Results 1 to 10 of 30
December 6, 2013 ? Quote of the Day ?Money will always flow towards opportunity
December 6, 2013 ? Quote of the Day
?Money will always flow towards opportunity, and there is an abundance of that in America?.America?s best days lie ahead? said ?Oracle of Omaha?, Warren Buffet, CEO and the largest shareholder in Berkshire Hathaway.
go to the Mad Hedge Fund Trader's website
Default Trade Setups for Friday Dec. 6th. GMO SSTK ETRM YY GST PLUG
My top 6 watches for Friday. Trade with us free for 2 weeks. Start here.
GMO ? similar setup to watch like PEIX did recently coming off lows. Risk for me is if the higher low fails AND if you decide to give it space, Max pain is if November low fails.
This New E-Commerce Stock Offers 70% Upside
There are some 75 million small and midsize businesses around the world. If they plan on competing in an increasingly connected world of mobile devices and e-commerce, they'll all need to have an online presence.
More than three-fourths of these 75 million SMBs don't have a basic website -- so this market is grossly underserved. Endurance International Group (Nasdaq: EIGI), which recently went public, is looking to change this.
Endurance is one of the U.S.'s top hosting companies, with a number of brands, including HostGator and Bluehost. Since its October IPO, EIGI is up 10%, and a number of positive aspects make the company a compelling growth investment.
Endurance estimates its share of the SMB website market at 5%, which means there's a lot of room for growth. But the company offers more than just website hosting. Endurance's variety of products and services -- including Web hosting, on-demand computing, security, marketing solutions and site analytics -- is relatively unrivaled in the space, allowing it to serve a broad array of companies.
In addition to the services listed above, Endurance also has its Mojo Marketplace product, which allows companies to develop software solutions and sell them to any number of Endurance's 3.4 million subscribers. Mojo Marketplace allows SMBs to buy the latest website templates, plug-ins, logos and scripts from some of the most popular open-source applications, like WordPress, Joomla, PrestaShop, Concrete5 and Drupal.
With companies looking to expand their presence in an increasingly competitive market, Endurance is in a great position to capitalize. Small and midsize businesses are expected to be spending $96 billion a year on cloud-based services by 2015, representing a compound annual growth rate of 28% since 2012.
Endurance can increase its revenue in two ways: by growing its subscriber base -- which it can accomplish as the market grows and through greater market penetration -- and by boosting its average revenue per subscriber. The company's roughly 3.4 million subscribers spent an average of $13.01 during the second quarter. The ability to upsell its customers to products with higher revenue per subscription is one of Endurance's most important growth drivers.
The company also could increase subscriber revenue through cross-selling its products. Its recent acquisitions, including HostGator, present the opportunity to cross-sell its other products to those subscribers. And its subscribers and customers are a loyal bunch, as seen in its stellar 99% retention rate.
Endurance has relied on word-of-mouth marketing for advertising, but the company plans to increase its marketing spending to help drive sales.
Driving Endurance higher should be the rising level of small businesses, more specifically, the increase in businesses that will be looking to boost their online presence. A continued rebound in the economy should help loosen SMBs' purse strings and further drive revenue for Endurance.
Endurance currently trades at an enterprise value-to-sales multiple of less than 6 and less than 4.5 when using 2014 sales estimates. This is on the low end among the major software-as-a-service (SaaS) companies: Salesforce.com trades at a multiple of 8.9, Proofpoint 6.3, Splunk 22.7 and ServiceNow 16.7. Given Endurance's scalable revenue model and ability to generate cash, a multiple of 6.5 for 2014 sales -- which yields a $22 price target -- is justified.
Risks to Consider: Endurance is dependent on SMB spending, which means it relies heavily on the broader economy. Any setback in the economic recovery could mean a decline in revenue.
Action to Take --> Buy Endurance for nearly 70% upside to $22.
- Marshall Hargrave
The Cars of War (TSLA)
Hugh L. O?Haynew (and there ain?t none other), one of our partners in crime here at Oakshire Financial, ascended to the heavenly realms of stock trading glory just a few weeks back with his two-minutes-to-midnight short call on Tesla Motors (NASDAQ:TSLA), a trade that returned nearly 100% booty in a mere seven days.
