Category Archives: $GOOG

AFAG (Amazon, FaceBook, Apple. Google).. Update following results

Tech has had a great run, since being sold off towards the end of the year (one reason the 2CentView portfolio gave up 3% (from up 15% to 1up 12%) in the year end run in – it is overweight tech).

Whatever Trump does, he cannot get in the way of advancements in Tech – otherwise the Chinese will overtake the US…. Apple, Google and MSFT alone are worth $2 trillion dollars!

FaceBook – reported another great quarter – Ad revenue still growing, FaceBook live is a big hit … 2017-2019 earnings estimates have been raised, and the company has been buying back stock.

2CentView fair value now $130 if you include the $10 cash. So why has the stock failed to break through $140 – the consensus target price is now $161. One reason, is that there has been a general rotation from growth to value – so investors are not paying up for growth any more – if growth is cheap (at $115 was a good price to buy if you didn’t own the stock), they will buy it – but it is not getting the premium it did before Trump – investors see great opportunity in value stocks as Trump policies begin to take shape..

2CentView has a core position in $FB and long term price target of $150. If Facebook drops back to 115, buy it!

Apple – reported a great quarter – as iphone Sales growth recovered again – partly helped by the issues at Samsung and partly because the iphone 7 and particularly the plus, were great hits. Services revenues continues to grow. The Cash generation is amazing – they have bought back $144billion of stock over the past 3 years – and they still have a WHOPPING QUARTER OF A TRILLION in CASH!!!!….So with or without innovation, the stock price will just keep going higher on buy backs alone – as long as the Iphone keeps selling at near 40% margins, Apple stock will go higher – and when the repatriation of tax break is announced – another $20 will go straight on the stock price – much of the cash held is actually overseas.

Apple is struggling in China however, – I got an Honor 8 phone, which has an Octo processor (actually have 3 phones now – Apple, Samsung and Honor 8) – it is amazingly fast – Apple should be creating phones with such power – hopefully the 8 will have 8 processors!

Keep a core position – the Iphone 8, expansion in India and repatriation of cash could see the stock reach in $150 in 2017.

$AAPL $120 vs $130 Yield 2%

2CentView has a core position in $AAPL. Patience is a virtue in investing, and the investment is Apple is starting to yield nice results.

Amazon reported a surprising lower than estimated revenue number, but higher EPS. The revenue number was expected to blow out the estimates as the sales over the holiday season expected to be very strong – but price competition affected even Amazon. AWS remains strong. Have to listen to the conference call (earningscast.com).

Investing in Amazon, is not about the EPS or the EV/EBITDA – it is having faith in Bezos’s vision – he still has some way to go – so if you’re investing horizon is 6 months, do not buy Amazon – but in 3 years this could be first trillion dollar company.

2CentView has a core position in $AMZN.

Alphabet is a great technology company – it dominates search and also involved in driverless cars, AI and cloud. The future of technology will be shaped by Google. Keep a core position.

$GOOG – FV = $740 vs $820

2CentView has a core position in $GOOG and looking to add a trading position at $750.

Stay long at least one of these great Tech companies!

2CentView themes – Technology

I read a great article in the Economist on the growth of A.I. – it mentions how A.I. technology is starting to be used in real commercial applications, from driver less cars, gaming, fraud detection and – decision making – the latter has huge potential, as our ability to make decisions and in thoughtful way and differentiates us from machines…The article mentioned Google and Nvidia whose GPU chips is the chip of choice for most AI Start ups – and has doubled since it announced earnings in November.

This article was published in June – and I stack up my Economist article reading when I have a free day – in this case I read it 5 months too late!

When computers became commercial 30 years ago there was a real concern about the impact on jobs – which never really materialised – things just happen faster – however, the recent innovations could have a significant impact on labour markets – but not for a while…

2CentView on popular Tech Stocks:

Alphabet is a great technology company – it dominates search and also involved in driverless cars, AI and cloud. The future of technology will be shaped by Google. Keep a core position.

