Saturday, May 30, 2015

TASR (31.58) GPRO (55.46) TSLA (250.80) Where do these stocks go from here?

TSLA is around 250 just as it was last August. Although it's moved around a bit since, it's basically stuck in the mud. When does it take off and where does it go? Willscore, any forecast on where the stock is going for those pondering entry? That dip under 200 was the bomb entry.

 The GPRO and TSLA charts have very similar patterns. Here are some observations about the two and I'll throw TASR in also. 

TASR: I'm a numbers guy first and foremost.  I'm very fortunate when I can see the future a bit, plus the current numbers rock. Warren Buffett always encouraged just picking a few good stock in a lifetime, and I get it. For me, NFLX had great numbers and I could see the future, but I can site few if any other examples where that's been the case for me. At the end of the day, it really does all come down to numbers, which are a reflection of operations. From where we sit, seeing the future of operations is dicey much of the time, but the numbers are what they are. The numbers not only tell you what has happened, but also what is currently happening and projected to happen. 

TASR's numbers are under-whelming. When we get into numbers, let's focus on two primary categories, sales and earnings. TASR is weak on the former, and strong on the latter. Earnings growth has been impressive, but that's due to weak comparisons. My God,  we have been following TASR for 11 years, and 2012 net was less than $3.5 million a quarter in 2012. In 2014, it was almost $5 million a quarter. Those simply aren't game changing numbers. For 2016 earnings are projected to be around $7.5 million a quarter. That's double where they were in 2012, but that was for years ago, equating to 25% earnings growth per annum. That's pretty good, margins are increasing, the company is making more money on their sales, and this is the primary driver behind the stock run above 30, not the body-cam potential. Either analysts are way off with future sales projections, or we are going to have to see a lot of upward revisions if the body-cam is going to be a huge driver.. Even with the body-cam news widely digested by analysts, future sales growth is projected at less than 20% total for the company, and it's not like this is a massive company.

As I wrote earlier, at the end of the day, it's all about the numbers: earnings numbers, which are impacted by sales numbers, and lastly one other key number, stock price. Stock price is just as important as earnings when valuing a stock. When a stock triples (give or take) as TASR has done in the last year, all valuations metrics have changed dramatically. It should not take a PHD to be able to say, hmmm, the stock has tripled, sales growth projected at less than 20%.. that's gotta tell you something. It tells me, that unless huge numerical revisions occur, while a strong market could see TASR go up some more, the triple you just saw is the only triple we are going to see for quite a while. I see TASR as neither a value or hyper growth play here. I think it's fairly valued.

GPRO: I can't see the future for GPRO. I don't have a firm grasp on their technology. So unlike NFLX, I have only numbers rather than numbers and vision. The numbers look good. Vision wise, the hype is virtual reality and drones. Thing is, both could be only hype, I don't know one way or the other. The numbers tell me that whatever they are selling now, they are selling more of it each quarter, but the rate of growth is declining.  Yet still sales growth is projected to be over 40% each of the next two quarters, which is more than double the projected sales growth for TASR. Double the sales growth is a big deal. Valuation wise, GPRO's 2016 net is estimated to be $1.96, TASR's is 60 cents. GPRO earns almost five times as much per share, yet the stock is less than double. Draw your own conclusions.

TSLA: Ahhh TSLA, slowly I turn, lol. Confucius say, he who he has the vision for the future of the electric car industry can make a few bucks, but who the Hell has it? Is anyone gonna cha-ching this industry? Warren Buffett was all over it years ago investing in BYD out of China. Now I get that Warren is long term, but he had to expect more, and more sooner. I also get that it probably takes longer to revolutionize the auto industry than it does DVD rentals, but when Buffett is five or ten years early, wtf?

Let's look at TSLA numbers. Slated to earn $3.62 in 2016, which is less than double GPRO's number, yet the stock is almost five times the price. Watching TSLA earnings, one can get motion sickness. Next quarter they are supposed to lose 58 cents. Last quarter they lost 36 cents. The quarter before that, they lost 13 cents. That's three money losing quarters in a row according to my math. 2015 as a whole is projected to be very slightly profitable, at four cents for the year. Here's the kicker though, earnings are supposed to explode in 2016, up to $3.62, which would equate to a pe north of 70. A 70 pe sounds sounds pretty good compared to the current pe of N/A due to losses. 

Please, save me the empty platitudes or cliches such as, "TSLA is going to change the world". Projected sales growth for 2016 is 55%. Earnings explode while sales growth is something less than stratospheric. Obviously, TSLA has a cost point that sales are expected to start exceeding next year, and profits materialize with huge numerical increases, but earnings growth will not be sustained anywhere near that rate if sales don't increase more than 50 percent. 

When do sales explode at TSLA? $8.8 billion projected sales for 2016, that's chicken feed for a company valued at $31 billion. So, TSLA trades at 4 times 2016 sales. If you see the stock doubling, it's 8 times 2016 sales. I don't see that as unreasonable. I see upside for TSLA, an easy double, but beyond that, you will need to gain a lot of momentum in the electric car revolution. 


TASR (31.58)

Ceiling: With a strong market and continued good news, a run at fifty.

Floor: A market correction or change in TASR sentiment could see a pull back to 20.

Projection: I see a range of 40-26 over next 12-18.

GPRO (55.46)

Ceiling: If one of the hyped drones or virtual reality hit or appear to hit, we could have a triple or quadrupler here. 

