Monday, April 30, 2007

SNIC (Sonic Solutions): Living Off the Cycle



You know, there are some stocks that are just worth holding onto long term and then there are some stocks that just don't go anywhere and man, this is one of them. I have never seen it go past 22. however, I have seen it hit $14 five times now. and at least 19 four times before this. So if you played your cards right within the last 3 years, you would have had youself a two-bagger by now. Not shabby for 3 years work.

High Growth stocks aren't the only way to get your baggers. Cyclical trading can be just as good.

This is yet another exercise in buying low and selling high but let's not run into this blindly. We'd be fools to think that it would hit 20+ again just because. So ya, it's the leader in digital media software for PC and ya, it has no debt and a solid cash base but the big thing for me is that it has excellent growth prospects in the next generation of media which is headlined by high definition DVDs (BluRay & HDDVD). The new media formats will spur a new round of software upgrades for Sonic and send it northwards. As always, we'll see.



Notes:
In Portfolio: In at $13 and will buy more as it goes down, if it goes down.
Duration: Start selling off at $18
Let's Go: Warriors, Let's Go! *clap* *clap*

Friday, April 27, 2007

AAPL (Apple Computers): Is It Too Late To Get In?

Golly this is a toughie, Apple just released monsterous earnings and golly, you have to ask yourself what to do in a situation like this. I mean, you have a stock that is pounding 100+ and the memory of it being a 50 dollar stock is still super fresh. If you held it since then, you'd have yourself a single bagger by now. I mean seriously... It's been a beast. Well, before I go on about whether you should get in or not, let's take a look at the lastest results:

"For the first three months of the year, the Cupertino-based company said Wednesday it earned $770 million, or 87 cents per share, up from $410 million, or 47 cents per share, in the year-ago period. Sales were $5.26 billion, up 21 percent from $4.36 billion last year. Analysts, on average, were looking for earnings of 64 cents per share on sales of $5.17 billion, according to a poll by Thomson Financial. Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter, representing a 36 percent growth in Macs and 24 percent growth in the music players. Sales from its market-leading iPods and other music-related products accounted for 44 percent of the quarter's total revenue."

So the biggest thing I see is not the profit, the record quarter or how analysts estimates were crushed. What I see is the iPod/iTunes Halo working it's magic to the other thing that Apple does: Computers. I know! ... they make computers? Why yes they do, expensive ass computers that come with really awesome software that allows you to do some pretty awesome stuff. And people are buying them because they now realize that PC's that come with nothing become just as expensive (if not more so) once you buy all the software. Let's face it, as a package, Macs are just superior products with mac only programs that work seamlessly between each other. It amazing when you see iPhoto work with Garage Band and iTunes.

Now onto the big question. Is it too late to get in? My answer is no. It definitely isn't. Apple is still just 2-3% of the market and it's not hard to see them with 10% of the computer market eventually. Apple is finally turning the corner when it comes to iPods making people think twice about getting a Mac instead of a PC.

Will I be getting in? That's a really good question. I think Apple's trek to 10% of the market will be a long but steady one. I think for any patient investor, it's a golden choice once the price settles down a little. Apple just keeps on hitting them out of the park and it's one of the few large CAPs that have Googlesque growth. But that's the thing, It's a large CAP with a high price of entry and it's hard to put money into this. The first thing we have to remind ourselves is that Apple isn't the only company out there with stellar potential and growth. Ya, we might have missed this train or got off too early (Sigh*** what I did) but hey, there is always another train coming right behind it. The second thing we should remember is that although Macs are great products, there are a lot of other machines out there that are very capable as well for much, much less. The third is that unfortunately for Apple, Macs aren't as sticky like iPod/iTunes. There isn't very much personal investment wise that is keeping you from moving to a PC. With iTunes, you need an iPod and after $250 dollars into buying music and movies, you really don't want to go anywhere else. Fortunately for PC users, your iPod will still work on a PC.

So ya, if you are patient, I think Apple will continue to grow as it has for the last 3 years. It's not Google but hey, who is? For me personally, I think I'm going to hold off and not feel sorry for myself for selling early. I see the market a lot more clearly now (without the emotional glasses) and what I see is a ton of opportunity, so long as we are willing to take a bigger risk (oh but there are bigger rewards) and have the insight to see the potential in things.



Notes:
In Portfolio: I already got off this train. Won't be getting back on. Large CAPs can be frustrating at times.
Random Thoughts: Cats aren't clean, they're covered in spit.
Move of the night: Kobe's Triple Pump against the Suns in Game 3 of the first round. Wow.

Wednesday, April 25, 2007

Friday, April 20, 2007

YHOO (Yahoo!): Question of the Day: 25 or 32?

Wow, that was a drop. The market is a total heart breaker sometimes. Let me be the first to tell you that it was a punch in the midsection to watch my nest egg at 32 be decimated 4 bucks the next morning. My stop automatically kicked in at 28 for a tiny gain... I <3 the market (Yes, I'm being sarcastic). There really was nothing I could have done about it. It opened at $28 and I can't always be around for after hours. Meh... Shit happens.

