Category Archives: $BABA

NASDAQ Closes above 5k! Bail out or Buy more? 2CentView …….

Can the NASDAQ power on from here or is this Y2K all over again?

$CSCO traded on a p/e of 100x in 2000 and there was talk it could become the first trillion $ company. Today, it has a market cap of 145bn a p/e of 13 and a growth rate of just 5% over 5 years – so not exactly the same as Y2K.
The Biotech sector is showing some signs of a bubble brewing up – but this is still not on the scale of bubble in 2000.

Mobile Social and BioTech stocks have done well over the past 18 months – PC related stocks have performed poorly – and will probably remain that way as there is no growth in PC – look at $INTC and $HPQ recently…

There are very few bargains left in these hot sectors – the last one $SWKS (Skyworks) which was an incredibly cheap stock at $60 when 2CentView tweeted the name back in November 2014, is now $102!

Value names in various Sectors:

Keep away from PC Stocks for now – if you do want to buy, $MU is the cheapest.
$MU FV = 38
$HPQ FV = 35 Yield 2%
$INTC FV = 29 Yield 3%

Mobile/Social/Internet of things/Wearables
$GOOG FV=600 – was a great opportunity to buy when below $510
$MSFT FV= 45 – if you think they can move out of their depdendence on the PC
$CSCO FV=30 – buy some for the yield of 3% and potential in the internet of things – implied growth still very low

Internet Software and Services
$BABA FV=120 – includes $20 cash – implied growth 25% vs 45% on $AMZN
$Z FV=108 – Spencer RasCoff is a great young CEO

$GILD FV = 109 also pays dividend! HepC is competition is heating up though!
$JAZZ FV=189 – could be the next pharma take out!

$CSIQ FV=60 [see earlier tweet on this name ]

2CentView has core positions in $AAPL, $GOOG, $FB [3 best tech companies in the world!], also $TWTR, $ISIS, $CELG , $GILD and $FEYE

2CentView FVs are calculated using a proprietary earnings based model which has been calibrated to determine a fair vlue stock price today. It is based on consensus analyst predictions of future earnings – these are predictions only and may not play out in the real world. It is designed to identify mispricing between the stock price and future earnings potential of the company. The model has helped 2CentView realise a 35% annual gain over the past 2 years.

$YHOO – buy on 9% pullback? Sum of the parts recalculated post $BABA ipo

2CentView FV of $YHOO post the $BABA ipo:

Cash raised from sale (post tax) = $6bn
Value of 15% Stake in $BABA = 221bn*15% = $33bn (pre tax)
Value of Stake in Yahoo Japan = $9bn
Cash already on Balance Sheet = $2bn

Value of Core Business = $5bn [2CentView FV model stripping out earnings from $BABA and Japan]

Total $56bn !!! or $56 per share….
so current price assumes $BABA will go back to it’s IPO Price of 68, the stake in YAHOO Japan is worth half the market value and the core business is worth ZERO! OR The $8bn in Cash will be wasted on a wrong overpriced acquisition.

If you believe, Marissa Meyer will spend the money wisely…

Possible trades are:
Go Short $BABA Long $YHOO a 20% drop in $BABA will only see a max 10% Drop in $YHOO

Go Long $YHOO outright and take a bet the apparent mis-pricing will be realized and the stock will trade up to $45 in the short term (and hope $BABA goes up!)

$YAHOO should buy $YELP!!

$BABA FV= 88…the power of 8!

Jack Ma like most chinese strongly believes the number 8 is lucky!

After the IPO his stake is exactly 8.8%, the issue price as $68 and it was set on the September 18th!

2CentView FV is also $88 – this implies 30% growth over 5 years – which is fairly reasonable given $FB’s implied growth of 36% over 5 years.

If you like $BABA and want to get involved, try an get some below $90.

2CentView holds a core position in $BABA via $YHOO.

$YHOO FV 43 hit – what about $BABA…

If you have not done so already take some profit in $YHOO now – buy on the rumour sell on the fact ! the Rumour being the Alibaba IPO and the fact it is now here!

But keep a core position in $YHOO – if you believe in Marissa Meyer…

As for $BABA – expect to open around $80 but could trade up as high as $100.

If you like $BABA, use some of the Yahoo proceeds to buy $BABA – but dont’ pay more than $90 which is 37x expect 2015 EPS.

2CentView holds a core position in $YHOO