An interesting dynamic about the market is that there is often a sharp difference between investing in a stock that benefits from the marketing machine that captivates the avg. investor and investing in a financially sound stock that produces steady returns.
For the purposes of this illustration, Beyond Meat or Tesla would be poster children for "marketing machine" equities, whereas Visa or Microsoft would represent the "Steady Eddies."
The rare company can profile in both realms. These are the places to look as you get diversification from both the "capture the imagination" and predictable return" crowds. At the end of the day, you want someone to buy at a higher price than you paid. Why not broaden the pool of market participants who may want to hold an interest?
Conduct due diligence selectively and invest wisely!
Friday, June 21, 2019
Wednesday, June 11, 2014
Apple Price Target Hit: Heading Toward Exit, Away From Unknowns
Apple (AAPL) recently hit our price target of $652.05 issued back in December 2013 ($93.15 post split). At that time, we argued that the company offered good value to investors from multiple catalysts. Share buybacks, dividend policy, and cash flow became the focus of investor activist and shareholder Carl Icahn and subsequently Apple's CEO Tim Cook took measures to satisfy these demands.
The focus now for AAPL has turned to innovation and growth. Apple is slated to grow earnings between 8-10% in 2015. The firm yields 2% and trades at 15.7 times current year earnings. Without quantifiable estimates of the market size and market share Apple expects to garner from new products such as wearable devices, there are too many unknowns to assign a higher price target at this time. Apple is also gaining a strong competitor in its cash cow smartphone category with the entry of Amazon, who has established an existing hardware capability in its Kindle e-reader products. An additional concern raised is that Apple was too slow in responding to the consumer demand for larger phone screens satisfied by its chief rival Samsung.
As highlighted, in the face of several areas of uncertainty, we are ending coverage of the Apple at this time since it now trades at over one and a half times its expected 1 year earnings growth rate. We believe this is fair market value for the stock has been reached. If Apple can generate enthusiasm for a new groundbreaking product and parlay this development with its retail investor friendly and recently completed 7-1 stock split, prices of $100 or higher could be printed in the coming months. But as we mentioned, there are too many show-me moments ahead for the Cupertino, California tech giant to warrant assigning a new higher price target rooted in speculation.
Disclosure
Foundry Stock Review has a long call position in Yahoo (YHOO) as of 6/11/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
The focus now for AAPL has turned to innovation and growth. Apple is slated to grow earnings between 8-10% in 2015. The firm yields 2% and trades at 15.7 times current year earnings. Without quantifiable estimates of the market size and market share Apple expects to garner from new products such as wearable devices, there are too many unknowns to assign a higher price target at this time. Apple is also gaining a strong competitor in its cash cow smartphone category with the entry of Amazon, who has established an existing hardware capability in its Kindle e-reader products. An additional concern raised is that Apple was too slow in responding to the consumer demand for larger phone screens satisfied by its chief rival Samsung.
As highlighted, in the face of several areas of uncertainty, we are ending coverage of the Apple at this time since it now trades at over one and a half times its expected 1 year earnings growth rate. We believe this is fair market value for the stock has been reached. If Apple can generate enthusiasm for a new groundbreaking product and parlay this development with its retail investor friendly and recently completed 7-1 stock split, prices of $100 or higher could be printed in the coming months. But as we mentioned, there are too many show-me moments ahead for the Cupertino, California tech giant to warrant assigning a new higher price target rooted in speculation.
Disclosure
Foundry Stock Review has a long call position in Yahoo (YHOO) as of 6/11/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results.
Copyright © 2014 Foundry Stock Review, LLC All rights reserved.
Thursday, May 1, 2014
Defensive Driving = Profitable Trading
By FSR staff
Speculating in weekly options is like handing the keys of a Corvette to a 16 year-old kid. The engine roars as the car is put into gear (trade is filled) and the tire shriek. (price moves) The car accelerates and the excitement builds, (profits grow) but the driver is not used to the speed. (quick decisions)
Older drivers (experienced traders) down shift, look ahead, (set profit and loss targets) put their foot on the brake (scale out) and stop at red lights (sell out when red flags come up). The novice trader cranks up the radio, puts the petal to the floor, races other cars (speculates on earnings, buys out of the money contacts, averages down) only to lose money in the long run.
If an experienced trader speeds (puts on too much risk) and they get a ticket (have a trade go against them) or get into an accident (go broke on a trade) they put the car in the garage for a few days. (stop trading) They take a deep breath (calm emotions) and regain their form by driving the station wagon (trade common stock) until they have full control over their bearings. (trade with reason, not emotion) Speculating in weekly options means setting your cruise control (defining your risk) so that you are driving the speed limit (following a strategy) and you aren't driving the car off of the road. (big losses)
Remember: If you're a weekly options trader, be a Sunday driver.
Disclosure
Foundry Stock Review has a long call position in Yahoo (YHOO) as of 5/1/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclosure
Foundry Stock Review has a long call position in Yahoo (YHOO) as of 5/1/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Copyright © 2014 Foundry Stock Review, LLC All rights reserved.
