Post a CommentToday I’m coming out of the gate with a new trade as I get back to just over half of the portfolio invested As is always the case you can see the existing live trades here:
http://www.intelligentspeculator.net/livetrades
Today’s trade is one between 2 ecommerce players. I thought long and hard about doing a AMZN-EBAY play but given where they are trading, the risk vs. reward seemed better with Apple. That being said, expect me to soon get involved into AMZN.. more on that very soon!
Let’s start off by looking at the numbers:
| Ticker | Name | Price | PE Ratio | PE Next Year | Return YTD | Sales Growth | Book Value | Beta | Revenue/Share | Sales 5Y Avg Growth | EPS 5Y Avg Growth |
|---|---|---|---|---|---|---|---|---|---|---|---|
| AAPL | Apple Inc | 93.99 | 9.99 | 9.34 | -10.5 | 27.86 | 23.13 | 1.12 | 40.62 | 25.56 | 34.76 |
| EBAY | eBay Inc | 22.49 | 10.78 | 10.74 | -19.65 | -2.25 | 5.55 | 0.95 | 7.11 | 3.65 | 36.71 |
For some reason, the y/y quarterly sales growth chart came out funky on this one (I expected it to look strange for EBAY given the big spinout but it looked strange even for Apple so let’s just get started:
Long Apple (AAPL)
Apple continues to be undervalued by the market in my opinion. There are some concerns but there are so many other good stories and I do think the growing huge number of loyal iOS numbers will continue to generate growth in both hardware and services. The y/y comparison is very tough this year given sale date changes in China but also last year’s late arrival of the larger screen phones but I have no doubt that the iOS user base continues to expand overall. Apple continues to be one if not the cheapest name on my tracking board (in terms of forward P/E) which screams buy to me.
Next earnings: April 25th 2016
Short eBay (EBAY)
I have to say, I have been increasingly negative about eBay’s future. Its bright star Paypal has been spun off and it now has to compete head’s on with Amazon which no one has been able to successfully do. I don’t expect EBAY to succeed and therefore expect a continued slide in all its numbers. It does not have a single (from my perspective) edge vs. Amazon which leaves it in a very dark spot. It does not offer more selection, a better customer (or seller) experience, etc. I will be curious to see how management approaches this problem but it does look like a great short at these levels compared to some other names.
Next earnings: April 20th
