iBooyah.com Investment Matters

4-27-07:  Like most people we had our doubts about Baidu’s (BIDU) ability to live up to its expectation given the high valuation and mediocre profit.  While we feel this stock is still expensive and about to get more so, last quarter’s earning (Q1) took everyone by surprise as the company blew past estimates.  Most analysts covering the company were caught off guard.  In our view, this is a testament to how vast the opportunity in China really is.  To put China’s growth into perspective, the government recently reported over 12% growths in GDP. This is about three times higher than the U.S. economy. 

Posted by ibooyah at 08:44 AM | Permalink

4-26-07: Big bad Microsoft (MSFT) just reported Q3 profit; beating estimates by 4 cents per share (earned .50 cents versus the expected. 46 cents).  This is hardly a surprise given the release of Window Vista.  When Vista was first released, there were concerns about the product’s initial acceptance.  These concerns lead several analysts to downgrade the stock. Since then, MSFT has been largely trading in the mid to high 20s.

Posted by ibooyah at 02:48 PM | Permalink | Comments (1)

In light of Nutrisystem impressive profit, we are re-posting our original analysis of NTRI from 2-7-07:

The weight loss industry is a huge market.  The majority of Americans are now overweight.  Obesity is so severe even Congress is getting involved.  As a society we continue to value and promote the ideal physique.  This is evident by the fashion and entertainment industry which continues to promote the “ideal weight”.  Anything less is seen as unacceptable.  NutriSystem (NTRI) and other weight management companies certainly stand to benefit from this social issue.

Posted by ibooyah at 02:02 PM | Permalink | Comments (6)

4-25-07: Consumers simply cannot get enough of the iPod.  Apple’s (AAPL) second quarter earnings clearly reflect the continued demand. In the last quarter alone, Apple sold 21.1 million of these things.  This is 50% above last year, very impressive indeed. We believed Apple’s momentum should continue to drive this company’s earnings for the remainder of 2007. With new products on the horizon, we remain bullish on the company’s ability to generate value for shareholders. Trading in the mid $90 per share, this stock is undervalued.

Posted by ibooyah at 01:49 PM | Permalink | Comments (2)

4-24-07: Investors of Amazon.com (AMZN) are smiling today.  The stock is up 11 points, representing about 26% appreciation after handily beating Q1’s expectations.   AMZN's profit was almost double compared to prior year (earned $111 million, or 26 cents a share, compared with $51 million, or 12 cents a share). Both the top line and bottom line were impressive. Although the earning is great, does this company really deserve a 26% appreciation? Our view is the stock is over bought at this level.  Our prediction is profit taking will occur in the next few days; highly doubtful this will be able to hold at $56 per share. This would not be the day to buy. There will be other opportunities for that. In case you missed the conference call, here are the main points:

Posted by ibooyah at 11:03 AM | Permalink

4-24-07: Carmax (NYSE: KMX) is the largest retailer of used and new car in North America. In addition to its carmax.com, the company operates over 79 used car superstores in 38 states and seven new car franchises. The fundamental business model of KMX is providing a friendly environment of “No Hassles, No Haggling," meaning the price on the sticker is what you pay. Thus far, this concept appears to be working.

Posted by ibooyah at 10:55 AM | Permalink

4-22-07: In celebration of Earth Day, it is only appropriate we look at an alternative energy company.  Energy Conversion Devices (ENER) engages in the design, development and production processes for the alternative energy generation. Founded in 1960 and headquartered in Rochester Hills, Michigan, ENER has more than 900 patents covering a wide range of potential solutions to help us reduce our dependence on fossil fuels.  As with most emerging technology company, profitability is still elusive.  Given the renewed focus on “going green”, we believed ENER is in an excellent position to capitalize in the long term. Despite the recent setback, this company holds great potential.

Posted by ibooyah at 01:46 PM | Permalink

4-20-07:  The DOW trading near 13,000 could mean a sell-off is near.  Every time the market reaches these historic levels, it is prudent to proceed with caution.  Back in 2000, the DOW was trading near 12,000 and everyone thought it was going much higher.  A few months later we witnessed one of the worse bear market in history.  While today’s economic condition is much stronger than in the year 2000, these historic high is concerning.

Posted by ibooyah at 04:22 PM | Permalink | Comments (10)

4-20-07: After listening to DHI Q1 conference call, we believed homebuilders will experience more tough times ahead.  The market condition remains challenging especially places such as California. To compete, DHI plans to aggressively cut prices in the coming quarters and further reduce cost.  During the conference call, the CEO kept stressing DHI has the highest operating margin; therefore the company has the best chance of meeting market demand. This essentially means they plan to cut prices and will do what it takes to move inventory. 

Posted by ibooyah at 12:55 PM | Permalink

4-19-07: What is left to say that has not yet already be said about Google?  Whatever they are feeding their employees in Mountain View, CA must be quite good because this company is growing faster than the weeds in our backyard.  Google’s Q1 profit makes Yahoo! and Ebay’s earning look ridiculous.  It is like the race between the tortoise and the hare. Looking at the top and bottom line growth, Google deserves its high valuation.  At this rate, Google could rule the internet in short time.  In the first quarter of 2007, GOOG posted $1 billion in net profit, a 69 % increase year over year.  This stock should be trading over $500 per share.

