Century Link (NYSE: CTL), can this stock make you richer?

Since last few weeks this stock is one of the most talked stock in news, specially after Century Link acquired Level 3. If we see the future potential of combined company, it is the third largest in telecom sector now. Level 3 dominates in fiber optics connectivity market. Stock is trading much less than (~ $13.9) its original value (P/B ~ 0.58). Company is consistently paying dividends with yield aprox 15.3 making it one of the highest yield in the sector. Stock is trading almost 50% down its value in one year. It makes it interesting risky bet. Couple of points to note: this company is build on a strategy of acquiring other companies, which it is doing since many many years and successfully integrating bought out companies with parent companies, second, company is rewarding its shareholders with handsome dividends consistently, third it is a global company with presence in more than 60 countries serving thousands of customers worldwide, fourth company has enough assets to cover its short term loan requirements. If we consider many other points other than financial ratios, fundamental analysis, qualitative factors indicate that this is a good stock to own now and there are many good reasons to believe that in coming future (next 1-2 years) this stock may double up.

What is your opinion about buying/holding this stock?

2,495 total views, 5 views today

Brookfield Asset Management reports Q2 profits..

On Friday 7th August, 2015, the Toronto, Canada based company Brookfield Asset Management (NYSE: BAM, TSX: BAM.A, Euronext: BAMA) reported $1.2 billion net income, or 0.62 per share. Net income for the six months increased by 10% to $2.6 billion and on a last twelve months (“LTM”) basis, increased by 15% to $5.4 billion.

Funds from operations (“FFO”) for Brookfield shareholders during the quarter totalled $520 million, or $0.50 per share.

Fee bearing capital increased to approximately $100 billion at quarter end; net inflows totalled $15 billion over the last twelve months, including $5 billion in the current quarter. Fee related earnings grew by 44% to $127 million in the quarter, as fees were earned on a higher capital base with relatively small increases in related costs.

The Board declared a quarterly dividend of US$0.12 per share (representing US$0.48 per annum), payable on September 30, 2015 to shareholders of record as at the close of business on August 31, 2015.

Brookfield Asset Management Inc. is a global alternative asset manager with over $200 billion in assets under management. The company has more than a 100-year history of owning and operating assets with a focus on property, renewable energy, infrastructure and private equity. Brookfield offers a range of public and private investment products and services, and is co-listed on the New York, Toronto and Euronext stock exchanges under the symbol BAM, BAM.A and BAMA, respectively. For more information, please visit our website at www.brookfield.com.

Sources: nasdaq, www.brookfield.com

 

9,714 total views, no views today

Amgen Inc. reported positive quarterly results.

Amgen Inc. (NASDAW: AMGN) reported positive Q2 results on June 30, 2015. Total revenue increased by 4% to $5.4 billion and EPS by 8% to 2.57.

The company generated $2.7 billion of free cash flow as compared to $2.1 billion for the same period in 2014.

Adjusted net income grew by aprox. 8% to $1.9 billion as compared to $1.8 billion for same Q2 last year.

Second Quarter 2015 GAAP EPS Increased 7 Percent to $2.15. 2015 Total Revenues and Adjusted EPS Guidance Increased to $21.1-$21.4 Billion and $9.55-$9.80, Respectively

 

Year-over-Year
$Millions, except EPS and percentages Q2 ’15 Q2 ’14 YOY Δ
Total Revenues $ 5,370 $ 5,180 4%
Adjusted Operating Income $ 2,551 $ 2,319 10%
Adjusted Net Income $ 1,977 $ 1,823 8%
Adjusted EPS $   2.57 $   2.37 8%
GAAP Operating Income $ 2,076 $ 1,902 9%
GAAP Net Income $ 1,653 $ 1,547 7%
GAAP EPS $   2.15 $   2.01 7%

 

“Focused execution with our growth products drove record revenues in the second quarter, and expense discipline further leveraged earnings and our ability to invest in new and forthcoming launches,” said Robert A. Bradway, chairman and chief executive officer.

AMGEN Press release

Amgen Inc. (Amgen) is a biotechnology company. The Company is engaged in discovering, developing, manufacturing and delivering human therapeutics.

sources: nasdaq, www.amgen.com

 

 

4,908 total views, 2 views today

Waters Corporation posted positive quarterly results.

Waters corporation (NYSE: WAT) posted increased EPS of 1.27 for Q2 2015 compared to 1.13 for the same quarter last year. Non-GAAP basis EPS reported 8% increase to 1.32 as compared to 1.22 for same quarter last year.

