Category Archives: $GOGO

@LookatBowen: $GOGO – view after the pull back..

JPM upgraded the stock to $28 (link below).

http://www.fool.com/investing/general/2014/04/17/why-gogo-inc-shares-will-soar-65.aspx

2CentView FV=$23 if you value the stock 2 years forward – $GOGO is not expected to make money till 2016-2018 when earnings are expected to grow in the 30% area – with stock trading on an 5Y implied growth in the low 20’s it is a good buy if you believe in the growth potential of on Air High Speed internet access on airplanes.

Revenues are expected to surpass $1bn in 2018.
There are about 50,000 commercial flights taking off worldwide every day, with around 3million passengers if Airlines are charged $5 per passenger x 365 = $5.5bn revenue potential in this market.

I read that $GOGO technology – which is on the ground technology – as opposed to in the air like $VSAT – is not that great, but recently I saw the CEO CNBC come on and say their technology is as good as $VSAT and is improving all the time. However, i dont think you can stream video on an airplane which has $GOGO technology – yet.
However, they are first to market and have signed up major airlines.

Strategy:

If you like $GOGO – buy here at $18, take some profit at $26, stop $14.

UK Budget – Pension Shakeup “We plan to overhaul the system completely”…..

The government made a huge change to pensions – from 2015 you can do what you want with your private pensions at 55 subject to marginal tax rate. This mean that you are NOT forced to buy a stupid Annuity or have income drawdown restrictions on your personal pension!
Download the udget_2014_greater_choice_in_pensions_explained.pdf from the government web site.

For example if you had 400k in your private pension then take 100k as cash tax free, the rest you can take out subject to normal tax rate in that year – so if you have retired at 55, and take out only 10,500 you pay no TAX!.

Hargreaves Landsdown stock – the provider of SIPPS rallied 15% on the news and the annuity providers were sold off – it is anticipated many more will contribute to SIPPS.
So plan to have 400k at least in your private pension by 55 – then sell the Porsche for a LAMBO! or pay any debts on your buy to let portfolio or buy the villa in south of france…..its entirely up to you..

Construct your portfolio now of the following:

Recovery plays – Good Companies which are broken but are coming back.
Stocks below have made dramatic gains in less than 3 years:
Sports Direct 60 o 800
Thomas Cook 20 to 180
SuperGroup 300 to 1700
DIxons 20p to 50p
HPQ 12 to 30
RiteAid: 1.50 to 6.50

2CentView model identifies when broken companies earnings expectations are expected to rise but the stock price has not reflected this change.

Low Beta Income stocks

BP, DLG, Scottish and Southern – now SBRY.
Buy these companies when there is potential upside of 15%-25% and dividend carry of between 4 and 6%. e.g. $SBRY FV=360, carry = 6%!

Growth Stocks
the Hardest to play – you need to know what you are paying for the growth and whether you think it can meet these expectations (use the PEG as a guide). If you are right gains will be big, but so also is the risk – the stock will be savaged and you will lose a lot if the company fails to meet the expectations.
Important to stick to stops on these.
2CentView model shows that growth stocks fall into 4 categories (over 5 years): low (5-15), moderate (15-35), High (35-50), Super(50-80)

Low: Apple, MSFT, HPQ, IBM, Oracle
Moderate: Google, GOGO, FSLR
High: FaceBook, AMZN, NetFlix, Tesla, GIMO
Super: FUEL, Twitter

$GOGO vs $VSAT – inflight technology expected to grow from 350mm to 5bn ..

$GOGO announced results this week and beat on earnings and eps – but stock went lower from the recent pop from $21 (where i first tweeted this name on feb 28) to $24 then back to $21.85.$GOGO was first to market and have signed up airlines such as United, American and Delta adn recently JAL – but it’s technology only currently supports a dozen users and watching your favourite movie on Netflix while drinking champagne 30,000 feet in the air is still a dream.

However, the stock trades on a 20% 5y Implied growth in an industry which is predicted to grow 70%p.a over next 5 years.

$VSAT – the other company in this space, has more advanced technology but trades on 65% implied growth over 5 years (px=72) – in line with the expected growth of this technology.

So, bottom line $GOGO is cheap – but for a reason – it’s technology LAGS well behind $VSAT. If you think they can close the gap buy $GOGO.

Google Financial Quotes

Google Finance Chart

$GOGO – company that provides internet on your plane! Pulled back from high of $30 to $21

Was travelling back from Dubai on the Airbus 380 and was sending texts and reading emails on my IPAD from the lounge on the plane! This company makes it possible i GOGO – the stock popped to $30 when news that the FAA has allowed planes to make use of phones and other internet devices in the US
but … has now pulled back to $21.

FV=$20, but this only assumes a growth of around 20% – so on a PEG = 1 the stock looks attractive.
If you think there is possible growth in this technology buy $GOGO here..

Google Financial Quotes

Google Finance Chart