Posted by ibooyah at 01:26 PM | Permalink

4-19-07: In listening to Motorola conference call, one thing was evident; management is feeling the pressure to return to profitability.  Every single executive stressed the common goal of once again delivering the kind of quarter investors had come to expect. There are many different products on the horizon and MOT is expecting business will turn for the better this year.  After listening to this call, our impression is management appears to understand what needs to be done. The forward strategy is to cut cost, deliver better/relevant products, grow by acquisition and continue its stock buyback program.  In our opinion, the recovery could take longer than what is being promised, thus investors should exercise caution with MOT stocks.  Here are the main points from the Q1 conference call:

Posted by ibooyah at 12:00 AM | Permalink

4-18-07: After listening to Ebay’s earnings conference call, we came away impressed with the management team.  They sounded bullish and appear to have an excellent handle on their overall business units. It is apparent to us these executives has a solid plan to grow Ebay. From shopping.com, Paypal, Skype, Stubhub and their core auction business, every unit are firing on all cylinders. It is no wonder Ebay continues to do well, beating their Q1 numbers by 3 cents per share.  Here are the main points from the conference call:

Posted by ibooyah at 03:00 PM | Permalink

4-18-07: The recent appreciation of Ebay shares is a little concerning.  Since we last wrote about Ebay, the stock has gone up about 3 points. Investors are betting the company will blow away their numbers when they report today.  Hopefully this will happen, but to be cautious, we are selling half of our positions and locking in the recent gains.  While we believed in the long prospect of Ebay, the stock could suffer a severe sell off if the company fails to exceed expectation.  The stock appears to be price for perfection; any sign of negative tone will spark a sell off. Therefore, the prudent strategy would be to take some money off table before earnings is release.

Posted by ibooyah at 10:54 AM | Permalink

Posted by ibooyah at 03:29 PM | Permalink | Comments (5)

4-15-07:  As the official tax filing deadline approaches, Intuit (INTU) comes to mind. We realize INTU is more than a tax preparation software company, but since this is tax season, we will concentrate on their main product, Turbo Tax.  Remember, this year we have until April 17^th since the normal April 15^th falls on a Sunday.  If you have not already filed, we suggest you get to it before the IRS comes calling.  In case you might not be aware, the IRS allows free online filing at www.irs.gov.  We have not tried it, but have heard it works well if your tax is straight forward.  If you are the type that prefers to do things on your own, the best tax software in our view is Turbo Tax from Intuit (INTU). The professional version is very easy to use and works quite well. It is almost as good as our accountant.

Posted by ibooyah at 12:30 AM | Permalink | Comments (1)

4/11/07:  Research in Motion (RIMM), the company behind the BlackBerry device is currently down almost $10 per share (~7%) in after hours trading.  The reason for the sell off appears to be three fold.  While the profit was stellar (up 66% from prior year), the company actually failed to meet analyst expectation by a penny a share (reporting .99 versus the expected $1 per share).  The future guidance was also weaker than most analyst have expected.  Although the company did sign up over a million new subscribers during the quarter, this was not enough.  Adding to the negative news, the company also confirmed the SEC is officially probing the company’s stock options practices. 

Posted by ibooyah at 02:32 PM | Permalink

04-10-07: While AMD’s stock has dropped to a level where it is getting hard to ignore (Trading at $13.27 per share as closed of 4/10/07); one might view this as an attractive price and be tempted to jump back in. We would like to caution you brave souls.  Despite the recent decline of ADM, our position remains the same on AMD.  AMD still has many problems to overcome.  It is unlikely this stock will pay off in the foreseeable future.  Stick with Intel (INTC). AMD is second rate at best.

Posted by ibooyah at 04:05 PM | Permalink | Comments (9)

With energy prices soaring, global warming and the focus on “going green”, the demand for alternative forms of energy will continue to grow.  One of the more promising alternatives is solar energy. While prices of solar panels are still expensive at present, this soon will change.  New technologies from cutting edge companies such as SunPower (SPWR) and SunTech (STP) could soon change the way we get our electricity.  As prices of solar panels become more affordable, the day when every home can generate enough electricity to sustain itself is very near.

Posted by ibooyah at 06:26 PM | Permalink | Comments (2)

According to the government report released Friday, the U.S. economy added 180,000 jobs in March.  The number came in above Wall St. expectation.  This is great news for the overall economy as it suggests the economy is still growing despite the lackluster housing market.  One thing is certain, this economy is resilient.  While this is good news, the stock market could view this as a negative Monday morning. 

Posted by ibooyah at 11:26 AM | Permalink

4-5-07: The negative news surrounding the subprime lenders has created a lot of bargains.  While the mortgage shakeout is not yet over, we believed there are opportunities worthy of consideration. Companies such as Countrywide Financial (CFC) and HSBC (HBC) are some of the opportunities we believed is undervalued. Realizing the sector is out of favor and could potentially take further hit in the short term, we believed these two companies will emerge as winners in the long run.

Posted by ibooyah at 12:00 AM | Permalink | Comments (2)

4-3-07:  What a great day on Wall St. The housing sector received a boost from a surprise gain in existing home sales and the decline in oil price got investors excited.  It has been awhile since the market was this excited about anything. To see green numbers scrolling across our screen again was a welcome sight. Ebay (EBAY), a stock we have recently identified as a value stock received a vote of confidence after Bear Stearns finally realized the stock was undervalued and increased their earning estimates. Ebay closed up 3% (very nice), now trading above $33 per share.

Posted by ibooyah at 04:49 PM | Permalink | Comments (2)

4-2-07: As we start the second quarter of 2007, it is important to recognize the second quarter has historically underperformed. The “Sell in May and go away” could very well happen again this year.  With that in mind, we would like to remind everyone to ensure your portfolio is diversified.  Do not make the mistake of “putting all your eggs in one basket”. Taking the passive approach during these uncertain times could end up costing you dearly.

Posted by ibooyah at 10:49 AM | Permalink