Cody Kiss & Tell: TradingWithCody Twitter, Synaptics, Facebook, Fitbit, Palo Alto Networks, and much more. August 19th, 2015.

Q: What is your latest feeling on $SYNA & $TWTR?

A: $SYNA‘s very cheap. SYNA’s on track to grow revenue 20% this year and 10% or more next year, earning nearly $7 per share this year and nearly $8 per share next year. With $12 per share net cash on the balance sheet, that makes their enterprise value to earnings ratio about 7. Their P/E itself is less than 10. If $SYNA does $8 per share in earnings next year, the stock will likely be in the triple digits — well into $100 or so. I would like to add to my $SYNA common stock long position if the stock drops into the $60s. Not in a rush though, we bought it back in the $50s a few months ago and took some profits higher, so steady as she goes as usual for now.

$TWTR‘s tougher. The stocks’ not “cheap” despite being down and near 52-week lows. On the other hand, $TWTR‘s growing its topline 60% this year and should do 40-50% topline growth next year. Next year’s earnings could range anywhere from 60 cents per share up to a $1 per share. But let’s look out over the next couple years and know that if $TWTR can generate $3 per user per month, or just 10 cents per user per day, that’d put them on a billion dollar per month revenue run rate — say $12 billion per year in sales, up from $2 billion per year this year and up from $3 billion per year this year. If this company can figure out how to grow their user base on top of that too, we’re off to the races. I could see $TWTR at $100 per share in three years. Now all that said, until they get a new CEO who knows what they’re doing, the stock has been and probably will remain “dead money.”

Q: Hi Cody. Are you as confident on the future of $TWTR as you were when $FB was in the teens and low twenties? Do you think they can grow the user base meaningfully?

A: When $FB was near $20 per share, I repeatedly explained that it was WILDLY cheap and that I made it one of my top 3 largest positions. I don’t think $TWTR at $28 is nearly as obvious a MUST-OWN position as $FB was. The two biggest differences between $TWTRand $FB is: #1- Facebook is a billion user company that’s clearly got critical mass that it will probably never lose but TWTR has 300 million users — not a billion and their user base has stagnated of late. #2- Facebook bought Instagram and Whatsapp which now have a billion users on them too and the Instragram purchase for $1 billion was truly genius by Zuckerberg. And #3 and most importantly – Facebook CEO Mark Zuckerberg is a genius and Twitter doesn’t even have a CEO right now.

Q: $PANW is very expensive–what price do u like it–are they the best??

A: $PANW is probably one of the best security companies in the world and they are growing quickly too with 50% topline growth this year and at least 30% topline growth next year. At a $15 billion market cap though, the stock is trading at 12 times next year’s sales estimates and 100+ times earnings. If all goes right though, $PANW could grow sales 50% per year for the next four or five years, which would put sales up near $5 billion per year and earnings would likely be more than $10 per share, up from less than a dollar per share this year. I wouldn’t want to bet my career or my whole portfolio on $PANW but I do like having a small position in it as part of our Security Basket along with the similarly very expensive $SPLK and the very cheap $FFIV. $FFIV is my favorite stock of the three though.

Q: Do you still like $SWKS? Why is $FFIV your favorite in the security blanket?

A: I don’t remember “liking” $SWKS per se. I do think and have always said it’s a Drone/App/Robotics/Wearables Revolution kind of stock, but I don’t own it and haven’t owned it in many, many years. $FFIV is my favorite of the security basket mainly because it’s the cheapest stock of the basket, with $7 per share in earnings and already well-established a de facto standard in the app/network/cloud/security optimization industry.

Q: Hope everything is going great with Amaris and Family. Coming to the markets, Do you think the market heading higher into the year end or will this down trend continue into the year end? Any good options you are looking into the year end with greater reward/risk?

A: I think the broader markets will be up 10% or more from these current levels this time next year, but I wouldn’t want to try to just game that from these current levels at this current time. I plan on buying some call options on the broader markets if the DJIA falls below 17000 in the next few weeks.

Q: Cody, any opinion on $JIVE software?

A: I haven’t looked at $JIVE in many moons, so let’s just do some back of the envelope analysis on here. $300 million market cap. $100 million net cash. Sales are growing single digit percentages per year and no earnings in sight. So nope, despite that huge cash balance relative to their market cap, the company is burning and losing money, so it’s exciting as an investment to me until they clearly can make money for shareholders.

Q: Recently TSLA price target was increased massively by Morgan Stanly.http://www.bloomberg.com/news/… Do you think that its realistic in the next 12 to 18 months as they are saying?

A: If Elon Musk can successfully beg for enough billions more in welfare money to build his factories, to give to people rich enough to buy their “Green cars,” and otherwise subsidize $TSLA shareholders, sure, the stock could double again from here. But until his company figures out how to run their business without needing taxpayer largesse to fund it, I want nothing to do with it. Sustainable business use private money to fund their models, not welfare money.

Q: Elon Musk is a very successful entrepreneur, but can you please explain is there any other reason you dont like his companies other than the social welfare he is getting from the tax payers?

A: What other reason do I need to have to be disgusted by Elon Musk and his using the Republican Democrat Regime to pilfer the taxpayer to benefit his shareholders. I don’t consider him a successful entrepreneur. I consider Elon Musk a successful Socialist who uses his government connections to steal the middle class taxpayer’s money. Capitalists use private money to build and fund their companies. Socialists/Fascists use government connections and largesse to build and fund their companies. I see poor people working at minimum wage jobs who need welfare more than Elon Musk and $TSLA shareholders do.

Q: Why do u like $AMZN, what exactly do they do??

A: $AMZN? They sell stuff on their site and their apps. Amazon has become the de facto standard retailer of the world and that’s worth A LOT of money.

Q: $FIT, it seems that mobile phone devices are increasingly being equipped with more and more sensors to accurately measure things like steps and heart rate. This would not affect the hard-core health conscious buyers, but may make the casual health conscious buyer less likely to pay $100+ for a $FIT device when they already have a device that gives them the info they need. Thoughts?

A: Not just smartphones, but smart watches are also full of fitness tracking features. I think $FIT is more likely to figure out how to successfully integrate and build their own smart watches and other devices and nobody wants to work out with a Samsung Phablet or a iPhone 6 in their pocket.

Q: Anything to this pending “death cross” discussion about AAPL stock?

A: Short answer — no. My old friend Barry Ritholtz is right in this case:http://www.bloombergview.com/a… No! The Dow Death Cross! (Oh, Never Mind) “The bottom line: Although there are plenty of things for traders to worry about, the Death Cross this isn’t one of them.