Monday, March 17, 2014
Tesla Sales Ban = Free Advertising
A couple years back Sodastream (SODA) produced a commerical that took a direct shot at Coke and Pepsi for the waste their plastic bottles created. Fearing backlash from the big two soft drink makers, the commercial was banned from the big game but created over 4 million views to date on youtube. Sodastream hired Scarlett Johansson for this year's big game spot and her sign off phrase "Sorry Coke and Pepsi" got the company's ad banned again. It was later modified and aired without the antagonistic language. This time over 13 million views were registered on Youtube. Why does this matter?
The direct sales bans Tesla is facing in New Jersey and potentially New York and Ohio are going to activate the groundswell of support for Tesla from the company's hard core followers who love the car, drive the car and want to buy the car. The dispute is likely to be discussed all over the news with protests and demonstrations, creating both tons of free advertising for the Tesla and political pressure on legislators to change the state law or stop the ban. We will no doubt read about people traveling to neighboring states to take a test drive. Who could rule out a parade of Tesla's rolling past state houses?
Some people are worried that these sales bans will have a negative impact on Tesla. From what we have seen with Sodastream, getting banned can work in the opposite direction. Tesla is about to get a lot more visibility in the coming months. This is a good thing as the voice of the people will be heard. Our guess is this voice will be heard sooner rather than later.
Disclosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) or Sodastream (SODA) the security detailed in this blog as of 3/17/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
The direct sales bans Tesla is facing in New Jersey and potentially New York and Ohio are going to activate the groundswell of support for Tesla from the company's hard core followers who love the car, drive the car and want to buy the car. The dispute is likely to be discussed all over the news with protests and demonstrations, creating both tons of free advertising for the Tesla and political pressure on legislators to change the state law or stop the ban. We will no doubt read about people traveling to neighboring states to take a test drive. Who could rule out a parade of Tesla's rolling past state houses?
Some people are worried that these sales bans will have a negative impact on Tesla. From what we have seen with Sodastream, getting banned can work in the opposite direction. Tesla is about to get a lot more visibility in the coming months. This is a good thing as the voice of the people will be heard. Our guess is this voice will be heard sooner rather than later.
Disclosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) or Sodastream (SODA) the security detailed in this blog as of 3/17/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Copyright © 2014 Foundry Stock Review, LLC All rights reserved.
Tuesday, March 11, 2014
PLUG Price Target Issued
Recent Events
Plug Power (PLUG) has skyrocketed in the past week on the hopes of new orders to expand the companies forklift power solutions on the back of a deal with Walmart for an initial 6 turn key locations scheduled to move online by mid 2014. Investor enthusiasm has peaked and waned for the companies shares in a rapid move up from $6 in January up to $12 in early March with recent prices pinballing back and forth to around recent prices of $6.50.
At this moment of extreme volatility is is important to assess the big picture. The deployment by Plug Power's fuel cell forklifts to Wal-Mart was a multi year project come to fruition inside a market that PLUG enjoys 90% or greater market share. These dominant metrics are unlikely to fall in the near distant future. CEO Andy Marsh mentioned in his March 3rd Roth Conference presentation the interest Wal-mart suppliers have expressed in PLUG's product line, as Wal-mart is widely recognized as the global leader in retailing. When Wal-Mart they makes cost saving business decisions, it likely to carry weight with competitors and partners looking for an edge in a small margin business.
Earnings Projections
With the lone earnings estimate for PLUG slated for break even over the next 12 months and the industry opportunity of $20 billion or more in potential market share at stake, it is puzzling to see earnings estimates of only -11 cents for 2014 and 11 cents for 2015. However, Plug Power is underfollowed by the analyst community. PLUG has the opportunity to sign deals with large retailers to drive these earnings estimates higher and gain wider analyst following. One positive feature mentioned by Andy Marsh PLUG CEO at the 3/11 Roth Conference is the ability of PLUG to generate 35% of earnings are recurring revenue opportunities and expand into the refrigerated transport markets with Sysco and other food distributors.
It is very likely that forthcoming deals are not baked into the earnings estimates so it is a helpful exercise to modeling an aggressive earnings projection of breakeven for 2014, 20 cents for 2015 and 40 cents in 2016 EPS, assuming business can double over the next three years. Under this uber bullish scenario it may be very optimistic but within reach to model a price target of 50 times 2015 forward earnings or $20 by the end of 2015. This trajectory would give the company a $2 billion market cap in what the company hopes to grow into a $4 billion market opportunity they project in the upcoming years. Assuming a more muted but positive growth trajectory where PLUG only grows earnings from -11 cents per share in 2014 up to 15 cents per share in 2015 jumping to 25 cents per share in 2016, leaves us a profitable company experiencing 83% average earnings growth over 2015 and 2016. Under this model, we would feel comfortable paying a reasonable 40 times our 2016 estimate of .30 cents per share or $12 a share by January 2016, about 85% higher from current prices of around $6.50. Because these deals are not yet in place, we would review our price target for any changes in consensus estimates, or if new orders are announced in the coming months.
Disclosure
Foundry Stock Review and its contributors have no positions in Plug (PLUG) the security detailed in this blog as of publication at 3:30 pm on 3/11/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Plug Power (PLUG) has skyrocketed in the past week on the hopes of new orders to expand the companies forklift power solutions on the back of a deal with Walmart for an initial 6 turn key locations scheduled to move online by mid 2014. Investor enthusiasm has peaked and waned for the companies shares in a rapid move up from $6 in January up to $12 in early March with recent prices pinballing back and forth to around recent prices of $6.50.
