In the 1990s, Microsoft Corporation (NASDAQ/MSFT) was the toast of Wall Street and arguably one of the top technology growth stocks in the world, based on my stock analysis.
At that time, personal computers (PCs) and laptops were the only computing devices around, as portable mobile devices were not widely developed yet. Microsoft, of course, developed the “Windows” operating system and associated applications. There was no real competitor at that time; Apple Inc. (NASDAQ/AAPL) was really not considered a valid threat yet, according to my stock analysis. In fact, Apple was on the fringe as its stock price languished at the dollar range.
Fast-forward a couple decades and now we see Apple at the top of the mobile devices ladder, while every other company tries to latch on, based on my stock analysis.
As my stock analysis indicates, during Apple’s rise, Microsoft was essentially comatose, having focused too intently on its operating system and on the PC platform. The company, under former CEO Steve Ballmer, failed to recognize the move to the mobile space. According to my stock analysis, this left Microsoft in a lurch, becoming a fallen star on Wall Street.
Luckily, Ballmer was cut and replaced with CEO Satya Nadella, who has made Microsoft relevant again to the investment community via his vision and focus on the growing technology spaces, such as mobile devices and cloud computing.
The stock has advanced 29.11% over the past 52 weeks, easily outperforming the 11.64% move by the S&P 500.
Chart courtesy of www.StockCharts.com
In addition to the Windows operating system, my stock analysis notes Microsoft has been shifting its energy into … Read More
The fear of Ebola has caused an increase in pressure towards the U.S. stock markets, particularly in the travel sector and aviation stocks. The concern is real, and if it is allowed to grow in the United States, Asia, or Europe, we could see a significant decline in travel demand that could impact the next few quarters, as my stock analysis would suggest.
The impact on the aviation space has been evident already, as we have seen travel-related stocks come off their tops; albeit, much of this also has to do with the current stock market risk, based on my stock analysis.
However, a big plus to the travel sector has been the major decline in oil prices to the $80.00 level for both West Texas Intermediate (WTI) and Brent crude. My stock analysis indicates this has translated into lower costs for jet fuel and gasoline—which would help to drive up demand for travel, if not for the Ebola fears, so travel by plane is likely to be most affected.
My stock analysis suggests that the market weakness is an investment opportunity to accumulate travel-related stocks, whether they are the airlines, chain hotels, or online travel operators—but the online travel operators are what I’m most interested in.
The following are what I believe to be good examples of the kind of top online travel operators you can put on your stock investment radar, based on my stock analysis.
The “Best of Breed” in the space is the granddaddy of the online travel sector—The Priceline Group Inc. (NASDAQ/PCLN). For some of you who have been active in the stock market for … Read More
While it’s well known that technology has led the broader stock market higher, there is a safer and more conservative play for investors at this time, according to my stock analysis. Where? Investors may want to take a glance at the banking sector.
Banks have dug themselves out of the financial crater that was imposed on the group by the sub-prime debt crisis back in 2007, which sent the global economy and banks into a massive tailspin, as is well represented in my stock analysis.
But that was then. As my stock analysis indicates, the banking sector has been rallying over the past seven years, beefing up their balance sheets, cutting risk, and creating a much stronger overall structure.
The chart of the Philadelphia Bank Index below shows the upward move of bank stocks from their 2009 and 2011 bottoms. Bank stocks staged a nice rally, but retrenched from March to May 2012 on the European bank concerns and Moody’s downgrade of the sector. However, the group has since staged a rally back to above the index’s 50- and 200-day moving averages (MAs), as my technical stock analysis indicates.
Chart courtesy of www.StockCharts.com
What has helped to drive the banks upward on the charts, based on my stock analysis, has been the recovering global economy and the rules set in place to help prevent excessive risk among bank stocks. At the core of the changes was the establishment of the “Volcker Rule,” which was economist and ex-Fed chairman Paul Volcker’s move to cap the speculative trades and risk banks are allowed to assume. Since these changes were put in place, … Read More
Apple Inc. (NASDAQ/AAPL) will launch its next-generation “iPhones” to the world on Tuesday and, while the expectations are high, it likely won’t blow away investors or competitors, based on my stock analysis.
