Archive for February, 2015

Closing Trade ($AAPL, $AOL)

By: ispeculatornew | Date posted: 02.27.2015 (3:00 am)
Today, I will be closing my first trade of the year where I went long Apple ($APPL) and shorted AOL inc ($AOL). That trade is now up over 47%, not too bad right? It has certainly helped the overall portfolio which is up 11.42% (see all trades here).
Why am I closing the trade? No it’s not because I don’t believe in Apple. In fact, it’s very likely that I will open a new position with Apple (and I do still own it as one of my 3 long term speculative picks). Rather, I’m closing it because the trade is up nearly 50% and I’d like to take the opportunity to revisit it and see if I can find a better trade going forward.
Here is the chart since opening the pick on Jan 5th.
AAPL Chart

AAPL data by YCharts

You can expect a new trade on Monday morning:)
Disclaimer: Long Apple ($AAPL)

New Trade: Long TripAdvisor ($TRIP) & Short Pandora ($P)

By: ispeculatornew | Date posted: 02.17.2015 (3:00 am)

The last few days were not as great with Travelzoo (one of my short positions) rising a bit but the 6.27% return so far this year remains very solid. Today I’m opening a new trade between 2 stocks trading at comparable levels but that I have extremely different longer term views about.

As is always the case you can see my long & short trades (from 2015 but also past years) here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers for today’s trade, two high priced stocks:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
PPandora Media Inc15.44N/A27.5-15.9344.3542.791.414.49N/AN/AN/AN/A
TRIPTripAdvisor Inc84.8152.8227.9310.3731.93.368.651.558.7129.4N/A31.39N/A

The chart that I always look at is below and this time, it “could” indicate that Pandora is a better buy given comparable forward valuations but the big difference is that I think Pandora’s margins will remain extremely low over time so it would need a much bigger lead in order to justify its current valuation.

TRIP Revenue (Quarterly YoY Growth) Chart

TRIP Revenue (Quarterly YoY Growth) data by YCharts

$TRIPLong TripAdvisor Inc. (TRIP)

No surprise that I’m buying TRIP again. I had closed an existing long position a week ago before the earnings and thus end up losing on a (very) big gain following the earnings release but overall, I think TRIP will continue to do extremely well and feel very comfortable holding it at these levels. I see very few if any threats to TripAdvisor. Its biggest online travel competitors are trying to expand but they’re not competing on TRIP’s “core offer” of online reviews & ratings. Priceline buying Kayak and Expedia buying Orbitz are good moves but pose no threat to TRIP in my opinion.

ycharts_chart

Next earnings release: May 6th 2015

$PShort Pandora Media Inc. (P)

Ah looking at the below chart is sad in a way. Why? I’ve been short Pandora over and over in the past few months but I still managed to miss out on much of Pandora’s decline, especially in the last month. I fear that I’m repeating myself but the bulk of my belief is that Pandora has a terrific service but is going against formidable competitors such as Spotify but also others like Apple, Google and Amazon that are willing to lose money over the long term in order to make their “ecosystems” more attractive. That is a big problem and as smart cars expand, it will become increasingly easy to access those competing services. I just don’t see how Pandora will be able to build a solid long term business and can’t possibly justify its current valuation.

ycharts_chart (1)

Next earnings release: April 24th 2015

Disclaimer: Long position on TripAdvisor (TRIP) and I will open this trade on today’s open

Adding A Stock To My Tech Stock Dashboard ($BOX)

By: ispeculatornew | Date posted: 02.12.2015 (5:10 am)

$BOXToday, I’m adding the first of several stocks to the list of stocks that I follow; Box Inc. (BOX)

For those of you who are new to the blog, you might know that one of the main things I blog about are my long & short tech stocks. It’s not a big part of my investments but it’s a lot more active than the rest and has done extremely well in the past few years. Evey time that I look for a trade opportunity, I start by looking at the list of stocks that I follow. That list can be found here.

I also track news, earnings reports and more for all of these companies. I generally tend to stay away from trading recently turned public companies. It is partially because I want more historical data on those companies but also because they are so volatile in the first few months. Just look at the daily movements by BOX:

ycharts_chart

What is Box?

