Super Stock Blog

Let's make our own bull run!

Month: August 2018

NXP Semiconductors – Great Fundamentals but Poor Technicals

As I mentioned in an early article, NXP Semiconductors (NXPI) is a great buy in a fundamental standpoint.  Qualcomm (QCOM) had to abandon the merger without the approval from China.  As a result, Qualcomm also had to disburse $2 billion in breakup fees to NXP Semiconductor as well.

The breakup caused a huge drop in the price as many hedge funds exited their positions.  Many investment funds thought that the merger would get approved at $127 per share.  Therefore, many hedge funds continue to exit their positions causing a rapid drop in NXPI price.

This has caused the stock chart to look rather poor in a technical standpoint.  In such a poor outlook, I even exited my position in the stock.  I will await a better outlook before coming back into the stock.  I will be looking for a modest uptrend to enter a position again.  This means it will be at minimum 2-3 months before I look at this stock.  However, I do believe in the long-term this should be a winner even for those wishing to just buy and hold.

Twitter to $52!

Twitter (TWTR) is such a hot commodity that news outlets produce quotes from it every single day.  The most popular candidate is the President of the United States, Donald Trump, who tweets often multiple times in a single day.  Each tweet getting quoted by CNBC and being deeply debated for the content that he has given.  Recently, even Elon Musk made the Twitter headlines as he mentioned that his company Tesla (TSLA) has the investors to get bought out at $420 per share.  This caused huge changes in the stock price and even had the stock ticker to be pulled from the market while people digested the news.  It has also caused the SEC and many lawsuits to come to Mr. Elon Musk.

Who know that such a small one sentence tweet can cause so much trouble?  Who also knew that you can cause such an impact?  You even see Twitter becoming the top broadcast to the World Cup with over 115 billion impressions.

In June, Twitter hit a stock price high at $46.80.  Goldman Sachs has a target price of $52 and it got nearly close.  However, a couple missteps and the price of Twitter has fallen over 20% recently reaching a low of $31 but slowly creeping back just almost at $33 as of today.

What happened to the stock price?

First, Twitter had a huge announcement about fake accounts.  The amount of fake accounts was much greater than expected.

Second, Facebook had the largest single-day decline on its stock price after second quarter earnings.  Twitter took a lot of impact being part of the same sector.

However, since these two events, the stock price has steadily and slowly gone up.  This proves that the uptrend is in place.  It also shows we have a safety net that the stock price will stay steady instead of continuing to drop.

Now, let’s do some research on why this is a super stock:

  1. Citron predict a $52 price target at end of year
    1. Their research shows that a similar company in China was recently valued at $75 billion.  Twitter has a current market cap at $25 billion.  With a current valuation, Twitter should be at $90 per share.
  2. Goldman Sachs predicts a $48 price target

I believe Twitter is a great buy at prices below $34.  There’s plenty of upside for this debt free company.  It is already priced for worse-case scenario.

PayPal for the Long-Term

PayPal (PYPL) recently released earnings and guidance late last week.  The results were excellent and even the guidance showed amazing growth for the upcoming quarter and year ahead.  The CEO and CFO mentioned that on their conference call that the guidance shows a strengthening business outlook moving forward.  PayPal mentioned that Venmo, one of the most popular payment platforms, has grown quite a lot and is now showing revenue instead of just engagement.  The company has purchased multiple e-payment platforms to strengthen their business and grow their bottom line.

However, from last friday-tuesday, the PayPal stock price continued to drop with the FANG stocks.  From a price last week over $92, it has dropped to almost $82 in the past week.  This gives you a nice 10% discount from the current price.  If the tech stocks continue to trend down, PayPal will continue to downtrend with them.  However, I believe PayPal is a strong candidate for long-term growth and I expect it to grow leaps and bounds in the future.

I believe PayPal (PYPL) is a great buy anything below $80 and I expect it to be a nice long-term hold.