Buy AT&T on Any Fed Fairytale

AT&T (NYSE: T) is underperforming the market today, as are utilities more broadly. It’s on a macro issue or beta-driver that I believe will be undone before long. The nascent risk-on race for stocks is being fueled by a favorable media and market interpretation of Fed Chair Yellen’s speech Tuesday. If it continues, it could start to pull capital from safe haven sectors like utilities (and telecom) in order to put it to work in riskier areas. However, this leg of the rally is based on a fairytale, in my opinion, fueled by faulty Fed expectations and economic softness, driven not by substance but by a negative feedback loop (read this). As March data reaches the wire next month, I expect its strength will paint a different picture that will change the Fed Chair’s tune once again, serving AT&T again. So, any weakness we see in AT&T and its telecommunications and utility brethren near-term should be bought in my view, as any lost capital will come back quickly. That should be limited for AT&T anyway, given the stock’s dividend payout and near-term dividend record date, which holders will at least wait for. See more of this report about AT&T shares here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Editor’s Note: This article should interest investors in Alaska Communications Systems Group (Nasdaq: ALSK), AT&T (NYSE: T), Atlantic Tele-Network (Nasdaq: ATNI), BCE Inc. (NYSE: BCE), CenturyLink (NYSE: CTL), Chunghwa Telecom (NYSE: CHT), Cincinnati Bell (NYSE: CBB), Consolidated Communications (Nasdaq: CNSL), eOn Communications (Nasdaq: EONC), Equinix (Nasdaq: EQIX), FairPoint Communications (Nasdaq: FRP), Frontier Communications (Nasdaq: FTR), Hickory Tech (Nasdaq: HTCO), IA Global (OTC: IAGI.PK), magicJack VocalTec (Nasdaq: CALL), Shenandoah Telecommunications (Nasdaq: SHEN), SureWest Communications (Nasdaq: SURW), tw telecom (Nasdaq: TWTC), UniTek Global Services (Nasdaq: UNTK), Verizon (NYSE: VZ), Vonage (NYSE: VG), Warwick Valley Telephone (Nasdaq: WWVY) and Windstream Corp. (Nasdaq: WIN).

Fitbit’s (FIT) Stellar Holiday Performance was Tarnished by Missteps – My Thoughts Moving Forward

Fitbit (NYSE: FIT) almost filled in all my checks for a perfect earnings report that could have been a catalyst for a short squeeze and sharp upside rise Tuesday. However, its stellar holiday quarter goes to waste due to surprising quarterly guidance that diverged significantly from analysts’ expectations. While it all works out by year end to conservative full-year figures that meet analysts’ annual estimates, it raises uncertainty and is evidence of an unseasoned management team. Unfortunately, the company misses an opportunity to force a vibrant short squeeze to fuel restoration of shareholder value to stakeholders deserving of it. Still, the deeply discounted on a PEG basis, oversold stock with a heavy short interest could still see a healthy upside rise by week’s end or even day’s end Tuesday, as current market dynamics have been serving deeply oversold stocks. Over the longer term, it’ll take a quarter or two for the company to refashion its image with investors. It’s important to note that there is hope; Facebook (NYSE: FB) also had missteps in its early post IPO days, and it managed to recover nicely. The company has potential but it cannot afford to miss a beat when competing against Apple (Nasdaq: AAPL) and Microsoft (Nasdaq: MSFT). See my full report on Fitbit here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article should interest Apple (Nasdaq: AAPL), Garmin (Nasdaq: GRMN), Microsoft (Nasdaq: MSFT), Google (Nasdaq: GOOG, Nasdaq: GOOGL), Amazon.com (Nasdaq: AMZN), Best Buy (NYSE: BBY), SPDR S&P 600 Small Cap ETF (NYSE: SLY), Vanguard Small Cap ETF (NYSE: VB), Vanguard Small-Cap Growth ETF (NYSE: VBK), Vanguard Small-Cap Value ETF (NYSE: VBR), Vanguard S&P Small Cap 600 Index ETF (NYSE: VIOO), Russell Small Cap Low P/E ETF (Nasdaq: SCLP), PowerShares Zacks Micro Cap ETF (NYSE: PZI) and Wilshire Micro-Cap ETF (NYSE: WMCR).

Fitbit EPS Pivotal for Battle Ground Stock (NYSE: FIT)

FIT Chart at Fidelity.com

Fitbit (NYSE: FIT) reports earnings for its fourth quarter after the close of trading Monday. The stock has been sold down significantly since topping out at $51.90 intraday on August 5, 2015. Several issues have factored into that, including a change in the overall investment environment working against emerging growth stocks, increasing competition, the expiration of share lockup post IPO, critical reviews of a new product, and a big build of short interest. Nevertheless, signs point to a strong holiday season for the company. Thus, I believe, and the whisper number and history indicate FIT should exceed analysts’ estimates this quarter significantly. Given the stock’s deeply discounted valuation to its growth outlook due to skepticism, and the excessive short interest in the stock, the earnings data could catalyze a strong move to the upside. However, investors will require evidence of good market share defense so far this year, and they will pay close attention to forward guidance and the conference call before they heed any call to buy. If the company is pressed on competition and the limits of its current product profile, it is not well-served. But if it can tangibly speak to expanded health care applications and interest and adoption by health care providers and insurers, the stock could soar. I have taken a modest long interest in the stock, as may aggressive investors understanding the risk, but I cannot yet recommend long-term investment in FIT generally to risk averse investors. See my full report on Fitbit (NYSE: FIT) here.

Security	06-18-15 to 02-19-16
Fitbit (NYSE: FIT)	-47%
Vanguard Total Stock Market (NYSE: VTI)	-11%
iShares Russell 2000 (NYSE: IWM)	-21%
SPDR 600 Small Cap Growth (NYSE: SLYG)	-14%
Technology Select Sector SPDR (NYSE: XLK)	-4.3%
GoPro (Nasdaq: GPRO)	-79%

Disclosure: Kaminis is long FIT. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article also interests Garmin (Nasdaq: GRMN), Microsoft (Nasdaq: MSFT), Apple (Nasdaq: AAPL), GoPro (Nasdaq: GPRO), Google (Nasdaq: GOOG), Facebook (NYSE: FB), Best Buy (NYSE: BBY), Amazon (Nasdaq: AMZN). .

Facebook (NYSE: FB) Should Do This To Unlock Value for Shareholders

I was overjoyed by Facebook’s (NYSE: FB) operational performance this past quarter as were most on the Street. Still, as I watched the stock collapse during its COO’s pre-conference call interview with CNBC (video no longer available at the site), I understood how the industry leader could do better for shareholders. Sheryl Sandberg had a fine interview, but I believe the company inadequately prepared the investment environment ground ahead of the EPS report. That I believe caused it to be poorly received and even today the stock’s compelling story fails to pull in bidders. Facebook has to properly prepare the seeds of price appreciation through clearer and more strategic communications geared toward the investors’ perspective. See my free report on Facebook here.

DISCLOSURE: Kaminis is long FB. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

GoPro (GPRO) – The Good, The Bad & The Ugly

When GoPro (Nasdaq: GPRO) reported its fourth quarter earnings last week, there were three key points; one was really good for the company, one was unfortunately bad for shareholders, and the final point was just ugly and unexpected. After rising sharply in early after-hours trading on the good news first discovered by antsy traders, the stock then collapsed on the bad and the ugly. But one of the three factors will matter a great deal more than the others moving forward, and drive the stock price direction higher long-term. See the free report on GoPro here. This article should also interest Ambarella (Nasdaq: AMBA).

