All Entries in the "Technology/Retail" Category

Slippery Slope Downhill for Blockbuster

2009 and 2010 have been rough years for many business, one in particularly is the video-store rental giant, Blockbuster (BBI).  Blockbuster once dominated the video rental world yet now they are being build out by its main competitors Netflix (NFLX) and Redbox.  With prospects continuing to weaken for Blockbuster I doubt there is little the company can salvage or do to save face.

Lets listen to the bad news first.  US stores sales fell 16% and revenue dipped 18% in the fourth quarter.  The company is in great amount of debt and continues to lose money.  Their reaction, closing down the 500 weakest stores, which is supposedly supposed to reduce expense by roughly $200 million a year.  Adding to this they have cut huge amounts of staff and slashed advertising costs.  The company now is trying to move in a direction of digital downloads and vending kiosks though I think it’s too late.  Netflix and Redbox beat them to the bunch and already own the market share.  That’s why I believe it will be near impossible for Blockbuster to ever become profitable again.  Maybe the best call is a merger with these new market-leaders until then it will be a slippery slope down for Blockbuster.

SuperBowl Ad Winners: Google and Doritos

Watching the Superbowl, I was very pleased to see the New Orleans Saints upset the Indianapolis Colts and take home the championship. Overall it was a great game, commercials were a little lacking but there were still some great ones in the bunch. Here were my two favorite ads:

Google

The commercial is the tale of a romance told by a series of typed-in search entries. It is so effective as you easily follow along with the strong and subtly Google demonstrates all the things that make its search engine so powerful. Google is clearly the market leader and continue to hold their place.

Doritos

This commercial wins for me as not only was it hilariously funny but also virally effective. It was talked about the most on Twitter, Facebook, and other social medias and clearly was worth the big paycheck.

Why Nike Should Buy Under Armour Soon

After researching both Nike (NKE) and Under Armour (UA) recently I think Nike needs to start realizing the benefits to be had if they were to purchase Under Armour. This would be a big acquisition and I believe it could help secure Nike’s dominance for the next decade or so.

Why Nike Should be Interested?

As of right now, Nike has tried to duplicate many of Under Armour’s top products such as Cold Gear and Heat Gear. So far they have had very little success in taking away any form of market share against these products. Adding to the concerns to Nike Investors, Under Armour has been dominating the younger generations, 25 years below. Another recent concern was the release of Under Armour’s running shoes and cleats. This has to be a threat to the long-term value of Nike. Right now this isn’t a concern to Nike, however with the younger consumers wearing Under Armour’s brand the momentum is in their favor to one day steal a large piece of the pie.

What Nike would have to do?

For Nike to have any chance at buying Under Armour, the deal would need to happen soon. Under Armour is still several years away from being a major threat to Nike, however by that time it will be to late for Nike to make any form of move. Right now Nike is sitting on roughly $3 billion in cash. This could be used to acquire Under Armour even at their current depressed price. As long as Nike could offer a premium price to entice shareholders to sell all would be set. Currently, insiders own less than 7% of the company. That would make it difficult for Under Armour’s CEO Kevin Plank to put up much of a fight against Nike. He would need to have a killer speech to explain to shareholders why Under Armour will be better off not selling. Going against both the uncertainties of the economy and the retail sector, this would be a hard sell. Plus with the current cash problems Under Armour is having, sale would make sense.

Nike Needs to Act Fast

Nike needs to take advantage of the depressed consumer spending market to acquire Under Armour. Currently, they are an iconic global brand and have both the management and the balance sheet to make such a move. Nike could help introduce Under Armour to the developing nations, a sector Nike has had recent success in. Purchasing Under Armour right away will give Nike time to introduce the brand and help decrease competition. Obviously, we know over time Nike could beat Under Armour but instead they should acquire them at a discounted price and use the brand as an asset. This would also ensure Nike keeps growing. Currently I am holding neither company. However, Nike should definitely take a serious look at this acquisition before they are fighting head to head against Under Armour for sales.

Cytokinetics (CYTK): Bullish Pharmaceutical Play

Hey guys so this is my second attempt at posting with a fractured wrist. Pretty difficult I must say but I’m struggling through. I go to the doctor today for the final read and after that should know the full details of my recovery. As a result, I am cutting my posting down to three times a week, Monday, Wednesday, and Friday. Since everything takes so much longer especially typing with one hand I need to allocate more times to both the site and my studies. Luckily recovery time is usually only six weeks so soon enough the site should be back at full-strength. Moving on I have been following the markets extensively and have come up on a risky pharmaceutical play I like. Here it is:

Cytokinetics (CYTK)

CYTK is a biopharmaceutical company focused on the discovery and development of small molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. The Company’s research and development programs are extensive and if completed will be quite revolutionary for the world of medicine. Click on this link to read further into all the details about the different clinical trials. CYTK is a very effectively run company. Just check out these numbers.

Profitability

Profit Margin (ttm): 31.34%

Operating Margin (ttm): 32.65%

Management Effectiveness

Return on Assets (ttm): 14.58%

Return on Equity (ttm): 30.91%

PEG Ratio (5 yr expected): 0.53

Price/Sales (ttm): 2.27

Price/Book (mrq): 1.69

All these numbers are outstanding in my opinion. Moving on I expect CYTK to only improve its efficiency by cutting wasted expenditures and improving revenue numbers. Read the following report from J.P. Morgan:

“Our $8 target price on CYTK is based on discounted probability-weighted sum-of-the parts analysis. The major sources of cash flows for CYTK are (1) its CK-452 drug for heart failure, (2) CK-357 for skeletal muscle related indications, and (3) marketable cash and securities. We value CK-452 at $5.57 per share and CK-357 at $1.49 per share, and cash and marketable securities at $1.42 which sums to approximately $8. For CK-452, we separately value the IV formulation, which will be used in the acute hospital setting, and the oral formulation which will be used in the outpatient setting. Our calculations are based on a 36% probability of success on the Phase II IV formulation trial for CK-452, and 33% for the oral formulation. We use a cost of equity (discount rate) of 10.6%.”

Final Say

I love this company for the main reason it has a huge potential upside. Mainly I have a positive view on CYTK’s pipeline of opportunities. The areas of medicine in which they are pursuing are in large areas of unmet need. This means that if these ventures are successful this stock will soar. Right now the market cap is roughly $200 million. If one of the three projects proves successful expect this company to soar to around $700 million. If all prove well we are talking about the billions. My 12-month target price for CYTK is $6.50 based on its current value, efficient operations, and growing potential.

