Stock of the Day

Recession proof Shopping list APRIL 2022

2022-04-22T13:35:00.004-04:00

Inflation is raging and close to 8.5%, but peaking as per Yellen and ECB. Most of the market downturn is attributed to war in Ukraine, supply chain bottleneck, Covid surge in china and cheap liquidity available in the capital markets today.

Growth stocks are bottoming out, what's the evidence behind this thesis ?

Tremendous negativity and sell everything mentality among retail investors, fear is at all time high. Low volatility showing that institutional selling is limited . Most of the recent growth sector reports such as Tesla, IBM, SNAP has been received with muted responses. Slight disappointments such as Netflix subscription numbers wiped out 50 billion USD in one trading session and still going down.

Tesla posted great numbers and how its circumventing supply chain issues with ease. The response to the earnings is 1 % move up vs 10 % during post covid recovery rallies.

Taiwan semiconductor being the backbone of chip industry posted blowout results and the stock is down 5% from its pre earnings stock price.

I think the inflation fears are overblown and temporary . The market is overpricing/overcorrecting to downside to keep up with the potential recession and very aggressive fed interest hikes.

Value stocks are showing signs of exhaustion and overbought conditions . Take Walmart and J&J for example, both have hit 52 week highs with low average volume.

The best approach is to turn off the noise in the Analyst predictions and focus on long term growth, value and dividend players.

My shopping list includes rotating into low PE/higher growth stocks and dividend players. Some of them i have listed in the earlier posts including

Value stocks(low P/E): MU,IBM,FB,GOOG,GILD and BJ

Dividend stocks : Shipping companies such DSX, GOGL,KNOP > 15% plus dividends

High Risk/Reward Plays : TESLA,NVDA,AMD,MSFT > 20 % Growth

More shopping list in coming weeks while market is adjusting to peaking inflation and aggressive rate hikes. I expect market to bottom in May (sell in may and go away doesn't apply anymore).

2022-04-21T16:56:00.001-04:00

Weeks Winners/losers 4/21/2022

Earnings Tracker Buy picks

IBM - Better than expected Results, Cloud revenue and solid execution with >4% dividend

DOW - Global supply chain issues doesn't seem to affect the Margins

SNAP - negative EPS, still maintaining growth, Less than expected AD revenue Loss

FB,PINS and TWTR - Expected to raise with SNAP rally.

NVDA - Touching October 2021 lows , earnings momentum lifting the stock in coming weeks.

TSLA - Priced perfectly .Trading range 975$ to 1100$. Potential china slowdown will be offset by energy credits revenue and pricing power of EV cars.

Sell picks

NFLX - Dropping subscriber volume, pricing challenges and shared account issues. $175 as base price target based on 15 PE which seems to be a trend among tech stocks

Disclaimer:

The Author owns one or more of the above stocks. I have a beneficial long position in the shares of one or more of above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own personal opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This is not a buy/sell recommendation for above stocks, but the earnings thesis based on recent results. Any investments can lose value overtime and you are investing at your own risk.

2020-01-27T14:20:00.002-05:00

Today's winner

Back on the blog after many years...Personal issue kept me away from this wonderful hobby.. Not anymore..

Stock market has doubled since i stopped writing couple of years back... US economic Engine powering the world now while promising Economy like BRIC are falling apart due to internal Crisis. US dollar has stabilized, Gold is up since Iran crisis, British pound stabilized since BREXIT withdrawal..

Corona virus scare is going to have major effect on already stressed Global economy on shorterm..But it will be contained over few weeks like any other virus that popped over the past two decades. I am sure the Pharma companies have major interest in developing vaccine for 7 billion people in the world, at least 1.3 billion Chinese and 340 million Americans to begin with...

With Geopolitical and health scare apart, the biggest swing will be the impeachment trial ongoing in senate which seesaw the market for next 9 months.. While most of the Fund managers will not make huge bets on the companies benefited by the tax breaks in 2018, they will focus on small and medium size companies .

I believe the US economy is poised for a long term growth and resilient compared to other world economies. New technology and innovation will keep this economy afloat for rest of the decade. A political swing in November election will cause a huge swing the market due to Major US policies .

Lets hope the Growth continues

2015-08-24T10:57:00.000-04:00

Today's winner - Long term investors.

US stocks ??   i am not kidding...

Short Squeeze ,Great opportunity to Cost average Value Stocks

Right beneath all the Market turmoil and flash crashes,i see a great opportunity for buying the Value and Momentum players at a heavy discount.. I am not talking about Mall Discounts,i am talking about Outlet discounts and Costco discounts. This market crash was caused by two unavoidable double edged sword of events

Friday - Massive option expiration in the middle of Rout

Monday - Margin calls due to the Expiration of worthless options and issue of new covered calls.

Lets analyze today's crash at the peak levels ie. 1000 point DOW crash

FB - Facebook was at one point trading at 72 $ and change.

The Momentum stock which not too long before valued at 110$ by leading market analysts,is now trading at 38$ discount. That is one hell of a discount for company that grows in the excess of 35% annually. One cumulative trade during opening selling was either buy or sell around 72$ and FB quickly bounced back to 82$ in 1 hour... That is 10 $ ride from lows...Looks like a huge market manipulation going or Short covering by hedge funds.Either way its enough heart attack for small investors like you and me.

AAPL - Apple plunges 6% and trading around April 2014 lows..

Apple the darling of Mutual fund owners was trading at the levels not seen since April2014.That is right before 4 quarters of earning surprise. For me that's a huge discount on earning multiples and zero premium on the earnings surprises we encountered past few quarters.Apple is a screaming buy at 95$.   The flash point trade around market around was 16 million shares with low price of 92$.. Lucky ones who got it.

Please never invest using Margin account.That will put u in peril.

More Analysis continues......................

Disclosure :   The author expresses his/her own viewpoint on stock market and individual stocks.This is by no means a recommendation to buy/sell these stocks.Individuals are advised not take this as a recommendation whatsoever. Invest your money at your own risk.

2015-08-12T11:08:00.000-04:00

Today's winner - American Economy - A place to be finally

Market had close to 7 distribution days this past month and very few accumulation days to count on.. There are couple of things that are rattling investor sentiments. Here are some to quote

1, Fed interest Rate decision pending September

2, Falling Oil prices due to Iran Nuclear Deal

3, China Market crashes.

4, China Devaluation of Currency.

5. Upcoming US selections. (seriously )

6, Greece Economy.

7, Crash of Euro as a Stable currency.

8. Mammoth Rise of US dollar and US stock market making new highs.

Lets analyse each one of them briefly ,so that you don't have to pour through tons of freakonomic predictions placed in the media and guys screaming on their lungs in CNBC.

Fed interest Rate decision pending September.

Meetings after Meetings with Yellen and Company yielded all but one confusion for the Banks and institutions sensitive to interest rates. We are debating and panicking over 0,25 bp rise, give us a break feds. That's enough thinking over past 1 year, go ahead and raise rates as Markets have already priced in 0.25 BP July 2015. This will send a clear message to world that U.S economy is not tanking and printing Dollars to cover its financial mess. In fact looking at the Job number and Manufacturing indexes we have actually grown in GDP from 2008 when we lowered the interest rates to pump cheap money into Banks. Any Delay in this will cause Global investors to panic and kick up a massive deflation of Dollar based assets.

