Howdy doody folks. Let’s get this show on the road.
Q. Here’s the first question, emailed by a subscriber this morning. “There is a company called Search Initiatives that is looking for investors. It is supposedly going public sometime in the next year or so. Have you heard of it and if so, do you have any opinion on it? Thanks. “We have a firm commitment underwriting from Maxim Securities to raise at least $50 million. The IPO will not only provide our investors with liquidity but will provide Search Initiatives with the funds necessary to maintain our leadership in the U.S. and to launch our technologies into markets around the world. Search Initiatives sends telephone leads to local businesses around the U.S. using new media and we get paid for every lead we send. The Company is one of the largest Pay per Call lead generation networks for local businesses in the U.S. The Pay per Call market is White Hot and SI is a leader in this fast growing market. The ‘old media’ businesses used to use, yellow pages and newspapers, are no longer effective for attracting new customers. This year is seeing a massive move to Pay per Call as a very Large numbers of the Nation’s 25 million local businesses are beginning to use Pay per Call to generate new customers. With the SI system local businesses can use a tool they are familiar with – the telephone to close new business.”
A. I’ve never heard of Search Initiatives, but a quick Google Search of “Search Initiatives IPO” reveals more than enough to make me run in the other direction. https://www.google.com/search?q=search+initiatives+ipo http://www.ripoffreport.com/r/Search-Initiatives-Elocal-Listing/nationwide/Search-Initiatives-Elocal-Listing-Investment-Scam-Temecula-California-338359 Scam Pre-IPO’s – Company shares are offered directly to unsuspecting investors based on the premise that the company will be going public in the very near future. This exploitation plays on an investor’s eagerness to partake in what could be a lucrative Initial Public Offering but, these companies either do not exist or are marginally successful and are not financially ready to “go public”. And why doesn’t anything about the supposed IPO with Maxim Securities leading the way come up if you Google https://www.google.com/search?q=search+initiatives+ipo+maxim
Q. Any interest in $BABA sub 90?
A. I think $BABA will go up. I don’t want to risk my own hard-earned money on $BABA, a Chinese-based company based in Cayman Islands with a very convoluted share structure. Read this: “It is not clear after looking over the structure just what the hell the holder of the stk actually owns if anything, except for a piece of a shell corp in the Cayman Islands. It is like a modern derivative, a betting vehicle, more a state of mind that a productive piece of anything when push comes to shove. http://bit.ly/1DoO1Qf”
Q. Are you expecting a big correction in Nasdaq??
A. No, I’ve been writing for the last week or so that, including in my report this morning that: “The path of least resistance for the broader stock markets remains sideways with a slight upward bias.”
Q. $AMBA: What are your expectations for $AMBA? I feel like I have missed the move up. Thanks.
A. $AMBA’S been on fire but not as much as its higher-profile customer $GPRO. Looking out five years from now, I think you’ll see teens wearing AMBA-based cams everywhere they go. I could see a HD-cam sales hitting 3-4 billion per year. Mobile phone unit sales are climbing towards 2 billion already and most all of those will have cameras in them, so a 3-4 billion unit per year market for HD cams and the chips that run them isn’t that far off.
Q. Hi Cody, Can you add color on $SNE? Aside from their library of titles, what attracts you to them? Also, do you think their recently announced TV box is a good move considering there are established competing products? Are you planning to add to lower your cost basis here?
A. I’ve added near $18-19 on $SNE and am just letting that ride for now. I’d probably add if it got down closer to $16 and would definitely buy another tranche of SNE if it got down $15 or so. As for the reasons why– remember $HPQ at $15 when it’d been crushed for messing up its businesses and overpaying for bad acquisitions and stuff? I think $SNE is similarly crushed for messing up its businesses right now and if they get the ship righted at all, the stock would double. If Sony wearables or TVs ever take off, the stock would triple or quadruple. And if everything on the planet goes right for Sony in the next few years, the stock could be a 5-10 bagger by this time next decade. Of course, if it doesn’t right itself, the stock will be dead money and/or lower than its current $17ish quote.