(Bear with me posts will get better as I get more accustomed to typing one-handed)

Back on Track With Under Armour: Bullish Times Ahead and I see the Stock Soaring to $37

With retail numbers improving, I have been seeing a growing popularity among consumers for the Under Armour (UA) brand. As a result, I am back on board with the Under Armour and think it has bullish times ahead. So far in 2009 I have been both held Under Armour in my portfolio and shorted it. Originally I purchased Under Armour on May 26th of 2009 at $20.20. After a 45%+ increase in less than 6 months, I decided to sell and short Under Armour on October 7th, 2009 at $33 per share as I was not confident with the strength in their earnings and their short-term profitability. Since then the stock has fallen 20% and now I think it is time to re-invest and buy back in, this is why.

Under Armour’s Long-Term Potential as Strong as Any

I have never doubted Under Armour’s long-term potential just the short-term swings and selling at critical resistance levels. I believe Under Armors long-term appeal is as strong as any as they have lots of potential within their growing brand. I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. We have seen this growth in footwear alone where revenues have increased over 69% in 2009. Under Armour’s footwear products are only starting to take off. In 2010, they plan on launching a line of Basketball shoes headlined by their main sponsor NBA Rookie sensation, Brandon Jennings. Adding to this, they plan on expanding the footwear line altogether with more running shoes, athletic cleats, etc. We have yet to see the full potential of this aspect of Under Armour’s business, which eventually I believe can be very successful and a main competitor to powerhouse Nike. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8% along with potential growth internationally. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. They also are expanding across the United States with the launch of Under Armor Apparel Stores. Their curtailed the expansion in 2009 which was a prudent in my opinion due to the weakness in the economy. Long-term however I see this as a strong potential revenue stream.

What to Expect From UA

Under Armour is in the early growth stage within highly competitive market. Short-term opportunities could be limited due to lower levels of disposable income, high unemployment, and less consumer spending. However long-term I see Under Armour as a strong growing brand with expanding distribution. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line. Overall my 12-month valuation for Under Armour is roughly around $37. Look for it to be a strong year within 2010 and make sure to capitalize on Under Armour’s strength.

The Buckle (BKE): Strong Long-Term Growth Stock

The Buckle, Inc. (BKE) is one of the leading retailers for casual apparel, footwear and accessories for fashion–conscious young men and women. Currently they operate over 400 stores in 41 states, under the names Buckle and The Buckle. Its market share ranges from a wide selection of brand names and private label casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. The Company emphasizes personalized attention to its customers and provides individual customer services such as free alterations, layaways, and a frequent shopper program.

What BKE Has Done

Buckle is a very conservative run company with strong management. In the past ten years sales have grown over 140%. To put this in comparison Wal-Mart sales for the past decade have been 146%. The key difference between the two however is that Wal-Mart has increased its number of stores by 115% during that time while Buckle has only increased its number of stores by 64%. This shows how management has been very successful at making each individual storeprofitable. Per store sales have gone up from $1.32 million to $2.19 million in the last 7 years, a net growth rate of 66%. When your analyzing retail stocks you have to put them in perspective at a per store basis not the company all together. Looking at Buckle overall what has made them so successful is the fact they have not overextended themselves. Management has been conservative and strategically opened new stores when the time is right. In doing so, they have been able to achieve strong margins and have been consistently increased gains.

Why I Like BKE

I like BKE due to their strong brand management and overall sales appeal. Long-term growth prospects are bullish heading into 2010 as I expect sales double-digit sales for a third consecutive year followed by strong earnings estimates. Adding to this, I see the advancement of the company with the expansion of 21 new stores driving sales numbers. BKE’s steady flow of brand right merchandise and store expansion will go a long way to increase brand awareness and attract new customers. I have stressed that BKE is supported by strong management along with strong financials. Currently they have $3 a share in cash, zero debt, and a current ratio of 3.70. Moving on they have a PEG of 0.98, which is a bullish indicator. Adding to this they have strong ROE and ROA of 31% and 23%. Plus Buckle insiders hold 43% of the company showing they have believe in its long-term growth potential. This long-term growth will only be strengthened now that Buckle is planning on expanding into the Northeast for the first time, hiring 2,776 new employees and opening numerous new stores. If they implement the same business model there is nothing to doubt that it won’t be as successfully as the 41 states it already operates in.

Overall

Overall I believe Buckle will be a strong long-term investment. Incorporating all factors together I value BKE at $42 12-months from now.

Christmas Coming Early: I Expect Retailer Numbers to be Better than Expected

Christmas is coming early guys and from what we have seen retail numbers look like they will be better than expected. Yes after yesterday’s news of the Advance Retail Sales beating expectations by 0.5% everyone is optimistic about the industry. I have been a strong promoter in the American consumer for some time and glad to see that it is finally coming true. With black Friday coming up on us along with the holiday shopping season I think we are going to start to see a resurgence in retail stocks. So where to look at? Well I am a strong promoter of the video-game industry and only see sales numbers increasing with the release of high profile games such as Call of Duty along with the price cuts on many next generation systems. GameStop (GME) is the best of breed video-game retailer and a very well run company making it a strong fundamental investment with long-term potential. Read last week’s article on GameStop’s future strength. I also think Best Buy (BBY) is a strong bet in the electronics market due to their improved inventory setup. Moving on I like accessory maker Coach (COH) who is I recently upgraded this month due to their strong cost cutting abilities and better than expected sales estimates. The next bull market would have to be the clothing brands. I see Chicos (CHS), Buckle (BKE) both having better than expected numbers along with GAP (GPS) who many expect to have an outstanding holiday season due strong market campaigns and cost cutting abilities. Lastly I think we can never lose faith in Warren Buffet’s ability to see value in stocks. This week he upped his investment within Wal-Mart (WMT) plus the company was backed by strong comments from CEO Michael Duke saying that they are encouraged by increased traffic and market share gains. Overall I am optimistic about the holiday shopping season and think retail numbers will be better than expected. As a result I think it wouldn’t be a bad choice to dabble in some retail stocks. Stay tuned for more in-depth reports on individual picks.