Falling Oil prices due to Iran Nuclear Deal

Ok now...Kerry wins the Nobel peace prize for Middle East coffee talks, OOh lah we got ourselves a deal. Iran is no longer a threat, (israel and Saudis never thinks so ) . We made new friends and scared away our allies.. Well who is benefited from all this ? of course Iran and its Middle East allies. Russia gets to openly ship weapons and countries like India can go back to cheap oil days of last decade. Good for them.. What did we get in the process ? Cheap oil and Good bye to all the progress made in the Carbon emissions control measures. In the process we also killed the Fracking Oil industry from ever making any profits Note: U.S Oil production actually fell in the last quarter due to the Oil industry paralyzed by the fall of oil. But all is good for the world's largest consumer of Natural resources.

China Market crashes

What is happening to China. The so called Red giant, 8 trillion economy is in shambles from when 2015 . How can i economy so strong , so powerful and its influences reaching across the Globe can look so much in trouble. Well answer lies in half baked Capitalism that China has followed for many decades. It work as long as they keep producing cheap goods and the rest of the world keeps buying. It made lots of sense in 90's when Developed economies where looking to offset the high labor costs and ever increasing consumer demand. China became the single shop for buying finished goods and mass production factory for rest of the world. This killed smaller economies like Korea, Taiwan, Thailand and Malaysia as manufacturing basis for Finished goods and offshore production facilities.
But the rise of new economies like Indonesia, India, Brazil quickly became self sufficient by balancing their domestic consumption with Global demand. China began to lose its sheen after US and European financial crisis crippled the consumer demand ,making them take adverse steps to curtail imports and increase domestic production. This was not apparent until 2014 when the US external deficit narrowed its fastest pace in a decade.. Thanks to Obama of course for his socialistic approach to failing capitalism.

(To be continued)

HOT SECTORS AND TOPICS FOR 2013

2013-01-30T11:10:00.003-05:00

Promising Sectors for 2013

I apologize for not updating this Blog in a long time..I Still see quite Good traffic to my Blog with such long break in threads, i relate to my previous threads on some great companies who are still one of the Hottest stocks in 2013 such Netflix (NFLX) and Baidu (BIDU) which has given the investors double digit returns if picked up during November Election fiasco. For stats Bidu has returned around 30 % and NFLX has returned around 60% due to the recent earnings burst. For Institutional investors timing is immaterial since they cost average highs and lows all through the year, while Hedge funds seek out short term opportunities

on both long and Short positions in the same sector.

For small investors like us its i imperative that we time the Market right and exit as quickly as you see double digit returns on paper. Not only does timing helps make us good profits but sector rotation and Frequent portfolio balancing is quite critical to sustain the market swings or survive sudden crashes.

Let us look at some promising sectors for this year. I scanned through some of the Hot sectors of 2012 and surprisingly Home builders on average returned double digit profits for investors. Oil industry was stagnant as the threaten of Gulf war and instability in Middle East has ceased to be the center stage. I guess it has direct correlation with Election opinion polls and November results towards the end of the 2012 and a Democratic President back in office. (see my early blog on Obama versus Market)

Now i see some hot topics for the year 2013 which will drive the Markets.

Fiscal cliff - Fancy term to describe if U.S can survive/fail the Government borrowing limits from federal Reserve and Debt ceiling.
Syrian Unrest and Geopolitical crisis .
Renewed Threats from North Korea
China Standoff with Japan over disputed islands
Cut in U.S Military Spending
Greece,Ireland and Portugal in 2012 replaced by Spain and Italy as the center-stage of EU crisis.
China revamping growth using its Internal demand/domestic Economy.
Brazil and Russia going into stagflation.
Death of Apple and Face Book shares - will Tech ever come back to rule the Wall street.

With a political stability in White house and increased focused on domestic issues, U.S Government is on war footing to patch up its Ailing economy with new world economics . What it means for the Global economy is decreased spending from worlds Largest Economy . This will result in less production and consumables from China and Other Service based economies pointing to low GDP growth among BRIC countries .Most of the offshore money flowing back into the U.S economy (i am talking about trillions held by major U.S and European companies abroad in low income generating assets to high risk assets) will bring back more Jobs and high pay slips to the U.S economy. Recent Immigration policy will have a profound impact on the Service and Hotel sectors, Tourism and Mass migrations to Big cities.

If you put together the above in plate and you will start getting the BIG picture. Most of the stock markets will depend on regional policies and consumption. Right out of the bat sectors that comes to my mind are Domestic oil companies,Retailers and Commercial Realtor in U.S, National Banks in Europe , Cyclical ,Auto industry, Financials in BRIC nations such as India , China and Brazil. Manufacturing and Petrochemicals in Russia.

Some of the dead sectors will be Solar Power , Mining, Shipping and Aerospace.

Do your math and preserve your Nest egg before risking it.!!!

Good Luck and Happy New year

Wizard

How to Play the Iran conflict ?

2012-01-06T15:22:00.005-05:00

Today's winner : Domestic Oil companies

The Oil is trading in range of 98$ to 105$ per barrel due to the recent war of words with Iran's Nuclear weapon program. It's a no brainier that the Iran conflict will drive the Oil prices to the range of 140$ plus not seen in the recent past. With world's 25 % of oil flowing through the Strait of Hormuz and half of them flowing to trading partners in raging economies of East, this makes it a very notable crisis .

Chinese petroleum companies like Petro China has a huge exposure to the oil fields in Iran. India imports LPG heavily from Iran through this Strait.Even though Saudi and Iraq can transport close to 10 million barrels through pipelines ,any counter attack by Iran on U.S Air bases in Saudi, Iraq and Kuwait will put this pipelines in risk.
Israel is a passive player in this since Uncle Sam is on the front of the Crisis, if Iran Ships are attacked, the Long Range missiles will be gunning for Israeli Bases and Jewish Settlements. If the Israeli Air Defense comes into the Gulf , we have a full fledged war in the cards.

I have screened through many of Major Oil players with exposure to Middle East and one who are not.

Companies with Huge exposure to Middle East Oil

Exxon Mobil
Apache
Petrochina
Marathon Oil
Hess

Companies with Least exposure to Middle East oil can be categorized into 4 Regions.

East Europe and Northern Europe (Russia, Norway, Netherlands etc)
Companies in South America
Canadian Oil Sands
U.S Domestic oil and offshore drillers (Alaska and Gulf Of Mexico)

With that in mind, these small players will be the first one to Rally followed by Big players since they are less leveraged across the world.

Based on the Exposure and Leverage i came up with Good Names to play in case of Iran Conflict or a Stand off in Middle East

Accumulate

Petro Brasil (PBR)
Canadian Natural Resources (CNQ)

Chesapeake Energy (CHK)

Sell

Exxon Mobil (XOM)

Apache (APA)

Marathon Oil (MRO)

Hess (HESS)

Even though it is a very unfortunate situation and Millions will be impacted , the Good Old Mutual Funds and Hedge Funds would still be Reaping the Blood fromthis Desert Sands by Hedging Oil futures and Oil Stocks across the Globe. The Market will react negatively to this Crisis by selling Equities and all World Currencies ,after Buying hoards of U.S Dollars, which would drive the Oil prices still higher.

The Best way to play this short term event is to Buy Oil companies with Least exposure to Middle East and ones which are closer to North American Shores.

Sit Tight and Play Safe.

Stock Picks for 2012 - Tibco

2012-01-04T13:54:00.003-05:00

Today's winner : Technology Stocks

Wish you all a very Happy Trading in 2012 and All my readers a Very Happy New Year

I recently scanned through some beaten down Tech stocks of 2011 and came across some promising names

Let us see their valuations and charts for my first pick of 2012

TIBCO Software

The Reason why picked this names is that the company, it has a quite foothold in Cloud Computing and a great acquisition target for Big players like Oracle and IBM. The valuation is quite attractive and it's unfairly beaten up in the 2011 market crash.The company recently posted a net income of 112 million and 65 cents/share . The Total revenue was around $920 million. The Revenue is expected to be in line with the Analyst estimate for Q1 earnings.

