Just an fyi: still no power but making do with the wifey. Simply crazy the type of damage Sandy has caused.
Wednesday, October 31, 2012
China rebound
Decent numbers out of China tonight. They are slowly climbing out of under performance. The FXI has closed the gap with the SP500.
Just an fyi: still no power but making do with the wifey. Simply crazy the type of damage Sandy has caused.
Just an fyi: still no power but making do with the wifey. Simply crazy the type of damage Sandy has caused.
Monday, October 29, 2012
Smartgrid!!!
Annoys me to no end that utilities are sitting on their antiquated hands, and not implementing a proper smartgrid.
Exciting. Apple vs Sandy
Not to be undone by Sandy, Apple released management changes.
John Browett has left. This is not surprising. He never felt like a good fit at Apple. Some of the actions he took were real head scratchers.
Scott Forstall is leaving. This is a bit surprising given his status. But bringing the iOS and Mac OS under one roof was inevitable. Especially with respect to the post PC concept of same content on various devices.
I really like that they are trying to apply Ive's design mentality to software interface.
Most surprising is that Bob Mansfield looks to be staying. (I thought he was going to retire.)
As for Sandy, she took out my cable and Internet. (Thank you apple for ushering in the mobile device/web convergence.) And she is teasing my power. Already witnessed a transformer blow. Winds have picked up, and shes not fucking around.
John Browett has left. This is not surprising. He never felt like a good fit at Apple. Some of the actions he took were real head scratchers.
Scott Forstall is leaving. This is a bit surprising given his status. But bringing the iOS and Mac OS under one roof was inevitable. Especially with respect to the post PC concept of same content on various devices.
I really like that they are trying to apply Ive's design mentality to software interface.
Most surprising is that Bob Mansfield looks to be staying. (I thought he was going to retire.)
As for Sandy, she took out my cable and Internet. (Thank you apple for ushering in the mobile device/web convergence.) And she is teasing my power. Already witnessed a transformer blow. Winds have picked up, and shes not fucking around.
Saturday, October 27, 2012
the INTC hedge
I am not a fan of Intel. The company is about 5years late to mobile, and getting dragged down a sinking PC ship. But I respects its fierce competitiveness, and its engineering capability.
To date, Intel has been pretty dead within the mobile space. Only recently has it over come battery line issues and App compatibility issues with their Atom base mobile processors, leading up to the 'Razr i'.
The 'RAZR i' allowed for an interesting comparison between ARM based 'RAZR m' that used ARM based processors over a year old. (Comparing a company's latest and greatest vs an older model is really not fair, but so is life.) The comparison was favorable for Intel. The App compatibility issue was mostly resolved, and real-world power consumption held up very well.
The recent developments showed Intel is on their way to simply enter the mobile market. But, and there is a big BUT, we do not know a lot of things. The most important aspect of thing we do not know is cost. (I am also concerned about how their LTE capability will be.) In fact, the only thing investors know is what Intel 'claims' within their road map. (Their road map is specific to chip size, and nothing more. I am more interested in how the smaller chips will operate with the unit, and if the smaller size really enhances the over all user experience.)
At the moment, the RAZR i looks like a test phone. If things go well, then Intel will have a basis to tout its experience and performance. But other chip makers are not standing still. (At the very least, Apple's A series chips are a testament to the innovation push.)
To date, Intel has been pretty dead within the mobile space. Only recently has it over come battery line issues and App compatibility issues with their Atom base mobile processors, leading up to the 'Razr i'.
The 'RAZR i' allowed for an interesting comparison between ARM based 'RAZR m' that used ARM based processors over a year old. (Comparing a company's latest and greatest vs an older model is really not fair, but so is life.) The comparison was favorable for Intel. The App compatibility issue was mostly resolved, and real-world power consumption held up very well.
The recent developments showed Intel is on their way to simply enter the mobile market. But, and there is a big BUT, we do not know a lot of things. The most important aspect of thing we do not know is cost. (I am also concerned about how their LTE capability will be.) In fact, the only thing investors know is what Intel 'claims' within their road map. (Their road map is specific to chip size, and nothing more. I am more interested in how the smaller chips will operate with the unit, and if the smaller size really enhances the over all user experience.)