Box is an extremely interesting company to add. It is an online file sharing company that mainly focuses on a business offering. As companies quickly move their assets towards the “cloud”, Box is very well positioned as one of the leaders. Many companies have tried to do this themselves which often ends up with security issues as we saw with the now famous Sony hacking incident.

Growing Sector But…

Box’s main problem of course is that it competes with the likes of Microsoft, Google, Dropbox, Amazon and many others in a sector where margins are quickly decreasing. Many of these companies are looking at selling this service as a way to establish a relationship with these businesses rather than trying to make money off of it which makes it extremely difficult for BOX to extract good margins and for that reason, I’d be very hesitant to pay a high valuation for a stock like that.

Beware The Company’s Financials

Like other stocks such as ZenDesk (ZEN) and Salesforce (CRM), Box should be seen as a SAAS (software as a service) company and valued based off of that. Here is a great article that explains the differences involved:

Understanding SAAS: Why the pundits have it wrong

Do any of you have a position or opinion on BOX?

New Trade: Long Google ($GOOG) & Short eBay ($EBAY)

By: ispeculatornew | Date posted: 02.11.2015 (3:30 am)

Yesterday was a very good day (I’m closing my first trade) and the average trade return so far this year as shot up north of 7%. Of course, it’s still very early and things could (and will) change significantly but it’s obviously better to have a good start than a bad one (duh!).

As is always the case you can see my long & short trades (from 2015 but also past years) here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers for today’s trade, two high priced stocks:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
GOOGGoogle Inc536.94N/A15.910.2718.884.44N/AN/AN/A22.4634.7
EBAYeBay Inc55.2734.6215.96-3.1911.563.7916.260.9114.3116.1833.14

The chart that I always tend to look at is once again to be used today and I do expect the clear trend here to continue with eBay’s revenues and earnings growth slowly moving down. Google is trickier to predict but I feel confident that it will be superior to EBAY’s.

GOOG Revenue (Quarterly YoY Growth) Chart

GOOG Revenue (Quarterly YoY Growth) data by YCharts

$googLong Google Inc. (GOOG)

To say that I have blind confidence in Google would be a lie. Even after all these years, I do still struggle to get a clear picture of Google and what it is actually trying to do. In one way, Google is a simple company that generates advertising revenues from its search engine dominant position. But then you have all of these other products, the incredible Android position, Google X, etc. I do still think though that in the end, Google is able to generate significantly higher long term growth than a company like eBay which is priced at an identical forward P/E ratio.

ycharts_chart

Next earnings release: April 16th 2015

Short eBay Inc (EBAY)

eBay has been a fairly easy company to track in the past few years which I’ve been treating mostly as an online bank because that is where most of the growth & value is.  The fact that eBay has finally confirmed it would be spinning out Paypal in a few months is a positive but as I’ve mentioned in the past I think in a way it’s a little too late for Paypal to become what it once had an opportunity to become (the default “electronic” payment system).

ycharts_chart (1)

$ebay

Next earnings release: April 22nd 2015

Disclaimer: No positions on eBay (EBAY) or Google (GOOG) but I will open this trade on the open

Closing 1 Trade ($TRIP, $NILE)

By: ispeculatornew | Date posted: 02.11.2015 (3:00 am)

Great news today as I’m closing my first long & short trade of the year. Two trades are currently over the +20% ratio but for now I will keep the long Apple (AAPL) & short AOL Inc. (AOL) trade live for now. This morning however I’ll be closing the trade that I did on January 9th where I went long TripAdvisor (TRIP) and short Blue Nile (NILE). Yesterday, NILE announced very disappointing results helping me in a big way. As much as I believe in the long term future of TripAdvisor, I was not terribly impressed with the last quarter earnings call and am a bit nervous about this week’s earnings so I prefer taking the gains here:)

TRIP Chart

TRIP data by YCharts

New Trade: Long Twitter (TWTR) and short Rackspace ($RAX)

By: ispeculatornew | Date posted: 02.09.2015 (3:00 am)

Today I’m opening a 6th trade, finally getting close to being fully invested:) There wasn’t much change last week and with the earnings season coming to an end, volatility will likely decrease significantly which is more than welcome.