In my view, it’s more about the apps and functionality of the smartphone, rather than screen size and aesthetics.
Of course, Apple also has to deal with the embarrassing leak of private pictures from “iCloud” belonging to several celebrities last week. The company believes the leaks weren’t due to any flaw in its security system but that they were a result of targeted attacks. Apple has had security issues in the past that were blamed on the operating system infrastructure, so I wouldn’t rule it out.
Apple stock has done well, easily beating the S&P 500 over the past 52 weeks with a 48.0% advance versus the 22.1% move by the index. The stock reached a new record high of $103.74 last Tuesday, but as my stock analysis indicates, how much more it can rise will be dependent on the “iPhone 6” and new phones from rival Samsung, multiple “Android” phones, and the upcoming launch of BlackBerry Limited’s (NASDAQ/BBRY) new operating system “10.3 OS” that will include access to the Amazon.com, Inc. (NASDAQ/AMZN) “Appstore” and its 200,000-plus apps.
While BlackBerry products are somewhat passé, I wouldn’t count the company out yet; however, the stock should only be regarded as a trade and nothing else, based on my stock analysis.
Going back to Apple, the iPhone 6 is expected to have a bigger screen. The company is also expected to launch a new $400.00 or so computerized watch that … Read More
The superhighway that Tesla Motors, Inc. (NASDAQ/TSLA) is building across the United States appears to be taking shape with consumers and investors.
The maker of the quick-charge electric-battery vehicle has recovered since taking a hit on growth and valuation concerns. The stock is still not cheap, but based on what is developing and its longer-term prospects, a stock like Tesla may be worth a closer look as an investment opportunity.
Back in April, I suggested picking up some shares of Tesla as an investment opportunity at a price tag of $193.00. The stock closed at $253.00 last Wednesday, representing a hefty quick gain of 28%.
Chart courtesy of www.StockCharts.com
Now after reporting a decent quarter, Tesla has been receiving kudos from Wall Street. Brad Erickson at Pacific Crest issued an Outperform rating and assigned a price target of $316.00. This price is high, given the stock is already trading at 80-times (X) its 2015 earnings per share (EPS) and an extremely high price-to-earnings growth (PEG) ratio of 5.34. For Internet and social media stocks, the valuation likely wouldn’t be given a second look, but for an automaker, there clearly are some heads shaking.
While I continue to like Tesla as an investment opportunity, I would be more likely to accumulate shares on price weakness than to chase the stock price higher.
In my view, Tesla needs to produce more unit sales of its vehicles in order to reduce the fixed overhead charges per vehicle made, thereby pushing up the operating margins.
We are seeing Tesla vehicle sales steadily rise, but the numbers still pale in comparison to the major automakers, … Read More
There was a time in the past when Wal-Mart Stores, Inc. (NYSE/WMT) was the top retail stock for investors and the go-to place to find a bargain. I used to refer to the retailer as the “Death Star” of the retail sector, killing off smaller rivals via its expansion.
But as my stock analysis points out, that was yesterday. The shopping environment is much more competitive now; it’s almost akin to a bowl of piranhas, where there are multiple retailers vying to snap up fewer consumer dollars.
According to my stock analysis, Wal-Mart doesn’t only have the big-box stores like Costco Wholesale Corporation (NASDAQ/COST) and the multitude of discount stores to fend off. As my stock analysis indicates, we are also seeing a marked shift to online spending as consumers search everywhere for the best selections and prices.
Cheaper goods are no longer found by simply venturing out to the stores. And to add to the savings, most of the major online retailers are offering free shipping. The convenience of shopping from home or even on the go via your mobile device appears to be more attractive to consumers, as my stock analysis indicates.
One of the top online retailers that I feel has the wherewithal to succeed based on my stock analysis is Amazon.com, Inc. (NASDAQ/AMZN).