Sales grow by 3% to $495 million as compared to $482 million in Q2 2014. Due to foreign currency fluctations sales numbers were reduced by 7%.

Commenting on the quarter, Douglas A. Berthiaume, Chairman, President, and Chief Executive Officer, said, “Our strong performance in the second quarter and first half of 2015 demonstrates the power of our technology-focused strategy and commitment to customer support. It also showcases our ability to continuously bring new innovations into the market while maintaining strong margins and strong free cash flow.”

 

Waters Corporation, founded in 1958 by James L. Waters and headquartered in Milford, Massachusetts, U.S.A., is the world’s leading supplier of ultra performance liquid chromatography, high performance liquid chromatography, mass spectrometry, thermal analysis and rheology instrumentation and consumables. Around the world, Waters products are used by pharmaceutical, biotechnology, industrial, university, and government research & development, quality assurance, and environmental testing laboratories. For these customers, we provide technology that gives scientists fundamental data on the composition of natural products and synthetic chemical mixtures and the physical properties of materials.

 

Sources: nasdaq, waters.com – corporate website.

 

 

 

3,935 total views, 2 views today

Yelp poor quarterly reports plunged its stock to yearly lowest…

On Tuesday, July 28, 2015 Yelp Inc. (Nasdaq: YELP) reported negative EPS of (0.02) with a quarterly loss of $1.3 million. The company declared profit of $2.3 million with EPS of 0.09 last year for same quarter.

YELP stock touched 53 weeks low on Wednesday morning trading session.

Company reported roughly 3% declination in unique visitors as compared to same quarter last year. Total revenue reported was $133 million as compared to $88.8 million for same quarter last year.

sources: nasdaq, yelp.com/(investors relations)

 

 

 

4,365 total views, 6 views today

Electronics for Imaging ( EFI ) posts record Q2 earnings…

Electronics for Imaging (NASDAQ: EFII), a provider of customer focused digital printing solutions, posted record earnings for quarter ended on July 20, 2015.

The company reported second quarter record revenue of $207 million up by 5% compared to previous quarter with 0.32 EPS which is 0.01 higher than previous quarter.

Non-GAAP net income was $22.9 million and GAAP net income was $7.7 million.

For six months ended in June 2015, company reported 4% year-over-year record revenue of $397.3 million as compared to $381 million for the same time in 2014.

Cash flow from operating activities was reported to be $25 million for the quarter.

46% revenu came from inkjet business, 16% from software and 38% comes from Fiery business segments. America region contributed 54% towards totoal revenue, 32% came from EMEA, and 14% came from APAC.

Company reported a loss of (0.03) NON-GAAP EPS due to currency fluctations.

sources:
nasdaq, efi.com

4,072 total views, no views today

NuStar Energy Q2 Earnings fall below the analyst expectations

On July 24, NuStar Energy, a St. Antonio based company reported weaker earnings of $570.5 million below the last year earnings of $749.8 million.

The company reported EPS 0.54 which is 4 cents lower than last year’s EPS of 0.58.

 

 

Sources: Nasdaq.

1,430 total views, 2 views today

Recommendations – June 2016

EQUITIES

  1. TSX: CM (CIBC, Canadian Imperial Bank of Commerce)
  2. NASDAQ: AAPL (Apple Inc.)
  3. NASDAQ: ATVI (Activision Blizzard Inc.)
  4. NYSE: AXP (American Express)
  5. NYSE: MA (Master Card Inc.)
  6. NASDAQ: SNPS (Synopsys)
  7. TSX: VSN (Veresen Inc.)
  8. HKG: 0215 (Hutchison Telecommunications HK Hld Ltd.)
  9. HKG:0043 (C. P. Pokphand Co. Ltd.) – BUY/HOLD
  10. HKG:1288 (Agricultural Bank of China Ltd.)