As is always the case you can see my long & short trades (from 2015 but also past years) here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers for today’s trade, two high priced stocks:

TickerPricePE RatioPE Next YearSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
RAX47.4971.645117.233.78.530.9611.0823.2832N/AN/A
TWTR48.01N/A53.03111.013.665.72N/A2.32N/AN/AN/AN/A

With Rackspace being in such a high growth sector, you’d think that growth would be much higher but the below chart surprised me. Twitter has not been public very long so it’s still early to say how the company will be able to keep impressing investors:

TWTR Revenue (Quarterly YoY Growth) Chart

TWTR Revenue (Quarterly YoY Growth) data by YCharts

$TWTRLong Twitter (TWTR)

Ah Twitter has been absolutely fascinating to cover in the past couple of years. I’m a very active user (mostly as a reader) and it’s perhaps the app that I use the most on my phone. I think that in many ways, the company has been under-estimated from the very start. I’m not part of those that had doubts about Twitter’s ability to generate income but it’s still very nice to see that growth finally come in to play. It still boggles my mind though to understand why Twitter has struggled so much to grow its user base. It’s a complex product to use in some ways and is certainly a challenge to start off with compared to others like Facebook (FB) but you’d still think that after all these years, Twitter would have figured out ways to get more mainstream use. Hopefully that happens in the near future. It’s a very big problem but I still feel like it’s the only thing pulling back Twitter and have faith that they will figure it out. Can Twitter become an “ecosystem”? I have strong doubts but I also think the product is unique enough to remain relevant on all ecosystems. In the end, I’m not clear that this is a great buying point for Twitter bur if TWTR and RAX are both trading at almost identical forward P/E’s, it feels like a no brainer to me.

ycharts_chart

Next earnings release: April 29th 2015

$RAXShort Rackspace Inc. (RAX)

Rackspace is a very interesting company and while over the years I have become more positive about it, I remain very sceptical of a company that will have trouble distinguishing itself in a world with extreme competition. Yes, the cloud hosting/computing area is an extremely fast growing one but it’s also one where Rackspace is competing with the likes of Amazon, Microsoft, Box, etc. RAX has been up and down and my primary fear of course are the on and off rumours that RAX could end up selling itself.

ycharts_chart (1)

Next earnings release: February 17th 2015

Disclaimer: No positions on Twitter (TWTR) or Rackspace (RAX) but I will open this trade on the open

New Trade: Long Facebook ($FB) and short Travelzoo Inc. ($TZOO)

By: ispeculatornew | Date posted: 02.05.2015 (3:00 am)

Today I will be opening a 5th tech stock long & short pick with the portfolio up 3.63% so far this year. After a more difficult start to the year, things are now back and my overall picks are back in the black. Today’s stock pick might look a bit odd as there is very little in common between Facebook and Travelzoo. It’s more of a case of buying a stock I like and shorting one that does seem overvalued at these levels. It’s probably not by luck that one seems like it’s on the cutting edge of where the web is and even where it’s headed while the other seems stuck in a world where Groupon (GRPN) was king.

As is always the case you can see my long & short trades (from 2015 but also past years) here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers for today’s trade:

TickerNamePricePE RatioPE Next YearSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
FBFacebook Inc75.6368.5529.5558.364.6112.910.714.77N/AN/A
TZOOTravelzoo Inc9.1411.238.92-10.213.52.70.629.626.76-12.33

Nothing shock here as Facebook has been performing drastically better than Travelzoo in the past few years:

ycharts_chart (2)

$FBLong Facebook (FB)

Facebook is my biggest single stock holding at this point and I continue to think it’s being managed in such a clever way. While Facebook could do much better in the short term, it continues to focus on user growth and user experience for most of its properties such as Instagram, WhatsApp, FB Messenger, etc. Revenues and profits have still increased significantly thanks to Facebook’s continued success in mobile but overall, I think Facebook continues to work extremely hard on securing its position as an “ecosystem”.  There has been very little upside in the past few earnings calls because of the surprise in spending growth but if you think about how early we are in this whole cycle, it makes a lot of sense for Facebook to continue focusing on the long term growth. I do think that if you consider both Facebook and Travelzoo are trading at comparable forward P/E’s, it’s no a brainer which of the two I prefer owning.

ycharts_chart

 

Next earnings release: April 23rd 2015

$TZOOShort Travelzoo Inc. (TZOO)

Well, not shocking to see that Travelzoo has been performing badly. There is little optimism about the company in general. It’s business model has remained fairly stable in the past few years as the companies continues to work on building a mailing list that it can send great travel offers to on a daily/weekly basis. I don’t see much of a transition to mobile or building a community, two of the critical areas to compete with the other big online travel players.