Tibco's line of Business includes SOA, BPM, Business Optimization, Cloud Computing and Complex Event Processing companies using IT heavily.

Valuation and Growth Forecasts

Name	P/E (TTM)	P/E (Fwd 12 Mo.)	PEG	1 Year EPS Growth Rate	Next 3-5 yrs EPS Growth Rate
Tibx	23.4x	21.0x	1.57x	11.8%	28.8%
Software Industry	20.5x	17.2x	-0.25x	9.4%	17.3%
Technology Sector	18.7x	15.4x	-0.35x	9.7%	17.7%
S&P 500	16.6x	14.6x	-0.41x	14.3%	7.3%

Charts indicate that the stock has bottomed out and selling has subsided. The selling happened in very low volumes and bounces were on strong volume.

Based on the Growth estimate and valuation , this stock should bounce back to 30's in a month or two. That is a Good trade and 40's if Oracle acquires the company for a 40% premium.

I will continue this article covering the rest of the picks for 2012.

Which is the Best of Emerging Markets ?

2011-10-13T00:21:00.002-04:00

Today's winner : INDIA

With a Population of 1.2 Billion and having the largest Middle Class spending like there is No tomorrow, India is poised to become the Next biggest Investment Destination excluding China...There are lot of factors driving the current Market conditions in India..Let me list out of the Pro's and Con's of Investing on India Equity markets

Pros

1, Largest and Ever-growing Middle-class. India is adding at least 2 Million new households to the Middle class every 2 years.

2, The Consumer Class is largely untapped, around 50+ percentile falls in the Young and Vibrant Spenders. They spend around 30 % of their disposable income on Electronics and Food. The profit margins of KFC's , Domino's, Sony's ,Hyundai's are through the Roof.

3, Continuously Clocking a 7% plus GDP growth for a Decade is no small task. Most of the Growth is fed my Internal factors. The Agriculture output driven by rotation of crops and Innovation has led to Surplus Grains.

4, India Car Market is expanding like crazy...Recently a handful of well known companies have opened additional manufacturing plants worth more than 10 billion USD. In a Reeling world economy deprived of Cash, this is Phenomenal.

5, Every Middle class and Lower Middle class household has atleast 2 Mobile Phones. Consider 600 million subscribers and growing...That is a great potential for Mobile apps and Media content on Mobile.

6, The Government has raised the Interest Rates to so high, that when recession do hit the world economies. They have lot of room to cut rates and ease the Liquidity crisis.

7, Considering India being in the Midst of East - West Shipping corridor offers a great potential to be the economic hub for South Asia. Strategically placed between the Oil Rich Middle East and Free Economic zones of South China Sea.

8, The Indian stock Market has matured a lot in the past decade, becoming more transparent and provides greater financial stability than the likes of China, Brazil or Russia. The banks are matured and higly liquid due to the Saving mentality of the Average Indian Household.

Cons:

1, The state control on Financial Markets are extremely annoying.

2, Corruption has eaten up around $1 trillion of the GDP in past 10 years.

3, There is no established free Trade zones in India like Singapore. So the presence if Global Financial Firms are minimal.
4, The Indian Rupee is not free tradable due to the State Monopoly RBI. Which cuts out the 6 trillion USD forex market from benefiting Indian banks.

5, Governance in Public Sector is a laughable to the point of Utter Ridicule.

6, the OIL companies loose money irrespective of securing low price oil contracts secured a Decade back..Come one tell me which country in the world where you have Oil companies posting Loss every quarter. Check the Balance sheet of ONGC and Relaince Petrroleum, they are pathetic.

7, Disparity between price of Goods versus quality is way overstretched . I wouldn't buy a Ford ikon or Chevy Blazer in U.S even with all the discounts and freebees. I guess same goes for all the Korean and Japanise car makers pushing low quality products for price conscious Indian Consumer.

With above said and the Indian Markets and Consumer maturing,, the potential for fixing the Con's will be possible with political stability, International Trade agreements and Stable financial markets.

There are very few instruments in India to tap the Growth story of India ...For examples you can invest on ETF's like INP traded in NYSE, or Catch the Good old Banks like ICICI, HDFC or Go for stable IT services companies like INFY, WIT,PCS. If you do, please stay invested for atleast next 15 years, because in 2025 India overtakes Japan to be the 3rd largest economy in the world with a Consumer base of 900 million strong...

I will in due course write about the rest of the BRIC nations

Have a fantastic Holiday season

Case for Gold , Silver and Mattress

2011-07-29T09:20:00.000-04:00

Today's winner : Cash in King Size Mattress

The Current Debt Ceiling Crisis can be traced all the way back to Bush and his Goldman Sachs Buddy Henry Paulson. Well how about Alan Greenspan for a Change..The U.S Fiscal and Monetary policy stroked by Alan Greenspan to curtail Inflation and infuse Liquidity into the ailing U.S banking systems has created a mountain of U.S Debt circling around the World in Record numbers. In Fact the Current European Financial Meltdown is caused by uncontrolled issuance of U.S Debt in exchange for increased Liquidity and Borrowing levels in Western Bloc.
The Result of Loose U.S Monitory policy and availability of Cheap borrowing cost for Financial Firms have resulted in Tremendous amount of U.S Debt within the World Financial System . The Result is

1, Explosive prices in World Commodity - (futures Traded in Dollar)

2, Increased Inflation in Developing Countries including China - (China holds 2Trillion in U.S Debt).

3, Weak Euro resulting in panic buying of Dollar based commodity.

4, Hoarding of Food , Oil and Commodity by BRIC nations due to Volatile Commodity Futures Markets.

Come Aug 2nd or August 11th (real date) , the World will be Staring at two diverse crisis points

1, U.S Government passing a Bill to Curtail 2 Trillion in Deficit - Gold, Silver and Oild Spiking 10 to 20% from here.

2, U.S Governement Passing a Bold Measure to cut 4 Trillion in Deficit - Cuts Commodity demand in Major markets and full stop to all Development activities in the world's largest Consumer market .

Either Way China will start offloading the U.S Debt which in turn will raise the Treasury yield's exponentially provoking a massive exit from U.S financial market into Commodity again..

In Either way the charts Suggest that Gold is headed to 2000$ and Silver to $55 an ounce. Oil could spike to 110$ when U.S dollar drops to lows...

by far the Best option is buying a king Size mattress and hiding all the cash (make sure you use a Good Bug spray ..)..

Good Luck investing

S&P 500 Support and Trend

2011-06-11T01:32:00.000-04:00

Today's winner: Cash

I apologize for a long break between my Blogs. The Stock market have been behaving pretty badly for past couple of months. Especially the U.S Government debt ceiling and Inflation in Emerging markets has finally spill over to the stocks. While the Governments are struggling to keep up with rising debt and inflation, the Companies are sitting on a historic amount earnings and cash. Companies are not able to decide on a stable market to Invest and grow their investments. But the inflation is creeping up across the world and companies cannot sit on un-invested cash for too long. There is only so much of Gold and Silver to hedge on the inflation. Those two are in historic highs . Let us look at the S&P 500 behavior for the past couple of months. As i have noted in my April Blogs when the stock market headed up on very low volume with least amount of Institutional Investors participating in the rally.