Now the reason I didn't write about this earlier is because I wanted to wait for Google to report earnings so that I could get a better understanding of the Ad Word landscape. Also, since I do not have the money nor the balls to invest into a $500 dollar stock, this will strictly be about the Y!

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So let's look at the two. Yahoo! fell 11.8% to $28.31 on volume nearly triple the stock's full-day average. Quarterly profit dropped 11% on higher operating costs, as the No. 1 operator of Web sites by traffic spent heavily to better compete against rival Google Inc. Net income for the first quarter fell 11% to $142 million, or 10 cents a share, from $159.9 million, or 11 cents, earned in the year-earlier period. Analysts had, on average, expected a profit of 11 cents a share, according to a Thomson Financial survey. Sales rose 7% to $1.67 billion on stronger demand for the company's online display advertisements and a surge in sales of text-only search ads late in quarter. OK, not too bad. A penny shy on inflated expectations that Yahoo!'s new ad word engine would come through early.

Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% of advertising revenues. In other words... Google ... Crushed... Yahoo!

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So here's my take on things. Yahoo! execs already told us to set our expectations with their new ad word platform, Panama, and told us not to expect anything to happen until Q3 of 2007. I think with any launch, it takes time to gain traction. On the buyer side, I think they need to see how well the new product performs and on Yahoo!'s side there will be a ton of adjustments made along the way. I think the turkey is still in the oven. So the big question is, will YHOO hit 25 first or rebound back to 32?

This is where Google steps in. I think the overwhelming mentality is that YHOO just can't compete. Just as investors were falling in love with the Big Purple again, Google reminds you why you settled down with it in the first place with yet another "I'm still the hot, sexy mama that locked down your candy ass" quarter. That combined with the usual weak Q2 and Q3 for internet companies will make me lean towards betting that the stock hits $25 (maybe lower) first.

And yes, for those of your who are wondering. If I had the 7 figure account, I would have definitely bought Google at $435.




Notes:
In Portfolio: Just got out... time to watch.
Investing Mindset: F-Large Caps... Go Smallies
NBA Playoff Hopes: I'm shouting "GO ROCKETS!" and I'm whispering "go lakers" ;)

Thursday, April 19, 2007

EBAY (eBay Inc): You Can Find It (Sadness) Here!

You know, only with large cap stocks, you can have a situation where a company totally overachieves and still gets penalized for it.

eBay posted a 52 percent jump in net profit on a 27 percent revenue rise, led by growth in its core auctions business and the rising prominence of international sales. On top of that, they also raised the top and bottom line for 2007 Guidance. Wow, that's impressive for a mature company. Really impressive.

Then the next day. The stock drops 10% from it's previous day after hour highs of $36+. I know... WTF. But that's the way the stock market works. It doesn't always make sense. And this is why smart traders can make money. So eBay going to go back up? Ya, probably. But you're going to have to be patient.

Today's fall came as a result of some report from yet another so-called expert. We've all seen them before. Worthless. I can't believe that people pay for insight like that. What it comes down to is numbers. And eBay came through... But then again... when has the stock market ever been about fundamentals.

So here's why I think you hold. eBay has just updated it's header which probably means they are probably going to improve the rest of the site. eBay is a horrid experience right now and they make a ton of money. It just goes to show that people would jump through any hoop to get what they want. Imagine if they finally got their act together and created a good experience?

Paypal is continuing to grow like crazy. Google's Gpay hasn't hurt it's sales at all. So will growth slow? Probably not, eCommerce is still growing and PayPal still has a tiny slice of the bigger commerce pie (both on and offline). Imagine what happens when they finally go offline into the stores. Watch out!

Skype is intruiging. It's growth is still amazing and it will interesting to see what eBay does with it. The latest updates to Skype Prime has been the integration of PayPal. Imagine what happens when they integrate into eBay. All of a sudden, customer service goes way up and trust and safety concerns go way down. It'll be interesting to see what happens.

So Hold... hold on tight. As for Large Caps in general. I think I will start investing more heavily into the smallies. At least I'll have hope and speculation on my side.



Notes:
In Portfolio: More than you know
Duration: I say it'll hit $60 again! Heck, maybe more!
Finally: Goodbye Sanjaya... I shall forget you

Friday, April 13, 2007

Holding Things Down

So I'm at a point where the portfolio is extremely diversified and in good position to grow. I think tinkering with what you have before it moves is a big mistake. For now, I'm going to sit on the portfolio for a bit until after earnings.

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Here's a current look at the current stock mix:

AMD (Advanced Micro Devices)- Still low. I think it goes a little lower or stays the course until they release their next gen technology.

ARNA (Arena Pharmasuticals)- It's slowly moving upwards

BBI (Block Buster Video)- I still believe that it will continue to gain on NetFlix. The CEO's leaving is not about the business. It's more about the relationship between him and the board.