Traffic based on most data that I’m seeing is down. Look at this chart from Compete.com:

traffic

It doesn’t look promising and I’d have a tough time trying to imagine Travelzoo’s overall numbers increasing in the next few quarters.

ycharts_chart (1)

 

Next earnings release: April 17th 2015

Disclaimer: Long Facebook (FB) and will be opening this trade on today’s open

Top 100 Dividend Stocks – February 2015 Edition – Oil & Gas… Opportunity or Danger?

By: ispeculatornew | Date posted: 02.04.2015 (3:00 am)

Offshore Drilling Platform and SunLast month, in my monthly top dividend update, I looked into TransOcean (RIG) which was at the top of the rankings in terms of top dividend payers in the S&P500. Well guess what, that has not changed. In fact, an increasing number of energy sector names have climbed near the top of these rankings. Like RIG, it is mostly driven by poor fundamentals. Let’s face it, the price of oil has been declining so quickly that many of these companies will face serious challenges. Already, Bonterra Energy (BNE.TO) in Canada just announced it was cutting its dividend by 50%. In much of the analysis of Exxon (XOM), analysts were discussing the possibility of Exxon pausing its dividend increases if the price of oil does not recover in the coming months.

I personally would be careful with having too much exposure to the energy sector in the coming weeks/months even though it will attract a very solid dividend yield. Would you go all in with oil names at this price betting on a rebound?

 

Here is the full list!