You can see from the above chart that S&P was down 9 out of 10 sessions on high volume. But the small positive not is that the Volume was weaker than the May crash to 1249. We are 30 points away from the Lows established in May. The Overall trend is very negative. We are yet to test the 52 week lows , Most of the downtrend is caused by recent spike in Oil Prices and Spiraling Debt crisis in the Western block.

The Recent oil reserve Data and Saudi efforts to increase output will recent in Supply exceeding demand in the Oil markets. Once the Summer driving season is over, we would see a 15% drop in Oil prices and create a temporary Commodity crash, which bodes well for the financial Markets.

Based on my recent analysis, S&P 500 has short term support around 1250 (may 2011 low) and if we continue sliding , we are looking a 52 week low of 1160. I would advice to stay in commodities (Gold , Silver and Oil ) until the low is established and switch back to Equities around the time we start seeing signs of Summer Rally.

The S&P 500 will see a 1400 by the end of this year if the Middle East and European Debt crisis Subsides.

I am Staying on Corporate Bonds, Oil stocks and Municipal Bonds until things are clear ..

Good Luck with your Investments...and Please check out my Novel "Life to Life : Journey to the Other side" in Amazon

Time To take profits - Global Unrest

2011-03-04T13:25:00.002-05:00

This is the synopsis of all chain of events in Middle East.. A Great read if you are not tracking the Middle East turmoil day by day

http://edition.cnn.com/2011/WORLD/africa/03/04/middle.east.africa.unrest/

Market Momentum

I have been watching the Market in past 30 sessions since the beginning of the Middle East Crisis. This is what i see

1, The Oil Price has been extremely Volatile

2, Around 25% of Global oil Supply is at Stake during the Crisis.

3, No visible Leadership from U.N or any of the Superpowers (Existing and Emerging)

4, Market pricing in a $125/ barrel Crude oil price.

5, Gold is Surging towards $1600 /ounce with Hedge Investor buying spree.

6, U.S and EU on the sidelines due to the Economic and Fiscal Deficit dictating their Global and Economic policies.

Lets watch the Market momentum for past week.

Market Momentum		Advances	Unchs	Declines	20-Day MA	50-Day MA	100-Day MA	150-Day MA	200-Day MA
Today	-0.78%	920	108	3142	50.53%	59.59%	70.74%	79.73%	81.22%
Yesterday	+1.94%	3400	79	691	61.58%	65.01%	74.72%	81.31%	82.59%
Last Week	+1.83%	3537	73	559	58.07%	62.70%	73.92%	81.14%	81.96%
Last Month	+0.30%	2164	122	1883	57.81%	65.99%	77.40%	82.77%	81.12%

Lets see how many Distribution days we had in past 30 sessions

$INDU - Daily Candlesticks: "
via StockCharts.com
"

Seems like we had 4 sessions of Heavy selling and not even one Session of heavier buying..

This shows couple of Red flags

1, The Market is definitely in a negative Trend.

2, Institutional Investors who create heavy volume is on the Sidelines.

3, End of Earnings season.

4, Arrival of Summer Driving season which naturally boosts Gasoline prices.

5, High $3+ Gasoline prices for past 4 months cutting into Consumer spending.

Looking at all of the above and possibility of IRAN revolution happening anytime which happens to be the Top Oil producer in the region after Saudi . We have one Toxic Brew of bad news to kill the World Economic Growth .

If Stock market is look ahead for 9 months of Economic conditions , the sell of will not stop until we see a 10% drop in coming months.

I would suggest to Exit out of High Flying /High Beta stocks and head to Dividend paying and conservative Bonds...

As Always Cash is the King

Baidu -- Growth Stock of the tomorrow

2011-02-23T23:13:00.000-05:00

Baidu, Inc. provides Chinese and Japanese language Internet search services. Its search services enable users to find relevant information online, including Web pages, news, images, multimedia files, and blogs through the links provided on its Websites. The company also offers online community-based products and entertainment platforms; an instant messaging service; and a consumer-oriented e-commerce platform. In addition, it designs and delivers online marketing services and auction-based P4P services that enable its customers to reach users who search for information related to their products or services. The company serves online marketing customers consisting of small and medium sized enterprises, large domestic corporations, and Chinese divisions or subsidiaries of multinational corporations primarily operating in the medical, machinery, education, franchising, electronic products, e-commerce, ticketing, tourism, information technology, consumer products, real estate, entertainment, and financial services industries. It sells its online marketing services directly, as well as through its distribution network. The company was formerly known as Baidu.com, Inc. and changed its name to Baidu, Inc. in December 2008. Baidu, Inc. was founded in 2000 and is headquartered in Beijing, the Peoples Republic of China

Analysis

BIDU is single best stock for Investors to take part in the China's Super hot economy. There are many stocks in this sector like SOHU, NTES, SINA which are all doing very well in recent few years.

BIDU is filling the need of 1/6 of the world population which is not served by Google. The middle class in China is twice bigger than the entire population of United States.

If Google lessons are true, more youngsters use the search engine on the typical day than any other age group. With Google out of the way and Yahoo/MSFT being sidelined in mainland china. Bidu is poised for APPLE like growth.

Lets see the fundamentals of Baidu Company and valuation based on its recent earnings.

Valuation Measures

Market Cap (intraday) :	40.39B
Enterprise Value (Feb 24, 2011):	42.96B
Trailing P/E (ttm, intraday):	75.65
Forward P/E (fye Dec 31, 2012):	32.11
PEG Ratio (5 yr expected):	0.89
Price/Sales (ttm):	34.90
Price/Book (mrq):	32.86
Enterprise Value/Revenue (ttm):	35.77
Enterprise Value/EBITDA (ttm):	66.22

	2010-12*	2009-12	2008-12
Income Statement
Revenue	7,915	4,448	3,198
Operating Income	3,959	1,605	1,097
Net Income	3,525	1,485	1,048
Earnings Per Share	10.10	4.27	3.02
Shares Outstanding	349	348	347
Balance Sheet
Current Assets	8,782	4,843	2,852
Non Current Assets	2,266	1,314	1,086
Total Assets	11,048	6,157	3,938
Current Liabilities	2,552	1,400	849
Total Liabilities	2,643	1,404	849
Stockholders' Equity	8,406	4,753	3,089
Cash Flow
Cash From Operations	—	2,279	1,746
Capital Expenditures	—	-450	-477
Free Cash Flow	—	1,829	1,269

You can see that the EPS has tripled in last four years.. The stock price did Quadruple in past four years, with the rest of the Market...With a projected annual growth of 75% YOY (year over Year). This stock will be $400 in next 5 years. Recently the BIDU jumped almost 25% post earning seasons. But the stock got beaten up in last few sessions due to Middle east turmoil. But one that should be clear to investors is that Oil price increase will not affect the revenue of a search engine company like BIDU or GOOGLE. Any dip in this stock is a great buying oppurtunity.

Five Year Shows that the stock is well above its support lines

BIDU - Weekly Candlesticks: "

via StockCharts.com
"

With tremendous growth and doubling EPS every year with limited threat from Google/Yahoo/MSFT BIDU is a real winner long term

My Target price for Baidu is $160 by end of the Year 2012.

The best entry points are below

First Buypoint if the Market shows signs of turnaround : $109
Second Buypoint if S&P cracks the 50 day average : $101
Third buy Point if Market crashed another 1000 points: $97

Please comment ,it helps us to see different viewpoints.