Floor: It would take a market correction to ever see this thing south of fifty again.

Projection: A two or three bagger in the next 12-24 months.

TSLA (250.80)

Ceiling: TSLA has a very, very high ceiling, and that's it's primary allure to certain trader/investor, speculator types, call them what you will, but we know who they are, and they are who we think they are. 

Floor: Should out perform market unless a new negative reality comes to fruition. Doubt it will ever be south of 200 again. 

Projection: Looking for a double by end of 2016.

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Wednesday, November 26, 2014

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Bears' game pivotal and may decide whether Lions are playoff bound

Gene Pritchard, 11.26.14
Let's go ahead and give the Lions wins with their next two home games after Thanksgiving, (versus Tampa and Minnesota). Let's also be realistic and give the Lions losses at Chicago and Green Bay. This scenario means that the Thanksgiving Day game at Ford Field versus the Bears will decide whether the Lions have a second half meltdown again (they've already lost two in a row, so this scenario could already be underway) and miss the playoffs at 9-7, or likely make the post season at 10-6. 

Don't scream at me and suggest Detroit might win at Chicago. They might also lose at home to Tampa, they did last season. Tampa won one road game all last season, and it was in Detroit. Tampa has already won two road games this season. Getting back to the game at hand, the Bears in Detroit tomorrow. I know the argument to be made for a Detroit win. They are favored and rightly so. Detroit should win this game, and if I had to bet my life, I'd take the Leos, however ......... I've heard things. lol

Jay Cutler is clearly having a better season than Baby-fat Stafford. Cutler has found the end zone 22 times, Stafford only 13. That's dern near twice as many td's according to my math. Cutler's qbr is 93, compared to Matthew's anemic 81. Detroit has beaten several qb's with better qb ratings, which is to be assumed when Stafford is in the bottom 7 in the league in rating. So you ask, what does qbr rating matter if this is the case? I'd answer, I'm just saying, if this game is close, Cutler is more likely to turn in a big play, twice as likely to hit pay-dirt so far this season.   

Another reason for concern is Matt Forte, who is second in the league among rb's with 7 td's in his own right. Forte is closer to Stafford's td total than Cutler is. The Lions have not scored a td in two games, and I was screaming about their offense the weeks before when they played Miami and Atlanta. Although wins, the offense was not exactly lighting it up in those games either, you can see the trend line that is the Lions' offense regressing. They've not scored more than 24 points since the first week of the season. Stafford's qb rating has been in decline for 11 weeks. 

I don't think either offensive line will have a great day and that both qb's will be under pressure. It might all come down to one big play... enter Cutler and/or Forte. I'd say Devin Hester, but he gone! If the Lions lose tomorrow, it's highly unlikely they'll make the playoffs. How can you make a case they'd beat the Bears in Chicago if they can't beat them in the D?

Is this the SOL... same ole Lions? Anybody here, seen my same ole Lions? Can you tell me where they've gone? They lost a lot of football games, I turned to look and they were gone. (click here for Anybody here song.) Actually we all saw the same ole lions last game versus the Patriots. If that wasn't the most Lion-Esq performance I've seen in a while. That game brought to light the realization that.... yes... this Lions team might collapse, they've done it before. In fact, only once in five seasons has Stafford not watched the playoffs from home. They have no business losing tomorrow, but what business did they have losing six of their final seven games and finishing 7-9 last season?

Suh, say it isn't so!

Gene Pritchard, 11.26.14
Martin Mayhew has been running the Lions for six years now. He's had several pics at the higher end of the first round during this period. MM has struck pro bowl gold with two of his draftees, DeAndre Levy and Ndamukong Suh. Levy has technically not made the pro bowl yet, but he plays at a pro bowl level regardless. Suh always makes the pro bowl, and rightly so. Suh is easily Mayhew's most decorated draftee, and he's the heart and soul of this defense, which is primarily responsible for Detroit's 7-4 current mark. 
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So much is wrong with this Lions team. They haven't drafted a "keeper" wide receiver since Calvin Johnson. I mean not even a single starter drafted since Megatron. Mayhew traded up for Pettigrew and drafted Ebron too highly, and get's no production from either. Stafford's stats suck. I could go on, but I regress. If there's one guy that the Lions need to keep, it's Suh. Are you telling me, they are going to lose him despite this reality? 

I understand there's nothing the Lions can do if JayZ is in Suh's ear and telling him to join the two win Jets. Losing Suh could set this franchise back a notch or two... just what it needed.

Bush and Calvin.... top of my under performers list

Gene Pritchard, 11.26.14
Reggie Bush has either been inactive or ineffective all season.. ditto Calvin Johnson. Bush was averaging 3.5 yards a carry on 53 carries before he was injured. Calvin is averaging only 3.4 yards after catch and has only three td's. Is it me, or does it seem like Calvin doesn't generally get a lot of separation? Does he still have 4.3 speed?

I'm a youth movement guy, everyone knows that. Both of these guys turn 30 next year and have been grinding several seasons. It will be interesting to see how they fair down the stretch. No doubt Bush will be gone if he doesn't make some big plays, and will Calvin be far behind? 
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My followers know I do not seek to extend Megatron after next season. I think Golden Tate is better now, and going forward, and that it's ill advised to drop $20 million a season on CJ, post 30 years of age, when you never won a playoff game with him pre-thirty.

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