TickerNamePriceDividend YieldPayout RatioEx-DvdIndustry
RIGTransocean Ltd18.416.363.792/18/2015Oil&Gas Drilling
WINWindstream Holdings Inc8.5411.71250.773/27/2015Telephone-Integrated
DODiamond Offshore Drilling Inc33.9110.3288.6902/12/2015Oil&Gas Drilling
ESVEnsco PLC29.9410.0236.903/12/2015Oil&Gas Drilling
NENoble Corp plc17.978.3525.202/06/2015Oil&Gas Drilling
FCXFreeport-McMoRan Inc18.986.5984.824/16/2015Metal-Copper
FTRFrontier Communications Corp7.345.72362.4203/09/2015Telephone-Integrated
TAT&T Inc34.345.48154.7104/01/2015Telephone-Integrated
CTLCenturyLink Inc39.595.46#VALUE!2/27/2015Telephone-Integrated
MATMattel Inc28.0655.42103.282/17/2015Toys
OKEONEOK Inc46.785.17117.54/29/2015Pipelines
WMBWilliams Cos Inc/The46.084.95222.6203/11/2015Pipelines
PMPhilip Morris International Inc82.244.8668.073/24/2015Tobacco
HCPHCP Inc46.814.83106.9202/05/2015REITS-Health Care
IRMIron Mountain Inc40.24.73213.913/18/2015REITS-Storage
VZVerizon Communications Inc47.834.689.1804/08/2015Telephone-Integrated
PBCTPeople's United Financial Inc14.594.5219.264/29/2015S&L/Thrifts-Eastern US
KMIKinder Morgan Inc/DE41.484.34192.824/29/2015Pipelines
CNPCenterPoint Energy Inc22.844.33114.1502/11/2015Gas-Distribution
COPConocoPhillips67.744.3161.2402/12/2015Oil Comp-Explor&Prodtn
SESpectra Energy Corp34.944.2480.5602/11/2015Pipelines
SOSouthern Co/The50.84.14107.3602/12/2015Electric-Integrated
PPLPPL Corp36.384.179.7903/09/2015Electric-Integrated
TETECO Energy Inc21.684.0696.662/13/2015Electric-Integrated
HPHelmerich & Payne Inc67.854.0537.5202/11/2015Oil&Gas Drilling
HCNHealth Care REIT Inc81.764.043110.7702/06/2015REITS-Health Care
VTRVentas Inc79.733.96164.0603/06/2015REITS-Health Care
POMPepco Holdings Inc27.433.94245.4503/06/2015Electric-Integrated
PCLPlum Creek Timber Co Inc44.83.93145.3202/11/2015REITS-Diversified
CVXChevron Corp109.533.9141.2102/12/2015Oil Comp-Integrated
WYNNWynn Resorts Ltd155.83.8596.5902/11/2015Casino Hotels
FFord Motor Co15.653.8461.374/28/2015Auto-Cars/Light Trucks
RAIReynolds American Inc69.913.8379.103/06/2015Tobacco
MOAltria Group Inc54.263.8376.923/13/2015Tobacco
EDConsolidated Edison Inc68.993.7767.892/13/2015Electric-Integrated
CCICrown Castle International Corp87.243.76179.323/17/2015REITS-Diversified
GEGeneral Electric Co24.473.7658.262/19/2015Diversified Manufact Op
ETREntergy Corp89.423.7183.1102/10/2015Electric-Integrated
LOLorillard Inc66.463.769.922/25/2015Tobacco
DUKDuke Energy Corp86.783.6782.3802/11/2015Electric-Integrated
STXSeagate Technology PLC59.253.6535.8502/06/2015Computers-Memory Devices
DRIDarden Restaurants Inc60.763.62157.3704/10/2015Retail-Restaurants
MCDMcDonald's Corp93.923.6267.62/26/2015Retail-Restaurants
AEEAmeren Corp45.433.6175.8103/09/2015Electric-Integrated
DOWDow Chemical Co/The46.893.5852.23/30/2015Chemicals-Diversified
GRMNGarmin Ltd53.653.5857.4403/12/2015Electronic Compo-Misc
GASAGL Resources Inc57.193.5770.9302/11/2015Gas-Distribution
FEFirstEnergy Corp40.443.56245.2302/04/2015Electric-Integrated
GMGeneral Motors Co33.983.53003/09/2015Auto-Cars/Light Trucks
CINFCincinnati Financial Corp52.13.5352.223/16/2015Multi-line Insurance
GMEGameStop Corp37.53.5237.2103/05/2015Retail-Computer Equip
OXYOccidental Petroleum Corp82.153.5134.8403/09/2015Oil Comp-Explor&Prodtn
PFEPfizer Inc32.023.574.0202/04/2015Medical-Drugs
COHCoach Inc38.693.4947.8803/06/2015Retail-Apparel/Shoe
PEGPublic Service Enterprise Group Inc43.23.4358.5703/06/2015Electric-Integrated
HSTHost Hotels & Resorts Inc23.313.43169.523/27/2015REITS-Hotels
KIMKimco Realty Corp28.063.42174.483/30/2015REITS-Shopping Centers
NOVNational Oilwell Varco Inc54.083.428.6503/11/2015Oil Field Mach&Equip
PNWPinnacle West Capital Corp70.463.3860.314/30/2015Electric-Integrated
AEPAmerican Electric Power Co Inc62.763.3860.7502/06/2015Electric-Integrated
EXCExelon Corp36.933.3673.5502/11/2015Electric-Integrated
TEGIntegrys Energy Group Inc81.273.3561.842/27/2015Electric-Integrated
CATCaterpillar Inc83.923.3345.14/16/2015Machinery-Constr&Mining
SCGSCANA Corp63.763.2960.303/11/2015Electric-Integrated
KRFTKraft Foods Group Inc66.973.2945.053/30/2015Food-Misc/Diversified
WYWeyerhaeuser Co35.573.2672.432/25/2015REITS-Diversified
PBIPitney Bowes Inc23.013.2663.7402/11/2015Office Automation&Equip
NUENucor Corp45.733.2666.413/27/2015Steel-Producers
PAYXPaychex Inc46.913.2481.3705/08/2015Data Processing/Mgmt
LYBLyondellBasell Industries NV86.93.2233.6703/05/2015Chemicals-Diversified
CACA Inc31.183.2150.392/17/2015Enterprise Software/Serv
AESAES Corp/VA12.483.2143.114/29/2015Electric-Generation
XELXcel Energy Inc37.643.1959.23/17/2015Electric-Integrated
ABBVAbbVie Inc61.653.18150.6504/10/2015Medical-Drugs
EMREmerson Electric Co59.443.1656.3602/11/2015Electric Products-Misc
KLACKLA-Tencor Corp63.473.1551.292/19/2015Semiconductor Equipment
MCHPMicrochip Technology Inc45.5853.1371.142/19/2015Electronic Compo-Semicon
LMTLockheed Martin Corp1923.1348.122/26/2015Aerospace/Defense
PCGPG&E Corp58.853.09100.613/30/2015Electric-Integrated
GISGeneral Mills Inc53.263.0853.4104/10/2015Food-Misc/Diversified
DDominion Resources Inc/VA78.583.0772.882/25/2015Electric-Integrated
DTEDTE Energy Co90.033.0768.533/19/2015Electric-Integrated
CMSCMS Energy Corp37.843.0761.3602/04/2015Electric-Integrated
CVCCablevision Systems Corp19.63.06122.8603/12/2015Cable/Satellite TV
KMBKimberly-Clark Corp110.173.0685.3503/04/2015Consumer Products-Misc
HASHasbro Inc56.1453.0672.8805/01/2015Toys
SYYSysco Corp39.543.0472.3104/01/2015Food-Wholesale/Distrib
NAVINavient Corp21.083.04#VALUE!03/04/2015Finance-Consumer Loans
WECWisconsin Energy Corp55.963.0256.9602/11/2015Electric-Integrated
PGProcter & Gamble Co/The85.953.01614/22/2015Cosmetics&Toiletries
XOMExxon Mobil Corp92.252.9935.5702/06/2015Oil Comp-Integrated
IPInternational Paper Co53.732.98110.2802/11/2015Paper&Related Products
MSFTMicrosoft Corp41.62.98422/17/2015Applications Software
NUNortheast Utilities56.042.9858.872/26/2015Electric-Integrated
MRKMerck & Co Inc61.022.97116.5303/12/2015Medical-Drugs
BAXBaxter International Inc70.452.9557.103/04/2015Medical Products
XLNXXilinx Inc39.3052.9542.4105/11/2015Electronic Compo-Semicon
KOCoca-Cola Co/The41.632.9457.8503/11/2015Beverages-Non-alcoholic
KKellogg Co66.652.9436.162/27/2015Food-Misc/Diversified
VLOValero Energy Corp54.382.9414.9502/09/2015Oil Refining&Marketing