Happy Investing

NetGear - Gem in the Telecom Space - Earnings Tuesday

2011-02-07T20:00:00.000-05:00

Today's winner : NetGear (NTGR)

About the Company :

NETGEAR, Inc. designs, develops, and markets networking products for home users and small businesses worldwide. The companys products enable users to connect and communicate across local area networks and the World Wide Web; and share Internet access, peripherals, files, and digital multimedia content and applications among various networked devices and other Internet-enabled devices. Its product line consists of wired and wireless devices that enable Ethernet networking, broadband access, network connectivity, and network storage and security appliances.

Analysis

Netgear has been one of the best router companies in the computer Networking space. This company is highly cyclical and sensitive to the economic conditions.

To See One of the clear examples of its cyclical nature , we should go back as early as 2007-2008. During the beginning of recession when consumers and companies

cutback on investments, Netgear reversed to negative earnings growth in parallel with the Rest of the Economy. Now the economy has turned the corner and we see

increased consumer and corporate spending take over the arena. Its time to invest in companies of cyclical nature.

Here is the snapshot from recent Fourth quarter results announced on Nov 10.

You can see the primary business revenue exposure is in North America and rest in Asia. Even though Asia is booming we have always been on the top of Technology spending.

   October 3, Percentage September 27,
   2010 Change 2009
   (In thousands, except percentage data)
  North America $ 121,956 61.7 % $ 75,408
  Percentage of net revenue 51.7 % 44.1 %
  Europe, Middle-East, and Africa $ 89,120 22.8 % $ 72,590
  Percentage of net revenue 37.8 % 42.4 %
  Asia Pacific $ 24,941 8.1 % $ 23,073
  Percentage of net revenue 10.5 % 13.5 %

Lets see the valuation of the company versus future guidance..(as of 02/07/2011)

Market Cap (intraday):      1.33B
Enterprise Value (Feb 8, 2011): 990.02M
Trailing P/E (ttm, intraday):       29.32
Forward P/E (fye Dec 31, 2011):      17.57
PEG Ratio (5 yr expected): 1.14
Price/Sales (ttm):      1.51
Price/Book (mrq):    2.77
Enterprise Value/Revenue (ttm):    1.15
Enterprise Value/EBITDA (ttm):    10.15

Lets compare the valuation

Valuation versus the Index and Telecom/networking space.

Name	P/E (TTM)	P/E (Fwd 12 Mo.)	PEG	1 Year EPS Growth Rate	Next 3-5 yrs EPS Growth Rate
NTGR	21.4x	17.3x	1.08x	23.6%	-0.3%
Telecommunications Equipment Industry	24.4x	21.0x	-0.05x	14.1%	9.2%
Technology Sector	24.3x	19.9x	-0.06x	25.3%	21.1%

You can see that its way slightly undervalued compared to the telecommunications Equipments/network industry as a whole.

These are reasons that stock might outperform the rest of the industry .

1, Retailers (traditional and Online) posting high revenues across computer related products
2, The stock is selling for 17.57, which is low compared to estimated 18 % Growth rate.
3, High Demand for WIFI enabled devices boosting the need for Home/Office Networking bandwidth.
4, Reported 3rd qtr 2010 earnings of $0.45 per share on 10/26/10. This beat the $0.38 consensus of the 8 analysts covering the company.

Lets look at the Weekly chart

NTGR - Weekly Candlesticks: "

via StockCharts.com
"

The stock is on the consolidation mode this year and settled well above the 50 day average with Reduced volatility. I would see this trading above $50 in 6 months time frame..

My target price for NTGR is $45 in next few weeks if they beat the $0.47c consensus. (which they will easily).

One of the areas of concern is the Speed at which the Company comes up with New products and speed of Expansion in Asia

Happy Investing.

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Blackstone Group - Seriously Undervalued

2011-02-03T17:16:00.000-05:00

Today's winner : BlackStone Group LP (BX)

About the Company :

The Blackstone Group, L.P., together with its subsidiaries, provides alternative asset management and financial advisory services worldwide. The company operates in four segments: Private Equity, Real Estate, Credit and Marketable Alternatives, and Financial Advisory. The Private Equity segment involves in private equity investing through five general private equity funds and one specialized fund focusing on communications-related investments. This segment engages in various transactions comprising leveraged buyout acquisitions of companies, transactions involving start-up businesses in established industries, minority investments, corporate partnerships, distressed debt, structured securities, and industry consolidations. The Real Estate segment manages opportunistic real estate funds, internationally focused real estate funds, European focused real estate fund, and real estate debt investment funds. This segment invests in lodging, urban office buildings, and various real estate operating companies. The Credit and Marketable Alternatives segment engages in the management of funds of hedge funds, credit-oriented funds, CLO vehicles, and publicly-traded closed-end mutual funds. The Financial Advisory segment offers corporate, and mergers and acquisitions advisory services; restructuring and reorganization advisory services; and fund placement services for alternative investment funds. Blackstone Group Management L.L.C. operates as the general partner of the company. The Blackstone Group, L.P. was founded in 1985 and is headquartered in New York, New York.

Analysis

Blackstone has been one of the flagship companies in the Investment management space. In fact its one of the few companies which survived the financial crisis by being conservative on the derivatives and CDE based investments.

Here is the snapshot from recent Fourth quarter results

Economic Net Income (“ENI”) increased to $1.4 billion for the full year 2010, up 102% from
$703 million for the full year 2009. ENI increased to $513 million for the fourth quarter of 2010,
up 56% from $329 million for the fourth quarter of 2009.
Distributable Earnings were $702 million for the full year 2010, up 47% from $479 million in
2009; Distributable Earnings increased to $239 million for the fourth quarter of 2010, up 12%
from $213 million in the fourth quarter of 2009.
GAAP Results Attributable to The Blackstone Group L.P. improved in 2010 with a net loss of
$370 million, compared to a net loss of $715 million in 2009, in each case including net IPO and
acquisition-related charges. GAAP Net Loss Attributable to The Blackstone Group L.P. was
$11 million in the fourth quarter of 2010, compared to a net loss of $143 million in the fourth
quarter of 2009.
Fee-Earning Assets Under Management increased 14% to $109.5 billion at December 31, 2010,
from $96.1 billion at December 31, 2009 while Total Assets Under Management increased 30%
to $128 billion at December 31, 2010.
Blackstone declares a quarterly distribution of $0.32 per common unit which brings full year
distributions to $0.62 per common unit.

Lets see the valuation of the company versus future guidance..(as of 02/03/2011)

Market Cap (intraday)	6.38B
Enterprise Value (Feb 3, 2011)³:	11.76B
Trailing P/E (ttm, intraday):	N/A
Forward P/E (fye Dec 31, 2011)¹:	11.73
PEG Ratio (5 yr expected)¹:	0.81
Price/Sales (ttm):	2.25
Price/Book (mrq):	1.49
Enterprise Value/Revenue (ttm)³:	4.32

lets compare the valuation

Valuation versus the Index and Financial Group

Name	P/E (TTM)	P/E (Fwd 12 Mo.)	PEG	1 Year EPS Growth Rate	Next 3-5 yrs EPS Growth Rate
BX	15.3x	11.9x	0.47x	28.4%	--
Specialty Finance Industry	16.6x	16.2x	-1.13x	8.1%	-12.4%
Financials Sector	17.8x	23.4x	-0.4x	31.0%	-2.9%
S&P 500	19.3x	17.2x	-0.19x	22.6%	10.3%

You can see that its way undervalued compared to the financial industry as a whole.

These are recent events of significance that will boost the stock price increase

1, Possible New real estate fund.
2, Acquisition of Polymer Group.
3, M&A activities involving Sara Lee.
4, Last quarter earnings up by 180 % .(BX reported 4th qtr 2010 earnings of $0.46 per share on 2/3/11.)