Under the leadership of its CEO, Jeff Bezos, Amazon.com has ambitions to make the company a one-stop shopping place for online consumers. Whether it’s books, music, clothes, electronics, or online movie streaming, Amazon.com offers it all.
Chart courtesy of www.StockCharts.com
The company is also experimenting with an online grocery branch in several major … Read More
The other day I talked about my growing optimism toward Apple Inc. (NASDAQ/AAPL) under the stewardship of CEO Tim Cook.
Now, I’ve noticed that a similar situation appears to be unfolding at Microsoft Corporation (NASDAQ/MSFT), which is currently under the leadership of CEO Satya Nadella. Nadella is transforming the former Wall Street darling into an enterprise-driven company that’s focused on capitalizing on new technologies, rather than simply on operating systems, as my stock analysis indicates. Former CEO Steve Ballmer failed to grasp the shift away from PCs and into the mobile sphere; something that Nadella is fully aware of and it’s paying off for shareholders, as the stock is up nearly 50% from its 52-week low, according to my stock analysis.
Chart courtesy of www.StockCharts.com
In the past, I have criticized the inability of Microsoft to adapt to the changes that were occurring in technology, as the company instead focused on its operating systems. The company’s strategic shift to the Internet and mobile spaces makes a whole lot of sense and will make Microsoft relevant to investors again, as my stock analysis suggests.
However, my stock analysis also indicates that there are still some operating issues for Microsoft. The company is struggling with its acquisition of the cell phone business formerly owned by Nokia Corporation (NYSE/NOK). When you have to compete against the likes of the “iPhone” and Samsung Electronics Co., Ltd.’s phones running on Google Inc.’s (NASDAQ/GOOG) “Android” operating system, it will not be an easy undertaking, as my stock analysis suggests.
The same goes for the “Surface” tablet. This is a great piece of technology, but it simply … Read More
Apple (NASDAQ/AAPL) may have finally come up with the killer apps that could vault the company ahead in the global race against Google Inc.’s (NASDAQ/GOOG) “Android” phones. Now, Apple could gain mobile supremacy, based on my stock analysis.
In an unexpected move, Apple’s CEO, Tim Cook, inked a valuable partnership with International Business Machines Corporation (NYSE/IBM) to co-develop apps that will focus on the lucrative enterprise segment.
Based on my stock analysis, the deal is gigantic for Apple, as the company has had issues breaking into and advancing in the enterprise market, where BlackBerry Limited (NASDAQ/BBRY) continues to dominate.
As my stock analysis indicates, the venture with IBM makes a whole lot of sense, as IBM is a trusted leader in developing enterprise solutions, and in addition, IBM has extremely strong alliances around the world with top global companies. This means that Apple, with its new enterprise solutions, could accelerate in this space, especially with corporate clients making Apple their mobile and applications provider. Of course, the need to provide a more secure platform, such as BlackBerry’s, is likely the focus of the venture with IBM, as my stock analysis suggests.
Now, that’s not to say that Apple will eventually beat BlackBerry in yet another segment, but it will open up opportunities. My stock analysis is that it could take years for the venture to deliver tangible enterprise solutions, so BlackBerry does have some time to counter and try to strengthen its position under CEO John Chen, who is offering some hope for suffering BlackBerry investors.
For Apple, the enterprise apps will increase the revenue stream from this segment, which … Read More
The U.S. military extensively uses unmanned drones to spy on foreign countries (and maybe its own citizens). In some cases, the military uses drones to take out the enemy, which is what recently happened when drones killed terrorists at a meeting in a remote region.
Interestingly, Amazon.com, Inc. (NASDAQ/AMZN) wants to use drones for an entirely different reason: to deliver your books and other merchandise.
Likewise, Google Inc. (NASDAQ/GOOG) wants to deliver groceries to your home in real time via its solar-powered drones that came into the company’s hands after Google acquired Titan Aerospace. Leave it to Google—self-driven cars and drones delivering goods.