DISCLOSURE: Kaminis is long GPRO. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Baidu (BIDU) – Beaten Back by China but Buy it Here

Baidu (Nasdaq: BIDU) has been beaten down over the last few months by bad news about economic activity in China and by some relatively disappointing earnings news from an important stock of the region as well. That situates the stock well heading into its own earnings report, but upside may be limited in this environment. Downside risk should be limited here as well, so I see the stock as okay to buy for the long-term here but I would not stake a short-term trade purely on the EPS report. See my full prescient report on Baidu here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

GoPro's Super Bowl is Thursday (GPRO)

The next few days will be big for GoPro. In fact, I think its stock is a good bet to go longer than the passes thrown by Tom Brady and Russell Wilson in the Super Bowl. GoPro (Nasdaq: GPRO) shares have been knocked down significantly since the company let down high-hopes at the Consumer Electronics Show (CES), in my opinion. But GPRO’s latest decline has situated the stock at a sweet spot just ahead of what should be a strong upside catalyst, its earnings report, due Thursday February 5th. Recall that simple speculation about a potential operational announcement at CES sent the stock soaring off similar lows previously. The heavily shorted name remains sensitive to good news, and there is an excellent chance it will have some of that to report this week, so I expect the stock to begin moving ahead of its report and to continue to rally through it. See the GoPro (GPRO) stock report here.

DISCLOSURE: Kaminis is long GPRO. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Facebook – Why I Went Long Again

Two weeks ago, on a day when Facebook (Nasdaq: FB) was dropping by more than $2 to around $74.30 a share, I took a new long position. Warren Buffett is known for advising amateur investors to buy when the blood is on the street, and that’s exactly what I did, but for more reason than the blood alone. There are two other good reasons I see further upside for Facebook in the offing and am still long today, despite the share move to over $78. See the Facebook report here.

DISCLOSURE: Mr. Kaminis is long FB. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Apple Pay is Catching On – Catalyst for P/E Expansion

Apple (Nasdaq: AAPL) announced last Tuesday that the list of companies working with Apple Pay has expanded to now cover a significant portion of the nation’s transaction volume. While it still has a ways to go to completely reach every possible transaction at every store, reports indicate that it is being adopted at a fast pace. In my opinion, Apple Pay is the main reason why Apple’s shares have recently run higher, and for good reason. I expect the business to make an important contribution to the company’s growing operational results. I also believe it is allowing the previously stale P/E ratio some room to grow, which means Apple shareholders are in for some special gains in the next few years.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Apple Pay just added several more financial institutions to its list of payments partners, including SunTrust Banks (NYSE: STI) and others, according to one of my resources for this report. From the consumer perspective, Apple Pay now supports 90% of all potential credit card transactions in the United States. The company is also seeking arrangements with providers of debit cards, prepaid cards, co-branded cards, small business credit and debit cards and corporate cards.

Apple (Nasdaq: AAPL) must also win the support of retailers and all companies that accept payments for goods and services. Early signees include McDonald’s (NYSE: MCD) and Whole Foods Market (Nasdaq: WFM) and recent signees include Staples (Nasdaq: SPLS) and others. Given the degree of Apple iPhone penetration, it behooves retailers and restaurants to accept Apple Pay in order to best serve customers. So this is something retailers are likely asking Apple about in many instances before Apple even approaches them.

Not only is the service becoming available though; it is being used by Americans. McDonalds indicated that 50% of its tap-to-pay transactions were through Apple Pay in November. It is being adopted because it simplifies the transaction process for customers and is a value-add for Apple’s partners. According to the New York Times, the NBA’s Orlando Magic basketball franchise expects it to speed service at its concession stands. Since lines at ballparks and stadiums are limiting to sales, as many fans hate missing the action, if Apple Pay can speed transactions it will help these partners sell more food and beverages and other goods. That is a value-add to sales and earnings, and all the more reason for companies to partner with Apple on this.

In the past, similar services provided by Google (Nasdaq: GOOGL) and others have failed where Apple seems to be succeeding. I think that is because of Apple’s broad iPhone penetration; big PR voice that got the message across clearly to a broad swath of America when it introduced the service; and because of today’s tech savvy population, which has gotten much better at picking up new technology. People want to try it out and are willing to spend some time to learn how to use it.

Some retailers are making their own app, including a consortium headed up by Wal-Mart (NYSE: WMT), but I’m not sure people are going to want to join up for more than one payment app. I suppose the consortium may be able to better compete with Google’s Android platform, but Google (Nasdaq: GOOGL) is likely stepping up its game to help support its platform partners.

While Apple has not offered much information on how successful Apple Pay has been, its partners have been talking. On CNBC Tuesday, I watched a SunTrust representative as he said the service was showing good progress. Obviously, as a newly won business partner, this SunTrust representative was supplied with the figures we have not yet seen. We do know that over 1 million cards were registered with Apple Pay within the first 72 hours of operation, according to Tim Cook.

But there is also circumstantial evidence. This weekend (12-20-14), I saw evidence that banks are using Apple Pay as a draw for their businesses, with commercials for Bank of America (NYSE: BAC) and J.P. Morgan Chase (NYSE: JPM) both flashing partnerships with Apple Pay. They would not be doing this if they did not see strong penetration and consumer interest in the application. Basically, the banks are riding the coattails of the highly popular Apple brand and its newest and greatest thing.

Over the last few years, I’ve often proposed that Apple’s low PEG ratio was reflecting investor concern that Apple could not keep growing and might even see some erosion of market share. We have been looking for the company to expand its efforts into television sets and other gear, and it has entered the wearables market with its Apple Watch. But I think it is Apple Pay that is most exciting investors today, and the reason for the stock’s gains since its introduction.

1-Year Chartof AAPL at Seeking Alpha

Apple’s P/E ratio is now 13.8X the analysts’ consensus EPS estimate for FY 15 (Sep). The company’s valuation metrics have been expanding, but the forward P/E ratio here still shows room for further expansion in my opinion. I expect that as the data is reported and investors begin to better see the potential for Apple Pay and Apple Watch, the P/E and PEG ratios will expand further. Given analysts’ expectations for 20% growth in FY 15, the current PEG on these figures is 0.7x. That’s cheap. Looking at the long-term growth estimate, I expect it will be revised upward from the current 11.5% estimate once data for Apple Pay and Apple Watch start rolling in. But even so, the company’s PEG ratio using this figure is a still modest 1.2X, and fails to incorporate the dividend yield Apple offers of 1.7% today. Reiterating and concluding, as data comes in and estimates are revised, I expect we’ll also see P/E expansion, so shareholders of AAPL will get extra lift to their investment return. Thus, I still love AAPL here. I cover AAPL semi-regularly, so readers may want to follow my blog and my column at SA.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Facebook’s Mr. Nice Guy Lie

Facebook (Nasdaq: FB) has a philanthropic effort underway in cooperation with internet.org to bring the internet to the two-thirds of the world’s population who are currently unconnected. The social media giant, and others like it including Google (Nasdaq: GOOG), are actively working on this endeavor together. It’s a kind gesture right? No! It’s brilliant business strategy. See Facebook’s Internet Philanthropy is Also Strategic Genius.

If Apple Soars is Google Out the Door?

