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Category: Super Stock (Page 2 of 11)

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.

DexCom Inc

Dexcom (DXCM) is a company that creates technologies to monitor glucose in people with diabetes.  Their stock price has been in a surge since March going from $55 to be over $100 in the past month.  However, their competitor Abbott (ABT) is interested in their same market and is coming up quick with their own technologies to compete.  Just this morning, Abbott’s new technology FreeStyle Libre was approved by the FDA.

This has dropped Dexcom today to as low as $93 per share.  As a company that specializes in glucose monitoring you know that they are advancing technology just like Abbott but you must also know that they already have their technology out in the marketplace helping diabetes patients through many countries.  They also plan to expand globally to help diabetics throughout the world.  An article on SeekingAlpha mentioned a value of $130 for Dexcom.

I give this stock a price target of $110 which should give you a nice 10% gain from the current price.

NXP Semiconductors

NXP Semiconductors (NXPI) was supposed to be purchased by Qualcomm (QCOM) for a stock share price of $127.50.  It was announced yesterday that if China does not authorize the merger then Qualcomm would walk on the deal and give NXPI a $2 billion break up fee and cancel the merger.  Today, China has not said anything and Qualcomm is walking.

NXP Semiconductor will soon have an extra $2 billion in its bank account.  The current rumor is that the extra money will be used for a big $5 billion buyback or even a special dividend.  Either way, it is great for shareholders especially since the stock has plummetted from over $120 to now an undervalued price at $91.

There is certainly plenty of volatility and even a chance that the stock price will go further down.  However, for the long-term investor, this is a great value.  Yahoo analysts give an average EPS for next year at 7.72.  This is a PE of 11.78 at the current price.  This price is indeed a bargain.

There is plenty of growth moving forward for this company.  In June, NXP Semiconductors introduced semiconductors for use in high powered RF products for 5g networks.  The company also is creating a new line of chips that make it easier for companies building AI tools.  If you just look at the present-day, their embedded chips are already used in factories and automobiles.

With a strong base of current customers using their technologies and a nice set of future chips that will grow the company in the future, there is plenty to get excited about with NXP Semiconductors.  I see this stock as a purchase below $92.  I also believe it will make a nice sell at any price at $120 which should happen in 2-3 years.

Disclosure: I am long NXPI and I purchased today.

Silver Miners vs Silver ETF

I posted an article last week about purchasing ETFS Physical Silver (SILV), a silver ETF, and First Magestic (AG), a silver miner.  There is quite a difference between the two and I would like to explain when it is best to get into both.

First, the silver ETFs follow the silver price.  Some of them hold physical silver like SILV and others purchase silver futures.  I recommend SILV over other silver ETFs like SLV because it has a lower expense ratio.  Since silver prices are quite low and inflation is in the works, I feel that the price cannot go down much lower.  The gold-silver ratio is also over 80 which means there is a higher chance that silver is bottoming out.

Next, I recommended First Magestic (AG).  This is a silver mining stock that is quite low and I do think it is finally hitting a bottom.  There is additional risk in silver miners as a lower silver price means the stock goes down much quicker than silver ETFs.  This also means when the silver price goes up that silver mining stocks can go up to 3x or 4x higher.

I recommend getting into both at this time.  If you don’t like the additional risk, I recommend purchasing the SIVR silver ETF.

High Gold-Silver Ratio and First Majestic

The gold-silver ratio has broken the 80-1 threshold.  This ratio usually implies that the silver price is so low that its time for a reversal which means higher silver prices coming soon.  To play this speculation, I recommend either getting a silver ETF such as SIVR which has the lowest expense ratio or SLV which is a popular silver ETF.  The volatility on both these ETFs are rather low so I don’t see much downside.  I also think if there is a recession or inflation that silver will go up in price.

For those that like leverage, silver miners are a great way to take advantage.  First Magestic (AG) is at a 52-week low and it continues to go lower!  I do think it should be bottoming soon especially if silver prices start rising again.  You do have more risk but if silver prices goes up then this will spike up 3-4 times more than the silver ETFs.

Cash is King. Easing off HABT.

I mentioned Habit (HABT) as being a nice buy-and-hold.  It was making a nice run until the last quarterly report which took the stock for a nose dive.  I still believe this will be a nice stock in the long-term but there are many factors that are causing this stock to not be as nice investment for the short-term that has caused me to get rid of it in my stock portfolio.

First, the quarterly report was rather bearish on the guidance.  It was stated to be much lower than expected.  The minimum wage rising per hour will also cause more disruption for the revenues.

Second, regarding the market, Lowes (LOW) recently had a bearish outlook to their guidance.  If you look at Home Depot (HD) and Lowes (LOW), technically, there stock price is trending downward.  Remember in the last recession, these were leading indicators that eventually led to the recession.

