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Alibaba Poised For Further Growth

Alibaba Poised For Further Growth
  • Alibaba reported improving monetization trends, paired with robust volume growth.
  • Net income doesn’t compare very well to prior periods, but the high profitability excluding investment income reveals that Alibaba’s profit margin is respectable when compared to peers.
  • The favorable economic backdrop, paired with high growth potential in Chinese e-commerce should be considered when determining whether or not to invest into Alibaba.
  Alibaba (NYSE:BABA) recently updated its F-1 filing to reflect Q2 earnings. The reported earnings figures offered further confirmation of the strengths of the e-commerce business, along with further improvements to the gross/net profit margin figure. Alibaba continues to absorb the benefits of a ...
Related Tickers: BABA, YHOO continue reading ...

iPad refresh and iWatch to drive Apple stock higher

iPad refresh and iWatch to drive Apple stock higher
  • Investors should ignore the double top pattern, and instead look to Apple’s promising future.
  • iPad refresh will drive significant revenue growth in the next fiscal year, and new product categories like iWatch will be supplemental to Apple’s growth.
  • Assuming iPad, iWatch, peripheral, and software/app/iTunes growth continue, Apple’s stock price will continue to trend higher.
  Apple (NASDAQ:AAPL) remains a compelling investment case, and while the double top may dissuade investors from piling onto the stock, the company may be able to break through that level based on end of year earnings catalysts that can drive the performance of the company.   Apple stock price and technical analysis Source: ...
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Twitter And Facebook Join The E-Commerce Race

Twitter And Facebook Join The E-Commerce Race
  • Last year Google announced a new same-day-delivery service in collaboration with local retailers which competes with Amazon.
  • As a response, Amazon is expected to launch a new advertising platform.
  • Facebook and Twitter offer their version of an e-commerce penetration – a buy button.
  • It is early to decide whether or not these initiatives are successful; however it clearly signals the way the market is going to go.
  In the middle of July, Facebook (NASDAQ:FB) announced a pilot for a new buy button that will enable users to purchase goods directly from the merchant without leaving the app or the website. The buy button allows small ...
Related Tickers: FB, TWTR, AMZN, GOOGL continue reading ...

PayPal Spin-off Offers Little Shareholder Value

PayPal Spin-off Offers Little Shareholder Value
  • Rumors of eBay spinning off PayPal have surfaced again.
  • It’s not well understood as to how this will benefit eBay shareholders and a spin-off is therefore hard to justify.
  • eBay has plenty of other alternatives for driving top line growth, or bottom line earnings.
  eBay (NASDAQ:EBAY) finds itself at cross-roads, on one hand it can spin-off PayPal, which may give PayPal the ability to expand into other e-commerce ecosystems. However, it’s not understood as to whether this will help PayPal’s growth. On the other hand, the case for investing in eBay comes from its ownership interest in PayPal. Hence spinning off PayPal offers no ...
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Price Earnings Ratio as a Valuation Metric

Price Earnings Ratio as a Valuation Metric
  • P/E ratio is not the be all and end all of valuation metrics.
  • Is it skewed in favor of market reactions rather than fundamentals?
  • Key factors to be considered before applying PE ratio.
  • Other relevant ratios : Price Earnings Growth ratio, Free Cash flows.
  What does the PE Ratio mean? Is it a statement a layman makes to appear as a well informed investor? I have been asked this question by quite a few supposedly well-informed investors in discussions involving stock markets and stock valuations. So, is the PE Ratio a good indicator of a stocks valuation? Is it the be all and end ...
Related Tickers: AMZN, PCLN, AAPL continue reading ...