At this moment of extreme volatility is is important to assess the big picture. The deployment by Plug Power's fuel cell forklifts to Wal-Mart was a multi year project come to fruition inside a market that PLUG enjoys 90% or greater market share. These dominant metrics are unlikely to fall in the near distant future. CEO Andy Marsh mentioned in his March 3rd Roth Conference presentation the interest Wal-mart suppliers have expressed in PLUG's product line, as Wal-mart is widely recognized as the global leader in retailing. When Wal-Mart they makes cost saving business decisions, it likely to carry weight with competitors and partners looking for an edge in a small margin business.
Earnings Projections
With the lone earnings estimate for PLUG slated for break even over the next 12 months and the industry opportunity of $20 billion or more in potential market share at stake, it is puzzling to see earnings estimates of only -11 cents for 2014 and 11 cents for 2015. However, Plug Power is underfollowed by the analyst community. PLUG has the opportunity to sign deals with large retailers to drive these earnings estimates higher and gain wider analyst following. One positive feature mentioned by Andy Marsh PLUG CEO at the 3/11 Roth Conference is the ability of PLUG to generate 35% of earnings are recurring revenue opportunities and expand into the refrigerated transport markets with Sysco and other food distributors.
It is very likely that forthcoming deals are not baked into the earnings estimates so it is a helpful exercise to modeling an aggressive earnings projection of breakeven for 2014, 20 cents for 2015 and 40 cents in 2016 EPS, assuming business can double over the next three years. Under this uber bullish scenario it may be very optimistic but within reach to model a price target of 50 times 2015 forward earnings or $20 by the end of 2015. This trajectory would give the company a $2 billion market cap in what the company hopes to grow into a $4 billion market opportunity they project in the upcoming years. Assuming a more muted but positive growth trajectory where PLUG only grows earnings from -11 cents per share in 2014 up to 15 cents per share in 2015 jumping to 25 cents per share in 2016, leaves us a profitable company experiencing 83% average earnings growth over 2015 and 2016. Under this model, we would feel comfortable paying a reasonable 40 times our 2016 estimate of .30 cents per share or $12 a share by January 2016, about 85% higher from current prices of around $6.50. Because these deals are not yet in place, we would review our price target for any changes in consensus estimates, or if new orders are announced in the coming months.
Disclosure
Foundry Stock Review and its contributors have no positions in Plug (PLUG) the security detailed in this blog as of publication at 3:30 pm on 3/11/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Thursday, February 20, 2014
Tesla Price Target Reached, New Target Set
Background
In our October 2013 newsletter, we set a $212.50 price target on Tesla by October 2014. We expressed the importance of monitoring the market for new electric vehicle entrants as risk factors associated with the stock moving forward.
While BMW's i3 is trying to make a splash at a lower price point in the 40K area, the car only offers 115 miles of range compared to 200 to 260 miles for the 2 versions of the Model S. The BMW i8 is the aesthetically pleasing brother of the i3 featured in Superbowl ads, and is expected to retail for about 43% more than the Telsa Model S performance sedan capable of 260 miles of range. (136K vs 95K) The BMW i8 series is expected to ship in the second half of 2014. We do not view these offerings as serious threats to Tesla's momentum in the next 12 months.
Earnings Rundown
Back in October 2013, Tesla's consensus earnings for 2014 were $1.85 for 2014 and analysts saw $3.34 per share for 2015. We believed Tesla would earn 60 cents for 2013, $1.70 for 2014 and used the projected 2 year growth rate of 144% to arrive at a forward P/E of 125 times 2014 earnings to develop at our initial $212.50 target price by October 2014. Now that we have reached these price levels 8 months early, it is important to look at current earnings guidance.
Tesla beat final 2013 estimates of 64 cents and delivered 78 cents per share for this past year, and is expected to earn $1.59 in 2014 and $3.00 in 2015. This represents $104% earnings growth in 2014 and 89% growth in 2015. Since many estimates have not adjusted for an accelerated 2014 earnings picture, it is appropriate to use a 2 year projected growth rate as we did late last year when we arrived at 144% growth from 2013-2015, when we projected 125 times our 2014 earnings estimate of $1.70 to arrive at our first target price of $212.50
New Target Price
Now that 2013 is behind us, the projected 2 year growth rate average for 2014 and 2015 is 96.5%. We will continue our long coverage of the stock and apply a forward multiple of 90 times 2015 current consensus estimates of $3.00 and set a revised price target by February 2015 of $270.00, 27% above our previous target price of $212.50.
Risks
Chief risk factors in the next 12 months include the companies ability to expand the supercharger network internationally, improvements in battery technology to expand profit margins, the operation expenses associated with developing and launching the Model X SUV, sales of the Model X domestically and overseas, operational expenses associated with expanding manufacturing capacity and building a giga battery plant, government subsidies related to electric cars, government investigations or recalls related to fires and accidents, public perception related to fires and accidents, and the emergence of viable electric car competitors.
Dislosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) the security detailed in this blog as of 2/20/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
In our October 2013 newsletter, we set a $212.50 price target on Tesla by October 2014. We expressed the importance of monitoring the market for new electric vehicle entrants as risk factors associated with the stock moving forward.
