***Official*** 2014 Stock Market Thread

[ponyo]

MRVL lost a big IP case recently and they have some solid products but no real catalyst to break out from where they are now. The dividend is nice, but I think there are many other semiconductor companies that can grow more that are also reasonably valued.

Michael

Yes, I read about the $1.5 billion judgement to Carnegie Mellon University being upheld this past May while looking at the company. I just don't know how judgement that large is going to hold up on Federal appeal. Seems to be ridiculous amount. I've read the company incorporated in Bermuda to avoid US jurisdiction and started the stock buyback and dividend program to limit its ability to pay in case of judgment loss. I don't know if that's smart or shady. The company caught my eye because of the large Greenlight Capital position and how it's been dead money for the past five years while the market and Nasdaq has more than doubled. Qualcomm has been eating everyone's lunch with the Snapdragon 4G LTE SoC on the highend but there is lot of growth left in the lowend with MediaTek and Marvell fighting for 2nd. From my reading Marvell has about one year lead over MediaTek on 4G LTE SoC tech which will be important going forward especially in China.

I think I will open a small position to get my feet wet. While waiting for a catalyst can protect you from dead money or losses, you can miss the big early gains as the stock usually starts moving before the positive news.

If you don't mind, could you share with us some semi/tech companies/names you think are reasonably valued and growing? I think I've read you're involved in the industry and currently working over in China or Asia so you probably have some good insight. Like you I have good bit of cash and that pile keeps growing each month so I'm always looking for new names and good ideas.

 

[FelixDeCat]

Dow will close up today.

 

[Imp]

Really hoping Canada hangs on just another month or two. Going to seriously start cashing out and maybe convert more money to USD.

Job numbers suck and beaucoup full-time employment being lost month after month. Mostly part-time and "self-employment" boosting numbers. And somehow, people are paying off their record debt and mortgages on these part-time jobs and self-employment.

 

[Michael]

For semiconductors, the metrics I tend to look at are the monthly unit/revenue data that comes from the Taiwanese assembly and test houses. That is the canary in the coal mine for a change in direction in the sector.

I think the real opportunity now is M&A analysis. There are not a lot of new semi companies becoming public as they are much less appealing to VC today. The market overall is getting somewhat saturated and the overall shipments and revenue are starting to tie more and more to overall GDP trends as chips are flattening out overall in growth because of a combination of ASP declines via Moore's Law and saturation. So a lot of firms with cash and good stock prices are looking for other, smaller players to buy to keep growing.

The one company that came public recently that I do like is Invensense. I have not looked at their valuation metrics recently, but they are a more pure play on sensor/MEMS technology which is a big growth area now.

I don't think MRVL's dividend makes up for being dead money for so long. There could be a catalyst - maybe a takeover - but I would have to go back and check the ownership structure. I think there is a strong founder still there which makes that much less likely to happen. The trend inside China is more homegrown chip content, so I am a little hesitant on a strategy that relies on growing in the lower-end Chinese phones.

Michael

 

[ponyo]

Thanks for sharing your thoughts. I agree with you about increased M&A activity. Market is favorable for M&A right now with the rates low, companies flushed with cash and high stock prices, and consolidation in the semi industry. I was thinking about the potential buyout of MRVL by a bigger player like maybe Intel but you're right about the founder not wanting to sell. I believe founder is Indonesian decent and it's one of the few if not the only Indonesian founded company. I read he's pretty proud of that fact so I don't see the company being sold while he's still there.

I'll take a look at Invensense. It's first time hearing the name.

 

[Michael]

I get DB and Baird research emailed to me. Looking at auto semi picks, DB says this right now: "Buys on Freescale, ON & NXP, Holds on Infineon, Maxim Fairchild, Linear, Analog Devices & Elmos and a Sell on STMicro.".

Baird likes Red Hat because they think that Openstack is a big advantage.

Michael

 

[KB]

There has been a big hubbub about the upcoming Alibabo IPO (BABA). Although I think the company will continue to make tons of money I think its mostly fullgrown already and like the Chinese economy, it is slowing down. Anybody have access to IPO shares or going to jump on it? I would pick it up after a fall, but not buying the first day.
One play on the IPO is the dumb people pick. Try to pick up shares of BAB or BABB (otc) to see if people buy the wrong symbol like they did with twitter.

 

[Michael]

Unfortunately, TD Ameritrade is not participating even though Goldman Sachs is one of the bankers, so I have no access to the IPO. Otherwise I would participate. Alibaba is still growing in China and is poised to grow overseas with the currency it will gain via the IPO. Taobao and other alibaba products are key commerce products in China.

Michael

 

[BoT]

Unfortunately, TD Ameritrade is not participating even though Goldman Sachs is one of the bankers, so I have no access to the IPO. Otherwise I would participate. Alibaba is still growing in China and is poised to grow overseas with the currency it will gain via the IPO. Taobao and other alibaba products are key commerce products in China.

Michael

I agree.
this is also an interesting piece to consider:

He and 26 other Alibaba co-founders and senior executives at the company and its affiliates are part of a powerful group dubbed the "Alibaba Partnership." Alibaba has said the interests of the partnership may conflict with those of investors.
"This governance structure and contractual arrangement will limit your ability to influence corporate matters, including any matters determined at the board level," Alibaba wrote.
Ma's group already planned to designate four of Alibaba's nine directors prior to its IPO. With the new disclosure, the group can name six of 11 directors if they expand the board.

http://www.reuters.com/article/2014/07/11/us-alibaba-ipo-idUSKBN0FG29J20140711

 

[Michael]

That is not too unlike Google and Facebook. Those types of special share classes and people with super voting rights is becoming increasingly common, unfortunately.

