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Wednesday, April 23, 2014

$FB into earnings

Some expectations for Facebook. 

The growth pattern is predicated on past performance. 

From a longerterm perspective the trajectory looks solid.

The revenue growth is predicated on a gradual increase in global digital ad share, in relation to emarketer's forecast.
Fundies look solid, except when we look at revenue in relation to market capitalization.

Facebook currently has a $160 market cap, while becoming a mature digital ad play, with a very very high multiple. Much of the revenue growth from 2015-2018 is predicated on market share gain, but if this is not seen, revenue growth will decline hard.  Similar to what Google is currently seeing. And like Google, facebook looks to have gotten a bit destracted considering their recent M&As.

Currently waiting for Facebook to hit their consolidation phase, and it may have started coming off its high.

Waiting for the mid-to-low 40s. (This maybe delayed if PC ad rates remain elevated as mobile rates keep rising.)

Tuesday, April 22, 2014

$T CEO says...

"Customers really like the new mobility value proposition and are choosing to move off device specific subsidies to simpler pricing while at the same time, they are continuing to move to smartphones with larger data plans"

Easy way to prove that, give the break down of new postpaid smartphone adds.

AT&T historically has a +80% iPhone allocation. 

Wednesday, April 16, 2014

$goog underlining numbers

Google missed on top and bottom line. More concerning is the underlining health. Paid Clicks (q-q) saw its first decline since q3 2011. And CPC keeps declining.

Also of interest, the quarter-to-quarter declines seen in this quarter were greater than this time last year. 

Still, Google is the 3rd largest American company, via Market Cap, trading with a multiple above 27.

$yhoo stops revenue decline

Looks like Yahoo had managed to stop the year-over-year revenue decline. 

Judging by guidance, management continues to expect flat revenue growth.

The early stages of a turn around seem to be in play. 

On the flip side, earnings continue to be supported by equity interest (Yahoo Japan and Alibaba). But as revenue increases, so will operational earnings. Yahoo's gross margins are sizable (and grew under Mayer), an increase to revenue will trickle to the bottom line nicely.

$bac is okay

Scratching my head a bit wondering why the market thinks the current report is worthy of a 3% decline in the stock. 

From all accounts, the report was decent. The street factored in lower revenues, and BAC beat. The biggest headline factor was the effect of the litigations. Hit the bottom line more then expected.

The bank is still one of the few large banks trading below tangible book, and in relatively healthy shape. As the litigation risk slowly passes (as today represents chipping away of that risk) the stock should begin to approach tangible book.

Monday, April 14, 2014

$yhoo tax or refund?

Yahoo reports tax day, and I'm not sure what kind of report they will give us.

Marissa Mayer has done an interesting job transforming the company. It's morphed back into an nice consumption-facing product. Beautiful layouts, fast speeds, interesting products and a focus on the driving technologies. 

Simply, the streets wants to see revenue growth. If yhoo sees it, a +7-10% move would not be surprising. 

Unfortunately there was chatter from Kara Swisher that suggests this may not happen. (Because of her connections to the industry, it's a point-of-chatter that holds more sway.)

Mayer took a more hands on role trying to court advertisers toward the end of last year. And because many of Yahoo's products were / are in the right conditions (with a high level of user numbers), there is an expectation of progress. (At least from me.)

Maybe Mayer set the stage for ad partners, and will now look to hand it off to another. But the chatter was not something that I wanted to see, obviously. 

Regardless of the core business performance, the Alibaba IPO is coming around Q3, with an expected value of $120-150billion, to add support to Yahoo's stock. But I am more interested in the revitalization of a once great internet name. Hopefully, the efforts made over the last year or so are starting to pay off.

Friday, April 11, 2014

Market Thought... Hello Kitty

An orderly blood bath. 

The jobless claims were suppose to set the tone. It was a kick ass number. A number that should have sent the treasuries higher, and at least allowed the market to see a morning pop. That was very wrong logic. Instead the treasuries took a dump. And it had diarrhea throughout the day.


One of my biggest concerns is Putin-bear. There maybe enough geopolitical uncertainty to remove the premium from the market. That maybe happening considering the treasury demand in a robust economic enviornment.

My other lingering concern, and a correlation highlighted many weeks ago, is the Yen.

Six days ago, it looked to be in a breakdown mode. About to test the lows. But bounced, hard.

Six days ago the SP500 started the decline, although it was minimal. The real fun came the two days after.

The Yen continued to jump, and equities for America and Japan followed. (There was a bit of a pause as the markets rose, but that was due to dovish comments from the Fed.)

Over the last month, Yen down-equities up prevailed.

Some of the strength came over the last few days because of the lack of "additional" stimulus. (Although the BoJ still plans on spending a ton on stimulus. We also had the Chinese stay mum on more stimulus, but didnt effect their market.)

The 3% SP500 decline seems to be a market mechanics issue.