Archive for the 'stocks' Category

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Goog / Tivo together?

Published on February 1, 2007 in business, future, stocks and tech. Closed

Google came out with blockbuster numbers yesterday prompting everyone but shareholders to gasp in awe. They had a profit of over $1B, nearly triple the amount from the same qaurter a year ago. It also appears that big brands, the slowest movers to the internet ad game, and also Yahoo’s one major advantage over Google are moving aggressively towards Google’s advertising platform. In an article in this week’s Business Week they review the Google call from yesterday, where they mentioned that these big brands such as Proctor and Gamble, Volvo, and Officemax have all placed video, banner, and text ads across google’s network.

I was most interested in the part of the article concerining Google’s ability to advertise on TV.

Schmidt even implied that television advertising was ripe for Google to handle. He said Google’s targeting technology can “really apply well” to TV, and allow television stations to charge much higher rates for that targeting. He said there was an opportunity for Google to use data from TV set-top boxes, which have unique Internet addresses, to do that targeting.

I think there is definitely a huge opportunity here for Google. But I think there may be an equally big opportunity here for a little company called Tivo. They are far and away THE brand of dvr devices. Like Google they have become a verb as people often refer to recording a program as “tivoing” it. My real question is when are they going to drop the hardware/service provider biz and start licensing their name/software to cable companies. If they would’ve done this already, they’d be sitting on top of access to the largest network of set top boxes in the world. We know they are building creative and interesting ways to deliver advertising by their recent patent applications, so why not move forward with the master plan already?

It’s been said before, but I’ll say it again…Tivo is an acquisition target. At $518M market cap, it’s worth less than HALF of youtube, a company with very little revenues at the time of it’s acquistion. For a billion dollars or less (less than Google’s profit this quarter) someone could most likely have Tivo’s loved brand, name, and service to call their own. Can you imagine what a company with deep pockets like Google’s could do with Tivo? They could preinstall google earth on every device, run video ads and video adwords, and even show youtube clips right on the tv. They could open up google video’s video marketplace to let people pay and view videos streamed. There are a million possibilties.
Google, what do you think?

(by the way, I’m a tivo shareholder)

iPhone, what’s really important?

Published on January 19, 2007 in business, stocks and tech. Closed

I’m definitely in the crowd oohing and ahhing over last week’s release of the Apple iPhone, but I’ve been shocked by the sheer number of nerd complainers across the blogs lately. I keep hearing the same complaints…touch screen bad, closed platform very bad, no third party apps, way too expensive, etc…The truth is the avg joe could care less about “closed platform,” or lack of “3rd party apps.” Most people are really blown away from what they’ve seen of the phone, and I would imagine that Apple won’t have a problem selling it. Bloggers are sometimes too techy for their own good, failing to realize the (and the people Apple REALLY cares about) masses could care less about all that junk above. Charlie says it best:

They didn’t care about iHandcuffs, third party apps or whether or not they are locking themselves into Apple.
The fact is… Apple’s products are such a vast improvement in overall consumer experience that most users will be more than satisfied. All the technobloggers are bitching about the lack of openness.

My 2nd favorite response to tech complaints was an Engadget comment (I don’t usually read them, there are always too many) posted by a guy named Russel. He posted a response to this comment:

Apparently none of you guys realize how bad of an idea a touch-screen

is on a phone. I foresee some pretty obvious and pretty major problems here.

I’ll be keeping my Samsung A707, thanks. It’s smaller, it’s got a protected screen, and it’s got proper buttons. And it’s got all the same features otherwise. (Oh, but it doesn’t run a bloatware OS that was never designed for a phone.)

Color me massively disappointed.

Russel’s response:

And this is what Jeff said back in 1984:

“Apparently none of you guys realize how bad of an idea a mouse is for a computer. I foresee some pretty obvious and pretty major problems here.

I’ll be keeping my Commadore 64, thanks. It’s cheaper, it’s got Lotus 1-2-3, and it’s got a command line operating system. And it’s got more software. (Oh, but it doesn’t run a bloatware “Graphic user interface” that eats all the processing power.)

Color me massively disappointed.”

And this is what he said in 2001

“Apparently none of you guys realize how bad of an idea a clickwheel is for a mp3 player. I foresee some pretty obvious and pretty major problems here.

I’ll be keeping my Diamond Rio, thanks. It’s cheaper, it’s got all my music on it, and it’s got a better battery. And it’s smaller. (Oh, but it doesn’t run a bloatware GUI that eats all the battery power.) Color me massively disappointed.”

Will you never learn?

There’s a reason why people like Jeff aren’t running consumer product companies like Apple. They lack the ability to see beyond the tech side of things into what the average consumer really wants. Steve Jobs, on the other hand, is a genius at this.

Weatherbill…a market for wacky weather protection

Published on January 18, 2007 in business, climate change, stocks, tech and weather. Closed

One of my favorite blogs, Paul Kedrosky’s Infections Greed has a post today on a new company called WeatherBill.
WeatherBill is:

In effect, a tool to allow people to create their own weather-related
short- and long-term insurance policies — and it will appeal to a
broad swath of companies whose business are weather-affected.

It appears to essentially be a marketplace where people can first evaluate what bad weather costs them in terms of sales, then they can purchase short or long term insurance plans to cover themselves from these losses going forward. On the other side it gives investors the opportunity to own these contracts or create their own that businesses can purchase. It appears it may definitely take some work to build up an efficient market, but I believe that the rapidly changing and increasingly sporadic weather makes a service like this definitely worth watching.

