By breakout on 2010/10/26
After the close yesterday processor designer MIPS reported earnings beating analyst expectations so that this morning their stock gapped up.
This is an old company that has yet to find the starting blocks for a growth run. The RISC architecture makes their processor more useable for embedded designs. One of the matching habitats for it are mobile machines. Energy saving is king in that land.
MIPS Technologies are competing directly with ARM Holdings and of course with bigger processor companies like Intel. With ARM they share also the same business model, namely licensing their IP.
The strong competition has so far prohibited a real success of the company. For now their long-term chart looks rather erratic. Perhaps that will change in the future, now that the mobile-everything era seems to have begun.
Posted in Stocks, TU | Tagged ARMH, MIPS
By breakout on 2010/10/23
Better than expected earnings and revenues gave Riverbed (RVBD) a jump start in its since three month ongoing trend. Riverbed has a product called Steelhead, which optimizes certain WAN operations for bandwidth and therefore speed.
The company’s stock price meandered the last four years around, starting at really high valuations. Recently the revenues curve (blue) seems to accelerate again after having slowed down for two years.
Riverbed’s product is said to have an advantage over alternatives, for now. There is just one problem. Among the competitors are network giants like Cisco and Juniper with directly competing products.
Posted in FU, Stocks, TU | Tagged RVBD
By breakout on 2010/10/23
Thursday Netflix missed earnings expectations by a cent but gapped up nonetheless the next day making a violent restart in its ongoing trend. The market was seemingly impressed with its subscriber growth acceleration during the quarter.
Looking at the weekly chart for the last 8 years reveals that Netflix is only a moderately growing company. Its stock is expensive and vulnerable to the upcoming competition.
The early mover advantage Netflix surely enjoys today could be quickly eroded if formidable Internet companies like Google and others move more directly into its space. Apple has for now partnered with Netflix but could decide to bypass them in the future. There are also other competitors in streaming video and TV emerging like Hulu or Amazon.
May it be that investors like Netflix’s convenient service so much that they project their couch pleasure onto the financial future of this company?
Posted in Stocks, TU | Tagged NFLX
By breakout on 2010/10/23
Chinese search engine Baidu posted strong earnings this week and the market reacted favorably with a restart of a long-term trend. Given the market cap of 37B the growth rate of this company of about 80% is simply amazing.
This chart with earnings (pink) and revenues (blue) shows what money machine Baidu is. Of course, its stock is also priced to perfection.
This phenomenal growth came once again from internal expansion of the Chinese search market and almost not anymore from Google’s retreat. Current market shares are 72.9 % for Baidu and 24.6 % for Google. That looks like Google lost another 2% to Baidu during the last quarter.
Posted in Stocks, TU | Tagged BIDU, GOOG
By breakout on 2010/10/21
Craft Brewers Alliance (HOOK) showed an interesting chart pattern this week. After trending up strongly for four month, it sailed down smoothly for an astonishing long period of time and then it made its “comeback”.
Whether beer brewer HOOK is also on a growth path like its virtual sister, alcohol producer China New Borun, or not, I don’t know. This is just a technical situation that caught my eye.
The long-term chart above shows no growth but probably a merger about two years back. That is most likely the reason why the blue revenues line jumped by almost a factor of 3.
Posted in Stocks, TU | Tagged BORN, HOOK
By breakout on 2010/10/21
Cirrus Logic reported earnings and missed slightly on the top and bottom line. Absolutely seen they are on a strong growth path since two years. Nonetheless the market seems to have expected more from the last quarter and was obviously disappointed with the results. Cirrus gapped down on strong volume.
The weekly chart with the pink earnings curve and the blue revenues line demonstrates two things. Cirrus is growing right now and the stock seems to be cheap. But instead of catching up with the fundamental lines the stock price is starting to go down, which is generally a severe sell signal.
Part of the explanation is the disappointing revenues guidance for the next quarter. The bigger question whether its customer number one, Apple, will still use sound chips from Cirrus for the next iPhone and iPad generations, found no answer so far, neither in the conference call, nor in the interview of Cramer’s show.
The CEO stressed that Cirrus has many customers and indicated only that the company has a good relationship with Apple. Other than that we learned from him that semiconductors are a cyclical business, that customers want to drive prices down for older chips and they have to keep up with innovations to sell higher priced new chips.