Facebook stock is poised to outperform

Facebook stock is poised to outperform
  • Facebook is the premier momentum stock in this market and looks to be on the verge of a powerful advance.
  • Underperforming fund managers will pile into FB and other momentum stocks.
  • It is the primary beneficiary of the growth in mobile advertising, and is poised for further growth.
  • Facebook stock is currently at a low risk entry point.
  Facebook stock (NASDAQ:FB) is one of the strongest stocks in the market from absolute and relative price performance as well as its revenue growth, earnings growth, and margins.  Expectations around the company are very optimistic with a Price to Sales ratio of 19.  It is the typical ...
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Amazon’s Twitch Acquisition Is A Huge Positive

Amazon’s Twitch Acquisition Is A Huge Positive
  • Amazon had recently announced that it is testing a new online ad placement product and also acquired Twitch, a gaming focussed video streaming portal.
  • Twitch will enable Amazon to accelerate its online advertising initiatives.
  • The high profit margins of the online advertising industry will be a huge relief for Amazon investors, in stark contrast to Amazon’s constantly increasing presence in low margin businesses.
  • However, Amazon’s current valuations are hard to justify even considering an exponential rise in earnings and our Amazon stock analysis re-iterates our negative long term outlook on the stock.
  Amazon (NASDAQ:AMZN) has recently been in the financial news for more wrong reasons ...
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Alibaba - Pre IPO Fundamental Analysis

Alibaba – Pre IPO Fundamental Analysis
  • Alibaba has grown sales as well as net income at a fairly high rate.
  • Alibaba has high profitability, and continues to expand into compatible opportunities that work well with its ecommerce ecosystem.
  • Alibaba has risk factors due to the political climate, and legal interpretation of special purpose entities.
  • Alibaba IPO will be a wildcard event, as further dilution, paired with Yahoo liquidating its position may impair Alibaba valuation.
  Alibaba (NYSE:BABA) may have significant growth potential given the favorable dynamics of an emerging Chinese middle class paired with opportunities to grow the business in international markets. The company continues to launch services that are highly ...
Related Tickers: BABA, YHOO continue reading ...

Google Glass: A Billion Dollar Revenue Potential

Google Glass: A Billion Dollar Revenue Potential
  • Google filed new patents for the Google Glass, which indicates that the designs have radically improved.
  • Going forward, Google Glass may grow into a significant contributor to Google revenue.
  • However, other business developments will also contribute to top line sales growth.
  Google (NASDAQ:GOOG) has redesigned the Google Glass, and this time around the design adjustment may be just enough to keep the critics from throwing salt at the design. Source: United States Patent and Trademark Office   According to Glass Almanac: US Patent D710, 928S was granted to Google engineer Mitchell Heinrich on August, 12 2014. The patent appears to be focused solely on a new version of ...
Related Tickers: GOOGL, GOOG continue reading ...

Facebook: A compelling investment opportunity

Facebook: A compelling investment opportunity
  • Facebook has made changes to its newsfeed, which has resulted in conflict between major media.
  • The continued emphasis on curated content for users improves engagement, which will eventually result in more user generated content.
  • Facebook’s growth trajectory is solidly intact based on key performance indicators.
  Facebook (NASDAQ:FB) has changed its newsfeed algorithm, which has had various repercussions to the website. To quickly summarize what has happened to the newsfeed, Facebook made the change so that users can only see content that they are actively interested in. This change makes it much easier for users to filter out noise, as users want to consume content ...
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Why does Warren Buffett avoid technology stocks?

Why does Warren Buffett avoid technology stocks?
  • Warren Buffett prefers to invest in companies which operate in fairly stable and certain environments. Technology sector is the last place to look for certainty.
  • He values certainty of returns more than the potentially huge but risky returns.
  • He believes predicting the economics of the fast paced technology sector is far beyond his competency, probably a strong reason for his avoidance of the sector.
  Warren Buffett has often been in the news for avoiding investments in the technology sector, which has been viewed by many investors as a highly lucrative sector. The Oracle of Omaha has his reasons for this approach. We look ...
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LinkedIn’s China Expansion Might Be Hard to Execute

LinkedIn’s China Expansion Might Be Hard to Execute
  • LinkedIn reported Q2 2014 financial results, beating analysts’ expectations for EPS and revenues, sending the stock price to an 11.7% increase a day after the earnings release.
  • LinkedIn presented weak progress in its international revenues with 60% of revenues originating in the US.
  • LinkedIn made a few steps into China to penetrate that market, however; Chinese market is currently dominated by local player Tianji that is owned by French rival, Viadeo.
  • With the global expansion problems and high P/S and forward P/E ratio LinkedIn is not the best tech company to invest in right now.
  At the end of July, professional social network LinkedIn ...
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Is Facebook Closing In On YouTube?

