StocksandBlogs.com StocksandBlogs.com Stock tips, Investment research and Markets commentary Articles
Accenture's Cashflow and Buyback Should be Catalysts for the Stock
2007-11-05 11:26:00 Accenture, Ltd. (ACN) is a management consulting, technology services, and outsourcing company. An offspring of the company formerly known as Anderson Consulting, the company employs over 170,000 people across offices in 49 countries.In its most recently concluded quarter, Accenture clocked in record earnings and revenues. Revenues were up 29%, while earnings were up 24% for the year. The company even boosted its dividend by 20% and announced a $3 billion share buyback.Accenture generates about $2 billion a year in free cash flow, currently holds $3.3 billion in cash and has almost no short-term debt. This is what makes Accenture so unique. From a cashflow perspective, ACN is a juggernaut and while at 15 times next year's eanings, it is more expensive than Electronic Data Systems (EDS), it is definitely cheaper than outsourcing and consulting outfits like Cognizant (CTSH), Infosys (INFY) and WiPro (WIT).With a strong international exposure, the weak US dollar has not had a negative... More About: Stock , Buyback , Accenture
Eastman Kodak Turns a Corner
2007-11-03 02:02:00 In July, I wrote that Eastman Kodak was well on its way to recovery. Their earnings yesterday, confirmed this trend. Sales of digital products increased 12% to $1.59 billion, making up almost 60% of Kodak's total revenues for the quarter. Additionall, revenues from their traditional film-based business fell 16%. Both these trends are great for their long-term success. Net income came in at $37 million compared with a year-earlier loss of $37 million, or 13 cents a share. Excluding restructuring charges (which were also lower than expected), profit came in at 45 cents a share, nearly double Wall Street's expectation of 23 cents, according to Reuters Estimates.With new products rolling out every quarter, technology improvements in their consumer products, enhancements to their commercial offerings, lower restructuring costs, and strong institutional ownership, and a good chart pattern that reflects the stock has bottomed.Since my recommendation, the stock has been dead money and bee... More About: Corner
Crocs Could be the next Deckers
2007-11-02 14:03:00 The Croc s (CROX) quarter was definitely not worth writing home about. There were high expectations from the company, but investors were disappointed and the stock is down $35 in one day. Granted they did not crush expectations, but earnings were still good. Revenues of $256.3 million, vs. $111.3 million a year ago and earnings were 66 cents per share, vs. 27 cents a year ago. Demand in some markets were too high and Crocs could not make their product fast enough.While brand dilution is a possibility considering companies like Sketchers and Payless are selling knock offs, exclusive licensing deals from colleges and companies like Disney will keep them "unique". Moreover, new products will take some seasonality out of their earnings and overseas expansion continues to flourish.Crocs is like Deckers (DECK), another footwear manufacturer made popular by their Ugg brand shoes. That stock fell out of favor between Dec 2004 and Nov 2005, when it fell from $48 to $17 after a huge run from $...
Navteq's Purchase is Disappointing
2007-11-01 03:26:00 Garmin's (GRMN) delayed bid for Tele-Atlas confirms investor sentiment that perhaps Navteq (NVT) should have played a little hardball before agreeing to be purchased by Nokia (NOK). I am still disappointed that Navteq gave up so cheaply. They are worth more and I am still holding their shares in the hopes of a counter bid by someone like Google (GOOG). At the very minimum, shares are worth $78 so its not like one can lose money. Besides, holding it and getting Nokia for it down the road means I might be able to avoid paying taxes on my capital gains.-- Faisal LaljeeFull Disclosure: I am long NVT and NOK but my position can change anytime without notice. More About: Purchase , Hase
Boeing's $7 billion Share Buyback Signals a Buy
2007-10-30 03:23:00 When a company announces a share buyback, it usually implies that the company's leadership believes the shares are undervalued relative to their future earnings. I won't deny, that it is also another way for insiders to inflate the earnings of the company, create a better equillibrium between supply and demand for the company's shares, and therefore, inflate the share price. Regardless of the motive, share buybacks are good for investors because the typical end result of that is that stocks move up.Boeing (BA), which has a history of buying back its own shares announced today, that it would buy back $7 billion, or roughly 9% of its current number of outstanding shares at the current price. Seasoned Boeing investors might recall that the company bought $8 billion of its own stock since 2004 and this new announcement, while having no timeline, indicates the confidence management has in the company's ability to deliver strong earnings and revenue growth over a prolonged period. Sin... More About: Share , Buyback , Billion
This Earnings Season - A Time to Stay Put and Wait for Opportunities