Gamestop (GME) the Video Game Leader Still a Strong Buy

Gamestop is a company to reckon with and a stock poised to surge in the coming months. Gamestop (GME) is the world’s largest specialty retailer of new and used video games hardware, software, and accessories. Gamestop is priced currently at $24.62 vastly undervalued. People have their doubts saying that the recession will continue to hold this stock back, fear of new competition will slow it down, and weak consumer spending habits will not allow it to come back. I disagree and think that this stock is poised to take off and this is why:

What Gamestop Does Right

Gamestop has shown strength and perseverance fighting through one of the worst recessions and generated solid operating numbers. Since 2003, Gamestop has grown earnings 31% a year. This included a 36% growth rate throughout 2008 when many were failing due to the recession. Gamestop is expected to grow even more as analysts expect revenues to rise 10% in 2010. It has a current PE ratio of 9, which makes it attractive when compared to its historical normal PE ration of 19. Gamestop continues to generate large amounts of cash, which has allowed them to fund their growth without issuing any debt. No matter what anyone says, Cash is always King! Gamestop’s management agrees with this statement, as they have stayed committed to staying in a good capital position. To add to this they have leveraged their strong flow of cash to continue their global growth through new store openings and acquisitions. Will get into this more detailed later. Adding to this Gamestop bodes significant assets to lure in new customers compared to competition. Gamestop’s publication, Gamer Informer is the Wall Street Journal of video game information for serious gamers. This paid publication offer tips, game reviews, etc to over 2.2 million subscribers. Worldwide we are also seeing an increase in video game users and a change in the demographics. Once dominated by men and teens this industry has shifted as now a days near half of all gamers are both female and over the age of 30. To read more into this and the future of Gaming, check out this article. Gamestop works very hard to keep serving its dedicated consumer pace by offering many extras such as tournaments, gamer communities, etc. This has proven to be successful, as they have built a formidable brand similar to Apple where customers continue to stay loyal. Gamestop has taken advantage of the lucrative used games business. Gamestop has created large facilities to refurbish, clean, and repair games and then resell them on the open market. It has taken 12 years for this to people a profitable aspect of their business plan so it has created a challenge for competitors to compete with. I expect the used game business to continue to thrive in 2009 and beyond especially during the challenging economic environment. We saw it jump 32% in the first quarter of the year, so no reason to doubt it will keep up similar success in the 2^nd half of the fiscal year.

Growth by Numbers

I believe competition should not be a concern for Gamestop. Companies like Amazon, Wal-Mart, and Best-Buy are greatly overblown when compared to the success Gamestop has achieved. In fact, the competition should be worried about Gamestop. Recently, Gamestop purchased Micromania, France’s largest video game retailer with over 300 stores. This was a strategic move as before that Gamestop had little presence within France. Strengthening their presence within Europe and abroad Gamestop bought Free Record Shops in Norway and The Gamesman in Australia and New Zealand. These acquisitions give Gamestop a larger presence internationally, which has been a thriving market for the video gaming industry. It is reported that in 2009, the video game industry will become the largest Entertainment Medium in the United Kingdom. Currently, Gamestop controls 6,200 stores worldwide. This includes the control of EB Games. To add to this expanded growth, Gamestop plans to open 400 new stores worldwide and expand its online store in 2009. This will help solidify, Gamestop’s emergence as the world’s largest video game retailer and one of the largest Video game dropshippers.

What Growth Potential Does Gamestop Have

I believe Gamestop has strong short-term growth and long-term opportunities as we enter into the 2^nd half of 2009. Recent Big Game title releases have done exceptionally well from top notch sales of Madden 2010, Beatles Rockband, etc. Then this week Call of Duty: Modern Warfare 2 broke the bank with the biggest launch ever for entertainment. Bigger than any movie as they grossed over $300 million in sales. Continued success like this will greatly increase the revenue from new-software sales for Gamestop, which was down 2% in the first quarter. Plus leading into the Christmas shopping season, retailers and video games always become a hot commodity. Long-term the expansion of their global brand along with an emergence in second generation systems will help future sales growth. Adding to this is the 10% annual expected growth in the industry as a whole along with the expansion of the customer demographics adding more potential consumers. Gamestop is also enetering the digital world as they plan to sell digital releases of video games.

Overall Valuation

Gamestop is currently trading at $24.62, which is vastly undervalued and has positioned the retailer to outperform the market within the next 12 months and beyond. EPS numbers are expected to increase 17% leading into 2010 showing a solid line of growth. To add to this the balance sheet is a compelling attraction with little debt and a high cash flow. PE ratio is trailing very low right now at 9. Basic assumptions project that this number will return to its normalized standing around 16. A double in today’s number is a reasonable expectation and a great growth prospect. Gamestop’s PEG Ratio is 0.65, which is very enticing as I value quality companies to have a PEG below 1. P/S are .45, well below 1 which is another bullish incidactor. International growth will continue due to large acquisitions mentioned earlier. Used video games sales will continue to thrive along with new releases due to the blockbuster titles coming out this fall. Long term, Gamestop is a great pick as a growth stock with high potential. Based upon my valuations I foresee Gamestop reaching $35 12-months from now.

Upping Coach’s 12-Month Target: Still a Buy

Back on June 29^th, 2009 I recommended everyone to buy Coach (COH) at around $25.50 per share with a 12-month expectation of $33. Well since then Coach has soared nearly 32% surpassing my 12-month target. In this case, most people would say sell, I say the opposite and want to buy more. After reevaluating Coach and its long-term growth prospects I now believe it is worth more than $43 per share and this is why:

Strength

What I like about Coach is there a winning brand. Throughout time they have been successful posting profitable quarter after profitable quarter. They even managed to prevail through the recession as consumers chose Coaches products over expensive European Brands with $2k+ price tags. I see this as a winning strategy as Coach has a unique ability to pose themselves as a luxury brand yet still appeal to value-focused shoppers. In the last quarter, we saw Coach’s handbags that are $300 or under rise 57%. Adding to this Coach is expanding globally. With the evolution of the Coach stores, they are gaining market share especially with their vast international expansion in Japan and China. Coach is opening 50 stores worldwide in the next five years. I see this international expansion supporting their global growth and strengthening the brand.

Value

Strong points about Coach are its excellent ability to post a return of over 100% on their capital. Adding to this, they manage a 10% earnings yield. Adding to this Coach has only $25 million in debt giving them flexibility to expand. As a business they are very efficient as you can tell by their 23% free cash flow margin. With a P/E of 15 and a PEG of 1.1 these are also strong numbers adding value. I believe the true strength in Coach’s brand will be seen in 2010 when consumer spending picks up pace and the economy starts to see more significant signs of recovery.

Growth

As of right now, Coach’s true growth potential and revenue growth is being limited by the recession. Contrary to this though they still have had an impressive revenue stream despite the fall down in consumer spending. The company has been successful in cutting unnecessary costs, results that will only benefit them long-term. Over the next five years, analysts expect Coach’s sales growth estimates to increase year by year. With a steady stream of new handbags expected to release in December, 4^th quarter sales should jump significantly. Adding to this is the 9% store expansion in new markets.

Overall

All in all, Coach is a fundamental sound value-growth company that will benefit even more from a recovery in the economy. I would suggest trying and to buy Coach on a dip. Watch the support levels to see where is a good entering point. Overall my 12-month target has now been raised to $43.

Nike Armour: Why Acquiring Under Armour would be in Nike’s Best Interest

After researching both Nike (NKE) and Under Armour (UA) recently I think Nike needs to start realizing the benefits to be had if they were to purchase Under Armour. This would be a big acquisition and I believe it could help secure Nike’s dominance for the next decade or so.

Why Nike Should be Interested?