$GOOG – FV = $740 vs $792.

2CentView has a core position in $GOOG and looking to add a trading position at $750.

FaceBook – growth is slowing at the world’s largest and ONLY Social network – 2017 will be year of heavy investment by FaceBook, as it looks to commercialise WhatsApp and Oculus.

$FB – FV = $115 vs $115 (implies 20% 5Y growth) – the stock is now at a zero premium to fair value – for the past 2 years it has always traded at a premium. If you are not long FaceBook and like the company this is a good buying opportunity. IF you have a core positon, hold – look to add if the stock drops to $110.

2CentView has a core position in $FB

Apple – Apple could significantly benefit if Trump government allows repatriation of it’s near $200billion of overseas cash a low tax rate. Could add about $20 to the stock price. Also, it is expanding in India, but still struggling in China.

IPhone 8 will be big as it is the 10th anniversary of the Iphone. Keep a core position – the Iphone 8, expansion in India and repatriation of cash could see the stock reach in $150 in 2017.

$AAPL $120 vs $116 Yield 2%

2CentView has a core position in $AAPL.

Amazon – Bezos’s vision is truly amazing – it delivered 1 billion packages over xmas – flawlessly. Drones, Airborne warehouses may seem crazy, but they are becoming a reality – logistics on this scale and efficiency is truly Amazing! Plus you have the Amazon Web services business and the hardware – Kindle + the new Alexa AI Device – which has been a hot seller. Stock looks expensive on a EPS basis, but reasonable on EV/EBITDA basis of 13x (MSFT is 12x to give you an idea the valuation is not as whacky as some pundits say it is).

$AMZN FV = 550 vs 750 – but the 2centView fair value is EPS based – so understates the value as Bezos is still reinvesting heavily. Own Amazon!

2CentView has a core position in $AMZN.

Twitter – Trump is a big Twitter fan – but this has not helped the stock. At one point there were several buyers lined up to buy the little bird – but they all flew away when the price reached $25!. Consensus analyst target price is $17 – Google is the best fit for Twitter – but do not see them paying more than $20.

Analysts are now pricing only around 10% earnings growth for $TWTR over the next 5 years – which puts the fair value at $13 if you include the cash of $3. So at $16 it is not that expensive, and view is that Twitter will get bought in 2017 – for between $17 and $20. Wait for the stock to reach $15 then buy some, and buy more if it trades down to $13. Then sit and wait – it is actually a very good property to own.

Set a stop of $10.5, and take profit target of $20.

2CentView is looking to add a trading position at 15, take profit target $20.

Nvdia last earnings report saw a massive jump in earnings as it’s strategy to focus on AI and driverless cars, as well as great graphics chips brings the company into the main tech growth areas for the next 5 years.

At 107, the stock is trading at 5Y growth rate of 28% – which is not expensive – expensive hot stocks trade at around 50%! So there is still room for upside in this stock, if investors are convinced this is the stock to own to get exposure to AI and the growth in intelligent gaming.

2CentView is looking to add a trading position at 107, take profit target $135 (implied growth = 34%)

$AMZN, $FB, $AAPL, $GOOG – why are they all lower post results?

Facebook and Google reported great numbers but the stocks are down….Amazon reported much lower EPS numbers and Apple reported a revenue decline and was blasted by Analysts on the conference call!

Fair Values as follows:

$GOOG = $700 vs $800 $80bn in CASH

$FB = $114 vs $121

$AAPL = $115 vs $109 Yield = 2%, $237bn in CASH [ most of which is overseas]

$AMZN = $500 vs $760

Apple stock had a good run up to $118 because of the Samsung Note 7 total recall [Samsung will bounce back from this set back], however they reported a revenue decline, supply issues with Iphone7 plus and struggling sales in China. The Services revenue grew 24% – which was encouraging, but still small relative Iphone revenues. What was interesting, is that apparently they had some interest in Time Warner, which is being acquired by AT&T – as 2 legacy businesses join forces in a vertical merger – to take on the threat of chord cutting and direct to consumer entertainment.