2007-10-23 13:57:00 It is one of the worst times this year to be buying some of the fast flyers. Indeed stocks like Baidu (BIDU), Intuitive Surgicals (ISRG), Google (GOOG), Apple (AAPL) are tempting as they defy the broader market and march on. But every rulebook says not to open new positions in these stocks at these levels when they sit so far above their 20, 50 and 200 day averages. On the other hand, there are some compelling stocks that have pulled back and one can arguably state that Under Armour (UA), down to $54 from summer highs of $70, Jacobs Engineering (JEC), down from highs of $87 just last week to $79 and EBay (EBAY), down despite a great quarter, are all worth looking at. If you do decide to buy these, I recommend buying only a small position. I am once again, a little uncertain of this market, and any margin exposure can be detrimental to your portfolio.Now, lets change gears. Earnings season is upon us and it is not usually a good idea to buy/sell a stock to guess which way it will mov... More About: Time , Season , Opportunities , Stay
Bank of America Will Pay Dividends
2007-10-19 13:01:00 Bank of America (BAC) reported some disappointing numbers yesterday. Quarterly profits were down by 32% due to credit losses and lack lustre performance in their investment banking division. However, this was still not as bad as Citigroup (C), Washington Mutual (WM) and some of the other banks which have seen profits decline as much as 70%.The CEO, Kenneth Lewis minced no words about the bank's performance. "Two-thirds was just mistakes we made in judgment," Mr. Lewis told analysts on a conference call. "Clearly, we bear a lot of the blame, much more so than just market conditions." He also promised that things would change, indicating that layoff's are imminent in the investment banking arm of BofA. For the last decade or so, BAC has been trying to compete with the likes of Goldman Sachs and Morgan Stanley's by shoring up its investment banking arm, however, it has been relatively unsuccessful and yesterday's earnings reflect that.Despite the less than stellar earnings from Ban... More About: Dividends , Bank of America , Bank
Create a Photo Collage of Friends on Facebook
2007-10-18 03:15:00 This is really cool. You can create a photo collage of all your friends on facebook by doing the following:1) Login to facebook and go to the Friends tab.2) Under the Show drop-down menu, select --- as in the picture below.3) Now you can do a Printscreen and paste in any photo-editor. Alternatively, you can use a screen capture tool like SnagIt. Good luck! Faisal Laljee More About: Photo , Facebook , Create , Collage
Western Refining is the best play on Oil Refiners as the Oil Refining Seaso
2007-10-14 22:31:00 In terms of stock price action, oil refiners like Tesoro (TSO) and Valero (VLO) typify the oil refining cycles throughout a given year. I looked back at the last 3 years (2004-2007), and here is what I learnt. Oil refiners like VLO and TSO, bottomed out typically in Sept/Oct. They ran up until June, and then spent 3 months going down. The cycle repeated again in Sept/Oct.For example, if you bought TSO in the 3rd week of Oct and sold in the 4th week of June the following year, you made approximately 60.3%, 11.1% and 104.5% in 2004, 2005 and 2006 respectively.If you owned VLO during the same period, you made approximately 96.9%, 17.3% and 45.7% respectively. 2005 seems like a lacklustre year only because of Katrina. Katrina hit the U.S shores in late August, and that triggered a 14.6% and 21.4% move in TSO and VLO shares just on Sept 2nd. I suspect that had those hurricanes not hit us, these stocks would have declined in August and Sept similar to 2004 and 2006.Now that the history le... More About: Play , Western , Refine
Diversify with Currencies
2007-10-12 09:17:00 I am not a currency trader. In fact, I have never bought currency. However, investors might consider diversifying their portfolio's by buying some international currencies. And while the Yen and the Euro are the first currencies that come to mind, I think its time to think about Canadian Dollar, the Indian Rupee, the Australian Dollar and even the South African Rand.The common denominator between Canada, South Africa and Australia is that they are commodity based currencies. All three countries are rich in natural resources including gold, energy, uranium, iron, copper and other metals. One might make the case that these currencies have had a bit of run of recent. Indeed the Canadian dollar is actually at par with the US Dollar. The Indian Rupee, which was Rs. 49 to a dollar, is up 20% over the last few weeks to Rs. 39 to a dollar. An easy way to play currency is to buy a currency share. FXC, for example, is your play on the Canadian dollar. It is up 17% in the last 6 months. FXA, ... More About: Currencies
Chinese Market Looks Dangerous
2007-10-11 13:59:00 I hate to be a party pooper, but the Shanghai Stock Exchange, along with all the China stocks, and Chinese IPO's remind me of the Nasdaq exhuberance of 2000. Granted China is growing at 10%, but does that justify a multiple of 80 that is currently sported by the Shanghai stock exchange compared to the meagre 16 multiple of the S&P?It seems like everyday, all day, I see these tickers scroll across on my TV screen with new companies I have never heard of. China Digital, China Natural, China Finance, China Development ... the list goes on. Most of these guys have no history of earnings and don't even pull up on Yahoo Finance!The Chinese market is up 110% this year so far, and ocver 200% since Jan 2006. Even stocks like China Mobile, China Telecom, China Life and Bidu, stocks that actually have an earnings history and have some claim to investor confidence are up like the Cisco's and Ariba's of the tech bubble. I don't know when the party will end, but it will definitely end un... More About: Market , Dangerous , Looks