As of right now, Nike has tried to duplicate many of Under Armour’s top products such as Cold Gear and Heat Gear. So far they have had very little success in taking away any form of market share against these products. Adding to the concerns to Nike Investors, Under Armour has been dominating the younger generations, 25 years below. Another recent concern was the release of Under Armour’s running shoes and cleats. This has to be a threat to the long-term value of Nike. Right now this isn’t a concern to Nike, however with the younger consumers wearing Under Armour’s brand the momentum is in their favor to one day steal a large piece of the pie.

What Nike would have to do?

For Nike to have any chance at buying Under Armour, the deal would need to happen soon. Under Armour is still several years away from being a major threat to Nike, however by that time it will be to late for Nike to make any form of move. Right now Nike is sitting on roughly $3 billion in cash. This could be used to acquire Under Armour even at their current depressed price. As long as Nike could offer a premium price to entice shareholders to sell all would be set. Currently, insiders own less than 7% of the company. That would make it difficult for Under Armour’s CEO Kevin Plank to put up much of a fight against Nike. He would need to have a killer speech to explain to shareholders why Under Armour will be better off not selling. Going against both the uncertainties of the economy and the retail sector, this would be a hard sell. Plus with the current cash problems Under Armour is having, sale would make sense.

Nike Needs to Act Fast

Nike needs to take advantage of the depressed consumer spending market to acquire Under Armour. Currently, they are an iconic global brand and have both the management and the balance sheet to make such a move. Nike could help introduce Under Armour to the developing nations, a sector Nike has had recent success in. Purchasing Under Armour right away will give Nike time to introduce the brand and help decrease competition. Obviously, we know over time Nike could beat Under Armour but instead they should acquire them at a discounted price and use the brand as an asset. This would also ensure Nike keeps growing. Currently I am holding neither company. However, Nike should definitely take a serious look at this acquisition before they are fighting head to head against Under Armour for sales.

Large Caps Like Apple and Google to Continue the Wall Street Rally

Apple joined the party after hours today, reporting robust earnings beating the streets expectations and sending the stock price higher. After hours, Apple soared to over $200 a share, reaching all-time highs. They also beat out Goldman Sachs, who reported last week, to that coveted $200 per share spot. Just look this graph to see how closely Goldman Sachs (GS) and Apple (AAPL) have traded since March.

(Since March both GS and AAPL have followed similar trends)

What’s in Store for Apple?

As for Apple, I currently don’t know what to expect out of this stock. I mean how much higher can they go? One thing, they are always innovators in the market launching new products and setting the tone for tech rally. After analyzing their balance sheet, the company is in a great position to move on and even acquire a company or two on the way. The problem is with the stock reaching an all-time high of $200 investors might get scared off on how much further it can grow. I would like to see a 2:1 cut to help entice investors back in with the support of a strong balance sheet and strong long-term prospects. Just look at what Apple has done since its initial offering.

Where’s its heading next? Not sure, but one thing I do know is that their recent break the bank earnings will help the Dow soar higher and lead on the tech rally. The other day I said that the Dow Jones will continue to rise over 10,000 in my recent article “The Dow Hits 10,000: Technicals Show the Earnings Will Continue to Rally” I am continuing to back this up and think that earnings and large cap stocks will continue the rally. We have seen the strength in earnings so far with the likes of Google (GOOG), International Business Machines (IBM), and Apple (AAPL). I expect earnings to continue carrying us higher. Another strong play is Tech. With the recent strong postings from both Google and Apple we see these companies have the ability to post a profit and that the economic downturn is not affecting them to much. So what I suggest to do? For Apple, hold off at $200 I think it might be a little overpriced. As for Tech though, buy in. Later this week I will do a run-down of what Tech Stocks I like and why. Stay tuned and make sure to keep playing the markets, otherwise you will lose out. Bullish times ahead!!!

GigaMedia (GIGM): A Strong Online Gaming Play

GigaMedia (GIGM) is a company that is focused on online gaming. They operate two companies one of which is a Gaming Software and Services and the other that is an Online Gaming and Services Business.

Balance Sheet

Financially I think GIGM is very impressive. GIGM has a solid balance sheet with around $100 million in cash while only $14 million in short term holdings. That roughly works out to around $2 per share in cash which is an asset they could use to increase shareholder interest in the future. Adding to this, GIGM has been quite profitable. Their sales have an annual growth of 38% and operating profits increase 67%.

Future Growth

Adding to this, GIGM should become more profitable as they have refocused themselves to be a greater provider to the Chinese Region. With many new deals in place revenues are expected to continue to raise projected 12% rise in 2010. Other plans for future expansion include deals to be a sponsor for the World Series of Poker. This will be a great promotional tool for sustainable visibility. Casinos are also currently expanding with more and more acquiring GIGM’s product to place on the gaming floor. Finally, another plus is the GIGM is in strong relations with EA, which could give them an exclusive license for future hot games. GIGM is a compelling stock as they are rapidly expanding and have commented on the possibility of some M&A activity in the future. 67%.

Market Share – Right now GIGM is a small competitor within the industry yet with a large amount of cash on hand and strategic deals I foresee them greatly expanding their market-share in the future.

Industry Growth – The Online Gaming Industry is one of the most lucrative, fastest growing industries out there.

Regulation - Aiding the expansion as well is rumors that the U.S. government is easing restrictions on online gaming, which would initially create a whole new market for GIGM.

Overall

As of right now, GIGM is trading at around $4.79. Calculating its P/E numbers to other Asia-Based Internet Stocks it makes them undervalued. I think it’s a very lucrative play. I would recommend buying it ASAP and buy it all the way up to $5. As for a valuation, my 12-month target price for GIGM is roughly around $8 a share, which would gross to a total net gain of 67%.

Protect this House: Sell Under Armour at $32-$33

For the short-term, sell Under Armour (UA). These are my reasons why:

Sell Under Armour ASAP

For one, look at the way Under Armour’s share price has skyrocketed in September. Up 36%, that has to first entice some investors to sell. Adding to this, I expect Retail Numbers for fall to be worse than expected as unemployment continues to rise and excessive consumer spending continues to decline. Plus I am still wary that Under Armour’s brand is strong enough to beat out an economic recession. Especially one where the consumer is under so much pressure. Lets not get me wrong, I love Under Armours brand (I own their shoes, shorts, and shirts) and have great respect for the direction of the company. Unfortunately, I don’t believe enough people are sold on the product, which will cause difficulties when going up against Nike and Addidas. In a strong economy, Under Armor would be fine. Unfortunately, that’s not the case and the challenges of a weak consumer will send the stock lower. Its not that they don’t have a great product. It’s the fact that many consumers are shifting to lower quality, lower price brands. Plus don’t get fooled by the rising stock market. There still is a huge disparity between Main Street and Wall Street as I characterized in last week’s article. Most Americans are cutting back on discretionary spending and are planning on continuing this habit, which I see as a huge hit to the resurgence in the economy.