FOREX

  1. CHF (Swiss Frank) – Buy
  2. USD (US Dollar) – Buy
  3. EURO (Euro) – Buy

4,380 total views, 2 views today

What is happening with Oi telecom (NYSE: OIBR)

There is so much going on with this stock and recently this company is in picture with very high volume and too much volatility concerned with its future. We are actively watching this stock and recent news related to this company since many months now. Here are some thoughts:

First of all we need to understand the telecom market in Brazil. Oi is the third largest telecom company in Brazil and south America. Oi was formed when government decided to merge state owned smaller telecom companies during privatization of Brazil telecommunications system. Oi brands include: Oi Fixo (fixed telephone landline services), Oi Movil (mobile services), Oi Velox (ADSL 3G), Oi Internet (ISP), Oi Wi-Fi, Oi TV, Oi VOIP. Oi acquired Portugal telecom in 2013 and as it turn out that it was not a very good deal financially. Not every company is successful in mergers and acquisitions specially when the sold out company does not clearly discloses it’s liabilities. Similar things happened with this merger. Portugal telecom lost in billions due to its bad bet to acquire another company. This fact was it came in news was hidden from Oi officers and they did not take this into account when making offer. The result is company had to suffer financially. Second, there were political disturbances in Brazil which increased pain for the company. As it happens people take panic and start selling. The end result was that stock fall down beyond expectations.

However, we believe that Oi is survivor. As it is indicated by company management in recent months that they are aggressively looking to gain more market share and attempting to acquire other companies. For some reason their deal to acquire assets of Italian telecom company did not go well. That’s all right. Some other opportunity will come along. It does not mean that people start taking panic and loose trust in company. As we know that company is taking all necessary steps including reorganization to make sure that they want to be on profitable track again. We believe in Oi! Its just time and very soon we hope that stock will hit back to its peaks.

Now, lets see what consumers say. We have done some research and found that their customer service is excellent which is a good factor to attract more and more consumers and they also have very competitive rates for their services. The Brazilian and Portuguese operations continued to add total subscribers with approximate 75 million in Brazil and 13.1 million in Portugal till to date of writing. There may be some competition from GVT now specially when it acquired assets of Italian company Telefonica. However this is not to be take too much to worry as Oi has deeper market penetration and user support. It will take more time to get GVT complete. The only worry for Oi is its liabilities. Oi management is doing all their best to Oi’s debt. Due to bad financial deal of PT telecom, Oi seem to be struggling for now in terms of finances. WE also have to look another factor that there may be some possibility that other telecom company may buy PT assets and repay back PT’s debt. If that happens then who knows within days Oi stock bumps up to its highest. Think about it!

Now let’s see at financials of the company. Oi’s current market cap is about 5B USD, EBTID margin 27.94, ROE 11.9. There can be upward trend found in total revenue in last 3 years. The profit margin is on declining trend. That is because of company is buying other companies and some bad debts. Net income growth is last 3 years is about 14% and on upward trend. Total equity is almost unchanged since last three years. Since there are long term debts which can be a risk. Company’s debt to asset ratio is about 50 percent which is a sign of worry. However as we said earlier some bad decision company had taken recently which is penalizing balance sheet. Nevertheless Pt deal was not that bad either. It added more customers to company’s existing customers base. And sooner or later company will benefit financially because of more subscribers. Company’s cash flow is in good conditions for next 3 years and by that time it will accumulate more revenue to pay back its long term debts.

oibr-chart-balancesheet oibr-chart-cashflow oibr-chart-income

(charts courtesy google finance)

In Brazil, Oi now has more that 18 million lines in service making it the largest fixed line provider in Brazil. Its wireless operation, Oi movil has more than 50 million subscriber and continues adding more customers and Oi is the fourth largest cellular provider with 18% market share.

A final note, since company has a very large base, any company who wants to strengthen their presence in Brazil and South America with money on hand may be very much interested in buying out Oi telecom if Oi is not able to pay back it’s liabilities, for example Amêrica Môvil.

We recommend to buy this stock (NYSE: OIBR) and hold it!!

Hope you have enjoyed our two cents. Do not forget to leave your comments 🙂

5,727 total views, no views today

American Apparel Inc. (NYSEMKT: APP) stock future outlook?

Since last few weeks American Apparel Inc. (NYSEMKT: APP) is in news and one can see average trading volume is in the range of ~5 million!!

There is a lot going on behind the scene. One can see  -20% to +20 fluctuations in stock price just because of some market news. Last week board of APP fired its founder and CEO. There is certainly much going on in this company. Let’s see what it means from stock perspective.