We call it ?two-minutes-to-midnight? because Hugh stepped up to the plate just a day before Tesla?s quarterly earnings report, timing that could equally have marked blastoff day for that already high flying, popular stock.
But it wasn?t. And Hugh?s call was prescient. Traders who went with him saw their money double in five trading sessions, and I, too, earned small sum for piggybacking on the idea.
A Win is a Win is a Win
Small or large, though, a profit is a profit, and in the aftermath of our first Tesla win, we got to wondering if that same Studebaker of a stock might offer us another round of juice if we played her again. Daily moves in the shares are huge, and if we just got the direction right, we thought? well, we, too, might find ourselves under the lights of stock advisory stardom.
So we looked at the charts.
First the weekly, as it offered us a definitive big-picture look at trading in TSLA ?
A 27% Yield From One of the Largest Oil Companies on Earth
People ask me about my most profitable investment.
It was an investment I made back in October 1999. Today, it pays me a yield equivalent to 27%, and it has forever changed how I look for income opportunities.
In 1999, I was speaking at an economic conference in New York. During one of the breaks, I struck up a conversation with two gentlemen who both happened to work in the oil and gas business. At the time, I was doing some consulting work for a lawsuit involving a number of large oil companies and had been knee-deep in oil price and production data.
Oil and natural gas prices had been on a steady 20-year decline following the "oil shock" of 1979. By the time 1999 rolled around, analysts had universally soured on the sector. Prices were going lower, they said. In March 1999, The Economist devoted a whole issue to the glut of world oil.
Discussing the future price for oil, The Economist said, "$10 [per barrel] might actually be too optimistic. We may be heading for $5."
In October 1999, I didn't agree with the analysts or the common view that oil prices were going to sink lower. As it turns out, neither did my newfound friends at the conference. Over the course of the meeting we exchanged information and data to back up our thesis.
Immediately following that conference, I made an investment in Burlington Resources, an oil and gas company that was later bought by ConocoPhillips (NYSE: COP).
Thursday links: having it both ways
?Tis the season to shop. Daniel Gross at The Daily Beast suggests you give the gift that keeps on giving: LED bulbs.
Quote of the day
Geert Rouwenhorst, ?People have difficulty buying things for diversification purposes. But negative correlation is what it is. When one thing goes up the other thing goes down. You can?t have it both ways.? (FT)
Chart of the day
The mark of a truly great investor
How good is Carl Icahn? Aside from the fact that he is now the wealthiest investor in the world, having surpassed George Soros this year with $8 billion in gains for calendar 2013 (according to Bloomberg), just look at how he plays his cards at the table.
The mark of a truly great investor is someone who can set themselves up to win even if they lose. Some call that ?optionality? or a ?margin of safety.? I call it genius, especially when the stakes and dollar amounts and visibility are this high.
That?s exactly what?s going on with Carl Icahn?s position in Apple. The stock?s been shooting straight up since his arrival and its trajectory has almost nothing to do with any of his proposals. The company has independently embarked on the largest share repurchase plan in history but Carl wants them to do more. And they may ? or they may not. It doesn?t matter. He can make money regardless thanks to the iPhone 5S, the new iPad products and whatever else they roll out in the future (TV, networked home, Internet of Things, iTunes payment processing etc).
Icahn has announced a softening in his stance re: how big the buyback he?s seeking needs to be. He?s filed a proxy motion for a precatory vote of shareholders on his proposals ? precatory meaning non-binding on the company, just a suggestion. Will he win? Who knows. Adam Lashinsky at Fortune is characterizing this move as the investor having ?blinked? in his game of chicken.
No, Adam. I don?t think so.
Why would he blink when he?s not in any danger at all. Isn?t that how a game of chicken works ? both parties have equal amounts of risk should they continue? What is Carl?s risk? Reputation? Please. He?s just allowing the investment to play out.
It is entirely conceivable that shareholders do not vote his way but that he wins anyway in the only way that truly matters ? making money. He lost his proxy fight with LionsGate but he still made money in the stock. With Netflix, he barely had to clear his throat. What?s the difference?
Carl is the king.