Lets look at the Weekly chart

BX - Weekly Candlesticks: "

via StockCharts.com
"

The stock is on the upswing with high volume in last few trading sessions. I would see this trading above $20 in short time frame..

My target price for BX is $25 in next 3 months

Happy Investing.

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Visa Swipe or Don't Swipe - Earnings Wednesday

2011-02-01T18:10:00.000-05:00

Today's winner: Visa

About the Company:

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services linking issuers and acquirers. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, Interlink, and PLUS brand names. In addition, it offers value-added services, including risk management, debit issuer processing, loyalty, dispute management, and value-added information services. The company was incorporated in 2007 and is headquartered in San Francisco, California

Analysis:

Visa is one of the Hybrid Financials in the overall Financial market dominated by Banks and Investment management company. Its is either credit card company or a Bank, They make money when you swipe the card or pay online for a service or a product. Its a great business model evolved out of century old middleman services. They make money whether economy is good or bad or in recession. Thats why Visa and MasterCard with their global presence and wide acceptance has strong balance sheet and deliver consistent financial results.

One of the recent key changes or regulations set by the Federal Government has been causing setting a serious setback to the stock price... Please reference this article which states the risk from the new regulations in the Credit card and debit card market.

http://www.ft.com/cms/s/0/8c37024e-2c8d-11e0-83bd-00144feab49a.html#ixzz1CkUR4dn9

Lets do technical analysis of the stock,

lets start with 52 week stock price chart

V - Daily Candlesticks: "

via StockCharts.com
"

You can see that stock got beaten up pretty badly making a 52 week low around December 2010. It was major drop in the stock price, Master card also took a big nosedive the same day.. I would consider that a big overreaction on the market sentiment towards a Government regulation which was seen coming for many months. It really surprised me that it came right around the Holiday season when the whole world was spending using the Debit and Credit card processed by Visa.

lets see the current valuation based on its posted earnings

Market Cap (intraday):	50.66B
Enterprise Value (Feb 1, 2011):	45.81B
Trailing P/E (ttm, intraday):	17.04
Forward P/E (fye Sep 30, 2012)	12.72
PEG Ratio (5 yr expected):	0.79
Price/Sales (ttm):	6.21
Price/Book (mrq):	2.00
Enterprise Value/Revenue (ttm)	5.68
Enterprise Value/EBITDA (ttm)	9.53

This shows that the stock is grossly undervalued when 4th qtr 2010 earnings of $1.06 per share on 10/27/10. This beat the $0.94 consensus of the 28 analysts covering the company.

Considering the great holiday season and renewed consumer confidence Visa will surpass the $1.29 EPS high estimate with ease. The stock price is currently undervalued based on the earnings last few quarters and additional earnings and high revenue will boost the stock price to a historic rally in next few months .

We also need consider the fact that credit card disclosure and the additional fees will be passed to the underlaying banks by Visa and MasterCard , so i see a very minor effect to its balance sheet on the long run..

I start Visa with Stock price target of $85 in next 3 months

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Obama Approval Ratings versus Stock Market Direction - Big Picture

2011-01-30T22:29:00.001-05:00

Today's winner : Obama Ratings

There are many variables that affect the stock market as whole. Let’s talk about some of the Major one's.

Interest Rates – Decision by Federal Reserve during the FOMC meetings.

Tax Cuts - Government decision to cut or raise Individual and/or Corporate Tax rates.

U.S Employment or Job Growth.

War, Terrorist Attacks, Regional Instability for U.S allies and Foreign Policies.

Market Regulations affecting the Core Economy.

How these are related to Political decisions, we will come to know shortly. Let’s look at the Stock Market Direction; I’ve chosen Dow Jones because it represent the Biggest companies in the world across every Business area in the U.S and world Economy.

The Dow Jones had dipped to the lowest point in decades following the financial crisis around March 2009 when we hit the lowest point 6,469 which represented extreme difficulties with the Financial World. Most of the too big to fail companies like Bank of America, Citi Group, and almost every Regional & National bank was under the risk of going belly up. The FOMC under the direction of newly formed U.S Government under Obama and the Henry Paulson initiated major policy changes and rescue efforts negotiating with the more Stable Players to take over the struggling financial giants.

The U.S government performed various austerity measures like reducing interest rates, issuing more Government debt, buying toxic mortgage assets, and other deflationary m to revive the ailing economy.

In addition to the austerity measures the U.S Government, under Obama, made policy decisions affecting job growth; like Jobless Benefits and Incentives for companies who hire. Well some of these measures have not been very fruitful to spur job growth, but they did increase the coffers of large companies who took in the incentives reflecting in their Balance Sheets as Profits.

So most of the decisions affecting the Stock Market have been directly influenced by Obama's New Government which came into power around the end of 2009.

If we try to track the Dow Jones performance starting in Dec 2009 until now, we can see that we hit a new low in March 2009 and made a new high around March 2010 (Dow Jones: 11,258). Let us watch this following chart which tracks the job approval rating for the same period of time. We can see that Obama's approval rating peaked around March 2009 and started dipping down when Market direction was in the Recovery Mode.

When th Dow Jones made a new high around March 2010, Obama's approval rating was at its lowest point of 47 with a 2 point spread against the disapproval rating. So far we can see that the negative correlation between two charts or we can say that Obama's approval rating is inversely proportional to the stock market direction.

Quite recently the President's approval rating has improved after tax cuts, poll results, increased job growth, less debt issued by the government, and the end of the War in Iraq. The last few FOMC meetings were focused on keeping the Interest Rates stable and/or considering aspects of increasing them in near future.

If history is right, any of the policies (Fed policies) or Geo Political changes (Middle East crisis, Afghan War) will and is proving to affect the direction of the overall Market.

Quite recently the U.S economy showed some bullish signs of recovery in job growth: companies paying back money borrowed from the government, increased hiring, positive GDP growth, increasing Inflation (seriously that’s good, look at China and India), Increasing Dividends,stable market regulations, and effective market speed breakers put on by SEC helping avoid sudden crashes in the Financial Markets.

All of the above add up to a positive job approval rating for our President crossing the 50 mark (please move the cursor on the approval rating chart to get the current rating). We also noticed that the recent Middle East crisis will require major changes in our President's approach to Foreign Policy.

If the trend we saw in last few years of our current government continues, we will see another dip in the Stock market. I think it’s time to take some Profits and Raise Cash! because there would some major policy changes in Middle-east that will cause fluctuations in Oil prices, New Friends and see-saw Stock Market , or even people dumping stocks to head back to hedging instruments like Gold and Bonds. I Hope the events will be resolved in coming months for a More stable and Growing world Economy

Note : This is not a politically motivated article, i am trying to show how Political Decisions can affect your Individual Portfolio more than the fundamentals of a company and its Business. It always helps to see the Big picture before venturing your precious funds into the Financial Markets.

Harley Davidson Cruising towards High Growth

2011-01-28T00:31:00.003-05:00

Today's Winner : Harley Davidson (HOG)

About the Company:

Harley-Davidson is an American motorcycle manufacturer with wide International Fan base. The company operates in two segments: Motorcycles and Related Products and Financial Services. The Motorcycles segment designs, manufactures and sells heavyweight touring, custom and performance motorcycles as well as a complete line of motorcycle parts, accessories and general merchandise. The Financial Services is engaged in the business of financing and servicing wholesale inventory receivables and consumer retail installment sales contracts (primarily motorcycles).