Earnings Scare Me

With the third quarter coming to an end much anticipation is on Under Armour earnings report. October 27th is the scheduled date to report and Under Armour’s management expect earnings to come in between $0.80 to $0.82 for this year. In this case, management has been very cautious with their long-term outlook. I think Investors should be scared off by this cautious behavior. With Under Armour trading around $30 that means that is a multiple of around 36 times forward earnings. Basing it on this alone it would be irresponsible to continue to hold onto this stock.

“Protect this House”

In my opinion, you should sell Under Armor this week at around $33-$33 a share. We are entering risky times especially among retailers so go by Under Armor’s slogan and “Protect this House.” Under Armour’s been a solid investment since I recommended it in June as its up around 45% yet every good investor needs to know when to pull the plug and the time is now.

What is Twitter’s Future? The Business Side of Twitter

Many questions surround Twitter and how the site will eventually make money? Some question that it is just a fad that will eventually fade out. This could be true researchers already show its unpopular among teens, I guess I am an exception, and that it’s a tool for middle age people. How long could that last? Others say it is the greatest thing to hit the internet since Google. The problem is how does Twitter make money and how will it? One of its main attractions though is it has no ads which people love to see. Unfortunately this won’t last long as ads are what keep websites going and at some point Twitter will cave in. Another problem to the site is the constant spam it receives which has grown concerns that spam could lead to its downfall. This would be a horrible site as we saw the Power of Twitter in Iran. The Iran debacle helped expose the true power of the site, as it became the only form of communication for Iranians to send photos, videos and messages outside of the country that made their way to mainstream media on Iran’s quest for freedom. Twitter had such a meaningful impact that the founders of the site, Biz Stone and Evan Williams are up for a noble peace prize, shocking isn’t it. Watch the clip to see its impact.

I believe Twitter is at an all-time high. I would advise the founders to sell it as to me they have done all they can do with the site without having to take the next giant step of taking it public and raising cash to help the site expand. For the two founders, this would be an unwise decision as they have offers on the table of over a billion dollars which will set them for life and limit their liability if Twitter was to fade out like Myspace and other social networking sites throughout the years. Yes they have made an attempt to make Twitter profitable with the launch of Twitter 101 which will charge companies money to exploit the services of Twitter, but will this be enough. I hope they do decided to sell but the more interesting part will be to see who will become the partner or owner of Twitter? Will Google attempt to capture some of Twitters spotlight or will Microsoft invest in Twitter following their Facebook investment?  More importantly Yahoo, which faces stiff competition from Microsoft’s new BING platform, could decide this is the right time to dive into the social networking game. To me, Google would make the most sense. Currently Google controls 77% of the searches on the Internet. Google is an amazing tool however; there is no way for people to Google what people are thinking and discussing.  For instance how do you search what regular people are thinking about the weakness in the economy or the Giants baseball game without going to a variety of blogs and forums. Google could deliver real-time search for people to discover what is the buzz.  This could be Google’s new growth engine and an unbelievable revenue stream.  It’s a hot commodity now, lets see which Tech company makes the jump.

I would encourage everyone to follow me @iamwallstreet and get my latest tweets, and as long as you follow my basic Twitter rules, I will follow you back!!! Plus follow my Favorite Twitter Followers: @sugardayfox @EvaEe @MrCraftworks @jordannelson39 @LouDogOG @loebeezy @LTLV613 @MAV25 @eKwelity @PaulaLover @adkwriter@kc0eks@ThisIsRachel182 @armchairtaikun @Cusville @DayTraderGuru @OriginalKingD @RobertSaintlot @MaxSasakiCrupi @jtbdjp @djrmc24

Altria Group Inc., Maker of Marlboro a Safe Sound Investment

Altria Group, Inc. (MO) - Through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in the United States and internationally.

Why I like Them

I like MO, as fundamentally they are very sound. They are in a growing industry and they control the market share being the largest producer making them a Best of Breed Company. MO is a very safe, conservative pick that will give you strong returns in exchange. I like them as they have a strong global brand, healthy balance sheet, and good future prospects. First lets look at the brand they hold. Right now they are the worlds largest manufacture of cigarettes. Yet bad for you, cigarettes will not be fading out of people’s lives anytime soon. It is a necessity and a crutch for most people and a way for MO to exploit their customers. Some people believe that the recent signing of the Family Smoking Prevention and Tobacco Control Act by President Obama will hurt this stock and the companies overall selling power. I disagree. The Act grants the U.S. Food and Drug Administration the authority to regulate tobacco products. Yes this will but a negative effect on the whole industry yet I see this being a more dominant effect on smaller competitors not Atria. Plus this was long anticipated so I only see it helping Altria long-term solidifying there position as the dominant global brand. Adding to this, operationally Altria is likely to benefit from several factors such as the integration of its recent acquisition of Smokeless Tobacco Company UST and benefits from recent restructuring actions. I think that in 2010 we will se sales volume increase along with revenues, which will be strengthened by higher pricing. This is all supported by brand investments, new acquisitions, and new product introductions. MO has been able to cut costs in recent times by consolidating all manufacturing facilities to Richmond, VA. Overall this will save them around $500 million. The industry itself has strong prospect for the future which bodes well for MO. Favorable pricing trends, along with free cash flow will allow for these companies to continue to grow. Even though consumption is expected to fall in 2009, I believe this will be offset by cost-saving efforts to eliminate wasted operating expensed.

Balance Sheet Looking Good

Highlights of the balance sheet would have to be the way MO utilizes its capital. They manage capital effectively as they reported a return on assets of 13% and a return on equity of 87%. Adding to this they have a 19% profit margin and 36% operating margin. I am always a big fan of companies with cash on hand and currently MO has around 600 million on hand. MO is strongly held by institutions and supported by strong analyst reports. With a P/S of 2.26 this shows a strong opportunity and helps support the claim that MO is a healthy, growing company. Adding to this MO offers a 7.5% dividend which is a very nice compliment to a solid company.

Overall

Overall, MO is a solid based company which will be a solid long-term investment. This is not a boom stock that you can bump or dump but it is a top stock pick if you are looking for long-term steady gains. Adding to this they offer a 7.5% dividend which sweetens the deal. Looking at all the valuations and fundamental factors I expect MO to be trading around $23.50 come 12 months from now. MO is trading at around $18.28 right now so that would be a total gain of around 30% then plus the dividend. If your interested in this stock buy before September 11th as that is the Ex-Dividend date.

What Assets Google Currently Has?