Is Facebook Closing In On YouTube?
  • YouTube's share of US online video advertising could expand in 2014.
  • Facebook has made good progress in its number of video viewers.
  • Directr acquisition could help YouTube serve small business better.
  Google’s (NASDAQ:GOOG) YouTube recently acquired Directr, an online video editing company, for an undisclosed amount. The move is aimed at strengthening YouTube’s position as a video advertising platform. The value of digital video ad spends in the US is expected to more than double by 2017 from its value in 2013. We look at YouTube, the video advertising space in the US as a whole and what some of the competition is ...
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Amazon Woos Local Retailers To Boost Revenues

Amazon Woos Local Retailers To Boost Revenues
  • At the end of July, Amazon announced disappointing financial results for Q2 2014 driven by a drop in AWS revenues.
  • Two weeks after the earnings call Amazon, announced a new mobile payment service named Amazon Local Register to compete with Square and PayPal Here.
  • By offering mobile payment service, Amazon could be present in the brick-and-mortar stores and leverage that to future partnerships and further income from complementary services.
  At the end of July, e-commerce giant Amazon (NASDAQ:AMZN) reported its Q2 2014 financial results with EPS lower than analysts’ expectations and slightly higher revenues than expected. As shown in chart 1 below, Amazon showed ...
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Twitter Stock Analysis - Is User Growth Real?

Twitter Stock Analysis – Is User Growth Real?
  • Twitter valuations have run up after strong user growth in Q2 2014.
  • Twitter's recent update suggests, user base is smaller than 271 million users.
  • Our Twitter stock analysis rates it a sell at its current valuations.
  The run up in Twitter’s (NYSE:TWTR) stock price suggests that investors are now less concerned about the company’s sluggish user growth. But have things really turned around for the micro-blogging site? As per the company’s updated earnings presentation, 11% of its active users solely used third party applications to access Twitter. What’s more, some of these users used third party applications which might have automatically contacted Twitter’s servers. ...
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Amazon: Will solid Q3 revenue growth be enough?

Amazon: Will solid Q3 revenue growth be enough?
  • ChannelAdvisor reported its July 2014 same store sales report last week
  • Based on the historic relationship between ChannelAdvisor numbers and Actual revenue growth reported, we model the Amazon’s August and September same store sales growth required to beat the company’s Q3 guided growth.
  • With an ever improving topline growth performance through the last few months, Amazon looks likely to beat Q3 2014 revenue guidance.
  • Investors are punishing lack of earnings at Amazon and as the company has regularly failed to deliver on this metric; we reiterate our negative outlook on Amazon stock as reflected in our Amazon stock analysis.
  ChannelAdvisor, the provider of e-commerce ...
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iPhone 6: Huge Potential for Apple Investors

iPhone 6: Huge Potential for Apple Investors
  • Apple’s upcoming iPhone 6 carries significant upside assuming production runs are inclusive of sapphire.
  • A pricing tier may offset supply chain constraints.
  • Assuming Apple can earn higher incremental profit from each consumer, Apple should have no difficulty with meeting FY 2014 consensus EPS estimates.
  There has been a lot of speculation over whether or not Apple's (NASDAQ:AAPL) upcoming flagship device will come equipped with a sapphire screen.   This has led to two opposing arguments. One is based on the practical production possibilities coming out of the sapphire plant, and the other believes that GT Advanced Technologies has stockpiled enough sapphire to meet the initial stages ...
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Investors Should Stay Away From One-Hit Wonders Zynga and King