Comment from a Home Depot Employee
2007-10-10 20:42:00 I was sad to get this from a reader. I wish her well and if there are more of you out there, I would love to hear from you."Mr. Laljee,When you said that things couldn't possibly get any worse with HD, I think there is still more trouble down the road. I work in a store and you are assuming that Mr. Blake is going to do what he has said in the press. I can tell you there have been no increase in employees(in fact they are still cutting), no new systems and equipment or improvements in logistics to stop the rampant out of stocks, no reduction in time consuming stupid six-sigma paperwork and micromanaging from Atlanta by people with ZERO retail experience. They are only concerned with buying back stock to artificially increase the earnings pershare. Mr. Blake may be a kinder, genteler ceo, but he has no clue how to satisfy customers, and the company is still full of Bob's GE yes-men. Employee s are losing patience, and the best ones are giving up on the company caring about us or the... More About: Home , Comment , Home Depot
Protect Your Gains in Research in Motion
2007-10-04 09:54:00 Research in Motion (RIMM) reports earnings Thursday after the market close. The stock has been on a tear of late, with gains of almost 200% in the last 52-weeks. The stock is priced to perfection and any weakness in the earnings and guidance could trigger a large sell-off. Long-term, the company remains a good play on wireless communications and mobile devices and their relatively recent venture into personal mobile handsets like the Pearl and Curve are exactly the kind of moves that will help the company keep growing for years to come. I am not an advocate of stop losses, but I suggest that you make an exception in this case and put a stop loss at around $90. I can't imagine the stock will do much more from these levels in the intermediate term. -- Faisal Laljee Full Disclosure: I own RIMM but my position can change anytime without notice. More About: Research , Research In Motion
Home Depot a Haven For Value Seekers.
2007-10-03 09:25:00 Home Depot (HD) has had its share of misfortunes. It started with competition from Lowe’s (LOW) which resulted in market share losses. Then customer service issues pegged back its retail expansion. That was followed by uproar over former CEO Bob Nardelli’s pay package, which was succeeded by the housing market’s woes that caused the home improvement giant to cut its earnings and revenue guidance three times already this year. Finally, there was a bit of disappointment, first over the debate whether Home Depot’s contractor supply chain unit deal would go through, and then the value of the deal when it finally happened. And amidst all the chaos, Home Depot’s management had a hard time finding a range for the tender offer of its common shares.But things can’t possibly get much worse. This is a company with over 2100 retail stores and $79 billion in revenues last year. And while the housing market shows no immediate signs of recovery, the stock is cheap enough to warrant a ... More About: Home , Home Depot , Haven
Navteq Deal Great for Nokia; Garmin Needs to Breathe
2007-10-01 20:13:00 Nokia (NOK) has really been an impressive performer of late, with the stock rising some 35% since mid-August and 90% year-to-date.First, lets talk about this Navteq (NVT) deal. I believe Nokia got them on the cheap. I mean Navteq is the number one player in the online map space and I am surprised that neither Google, nor Garmin made a counter bid. $8 billion for a dominating player of navigational technology is dirt cheap and disappointing to me as an investor considering I own Navteq and was expecting to make a lot more over the next few years. Regardless, for those who bought this stock on my recommendation back on August 1st, the stock is up 27% in two months.This deal will definitely hurt Garmin (GRMN), a stock that I first recommended early last year, then again in March when Garmin hit its 50 day average. If at any point, you bought Garmin on my recommendation, you have a gain of up to 190%. While it is hard to say how much the Navteq deal will hurt Garmin, I believe it is a g... More About: Nokia , Great , Deal
Which Solar Energy Stock Should You Own: A Comparison
2007-04-24 01:41:00 It seems like there is a new solar name appearing out of thin air every week these days. Until a month ago, when Jim Cramer mentioned First Solar (FSLR), most individual investors had never heard of it. There are way too many solar stocks out there, some of which have long term potential, some speculative and some that should probably be avoided.First off, I want to mention that I have recommended solar stocks in the past. Indeed, back in June of last year, I wrote a bullish piece on MEMC Electronics (WFR). But in light of the speculative air that surrounds this space now, I want to revisit solar stocks to see which ones are probably worth a second look, and which ones are fluff.If you look at the company profile (on Yahoo Finance) of most of the solar companies out there, a common theme emerges. Apparently, they all "engage in the manufacture and sale of solar photovoltaic modules, and their solar modules provide electric power for residential, commercial, industrial, and other app... More About: Energy , Stock , Paris , Should
Is the Market a Buy, Sell or Hold?