1-Year Chart Comparison of GOOGL & AAPL at Yahoo

It’s a legitimate question to ask. Might Google (Nasdaq: GOOG) shares fall if Apple (Nasdaq: AAPL) shares rise in coming months? Some will say that even if it occurred, it would be coincidental, because the paths of the two stocks are mutually exclusive. But are they?

The one-year chart comparison of the performances of Google (Nasdaq: GOOGL) and Apple (AAPL) shows rising shares and positive returns across the board. However, you will note that the most recent history seems to portray at least a divergence if not negative correlation between the two. There are other than operational reasons why that might be, and we get into those in our report Why Google Could Fall if Apple Rises.

Apple’s Playbook (AAPL)

In my reporting on Apple (Nasdaq: AAPL) over the years, I believe I’ve been an early voice exposing catalysts or the absence of catalysts behind the stock’s movement, or rather lack of upside movement. It has sometimes taken awhile for the company to find the route I have laid out for it in my articles. Eventually, though it seems the message gets through, judging by the actions that eventually follow through. Or, more likely, at the insistence of activist investors, Apple is finally actively seeking to correct its valuation issue. The stock has been deeply discounted to the value of peers like Google (Nasdaq: GOOGL, Nasdaq: GOOG), Microsoft (Nasdaq: MSFT) and others for too long now. Whatever the case, Apple is clearly and finally seeking to add value by means other than operational. However, what comes next is likely going to be an operational catalyst. If it’s not, then another of my articles may prove prescient, and it’s one that would definitely drive change at Apple. The good news is that I don’t see that happening, and I do see Apple finally rising to new heights. For all the sexy details on how this will be, see Apple’s Playbook Revealed. to new heights. For all the sexy details on how this will be, see Apple’s Playbook Revealed.

Apple (AAPL) Supported by Rumors & Tricks

There’s nothing tangible besides Apple’s own share repurchase efforts to stop Apple (Nasdaq: AAPL) shares from dropping to below their 52-week low of $419 in the very near-term. The shares only recovered over the last month because of rumors and anticipation. However, without any real news to give credence to prospective buyers, Apple shares could give way to a new low, perhaps as deep as $400.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Apple

Chart at Yahoo Finance

Before the latest share rally, your author here suggested that For Apple, No News is Bad News. Not long after that note was published, the Apple rumor mill started churning faster. First there was renewed chatter of a potential special unscheduled product announcement, with hope for news of new electronic gear like an Apple watch or the long anticipated Apple television set. The excitement was heightened because of Google’s (Nasdaq: GOOG) introduction of its Google Glass, and Samsung (OTC: SSNLF.PK) and Blackberry (Nasdaq: BBRY) introductions of their newest phones. Still, an eerie silence surrounded Apple and none of those rumors materialized.

Then, with pressure from activist investors ongoing, and as the company approached the one-year anniversary of its dividend and repurchase program announcement, popular media began speculating about a possible event for this year. The coverage was so heavy it almost seemed factual, but there was no indication from Apple that such an event was in the cards.

On the day that Samsung (OTC: SSNLF) introduced its Galaxy S IV with high hoopla and celebration, famed investor Bill Miller appeared on CNBC television before the market open and shared that he favored Apple again and had just concluded acquiring a stake. In my piece, Why Apple Rose on Samsung’s Big Day, I suggested the curious gain for Apple that day was likely attributable to the Miller interview and, I speculated, on Apple’s own share repurchases to support its stock.

But months have passed and still no news from Apple. Investors are starting to question whether the company actually has anything to say or any new product to wow America with. The next opportunity for it to wow us may not come until the company’s next earnings release, scheduled for April 23 at 5 PM ET. Even so, after the long boys have cried rally wolf so many times, who is to say the shares will rally again into the risk of another letdown. Tuesday just after the noon hour a guest on CNBC’s Halftime Report expressed his view that Apple would introduce a television in the third quarter. The stock did not budge higher from its already established gain on the day. The boys who cry for Apple to go higher are starting to be ignored already.

It’s clear by now that standing pat is not going to turn AAPL around. The company’s technology is being effectively chased down now by Samsung and Google, and perhaps less effectively by Microsoft (Nasdaq: MSFT), Blackberry (Nasdaq: BBRY), Nokia (NYSE: NOK), Amazon.com (Nasdaq: AMZN) and more. The challengers to Apple are still lining up, with Facebook (NYSE: FB) now set to launch its own mobile platform as well. No, standing atop the hill will inevitably result in Apple being knocked off the hill, because those who would do it are all around Apple now.

A capital use announcement like an increased dividend or a special dividend has the potential of backfiring on Apple, because of the message it might send. Apple Must Send the Right Message, that it is still a growth company and the innovator of our age, and not that it is a maturing company preparing to become a cash cow dividend payer. A higher dividend is a good thing, but absent of any news about where growth will come from, will probably lead the shares lower in my opinion. An increased share repurchase program could produce a different outcome, because investors might read into it about Apple’s plans for the second half of 2013.

Apple’s valuation is a support for the stock, but it does not reflect an expectation for the company to continue to grow at the pace it has managed in the past. The stock’s forward P/E of 9.9X and PEG ratio of 0.5X is expressing doubt in Apple’s growth outlook.

Goldman Sachs (NYSE: GS) removed Apple from its conviction buy list Tuesday and others are expressing concern about its non-contention in the lower priced (lower margin) phone market. Now we have to assume that the Goldman analyst has good insight, so this is a peculiar moment for him to be hedging. Still, pressure from “above” always seems to mount on analysts at precisely the wrong moment, and I speak from experience. We’re within the quiet period for the company and so the analyst is not basing anything on a discussion with management, we assume. Therefore, I do not see this as an especially important warning sign. I think he’s just lost confidence in Apple’s team as much as I have.

Still, I expect Apple to eventually produce that big product announcement, but I’m just not convinced it will be before $400. I’m losing confidence in the company’s shareholder focus, because I believe it should be more loudly hinting at its new product efforts or aggressively supporting the stock with its allotted repurchase plan. Some of this is probably occurring and is probably the very reason why the stock was up Tuesday against the Goldman cut (similarly to its rise on the day of the Samsung product release). Given the share price drop recently, I’m wondering if Apple is more focused on looking good six months from now when it tells the story about how it repurchased shares at such bargain prices, versus the focus it should have about the positions of its shareholders in the here and now. The way to support that focus is to say something about a new product, even if that product is not yet fully ready. That’s my view, and I welcome you to follow my column and tag along for more of the same. Also, business owners who see value in my insight may contact me about consulting services, as I can study, analyze and add value to businesses of all sorts and sizes. Those interested in potentially hiring me to manage a mutual fund or hedge fund portfolio may make contact as well, as nothing is beyond my consideration.

More interesting work on Apple and Google: Will Google Fall if Apple Rises?

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Will Google Fall if Apple Rises?

A comment posted to a recent report of mine suggested that Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL) shares might be negatively correlated. In other words, the reader suggested that Google has benefited from Apple’s weakness since December. I thought it to be an interesting theory worthy of further review, and so we explore that here. Because I believe AAPL will eventually rise again, we especially want to know if AAPL rises, will GOOG fall?

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Google vs. Apple

Chart at Yahoo Finance

The six-month chart comparison of the two behemoths of technology does seem to indicate negative correlation of returns. The deviation of the two stocks seems to pick up steam in mid-December.

