Lying awake intent at tuning in on you
If I was young it didn’t stop you coming through
and now I understand the problems you can see
I met your children
Let’s update the analysis on some of our positions.
Synaptics – The stock is up almost 10% since we added it to the portfolio three weeks ago. I’d like an opportunity to add to it on weakness but sometimes you don’t get that chance right away. I’m going to add a second tranche to my own personal portfolio in Synaptics today. The balance sheet has more ethan $10 per share in net cash. Most of the hundreds of millions of lower cost Android smartphones sold in 2015 will have a Synaptics finger and touch sensors in them. Indeed, Synaptic is first to market with an integrated touch controller/display driver for smartphones and tablets. The stock is trading at about 1x this year’s revenues estimates and 10x next year’s earnings estimates of $6.50 per share, which are probably too low anyway. Synaptics could deliver upwards of $8 per share in earnings next year if the company executes and fully catches the growth of the cheap smartphones market.
Sony – I’ve been saying for the past four weeks that “I still don’t believe for a minute that the primitive technology nation of North Korea is to blame for Sony’s hacked network problem.” And it’s looking increasingly like North Korea was not to blame, rather insiders from the company were. Whatever the case maybe, I continue to hold my Sony and think that there’s a lot of upside over the next five years with this stock. The library of TV shows and movies are in high demand by all the iTunes, Amazon, Netflix, Hulu streaming wars. The collapsing Yen figures to be a huge boost to the company’s finances in the next year too. And as I’ve mentioned, Sony’s investing heavily in wearables and Sony could be a big player in wearables. Speaking of which, was the Sony Walkman the first successful wearable computer?
Facebook – I trimmed my Facebook down a bit last week, but mostly out of discipline as it has become a very large position relative to my overall stock holdings. So what do I think about Facebook’s upside potential for the longer-term after the 300% move we’ve had since I made it one of our three largest positions back in the low $20s and teens? Maybe the best way to think about Facebook’s long-term value is to picture it as its own unique closed Internet. The opportunity to enable people to find each other and build relationships is key to the entire Internet’s success and Facebook enables that to be done on an individual basis like nothing else ever has. Leading technology, a wildly sticky platform of more than 1BB people — and say 90% of tech-savvy people are active on Facebook…ten years out revenues are BIG. Instagram is probably worth tens of billions of dollars as the monetize it over time, but with $FB’s market cap already $220BB Instragram’s ability to drive $FB’s stock price higher is probably limited. The Facebook-Net and their various platforms must maintain their dominance and continue to morph and interconnect and I think they will.