The employment of drones is extensive if it receives clearance from the Federal Aviation Administration (FAA), which is likely still a long shot, especially in the more populated areas of the country, based on my stock analysis.
If the FAA approves it, the use of drones in commercial applications will likely rise, but it could take some time before they are used for broader applications, as my stock analysis suggests.
The market for U.S. drones is estimated at $82.0 billion by 2022, based on information from IHS Jane’s. (Source: Medina, D.A., “Drone markets open in Russia, China and rogue states as America’s wars wane,” The Guardian, June 22, 2014.)
The major players are the big aerospace companies, such as The Boeing Company (NYSE/BA). On the small-cap stocks side, my stock analysis indicates that an interesting company to watch is AeroVironment, Inc. (NASDAQ/AVAV). As my stock analysis notes, the company is best known for its efficient energy systems (EES) division, which makes electric vehicle (EV) charging solutions.
Yet … Read More
One of the most common traits I find in successful companies is that they often have a multinational presence. That’s not to say that domestic-only companies are not successful, but for real growth, many of the top S&P 500 companies are global, based on my stock analysis.
Whether it’s in the industrial, technology, financial, aerospace, or healthcare sectors, the commonality is the global exposure that many of the world’s top companies all exhibit.
In fact, the failure to capitalize on foreign markets can really limit a company’s growth, according to my stock analysis.
There are only two avenues to drive revenues: A company can increase its price to the consumer, but this doesn’t always come across as being prudent. Or a second and more viable way is to expand outside to foreign markets, as my stock analysis suggests.
Companies can expand nationwide or internationally like many of the world’s multinational companies. Just take a look around and see how many American companies are found outside of our borders and spread across Europe, Asia, and Latin America. China is a perfect example of where companies go to seek added growth, as my stock analysis indicates.
Technology companies like Microsoft Corporation (NASDAQ/MSFT), Google Inc. (NASDAQ/GOOG), Facebook, Inc. (NASDAQ/FB), and Apple Inc. (NASDAQ/AAPL), to name just a few, all have a major global presence.
An example of moving to the global sphere too late is Target Corporation (NYSE/TGT), with its first foreign foray into Canada. It has been a bust so far, given that rival Wal-Mart Stores Inc. (NYSE/WMT) has been in Canada since 1994, being the market leader in the country and … Read More
Retail is tough, especially the bricks-and-mortar end (i.e. physical stores). Blockbuster and Circuit City are examples of two major companies that plummeted into the abyss after failing to recognize the strong moves long ago towards online shopping with the growing popularity and accessibility of the Internet, based on my stock analysis.
Now, it looks like we are seeing clues that yet another major retailer may soon follow suit. My stock analysis indicates that electronic retailer RadioShack Corporation (NYSE/RSH) could be the next big retailer to collapse.
I can personally tell you that RadioShack is well past its prime. There’s an outlet near me, and I can honestly say that I have only been there a few times in the 14 years I have lived in the area. Shoppers looking for TVs, gaming consoles, mobile devices, and the like usually venture out to the Best Buy Co., Inc. (NYSE/BBY) that is located within a mile of this RadioShack.
However, Best Buy is still not totally safe, based on my stock analysis. Under the leadership of Hubert Joly, the electronic retailer has improved, but the company continues to face massive competition from both other physical stores and online sales especially.
I’m not sure I would be running to buy Best Buy at this time, and the stock market appears to be in agreement with my stock analysis, as the company is about 28% off its high.
My stock analysis suggests that Best Buy is not dead, as the stores are still popular as a place to physically shop; however, the issue I see is that electronic retailing has become extremely competitive based … Read More
Apple Inc. (NASDAQ/AAPL) gave investors some optimism after introducing its so-called “Android” killer—its “iOS8” operating system—at the Worldwide Developers Conference.
The upcoming update to Apple’s operating system incorporates some great changes, including advanced healthcare, music, and home monitoring applications.
Yet while there’s definitely some excitement from Apple users towards the new operating system, the reality is that it will likely still not be enough to knock Android off its perch as the top mobile operating system in the world, powering about 85% of all phones worldwide, based on my stock analysis.