Analysis

One of the Sectors that turn around coming out of Recession is Automobile Manufacturing especially the luxury segment. Harley sales was very negatively impacted during the recession that lasted officially around 1 year and 9 months .During that period Harley held up well by launching targeted models and distribution in Asia where two wheeler was welcome whatever economic conditions existed during the recession. In fact recession did not exist technically in China, India and some parts of Asia due to internal consumption keeping their Economic Engines well oiled.
Harley recently launched some interesting model in India. The company launched 5 Harley Davidson models which will be available in the Indian market from 2011 onwards. The models announced are - Night Rod Special,Fat Boy, customized model Legend Harley and Roadster. In countries like India, the two wheelers are a day of life versus in America its still a hobby for most.

Even though the price tag is high for most of Indians, there seems to be increased interest in high level car segments which was considered non affordable by many Indians in the last decade. In short launching to new and enormous markets like India and China would benefit American Companies to weather future recessions with ease. Pepsi, Coke and McDonald are some clear winners of Global Diversification..

One year chart for Harley-Davidson

You can see that we lost a Great opportunity to catch the Stock during peak of recession in 2009. The stock price has grown almost 400% from its lows in 2009, due to increasing revenue and sales .

Lets us recent earnings and valuation

Name	P/E	P/E	PEG	1 Year EPS Growth Rate	Next 3-5 yrs EPS Growth Rate
Automobiles Industry	13.9x	62.7x	0.0x	-24.5%	-18.6%
Consumer Goods Sector	19.9x	25.0x	-0.04x	2.8%	12.3%
Hog	35.8x	18.4x	1.31x	94.6%	-26.9%
S&P 500	19.4x	14.8x	-0.32x	22.1%	8.2%

Looks like the Stock price is still way undervalued compared to rest of the industry. With a Forward PE far below the current Industry valuation. Let us look at the recent earnings report versus consensus.

HOG reported 3rd qtr 2010 earnings of $0.40 per share on 10/19/10. This beat the $0.35 consensus of the 9 analysts covering the company.

The stock price adjusted almost 20% upwards placing it comfortably above the Support line. The consensus for the current quarter is 0.55c to high estimate of 0.60c . I think the company would be able to meet the consensus or even beat it, as the Automobile sector posted some good numbers last few quarters signaling economic turnaround.

With increased presence abroad and keeping the future turnaround in consumer confidence and spending, American flagship brands like Harley will be a big winner..

My Target price for Harley-Davidson is $60 by next quarter or end of the Year.

Please comment ,it helps us to see different viewpoints.

Happy Investing and Happy Riding

Netflix - Buy or Sell - Earnings Today

2011-01-25T23:09:00.003-05:00

Netflix before and after Earning

Today's winner : NFLX !!!

About the Company:
Netflix, Inc. provides online movie rental subscription services in the United States. The company offers its subscribers access to a library of movie, television, and other filmed entertainment titles on digital versatile disc (DVD).

Analysis

Netflix online has been a major competitor to Movie Rentals like BlockBuster for many years.. Netflix has carved itself a monopoly space among online rentals where companies can take market shares just by word of mouth.

Netflix really launched itself when they switched from traditional DVD shipping business to Download movie business using Media players and Gaming Machines (PS3, XBOX,WII) . Its not until they launched into this domain that the stock price skyrocketed to triple digits gains.

One of the areas of concern is that the company recently announced on its blog a few new developments that could be of interest to customers. Most recently, Director of Product Management Jamie Odell chimed in to inform that users will no longer be able to add movies to their DVD queue from streaming devices. As far as we know, the functionality has only been available on a few platforms, but if you're apt to do all or most of your queue management then it could be an issue, if you only use the website then everything will be the same.

The Stock price nearly tripled starting around 2009 to post triple digits gains due to failures by BlockBuster, Walmart etc. So we should think about what is the real driver for this stock now...I would say Smart Phone based users will be the primary customers in near future , with Verizon and Apple posting Good results . We do have a major Mobile media provider going forward. One thing that the Netflix lacks is the International Subscribers restricting users from abroad to subscribe due to copyright issues.

The Stock performance for One year is given Below.

You can see that the Netflix has been consitently bouncing off the 50 Day moving average, but the overall trend is up.. Going by the pattern we are due for another bounce from 50 MA , but also keep in mind that any major news or earning disappointment will breach the pattern towards a 40$ drop..

I see this as a consolidation pattern going forward...

Lets see how they did in the last Quarter

NFLX reported 3rd qtr 2010 earnings of $0.70 per share on 10/20/10. This missed the $0.71 consensus of the 28 analysts covering the company.

But when news hit the wire, stock was already trading at a 52 week high which is a very bad entry point for small investors..

Now lets see the consensus

Not changed from last quarter, its again $0.71 which is pretty lame considering that the Holiday season and winter are when people watch lots of movies from Home (I do it too by the way).

But still NFLX is high PE , high Beta stock which bring very high risk on both sides.. If they beat the estimates and post a good forward guidance you might see the Stock popping $10 tomorrow to $195.

If they just meet the estimates or Disappoint you see the stock dropping to $155 ..

So I suggest open your position two days after the earnings report and the good entry point will be around $178 if the stock price settles above the 50 MA .

Happy Investing

Gold Prices: Gold Skims 10-Week Low as Safe-Haven Bid Evaporates - CNBC

2011-01-25T09:49:00.001-05:00

Gold Prices: Gold Skims 10-Week Low as Safe-Haven Bid Evaporates - CNBC

http://www.cnbc.com/id/41245032

Widespread Gold ETF selling and Inflation news from India, UK GDP will cause U.S dollar and assets traded in the Currency to loose value...Another Great case for Gold Price fall.

The best place to be in world would be in U.S stocks especially Cyclicals,Technology and Consumer Staples.

Yahoo before and after Earnings

2011-01-24T17:14:00.002-05:00

Today's winner : YAHOO !!!

About the Company:

Yahoo! Inc. provides online properties and services to users; and marketing services to advertisers worldwide.

Analysis

Yahoo has been seriously competing with google on the Ad revenues. Eventhough their Search Engine performance has improved vastly on tie ups with Google and other Search engines. Yahoo has been one of the best content providers there is , in my opinion better than all other players out there especially presentation of content .

Let us do a Technical Analysis of the Company stock

Current Price as of Close 01/24/2011 is 16.09 $

Lets look at the Current Valuation

YHOO	Industry Average	Percentile in Industry
Market Capitalization	$20.81B	$5.63B	98th
Beta (1 Year Annualized)	0.09	1.28	29th
EPS (Adjusted,09/30/2010 TTM)	$0.77	$13.90	87th
Current Consensus EPS Estimate	$0.22	--	--
EPS Growth (TTM vs. Prior TTM)	755.56%	+77.57%	98th
P/E (TTM) AS OF 01/21/2011	20.73	34.22	72nd
Dividend Yield (Annual) AS OF --	--	2.65%	--
Total Revenue (TTM) AS OF 09/30/2010	$6.53B	$16.51B	99th
Revenue Growth (TTM vs Prior TTM)	-0.05%	+25.00%	35th

Current PE is quite below the market average , so on the first look the stock is undervalued..

Lets look at the last Quarter earnings Report
Consensus : 0.15c versus Actual : 0.29c on Quarter ending October 2010

Here is the stock performance based on the earnings and other factors

the stock actually went up close 20 % and retraced back to October price range...

The current consensus estimate for Tuesday's earnings report seems pretty low, 0.22c , considering the fact that the Holiday sales for online retailers like Amazon posted enormous gains and increased traffic leading to higher Ad revenues . The Ad Revenues must have grown many fold than the previous recession years..

