Facebook is still a buy

Obama furious over platinum coin -- http://www.newyorker.com/online/blogs/borowitzreport/2013/01/obama-furious-he-wasted-week-posing-for-coin.html?

JP Morgan upgrades hpq to neutral from underperform. Takes price target to $21, up some 30%. This analyst is so bad at timing stocks, the stock is due to ROCKET. He upgraded the HDD biz to market perform a couple of years ago while it tripled. The company did seem to have a good december quarter in the pc market share department as the company held units flat in a declining industry. With a slew of new products and improving balance sheet, the stock should head much higher if they make street numbers.

Speaking of hpq balance sheet, i want to bestow my "A Whole Lotta Bunk" award on Cory Johnson from Bloomberg. Parroting the lies from short sellers, Mr Johnson expressed much concern about hpq's leverage and ability to refinance debt in a Bloomberg piece last week. What a clueless moron! HPQ has only $8 billion in net debt at the operating company, or less than 1 years operating profit. They do have $10 billion plus in debt in a financing arm, but that is secured by assets. $8 billion in debt on a $100+billion business is small potatoes. Also, much of their debt trades for a premium in the bond market, and yields 2-3%. If the market had concerns about refinancing ability, it would price in much higher yields. So before you stupidly opine concerns about Hewlett's ability to refi debt, buy a vowel and get a clue Mr Johnson. Or, at least do some research and get some perspective instead of mouthing some b.s. short dishonesty. Mr Johnson, you get my "A Whole..." award for Jan 2013.

long hpq

@Bob: HP needs to push more into 3-D printing business. http://www.youtube.com/watch?v=WxV9rrkvKTA

no they dont, they need to make it much more convenient. some king of nfc printing from any device to hpq color printers would be a home run. imagine all the cell phone pics printed if all u did was stand near any printer and hit print.

@robert: At what level is AAPL stupid cheap? 400? 300? 200?

ahh, the aapl conundrum. what fb giveth the mo-mo, aapl taketh away. the issue of aapl resides completely in the sustainability of its after tax profit margin. aapl is cheap on valuation multiples because of a 27% after tax profit margin, something unheard of in consumer electronics. so the 10 p/e is 270% price/sales ratio with a 27% net margin. most CE businesses make 5%-10% or lower margins in the long run. with android taking 80% global smart phone share, investors perceive that the aapl story faces new challenges for growth and profitability. clearly aapl has lost its innovation edge to android based products. aapl is dirt cheap in here if they keep 27% margins and double digit revenue growth. if they have 15% margins the stock is goind down a lot more. alan, you tell me what aapl income statement looks like in calendar 2015, especially the net margin, and i can tell you its fair valuation. at $400 ish, it might mike sense to bottom fish as i have written here last year.

as for the other conundrum, FB, i am flat the stock. i dont see the growth rates as justifying the current valuation, but the company may surprise me with a growth spurt. i think they neeed 40-50% top line growth to get the stock to the ipo price. if they can deliver that, the bulls will be rewarded. with 15-20% revenue growth, the shares will fade.

nope, but i did say i was circling a few new names, and one of them popped 20% today in retail. and i missed it. annoyed at myself now.

jay, yes cash is big support for stock, but i dont know how they use it to create stock value in short run. maybe they could pull a seagate and announce a 40% payout ratio! that would get the stock rocking!

cash is usually downside protection.

jay, i am assuming profit margins must come down in short run, and not insignificantly over 3-5 years. for no other reason than 25% never done before in aapl industry. ever.

if one believes margins flat forever, stock a screaming buy here.

Bob, and AAPL compare with AMZN , (P/E); and tell me What do you choose ...often there is no logic in the market is only a matter of time

jay, if you are correct its bet the farm long idea. myself, i believe in mean reversion. esp if the new samsung phone is as cool as the buzz suggests.

aapl has a lot of fast money in it. if they disappoint again, the stock could get stupidly oversold as mo-mo becomes no-mo.

but jay, aapl is still a great company.

BOB must have been FNP

talked to a store mgr their over Christmas as i was Buying something for my daughter she said all good...forgot to grab some shares...

any other cheap specialty retail besides crox you looking at? TIA

@robert: Thanks for all the helpful info. I understand what you mean about eventual drop in gross margins. I have a few thoughts 1. It's interesting how this dramatic concern in a drop in gross margins has occurred in the last three months, where was the concern before then? 2. AAPL isn't a strict hardware company. To get the Apple software you must buy the Apple hardware. MSFT profit margin is just under 22%. APPL may have trouble keeping the profit margin at 27%, but I don't see it going to 10%. 3. There is still a lot of PC to Mac left to go. My son just bought his first Mac, my wife is considering going and if she does I'll probably have to as well. I can easily buy off on a 25% net margin for AAPL in 2015, so I guess AAPL is stupid cheap for me. 4. My favorite part of your answer is that it was working off of $400, not $200.