In Dec 2007, APP stock was at its peak trading at ~ US $15. Since Jan 2008, it started declining and never got a chance to cross even $5 mark. APP went into loss and to keep running the company company had to take debt. Some long term debts are going to mature very soon and in fact one lender Lion’s capital gave a kind of hard notice to repay back. Due to its brand and good will, APP attracted some foreign investors who trusted in APP brand and invested their capital in the company. Personally I think, APP brand is unique and I find APP has a quality as compared to its competitors. I like the designer cloths by APP and most importantly APP supports “no sweat shop”. Ethically APP is doing right. What is the point to support the system where workers are exploited whether it is in America or other pat of the world. Just think about it? Just wear the shoe of a worker who even does not get 50 cents a day? Is it ethical?

However many clothing companies which include very large corporations do not think this way. I think they are promoting the system where wealthy individuals exploit cheap labor in Asian countries. Also, one can see the quality of cloths manufactured in those sweat shops. These cloths do not have any quality!  these cloths are like use and throw. On one wash, their color fades away, cloths looks too dirty and old that its hard to wear.

But lets focus our attention to future outlook of APP. There had been some mistakes done by APP’s ex-CEO in past which lead company into nearly bankruptcy territoriality. However its nothing to worry about it now. We believe that new management will work on to strengthen APP’s balance sheet. In last quarter, APP made significant profit with a revenue of aprox. 139 million and sales growth of ~2.5%. We think this trend will keep going forward for APP. APP has significant high beta but need to consider that in the hands of new management there are better chance that APP financial condition will improve.

APP ex-CEO has a very eye for design but he may not be good in terms of finances. But new management will focus on financial management. We think APP stock is a long term bet. There are short term bullish kind of behavior of APP stock but one needs to be patient enough and have faith in APP brand.

(P.S. image courtesy from yahoo finance)

Let’s know what do you think. Your comments are most welcome!

Have a cheerful day!

-hr

3,917 total views, 4 views today

Apple stock split?

Today afternoon when I checked my portfolio, I was a bit shocked to see Apple Inc. (NASDAQ: AAPL) trading around ~ US$97 which was about ~ US$700 last week. Then I realized that its stock split has taken place which was announced a few months earlier. Apple’s stock went for 7-for-1 stock split thus creating more shares to offer to investors. In this split each 1 share holder will be awarded 6 more shares. Simultaneously the price of each stock will be divided by 7. To keep math simple, if you have 100 share worth ~US$70000 on friday, you will have 700 shares worth ~US$100. Your total value of holdings will be same and you will have more number of shares at lower price.

This is after 9 years when Apple’s stock has split. It happened earlier on three occasions, on a 2-for-1 basis in 1987, 2000, and 2005. Apple’s driving officers found telling that Apple wants to reach to more people and within their range. Lower the price, it uplifts psychological barrier in the mind of common investors who think that now its cheap to buy. This is purely psychological syndrome, math remains same. One needs to be careful biasing their decisions based on such events.

We expect that there will be a bullish reaction in the market and more people might jump into buying without much thinking and analyzing fundamentals. Apple is a darling brand of millions of people around the world but it does not mean that darling brand is good enough to give good returns on investments. One needs to watch out.

In recent years, Apple is facing a lot of competitions from other brands which are offering almost similar kind of devices at lower cost. Apple if finding hard to keep innovations going at same pace. After all technology has its own limitations. You might have seen news that Apple is on hunt to find new companies to acquire and keep itself in the race of innovations. However in recent years, you may not see much add ons in Apple products for the price it sells. Here is the hitch!! What if market reacts a bit badly, Apple stock loose its value. It happened in past, Apple stock was trading at ~US$1000 and suddenly it went down and even touched US$360 mark in two years just because of a some huge funds pulled of their investments from Apple and market took a panic. People started selling their shares and overall result Apple stock hit lowest in last few years.

It might be that Apple management is thinking that similar thing might happen after their WWDC which recently concluded as there was not much attraction or planned innovations in coming future. Bringing price below US$100 breaks a psychological barrier in people’s mind and more and more people might attracted to consider Apple as viable investment options. Thus increasing the investors base. However we fee a bit of greediness in this decision. Apple management seem to becoming too greedy which may be harmful in long run. Apple guys watch it out! Greedy destroys big kingdoms!

Now let us look at fundamentals:

Apple stock has strong fundamentals with P/E of ~15.7, dividend yield of ~3% and beta of 0.93. It’s P/B ratio is about ~4.6 which is okay for a technology company. Long term debt to equity is about 14.1 which is not bad either. ROI for last 5 years is about 30%, which is pretty good. However need to watch out its growth prospects. The US$45.5 billion in revenue reported in last quarter is about 4% increase than the revenue reported in the same quarter last year. If we look at upcoming product line, we find that there is no new innovative products coming in next few months. For some reason, company’s business deteriorated rapidly most recently. Not to mention Samsung, Google, LG, HTC etc. are giving though fight to Apple. The company’s profit margin’s have been shrinking since last three quarters rapidly. This gives an alarm!! Something mess is cooking in the management.