2CentView maintains a core position in Apple – the last quarter only included one week of iphone 7 sales and a trump victory could see the opportunity to repatriate the $200bn in overseas stock at a low tax rate.

$FB declared another revenue and earnings beat above expectations, MAU now 1.8billion – but the stock went lower – Zuck made it clear that growth [ specifically ad revenue] will slow and the company will invest heavily in Video [ and take on SnapChat!] . The 2CentView fair value of $114, implies 5 year growth around 22% versus consensus of 30%. It is likely the consensus growth will come down and analysts will lower their price targets from $160, which implies 30% growth over 5 years.

So FaceBook unlikely to go above $130 over the next 3 months – consider buying if the stock falls back to $110. 2CentView has always stuck with the Zuck since 2013, and plans to retain a core position (the trading position was sold at $130) as it plans for its next phase of growth.

$GOOG – reported another good quarter. The New Pixel looks good and sold out!. 2CentView has a core position. Stock trading lower – will look to add to the core position on further weakness.

$AMZN – Bezos surprised the street again, as it reported lower than expected EPS as it invests heavily in India and also considering expanding in the Middle East. Amazon cannot be valued correctly using EPS (earnings per share). Bill miller, the legendary VALUE investor, has held a position in Amazon since the IPO – and he looks at Enterprise Value / EBITDA (a metric often used by analysts to come up with price targets) 0- which for Amazon is only 13 in 2018…$MSFT EV/EBITDA for 2016 is 11 – so based on this metric Amazon is not that expensive.

Ultimately, to hold Amazon stock you need to believe Bezos will create one of the greatest retailers (and cloud services) company the world has ever seen – which operates seamless logistics, great customer service, great prices all over the world [except china!].

2CentView doubled its position in Amazon post results – take profit target $880.

Hold at least one of these great stocks in your portfolio. Recent stock price movements are not necessarily company specific but somewhat overall market related due to the US Election, which has seen the S&P 500 go lower for the year, in matter of weeks.

 

 

$TWTR – the buyer will be the company which can makes sense of the data ..that is..

Google! The Twitter data is actually very valuable – it is real time news and tell us what the planet is thinking now.

Google , which is making a big push into AI can use the data to make it’s search results more up to date – and apply AI techniques to the valuable data that Twitter has – this could be sold to advertisers.

2CentView predicts Google will finally buy Twitter. Salesforce, Disney are also in the frame.

Amazon, FaceBook, Apple, Google – AFAG – probably the best 4 tech Cos in the world

Back in January 2016, tweeted that you should have a AFAG – not smoke a cigarette – a disgusting habit – but own one or more these great tech companies.

2CentView owns all 3 and recently added Amazon at $700 – this company is amazing and Jeff Bezos and Mark Zuckerberg are perhaps the 2 most visionary CEOS on the planet today.

Fair Value update as follows:

$GOOG = $700 vs $800 $80bn in CASH

$FB = $115 vs $125

$AAPL = $120 vs $108 Yield = 2%, $200bn in CASH!

$AMZN = $500 vs $777

So Apple remains the cheapest – and in danger of losing it’s ‘best tech title’ as there are no signs of innovation – just new iPhone product upgrades – the service business is growing but is that enough? The Stock has a good run since the results – if the new US Government allows the repatriation of foreign Cash at a low tax, the stock would go higher – but that is not a reason to own the stock long term.

2CentView is holding the core position – for now.

$FB is now starting grow into its valuation as the price and the FV Converge – a blow out quarter did not see a follow through on the stock – has advertising revenue on the world largest social network started to mature a bit? The stock is still attractive here as the implied growth rate of 25% is lower than the expected growth rate of 35% – but is that expected growth rate too high?

