Posts Tagged ‘stock analysis’
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
The 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.
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
The housing market looks like it may be ready to fall. While the homebuilders may face some hurdles, the area of housing that I feel is a buying opportunity is the home supplies and services stocks. The Home Depot, Inc. (NYSE/HD) is the “Best of Breed” in the housing market, with Lowes Companies, Inc. (NYSE/LOW) trailing in second.
While I like the Home Depot in the housing market, the reality is that the company is too big for my liking, with its market cap at a whopping $112 billion. Even Lowe’s, with a market-cap of $53.0 billion, is too large for my liking and the current valuations are fair.
A small-cap stock that I would look at as an alternative in the housing market supplies sector is Dallas-based Builders FirstSource, Inc. (NASDAQ/BLDR), with a much smaller market cap of $728 million. But unlike the Home Depot and Lowe’s, Builders FirstSource primarily deals with the residential new homes construction housing market as a manufacturer and seller of structural and related building products. The company’s products include roof and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork, and pre-hung doors.
The company runs 53 distribution centers along with 47 manufacturing facilities in nine states that are situated mainly in the southern and eastern United States housing market.
Builders FirstSource has outperformed the S&P 500 over the past year with a 29.91% advance, versus 23.52% by the S&P 500.
The company recorded sequential annual revenue growth from 2004 to 2006, but then struggled on the charts with three straight down years. Builders FirstSource appears to be on the right path … Read More
As I recently discussed, the release of new gaming and entertainment consoles generate excitement and drive up the demand for games. (Read “Why the Gaming Sector Should Be on Your Radar.”) In this column, I wrote about Electronic Arts Inc. (NASDAQ/EA) and Activision Blizzard, Inc. (NASDAQ/ATVI), but a much smaller gaming software maker that I expect could deliver some impressive numbers, based on my stock analysis, is Take-Two Interactive Software, Inc. (NASDAQ/TTWO).
If you are a fan of the infamous “Grand Theft Auto” series, you also probably know that the creator is Take-Two Interactive. The recent launch of its latest version, “Grand Theft Auto V,” is breaking all records for the series, as the company said it has already sold 29 million copies in the first six weeks of sales. That’s impressive and will generate well over $1.5 billion in revenues, which is more than the company’s trailing 12 months of sales, according to my stock analysis.
In addition to Grand Theft Auto, Take-Two Interactive publishes games under two labels: Rockstar Games and 2K. The 2K label publishes under three more labels: 2K Games, 2K Sports, and 2K Play.
My stock analysis suggests that the stock should be doing better with the projected sales. Take-Two Interactive is still up 61% over the past 52 weeks, easily beating the 25.5% return of the S&P 500. But in comparison, over the same period, Electronic Arts is up 95%!… Read More
With the upcoming release of new video consoles from Sony Corporation (NYSE/SNE) and Microsoft Corporation (NASDAQ/MSFT), the video game sector appears to be set to experience a revival, as my stock analysis indicates.
According to NPG Group, the U.S. sales of video game-related hardware, software, and accessories surged by 27% year-over-year to $1.08 billion in September. (Source: The NPD Group, Inc. web site, last accessed October 22, 2013.) The sale of software, specifically, surged 52% to $754 million, accounting for 70% of total sales. Yet with the debut of two new consoles in November (Sony’s “PlayStation4” and Microsoft’s “Xbox One”), my stock analysis indicates that sales in the hardware sector will pick up, giving a boost to the share prices of Microsoft and Sony.
In the hardware area, Microsoft has done well with its Xbox console in spite of its lag in sales compared to Sony’s PlayStation console, based on my stock analysis. Yet the move by Microsoft into the gaming and entertainment console market is a big selling point for the company, as my stock analysis points out. (Read “Why Microsoft May Finally Be Set to Turn Its Fortune Around.”)
I know my son is anxiously anticipating the release of the PS4 and, in particular, the “NBA Live 14” game that is made by one of the top games developers Electronic Arts Inc. (NASDAQ/EA). Electronic Arts (EA) develops games for the Xbox, PlayStation, and ”Nintendo Wii” consoles. The company also develops games for mobile phones and tablets.
EA games are broad in scope and include action, military, sports, racing, simulation, strategy, family, kids, music, and puzzle-based games. … Read More
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; albeit, … 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 regain … 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 price points are … 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
The battle is on in the online streaming of videos and other shows, according to my stock analysis.
Yet the main combatants include not only incumbent Netflix, Inc. (NASDAQ/NFLX) but also upstart Amazon.com, Inc. (NASDAQ/AMZN), which in two short years is likely causing some stir at Netflix’s corporate headquarters due to its own video streaming service.
If I was Netflix CEO Reed Hastings, I would be more than worried about the aggressive push of Amazon.com into the video streaming market, based on my stock analysis.
No longer is Amazon.com merely a seller of books and related items, as the company is looking at expanding its business line. My stock analysis suggests this strategy makes a lot of sense, considering that Amazon.com has a significant membership base to draw business from. This is the very real reason why Facebook, Inc. (NASDAQ/FB) needs to monetize its more than one billion users and make money, as my stock analysis indicates. (Read “Facebook Does an About-Face: Set to Move Higher?”)
There is speculation that Amazon.com may have paid as much as $200 million to Viacom Inc. (NASDAQ/VIA) for the rights to show hundreds of shows on its “Amazon Prime Instant Video” streaming service, including those from Nickelodeon, MTV Comedy Central, and others. The move comes after a similar licensing deal between Viacom and Netflix expired. For Amazon.com, it appears to be a great move and hits hard at Netflix. (Source: “Amazon and Viacom reach multiyear licensing deal,” Associated Press, Yahoo! Finance web site, June 4, 2013.)
My stock analysis suggests that Amazon.com has clout, and Netflix better be watching.
With a … Read More
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