Only ten years ago Google was a research project based in a dormitory at Stanford University. Since then they have become a $250 billion dollar corporation employing 20,000 people worldwide and have a brand presence that matches McDonalds and Coca Cola.  “Google” has become an actual word in the webster’s dictionary, it means to search for something. The question has arisen recently however, where to next for Google? What more could they possibly do? The answer is Google could eventually rule the world. Over the next few weeks I will talk about is Google. I have five articles lined up which I will talk about: What Assets Google Has? What Google is Innovating? Is Google a Good Investment: Analysis of Google’s Stock and Financials? What is Google’s Competition and What it means? and finally What Google’s Overall Outlook looks like? Is it a good time to invest in Google and is Google a Good Stock to Buy? Read and follow this week to find out.

What Assets Google already has?

Google currently is the #1 website on the Internet. With over 400 million people using it on a daily basis it dominates all search engine activity. When I mean dominate, I mean dominate as Google controls roughly around 78% of the Search Engine Perspective. TO but that in perspective, even with the merger of Yahoo and Microsoft, MicroYoo will still only control 15% of the Search Engine market. A small piece in the Google pie.

Adsense & Adwords

Google’s revenue comes from advertisements posted throughout the web. To place the advertisements in as many possible places, Google uses both Adsense and Adwords. Many Bloggers would know both of these very well. I use Adsense on Stocks on Wall Street and love it. Virtually Adsense allows for users to have content-based advertisements placed on their site. They are paid for on a Pay-Per-Click basis. Google takes a cut out of every click yet no one knows how much but always equals to be quite profitable for Google. The other service is Adwords which is a way to market a website. I pay Google to place advertisements for Stocks on Wall Street around the web.

GMail

GMail is the top non-paid email service on the web hands down. This role use to belong to Yahoo yet no more as GMail currently has more than 146 million monthly users. The features it offers make it stand out against the rest that now people are trying to copy it. Just look at Yahoo’s launch of YMail. GMail does show ads and has been a profitable addition to Google’s portfolio.

Google Chrome

Google Chrome is growing into the top browser on the web. It will be impossible for them to dethrone Internet Explorer or Firefox in 2009 though after that it is all open for Google to emerge as a leader. With Google Chrome planned to be installed on most new computers it its very reasonable to expect them to snag as much as 15% of the browser market.

Google Apps

As the economy continues to struggle, Google Apps continues to thrive. Google Apps deliver all the products Microsoft does for FREE! More and more business are taking advantage of this and switching their whole office to operate around Google Apps. Makes sense to with the large costs associated with legally setting up Microsoft Exchange and Office.

Google Earth

Google Earth allows users to see pictures overhead pictures of cities across the globe. With new updated street view it is becoming a popular tool for web users.

Google Checkout

Google Checkout is the replacement for Paypal. Its provides simple, easy-to-use service services to buy online and for small business to create online stores.

Google Health

Google Health’s popularity had been growing quickly. Over the next couple year it is expected to save the Treasury $20 billion, as they will implement it into their system instead of creating their own. Google Health allows patients who attend one of the increasing number of medical establishments that subscribe to the scheme to place all the medical records on a cyber vault for the patients to access.

YouTube

Google has also made some acquisitions such as the purchase of YouTube for $1 billion dollars. Google now claims that YouTube is entering the realm of profitability. I don’t see why not as its monetized views as tripled in the past year as it has established itself into the world.

Android

Soon enough the Android will be competing against the iPhone for the top smart phone spot. Currently the Android is only available on the G1 for T-Mobile. However that is changing soon as by the end of 2009 the Android is expected to be included on both Motorola and Samsung. To add to the G1, Google will be coming out with more phones that run the open source operating system. This hype of more Android phones will fuel further development and make the Android very successful.

Overall, Google is coming off a terrible year along with most other companies due to the fall in the economy. They have the pieces in place to be very successful. With current holdings as mentioned and future developments, which I will mention, tomorrow they are on the path to revolutionize the Internet again.

Gamestop (GME): Fundamentally Sound Company w/ Huge Growth Potential

Gamestop is a company to reckon with and a stock poised to surge in the coming months. Gamestop (GME) is the world’s largest specialty retailer of new and used video games hardware, software, and accessories. Gamestop is priced currently at $22.86 vastly undervalued. People have their doubts saying that the recession will continue to hold this stock back, fear of new competition will slow it down, and weak consumer spending habits will not allow it to come back. I disagree and think that this stock is poised to take off and this is why:

What Gamestop Does Right

Gamestop has shown strength and perseverance fighting through one of the worst recessions and generated solid operating numbers.  Since 2003, Gamestop has grown earnings 31% a year. This included a 36% growth rate throughout 2008 when many were failing due to the recession. Gamestop is expected to grow even more as analysts expect revenues to rise 10% in 2010. It has a current PE ratio of 9, which makes it attractive when compared to its historical normal PE ration of 19. Gamestop continues to generate large amounts of cash, which has allowed them to fund their growth without issuing any debt. No matter what anyone says, Cash is always King! Gamestop’s management agrees with this statement, as they have stayed committed to staying in a good capital position. To add to this they have leveraged their strong flow of cash to continue their global growth through new store openings and acquisitions. Will get into this more detailed later.  Adding to this Gamestop bodes significant assets to lure in new customers compared to competition. Gamestop’s publication, Gamer Informer is the Wall Street Journal of video game information for serious gamers. This paid publication offer tips, game reviews, etc to over 2.2 million subscribers. Worldwide we are also seeing an increase in video game users and a change in the demographics. Once dominated by men and teens this industry has shifted as now a days near half of all gamers are both female and over the age of 30. To read more into this and the future of Gaming, check out yesterday’s article. Gamestop works very hard to keep serving its dedicated consumer pace by offering many extras such as tournaments, gamer communities, etc. This has proven to be successful, as they have built a formidable brand similar to Apple where customers continue to stay loyal. Gamestop has taken advantage of the lucrative used games business. Gamestop has created large facilities to refurbish, clean, and repair games and then resell them on the open market. It has taken 12 years for this to people a profitable aspect of their business plan so it has created a challenge for competitors to compete with. I expect the used game business to continue to thrive in 2009 and beyond especially during the challenging economic environment. We saw it jump 32% in the first quarter of the year, so no reason to doubt it will keep up similar success in the 2^nd half of the fiscal year.

Growth by Numbers

I believe competition should not be a concern for Gamestop. Companies like Amazon, Wal-Mart, and Best-Buy are greatly overblown when compared to the success Gamestop has achieved. In fact, the competition should be worried about Gamestop. Recently, Gamestop purchased Micromania, France’s largest video game retailer with over 300 stores. This was a strategic move as before that Gamestop had little presence within France. Strengthening their presence within Europe and abroad Gamestop bought Free Record Shops in Norway and The Gamesman in Australia and New Zealand. These acquisitions give Gamestop a larger presence internationally, which has been a thriving market for the video gaming industry. It is reported that in 2009, the video game industry will become the largest Entertainment Medium in the United Kingdom. Currently, Gamestop controls 6,200 stores worldwide. This includes the control of EB Games. To add to this expanded growth, Gamestop plans to open 400 new stores worldwide and expand its online store in 2009. This will help solidify, Gamestop’s emergence as the world’s largest video game retailer.