2CentView is sticking with Zuck – a trading position was added post Brexit at 112 – looking to take profit on the trading position at 130, but keeping a core position – revenues from WhatsApp, Instagram and Oculus are yet to materialise.

$GOOG – also reported a great quarter. See Alphabet – as it is called now as an ETF of the future – run by the smartest people on the planet. AI will be big and they will be involved. 2CentView has a core position.

$AMZN – the Bezos strategy of diversification, investment and customer focus is starting to yield higher EPS numbers – Amazon’s TAM is so huge, AWS is the leader in Cloud – Bezos is so visionary you just have to own a piece of this amazing business – PRIME is one of the greatest retailing strategies ever! The stock is the most expensive ofthe four  – but deservedly so..

2CentView has a trading position opened at $700, take profit target $850. The FV will eventually grow into the Stock price but there is some way to go.

Google, Apple and FaceBook – probably the best 3 tech Cos in the world…Update

2CentView has always said you should own at least ONE of these great companies in your portfolio [2CentView owns all 3!] – you can also add $AMZN (Amazon) to that list!

$GOOG (now Alphabet) was the best performer, rallying to $780 since hiring Ruth Porat from Morgan Stanley, who will keep spending under control, but will continue to invest in new technologies such as driverless cars. [Back in Feb 2CentView
tweeted to BUY Google when the stock was at $510 and so cheap]. Google is an ETF on the future – hold a core position.

FV now $610, So google is now gone from very cheap to quite expensive!

$FB – FaceBook is a just a must own stock! Businesses large and small are queuing up to advertise on FaceBook and the money spent is yielding results. 1.6billio users. No Competition. Great CEO.

Stick with the Zuck.

Facebook is an expensive stock [2CentView FV=$80], with an implied growth rate of 34% over 5 years. But the premium is justified. Look for opportunities to buy the stock on weakness if you are not involved.

$AAPL – Apple stock ended year virtually unchanged, as the Analysts continue to focus on the potential slowing down of iPhone sales growth.

FV=$125, so if you like Apple, current level is attractive. Apple reports Jan 25th – again focus will be on iPhone sales numbers.

2CentView Performance in 2015

The 2CentView portfolio was up 1.5% and flat if you exclude dividends for 2015, which matched the S&P500 but above the FTSE100 which was down 5%.

The portfolio was up nearly 10% mid year, but then the Chinese stock market plunged and was followed an amazing drop in commodity and oil prices, the scale of which no one predicted, sees stocks like Anglo American, Glencore and BHP Billiton drop to record lows.

The objective of the 2CentView system is to outperform the index in rising markets and be at least in line when the major index is flat or falls up to 20%, and outperform if the market corrects more than 20%. The portfolio is benchmarked vs. the SP500 (50%, flat ) and FTSE100(50%, down 5%), so the outperformed by 2,5% in a flat year. Overall return since 2013, 74%.

The exposure to USD/GBP exchange rate is also something to keep an eye on – and 2CentView started using the PUS3 3x Leverage ETFS Short USD, Long GBP to hedge foreign exchange risk, locking in at 1.52.

Where it did badly:
2 Core positions were savaged – SAVE (down 60%), $YHOO (down 50%), $TWTR (down 50%) which cost the portfolio nearly 5% – 2CentView exited these positions, when the 50% threshold was hit. $ACA (Acacia Mining – Gold) was also down 40% due to lower gold prices.

Trades in $AMBA (Amberalla), $GNW (Genworth),$KORS (Michael Kors), $BHP (BHP Billiton) and $AAL (Anglo American) were all stopped out. In the case of $GNW, $BHP and $AAL, these stocks continued to fall and the stop loss system saved the portfolio from losing a lot of money.

Trades in $FIT (FITBIT), $HSBC were hit their targets and were profitable.

Core positions which did well: $FB up 40%, $MRKT, $DLG (Direct Line, up 30%+dividends),$NFLX (NetFlix), $TWOD (Taylor Wimpey, up 50%), $GOOGL up 60%.