2007-04-23 01:30:00 The last few weeks have been nothing short of confusing.Mark et s are up 15 of 16 days. But when I say Markets, I am referring to Dow Jones Industrial Average and S&P 500. Note that the Nasdaq has had 4 days of higher selling in the last 2 weeks. In essence, the Dow and S&P, have been diverging from the Nasdaq. Margin borrowing is at all time highs, which means people are bullish on the market. This is a contrarian indicator to the downside.The housing slump is far from over. In fact the higher number of new housing starts is misleading. It translates to higher inventory and lower home prices.Default rates on mortgages is up over 50% year-over-year. This will further drag home prices down.Unemployment is historically low, but lay-offs from the home builders and mortgage companies have yet to register with the Department of Labor. US Economy is slowing down. GDP keeps getting revised lower and money flows into the US equities are much lower compared to what is being invested abroad. US... More About: Sell , Hold , The Mark
Hotels Still Comfortable Here
2007-04-20 00:11:00 I recommended this sector in the past. With Morgan Stanley's purchase of 13 hotels in Japan, the sector has turned even hotter. Don't be surprised if more investment banks and private equity pours into this space. I still like Hilton (HLT) here. In fact, the sell off today on the tails of Marriott's disappointing outlook is even more reason to buy. -- Faisal Laljee Full Disclosure: I own shares of HLT, but my position can change anytime without notice. More About: Hotels , Tabl , Stil , Here , Table
Yahoo Disappoints
2007-04-17 22:42:00 If you heeded my advice about exercising caution going into Yahoo 's earnings, you did ok. If you were looking to buy and flip the stock, your move must be hurting. For long term investors, this is just another buying opportunity. -- Faisal Laljee More About: Point , Points , Yahoo! , Sapp
Cautious Going into Yahoo's Earnings
2007-04-17 21:01:00 I am bullish on Yahoo for the year, but considering the big move its had in the last 6 months, I am a little cautious. Earn ings and guidance will need to be very bullish for the stock to register a move up after hours. More About: Earnings , Going , Earning , Goin
Travelzoo Should be Bought Ahead of Earnings
2007-04-17 20:57:00 Travelzoo (TZOO) looks to be breaking out on heavy volume today. Fundamentally, the company is doing really well and has been growing earnings at a very fast pace. With Priceline's (PCLN) blowout quarter and Travelzoo's earnings next week, I believe there is some upside to this name. More About: Earn , Earnings , Should , Head , Ahead
RIMM Earnings Might Trigger Sell-off
2007-04-11 21:57:00 The stock has run up so much in the past year that I wouldn't be surprised if it sells off despite good earnings. They will really need to provide blowout numbers for the stock to move up. More About: Earn , Earnings , Sell , Earning
Choicepoint Responds
2007-04-11 07:29:00 Mr. Chuck Jones of Choi ce point posted a comment to my previous post that I wish to highlight. I appreciate his feedback. Here is an extract from his original comment:"Your presumption of ChoicePoint ’s involvement in the subprime mortgage market is grossly overstated. Our company is not 'very heavily levered towards subprime,' as you wrote.On January 24, ChoicePoint’s management laid out for investors the details of its Marketing Services business, which is the segment most directly tied to the subprime mortgage industry. During this conference call with industry analysts, we reported that 30 percent of the Marketing Services’ 2006 segment revenues of $79.7 million (or less than 3 percent of ChoicePoint’s annual consolidated revenues) came from mortgage customers and that this portion of the segment’s revenues was down 35 percent from 2005 results. Also, you incorrectly stated that “a few million identities were stolen” in the fraudulent data access incident which Cho... More About: Pond
Remember Stratasys?