Apple is clearly working on improving its platform and is expected to introduce a bigger screen on its “iPhones,” but my stock analysis indicates that the problem is that the cost of the phones remains prohibitive to buyers, especially in the emerging markets in Asia and Latin America.
As my stock analysis suggests, the company is still so set on protecting its margins that its iPhones remain relatively expensive versus Android and other phones. Just go to your local mobile dealer, and you will see that while the iPhone has come down in price, the associated contract continues to be quite expensive versus that of other smartphones.
I experienced this firsthand after I just switched from the iPhone to the Samsung “Galaxy.” I bought the “S4,” which is a slightly older model versus the new “S5,” but it’s an excellent phone. It uses the Android operating system, which I actually like more than “iOS7.” The only problem is that my “iPad” refuses to acknowledge my S4 as a hotspot via the Bluetooth connection, which is not surprising, given how … Read More
The airline sector is flying higher, as the global economy strengthens and income levels in the emerging markets steadily improve, based on my stock analysis.
Yet unlike what you or your parents might have done when booking a vacation decades ago, we are now seeing a massive migration of travellers looking to the online space to book their next flight.
While there are numerous operators in the Internet travel space, the “Best of Breed” and the company that started it all is The Priceline Group Inc. (NASDAQ/PCLN). I distinctly recall reviewing this company in late 1999 and recommending it at under $20.00. Since then, the stock has been one of my top performers, as it currently trades at more than $1,200 per share and has a market cap of roughly $67.0 billion.
The price of the stock puts it out of the reach of many investors, but the company deserves its place at the top of the online travel segment, based on my stock analysis. Priceline has superior growth metrics and a comparative valuation to its peer group, which makes it the market leader and a top investment opportunity.
Chart courtesy of www.StockCharts.com
Now, if you cannot afford the high stock price of Priceline, then there are several companies that I view as the next best opportunities in this market space.
The second leading online travel company, based on my stock analysis, is Expedia, Inc. (NASDAQ/EXPE). This stock is still large, but it has a market cap that’s approximately seven-times smaller than Priceline. The valuation of Expedia is also more attractive at 16.47 times (X) its 2015 earnings per share … Read More
For years, Whole Foods Market, Inc. (NASDAQ/WFM) was the top of the food chain in the sale of natural and organic groceries. Yet with success often comes competition.
Whole Foods is now finding itself in a fierce battle with new rivals, established grocers, and big-box stores all looking for a piece of the action in this higher-margin business, based on my stock analysis.
Whole Foods’ stock was devastated on Wednesday after the reporting of weak first-quarter results that clearly displayed the negative impact of competition on the company.
Whole Foods was also hurt by margin pressures, as the company cut prices in response to the competition, as my stock analysis indicates. Given the squeeze on margins, my stock analysis suggests that Whole Foods will have to come up with some innovative strategies to attract customers and stop them from venturing over to its rivals’ outlets.
Yet as my stock analysis indicates, this will not be easy as the market for natural and health food is crowded. You not only have the smaller, emerging players, but Whole Foods also needs to watch the established big-box stores, such as Wal-Mart Stores Inc. (NYSE/WMT) and Costco Wholesale Corporation (NASDAQ/COST).
If you are looking for a small-cap natural and health food play, take a look at Natural Grocers by Vitamin Cottage, Inc. (NYSE/NGVC). I have been following this company for years, watching it rise to a high of $44.60 prior to its subsequent collapse.
The stock has retrenched to the low $20.00 level, where I see a contrarian investment opportunity, based on my stock analysis. (I liked the stock in the $30.00 range—but I … Read More
Mother’s Day is on Sunday, and it’s not too late to begin thinking about how to celebrate and reward good old mom for all those years of managing the household.
Of course, what always comes to mind are flowers, a special dinner, or perhaps a show or gift to display your appreciation.
So whether it’s from you to your mom or for your wife from your kids, it’s not a day to forget—trust me, you’ll be in the dog house if you do. (I know that’s what would happen in my case!)