At the moment, the RAZR i looks like a test phone. If things go well, then Intel will have a basis to tout its experience and performance. But other chip makers are not standing still. (At the very least, Apple's A series chips are a testament to the innovation push.)
I am a firm believer that QCOM owns the mobile space, and will continue to do so. Hence my recent post, "QCOM - pesky fundamentals", and a position in QCOM. I do not like investing in "could be" stories, and right now Intel is touting a heavy "could be" story via mobile. The RAZR i is the only tangible evidence it can enter the space. But a new chip vs an old chip is nothing to really brag about.
On Friday, INTC started to breach its negative trend, via the 14 SMA resistance. Because of the technical set up, I decided to enter the stock.
I view the position as a hedge to QCOM, and the fact Intel is yielding 4% helps. I will probably hold on to this position until I unload QCOM, or come CES we begin to see just how fruitful Intel's mobile effort really will be.
Mahaney fired at Citi
The news was a surprise to see. I rarely listen to any analyst opinion or commentary to make trades or investment because I try my very best to let pure data guide those decisions. But there are a few individuals I listen closely to, Mahaney was one of them. (His work is usually less bias then the rest.)
Given his status within the investment world and technology, I am sure he will be fine. (Its really Citi's loss.)
The article also highlights obvious interactions between bankers and journalists. (The interactions should not be a shock to anyone.) One of the journalists mentioned was Josh Constine from TechCrunch. I found that interesting because over the past two quarters, he produced some really interesting articles and information specific to Facebook. So much so, I felt he was Facebook's 'leak' guy. Just like Steve Jobs used Walt Mossberg, I got the impression someone at Facebook (who knows, maybe Zuckerberg himself) was using Josh.
Firing key people like this keeps making Citi look stupid.
Thursday, October 25, 2012
AAPL. all about the multiple
The quarter was alright. I'm sure the guidance of 11.75 caught a lot of people by surprise. Its probably the first comparable eps decline in some time. Given Apple's low-ball guidance, I am sure they will produce an eps near or slightly above the eps of last year's 1st quarter. Last year's 1st and 2nd quarter had higher margins. With the multiple tablet push from all competitors, and lower price points of the iPad, margins will simply not be as good.
Regardless, the margin scenario is not stopping top line growth. In relation to any other company AAPL is still cheap, and has been for years. So they will not see +50% eps growth, they will see 20-30%, and earnings are very stable. Does this merit the stock to collapse?
With lower margins, and a flat eps growth for the quarter, the question becomes 'what is the multiple the street will give AAPL'?
Will the street punish the stock? Allowing it to trade at a trailing multiple near its low of 12.5 because of the flat eps? The street certainly did not reward the stock when it was seeing a +50% eps rate last year with 50 trailing multiple. In fact, when AAPL was growing at a +85% clip the street rewarded the stock with the greatest multiple contraction I have ever witnessed.
Apple now has a cash level of $127-128-per-share. Which means the stock, as of after-hours action (609) has a business value of $481 per-share. This means the street values Apple's businesses with a trailing multiple of 10.89. For a set of businesses that will see a top-line growth of 13% (2011 1st quarter had an 46B revenue, and 1st quarter 2012 is projected to be 52B), an obscene free cash-flow and product being adopted at a very very fast clip, the street is basically valuing the business as they are Intel's business. (I don't need to explain why this is stupid.)
Excluding the "minus cash" or "valuation-per-cash-growth" (assuming the stock value should trend the cash growth) argument, at 609, Apple has a trailing multiple of 13.8. This is already near its low end. The contraction is consistent with the current market environment. If the market holds up, this valuation is too low. AAPL should trend more toward a 14.5 multiple.
From a technical perspective, AAPL's daily chart is very oversold.
From a weekly perspective, an interesting support is very near. The 28SMA typically acts as an area for a bounce.
If that level breaks, the 50 SMA on the weekly is next. (That would mean the stock drops to the 560 area, giving the stock a trailing multiple of 12.6. Near historically low multiples for AAPL. That would suck, but given the growth of cash, I do not expect it to happen.)
I will try to play a bounce off the 28SMA.