While BMW's i3 is trying to make a splash at a lower price point in the 40K area, the car only offers 115 miles of range compared to 200 to 260 miles for the 2 versions of the Model S. The BMW i8 is the aesthetically pleasing brother of the i3 featured in Superbowl ads, and is expected to retail for about 43% more than the Telsa Model S performance sedan capable of 260 miles of range. (136K vs 95K) The BMW i8 series is expected to ship in the second half of 2014. We do not view these offerings as serious threats to Tesla's momentum in the next 12 months.
Earnings Rundown
Back in October 2013, Tesla's consensus earnings for 2014 were $1.85 for 2014 and analysts saw $3.34 per share for 2015. We believed Tesla would earn 60 cents for 2013, $1.70 for 2014 and used the projected 2 year growth rate of 144% to arrive at a forward P/E of 125 times 2014 earnings to develop at our initial $212.50 target price by October 2014. Now that we have reached these price levels 8 months early, it is important to look at current earnings guidance.
Tesla beat final 2013 estimates of 64 cents and delivered 78 cents per share for this past year, and is expected to earn $1.59 in 2014 and $3.00 in 2015. This represents $104% earnings growth in 2014 and 89% growth in 2015. Since many estimates have not adjusted for an accelerated 2014 earnings picture, it is appropriate to use a 2 year projected growth rate as we did late last year when we arrived at 144% growth from 2013-2015, when we projected 125 times our 2014 earnings estimate of $1.70 to arrive at our first target price of $212.50
New Target Price
Now that 2013 is behind us, the projected 2 year growth rate average for 2014 and 2015 is 96.5%. We will continue our long coverage of the stock and apply a forward multiple of 90 times 2015 current consensus estimates of $3.00 and set a revised price target by February 2015 of $270.00, 27% above our previous target price of $212.50.
Risks
Chief risk factors in the next 12 months include the companies ability to expand the supercharger network internationally, improvements in battery technology to expand profit margins, the operation expenses associated with developing and launching the Model X SUV, sales of the Model X domestically and overseas, operational expenses associated with expanding manufacturing capacity and building a giga battery plant, government subsidies related to electric cars, government investigations or recalls related to fires and accidents, public perception related to fires and accidents, and the emergence of viable electric car competitors.
Dislosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) the security detailed in this blog as of 2/20/2014. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Copyright © 2014 Foundry Stock Review, LLC All rights reserved.
Wednesday, January 15, 2014
Foundry Stock Review December 15, 2013
Check out our last free monthly investment newsletter 30 days after publication.
December 15, 2013
Be sure to also check out our North American Stock Picking Contest awarding $150 in gift cards to the top 2 performers with the top 3 entries published in a special edition next month!
Entry ends in 9 days so send us your pitch!
FSR Staff
www.foundrystockreview.com
blogspot.foundrystockreview.com
@FoundryOnStocks
December 15, 2013
Be sure to also check out our North American Stock Picking Contest awarding $150 in gift cards to the top 2 performers with the top 3 entries published in a special edition next month!
Entry ends in 9 days so send us your pitch!
FSR Staff
www.foundrystockreview.com
blogspot.foundrystockreview.com
@FoundryOnStocks
Thursday, January 2, 2014
Foundry Stock Review’s "Stocks Across North America" Showdown
Calling All Stock Pickers...Let's Ring in the New Year
in Style!
Foundry Stock Review’s "Stocks Across North America" Showdown
Pick one stock. It can be traded on:
AMEX American Stock Exchange
BMV Mexican Stock Exchange
NYSE New York Stock Exchange
AMEX American Stock Exchange
BMV Mexican Stock Exchange
NYSE New York Stock Exchange
NASDAQ US
TSX Toronto Stock Exchange
The stock must have a major presence in your state, federal state, or province (i.e. corporate headquarters, manufacturing, distribution, retail stores) that you feel is poised to soar in 2014. The stock must trade for a minimum share price of:
$5.00 (USD) U.S Dollar
$5.00 CAD Canadian dollar
65 MXN Mexican Pesos
at market open on Monday February 3rd, 2014.
TSX Toronto Stock Exchange
The stock must have a major presence in your state, federal state, or province (i.e. corporate headquarters, manufacturing, distribution, retail stores) that you feel is poised to soar in 2014. The stock must trade for a minimum share price of:
$5.00 (USD) U.S Dollar
$5.00 CAD Canadian dollar
65 MXN Mexican Pesos
at market open on Monday February 3rd, 2014.
- Write a brief summary between 75 and 200 words describing why you believe your hometown stock will outperform the market in next 12 months.
- Include your
first name as well as your home city and state/federal state/province.
- Submit your completed entry to info@foundrystockreview.com by Friday, January 24th.
Limit one entry per contestant. Multiple submissions for the same company will be granted entry into the contest in the order they are received. If a company has already been nominated, we'll notify you via email and you may nominate another stock if would like to participate.
Three finalists will be
selected by a panel of our contributors and will be published in our special
February edition of Foundry Stock Review “Stocks Across
North America” newsletter. For participating, all entrants will receive a
free copy of our "Stocks Across North America" newsletter via email on February 15, 2014..
Prizes:
- The finalist with the highest percentage gain from February 3rd 2014 open price until Feb 2nd 2015 closing price will win a $100 Amazon gift card.