@jay: Thanks for your help in the AAPL discussion as well.

retailer was expr

aapl a good stock if 25% margins hold

what was big FB deal?

@robert: I think AAPL 25% margins can hold for 3 years without much problem. What they will be like in 10 years is not nearly as certain.

LOL Bob! Like playing Jeopardy with you some times.

AAPL growth -- http://www.cnn.com/2013/01/15/opinion/chiang-apple-china/index.html rather supports Jay's observations

At least Bob (as we would expect) has a quantitative framework for his analysis. Most of what I am seeing is opinion about products unrelated to any actual sales. Or even worse, the chart guys saying that the fundamentals don't matter. Different perspective.

posted this am regarding AAPL sales Jeff: http://www.tech-thoughts.net/2012/09/iphone-sales-estimates-by-region.html#.UPS-e6FdclZ

@Bob: What's the update with CROX?

@Scott: I'm buying/adding with you. Thanks.

crox filed 8k, said it hit revenue outlook, but retail environment was challenging. probably means a slight eps miss. i had been prepared for a sloppy quarter, and still have shares to buy. hoping for a round trip to $13ish so i can fill out position. stock very cheap, balance sheet excellent, good shot at 10%+revenue growth. thats hard to find in market todat, even if eps ests a few pennies lower.

II investor sentiment shows another jump in bulls and fade in bears, as expected. differential now 30% points. thats flashing yellow. i would prefer a 40% clear top signal to sell but 30 % will temper any new buying. its getting harder to find new buys that fit formula, and that is a negative sign in itself. i am not saying we cant continue to grind higher in good season, but the easy part of the move seems behind us.

@Bob: why such a high level of short interests in GMCR? What is their thesis for shorting it?

shorts think increasing competition kills business model. k-cup patent expirations generate generic competition while starbucks and others have new brewers to feed. feeling is earnings power about to get clobbered.

tom demark made positive comments re aapl on bubblevision last nite. however, he did not talk about market. last i heard he had a mini-surge to 1490ish then a 5-6% correction. anyone else see his forecasts recently?

@Bob: this may be it: http://www.bloomberg.com/video/tom-demark-sell-around-the-world-KdBPeJbXQXqvlShFYHL7Jw.html

i saw that. unfortunately he did comment on general market last nite. but one would assume his position is the same.

housing is recovering. i get it. what i dont get are the stock valautions of homies and related building supply cos. take eagle materials for example. it trades for $61 and has a $2ish est for fy 2014. maybe this deep cyclical has $3-$3.50 in normalized eps so its 15-20x's normalized profits. no secular revenue growth of note. deep cyclical in mid cycle recovery. it doesnt make sense to me. i am flat the stock and the entire sector, but i am looking to short some of these stupid valuations building material/home builder stocks this spring.

interesting market. stocks rising on good macro, but companies reporting earnings are not getting any positive action. market feels like it can grind a bit higher, but mediocre eps/outlooks may cap the rally around 1500 ish. long book doing well but too much cash also. in here i look for stocks with catchupside, laggards that can spike to more normal valuations on good earnings reports. only problem is higher probability of fundamental failure as laggards telegraph bad news.

while i am not harvesting profits yet, this move feels long in the tooth. its sloppy, no growth E vs QE. still chomping at the bit to short xhb.

Bob, whats your favorite laggard stock?

it would have to be a computer stock. lets see if the intel reports shakes up the pc related stocks and puts a damper on the sector.

after that, it would have to be an 8 p/e tire and wheel company. u.s. ag looking good. with rally in metals, mining tires looking good also now. wasnt so when china imploding. a 10-12 p/e gets me a 30-50% catchup move.

the tech conglomerate i am in print with a price target about 50% higher than todays price.

but in general, i see many more holds or sells than buys, even in my 50 stock deep value long fund i have here where i hang out. these moves feel good, but they are removing future upside from equities. and that makes me feel less good.

Bob, do you have any idea what the er will look like for TWI (up on the apr 20.00 calls 132+%, thanks to you!)

the tire/wheel co is notorious for surprises and i have no sense of the quarter. i would hope that the company makes its numbers, but there are a lot of moving parts there so its hard to say.

@Bob: do you still like ANF and DECK? At what level can we put in a starter position? Same question for GMCR. Thanks.

bank stocks stinky after earnings releases. tech just starting. energy might be ok. we will see. majority of companies still to release. we have best of both worlds now. good macro off of income/spending pull forward but no micro based on slowdown impact from tax hikes and spending cuts. i could see once again a spring top on trailing good news that turns into a selling opportunity on deteriorating macro in q1 and 2.

