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Thursday, July 17, 2014

$googl report not that good

The report was decent. Not sure it justifies the +30 multiple for a +$340B company. The paid clicks and cpc were nothing special. 


Revenue growth is 13% yr-yr. (I see chatter simply cherry picking search revenue growth.) The one metric that MAY justify a higher multiple, is the faster growing operating income. It is growing 36% yr-yr, but most of this growth is due to the supressed income Motorola caused. (Normalizing for Motorola, growth is about 6-7%.)


Still trying to figure out why Google is allowed to have such a high multiple while growth is / has slowed, and much of there "initiatives" have little prospect for adding legitimate business lines.

For a mega cap stock, a multiple of 20-25 is considered pretty large. (But mega caps usually have capital allocation programs, making their cash productive. Google does not have such allocations.)


Better econ data, rates up. No, down. $tnx $spy

Nice jobless claim number and Fed survey. Keeps the narrative of a very healthy US economy. Better economy means higher or at the very least steady treasury interest rates, or so one would logically think.

Nope. Declines.


The housing number was off, but I believe that is more of a consequence to the difficulty in obtaining a mortgage. (The criteria now has become very detrimental to home own ship.)

Regardless, somehow this will be justified. But I'm still puzzled by it. Unless the treasury is the only market reflecting the true uncertainties around current geopolitical events. (See 'Market Thought... catalyst' post below.)

Wednesday, July 16, 2014

$bac book value rises

Tangible book: 14.24

Book value: 21.16

Stock price: 15.70 (as of current pre-market)

Once litigation concerns are behind them, the stock will start to appreciate to the 20s. For now, we wait.

Monday, July 14, 2014

$yhoo target revenue

To show the street yhoo is growing again, it needs revenue greater than $1.135B.

The street is currently expecting $1.08B.

IMO, if yhoo does anywhere between 1.08-1.135 the stock's reaction will be blah.

If it can show growth, the reaction will probably be +9%.


$yhoo and $aol

Never been a fan of the AOL / Yahoo chatter. I would rather see Yahoo focus on local search and acquire Yelp with its BABA cash. 

Despite the nice web properties Aol has accumulated and nourished over the years, the only aspect of an Aol / Yahoo merger that would make sense to me is Aol's unique video views.

A combined company would theoretically produce a unique audience that would come just behind Google, and may provide YouTube with some needed competition. (Although the below is missing mobile-share.)




Thursday, July 10, 2014

Market Thought... $spy dynamic

The SP500 got the bounce off of the 28sma on the daily. But the 5sma on the weekly is breaking.


Suggest the 14sma will be seen, along with the continued hugging of the 5sma of the monthly.







$spy catalysts

1. Greek debt did not spark good demand.

2. ISIS now has chemical weapons. Potentially setting up a scenario for a multi-lateral response from the UAL (what's left of it), G7 or NATO.

3. Israeli - Palistine conflict escalating. (Not new, but this tit-for-tat involving children is gut wrenching to watch.)

4. US job market is in a positive cycle. (Jobless claims, again, were very good.) signaling higher US interest rates sooner-rather-then-later.

5. Russia

6. The unknown. Geopolitical flare up has been very high over the last few years. Just feels like we are in a scenario where anything can flare up.