- Second place will receive a $50 Amazon gift card.
Foundry Stock Review's "Stocks Across North America" Showdown isn't
just about picking stock. It is about geographic bragging rights and a shot at a
prize!
We look forward to
your submission and good luck!
Happy New Year,
FSR Staff
Sunday, December 15, 2013
Foundry Stock Review November 15, 2013
Foundry Stock Review Free 3 month preview to end!
Please note: Foundry Stock Review's final free newsletter available 30 days after publication date is our December 15th, 2013 newsletter available on January 15th, 2014.
Sign up today! to receive our newsletter to your inbox on the 15th of each month.
Email us at foundrystockreview@live.com to receive our top 3 picks of 2014 valid with any 1 year subscription. This offer is only good until December 31st, 2013.
To reiterate, act now to receive 12 monthly newsletters and our top 3 picks of 2014 for just $30!
Our 2nd of 3 Foundry Stock Review preview newsletters is here:
November 15th, 2013
Seasons Greetings,
FSR Staff
Please note: Foundry Stock Review's final free newsletter available 30 days after publication date is our December 15th, 2013 newsletter available on January 15th, 2014.
Sign up today! to receive our newsletter to your inbox on the 15th of each month.
Email us at foundrystockreview@live.com to receive our top 3 picks of 2014 valid with any 1 year subscription. This offer is only good until December 31st, 2013.
To reiterate, act now to receive 12 monthly newsletters and our top 3 picks of 2014 for just $30!
Our 2nd of 3 Foundry Stock Review preview newsletters is here:
November 15th, 2013
Seasons Greetings,
FSR Staff
Tuesday, December 3, 2013
Minimizing Tesla's Stock Whiplash
Why A Defined Strategy Can Limit Investor Jolt
FSR Staff
Here at Foundry Stock Review, we have a set investment horizon and criteria for profiling and selecting stocks that we feel are undervalued or overvalued. It would be very easy to pick a handful of trading sessions and hammer an opinion across by sighting the trading action of a given day or week or month. It is much more important to stay disciplined and true to your method whether you are a short term trader or long term investor. We are an intermediate term earnings focused newsletter, here to give investors our insights over the next 12 to 18 months. We have an established price target and time horizon for Tesla. We would like to share with you our stock profiles in our monthly investment newsletter by email on the 15th of every month. To request a free copy of our November newsletter contact us at foundrystockreview@live.com. Be sure to inquire about our 2014 subscription packages. If you are trading Tesla day to day, all we can say is good luck and grab some ice, as your neck may continue be sore from following the price action.
FSR Staff
Here at Foundry Stock Review, we have a set investment horizon and criteria for profiling and selecting stocks that we feel are undervalued or overvalued. It would be very easy to pick a handful of trading sessions and hammer an opinion across by sighting the trading action of a given day or week or month. It is much more important to stay disciplined and true to your method whether you are a short term trader or long term investor. We are an intermediate term earnings focused newsletter, here to give investors our insights over the next 12 to 18 months. We have an established price target and time horizon for Tesla. We would like to share with you our stock profiles in our monthly investment newsletter by email on the 15th of every month. To request a free copy of our November newsletter contact us at foundrystockreview@live.com. Be sure to inquire about our 2014 subscription packages. If you are trading Tesla day to day, all we can say is good luck and grab some ice, as your neck may continue be sore from following the price action.
Wednesday, November 27, 2013
Happy Thanksgiving Everyone!
Remember to take this time to enjoy the company of family and friends. The market will always be there but moments like these only come a couple times a year so make the most of them!
FSR Staff
Monday, November 18, 2013
Genius Premium: Jobs vs Musk
What Will It Take for Elon Musk to Meet All-Time Expectations?
Many have compared Telsa's CEO Elon Musk to former Apple CEO Steve Jobs. Both men have been considered innovators, known for possessing superior intelligence, savvy business acumen, and a rabid following devoutly loyal to their products. How do we put a value on these intangibles?It may be instructive to see how the market assigns a "genius premium" by analyzing the performance of Apple stock during Steve Jobs second stint at the company from September 1997 until his passing in November 2011. During this 14 year span, Apple stock experienced a gain of about 6800% or 35% per year from a split adjusted price of $5.28 to $365.73.
Elon Musk has seen Tesla climb from its IPO in late June of 2010 from $23.83 to around $135 in early November 2013. This return of about 470% over the first three plus years as a public company has seen his stock charge ahead an average of about 70% per year. This meteroic rise in valuation has partially fueled commentators to draw comparisons between Elon and perhaps the greatest CEO and American company of all-time, Steve Jobs and Apple.
So the question going forward now becomes if there is a "genius premium" to place on Tesla what should it be? It may be difficult to compare cars to iPhones, Samsung to BMW, and car fires to Foxconn incidents but essentially on some level, these questions are worth asking. Was Jobs as valuable to Apple as Musk is to Tesla? Can Tesla achieve 35% annual stock returns for the next ten years years and trade at $1600 a share in 2023? If Musk can grow his capital intensive car companies share price half as quickly, should we expect 17% annual stock returns from Tesla for the next several years and a more dampened stock price of $214.65 in 2023? If competition picks up and Telsa grows share price only 10% per year, maybe the stock will only trade for $90 per share in ten years. A wide range of outcomes with big investor consequences.