Chart at Yahoo Finance

The one-year chart here adds some color as well, because it shows the two stocks were probably positively correlated, or at least each correlated to the broader market before December. Apple diverged from the market as well in December, which was painfully obvious to Apple shareholders. Apple should have followed the market higher, since it carries a beta coefficient of 0.74. Google’s beta is 1.18, and so it should exaggerate market moves. Apple has clearly marched to the beat of its own drummer over the last several years, but historically, that march was to its benefit against a weaker market performance.

It’s certainly possible that Apple’s decline is completely unrelated to Google’s rise. Because around the time it began lower, market chatter was expressing concern about a possible increase to the capital gains tax rate. Long-time holders of Apple may have taken gains before the turn of the year in order to avoid paying higher taxes in the future. There is a critical flaw in that argument though since Google’s long-term performance is also pretty good. So there might have been selling in GOOG around that time for the same reason.

Chart at Yahoo Finance

The only reason one might think the two could be correlated is due to capital flows, and the similarities of the companies in terms of sector participation, market capitalization and trading volume. Apple dominates most companies in each of those last two categories, and it dominates Google as well. However, Google shares have heavy enough volume to support the demand of big institutional investors who may have needed something interesting in technology to replace Apple holdings over recent months.

Even if that were the case, as time passes and given new valuation considerations, any negative correlation would dissolve. In my opinion, the two companies each offer interesting long-term opportunity for investors in stocks because of the importance of their goods and services in the marketplace and their ongoing prospects. Furthermore, I believe each should be included in the space allotted to technology within diversified portfolios. Apple would seem to offer the best value with its PEG ratio of 0.5X, but the stock’s valuation is due to recent questions about its ability to continue to innovate and grow. Google may seem expensive as it trades at a PEG of 1.2X, but it is introducing new electronics now, including the Google Glass, and so could pick up its growth pace. In conclusion and in answering my question, no, I do not think Google will fall if Apple rises.

This article will also interest investors in Microsoft (Nasdaq: MSFT), Samsung (OTC: SSNLF), Nokia (NYSE: NOK), Amazon.com (Nasdaq: AMZN), Facebook (NYSE: FB) and Yahoo (Nasdaq: YHOO). Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Apple Television – The Next Game Changer

When Apple (Nasdaq: AAPL) entered the mobile phone market, it had no presence and yet followed through to change the game for the electronics segment. With the iPad and iPhone, Apple has changed the way we think about our web surfing, opening up computing to a slew of new hardware possibilities. The company did the same thing for mobile music, and I propose, it is capable of changing the game yet again, this time for television. The Apple television solution, however it may develop, should be the driver for the next leg of mind-blowing growth for this innovator of our age. At the same time, I believe that how Apple proceeds could determine whether its age of innovation has peaked, or whether it goes on.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

In television, Apple will find no lack of competition. The deeply embedded list of experienced players includes iconic electronics producers and some companies that Apple is already butting heads with. The leading large-screen brands globally in terms of market share based on Q1 2012 revenues are Samsung (KSE: 005930.KS), LG (KSE: 003550.KS), Sony (NYSE: SNE), Sharp (OTC: SHCAY.PK) and Panasonic (NYSE: PC).

So Apple finds its arch-nemesis, Samsung (OTC: SSNLF.PK), which it recently battled in patent court, atop the list in television sets. Samsung is not sitting idle either, having already introduced a Smart-TV of its own, striking before Apple could introduce a model. Samsung has built on what it has learned works in its experience competing with Apple in mobile phones. Yet, I still believe Apple can become the leading player in televisions. Why?

It is not as if innovation was not already present in the mobile phone industry when Apple entered it, and yet Steve Jobs’ vision was still able to revolutionize it. Motorola (later Motorola Mobility), which was acquired by Google (Nasdaq: GOOG) not too long ago, was flattening the phone and Nokia (NYSE: NOK) and everybody else were shrinking it and adding features, including cameras. Yet, Apple came in with an exciting new idea, a fresh look and two brands people respected, Apple and Steve Jobs, and it earned the demand of the market. Its latest mobile conquest has been in a last bastion of mobile dominated by one of its rivals. Research in Motion (Nasdaq: RIMM) had dominated the business market, and yet today it is struggling to keep from following the fate of Palm, which was acquired by Hewlett-Packard (NYSE: HPQ) before it could fail. However staggered, the competition is arguably catching up in mobile phones now, and Apple will need a new front to keep its stunning growth going.

Presumably, Apple will do a little of the same innovating in its television development. Though without Jobs at the helm, one must question whether it will be as clairvoyant in its vision. Even with Jobs, Apple may have been over-thinking television. Certainly Apple could have had a smart television on the market long ago, but the company wants to provide more than what other smart TVs are offering today. Jobs’ vision was that the Apple television should offer both new content and new access to existing content for it to be disruptive enough to change the game. However, the company has run into roadblocks in its discussions with content and cable providers like Time Warner Cable (NYSE: TWC) and Comcast (Nasdaq: CMSCA), which have been skeptical and cautious about letting Apple into their realm. It’s understandable, considering Apple’s impact upon some of the players in other fields. The trick is in getting the cable providers to see themselves like the communications companies in mobile, the AT&T’s (NYSE: T), Sprint Nextel’s (NYSE: S) and Verizon’s (NYSE: VZ) of the world, and not like the decimated mobile phone makers.

However, even without the degree of disruption Apple wants, it still could dominate television, in my view. That’s because whatever Apple may today be missing in creativity and persuasion without its iconic visionary, this time, should be offset by the draw of its strong brand name and its excellent reputation. So the company could be missing an opportunity and possibly a stepping stone toward its end goal for as long as it stays out of the television market. Or, it could be smartly controlling its image in television, and keeping from weakening its future role by waiting. The evolution of television is complex and developing, and offers a range of scenarios for companies of all sorts, including those already mentioned and the likes of Netflix (Nasdaq: NFLX), TiVo (Nasdaq: TIVO), DirecTV (NYSE: DTV), Amazon.com (Nasdaq: AMZN), Google (Nasdaq: GOOG) and Microsoft (Nasdaq: MSFT).

Television sets have been viewed as a commodity for so long now, that no manufacturer has yet been able to establish its brand as a destination driver. In other words, I do not believe people go to Best Buy (NYSE: BBY) to buy a Samsung Smart TV. This is proven by consumers’ defining televisions by their features, rather than by their brand names. You hear people talking about their flat screen TV, not their Samsung TV. The newest technological nuance has been 3D technology, but I expect that if you surveyed consumers, very few could definitely tell you which brand they like best in 3D. People assume that everybody makes one, and so they decide on which to buy while shopping; and based on their store experience, TV image quality at viewing, consumer reviews and on price.

Yet, if Apple enters the fray, even with a less powerful offering than the company targets, I feel comfortable saying Americans will stampede for their latest Apple toy. The fact that smart televisions already existed before Apple entered the market would be quickly forgotten. I expect an Apple television would instantaneously become a market share leader, if not the top player. Perhaps only price would slow its rise to the top in TVs, but only as much (or as little) as it has slowed its stellar growth in other segments. Apple has proven that enough people will pay up for a better solution. Analyst Peter Misek at Jefferies & Company, figures an Apple television priced at $1,250 would have generated $2.5 billion in sales in the fourth quarter of this year. That’s about 6.9% of what Apple is currently projected to make in fiscal Q4 (Sept.) without a television. It’s not negligible, but it’s not blockbuster either, though I believe it is understated.