Given that, it doesn’t hurt to browse around for something for your portfolio while your mind is in Mother’s Day shopping mode. Here are three examples of the stocks you could consider as an investment opportunity that could benefit from this day, based on my stock analysis.
First of all, what woman doesn’t want flowers? A decent investment opportunity, 1-800-FLOWERS.COM, Inc. (NASDAQ/FLWS) is worth a look. The online operator sells market-fresh flowers along with plants, gift baskets, gourmet foods, confections, candles, balloons, and stuffed animals. I like 1-800-FLOWERS.COM as an investment opportunity.
Chart courtesy of www.StockCharts.com
In the fiscal third quarter (ended March 30, 2014), 1-800-FLOWERS.COM reported quarterly revenues of $179.6 million, which was down from $191.6 million in the year-earlier fiscal third quarter. The company attributed the decline to the winter conditions and the shift of Easter to the fiscal fourth quarter. The quarter saw the addition of 675,000 new customers; 1.6 million customers ordered something during the quarter, according to the company.
For that special dinner to show your appreciation, you might consider taking your mom … Read More
The restaurant sector is a fiercely competitive battleground for operators, especially at times when the consumers are careful about their spending habits, as my stock analysis suggests.
One of the top performers in the quick service market, based on my stock analysis, is Chipotle Mexican Grill, Inc. (NYSE/CMG)—the operator of the hugely popular Mexican burritos and tacos fast food restaurant chain. The food is good and has caught on with diners seeking a better and healthier alternative to the old-school fast food operators, such as McDonalds Corporation (NYSE/MCD).
While Chipotle is clearly giving McDonald’s a challenge, I wouldn’t be ruling out the maker of the “Big Mac” yet. As shown in the last decade, McDonald’s has an excellent business model and the desire to change its strategy to conform to the trends in the restaurant business, based on my stock analysis.
For instance, McDonald’s noticed that the coffee market was highly lucrative and high-margin, but it was controlled by the likes of Dunkin Brands Group, Inc. (NASDAQ/DNKN) and Starbucks Corporation (NASDAQ/SBUX). McDonald’s decided to improve the quality of its coffee and offer lower prices along with free coffee days in an effort to enter the market, as my stock analysis indicates. So far, the strategy has worked; McDonald’s is currently third in coffee sales in the United States and second in Canada, following the iconic home-brewed Tim Hortons Inc. (NYSE/THI).
Yet the current environment has not been easy for many restaurant operators, including McDonald’s. In the first quarter, McDonald’s fell short on earnings and reported a decline in its U.S. traffic. A plus was growth in Europe and Asia, particularly … Read More
Every time I drive my SUV, especially when I have to fill up the tank with premium gas, I quiver and think about downsizing to a smaller gas-efficient vehicle or some sort of hybrid.
I remember back more than a decade ago when Canadian upstart Ballard Power Systems Inc. (NASDAQ/BLDP) was all the rage on Wall Street, with traders driving up the stock price to above $100.00 in early 2000 on anticipation the company could develop the first hydrogen-powered cell for vehicles. Of course, as my stock analysis indicates, that failed, as Ballard was unable to develop a battery small enough to power the everyday car. The rest is history. Ballard is still hanging around, but it’s a non-factor in the alternative power sector for vehicles, based on my stock analysis.
As many of you already know, my stock analysis favors Tesla Motors, Inc. (NASDAQ/TSLA) as the big winner in the alternative power sector for vehicles. In a few short years, Tesla has become the next big technological innovation with its fully electric-powered vehicles. The Tesla vehicles look sharp and sporty and are gaining a wide acceptance based on the sales we are seeing.
I drove by a Tesla charging station the other day, and it looks impressive and innovative. Tesla is aiming to build a “Supercharger” network to cover about 98% of the United States by 2015. The Supercharger network can charge up a Tesla car via the changing of the battery pack and is free if you buy the more powerful battery. The whole process to automatically change the battery takes less than 90 seconds, according to the … Read More