This is my prediction based on the current valuation and Yahoo possibly beating the low estimates

If they beat by 5c to 10c above consensus - Stock price will be around 17.5$

If they Beat twice the consensus like last time - Stock price might zoom past 18$

If they equal or come under the estimates (which is very rare) - Stock price might drop to $14.5 or lower..

Yahoo is definitely a Winner Tomorrow ...

Where is Gold Headed from here?

2011-01-23T18:37:00.006-05:00

Today's winner - Gold sellers (Seriously)

Gold has been hedge for many investors against Global Economic and Currency devaluation for past few decades. In fact Gold hit a peak during Oil Crisis of 70's and 80's and also during the First Iraq war causing massive oil disruption in the Middle East...

Here is a one year chart on Gold

You can see that current 15% spike in Gold was caused by Greece and Portugal going belly up on their external debts and inability to Borrow. If you breakdown the 15 % rise , its influenced by many factors.

1, The Devaluation of Euro currency - Gold spike 4%
2, U.S government issuing more Debt - Gold Spike 2%
3, The Inflation in China - Gold Spike 2%
4, the Inflation in India (around 23 %) - Gold Spike 1%
5, Gold ETF's coming onboard across the world (especially in India and China) - 6%

The above issues fed into each other and caused the recent currency meltdown woes. Silver is still not in parity with Gold over many years because of its Higher liquidity and it's Reputation as an Industrial Metal rather than metal of Ornamental value.

Gold spike has been caused by Retirement funds, Investors buying the Gold ETF's when they rushed out stock meltdown. The Inverse correlation of Stock market and Gold ETF does not apply here because whoemever bought Gold ETF's did not dump it until now and they also kept on buying Stocks.. But there is only so much Gold in the world and most of it is in the private Hands (especially in India, China and Africa).

Lets treat Gold as investment instrument or a Company stock,rather than a metal with an Glittering value..Here is where its headed in next few months when investors or shunning hedge instruments and heading 100% to World Equity stocks..

You can see that Gold cracked through the crucial 50 day average recently and heading towards the 200 day average of 1250$/ounce ...If technicals are correct you might see a bounce on 1250$ and consolidation..if it fails there and you see more positive economic indicators like Job numbers and Consumer spending we will the Gold has nowhere to go except down ..The next stop would be around 1150$... if it touches that prices i would be buyer ...Will you?

GE Shares before and after Earnings

2011-01-20T17:29:00.003-05:00

CNBC Stock Blog — GE Shares Get Bullish Bets Ahead of Earnings — CNBC.com Market News — General Electric - CNBC

Here is the Analysis on GE stock before the Results for tomorrow

The GE has run atleast 50 % from its recent lows in 2010. Berkshire increasing investments might have contributed to this sudden rise. GE has always been the Yardstick of US and also World Economy. The Multi conglomerate has presence in every sector from Turbines to papers , from America's to China and Asia to South pacific, its presence is known to influence and be influenced by every change in Global commerce. Its a very Good long term investment considering it is one of the strongest DOW Jones component to date and contributed to at least 2 % rise in the Total Index return in the recent bull Run..

lets look at the recent run from Past Quarter in October 2010 to Jan 2011, The stock has run atleast 20% from its lows of October

Stock Price GE 3 months

10/19/2010 – 01/20/2011

Zoom: 1D 5D 1M 3M YTD 1Y 3Y 5Y 10Y Max

XNYS:GE:+2.36|14.69%

Lets look at the Quarterly Revenue beat versus forecast They beat the consensus estimate of 0.27c with 0.29c, Looking the Forward Estimates the Stock is still trading at healthy 16PE multiple compared to industry average of 19. This gives the stock another 10 % room to run if they beat the estimates again.

Current Valuation GE

	GE	Industry Avg	S&P 500	GE 5Y Avg*
Data as of 01/20/2011, *Price/Cash Flow uses 3-year average.

Price/Earnings	16.1	19.6	15.5	15.5

Price/Book	1.7	2.5	2.2	—

Price/Sales	1.3	1.2	1.3	—

Price/Cash Flow	5.3	8.4	9.3	—

Dividend Yield %	2.5	2.0	2.2	—

Forward Valuation GE

	GE	Industry Avg	S&P 500
Data as of 01/20/2011.

Forward Price/Earnings	14.2	—	13.6

PEG Ratio	1.3	—	—

PEG Payback (Yrs)	8.0	—	—

If GE beats the estimate we are looking at a Gain of 10% (+/- 2% error)

If they don't beat the estimates we can see the stock price dropping as follows

2c down versus consensus - Stock price $16

1c Down versus consensus - Stock price $17

If they equal the estimates and provides a better guidance for next quarter , we can see the Stock price around $19.5

Good luck Investing

Today's Winner ---- FX Energy, Inc. (NASDAQ)‎

2011-01-20T00:28:00.000-05:00

FXEN
Sector : oil and Gas exploration
Competitors:
Transocean (RIG)
Brief History of The company
FX Energy is an independent oil and gas company focused on the exploration and production of oil, primarily in Poland and the United States. Its operations are primarily focused on the Fences region of western Poland, which had previously been developed and produced by the Polish Oil and Gas Company. The company believes the area holds oil and gas reserves that have not yet been discovered by previous research techniques. FX Energy is headquartered in Salt Lake City, Utah.
The Company's financial strength can be measured by Free cash flow or in layman terms how fast the company burns through Cash
Here is the indicator and you can notice that the company's stock performance improved after the Cashflow turned positive last eyar

Cash Flow Ratios	2000-12	2001-12	2002-12	2003-12	2004-12	2005-12	2006-12	2007-12	2008-12	2009-12	TTM

Operating Cash Flow Growth % YOY	—	—	—	—	—	—	—	—	—	—	—

Free Cash Flow Growth % YOY	—	—	—	—	—	—	—	—	—	—	—

Cap Ex as a % of Sales	204.70	26.22	10.76	46.58	232.05	57.45	95.80	47.14	128.27	58.98	17.23

Free Cash Flow/Sales %	-364.29	-111.40	-89.59	-285.49	-386.71	-227.66	-160.24	-55.92	-208.13	-98.73	18.54

Free Cash Flow/Net Income	1.28	0.51	0.41	2.27	1.17	1.18	0.96	0.86	0.68	27.32	1.09

The Project Stock price based on chart analysis is as follows

Performance compared with competitors

Total Return % (01/14/2011)	1-Day	1-Week	1-Month	3-Month	YTD	1-Year	3-Year	5-Year	10-Year	15-Year
FXEN	0.92	15.75	24.60	57.79	25.20	141.38	15.48	6.50	3.66	7.11
Oil & Gas Drilling	1.45	4.35	8.09	22.76	6.64	-7.81	-15.65	-7.07	0.87	7.84
S&P 500 TR	0.74	1.72	4.30	10.73	2.90	14.89	-0.76	2.23	1.71	7.13
+/- Oil & Gas Drilling	-0.54	11.39	16.50	35.03	18.57	149.19	31.13	13.57	2.79	-0.73
+/- S&P 500 TR	0.18	14.02	20.29	47.06	22.30	126.49	16.24	4.27	1.95	-0.02

My Target price is $11 Dec 2011....

See you there
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Today's Winner ---- FX Energy, Inc. (NASDAQ)‎

Today's winner : NFLX !!!

About the Company:
Netflix, Inc. provides online movie rental subscription services in the United States. The company offers its subscribers access to a library of movie, television, and other filmed entertainment titles on digital versatile disc (DVD).

Analysis