Fused markets
The markets are mixed to down fractionally this morning. There’s a collective summer apathy that’s permeating the trading this morning. I’m ready for the weekend after a long week of work, how about you?
Our long-maligned Fusion-IO is up more than 25% today, having delivered a rather shocking quarter of growth, coming in nearly 20% above expectations on the topline. Beating the bottom line expectations by 20% is one thing, but delivering that kind of upside results to the topline is really indicative of how strong the growth of this business really is.
And then there was the guidance — Fusion-IO now expects the 2013 results to come in at 45-50% topline growth for the year. How many other companies do you own that are growing revenues 50% per year. Yowza.
Here’s a few highlights of my recent writings on FIO:
I always tell you guys that this is a long-term play, and I have no idea how to play it into this quarter, but feet to fire, I’d expect a great number on the topline and woiuld guess that the market will reward that. http://tradingwithcody.com/subscriber-chat-room/
I agree that FIO’s got a lot going for it and these new deals with Cisco and NetApp could indeed help boost the topline and help make the company’s products a de facto standard in the next gen server world. http://tradingwithcody.com/2012/08/08/cody-kiss-tell-romneys-ira-apple-dividend-nuance-rising-and-more/
Fusion-IO (Revolution Investment rating: 9/10) That spending on capital infrastructure Facebook talked about on their call? I expect a healthy chunk to go FIO’s way. This is a VC investment for us, I’m looking to make 10x because that’s how big the addressable market and how far ahead of the competition FIO is. And if this were in your VC portfolio you wouldn’t think about the swings on the secondary market, so think of the stock that way, take advantage of any weakness to add to your position. http://tradingwithcody.com/2012/07/31/portfolio-run-through/
I’ve been saying since we added the name that this one should be pictured as a venture capitalist investment because the company is such an early driver in its entirely new revolutionary market. Right now the market wants to sell you FIO for a lot less than it did a couple months ago, and it has a great place in a portfolio that is built for the long-term. FIO is one of my Apple Supplier Stocks and Piper Jaffray just said that Apple could displace Facebook as its top customer, as Cupertino continues to invest in iCloud. My team poked around with the beta of iOS 6 today (Apple’s mobile operating system today) and its all about that cloud. For everything to run smoothly, and for Apple to sell TV’s in the next year, they are going to have to spend hundreds of millions to make sure the back end runs smooth. You only get one chance to make a first impression and Apple is spending lots of that hundred billion to make sure they are in your living room and in your pocket for the next decade, and that will likely double or triple FIO’s earnings over the next few years.
The upshot is that last night’s quarterly report from FIO really underscored how strong their business is and I think the entire Street is out there trying to catch up with us on this name now. I’m going to trim this position back just slightly today, as you guys know that I was adding to this stock periodically while we had the chance to do so at lower prices.
No other trades for me today.
