Summary Earnings beat but guidance disappointed. Guidance was in line with the pattern of growth of the last few years. The stock dropped because the market has realized that growth will not be what it has been. Valuing the stock at a growth that continues but at a lower rate (in line with history) results in a stock price of $75. LinkedIn (NYSE:LNKD) … [Read more...]
Proofpoint: A Short Idea For 2016
Summary Despite high growth, market leadership and some of the largest clients in the world, the company has yet to turn a profit in its 14-year history. Competition that includes Cisco, Microsoft, Symantec and HP is fierce which results in little pricing power and risk of losing out to the bigger name that is better capitalized. The stock has been used as … [Read more...]
Newsletter – December 2015
Are you a believer? When I talk about FatAlpha, I always tell people who look at my strategy to ignore the stellar performance. This is something any investor should do when they look at any fund or portfolio manager. Two of the most important questions are: a) Do you currently have an allocation or interest in the manager’s investment universe? Someone interest in bonds … [Read more...]
David Dreman
David Dreman is regarded as the dean of contrarians by many on Wall Street and in the national media. Dreman is the Chairman and Managing Partner of Dreman Value Management, L.L.C., a firm that pioneered contrarian strategies on the Street and manages more than 5 billion dollars of individual and institutional funds. The author of the critically acclaimed Psychology and the … [Read more...]
Newsletter – November 2015
November saw the FatAlpha Active portfolio cover October’s lost ground as it rose 2.6% versus 0.4% for the S&P 500. The position in Abercrombie & Fitch (ANF) rose 21% on an earnings beat while Stage Stores (SSI) dropped -20%. The loss on SSI was larger but news of insider buying activity and a monster 10% dividend yield brought in buyers that took the stock from $6 to … [Read more...]
Potential 50% Upside in Trinity
Summary 2015 is a historical record year for TRN. Extreme pessimism regarding litigation and industry has pushed stock to opposite extreme. 2016 earnings and positive litigation outcome to push stock up. Trinity Industries (NYSE:TRN) is a stock I hold in my portfolio. It currently trades at a P/E of 5x despite good results due to extreme pessimism. Company … [Read more...]
Why I Sold My Shares in Micron
Summary MU surprised the market with its EPS guidance. Fundamentals appear to be deteriorating. Taking into account recent results, the Inotera acquisition and guidance, the stock valuation is not sufficiently cheap enough for me. Micron Technology (NASDAQ:MU) came out with results yesterday. As the graph shows below, it has been a difficult year for … [Read more...]
