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Optical Networking Stocks: Death By A Thousand Cuts

May 8th, 2017 · Comments Off on Optical Networking Stocks: Death By A Thousand Cuts

  • Sometimes whole sectors are sold off without much discrimination between the different names. This opens up opportunities for the rational investor.
  • For instance, the optical networking sector has sold off, multiple times on news of a slowdown in Chinese demand.
  • However, by no means all of these networking stocks have comparable exposure to China; some don’t even have any.
  • There are also valuation anomalies at work which are tradable, in our view.

Optical Networking Stocks: Death By A Thousand Cuts | Seeking Alpha

Comments Off on Optical Networking Stocks: Death By A Thousand CutsTags: FNSR · LITE

PayPal – Mind The Gap

May 8th, 2017 · Comments Off on PayPal – Mind The Gap

  • PayPal came out with good Q1 figures and very good news about its P2P service Venmo.
  • It looks increasingly likely they have one of the major payments platforms for the digital age and worries about the fintech revolution might be overblown.
  • While we have little doubt the future contains significant leverage in the business model, this is less apparent at present than management wants you to believe.
  • We would buy the shares if the gap fills in the graph.

PayPal – Mind The Gap

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Wall Street Vs. Main Street

May 6th, 2017 · Comments Off on Wall Street Vs. Main Street

  • The uproar of financial analysts over a wage hike at American Airlines is really illustrative of what has gone wrong with the economy.
  • The details of this case are particularly stunning.
  • But it’s only the logical outcome of how companies have been hardwired the last 4-5 decades, and the negative consequences for the economy are clear.

Wall Street Vs. Main Street | Seeking Alpha

Comments Off on Wall Street Vs. Main StreetTags: Economy

Western Digital: What’s Not To Like?

May 3rd, 2017 · Comments Off on Western Digital: What’s Not To Like?

  • Western Digital caught analysts by surprise with a very bullish guidance for the coming quarters.
  • The near future is good with substantial amounts of synergies from recent acquisitions, and a strong NAND market will produce substantial free cash flow.
  • With the help of that cash flow, the company can deleverage.
  • Longer-term worries about the secular decline in hard disks and a possible turn in flash memory are not gone though.

Western Digital: What’s Not To Like?

Comments Off on Western Digital: What’s Not To Like?Tags: WDC

What To Look For In Shopify’s Earnings

May 3rd, 2017 · Comments Off on What To Look For In Shopify’s Earnings

  • The shares of Shopify, already tremendously valued, rallied another 50% in the past three months.
  • We fear this sets us up for an earnings disappointment.
  • We provide some pointers in what to look for.

What To Look For In Shopify’s Earnings

Comments Off on What To Look For In Shopify’s EarningsTags: SHOP

Ellie Mae Is Too Expensive

May 1st, 2017 · Comments Off on Ellie Mae Is Too Expensive

  • Ellie Mae has one of the best business models we have come across.
  • But the law of big numbers and some headwinds in the mortgage market is slowing growth and exposing a valuation that is too rich.
  • This could change if they land a big bank as a customer, which would be a breakthrough.

Ellie Mae Is Too Expensive

Comments Off on Ellie Mae Is Too ExpensiveTags: ELLI

Texas Instruments Is Highly Profitable

May 1st, 2017 · Comments Off on Texas Instruments Is Highly Profitable

  • The beauty of Texas instrument is that even with moderate growth it produces a considerable amount of leverage.
  • This is a company that is really impressive on numerous financial metrics, like free cash flow, margins, dividend, buybacks.
  • There is a good deal of leverage left in the model.

Texas Instruments Is Highly Profitable

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Will Trump Be The Next Ronald Reagan?

April 29th, 2017 · Comments Off on Will Trump Be The Next Ronald Reagan?

  • Can Trump do a Reagan? We have to wait for further details of his tax plan and see what survives Congress.
  • However, we have to point out that there are some important historical differences which makes a repeat of the Reagan years much less likely.
  • And this is even if you believe that tax cuts have a strong effect on business investment, for which there isn’t much support.

Will Trump Be The Next Ronald Reagan? | Seeking Alpha

Comments Off on Will Trump Be The Next Ronald Reagan?Tags: Economic Policy · Fiscal policy

The Limits Of Free Money

April 29th, 2017 · Comments Off on The Limits Of Free Money

  • Investors have been much more savvy about how economies behave under excess savings than many policy makers and observers.
  • While investors piled on and made a killing, many policy makers have overly worried about the risks of accelerating inflation and the state of public finances.
  • That doesn’t mean the near free money that a savings glut brings is without risk though.

The Limits Of Free Money | Seeking Alpha

Comments Off on The Limits Of Free MoneyTags: Economic Policy · Fiscal policy

Boom Time For Liberals

April 29th, 2017 · Comments Off on Boom Time For Liberals

  • The existence of excess savings over investment produces an economy that works differently.
  • It basically enables the public sector to increase spending for free.
  • This is most visible in the deleveraging stage after the burst of an asset bubble, where policy vice becomes virtue and public releveraging needs to compensate private deleveraging.
  • But some of the same mechanisms are operative even in the absence of bursting bubbles, caused by a global savings glut.

Boom Time For Liberals | Seeking Alpha

Comments Off on Boom Time For LiberalsTags: Economic Policy · Fiscal policy