CELL (Bright Point)- Interesting one... Has made a nice 12% but I want to see where it goes... It's still low.

COGT (Cogent)- Holding steady at 13.

EBAY (uh... eBay)- The header has just changed and it's a world better. Is it a sign of things to come..? You know what they say about business' that are changing their storefronts...

EGY (Vaalco)- Iran, Iraq, and every other major oil supplier is a hot topic now. EGY are looking for alternatives. Let's see how Africa turns up.

EXEL (Exelis)- Another Stock for hope. Does it blow up like NUVO did?

ISV (Insight Vision)- Don't look at me, This is a girlfriend pick. Can't let her have all the fun ;)

LOOP(LoopNet)- Near 52 week highs... Waiting for Q1 Earnings to see if it meets and exceeds.

MNST (Monster) - Unjustly pummeled. Nice Bounce in the last couple of days.

NUVO (Nuvelo) - Does it keep on going up? I already cashed out.

PANL (Universal Display) - I'm holding onto this one forever!

RRGB (Red Robin) - Think I'll have burgers tonight. Still 10 bucks away from my 50 mark.

SBUX (Starbucks)- Still a chance to get in?

USO (United Oil Fund)- God, this one has gone nowhere. I think I'm up like 1% on this one. Hahaha. I'm terribly interested to see how this stock does as summer progresses.

VLO (Valero)- Too late baby!

YHOO (Yahoo!)- Let's see how Q1 has fared for the Y!

Monday, April 9, 2007

NUVO (Nuvelo): Placing Bets On Hope

I've had a lot of trouble writing about this stock. Believe it or not, this humble penny stock used to rock $378.75 (February 18, 2000).

So today, this bad boy exploded for 50% during the day and another 15% in after hours trading and I'm sorry that I couldn't write about this sooner but I just didn't have any major insights like I do with some other stocks like ARNA or GM. So I apologize however I just wanted to share my notes on this bad boy while it's top of mind.

HOW IT GOT HERE:
Back in December (2006) the company's main pharmaceutical pony, Alfimeprase, got steamrolled when it failed a Phase 3 clinical trial of it's performance in acute peripheral arterial occlusion (in English: it fights blood clots and might be effective against stroke) and took an undeserved (okay, maybe deserved) drubbing.

Testing involves, at times, failures. My thoughts on the 80% drop in one day...Wow.

WHY YOU SHOULD BUY (HAVE BOUGHT) IT:
It just received fast track approval for several of their cancer drugs (see website for details). I've read that "usually (and I emphasize usually), bio techs receive final FDA approval when the FDA has already fast tracked their drug." But let's be honest... any drug is fast tracked if there is a disease out there with no treatment or cure. It's fools gold.

It also has a decent pipeline with cash on hand and no debt. It's also worth mentioning that Bayer, the 50 million sponsor for Alfimeprase didn't jump ship.

MY REASONS FOR BUYING IT:
I really didn't have any. I didn't write about this one early on because I didn't feel strongly about it or have any unique insight. I just saw a solid company with with a lot of potential, strong public (CAPs) support, that is trying it cure something that is very close to me. It all came down to a bet on hope.



Notes:
In Portfolio: This one's for hope... I'm in!
Duration: Until it hits $378.75 again! (hmm, we'll see)
Random Thought: Cats are clean, they're covered in spit.

Thursday, April 5, 2007

MNST (Monster Inc): Yet Another Classic Over-Reaction By The Market

"The parent of the job website Monster.com said in a statement that its revenue for the first quarter ended Mar. 31 is expected to be in the range of $328 million to $329 million, slightly below its $330 million to $338 million forecast issued on Feb. 1. It also said Apr. 4 that it continues to expect the same financial results for the full year 2007 that it had forecast on Feb. 1. At the time, Monster projected revenue of $1.36 billion to $1.41 billion for the year.

Shares of Monster Worldwide Inc., which operates job site Monster.com, continued falling but a number of analysts (a lot of them) said the company will gain from international exposure. Monster backed full-year revenue guidance on Wednesday, but said first-quarter sales will come in below expectations, due in part to weakness in its North American careers unit."

Okay, okay... so what this all mean? It means that they slightly adjusted the guidance and the public over-reacted... as usual. And the result is the public sent the stock down 18%. Translation... Sale!

The North American Market is a little weak now but remember, it's cyclical. But I think as Americans, we don't see the big picture and in this case, it's the world. Monster is just dominating the international landscape and pretty soon, over sea revenue (now 27 percent of revenue) will surpass homeland revenue. But really, the situation at home isn't all that bad so if anything, think of it as an opportunity to get in on a solid stock with growth potential at a relatively cheap price. As always, we'll see.



Notes:
In Portfolio: Entry buy at $40 and will buy more as the stock bottoms out.
Duration: Tighten the leash at $60
Gyroball?: Daisuke Matsuzaka fans 10... Sox win 4-1