Saturday, February 13, 2016

Cloud computing stocks

The cloud computing industry includes companies offering services such as data centers, software as a service (SaaS) and networking hardware manufacturers.

SKYY  First Trust ISE Cloud Computing ETF

 (by market cap)                        
Company name Mkt Cap ($ billion)
  • CRM Salesforce $41.6 B
  • LNKD LinkedIn $14.8
  • WDAY Workday $11.1
  • NOW ServiceNow $8.9
  • ATHN Athenahealth $5.2
  • ULTI The Ultimate Software Group $4.7
  • N NetSuite $4.6   a cloud-based provider of financial information and ERP - Enterprise Resource Planning suites of software. 
  • TEAM Atlassian Corporation $4.5
  • VEEV Veeva $3.3
  • PFPT Proofpoint $2.0
  • MDSO Medidata Solutions $1.9
  • ZEN Zendesk $1.7
  • SHOP Shopify $1.6
  • FLTX Fleetmatics Group $1.6
  • RNG RingCentral $1.5
  • CSOD Cornerstone OnDemand $1.4
  • XRO Xero $1.4
  • RP RealPage $1.4
  • CTCT Constant Contact $1.3  (*)
  • NEWR New Relic $1.3
  • LOGM LogMeIn $1.2
  • BOX Box $1.2
  • HUBS HubSpot $1.1
  • LOCK LifeLock $1.0
  • DWRE Demandware $1.0
(*) Constant Contact (CTCT) was acquired by Endurance International (EIGI) for $1.1 billion in November 2015.

Large players:
  • Google, Inc. (GOOG) - An exposure to cloud computing, a mega cap leader in search, online advertising and more 
  • Cisco Systems (CSCO) - a global leader in networking and communication devices, and is best-known for its routers and switches.
  • Oracle (ORCL) - Cloud services is a part of one of the three segments of this enterprise software company.
  • F5 Networks (FFIV) - both software and hardware technology for application delivery networking.
  • Citrix Systems (CTXS) - They acquired in July 2011, RingCube in August 2011, and ShareFile in October 2011.
  • VMware, Inc. (VMW)
  • Rackspace Hosting (RAX) - The launched Cloud Servers for Windows in summer 2010, and United Kingdom cloud service in January 2011.
  •, Inc. (AMZN) - a prominent player in the cloud computing industry with its Amazon Web Services (AWS)
  • Microsoft  (MSFT)

More about cloud computing
Cloud computing, also known as 'on-demand computing', is a kind of Internet-based computing, where shared resources, data and information are provided to computers and other devices on-demand.   Cloud computing has now become a highly demanded service or utility due to the advantages of high computing power, cheap cost of services, high performance, scalability, accessibility as well as availability. Cloud vendors are experiencing growth rates of 50% per annum.

Sunday, February 7, 2016

Banks that are set to grow EPS in 2016

  • Ally, Bank of America, BB&T, Citi, KeyCorp, Regions, Synchrony, U.S. Bancorp and Zions are well positioned.

Shares in some of the world's biggest banks are plunging. Financial stocks in the S&P 500 are down more than 11% so far this year. That's worse than oil, energy stocks, and even the emerging markets index. European banks have fallen even further.

Deutsche Bank (DB) has lost 31% so far this year, Unicredit (UNCFF) is down 35%, and Credit Suisse (CS)is 30% down. Barclays (BCLYF), BNP Paribas (BNPQF), Societe General (SCGLF), and UBS (UBS) have all lost about 20% since the beginning of 2016.

Data from this week largely affirmed our outlook that 2016 will likely be a narrow window for some banks to grow earnings per share powered by expanding pre-provision net revenue outpacing provision increases, although this window will likely prove more narrow for some banks than others.

Banks we consider well positioned to benefit from these trends include Ally Financial (ALLY), Bank of America ( BAC ), BB&T ( BBT ), Citigroup ( C), KeyCorp ( KEY ), Regions Financial ( RF ), Synchrony Financial ( SYF ), U.S. Bancorp ( USB ) and Zions Bancorp ( ZION ).

Conversely, banks we consider poorly positioned include American Express ( AXP ), Comerica ( CMA ), Capital One Financial ( COF ), Discover Financial Services ( DFS ), JPMorgan Chase ( JPM ), PNC Financial Services Group ( PNC ), Santander Consumer USA Holdings ( SC ) and Wells Fargo ( WFC ).

We see particular risk to the outlook for American Express and Discover given that their EPS growth remains heavily dependent on share repurchases, which we expect to be nearly 100% of net income in 2016, but may be more limited in the face of an increasingly rigorous Comprehensive Capital Analysis and Review stress-testing process this year.

Our three 2016 themes are: 1) Unique business model-driven growth -- Synchrony (Best Idea), Goldman Sachs Group ( GS ), LendingClub ( LC ), MasterCard ( MA ), Signature Bank ( SBNY ), LendingTree ( TREE ), Visa ( V ) and Wells Fargo; 2) Catalyst-driven value names -- Zions (Best Idea), Ally, Bank of America, Citigroup, Citizens Financial Group ( CFG ), First Horizon National ( FHN ), Huntington Bancshares ( HBAN ), Regions Financial and U.S. Bancorp; 3) Industry consolidators -- BB&T, KeyCorp and OneMain Holdings ( OMF ).

Friday, January 29, 2016

Oil closely tied to dollar, not just stocks

While oil prices have tracked the Standard & Poor’s 500 Index more closely this year, the link between moves in crude and the dollar has the attention of Citigroup Inc.’s chief U.S. equity strategist, Tobias Levkovich. “Investors may just need to look at one factor rather than a plethora of inputs” to understand oil’s moves, he wrote in a report Monday. The 30-day correlation between WTI crude and a dollar index was minus 0.91 a week ago, while oil’s correlation with the S&P 500 surpassed 0.95 last week.

Wednesday, January 20, 2016

Market testing August 2015 lows (1/20/15)

  • The Standard & Poor’s 500 Index knifed through its lows from the August crash at 1,867 earlier today, before staging a partial recovery this afternoon. The Dow Jones Industrial Average and Nasdaq Composite Index also sold off sharply, but didn’t quite get through their intraday August lows at 15,370 and 4,292, respectively.
  • On the other hand, the Dow Transports and Russell 2000 Index bid adieu to those support levels a couple weeks ago. The Russell just hit the lowest since July 2013, while the Transports tanked to the lowest since October 2013. As a matter of fact, the iShares Transportation Average ETF (IYT) is down more than 11% year-to-date.



past bear markets (Carter Worth)

Adam Johnson's stock picks

Value screen list:

1. P/Cashflow <10x
2. NetDebt/Cashflow <2x
3. ROE 3yr avg >13.5%

Saturday, January 16, 2016

Monetary policies around the world

11 Feb 2016: Sweden cuts key interest rate further below zero. US Fed is only developed central bank whose last move was a hike. 

Tuesday, January 12, 2016

The Royal Bank of Scotland: "Sell everything except high quality bonds"

The Royal Bank of Scotland tells investors to 'sell everything' in client note.  "Sell everything except high quality bonds," the note said, warning that the situation is similar to the global financial crisis that occurred in 2008.