Again, use your own due diligence, but in the point in the market, I rather be more conservative and wait to invest during the downturn.  I was heavily invested before the last recession which meant I did take many losses as other investors did.  I rather have some reserves this time to get bargains during the next downturn.

Is NexGen Energy poised to be bigger than Cameco?

Nexgen Energy (NXE) is a recent uranium company that has come into my radar.  I posted numerous times about another company called Energy Fuels Inc (UUUU) but Nexgen Energy appears to be in a better fundamental standpoint.  First, it has discovered multiple uranium deposits and the company continues to find more even the past week.  Second, the uranium deposits are of higher quality than the current mines currently out there.  Third, these deposits are close to the same amounts that Cameco (CCJ) and are poised to overtake the amount of uranium in comparison.

Nexgen Energy is a $750 million cap company while Cameco is a $3.7 billion cap company.  If it were to have equal uranium deposits, there is plenty of growth for Nextgen Energy to grow in the future.  It also recently received $110 million in funding from CEF Holdings.  This company is part of a larger conglomerate of businesses controlled by Li Ka-Shing who also is known as the “asian Warren Buffett”.  He invests in many asian countries and knows the market very well.

China is a energy hungry country that is in process of constructing and completing multiple nuclear plants in the next decade.  Li Ka-Shing knows the market going forward and that uranium will be a necessary commodity for China to fuel their nuclear power plants.  It makes sense that he would accumulate shares in this smaller company that would give him a bigger stake in ownership.  I do believe their is a chance of being acquired in the future but the fundamentals show that Nexgen Energy will have a bullish future ahead as well.

Disclosure: I did recently purchase NXE by selling some of my holdings in UUUU.

Is Akamai in for a dead cat bounce?

Akamai Technologies (AKAM) is the largest cloud technology company that helps businesses deliver cloud delivery content through their high-availability servers across the world.  A few days ago, their stock dropped over 13% when their earnings report was released.  The company did hit their numbers but their guidance was lower than analysts expects.  The stock experienced a major drop in the morning after earnings but the company stock price has been steadily moving up since the release.

One major proponent of the stock is the CEO who has multiple million dollar purchases of the stock.  He believes that the price is too low and started these purchase only this year.

Technically, major stock price drops like this usually follow with a “dead cat bounce” which means this stock will continue with the down trend.  If this happens, expect to get the stock as a cheaper price in the following week.  I am not sure if this is a good long-term stock as Amazon and Facebook have been building out their own hardware to replace Akamai’s services.  However, there are many other businesses that use Akamai including Netflix which will definitely help increase their revenues going forward.

Rite-Aid Becomes Long Term Hold!

Rite-Aid (RAD) just announced earnings and, more importantly, discussed details of the merger deal.  First, the merger deal is off the table.  Walgreens will be paying $325 million for the termination agreement.  However, Walgreens (WAG) is going to purchase half of Rite-Aid stores for $5.2B.  Rite-Aid retains all of its west coast stores but will sell many stores in the other states.

For the long-term outlook, this is a great play on Rite-Aid.  There is a chance that another company possibly even Walgreens (WAG) in the future would be interested in Rite-Aid with the potential for the west coast stores and to own their pharmacy benefit manager.  Rite-aid is valued over $5 with this current outlook.  As long as they can start growing (which they have not in a long long while), there is the potential to move up to $9 which would be their price two years ago before all this merger and acquisition talk.

It is hard to predict where the stock price will be in the short-term.  However, if you wish to play this long-term, there is potential in Rite-Aid.  If another company wishes to acquire the remaining Rite-Aid, there is a good change you can double your money but don’t expect this to happen anytime soon.

Double Your Return in One Month with Rite-AID!

The Rite-Aid – Walgreens merger saga is coming to an end after two years of merger approval issues.  The end result will be $6.50-$7.00 of cash out per each Rite-AID (RAD) share.  I believe it will end up being at $6.50.  The stock is trading currently at $3.83 which means you will double your money on closing.  The only thing that can hold this up is if FTC blocks the merger.  With Amazon coming to the retail pharmaceutical business, I do not see an argument that FTC can make to block the merger.

The FTC would be doing a disservice to prevent this merger.  Amazon already has a hold of the retail market.  It wouldn’t be tough for them to change their structure to take over the pharmacy business as well.  Amazon can easily make a subscription model to customers that need antibiotics, cough syrups, medicines, etc. without going to your local CVS, Walgreens, Fred, Rite-AID, etc.  that would be cheaper and require less employees.

If you like to gamble, feel free to pick up some Rite-AID (RAD) shares.  The company is also coming out with earnings on Thursday so there is a lot of public news that will be out this week and next week.  The price was recently at $4 a share but has gone down to $3.81 this morning making this a good purchase.  If at worse case they do not merge, Rite-Aid will definitely go down to $2 per share which would still be a nice buy for a company that other competitors are interested in purchasing.

Disclosure: Long RAD stock and Long with RAD naked puts

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