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Entries from April 2018

The Great Slowdown?

April 30th, 2018 · Comments Off on The Great Slowdown?

There are signs that world economic growth is slowing down, although it’s not clear whether this is just a blip or the beginning of a more lasting trend. Lower growth would be especially toxic if accompanied with higher rates and a higher dollar. Equities seem to be pricing in at least some of these possibilities […]

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Tags: The Markets · World Economy

Data I/O Should Bottom Out Here

April 30th, 2018 · Comments Off on Data I/O Should Bottom Out Here

Shares have gone down as fast as they rose last year, but we think both movements have been exaggerated. The quick downturn in the share price is on expectations that we’ll experience a traditional severe cyclical downturn. But we think there are several reasons why this will be a muted cycle. With the company in […]

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Tags: DAIO

Ellie Mae Confounds The Skeptics

April 28th, 2018 · Comments Off on Ellie Mae Confounds The Skeptics

The company keeps confounding the critics, growing against headwinds from rising interest rates and lower mortgage origination volumes. This isn’t so surprising, it has done it before. The company has enough tricks up its sleeve to keep this going for some time to come. Only if interest rates rise much further and economic growth slows […]

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Tags: ELLI

United Microelectronics Has An Excellent Long-Term Perspective

April 28th, 2018 · Comments Off on United Microelectronics Has An Excellent Long-Term Perspective

A change in strategy, the backdrop of end-product demand growth and scaling up a facility in China should give the company considerable room to run. This won’t happen immediately though. But in the meantime, you can enjoy the 3%+ dividend yield. Source: United Microelectronics Has An Excellent Long-Term Perspective – United Microelectronics Corporation (NYSE:UMC) | […]

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Tags: UMC

Workday Keeps On Rising, But Its Valuation Is Steep

April 25th, 2018 · Comments Off on Workday Keeps On Rising, But Its Valuation Is Steep

The company keeps doing almost everything right, with good growth, operational leverage and lots of free cash flow. There is no reason to think this won’t continue, but the picture is muddied by a large amount of share-based compensation. The company’s valuation is also quite stretched, in our view. Source: Workday Keeps On Rising, But […]

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Tags: WDAY

Are Investors Excessively Punishing Companies That Invest In Growth At The Expense Of Margins?

April 25th, 2018 · Comments Off on Are Investors Excessively Punishing Companies That Invest In Growth At The Expense Of Margins?

While not a systematic inquiry, we nevertheless spot quite a few companies whose shares get punished for investing when that results in some margin decline. With investment the cost gets in front of the benefits, so this will produce situations in which time will rectify the problem. This is especially the case with companies with […]

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Tags: BZUN · GOOG · JD · SKX

Cypress 3.0 Is Working Very Well

April 24th, 2018 · Comments Off on Cypress 3.0 Is Working Very Well

The company is benefiting from a number of positives, like the IoT market taking off, increasing electronic content in cars, a USB-C explosion, and very strong memory prices. It is also still increasing capacity utilization at its Fab 25, increasing gross margins. The company shows strong leverage and produces copious amounts of free cash flow. […]

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Tags: CY

Ctrip’s International Expansion Adds Another Booster

April 24th, 2018 · Comments Off on Ctrip’s International Expansion Adds Another Booster

Ctrip, the giant online Chinese travel platform, is going through a soft patch, in part the consequence of one-off factors. But we argue that this is still a very well-managed company, benefiting from powerful tailwinds and strong platform economics. We expect more solid growth to return to the company later in the year. Source: Ctrip’s […]

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Tags: CTRP

SHU Portfolio: Buy Skechers Again

April 24th, 2018 · Comments Off on SHU Portfolio: Buy Skechers Again

Shares in Skechers have sold off big time on rising cost and a soft Q2 outlook. But much of the cost rise is due to investments in growth, which the company keeps delivering, and one-off factors. The soft quarter seems mostly a timing issue according to management although their credibility has taken a bit of […]

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Tags: SKX

ASML Holding Doesn’t See A Memory Slowdown

April 22nd, 2018 · Comments Off on ASML Holding Doesn’t See A Memory Slowdown

ASML Holding posted a solid first quarter and guidance. While Q2 gross margins are guided down, this problem will disappear during the rest of the year as margins will steadily improve. Management also sees no signs of a memory market slowdown. So we think shares will find support at the levels of today at the […]

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Tags: ASML