What Growth Potential Does Gamestop Have

I believe Gamestop has strong short-term growth and long-term opportunities as we enter into the 2^nd half of 2009. As I mentioned in yesterday’s article the video game industry should expand in the second half of 2009 due to the release of Blockbuster titles such as: Madden NFL 10, Call of Duty: Modern Warfare 2, Assassin’s Creed 2, Left 4 Dead, The Beatles Rock Band, Halo 3, Guitar Hero 5, etc. This will greatly increase the revenue from new-software sales for Gamestop, which was down 2% in the first quarter. Plus leading into the Christmas shopping season, retailers and video games always become a hot commodity. Long-term the expansion of their global brand along with an emergence in second generation systems will help future sales growth. Adding to this is the 10% annual expected growth in the industry as a whole along with the expansion of the customer demographics adding more potential consumers. I believe the video game market is far from saturated leading Gamestop to potentially run and operate more than 7,000 stores worldwide. Despite the slowdown in Consumer spending I expect Gamestop to continue to produce growth in overall earnings and revenue. I think Gamestop will capitalize on the growth of the video game industry, expand in the used game market, and increase awareness of the Gamestop brand.

Overall Valuation

Gamestop is currently trading at $22.86, which is vastly undervalued and has positioned the retailer to outperform the market within the next 12 months and beyond. EPS numbers are expected to increase 17% leading into 2010 showing a solid line of growth. To add to this the balance sheet is a compelling attraction with little debt and a high cash flow. PE ratio is trailing very low right now at 9. Basic assumptions project that this number will return to its normalized standing around 16. A double in today’s number is a reasonable expectation and a great growth prospect. Gamestop’s PEG Ratio is 0.49, which is very enticing as I value quality companies to have a PEG below 1. International growth will continue due to large acquisitions mentioned earlier. Used video games sales will continue to thrive along with new releases due to the blockbuster titles coming out this fall. Long term, Gamestop is a great pick as a growth stock with high potential. Based upon my valuations I foresee Gamestop reaching $35 12-months from now a total gain of around 60%.

Video Games a $45 Billion Industry on a Path to the Top

With the economy still posting its struggles some sectors continue to thrive and one that has huge growth potential is the video gaming industry. The recession has affected the video gaming industry in some unexpected ways. Despite stocks within the sector falling earlier this year due to the collapse in markets video games sales have gone up. Yes according to the Nielsen ratings more consumers are buying video games and playing them longer. Of course the industry itself is down due to the economic disaster however on any level this is positive news. According to the study 42% of gamers have increased their playing time, 35% have spend more money on gaming, and 39% say they’ll spend the same amount in 2009. Gamers are under the same spending pressures every other consumer in America is under and it seems they are trying to get more bang for their buck. With the increased playing time it shows the desire for gamers to get more value out of new line games. Another huge sector for growth within Video games is the purchasing of used-games. Used video game sales are up 50% in 09’. That will help retailers like GameStop who have saw used video game sales jump 32% in the first quarter. I personally think video games sales as a robust industry with high ceilings for potential and growth. I actually think it will soon become the largest entertainment medium in the world and this is why:

- Video Games sales in have increased more than 50% in the past 5 years, whereas Music Sales have fallen 12% and Movie Tickets Sales 6%

- Video Games are more popular than Cinema now; Past 6 months 63% of Americans have played a Video Game whereas 53% have seen a movie

- Video Games Spending has become 8% of teenager’s budgets, up from 3% five years ago.

- 89% of Teenagers now own at least one video game console, 59% own two.

- The emergence of the Wii has created a plethora of girl gamers and younger gamers, a market that use to be untapped.

- It has poised to become a $45 billion industry Worldwide in 2009 near double what Music Sales are

I foresee Video Games only getting stronger in the 2^nd half of 2009 with the release of big-name titles and the potential price cuts for consoles. This should spur a significant rebound in overall sales, which are struggling since 2008 when the market collapsed. Throughout the remainder of the year we will see the release of major franchise such as Halo, Call of Duty, the Beatles Rock Band, Madden, Left 4 Dead, and Assassins Creed, which should give a much-needed boost to the industry.  Leading into the Christmas shopping season, retailers and video games always become a hot commodity. Plus the cuts in console prices should also help boost market share in return leading to higher software sales. On the path to the world’s entertainment leader this minor slip-up we have seen in the past year will do nothing to slow up the industry long-term.

Apple’s Big Run Might Be Coming to An End

For Apple, the great run might be finally over. On Wednesday, Apple closed above $156 the highest price since last September. This recent surge was a result of the company posting a 15% increase in quarterly profit, mainly due to the record sales of their new iPhone 3G S. For those of you know think the good times will keep on coming might want to think again. The last five years have been quite a ride for Apple Investors. This year alone Apple has doubled and over the past five years it has averaged an increase of 56% a year, a significant return. The problem is, it might be time for reality take its turn. Overall, I think the stocks best days are behind them and it’s a risky pick to expect the tech giant to continue to perform. Even though I have always been a Mac guy and agree that Steve Jobs continues to deliver terrific products the numbers don’t add up. Apple once to be this small growing company, however they are now valued at $135 billion. That’s quite an achievement and makes them the 10^th most valuable company in America. The implausible thing to me is for someone to believe that Apple can continue to grow at this rapid pace. If shares were to increase at the same pace it would make Apple be worth $1.25 trillion in the next five years. That kind of expectation is absurd. It would make them three times more valuable than Exxon Mobil. The main reason I doubt apple is that the market is beginning to look saturated plus they are slow being hit with more and more competitive brands. Besides the surge in iPhone sales, the rest of Apple’s products took a step backwards so far in 2009. iPods fell 7% and Mac Computers 8%. Plus analysts expect these numbers to fall another 8% in 2010. To add to this, it seems as if the iPod doesn’t have the same draw it use to, plus many people are refusing to pay hundreds of dollars for the iPhone Touch when it is just a sub par iPhone. Apple is currently being attached on all fronts within the computer sales business. Dell, Microsoft, and HP are all heavily invested in promoting the PC product and have a goal of swaying away future laptop owners with the cheaper price point. So now lets take a better look at Apple’s surging quarterly results. All of the growth came from iPhones and that is the major problem. This now makes Apple a mobile phone stock, which could be a brutal business as they go head to head with Google’s Android, RIMM’s Blackberry, and others like Nokia, Sony, and Palm. Plus to compete Apple will only have to continue to lower the prices, which could take a major cut at their profit margins. Plus there still remains a major worry over Steve Job’s health. He has been absent from major Apple events recently and does not have the same control and influence of the company as he once had. He is Mr. Apple and the reason they have reached the level they are at today. Some might even call him the world’s most successful CEO. Yes Apple has but replacements in place but to think that anyone could top what Steve Jobs has done is wishful thinking.