Note that Apple is one of our favourite company, but being favourite is because of its products not because of its managements. So, its a question whether I like to put my money in a vehicle which is driven by poor management or rather invest somewhere else where management is efficient and honest enough!

Apple’s current market value is ~4% than its book value. The valuation seems attractive. Its price-to-sales ratio is about 3.17% which is slightly than computer hardware industry ~1.6%.  Company’s cash flow is well managed with US$137 billion cash on its books. Impressive!

Since the stock split happened today, it will have too much volatility in the market towards Apple stock. The investors who are seriously thinking to invest in Apple may wait for the tide to go over. After that there will be clear indication about who much water is beneath. We expect Apple may dip down in range to 60~70 before starts gaining upwards.

3,883 total views, 10 views today

AMD bouncing back?

AMD was struggling since few months and investors were skeptical about whether to invest in this company or not to invest. Since few months its stock was depressed. Since PC sales was declined in past months, AMD was not looking good. Howvever the scenario looks a bit different now and favours AMD.

AMD is a solid engineering company. AMD has a great technology and is a leader in gaming chipset market. Major gaming device manufacturing companies (Microsoft, Nintendo, Sony, Apple) are using AMD’s graphics chipset. Considering the future outlook of the gaming market and graphics chipset providers, AMD has direct competition with NVIDIA. However AMD’s graphics chipsets are more energy efficient than others which is a major factor (You would not want your device run out of battery in a gaming battle ;-)). There are many other factors why low power chips are preferred. One can go deep into engineering comparisons (e.g. device heating, reliability, life, performance etc.)

AMD is trading at $3.28 and we expect it to rise. The company has reported positive results in third quarter of 2013 beating the market expectations. The boosting sale of gaming consoles benefited AMD and the trend looks going forward. (http://www.bloomberg.com/news/2013-10-02/worldwide-video-game-console-sales-to-rise-in-2013-idc-projects.html). AMD reported its third quarter results with revenue increasing 26 percent quarter-over-quarter and 15 percent year-over-year. The company reported $48 million profit as compared to loss of $150 million a year earlier.

(snapshot taken on Nov 11, 2013 at 13.04 hrs (Eastern daylight time), courtesy: yahoo finance)

There are many other good reasons to invest in AMD. AMD is also a leader in server chipsets. The growth of cloud computing and big data centres will benefit AMD. AMD’s SeaMicro system is most energy efficient server in the market. AMD is continuing technology innovation in the areas of server, gaming chipsets which we expect is the right direction for the company to go for AMD.

AMD uses SOI technology (silicon-on-insulator) technology which offers significant advantages over bulk silicon technology which many other chip manufacturers uses: reduce parasitics, higher performance, lower power consumption, no latch-up (no extra circuity to prevent latchup, reduce area), increased density, low complexity process, reduced cross-talk, cold-sparing capability (higher system reliability). At nanoscale geometries (below 45nm) SOI technology offers great advantages over bulk silicon. As we see the future chipsets are coming at these nano-scale geometries, AMD has certainly an edge.

The sale of gaming consoles have given a boost to AMD. It has its processors in all major gaming consoles. Microsoft has highly customized its processors for their X-Box playstation. AMD’s Radeon brand processing units have always been favourite for gamers. AMD beats rival NVIDIA in gaming consoles.

We find from various sources that gaming revenue could cross $1B in 2014 which will turn out to be a clear win of those companies who are involved in the business. Since AMD is ahead of its competitors it will be a clear win if market projections are right. Nevertheless we suggest to buy AMD at the current price and expect it to rise up to ~10 in 4-5 months and at that time sell.

AMD’s accelerated Processing Units (APU) combine high performance processing cores (like many other competing mobile chipset vendors) enabling breakthroughs in visual computing, security, performance-per-watt and device form factor. AMD is clearly going to win in near future. AMD’s certainly has capabilities for a game changer.

We recommend to buy AMD at this current price $3.28 and hold it for few months. We expect that it will rise and be in range of ~ $10 in coming few months.

15,620 total views, no views today