Apple’s valuation has for some time now reflected skepticism about whether the company could continue to grow at its amazing pace as it comes against the law of large numbers. I broached this subject in my article entitled “Should I Buy Apple?” Apple’s high stock price has drawn questions as to whether a stock split could add value or not, and I covered the pros and the cons of a potential Apple stock split in recent works as well. But if Apple could provide investors with a viable new vehicle for growth, some of its valuation gap would narrow, adding fuel to capital appreciation that would also benefit from boosted EPS growth.

Today, AAPL shares trade at a P/E ratio of about 11.8X the analysts’ consensus EPS estimate of $53.45 for fiscal year 2013 (Sept.). That compares to analysts’ projected five-year growth expectations of 24%, giving the stock a P/E-to-growth ratio of 0.5. It’s apparent here that there is some skepticism with regard to the company’s ability to grow at the estimated pace. Investors betting on the company’s follow through would thus have a margin of safety to play with. Furthermore, if the company can successfully enter a new market segment like television, I expect it would prove those investors right. My expectations for television are an important reason why I favor AAPL shares today, especially at the stock’s valuation. Still, how well Apple capitalizes on its opportunity is completely dependent on the execution of its Jobs-less management team. As I have determined to pick up regular coverage of Apple for investors, you may want to stay in the loop by following my column.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Facebook IPO Windfall if Open to its Users

Imagine how awesome it would it be for Facebook (NYSE: FB) to offer its shares via a social IPO™. With some 800 million users of its now iconic social networking platform, the new king of the internet might score yet more points with its “friends” if it were to offer them access to the company’s IPO. Beyond being just a brilliant public relations maneuver, such access to the new shares should allow the company to achieve an even better valuation than it might otherwise.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

For Facebook a Social IPO Would Rock

Just do the math. With 800 million active users, if it were to offer its shares at $100 per, Facebook could generate $80 billion if each of its members bought just one share. Valuation aside, the unsophisticated marketplace would likely bid up Facebook’s value beyond the $100 billion valuation some sophisticated investors say Facebook is worth. And given that there would likely remain strong demand among many institutions, Facebook might then achieve an even greater than $100 billion valuation.

Furthermore, the news of a social IPO would likely push more people globally to join the social network, giving lift to the company’s intrinsic value. Thus, like a Newton’s Cradle, the metal balls that rock each other in perpetual motion on executive desks across the country, Facebook’s members would drive its share value as its share offering drives membership growth. I think that’s just brilliant.

As is, the Facebook IPO is the most heralded and anticipated since Google’s (Nasdaq: GOOG) blockbuster offering about a decade ago. The offering’s proceeds and valuation should exceed Google’s and other major internet IPOs like that of Zynga (Nasdaq: ZNGA), Groupon (Nasdaq: GRPN), Vonage (NYSE: VG), Orbitz Worldwide (NYSE: OWW) and LinkedIn (Nasdaq: LNKD). Just the news of Facebook’s registration sent the shares of stocks that might benefit from Facebook’s valuation soaring. Renren (Nasdaq: RENN) and Zynga (Nasdaq: ZNGA) took off like rockets late last week.

I only wonder if the bankers at Morgan Stanley (NYSE: MS), the investment bank said to be heading up Facebook’s offering, have considered this novel idea. If not, just a tiny cut from the commission would do me just fine fellas.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

magicJack Vocal Tec (Nasdaq: CALL) - The Magic is Back

Shares of magicJack Vocal Tec (Nasdaq: CALL) were among the market’s leading gainers last Friday, on news of strong fourth quarter sales of the company’s latest Internet telephony device. The shares also got extra lift from a second simultaneous announcement, as the company canceled a dilutive share offering. The unexpected sales provided the needed operating capital in the offering’s stead. Shares of CALL were up 18% on the day, placing the company among the market’s leading gainers.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: Nasdaq: ALSK, NYSE: T, Nasdaq: ATNI, NYSE: BCE, NYSE: CTL, NYSE: CHT, NYSE: CBB, Nasdaq: CNSL, Nasdaq: EONC, Nasdaq: EQIX, Nasdaq: FRP, Nasdaq: FTR, Nasdaq: HTCO, OTC: IAGI.PK, Nasdaq: CALL, Nasdaq: SHEN, Nasdaq: SURW, Nasdaq: TWTC, Nasdaq: UNTK, NYSE: VZ, NYSE: VG, Nasdaq: WWVY, Nasdaq: WIN, Nasdaq: AMCX, Nasdaq: ASCMA, NYSE: CVC, Nasdaq: CHTR, Nasdaq: CMCSA, Nasdaq: CRWN, Nasdaq: DTV, Nasdaq: DISCA, Nasdaq: DISH, Nasdaq: LBTYA, Nasdaq: LNET, NYSE: SJR, Nasdaq: TIVO, Nasdaq: VMED.

See my review of the old magicJack

The Magic is Back

It appears the magic may in fact be back for magicJack (Nasdaq: CALL). The company announced Friday that its latest product, the magicJack Plus, is basically selling like hotcakes (whatever that means), with approximately 365K units sold in the last 30 days. The original magicJack device needed to be plugged into a computer connected to the internet to make use of it, but the magicJack Plus connects directly into the internet line. Thus, you do not have to keep your computer on 24/7 to make or receive phone calls. It’s a major upgrade in technology and utility value, and the price is likewise higher, retailing at $69.95, versus the $39.95 price for the original magicJack.

Because of the strong sales, the company expects to have a cash store of approximately $50 million by next month. Thus, it was able to kill its planned share offering. Not only did it do so, but the company will renew its share repurchase program as well. It’s an interesting shift in capital management that I find telling about the management team’s forecasting prowess. That means that both upside and downside surprises are highly possible in the future as well. Such unreliability and uncertainty likely burdens the company’s valuation a bit.

Internet telephony has been an interesting market to follow. We saw Vonage (NYSE: VG) dive after its high profile IPO in the middle of the last decade. However, Vonage’s product price point probably was not or is not far enough off the major telecoms to stick, in my view. VG shares still rose in sympathy with CALL Friday, up 7.3%, to $2.36. Likewise, Skype, now owned by Microsoft (Nasdaq: MSFT), did well enough but never caught on with the broad populace. Perhaps it was just too early or maybe the tech savvy needed to use it was too much for an older demographic of American citizens. It’s clear, though, that with the evolution of technology usage, Internet telephony will be an easy learn. Meanwhile, magicJack just made it easy enough for even non-tech savvy seniors to use.

Eventually, the Verizon’s (NYSE: VZ), AT&T’s (NYSE: T) and Sprint Nextel’s (NYSE: S) of the world will feel threatened by internet telephony and magicJack, if they aren’t already. I’ve noted that the price difference between Verizon’s independent internet service and internet and telephone service bundle is marginal, leaving me to question whether “the jack” would really offer worthwhile savings given the convenience trade-off of the first model. I suspect Verizon and other internet providers have priced this way for this very reason. You can get cheaper internet service from the big boys of the industry, but you get less bandwidth in return. Now this second product model by magicJack presents a different story, and given that the ability to port your old number has finally arrived, the game may be on.

The important question to ask is what strategy will the telecom giants employ to crush this emerging competition. Well, the big box players are well positioned to do so, given that they control the internet. However, I could see the cable providers, who are also providers of bandwidth, like Time Warner Cable (NYSE: TWC), Cablevision (NYSE: CVC) and Comcast (Nasdaq: CMCSA) having interest in acquiring a magicJack in order to provide a more competitive bundle package against the telecom players’ offerings. Thus, the new magicJack might be more than just a nifty product for a thrifty spender. Its shares and those of similar servicers might find broad appeal one way or another. Given that a recent census poll showed about half of America is poor, and given the number appears to be increasing, even the worst case scenario seems to present an expanding market opportunity.