Other core positions in $AAPL, $NASDAQ:AAL (American Airlines), $SWKS, $MS, $CELG and Ionis pharma were fairly flat.

Main lesson learnt from 2015 – STICK to your stops – downward moves can be savage – Analysts forecast can severely LAG the market on the downside as well as the upside, so do not fight the market, exit at your stop, re-evaluate and come back in lower down if you still like the stock.

Happy 2016 from the 2CentView team.

$FB (FaceBook) Surges through $100 pre market as big cap tech earnings surge

In this volatile market have been pretty much on the sidelines, sitting on cash.

The volatility in the commodity and health sector is quite scary – Glencore, Anglo American and Valeant Pharma!!

However, good quality companies which focus on the customer and long term vision will always succeed long term – Google (Alphabet) and Amazon reported great numbers yesterday.

Hold at least one of Google, FaceBook, Apple or Amazon in your portfolio – they are great tech companies!

2CentView has a core position in Google, FaceBook and Apple.

$GOOG $AAPL $FB – probably the best 3 tech Cos in the world..all reported – which is the best buy now?

2CentView is that you should have one of these great tech companies in your portfolio. 2CentView as all 3!

First to report, GOOGLE popped $80 on earnings boosted by Youtube – but the real winner was Ruth Porat who hosted the conference call and showed amazing insight into Googles products just 6 weeks after joining – her presence seemed to calm investors nervous about Googles spending on projects like Google Glass…the driverless Car could be a real winner for Google though – so hopefully they will continue to invest there.
FV=600 still – so the stock has gone from being very cheap at 510 to a bit expensive at 660.

Apples iphone number was below analyst expectations and this combined with the sell off in China has seen the stock drop to 115 from 130. Investors would be more comfortable with a 50;50 rather than 70:30 ratio of iphone earnings to other products. But it is a big ask for the other new products – Apple Pay, the watch and streaming to be worth $130bn! (20%)

FV=$125 on Apple.

Facebook again reported a great quarter – but the stock’s had good run up prior to the results so there was only way it could go post results – DOWN! As it did last quarter – where it traded down $74 which was a good level to get involved.
$FB is an expensive stock – but the multiple is deserved as it has such huge potential given it’s user base.

Bottom line, is that FB remains expensive – but deservedly so, Google now is a bit expensive from being really cheap – and Apple looks cheap – BUT…if iphone sales continue to disappoint the stock could go lower.

2CentView has core positions in $FB, $AAPL and $GOOG.

No clear trade on at the moment in the best 3 tech companies in the world.

Take profit in Google if you have not done so already – but keep a core position.

Hold on to FB – stock could go to 110 by the end of the year.

Apple – if you are not involved an entry point is 110. If you have a position, hold.

$GOOG Trading $681 pre market – up $80! following results yesterday…

Google reported numbers below – with the call presented by new CFO Ruth Porat – investors clearly liking the a more careful approach to growth resource allocation and strong performance of You tube.Earnings estimates will be revised upwards – know I tweeted it was time take to some profits in Google yesterday – as we never know which way an earnings post can go – Mark Cuban for example is very bearish on Google given their dependence on traditional search – taking SOME profit was the right thing to do if you bought at the cheap cheap price of $510 back in Feb!
Hopefully you have kept a core position in this great company also!

  • Revenues of $17.7 billion and revenue growth of 11% year over year; constant currency revenue growth of 18% year over year
  • Strong performance of core search business, particularly mobile, complemented by growth in YouTube and Programmatic Advertising
  • GAAP and non-GAAP operating income grew 13% and 16%, respectively, year over year
  • GAAP diluted EPS for Class A and B common stock and Class C capital stock of $4.93 and $6.43, respectively, and non-GAAP diluted EPS of $6.99
  • Strong operating cash flow of $7.0 billion

2CentView holds a core position in $GOOG