Investors Should Stay Away From One-Hit Wonders Zynga and King
  • Zynga and King are two online game developers that succeeded to unlock the potential of web 2.0 and were able to gain substantial revenues from it.
  • These companies used the bullish market and buzz around their games and went public in a very disappointing debut.
  • Both of them presented in Q2 2014 another decrease in revenues that increased investors’ concerns about their ability to generate revenues apart from their good old titles.
  • Each company is handling that situation differently: Zynga is investing further in its business model while King attempts to penetrate new markets.
  Zynga (NASDAQ:ZNGA) and King (NYSE:KING) are two of the biggest ...
Related Tickers: ZNGA, KING continue reading ...

New agreement boosts Alibaba's Alipay IPO payouts

New agreement boosts Alibaba’s Alipay IPO payouts
  • Alibaba’s equity interest in Alipay has potentially increased to 33%, upon Alipay’s IPO.
  • However, if Alibaba cannot secure regulatory approval to own any equity interest in Alipay, Alibaba will earn a royalty stream that’s equivalent to 37.5% of Alipay’s pre-tax earnings.
  • Alibaba valuations will get a boost and investors can gain more upside if Alibaba can secure 33% equity interest in Alipay.
  Alibaba has restructured the agreement it had with Alipay, and in this process of restructuring the equity interest, Alibaba investors will either gain 37.5% pre-tax income from Alipay for perpetuity, or they will receive a one-time payment equaling 33% equity interest ...
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TripAdvisor Earnings - Risky Valuations Continue Post Q2

TripAdvisor Earnings – Risky Valuations Continue Post Q2
  • TripAdvisor's revenue growth and future prospects look attractive.
  • Profit margin contraction is expected in the coming quarters.
  • TripAdvisor's valuations are likely to come under pressure, making it a risky bet.
  TripAdvisor’s (NASDAQ:TRIP) stock price corrected by about 11% on 24 July 2014, the day after it announced its Q2 earnings. The company delivered accelerated revenue growth for the quarter and looked well placed to beat its full year revenue guidance. However, investors were disappointed by the company’s near 10% miss on the Non-GAAP EPS estimates. TripAdvisor’s management also lowered its full year Adjusted EBIDTA projection. Even with the downward revision of the guidance on ...
Related Tickers: TRIP continue reading ...

Facebook Stock Analysis - A Fundamental Perspective

Facebook Stock Analysis – A Fundamental Perspective
  • Facebook trades at a reasonable valuation when compared to peers.
  • Facebook’s revenue growth paired with falling incremental cost will continue to improve its profitability.
  • Assuming Facebook can reverse the trend in share dilution through share buybacks, EPS growth will improve drastically.
  Facebook (NASDAQ:FB) trades at a reasonable valuation multiple when compared to peers, and is set to grow earnings at a fairly exponential pace due to favorable cost tailwinds paired with continued growth in its core business. In future years, Facebook will eventually return cash to shareholder through share buybacks, which will reduce the negative impact share dilution has had.   Facebook Valuation Over the past five ...
Related Tickers: FB continue reading ...

Priceline Stock Still Attractive Post Strong Q2

Priceline Stock Still Attractive Post Strong Q2
  • Priceline reported a strong Q2 performance, though missing revenue estimates marginally.
  • The company beat consensus EPS estimates by 4%, with a Non-GAAP EPS of $12.51 in Q2.
  • The current valuation multiples, future growth opportunities and M&A activity make Priceline an attractive investment in the OTA space.
  • We reiterate our positive long term outlook on Priceline stock post Q2 results, as reflected in our Priceline stock analysis.
  Priceline(NASDAQ:PCLN), the largest OTA (Online Travel Agency) by revenues announced its Q2 2014 results before markets opened yesterday, August 11. Priceline reported Non-GAAP EPS (earnings per share) of $12.51, crushing analyst consensus of $12.02. The company delivered solid growth ...
Related Tickers: PCLN, EXPE, OWW continue reading ...

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