Michael

 

[FelixDeCat]

GRPN momentum play. $8 looming?

Bought 6.71, sold 7.18

Rebought 6.71 9/8/14

 

[BoT]

so Alibaba (BABA) IPO to start of at $60-66. yay or nay?
it's a bit high for my taste but I have no doubt they can ask for it.

GRPN, maybe around early next year. EPS next Y are at 150%

 

[Michael]

Will depend on demand. Big jumps from the offering price means that banks did not get good value for their client.

Michael

 

[BoT]

does anybody know about metatrader? MT4 and MT5?

 

[Michael]

I received some Baird research today where their main semi analyst, Tristan Gerra is cutting ratings on building block semi companies like FCS and ONNN. He sees that lead times are shrinking which is not typical in a strong second half. He is fairly negative on semis not directly linked to the Apple Iphone supply chain. Tristan is a pretty experienced and thoughtful analyst.

Michael

 

[BoT]

He is fairly negative on semis not directly linked to the Apple Iphone supply chain.
Michael

why is that? just because of the iphone 6 release or is there more to it?

 

[Michael]

He sees weakness in demand for notebooks, set-top boxes, automotive semis, as TD-LTE phones. Lead times are coming in for many products except for ones supplying the iPhone which is in a major ramp. I have seen other reports saying that Apple has locked up so much shipping capacity that others are getting squeezed out.

Michael

 

[Michael]

Pretty funny, just received a DB report after the first day of their tech conference. Their analyst says companies sound pretty bullish and that there is not a down cycle, but some slowing. DB guy (Ross Seymore) still thinks semis are pretty fully valued and more care in stock picking is needed. He likes INTC, BRCM, and NXPI in large cap, FSL in mid-cap and ONNN and MXL in small cap.

Michael

 

[BoT]

wanna talk me out of signing up with e-trade?

I have been trading with ML so far and it was fine for me as it gives me easy access to my money but the tools are more like meh and trades don't solidify until market close.

I want something quicker. I am not exactly planning to become a day trader but all to often have I seen my sale orders differ somewhat significantly because they have not been executed until market close.

I also would like to have access to real time stock monitoring system. either web base or desktop. I think I could get away with just the access to this. I found one that is desktop and analysis only. it's called "Hotstocked Precision" and is $49. not sure if it's worth it. any opinions
http://www.hotstocked.com/precisionapp

I also found Telechart 2000. it's a bit more expensive at $299/y for basic access. looks nice and works well with TDA, which I don't use at the moment.

so, option is to just sign up with someone who already provides it, like e-trade.
what should I do?

 

[FelixDeCat]

Bought 6.71, sold 7.18

Rebought 6.71 9/8/14

sold grpn 6.94

long 45 oct $7 calls grpn

 

[FelixDeCat]

wanna talk me out of signing up with e-trade?

I have been trading with ML so far and it was fine for me as it gives me easy access to my money but the tools are more like meh and trades don't solidify until market close.

I want something quicker. I am not exactly planning to become a day trader but all to often have I seen my sale orders differ somewhat significantly because they have not been executed until market close.

I also would like to have access to real time stock monitoring system. either web base or desktop. I think I could get away with just the access to this. I found one that is desktop and analysis only. it's called "Hotstocked Precision" and is $49. not sure if it's worth it. any opinions
http://www.hotstocked.com/precisionapp

I also found Telechart 2000. it's a bit more expensive at $299/y for basic access. looks nice and works well with TDA, which I don't use at the moment.

so, option is to just sign up with someone who already provides it, like e-trade.
what should I do?

I went to TD Ameritrade (TDA) in 2008. The ODDEST thing about TDA is that they are the only broker with a "concentrated positions" margin requirement......for example:

If you have all your money in one certain stock on the "special margin requirement list" its likely not going to be marginable by more than 10%.

Lets say you have $2000. Your buying power is $4000. You want to buy PLUG at $5.00.. If you buy 400 shares ($2000), you have $2000 left to spend on a different stock. If you max out your buying power and buy 800 shares at once ($4000), YOU WILL GET A MARGIN CALL for up to $1800. That is because the more "concentrated" you are in certain stocks you have to pay up to 90% or 100% for the entire trade. In other words, you cant use margin on PLUG for more than your actual cash position ($2000), even though its "marginable" if its only 50% of your available buying power.

That "concentrated position" thing is annoying.

 

[BoT]

That "concentrated position" thing is annoying.

but isn't that a rather good thing? it's there to protect you and them from continuing to invest into a potentially poor trade. will that happen regardless of how the stock performs?

 

[JEDI]

i have optionshouse.
for stocks, I pay $3.95/trade PLUS $0.005 per share.
so if 1000 shares, I pay an extra $5.

is this the norm or am I being raped by my brokerage firm?

 

[BoT]

i have optionshouse.
for stocks, I pay $3.95/trade PLUS $0.005 per share.
so if 1000 shares, I pay an extra $5.
is this the norm or am I being raped by my brokerage firm?

I don't think it's too bad. I pay $6.95 at ML and e-trade is $7.95 per trade.
how do you like the platform and the tools?

 

[Schfifty Five]

i have optionshouse.
for stocks, I pay $3.95/trade PLUS $0.005 per share.
so if 1000 shares, I pay an extra $5.

is this the norm or am I being raped by my brokerage firm?

I pay a flat fee of $7.95 with Fidelity. I think it's $7.95.

With options and foreign stocks, the fee/commissions can fluctuate, don't know the exact math.