2007-04-11 02:20:00 The 2003 horseman SSYS looks to be back in favor. My trader friends and I made tons of money in this name back then. Institutional buying has been heavy of late. Need to evaluate this opportunity in more detail. More About: Strata , Trat , Stra
Monster Ready for Dead Cat Bounce
2007-04-06 08:09:00 The Mons ter (MNST) news really sucked. But the stock is overdone in the short-term. I expect a dead cat bounce. If you are playing the portfolio challenge (and I am not sure of the exact rules), I recommend you buy this for Monday and get out Tuesday. More About: Dead , Bounce , Ready
Mortgage Fallout Will Shelter Countrywide but hurt Choicepoint and Bankrate
2007-04-06 03:59:00 The fallout from last month's subprime headlines did not have any impact on players not involved directly with the mortgage business. In fact, while the stocks of all mortgage lenders dropped off a cliff, companies that have exposure to the mortgage sector, but that don't directly participate in the lending process have kept their valuation as if nothing happened. Two such companies are Bankrate (RATE) and Choice point (CPS).While I have mentioned RATE in a negative light in the recent past, I just want to add to my original post that I believe Bankrate's earnings per share for the first quarter will come in closer to the lower end of analyst estimates - somewhere between 25 and 29 cents per share. The stock will be in the 20's before year end.Choicepoint (CPS), in a nutshell, is a data and analytic services provider. The only time an average investor would have heard about them was when a few million identities were stolen from their possession, resulting in some heavy fines im... More About: Hurt , Mortgage , Wide , Will
CVS Caremark Looks Better than its Competition
2007-04-06 00:38:00 Much of the recent news around CVS Care mark Corp. (CVS) has involved its recent $26.5 billion acquisition of Caremark, which completed last week. But to me, there are a couple of other things that have looked quite interesting.I didn't have a single CVS store in my area until about 8 months ago, when the local Savon Drugs stores started undergoing some serious facelift. Within a matter of weeks, these run down stores had been renovated with a clean new look, bright lights and friendlier staff. This happened to all of the 3 Savon's within a 5 mile radius.Then the marketing campaign kicked in, encouraging shoppers to sign up for the CVS reward card. Shoppers got 10% off their bill at checkout if they signed up for the ExtraCare Account, and 2% cash back on future purchases both in-store and online. I even received a $30 free gift card offer if I submitted a new prescription or transferred an existing one to CVS.One has to admit that even before the Caremark deal, CVS was much loved ... More About: Competition , Petition , Better , Mark
Metals on Fire
2007-04-05 18:55:00 I have been wanting to write in detail about why I think stocks like RIO, CLF, RS, CHAP and even Nucor, but just have not had time. At any pull back, buy any of these with confidence. More About: Fire , Meta
International Securities Exchange Flies Under the Radar
2007-04-03 04:59:00 Amidst the jealous love triangle created by the intruder Intercontinental Exchange (ICE) against incumbent Chicago Mercantile Exchange (CME) over Chicago Board of Trade (BOT), and all the loud babble over Nasdaq's (NDAQ) inbility to take over the London Stock Exchange, one such company that has been flying under the radar when it comes to M&A is the International Securities Exchange (ISE).ISE is the largest US equity options exchange with around 27% of the overall market. Options trading has been on the rise - just ask OptionsXpress (OXPS) - or you could see the March activity numbers. In fact, ISE's market share dropped from 30% to 27.3% even as their volumes rose by 26.7% yoy. With quarterly earnings growth of over 50%, a humble market cap of less than $2 billion, and a 19 multiple, ISE is cheaper than most of its well known rivals. Last month, their CEO had this to say on the occasion of the exchange trading its 2 billionth options contract:Looking ahead, we expect continued gr... More About: Flies , Radar
Blockbuster CEO Departure an Opportunity to Buy
More articles from this author:2007-03-30 02:43:00 I disagree with pundits about Bloc kbuster (BBI) going down with the departure of their CEO by the end of 2007. He is not as good as people think. Total Access is hugely successful, but he took a long time before responding to the Netflix (NFLX) threat successfully. Shame on him for that. I think the company is finally doing things right and I like it here. Without him, it will be even better.-- Faisal LaljeeFull Disclosure: I do not own BBI but my position might change anytime without notice. More About: Opportunity , Bust , Part 1, 2, 3, 4 |
|
 |
|
 |