Regardless, the margin scenario is not stopping top line growth. In relation to any other company AAPL is still cheap, and has been for years. So they will not see +50% eps growth, they will see 20-30%, and earnings are very stable. Does this merit the stock to collapse?
With lower margins, and a flat eps growth for the quarter, the question becomes 'what is the multiple the street will give AAPL'?
Will the street punish the stock? Allowing it to trade at a trailing multiple near its low of 12.5 because of the flat eps? The street certainly did not reward the stock when it was seeing a +50% eps rate last year with 50 trailing multiple. In fact, when AAPL was growing at a +85% clip the street rewarded the stock with the greatest multiple contraction I have ever witnessed.
Apple now has a cash level of $127-128-per-share. Which means the stock, as of after-hours action (609) has a business value of $481 per-share. This means the street values Apple's businesses with a trailing multiple of 10.89. For a set of businesses that will see a top-line growth of 13% (2011 1st quarter had an 46B revenue, and 1st quarter 2012 is projected to be 52B), an obscene free cash-flow and product being adopted at a very very fast clip, the street is basically valuing the business as they are Intel's business. (I don't need to explain why this is stupid.)
Excluding the "minus cash" or "valuation-per-cash-growth" (assuming the stock value should trend the cash growth) argument, at 609, Apple has a trailing multiple of 13.8. This is already near its low end. The contraction is consistent with the current market environment. If the market holds up, this valuation is too low. AAPL should trend more toward a 14.5 multiple.
From a technical perspective, AAPL's daily chart is very oversold.
I will try to play a bounce off the 28SMA.
Tuesday, October 23, 2012
FB. nice.
The pre-earnings chatter turned out to be on the mark. Facebook went from 0% of revenue from mobile ads to 14% of revenue from mobile ads in about two quarters. And from the chatter, most of the mobile revenue came from the current quarter.
The quarter was good. Even better are the realistic prospects. (I say realistic because analysts and tech writers have a way of running wild with "could be" expectations that hold zero merit.) The two drivers
1. expansion of the current mobile strategy to the rest of world
2. Gifts morphing into a commerce experience
Rest of world (ROW) ARPU is lower.
As Facebook's current mobile strategy expands globally, these rates will rise. Especially as the ROW's main connection to Facebook is mobile. (This means Facebook will be gaining a macro wind, and benefiting from global smartphone adoption.)
If after hours action holds up (and with the strengthening of action as the night progressed, the action should hold up) the stock's trading dynamic will shift to a bullish one.
FB will most likely open near 22, which will be a clear breach in SMA consolidation. The technical set up, along with the fundamentals at Facebook's back, 24 looks to be easy. As the sentiment shifts from negative to positive, and 24 begins to break, 27 will be achieved sooner rather than later.
A stock move to 27 would give FB a market capitalization of about $58B. Considering the bulk of the 14% of ad revenue is due to mobile within one quarter, the valuation does not seem like a stretch.
A note on the wall-of-'lock-up-expiration'-worry, Zuckerberg controls the majority of the stock to be unlocked. He has already publicly stated he will not sell for one year. Those words were about a month ago.
The quarter was good. Even better are the realistic prospects. (I say realistic because analysts and tech writers have a way of running wild with "could be" expectations that hold zero merit.) The two drivers
1. expansion of the current mobile strategy to the rest of world
2. Gifts morphing into a commerce experience
Rest of world (ROW) ARPU is lower.
If after hours action holds up (and with the strengthening of action as the night progressed, the action should hold up) the stock's trading dynamic will shift to a bullish one.
FB will most likely open near 22, which will be a clear breach in SMA consolidation. The technical set up, along with the fundamentals at Facebook's back, 24 looks to be easy. As the sentiment shifts from negative to positive, and 24 begins to break, 27 will be achieved sooner rather than later.
A stock move to 27 would give FB a market capitalization of about $58B. Considering the bulk of the 14% of ad revenue is due to mobile within one quarter, the valuation does not seem like a stretch.
A note on the wall-of-'lock-up-expiration'-worry, Zuckerberg controls the majority of the stock to be unlocked. He has already publicly stated he will not sell for one year. Those words were about a month ago.
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