Aapl’s numbers

Published on January 18, 2007 in business, stocks and tech. Closed

For a good break down of Apple’s earnings numbers release Wednesday, take a look here. The quarter was simply amazing and Apple continues to experience explosive growth. Some of the highlights (in my opinion):

  • the amazing ipod…Apple shipped 21.1 million ipods in Q1 resulting in an astonishing $3.43 billion in revenues or half the company’s total revenue for the quarter
  • 1.6 million mac computers sold, up 28% over last year’s number (compare that to nearly flat growth in pc sales)
  • Apple’s share of the PC market in the US grew to 4.7% up from 3.6% a year ago

I think Apple is simply an amazing company to have stock in right now, and they are simply on a tear. I remember telling a friend a few years ago that the iPod was simply a “trojan horse,” into the the PC world. By introducing a somewhat revolutionary, yet incredibly simple to use universal device to the world they were able to show the PC users just how great Apple’s products work. The change is occurring with more and more PC users choosing macs as their next computer. This is even more true the younger, and younger you are with the majority of people I know under 21 telling me their next computer with be a Mac. Just imagine when this group enters the workforce.

A final thought comes from a comment on Barrons about the recent quarter and the stock price:

Having demonstrated massive 70%
YoY earnings growth for Q1, and after one of the largest “beats” in its
history (an 80% upside surprise), and having guided for 30% YoY growth
for Q2, it is hard to see how AAPL can possibly grow earnings less than
40% YoY for FY07 now.

Isn’t it insane that it currently bakes in just 20-25%?

Massive
earnings upgrades ahead IMO. And they’ll have to be massive just in
order to accommodate the Q1 results, let alone any bullishness for the
rest of the fiscal year!

This stock should be trading at $120
right now. Its forward PE of 27 is laughably low given growth of 40%
ahead. If you took the almost-$12B in cash out of that, then its
trading with a forward PE of about 22. That’s 22, with YoY growth of
40%. Can you scream “disconnect?”

Once the earnings estimates
upgrades for FY07 start coming out, the stock will finally climb to its
justly-deserved destination, but it might take the end of options
expirations for that to happen, not to mention the SEC rubbish finally
put to rest.

A huge driver for Mac sales near-term is going
to be the imminent arrival of Adobe CS3. Once that comes out, Mac Pro
sales are going to soar, adding, IMO, about 200-300k unit sales in a
single quarter to desktops and a ton of revenue on these high-cost,
high margin products.

I don’t believe the Street has begun to
work out the true impact of this, and it – combined with the iTV, new
iPods, updated Macs, new software, should provide considerable upside
to earnings estimates for the next two quarters.

Apple said
they will be including estimates for iPhone sales in their guidance for
the June quarter, so we can pretty much guarantee that Q3 guidance from
the Q2 report is going to be fantastic. And then there’s the
educational buying season of course, not to mention MacBook updates.

I
see nothing but massive upside for the company going into the remainder
of this fiscal year. I see a market fast asleep at the wheel and with
no clue whatsoever about the true earnings potential of Apple.

40% YoY growth on the cards. Buy this dip.

Search trends for better investments?

Published on December 12, 2006 in business, nyc, stocks and tech. Closed

Hitwise, a great blog that talks about general web traffic patterns, had an interesting post this morning about Heelys the company that makes those shoes that have built in wheels. I remember seeing those shoes years ago, but only recently have I started to see them everywhere. The company went public this week and the stock did very well. It was priced at $21 a share, but opened at $38…one of the best IPO performances of the year.

Anyway this post with it’s exploration into why Hanleys was getting so many searches over the last month, really got me thinking. Ultimately Hitwise determined that the boom in search traffic was not related to the hot IPO, but instead to the fact that Heelys are a hot holiday gift item. So I’m wondering if more shopping is done online, which means that sales can be tracked in almost real time with website statistics, could one invest more wisely in retail related companies by closely monitoring web stats? I’m sure smart money is already actively doing this, but why haven’t I heard more about this? It seems really straight forward…Sign up for Hitwise (I’ve heard it’s fairly expensive, over $5-$10k a month), and then setup some keyword monitoring reports on items related to stocks you may or may not want to invest in. If the numbers look good, maybe way better than last year or better than expected, then buy (or worse, then sell). Presumably, you’d know way before most who would rely on company numbers or retail interviews.

I was fortunate enough to meet Jeff Stewart a few weeks ago, a successful New York serial entrepreneur and founder of monitor110.com, a company that scours the web to find relevant news before it hits the wires. They are providing enormous value to big traders, where knowing first can be worth billions. I think this is a fantastic service, but it’s still not quite what I’m talking about above.

I’d love to find a way to estimate sales numbers based on search numbers/web traffic trends. I bet it’s easier than you think.

goog

Published on October 20, 2006 in homepage and stocks. Closed

I know this is rare on this blog, but I couldn’t help myself in this situation. For those of you who know me well, you know I’m an avid investor in the stock market. I believe there is no better way to follow the pulse of the economy than to follow the market. You really get to see what’s working, and what is not. Google is working, and their earnings numbers yesterday were simply amazing. We’re talking about a 7 year old company valued at nearly $140 billion that grew revenues by 70% over the last year and profits by an amazing 92%! We’re not talking about boosting $100 to $180, we’re talking about profits going from $381 million to $733 million…real money. Can you imagine boosting your take home income by 93% in 12 months? How about if you were a giant company?

Google simply put has created one of the best business models ever by creating the world’s largest and most efficient advertising network. Their network is effective whether you’re spending $.50 or $5million. As more people move online (hard to believe more could), more advertising dollars will move online (it’s still only a fraction of overall ad spending), and they will move to google first. Point: That company still has room to grow, and the stock isn’t too bad either even at $455 a share. Simply amazing.

I will say, however, that 7 years from now we will be discussing another company that simply flew through the roof (maybe not quite on google’s scale) and we’ll be calling it something other than google. Just look at the history of the internet, the giants of tomorrow are not even created yet.