For now I think it is fair to say, Cirrus is more a stock for volatile swing trading with the occasional surprise in the cards. The disruption of the longer term trend in conjunction with the earnings and revenues lines sends out a strong warning message.
That, of course, doesn’t mean that CRUS can’t go higher eventually and surpass the July highs. It just means that trend riders have to wait for getting in the saddle again.
Posted in FD, TD | Tagged AAPL, CRUS
By breakout on 2010/10/19
Yesterday, after the market close, silicon and software wonder Apple posted record earnings above estimates, but its stock dipped afterhours. One reason were iPad sales that came in below expectations and the other one margins, also a bit compressed.
However, the iPhone sold better than expected. Perhaps analysts overestimated the effect of Antenna-Gate and underestimated production constraints for the iPad.
The long-term chart shows that Apple had a truly exceptional quarter. It almost looks as if Christmas sales, which traditionally peaked the revenues curve (blue), had already begun. That leaves room for speculation how sales the next quarter will look like…
Earnings and revenues in this chart are a bit distorted, because, since the beginning of the year, sales of iPhones and Apple TV are not anymore booked partly deferred.
Posted in FU, Stocks | Tagged AAPL
By breakout on 2010/10/18
Some rare earth elements and precious metals stocks made today a restart in their fulminant trends. All of that coincidentally at the beginning of the earnings season.
Here we have Molycorp (MCP):
and Rare Element (REE):
and finally Golden Minerals (AUMN):
Common to all three (and other peers) seems to be a technically fine trend and fundamentally a high or even obscene valuation. These are the right horses for momentum traders only.
Posted in Stocks, TU | Tagged AUMN, MCP, REE
By breakout on 2010/10/12
Recent IPO Motricity (MOTR) made today a strong restart in a coherent trend after news came out that it formed a new relationship with an Indian mobile provider.
The IPO earlier this year went less well. The company had to lower its expectations more than once. Motricity offers software and services for wireless carriers. What exactly the company’s product is remains a bit unclear, probably on purpose. The only thing I got is that they want to put personal and private data via their products into the hand of telecom providers, which is a thing that I really dislike.
Their CEO, Mr. Wuerch, dreams of mobile devices that fuse with human beings to the point that they know their wishes and thoughts. He seems to foresee a future where people live their life mostly through a little piece of wireless connected electronics. His dreams already started to become reality with regard to pins, credit card and social security numbers that now “enrich” applications in mobile devices giving their users the … ?
Yes, what exactly is the advantage of the electronic life other than a small convenience for very few things? Users now have to constantly fear that their private data doesn’t remain private and wanders into the digital Hades of Big Brother. Moreover, it looks like they are also required to hope that their telecom provider knows how to live a fulfilled life electronically.
So, the bottom line seems to be, Motricity is a company with a questionable product, growing revenues, and a stock with a currently amazing trend.
Posted in Stocks, TU | Tagged MOTR
By breakout on 2010/10/02
Wednesday Cirrus Logic got a big boost from the Mad Monkey show subliminally relaying that it is still cheap and could double from here. The next day CRUS got hammered down by a rumor telling us that Cirrus will lose the Apple business of the sound chip in the next iPad and iPhone.
Finally on Friday the price was again where it had been three days before. Here are the last ten days of CRUS in the 15 minute chart:
Was this just a strange coincidence, or was it manipulation? The source of the rumor was rooted in Taiwan and, as it turns out now upon a retranslation, the basic message seems indeed questionable. It looks like someone had deliberately misinterpreted a Mandarin Chinese article.
My best guess is that both incidents were a manipulation. Cramer’s ramblings, that at times rock stocks, have a good chance to be positioned “wisely”, i.e., someone knows their possible impact beforehand and takes a position accordingly. That this Taiwanese damper the next day came out of the blue is also unlikely.
Perhaps someone got trapped being short, or, the other way round, wanted to be also in, but at lower levels. Maybe both moves had the same initiator creating a soliton, a single wave front floating through the markets, vanishing as fast as it emerged, making him money on the long and the short side.
The swing trader who entered early Wednesday got probably stopped out badly, while Thursday there was a fine entry chance, admittedly more suited for the day trader. Still, the method of getting in in the morning directly after a stock gapped down, but on already rising prices, should be in the tool box of long term traders also.
So, the price is back to where it was as if nothing has happened. In other words, the market doesn’t seem to be too worried, neither about the rumor, nor about Cramer.
Posted in Stocks, System | Tagged AAPL, CRUS
