Stock Analysis 2013
Stock analysis is the application of a method or set of criteria to evaluate a company’s stock. This analysis can fall into several areas; more broadly this encompasses fundamental analysis, technical analysis, and quantitative analysis. Fundamental analysis covers the research of a company’s financial statements, its management, the marketplace, the firm’s competitors, and forecasts for the future of the business. Technical analysis is the study of a stock’s chart. Someone using technical analysis wouldn’t look at the income statement, but would spend their time looking at the chart and indicators, such as volume, moving averages, and past market moves to forecast future stock moves. Quantitative analysis is when a computer is programmed to look for patterns using mathematics. Some examples of quantitative analysis can be found in statistical arbitrage or algorithmic trading.
Carl Icahn, the infamous market maven who usually gets his way via buying major equity interests in companies he feels need changes, did the smart thing after dropping his takeover bid for personal computer (PC) maker Dell Inc. (NASDAQ/DELL). My thinking was why buy a company that’s sinking fast and, according to my stock analysis, had many hurdles ahead of it to get back to where it was?
A decade ago, Dell was the toast of Wall Street. It was a great company started by CEO Michael Dell in his garage in Texas that made him and all of his early shareholders super rich. I still recall when the stock was trading at the $1.00 level in the late 80s and early 90s. I was a poor student at that time, but I still think about what may have happened if I decided to quit college and put all of my college funds into shares of Dell back then—the company traded at over $50.00 a decade later. Anyway, that was a trade I missed that would have made me quite wealthy at a young age.
So, here we are. Icahn may have given up his push to buy Dell, but it was the right move this time around, based on my stock analysis.
The reality is that Dell is what I describe as a company that is stuck in the past, as my stock analysis suggests. With the advancement of the mobile market, smartphones, and tablets, there is just very little space for desktop computers and laptops for that matter. The company offers tablets and gimmicky laptops that have a … Read More
If you own Tesla Motors, Inc. (NASDAQ/TSLA) and bought this momentum stock at much lower prices, then congratulations to you! Nice job on the great profits.
Now you need to do the right thing and look at an exit strategy, according to my stock analysis. Yes, Tesla could easily move higher. In fact, Northland Capital Partners recently increased its price target from $95.00 to $230.00 on Tesla, up about 67% from the close of last Friday. That’s great, but there’s also a $38.00 target on Tesla, according to Thomson Financial. This is clearly too low, based on my stock analysis. The mean target was $120.55 as of last Friday. What I would do at this time is take some profits off the table, based on my stock analysis.
Some of you will look at the $230.00 target and say my stock analysis is incorrect. Hey, I might be wrong, and it wouldn’t be the first time, but I have been able to survive for over 20 years of trading and not lose my capital base because I knew there were times that profits had to be taken.
This is a mistake made by many investors who believe in the high targets flown around by Wall Street. Guess what, these targets are usually never on the mark, based on my stock analysis. If you bought at much lower prices, take some profits as in “buy low and sell high.” This makes sense.
Now some of you are probably also buying Tesla at the current high point. This is not what I would do. I really don’t adhere to the “buy high … Read More
The market action is telling me I was wrong about my previous prospects for Hewlett-Packard Company (NYSE/HPQ) and its CEO Meg Whitman.
When the maker of personal computers (PCs) was trading at $17.00 last October, I didn’t have that much optimism for Hewlett-Packard (HP). However, since that time, the stock is up about 40% and Wall Street appears to be getting back on the bandwagon and cheerleading once again.
The current rally and renewed optimism in Hewlett-Packard was driven by its beating Wall Street earnings estimates in spite of a 10% year-over-year (y/y) decline in fiscal second-quarter revenues. It was the company’s seventh straight quarter of declining sales.
I really wouldn’t be getting excited, based on both the sales contraction and my stock analysis.
Right across the board, Hewlett-Packard saw declines, especially in the PC segment (-20% y/y) and enterprise (-10% y/y). The ravaged PC segment saw total unit sales fall 21%, comprising a decline in desktop sales of 18% and a horrible 24% drop in notebook sales. My stock analysis suggests that the notebook market is probably negatively impacted by the rise in demand for more portable tablets. (Source: “HP Reports Second Quarter 2013 Results,” Yahoo! Finance, May 22, 2013, last accessed May 27, 2013.)
So, while Wall Street and investors appear to be onboard, I’m still sitting on the sidelines and will need more evidence than one quarter in which all segments witnessed sales losing ground to believe that Hewlett-Packard is turning around, based on my stock analysis.
The company beat on an adjusted-earnings basis, but like many companies undergoing restructuring, the improvement in earnings was largely due … Read More
A year ago, I was able to take a close look at a cool-looking electric-powered sports car. I even got to sit in it. I noticed that it was not made by a manufacturer that I had recognized—it was built by Tesla Motors, Inc. (NASDAQ/TSLA), but I really didn’t give it a second thought.
Well I wish I had now, as Tesla is seeing its shares supercharge on the price chart, up 70% in the first few weeks of May and 167% so far in 2013, based on my stock analysis. Tesla is up a sizzling 198% over the past 52 weeks compared to the S&P 500’s 23% increase.
My stock analysis suggests that the maker of the sharp-looking electric sports car has really shocked the stock market with its superlative price appreciation. Who would have known?
Chart courtesy of www.StockCharts.com
I thought Tesla was interesting and gimmicky in some ways, but never in my wildest imagination did I expect the stock to surge as much as it has.
According to my stock analysis, you can thank the short-sellers for running to the exits and unloading their positions in a classic short squeeze. At the end of April, there were 27.5 million shares of Tesla shorted. The share price was $53.99. Fast-forward 10 sessions, and the price has surged to over $90.00.
Now you can’t blame short-covering for all of the increase in the share price. Tesla did deliver some awesome numbers that tore apart Wall Street’s estimates, according to my stock analysis.
In the first quarter, Tesla sold 4,900 vehicles. That’s it. By comparison, General Motors Company (NYSE/GM) sold … Read More
The shares of Apple Inc. (NASDAQ/AAPL) have been on a steady climb since plummeting to $385.10 on April 19; but my sense is that the buying has largely been driven by retail investors and not from where it counts with the institutional money, based on my stock analysis.
Insiders and the institutional money are not as supportive of Apple, according to my stock analysis. Over the last six months, insiders have sold Apple in 10 transactions totaling 127,896 shares, while there was only one insider buy of 1,780 shares, according to information by Thomson Financial.
Institutional buying, which I believe is the key to stocks due to their knowledge on the companies, is also refraining from buying Apple, even at the much lower price. My stock analysis indicates that institutions have unloaded 27.8 million shares of Apple with institutional investors’ ownership declining 4.5% on a quarter-to-quarter basis, according to Thomson Financial. Some of the biggest sellers include Capital World Investors (-56.3% in Apple stock), Wellington Management (-48.9%), HSBC Holdings (-62.6%), and BlackRock Advisors LLC (-48.2%). My stock analysis notes that this selling suggests a lack of confidence in the company, even with Apple shares plummeting down more than 40% since the company’s high point.
Based on the lack of buying by the insiders and institutions, I would still be wary of buying Apple at this point. In my view, Apple is more of a trading opportunity than a buy-and-hold.
The reality is that following where the professional money is flowing gives us another tool to evaluate the stock market and get a sense of what is happening.
The concept of … Read More