There’s just one analyst following the company, based on Yahoo Finance data. His EPS estimate for 2012 appears to be $1.83, which puts its P/E ratio at 13.1X as of Friday. While EPS growth looks to approximate 71% in 2012, the long-term growth estimate is 17.5%, again based on Yahoo Finance and its data providers. Based on this thumbnail, the stock would appear undervalued. The question is, can Internet telephony, and more importantly, the MagicJack, really replace standard telephone service? It once seemed unlikely, but there certainly is a market of bargain seekers willing to try it out, and that market is expanding as economic difficulties continue. Meanwhile, the technology just got easier to operate.

I suspect there is untapped value in recurring revenue not currently being maximized. Today, you buy the magicJack and have telephone service all year long, and then are asked to pay the same amount the following year to continue using the service (though the company stretches that revenue across the year). I suspect that an acquirer would create value by raising the monthly charge tied to magicJack usage through the year. So, while lowering the revenue received currently through telephone service provision, they could also add value to the acquired service and position more competitively against the big three telecom providers. I see this as a clear opportunity for the cable industry, but bad news for the savvy consumer now benefiting from his "jack".

The stock’s chart seemed to show market disinterest until volume picked up in 2010. The cure for questions is earnings growth, and earnings visibility is a new development here. As earnings grow now, and with a P/E near single digits, there would be little stopping the share price following earnings per share higher. The company managed to sell 8 million of its original magicJacks® into a market of roughly 100 million households. This newest product is far superior and the economics more attractive. Its appeal can reach a broader span of Americans, in my view. So, I am a short to medium term fan of magicJack shares (Nasdaq: CALL) and recommend them for aggressive, emerging growth and micro to small cap portfolios.

Editor’s Note: This article should interest investors in Alaska Communications Systems Group (Nasdaq: ALSK), AT&T (NYSE: T), Atlantic Tele-Network (Nasdaq: ATNI), BCE Inc. (NYSE: BCE), CenturyLink (NYSE: CTL), Chunghwa Telecom (NYSE: CHT), Cincinnati Bell (NYSE: CBB), Consolidated Communications (Nasdaq: CNSL), eOn Communications (Nasdaq: EONC), Equinix (Nasdaq: EQIX), FairPoint Communications (Nasdaq: FRP), Frontier Communications (Nasdaq: FTR), Hickory Tech (Nasdaq: HTCO), IA Global (OTC: IAGI.PK), magicJack VocalTec (Nasdaq: CALL), Shenandoah Telecommunications (Nasdaq: SHEN), SureWest Communications (Nasdaq: SURW), tw telecom (Nasdaq: TWTC), UniTek Global Services (Nasdaq: UNTK), Verizon (NYSE: VZ), Vonage (NYSE: VG), Warwick Valley Telephone (Nasdaq: WWVY), Windstream Corp. (Nasdaq: WIN), AMC Networks (Nasdaq: AMCX), Ascent Media (Nasdaq: ASCMA), Cablevision (NYSE: CVC), Charter Communications (Nasdaq: CHTR), Comcast (Nasdaq: CMCSA), Crown Media (Nasdaq: CRWN), DIRECTV (Nasdaq: DTV), Discovery Communications (Nasdaq: DISCA), DISH Network (Nasdaq: DISH), Liberty Global (Nasdaq: LBTYA), LodgeNet Interactive (Nasdaq: LNET), Shaw Communications (NYSE: SJR), TiVo (Nasdaq: TIVO) and Virgin Media (Nasdaq: VMED).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Every Dog has its Day - Cisco Systems (Nasdaq: CSCO)

Cisco (Nasdaq: CSCO) shares shot up and closed 16% higher Thursday, after the company posted results Wednesday afternoon. Simply put, the long-suffering Cisco beat the beaten down Street estimate, and offered some hope that the company’s simplification plan might create significant economic value in the quarters ahead, and market value by natural progression. The company, which was the poorest pooch of the Dow dog pack, looks to have better days ahead of it now.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: Nasdaq: CSCO, Nasdaq: JNPR, Nasdaq: RVBD, Nasdaq: ARUN, Nasdaq: FNSR, Nasdaq: SMCI, Nasdaq: BBOX, Nasdaq: DGII, Nasdaq: ELON, Nasdaq: EXTR, Nasdaq: GCOM, OTC: HUTC.OB, Nasdaq: LTRX, OTC: LTTC.OB, Nasdaq: NWK, Nasdaq: PTIX, Nasdaq: SWIR, Nasdaq: SILC, Nasdaq: SCMR, Nasdaq: VPF, OTC: ZWBC.PK, OTC: WGAT.PK, NYSE: AIQ, Nasdaq: AONE, Nasdaq: IDSA, Nasdaq: INSM, NYSE: KV-A, Nasdaq: MFNC, Nasdaq: HGSH, AMEX: BHO, NYSE: TLB, Nasdaq: CARB, Nasdaq: TTHI, Nasdaq: AMPE, Nasdaq: CECE, NYSE: IL, NYSE: SOL, Nasdaq: AFFM, Nasdaq: USCR, Nasdaq: TPCG, NYSE: BAC, NYSE: VHI, AMEX: IDI, Nasdaq: CXPO, Nasdaq: EDAC, Nasdaq: IPHI, Nasdaq: TCHC, Nasdaq: ADES, OTC: ALBCF.PK, NYSE: BUD, Nasdaq: BONE, NYSE: BYI, Nasdaq: BIOF, Nasdaq: BODY, Nasdaq: EPAY, NYSE: BGG, NYSE: EAT, NYSE: BR, Nasdaq: CECE, Nasdaq: CHNR, Nasdaq: CPHI, Nasdaq: CIDM, Nasdaq: CDTI, Nasdaq: COSI, NYSE: DV, Nasdaq: DGLY, Nasdaq: ESTE, Nasdaq: DIET, Nasdaq: RDEN, Nasdaq: ELTK, Nasdaq: EMAN, Nasdaq: GENC, Nasdaq: GCFB, Nasdaq: HOKU, Nasdaq: JSDA, NYSE: KSS, NYSE: MCP, NYSE: JWN, Nasdaq: NVDA, NYSE: PGR, Nasdaq: QPSA, Nasdaq: RRGB, Nasdaq: RENN, Nasdaq: SPNS, NYSE: SLE, NYSE: TK, NYSE: THI, Nasdaq: URRE and NYSE: WEN.

Cisco Systems (Nasdaq: CSCO) – Every Dog has its Day

Cisco’s revenues rose 3%, to $11.2 billion, which was about $300 million higher than the revenue estimates of analysts on average, based on Factset data. Last month, the company said it would let 6,500 people go, and it has begun shedding non-core business efforts like its Flip Video camcorder. Excluding the cost of these measures, Cisco said it would have earned $0.40 a share last quarter, which was 2 cents above the Street view. Cisco even said it might generate 4% revenue growth in the current quarter, also above the Street outlook.

There was but one negative point and warning from John Chambers, the company’s embattled CEO, and that is that government sourced revenue streams are threatened. Indeed, its public sector sales dropped 7%, and unfortunately, this segment represents about a fifth of the company’s business.