Maybe the best takeaway from this exercise is to marvel at how well Jobs executed on his vision and how far Musk and Tesla have to go to fulfill their vision of bringing electric cars to the masses in an exponential way. Big goals, but maybe not unattainable goals for a man who has secured contracts from NASA to send rockets into outer space.
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Copyright © 2013 Foundry Stock Review, LLC All rights reserved.
Friday, November 15, 2013
Wednesday, November 13, 2013
An Ode to Elon
You can invest in Groupon or Pandora,
Or in new versions of our friend Tom at Myspace.
I'll take the guy calling the shots at Tesla,
When he's not sending ships into space.
Ask who will deliver the bottom line,
Do you trust Cook, or Ballmer, or Zuck?
Or do you want a guy whose net worth is heavy in Tesla,
If no one cared about the stock, I'm sure he'd still give a f###.
You can say other CEO's put shareholders first,
But ownership percentage is all I need to see.
For I will invest with Elon Musk for the future,
He is doing for electric cars, what the iPod did for Mp3.
Copyright © 2013 Foundry Stock Review, LLC All rights reserved.
Or in new versions of our friend Tom at Myspace.
I'll take the guy calling the shots at Tesla,
When he's not sending ships into space.
Ask who will deliver the bottom line,
Do you trust Cook, or Ballmer, or Zuck?
Or do you want a guy whose net worth is heavy in Tesla,
If no one cared about the stock, I'm sure he'd still give a f###.
You can say other CEO's put shareholders first,
But ownership percentage is all I need to see.
For I will invest with Elon Musk for the future,
He is doing for electric cars, what the iPod did for Mp3.
Copyright © 2013 Foundry Stock Review, LLC All rights reserved.
Tuesday, November 12, 2013
Dunkin' Brands: Growth Expectations Too Sweet?
Growth Plans Overseas Set Ambitious Goal
Dunkin' Brands Group Inc. (DNKN) and its flagship Dunkin' Donuts coffee shops have grand ambitions for conquering the international landscape and North America outside of their highly concentrated Northeastern U.S presence. There are over 500 locations in New York City alone and several hundred in Massachusetts. The firm has a strong presence in the city hubs of the I-95 corridor from Boston to Philadelphia. There are about 7.500 Dunkin' Donuts stores in the U.S. and about 3,200 overseas. Many stoefronts are co-branded with Baskin Robbins ice cream shops, which is featured in 7,000 total locations across the globe.
The company has added Dunkin' Donuts franchises at a fast clip in the US and plans on effectively doubling locations in the US to 15,000 by around 2031. To achieve this goal the company has to open on average 500 stores state-side each year. The last three years has seen Dunkin' add 240 stores in 2011, 291 in 2012, and 357 of a projected 360 stores completed to date in 2013. International expansion has been tagged at 10,000 stores up from 3,000 but no time frame was provided in a late 2011 Businessweek article outlining the initiative. For the sake of projection purposes, to use the domestic 500 store per year build out, it 14 years until 2027 for Dunkin' to reach this goal. A more tempered 300 overseas annual expansion rate would take 33 years or 2046 to complete.
The main driver of domestic growth for Dunkin' is California. The company will start building stores in full force by the year 2015 to include a goal of 1,000 locations in the Golden State. The main thrust internationally will include Shanghai, China with 100 locations by 2023 and India with 500 locations expected by 2026. The company has not found success in Canada or Japan and will count on building 150 stores in the UK to help its peripheral global expansion efforts set for new regions to include Brazil and Eastern Europe in the future.
Revenues for Dunkin' Brands have ranged from 8.8% growth from in 2011 to 4.8% in 2012 to projected 7.9% growth in 2013. 7.1% sales growth in 2014 is analysts current consensus estimate. Earnings growth is expected to come in around 16-17% in 2014. On the surface Dunkin's international expansion plans appear to be very ambitious at best and far fetched at worst in the next 15 years. At the very least, executing on the domestic expansion strategy may prove challenging at home, where Starbucks has a established foothold on the west coast.
Request a free copy of our investment newsletter Foundry Stock Review including price targets on Dunkin' Brands (DNKN) email us today at foundrystockreview@live.com for a limited time.
Dislosure
Foundry Stock Review and its contributors have no positions in Dunkin Brands' (DNKN) or Starbucks (SBUX) the securities mentioned in this blog as of 11/12/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Copyright © 2013 Foundry Stock Review, LLC All rights reserved.
Thursday, November 7, 2013
A Letter from Tesla Investor to Twitter Investor
Dear Twitter Investor,
I write you pleading and warning you to be diligent. I write you with the credibility of having been in your shoes not that long ago. You see, I have been beholden to a company whose stock has traded like a rock star. But like several episodes of VH1's "Behind the Music" there is often a temptation for the higher highs to give you a feeling of invisibility- right before a fall from grace.
You may be giddy at this moment and feel like you can't lose after today's wonderful IPO.
In the coming months, I implore you to stay mindful that if the stock goes parabolic, it may come crashing to the ground. You own a stock not a dream, so don't let it become a nightmare.
My advice to you is to remain skeptical, read quarterly reports, pay attention to those who think the stock is overvalued. Develop sound arguments to combat these bears but allow yourself to change your mind. Re-evaluate your investment often. The market does everyday.
