and the United Kingdom. The company just made its first foray into Detroit, Michigan. Now at first glance it doesn’t seem odd but, as my stock analysis suggests, given that the “Motor City” has a massive unemployment rate of 17.5% (source: U.S. Bureau of Labor Statistics, last accessed June 18, 2013) and Michigan has more people looking for work than the national average, you have to wonder why the company has decided to expand there. While there may be more economically viable places for expansion, the reality is that the company is searching far and wide for places to expand, as it doesn’t want to face growth issues down the road, as my stock analysis indicates.
The need to expand internationally has made many American companies into global brands and has rewarded shareholders along the way, as my stock analysis suggests.
Expansion is what companies need to do in order to grow and become much bigger companies. Maintaining a … Read More
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