LNKD

We’re At New Highs Again

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The taper came and went, and the markets don’t seem to care. The S&P 500 notched yet another high this week. The correction that we warned about came and went as well, almost as if market forces created such an event just to move higher. From my experience, the market, at the present moment, is trading almost purely on technicals. For example, once we touched the 10% official mark of a correction, we started to move higher, and once the markets started to move higher, the move accelerated. Consecutive gap ups following pull-backs have become the norm. This market has become almost a pure technical market, where traders and moving averages are taking precedent over fundamentals. This won’t last forever. The … Read more

Valuentum’s Performance on Seeking Alpha

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Image Source: TipRanks, as of November 2016 By Valuentum Editorial Staff Seeking Alpha recently published the returns of certain ‘buy’ and ‘sell’ calls for each author. We applaud the firm’s ongoing dedication to transparency of its authors, if not by name, by track record. Valuentum Securities is an independent research firm headed by President Brian Nelson, CFA. Out of the 2,000+ articles Valuentum has published on Seeking Alpha, the Seeking Alpha study covered 567 of them, spanning from May 16, 2011, through June 25, 2014. Long ideas: 508; short ideas: 59. The articles in the study spanned all sectors and market capitalizations. The study pulled articles that were either tagged by Valuentum as ‘long’ ideas or ‘short’ ideas within the … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

I’d rather lose half of my clients than lose half of my clients’ money.

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“I’d rather lose half of my clients than lose half of my clients’ money.” – Jean-Marie Eveillard (First Eagle Global) Josh Brown, who runs the blog The Reformed Broker, wrote an excellent piece today on how irrational clients and customers can bring down even the best of money managers. We think it’s a very informative read. Pasted below is an excerpt from the intro, accompanied by the list of the top 25 most overvalued stocks on the market today on the basis of our research. There is a link to continue reading the piece from Josh at the bottom of the table, too.  Something tells me there are some serious blow-ups on the horizon for professional managers. I feel this … Read more

Sign of the Times: Facebook Soars, Yahoo Sours

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On January 29, Facebook (FB) kept the fundamental momentum going in its operations. The social media giant announced impressive fourth-quarter results, revealing that revenue jumped 63% (see image below) thanks to a 76% increase in revenue from advertising. Facebook indicated that mobile advertising revenue now represents more than half of advertising revenue compared to less than 25% in the same period a year ago. Income from operations nearly doubled in the period, to $1.13 billion, as the firm’s GAAP operating margin leapt 11 percentage points, to 44%. GAAP net income advanced to $523 million, compared to $64 million in the fourth quarter of 2012. Diluted earnings per share came in at $0.20 per share in the quarter, up from $0.03 … Read more

FedEx, Ford and Facebook Topping News

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On Wednesday, FedEx (FDX) reported slightly lower-than-expected bottom-line performance in its fiscal second-quarter results. Revenue advanced 3% during the quarter, while reported operating income leapt 15% thanks to roughly 80 basis points of operating-margin improvement. Adjusted for the effects of Hurricane Sandy, however, year-over-year performance wasn’t that great. The firm’s quarterly earnings per share mark of $1.57 compares to an adjusted measure of $1.50, or a 4.7% increase, which itself was augmented by its share-repurchase program. Free cash flow was negative during the six months ended November 30, 2013, consistent with the cash use during the prior-year period. The company experienced improved yield and cost management (and materially better operating margin performance) at FedEx Express (its largest operating segment), but … Read more

Twitter Prices at $45.10 Per Share, Up 70%+ From $26 IPO Price

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<< Twitter’s Form S-1/A What Is Twitter? Adapted From Twitter’s S-1/A: “Twitter (TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to create, distribute and discover content, the firm has democratized content creation and distribution, enabling any voice to echo around the world instantly and unfiltered. The firm’s platform is unique in its simplicity: Tweets are limited to 140 characters of text. This constraint makes it easy for anyone to quickly create, distribute and discover content that is consistent across its platform and optimized for mobile devices. As a result, Tweets drive a high velocity of information exchange that makes Twitter uniquely “live.” The firm aims to become … Read more

LinkedIn’s Growth Doesn’t Disappoint But Its Valuation Is Absurd

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Professional social networking giant LinkedIn (LNKD) posted another strong quarter Tuesday night after the market close. Revenue exceeded consensus estimates as it soared 56% year-over-year to $393 million. The bottom line followed suit, as non-GAAP earnings per share jumped 77% year-over-year to $0.39. LinkedIn also revealed decent free cash flow, which stands at $133 million year-to-date, equal to 12% of total revenue. However, Mr. Market was none too pleased with LinkedIn’s guidance, but we’ll get into that later.  Engagement Remains Strong Image Source: LNKD 3Q13 Slides Though down slightly sequentially, LinkedIn continues to take steps with respect to engagement. According to comScore (shown above), LinkedIn had 142 million unique visitors during its third quarter, an increase of 29% on a year-over-year … Read more

Get To Know Yahoo!’s Management; We Value Alibaba at $75 Billion

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The only question that comes to mind after looking at the below slide is: What turnaround? Image Source: Yahoo GAAP revenue down 5%. Revenue ex-TAC down 1%. Adjusted EBITDA down 19%. Income from operations down 39%. Non-GAAP operating income down 27%. Net earnings down 91%. EPS attributable to Yahoo down 89%. Non-GAAP EPS down 13%. Free cash flow down 73%. Cash and marketable securities down 66%. It’s flat-out puzzling that CEO Marissa Mayer included the following statement in the third-quarter press release: “I’m very pleased with our execution, especially as we’ve continued to invest in and strengthen our core business.” We understand the importance of staying positive, but her statement is quite a stretch considering actual financial performance at the core Yahoo business.  The only line item in … Read more