Cisco Systems was the dog of the Dow, down 32% before Thursday for the year-to-date. That measured against the Dow’s 7% drop-off. Every dog has his day, though, and today is Cisco’s. It looks like its economic value creating strategy will serve as an offset against the impact of broader economic weakness. Thus, CSCO’s return outlook has some alpha in it to overcome the beta beat-down from the broader economy and market.

This stock epitomizes the appeal of value in a growth troubled environment. It should attract capital as a result, like it clearly has today. The company’s PEG ratio, before the day’s move, was sub-1.0 (about 1.2X now), and growth looks like it has the potential to surprise as the company sheds burdensome business lines, cuts costs and spurs the top line. The PEG ratio we quoted here is based on about a 10% growth forecast over the next five years (Yahoo Finance), but Cisco produced 21% operating EPS growth in this latest quarter, based on the $0.40 figure. As a result, I cannot help but like it as a sector representative for well diversified portfolios.

This article should interest investors in networking and computer device companies, including Cisco Systems (Nasdaq: CSCO), Juniper Networks (Nasdaq: JNPR), Riverbed Technology (Nasdaq: RVBD), Aruba Networks (Nasdaq: ARUN), Finisar (Nasdaq: FNSR), Super Micro Computer (Nasdaq: SMCI), Black Box (Nasdaq: BBOX), Digi International (Nasdaq: DGII), Echelon (Nasdaq: ELON), Extreme Networks (Nasdaq: EXTR), Globecomm (Nasdaq: GCOM), Hughes Telematics (OTC: HUTC.OB), Lantronix (Nasdaq: LTRX), Lattice (OTC: LTTC.OB), Network Equipment Technology (Nasdaq: NWK), Performance Technologies (Nasdaq: PTIX), Sierra Wireless (Nasdaq: SWIR), Silicom (Nasdaq: SILC), Sycamore Networks (Nasdaq: SCMR), Valpey-Fisher (Nasdaq: VPF), WideBand (OTC: ZWBC.PK), WorldGate Communications (OTC: WGAT.PK).

Other big gainers Thursday included Alliance Healthcare (NYSE: AIQ), A123 Systems (Nasdaq: AONE), Industrial Services of America (Nasdaq: IDSA), Insmed (Nasdaq: INSM), K-V Pharmaceutical (NYSE: KV-A), Mackinac Financial (Nasdaq: MFNC), China HGS Real Estate (Nasdaq: HGSH), B+H Ocean Carriers (AMEX: BHO), Talbots (NYSE: TLB), Carbonite (Nasdaq: CARB), Transition Therapeutics (Nasdaq: TTHI), Ampio Pharmaceuticals (Nasdaq: AMPE), CECO Environmental (Nasdaq: CECE), IntraLinks (NYSE: IL), Renesola (NYSE: SOL), Affirmative Insurance (Nasdaq: AFFM), U.S. Concrete (Nasdaq: USCR), TPC Group (Nasdaq: TPCG), Bank of America (NYSE: BAC), Valhi (NYSE: VHI), SearchMedia Holdings (AMEX: IDI), Crimson Exploration (Nasdaq: CXPO), EDAC Technologies (Nasdaq: EDAC), Inphi Corp. (Nasdaq: IPHI).

The rest of the EPS schedule includes: 21st Century Holding (Nasdaq: TCHC), ADA-ES (Nasdaq: ADES), Alibaba.com (OTC: ALBCF.PK), Anheuser-Busch InBev (NYSE: BUD), Bacterin Int’l (Nasdaq: BONE), Bally Technologies (NYSE: BYI), Biofuel Energy (Nasdaq: BIOF), Body Central (Nasdaq: BODY), Bottomline Technologies (Nasdaq: EPAY), Briggs & Stratton (NYSE: BGG), Brinker Int’l (NYSE: EAT), Broadridge Financial (NYSE: BR), Ceco (Nasdaq: CECE), China Natural Resources (Nasdaq: CHNR), China Pharma (Nasdaq: CPHI), Cinedigm Digital (Nasdaq: CIDM), Clean Diesel Technologies (Nasdaq: CDTI), Cosi (Nasdaq: COSI), DeVry (NYSE: DV), Digital Ally (Nasdaq: DGLY), Earthstone Energy (Nasdaq: ESTE), eDiets.com (Nasdaq: DIET), Elizabeth Arden (Nasdaq: RDEN), Eltek (Nasdaq: ELTK), Emagin (Nasdaq: EMAN), Gencor (Nasdaq: GENC), Granite City Food (Nasdaq: GCFB), Hoku (Nasdaq: HOKU), Jones Soda (Nasdaq: JSDA), Kohl’s (NYSE: KSS), Molycorp (NYSE: MCP), Nordstrom (NYSE: JWN), Nvidia (Nasdaq: NVDA), Progressive (NYSE: PGR), Quepasa (Nasdaq: QPSA), Red Robin Gourmet (Nasdaq: RRGB), Renren (Nasdaq: RENN), Sapien’s (Nasdaq: SPNS), Sara Lee (NYSE: SLE), Teekay (NYSE: TK), Tim Horton’s (NYSE: THI), Uranium Resources (Nasdaq: URRE), Wendy’s (NYSE: WEN), and more.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

LiveDeal (Nasdaq: LIVE) – Discerning What May Have Driven its 58% Gain

LiveDeal (Nasdaq: LIVE) might be mitigating its delisting issue, or the day's 58% gain may be without solid basis. We explore several possibilities herein, and expect you'll find value in our perspective. LiveDeal (Nasdaq: LIVE) led most shares Wednesday on no corporate news and little sign of reason. Even the message boards were empty of speculation. Thus, the mysterious movement only drew in more capital and perpetuated momentum of the lightly traded microcap stock with few shares outstanding and fewer floating.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

LiveDeal (Nasdaq: LIVE) – Discerning What May Have Driven its 58% Gain

Relative Tickers: Nasdaq: GOOG, Nasdaq: BIDU, Nasdaq: YNDX, Nasdaq: LNKD, Nasdaq: AKAM, Nasdaq: ACOM, NYSE: AOL, Nasdaq: ATRN, Nasdaq: ABTL, AMEX: BNX, Nasdaq: BITA, Nasdaq: JRJC, Nasdaq: CCIH, OTC: CLKZ.PK, Nasdaq: EDGR, Nasdaq: DIETD, Nasdaq: GSOL, Nasdaq: HSTM, Nasdaq: HSWI, Nasdaq: INSP, Nasdaq: INXN, Nasdaq: DATE, OTC: KBAS.PK, Nasdaq: LOCM, Nasdaq: LOOK, Nasdaq: LEDR, OTC: MMRF.OB, OTC: PCIR.PK, OTC: QPSA.PK, Nasdaq: REDF, Nasdaq: RENN, OTC: SLNM.PK, Nasdaq: SOHU, Nasdaq: SFUN, Nasdaq: SBAY, Nasdaq: TTGT, Nasdaq: KNOT, NYSE: TST, Nasdaq: TZOO, AMEX: TCX, Nasdaq: VTRO, Nasdaq: WWWW, Nasdaq: WBMD, Nasdaq: YHOO, Nasdaq: YOKU, OTC: ZAOFF.PK, Nasdaq: LIVE, Nasdaq: NGSX, Nasdaq: SCEI, Nasdaq: WFSLW, Nasdaq: NFEC, NYSEArca: TVIX, AMEX: XPO, AMEX: ESA, NYSEArca: CVOL, NYSE: DST, NYSEArca: VZZ, Nasdaq: OVRL, Nasdaq: DHRM, Nasdaq: HOLI, AMEX: ELC, Nasdaq: CMED, Nasdaq: SMRT, Nasdaq: CDTI, Nasdaq: EPOC, Nasdaq: RGDX, Nasdaq: SPMD and Nasdaq: PFED.