But above all, if the good times roll, take some profits.
Best of luck,
Tesla Investor
Copyright 2013 Foundry Stock Review All Rights Reserved.
I write you pleading and warning you to be diligent. I write you with the credibility of having been in your shoes not that long ago. You see, I have been beholden to a company whose stock has traded like a rock star. But like several episodes of VH1's "Behind the Music" there is often a temptation for the higher highs to give you a feeling of invisibility- right before a fall from grace.
You may be giddy at this moment and feel like you can't lose after today's wonderful IPO.
In the coming months, I implore you to stay mindful that if the stock goes parabolic, it may come crashing to the ground. You own a stock not a dream, so don't let it become a nightmare.
My advice to you is to remain skeptical, read quarterly reports, pay attention to those who think the stock is overvalued. Develop sound arguments to combat these bears but allow yourself to change your mind. Re-evaluate your investment often. The market does everyday.
But above all, if the good times roll, take some profits.
Best of luck,
Tesla Investor
Copyright 2013 Foundry Stock Review All Rights Reserved.
Wednesday, November 6, 2013
Twitter IPO To Give Facebook a Face-lift
Euphoria over Competitors IPO will Boost King of Social Media
Is Twitter (TWTR) on the verge of offering investors a chance to ride the wave of social media exposure that they so desperately seek? Very likely, but what happens if retail investors get shut out of Twitter after it jumps several points tomorrow in the first day of trading? It may be time for investors to take a look at an old flame that shut them out of a similar frenzied IPO a year and a half ago, but has recently rediscovered its sex appeal: Facebook (FB)
Before summer of 2014, if Twitter struggles to show profits and the stock languishes, they may end up sending @Facebook a tweet "How do we deal with a struggling stock price?" #IPOfallout. For the time being, Mark Z. and company should smile and reply @Twitter "Good luck!" #beenthere.
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Dislosure
Foundry Stock Review and its contributors have no positions in Facebook (FB) or Twitter (TWTR) the security detailed in this blog as of 11/7/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Dislosure
Foundry Stock Review and its contributors have no positions in Facebook (FB) or Twitter (TWTR) the security detailed in this blog as of 11/7/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results
Copyright © 2013 Foundry Stock Review, LLC All rights reserved.
Monday, November 4, 2013
Can Tesla Grow into its Earnings Multiple?
Tesla (TSLA) has been one of the most electric performers in 2013 and the company has a style and flair in its DNA that comes directly from its CEO Elon Musk. Many believe the sky is the limit for Tesla and some investors like to look out to earnings in 5 years to justify current valuations. But it is possible that along the road, the valuation of this company will hit some speed bumps?
We believe the answer is best demonstrated in a bullish forecast. If you project forward to 2018, Tesla will most likely have launched its Model E sedan in 2015 and will have sold this mainstream electric vehicle at a cost of $40,000 for about 3 years. If they sell 415,705 total vehicles in 2018 it would represent 80% production growth from 22,000 vehicles in 2013, 39,600 in 2014, 71,280 in 2015, 128,304 in 2016, 230,947 in 2017, 415,705 in 2018. If we use a sales mix of 20% Model S, 20% Model X, and 60% Model E production levels for S and X would come in at 83,141 each and model E at 249,423 cars, 5 years from now.
At these sales levels gross revenues would total $9.97 billion for Model E at $40K average selling price (ASP), $8.31 billion for Model S at $100K ASP, and $7.06 billion for Model X at an estimated $85K ASP. This total revenue figure of $25.34 billion would peg gross margin somewhere around 17.2% assuming 25% margins for Models S and Model X, and 12% gross margin for Model E. If SG&A and R&D expense total 10% of sales we are looking at $2.5 billion in additional expense. under this scenario, $4.35 billion gross profit would be reduced by an estimated $2.5 billion in SG&A and R&D to arrive at $1.85 billion in EBIT. A 30% effective tax rate, leaves us with $1.29 billion in 2018 net earnings. In this example, we are assuming a current share count held constant at 121.5 million for $10.62 dollars in 2018 earnings per share. We are estimating that ZV credits will be phased out completely but advances in battery technology and production methods will make up for this to hold the line on gross margins.
At current prices of $168 per share, under this assumption, investors are paying 15.82 times 2018 earnings. If you believed Tesla could continue to grow 50% in 2019 and 2020 when it is approaching and eclipsing the 1 million vehicle production level, you may be willing to pay $500 or more per share down the road. However, to see the company move up 300% from here, a lot has to go right over a significant period of time.
To summarize, this growth projection may represent a high hurdle that Tesla can meet or exceed in the next 1 to 2 years. However, it may be very challenging to pencil Tesla in for 80% production growth 3-5 years from now. At Foundry Stock Review, we focus on profiling stocks by projecting earnings in the next 12-18 months. Request a free copy of our premium newsletter at foundrystockreview@live.com or visit us at www.foundrystockreview.com for more details.
Disclosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) the security detailed in this blog as of 11/4/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
We believe the answer is best demonstrated in a bullish forecast. If you project forward to 2018, Tesla will most likely have launched its Model E sedan in 2015 and will have sold this mainstream electric vehicle at a cost of $40,000 for about 3 years. If they sell 415,705 total vehicles in 2018 it would represent 80% production growth from 22,000 vehicles in 2013, 39,600 in 2014, 71,280 in 2015, 128,304 in 2016, 230,947 in 2017, 415,705 in 2018. If we use a sales mix of 20% Model S, 20% Model X, and 60% Model E production levels for S and X would come in at 83,141 each and model E at 249,423 cars, 5 years from now.
At these sales levels gross revenues would total $9.97 billion for Model E at $40K average selling price (ASP), $8.31 billion for Model S at $100K ASP, and $7.06 billion for Model X at an estimated $85K ASP. This total revenue figure of $25.34 billion would peg gross margin somewhere around 17.2% assuming 25% margins for Models S and Model X, and 12% gross margin for Model E. If SG&A and R&D expense total 10% of sales we are looking at $2.5 billion in additional expense. under this scenario, $4.35 billion gross profit would be reduced by an estimated $2.5 billion in SG&A and R&D to arrive at $1.85 billion in EBIT. A 30% effective tax rate, leaves us with $1.29 billion in 2018 net earnings. In this example, we are assuming a current share count held constant at 121.5 million for $10.62 dollars in 2018 earnings per share. We are estimating that ZV credits will be phased out completely but advances in battery technology and production methods will make up for this to hold the line on gross margins.
At current prices of $168 per share, under this assumption, investors are paying 15.82 times 2018 earnings. If you believed Tesla could continue to grow 50% in 2019 and 2020 when it is approaching and eclipsing the 1 million vehicle production level, you may be willing to pay $500 or more per share down the road. However, to see the company move up 300% from here, a lot has to go right over a significant period of time.
To summarize, this growth projection may represent a high hurdle that Tesla can meet or exceed in the next 1 to 2 years. However, it may be very challenging to pencil Tesla in for 80% production growth 3-5 years from now. At Foundry Stock Review, we focus on profiling stocks by projecting earnings in the next 12-18 months. Request a free copy of our premium newsletter at foundrystockreview@live.com or visit us at www.foundrystockreview.com for more details.
Disclosure
Foundry Stock Review and its contributors have no positions in Tesla (TSLA) the security detailed in this blog as of 11/4/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities.It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results.
Friday, November 1, 2013
Yahoo Keeps a Bigger Stake in its Crown Jewel
Why Restructuring the Alibaba Deal Makes Sense
FSR Staff
On October 15th, Yahoo (YHOO) reached terms to sell only 9.6% of its 24% ownership stake in Alibaba as part of the chinese e-commerce much anticipated IPO slated to arrive in the coming months. Yahoo can sell the remaining shares after the IPO lockup period expires, usually a period of six months after the shares are listed on an exchange. In this arrangement, Yahoo is retaining 20% more shares than under the original agreement. A conservative valuation of Alibaba is $80 billion dollars, meaning Yahoo stands to gain somewhere around $20 billion from the filing of which $8 billion will be available to the company and $12 billion or 14.4% stake will remain under the Yahoo roof until lockup Ends.
This news is a positive sign that Yahoo is confident Alibaba will continue to grow at a fast clip and reach a higher market cap in the next year or so. Yahoo stands to benefit on the order of $480 million millions if the company can achieve a $100 billion market cap down the road. This assumes the company's IPO garners a $80 billion initial offering value and tacks on $20 billion over the next 6-12 months. If Yahoo sells out the remaining 14.4% stake entirely at $100 billion, it stands to receive another cash infusion north of $14 billion dollars which alone represents 40% of its current market cap of $35.35 billion.
Where do we see Yahoo headed in the next 12-18 months? To find out now, email us receive a free copy of our monthly newletter at FoundryStockReview@live.com.
Foundry Stock Review and its contributors have no positions in Yahoo (YHOO) the security detailed in this blog as of 11/01/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
FSR Staff
On October 15th, Yahoo (YHOO) reached terms to sell only 9.6% of its 24% ownership stake in Alibaba as part of the chinese e-commerce much anticipated IPO slated to arrive in the coming months. Yahoo can sell the remaining shares after the IPO lockup period expires, usually a period of six months after the shares are listed on an exchange. In this arrangement, Yahoo is retaining 20% more shares than under the original agreement. A conservative valuation of Alibaba is $80 billion dollars, meaning Yahoo stands to gain somewhere around $20 billion from the filing of which $8 billion will be available to the company and $12 billion or 14.4% stake will remain under the Yahoo roof until lockup Ends.
This news is a positive sign that Yahoo is confident Alibaba will continue to grow at a fast clip and reach a higher market cap in the next year or so. Yahoo stands to benefit on the order of $480 million millions if the company can achieve a $100 billion market cap down the road. This assumes the company's IPO garners a $80 billion initial offering value and tacks on $20 billion over the next 6-12 months. If Yahoo sells out the remaining 14.4% stake entirely at $100 billion, it stands to receive another cash infusion north of $14 billion dollars which alone represents 40% of its current market cap of $35.35 billion.
Where do we see Yahoo headed in the next 12-18 months? To find out now, email us receive a free copy of our monthly newletter at FoundryStockReview@live.com.
Dislosure
Foundry Stock Review and its contributors have no positions in Yahoo (YHOO) the security detailed in this blog as of 11/01/2013. Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.
Disclaimer
Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results.
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