Q. Cody, what would be a good entry point for $AAPL?
A. Glad you asked. I thought I’d included this paragraph in this morning’s report too, but it seems it got cut off at the end for some reason (probably because I hit “Cut” to move it at one point and forgot to hit “Paste” later). “If I didn’t own any $AAPL, I’d start scaling into it with a small tranche of about 1/5 of whatever a full position is for you without waiting for a pullback. Then I’d look at buying a second tranche if it gets hit even just 3-4% in the near-term. And then just be patient about buying the next two-three tranches. It’s always possible that $AAPL gets hit 20% or more at some point, and although I don’t expect that to happen any time soon, I’ve owned it for 11 years and it does happen.”
Q. Hi Cody. Love your service. Invaluable!! I get the tranche approach and always apply that strategy. I haven’t established any positions in the 3-D printing basket, would you do so now? If so, just $SSYS? Or would you do $DDD as well? Thank you so much for your hard work and everything you do. As an aside, Scutify is the best!!
A. We made some decent money owning $DDD early on in the 3-D Printing Bubble but I sold it long ago back in the $80s or so when I got sick of management’s hype-ful press releases and the way I always felt like they were trying to sell me something when I heard them talk or met them. I’m sticking with SSYS but would definitely use a small tranche approach and start slowly with it and give it some room to pull back as you scale in over time. It’s a very volatile stock and sector. Good luck. Thanks for the kind words too!
Q. Cody: I am hearing lot of positives on $TWTR stock. What are you thinking of it for a near term into next earnings or so?
A. I think $TWTR’s doing much better monetizing their user base but I think they’re struggling to grow that user base. Depending on what the markets weigh more in the next report, is how the stock will trade. I’d rather own $FB than $TWTR and I do.
Q. Cody: I see that $AMZN is not getting any love and all the comps and some investors I know are positive $AMZN. Its earnings in October. I see you have $AMZN at 8 ratings and for short term do you see it goes up into earnings?
A. Feet to fire, I’d rather be long than $AMZN into year-end and that’s why I have it rated an 8 out of 10 right now. The company’s lack of earnings power and margin power is in focus as Alibaba’s $BABA’s own earnings and margin power is so much stronger. Not a fair comparison, but who said the market is fair? I do think $AMZN can double from here over the next couple years if they keep growing top-line as fast as they have been for years now.
Q. Cody, are you thinking of adding more physical gold at these levels or do you think there’s more risk/lack of upside coming up?
A. I’ve done my physical gold buying at these levels in months past and am not in any rush to add to my gold anytime soon. Gold and silver might be dead money and/or stuck in a down trend while this dollar rallies, as it has been and as it looks like it might for the foreseeable future.
Q. What do you think of $CRUS at this level?
A. I like $CRUS’s recent acquisitions and their potential to gain pricing power. The stock’s not terribly expensive, trading at 13-14x next year’s earnings estimates, but it ain’t wildly cheap either. I’ve got no edge there, but I’d rather be long than short it for the next few months/years of this cycle.
Q. What do you think about $YELP at this moment?
A. $YELP’s got to deliver some strong earnings and top-line growth in their next earnings report. The stock could be sideways and volatile until then. Longer-term, I think $YELP’s got much more upside from these valuations.
Q. What do you think about $MU earnings this week?
A. $MU’s earnings power has been tremendous since they consolidated their competition. You’re paying more than you should for memory on your Smartphones, tablets and computers because they were allowed to get exempted from Anti-Trust laws, but it should be good for earnings this quarter. I’ve no edge there for the near-term but if it were to get hit hard before earnings, I might even consider nibbling on a few call options myself.
Here’s a podcast of some of this Q&A.
Okay, thanks everybody. Great chat today.