The stock closed up 58%, taking it to a technical level it had previously found comfort in. At $4.34 though, the shares still traded well short of their 52-week high of $22.25. Given the stock’s float of just 470K, based on Yahoo Finance data (Nasdaq: YHOO), it wouldn’t take much to move it like it did Wednesday. Institutional holders UBS (NYSE: UBS) and Wells Fargo (NYSE: WFC) recently (March 31, 2011) reported small stakes, though Thomson Financial data at Yahoo seems to show net sales on the institutional level in the quarter before last.

The latest news we could find on the wire was of LIVE’s delisting notification for violating a NASDAQ exchange rule regarding minimum shareholders equity, and so on May 24, 2011 it was given 45 days to show NASDAQ (Nasdaq: NDAQ) how it planned to achieve and sustain compliance. Therefore, perhaps the day’s movement can be explained to be relative to LiveDeal’s near-term ability to meet the NASDAQ’s listing rules. I say this because the shares began downward from $4 on the delisting release on May 24, and have restored the market value lost since that news broke in one day’s trading on Wednesday.

Thus, it would appear that someone is betting on the possibility of this company mitigating its delisting issue. The stock’s activity seems to reflect that driver if we are discerning clearly. My study of the company’s website turned up a bit of a confusing (to me) headline above the newest company press release on its press releases page (which I have saved and notified the company of), which read, “LiveDeal Secures Additional Commitments from Foreign Equity Investors.” There was no date on the press release teaser, leaving me unsure as to whether it was published today. Thus it was confusing to me. I suppose that if you only read that headline, something a prudent investor should never do, you may have misunderstood the page. However, if you clicked through the release underneath that headline, which offered a lead-in that discussed the appointment of the new CEO (onus on the reader to notice), you found a news item detailing the appointment of the new CEO, which is old news. There was no information about a new foreign investment in the release text or leader. Only the headline was confusing if taken in isolation, which any investor should never do! However, I wonder if any did.

I called in to LiveDeal and spoke with the Investor Relations contact, CFO Lawrence Tomsic, and he said the company had not issued any press release Wednesday nor announced any news of new foreign equity investors since the March 25 release last indicating so. He said the company had no comment with regard to the day’s stock movement, and knew of no specific timely reason for the stock’s activity Wednesday.

Because of the possibility of a gunslinging investor potentially acting on incomplete due diligence, the driver of the 58% move in the stock could be without any base, though I cannot be sure; it could also be an independent bet on the company avoiding delisting; or it could be on another issue or theory or other reason. Whatever the case, I perceive risk in holding the shares now after the big gain, while not knowing certainly the true driver and with those possibilities seemingly in the cards.

If the stock is up on a presumed ability to avoid delisting, without any other important news, it would seem the shares would find balance at around $4, where about it traded steadily before the delisting warning. If the stock appreciation was driven by faulty reasoning, then the stock could move back toward where it stood before Wednesday, in my estimation, which was $2.75. In after-hours trading Wednesday, speculators have taken the shares to near $5 (seen on Yahoo Finance), which based on our reasoning here, looks lofty in my view (above $4) if not completely without base given the risks outlined above.

Note: Risk of missing upside also exists if the catalyst for the day's rise is something other than NASDAQ listing violation mitigation but still construed as positive by the market, or if that catalyst exists simultaneously with another, or for many other reasons.

We will continue to explain vaguely understood stock movements as best we can for our readers, so join our mailing list or revisit us regularly. We welcome your requests. Simply submit your stock questions to us via comments to any of our articles or to a button we will establish shortly atop the blog. If the stock is especially active that particular day, or if it is of broad interest otherwise, we will dedicate a post toward answering your question.

Disclosure: The author has no direct or beneficial interest in the shares of or securities relative to LiveDeal (Nasdaq: LIVE) or any other stock mentioned in this article.

The day’s top gainers included LiveDeal (Nasdaq: LIVE), NeurogesX (Nasdaq: NGSX), Sino Clean Energy (Nasdaq: SCEI), Washington Federal (Nasdaq: WFSLW), NF Energy Saving (Nasdaq: NFEC), VelocityShares Daily 2X (NYSEArca: TVIX), Express-1 Expedited Solutions (AMEX: XPO), Energy Services of America (AMEX: ESA), C Tracks Exchange Traded Notes (NYSEArca: CVOL), DST Systems (NYSE: DST), iPath Long Enhanced S&P 500 VIX (NYSEArca: VZZ), Overland Storage (Nasdaq: OVRL), Dehaier Medical Systems (Nasdaq: DHRM), Hollysys Automation (Nasdaq: HOLI), Eastern Light Capital (AMEX: ELC), China Medical (Nasdaq: CMED), Stein Mart (Nasdaq: SMRT), Clean Diesel Technologies (Nasdaq: CDTI), Epocrates (Nasdaq: EPOC), Response Genetics (Nasdaq: RGDX), SuperMedia (Nasdaq: SPMD), Park Bancorp (Nasdaq: PFED).

This article might interest other Internet Information Providers like Google (Nasdaq: GOOG), Baidu (Nasdaq: BIDU), Yandex (Nasdaq: YNDX), LinkedIn (Nasdaq: LNKD), Akamai (Nasdaq: AKAM), Ancestry.com (Nasdaq: ACOM), AOL (NYSE: AOL), Atrinsic (Nasdaq: ATRN), Autobytel (Nasdaq: ABTL), Banks.com (AMEX: BNX), Bitauto (Nasdaq: BITA), China Finance Online (Nasdaq: JRJC), ChinaCache International (Nasdaq: CCIH), Clicker Inc. (OTC: CLKZ.PK), EDGAR Online (Nasdaq: EDGR), eDiets.com (Nasdaq: DIETD), Global Sources (Nasdaq: GSOL), HealthStream (Nasdaq: HSTM), HSW Int’l (Nasdaq: HSWI), InfoSpace (Nasdaq: INSP), InterXion (Nasdaq: INXN), Jiayuan.com (Nasdaq: DATE), Knobias (OTC: KBAS.PK), Local.com (Nasdaq: LOCM), LookSmart (Nasdaq: LOOK), Market Leader (Nasdaq: LEDR), MMR Information (OTC: MMRF.OB), Prime Companies (OTC: PCIR.PK), Quepasa (OTC: QPSA.PK), Rediff.com (Nasdaq: REDF), Renren (Nasdaq: RENN), Salon Media (OTC: SLNM.PK), Sohu.com (Nasdaq: SOHU), SouFun Holdings (Nasdaq: SFUN), Subaye (Nasdaq: SBAY), TechTarget (Nasdaq: TTGT), The Knot (Nasdaq: KNOT), TheStreet.com (NYSE: TST), Travelzoo (Nasdaq: TZOO), Tucows (AMEX: TCX), Vertro (Nasdaq: VTRO), Web.com (Nasdaq: WWWW), WebMD (Nasdaq: WBMD), Yahoo (Nasdaq: YHOO), Youku.com (Nasdaq: YOKU) and Zaio Corp. (OTC: ZAOFF.PK).



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