Potential?

Are there names on this list that you like or that you are currently considering?

 

 

New Trade: Long Microsoft ($MSFT) and short Adobe Systems Inc ($ADBE)

By: ispeculatornew | Date posted: 02.03.2015 (3:00 am)

After a more difficult start to the year, things are now back and my overall picks are back in the black. Today I’m back with my 4th pick, I’ll try to pick up the pace a bit. Apple has been a very big help in getting things back thanks to its record breaking earnings that took the stock to its all-time high.

You can see my long & short trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers for today’s trade:

TickerNamePricePE RatioPE Next YearSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
MSFTMicrosoft Corp41.2815.4813.9411.543.6711.181.0110.466.91-0.94
ADBEAdobe Systems Inc71.11138.1421.582.263.813.620.918.338.17N/A

Here is a chart that I always like considering, especially for 2 stocks that are trading at very comparable P/E ratios, as you see Microsoft clearly has had superior growth in the past 2 years:

MSFT Revenue (Quarterly YoY Growth) Chart

MSFT Revenue (Quarterly YoY Growth) data by YCharts

$msftLong Microsoft (MSFT)

These days, Ben Thompson (Stratechery) has been critical in helping me get a better grasp of what Microsoft has been doing, what it should be doing, etc. Overall, I feel like they are doing much better than the market seems to be giving it credit for. I personally don’t consider the last earnings report anywhere near bad enough to justify that kind of drop and I do expect that to continue.

msft

Next earnings release: April 23rd 2015

$ADBEShort Adobe Systems Inc. (ADBE)

Both Adobe and Microsoft are facing a similar challenge as they attempt to change a software business from an “acquisition” customer base to a “subscription/ongoing” business. That started earlier at Adobe and for the most part has been a success but the growth remains fairly low and I don’t think expect that to change. The fact is that Adobe faces a very difficult environment and a lot of competition, which is also true for MSFT but that Nadella led company has a very strong presence in the still important (for enterprise especially) pc world. I don’t see anything that justifies Adobe having a higher forward P/E and feel very good about this new trade.

adbe

Next earnings release: March 17th 2015

Disclaimer: No positions on either MSFT or ADBE but I will initiate this trade on the open today