No Need to Short Apple

This said there is no reason to short Apple. If there is one thing they do great, it is holding onto cash. Apple $42 billion in cash and as we know Cash is King!!! This makes me suspect that Apple might finally decide to offer a dividend to continue to attract new investors. The good news for the company is they continue to grow their brand and attract more lifelong customers. I am a perfect example as I have a Macbook Pro, iPhone, and iPod and can never see myself switching back to a PC. I guess its true in the saying once you go Mac you never go back. Adding to this Apple continue to emerging as a player in the Asia market and currently overseas sales are such a tiny part of their balance sheet that I expect this to be a main attraction and opportunity for the company. Overall though at the end of the day, Apple isn’t the bargain stock that it once use to be. To expect 56% annual returns is naïve and I just don’t see it being a huge growth opportunity that it once was. The debate is not whether or not Apple’s share prices will continue to rise but more to the point that is the risk worth the reward any more.

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What is Twitter and How to Make it Effective for You?

What is Twitter?

Well Twitter recently has become one of the greatest tools on the Internet. It’s the hottest thing on the web with over 20 million visitors per day. Basically twitter is a microblogging service that lets you type short messages for everyone to view. Twitter takes the idea of blogging and shakes it up. Instead of users writing long, time consuming blogs, Twitter allows you to write one or two sentences and move on.  Still confused? Watch this short clip and all your questions will be answered.

C.R. Bard (BCR): A Health Care Leader

C.R. Bard (BCR) – This diversified maker of therapeutic and diagnostic medical devices has exposure to the vascular, urology, oncology, and specialty surgical markets.

What I Like

With BCR’s share price currently at $74.33 its shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $73.36. With a 52-Week High of $101.61 (Sep 08) and a 52-Week Low $68.94 (Apr 09) the stock has seen the share of volatility that the markets have experienced.  I like C.R. Bard due to the huge growth opportunities in the Health Care industry, which will be helped out by President Obama’s National Health Care plan. Forecasts show that C.R. Bard is making roughly $2.6 billion in 2009, which will be a 4% increase. With the expansion overseas and the expanded demand for health care options in America I project it to increase even more in 2010, roughly around 5-10%. C.R. Bard should be a leader in its industry by out earning its peers as the company continues to drive growth with the release of new breaking products. The company hopes to generate higher sales through selective acquisitions. Although management will occasionally look for large and established companies to acquire, in general, BCR expects to focus on small- to medium-sized deals. Volume is above 100,000, which is the threshold in which I set. They have outstanding numbers with a 23.16% return on equity and 18.30% return on assets. Another plus is the company is not in debt and has half a billion in cash on hand top help expand their worldwide brand.

What I Don’t Like

C.R. Bard is a very safe pick and only risk would come at the inability to commercialize its products and bad outcomes from reimbursements.

Overview

Overall C.R. Bard is a strong growing brand in a growing industry. It is one of the top Health Care products providers and is a strong buy. I value C.R. Bard at $90 per share come 12-months from now.

Coach: A Growing Brand

Coach (COH)

Coach designs, makes and markets fine accessories for women and men, including handbags, weekend and travel accessories, outerwear, footwear, and business cases.

What I Like

With COH share price currently at $26.93 its shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $25.84. With a 52-Week High of $32.96 (Aug 08) and a 52-Week Low $11.43 (Mar 09) the stock has seen the share of volatility that the markets have experienced. I have been a big fan of Coach for the past couple months as it has been on the Stocks on Wall Street Bullish List and I now want all readers to know about it. What I like about Coach is their winning brand, which has been successful in 2009 as consumers avoid European Brands with $2k+ price tags for Coach products. With the evolution of the Coach stores, they are gaining market share especially with their vast international expansion in Japan and China. Coach is opening 50 stores worldwide in the next five years, a number that would have been larger if it wasn’t for the overall weakness in the economy and consumer spending. Despite these concerns, analysts still expect Coach’s sales to grow 2% in 2009 and 3% in 2010. Coach has favorable long-term sales and earnings prospects, which should help it, prevail long-term even if consumer-spending weaknesses continue. In recent times, Coach has initiated a lower price strategy reducing prices 10-15% on the average handbag. This has proven successful in luring in new customers and we have seen the results in recent income statements. Right now valuations show that Coach is undervalued 25% compared to most other retailers making it an attractive investment. Volume is above 100,000, which is the threshold in which I set. They have outstanding numbers with a 28.77% return on equity and 46.07% return on assets. Another plus is the company is not in debt and has half a billion in cash on hand top help expand their worldwide brand.

What I Don’t Like

Risks for Coach are the consumer spending weakness that currently exists and whether or not it will continue, and if so how long.

Overview

Overall Coach is a strong growing brand that will continue to expand in the next few years which large growth opportunities internationally. I value Coach at $33 per share come 12-months from now.

LinkedIn: A Growing Enterprise

What is LinkedIn? It is the world’s largest professional network with over 40 million members and growing rapidly. LinkedIn connects you to your trusted contacts and helps you exchange knowledge, ideas, and opportunities with a broader network of professionals. Why should you join? First it can help establish your professional network. LinkedIn gives you the keys to controlling your online identity. Have you Googled yourself lately? You never know what may come up. LinkedIn profiles rise to the top of search results, letting you control the first impression people get when searching for you online. Well watch this video and it will explain.

Well why should you be following this? Because LinkedIn is about to take off to new levels. With the confirmation of Jeff Weiner as CEO of LinkedIn the company now has the pieces in place to launch their IPO. Due to the recent strong showings in the IPOs of OpenTable (OPEN) and Solar Winds (SWI), LinkedIn thinks the timing is right to make the jump and lead the company to the next level. Currently LinkedIn’s cash on hand situation is fine as they have no immediate needs for capital. They still have roughly around $50m of the $100m they raised privately. Last year LinkedIn was profitable and they expect better results in 2009 and looking forward. They have 42m members with another 2m joining every month and they just recently started to promite the site international with raving results. That is where the IPO comes into play. To expand to the point the company forsees and grow internationally more capital is necessary and I think finding invesotrs shouldn’t be hard. In 2008, LinkedIn met its target revenue of $100m and expects to double that number in 2009 poising it for a strong future. The great part of LinkedIn is the company isn’t based soley on advertising like many social networking sites. Many business professionals bay extra subscription fees to get bonus advantages to help promote themsleves and further their career. Even with the downturn, I like LinkedIn a lot as an IPO play and have high hopes for the company. Another noteworthy point is with the current tech rally, we could see a rapid pace of start-up tech IPOs throughout the year and it looks like LinkedIn will be leading the group.

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