@robert: Can you describe the tech conglomerate in a little more detail? Does it sell anything besides PCs and Printers? Was it included your top 5 for this year?

yes a tech conglomerate was included in the top 5 list. as was my price target.

i am not buying any more retail related stocks in here. i think most stocks are fairly priced or even expensive. after big moves in retail or any sector or after moves to mid teen p/e ratios i am a harvestor of profits.

decent numbers from intel. earnings beat, subdued outlook, right where we want it. last year intel guided aggressively and pooched. this year, the company has set more modest goals for 2013. i expect a slow atart to 13 in eps, but then a big finish as wintel tablets/hybrids/smart phones storm the market. stock is very cheap, but wall street wants to wait for proof of successful transition. i think the stock has a good year as new technology comes to market successfully.

long intel

@Bob: I'm buying INTC after hours. I like your reasoning on its growth later in the year.

@robert: I'll be looking into your top 5 pick. Even now, your predicting a 50% total return for the year between appreciation and dividend. Thanks

@robert: FTR, the minimum on that stock was just under 15 in 2013. It closed 2012 at 14.25, but there was a big gap open on 1/2, which was common since the fiscal cliff had been resolved.

i dont get the dump on intel. the company is handling a tech recession and transition very well, with record high gross margins for a down cycle. they are making $2 run rate with a good shot at decent revenue growth on 2h 2013. they dominate the semi industry w manufacturing process. and they return billions to shareholders every year. compare this to texas instruments which cant compare fundamentally, yet trades for a huge premium to intc on ev/sales or ev/ebitda. sometimes people just do stupid stuff. i expect a good year for intc, however it will be, mostl likely, back end loaded.

Robert, would you be able to give some er advice re your 5 picks? (You could perhaps refer to them by number.) Thanks!

@Bob: Panic selling on INTC. I'm adding slowly.

@Bob: I have a feeling INTC will get more business from AAPL as AAPL wants to shift its chip production away from Samsung.

your welcome...lol

here's a snip from a tech service i take re INTC and AAPL: "Partnered with INTC, AAPL would quickly gain at least a one fabrication node advantage over not only Samsung, but every other ARMH core smartphone applications processor in the world. With INTC, AAPL would clearly be the follower or junior partner versus the leader, or at least an equal partner, which would most likely be the case with TSM."

@Kim: What does that actually mean? And how likely that would happen? Any inside knowledge?

it was part of the answer as to how involved AAPL may get with TSM in light of manufacturing issues its rumored to have with Samsung

if intel did leading edge foundry biz that would sound good, but never amount to any real profits, imho. they need to out fabricate the arm contingent wiht superior manufacturing ability. they are investing heavily to get superior products into phones and tablets. and maintain dominance in pc. investors betting against wintel survival. maybe so, but intel may succeed or adapt and continue to thrive. but if they dont, and make shittie margins like txn, the stock is 2x's revs vs 3x's for txn.

sorry, my friends, i will not comment regularly on my top 5 picks. commentrat freezes out trading. so i cannot buy intel for the next week,

msft interest in dell deal very good for my top 5 computer pick. i am also hearing good things from the kids about laptops and notebooks with beats audio becoming popular. very interesting.

"msft interest in dell deal very good for my top 5 computer pick. " Bob, could you explain why? Thanks!

scott, that comes fro my son, a tech hardware geek and serious gamer. just purchased $4k win gaming computer(tho not hpq). as well as a friends son, a high school football playing, african american student who just requested and received an hpq laptop for xmas. both tell me that hpq picking up mindshare with new products. maybe your universe is behind the curve??

jay, msft would invest a billion or to to get a seat at mgt table. it helps the deal along nicely. any dell lbo helps remaining pc makers as co is highly levered and must play nice in biz, also has less funds for innovation.

we will see how that stock performs this year guys. i put my money where my mouth is. i am in print forecasting a 75% price appreciation move. it depends on macro and micro, but is possible. a decent economy, and some reasonable execution from the jokers at the company and i have a double in the stock. if you doubt the story, short the shares.

jay, ask your kids about the headset/headphone market. i am looking at a single digit stock of leading headset maker. ask them if they have any brands they like.

sorry that was for scott

also would nwelcome any other opinions on the consumer pc market or the headset business.

my kids always want Beats

wasnt sure

jay, beats is hot these days but very expensive...what dsid she think of the competitor?

thats an interesting story if they dont crash and burn the numbers. i have gotten mixed reviews on the products so far

scott, what say ye?

the stock i am researching from buy screen is risky, one product co in biz subject to fads. so please note that. if they make the numbers its stupid cheap and will spike up. buzz is that they miss so i am torn, looking for customer feed back. anyone out there can help with Facebook crowd source. i did and got some good feedback, but i need more.

@robert: From the University of Illinois -- my son says that Skulcandy is his favorite -- noise cancellation, unobtrusive. He also says that their displays are usually the largest and most prominent in stores. I only have one kid, so that is the best I can do

thank you my friend

yes, my kids may WANT Beats, but they sure cant afford Beats, so SKUL is the next choice for them

so this stock is down 65% from peak with no debt, and trades for 6x's eps. feedback is that they r good value products with solid performance, but beats is the prestige brand, and everyone ewants them. still budgets force lots of buyers into mid price range and they still ahve goo share there. as i wrote, interesting speculation.

excuse the typos, multitaksing

lol