Sean Udall is the author of the TechStrat Report, a tech focused newsletter. The following is a free sample. Take a free trial!
(AMZN): I'm not a fan of this name at the current valuation level, but this is one of those cases where I do believe the margin compression due to future investment will pay off. Simply put, I think the Kindle Fire will add another growth leg to the AMZN stool. This product is going to sell strongly to uber-hugely and become a core media consumption device for the firm.
I still greatly favor my tech favorites due to much lower valuation with similar (or even superior) growth long term -- chiefly Google
(GOOG), Marvell Technology
(BRCM) and various networking plays. And a primary reason for favoring these sorts of names is due to what I believe will be strong continued success from the AMZN platform and the new Kindle Fire. Basically, I think the Kindle Fire will likely own the "low price point" area in the tablet space.
Bottom line, I don't think it's a game-over Netflix
(NFLX) situation at AMZN at all, and I think the bulls will still be rewarded long term. I just can't get on the train at the current valuation as it's counter to my long-running valuation discipline.
(BRCM): We all know (or should) that its the stock's reaction to the event and not the event that counts. Today BRCM is trading very well on a pretty disappointing EPS guide. This is still the best chip name on the planet, as I've termed it since writing for the 'Ville. I think the market knows this and also knows about the future growth catalysts here. Personally, I'm a bit bummed (to use a technical term) as I was wanting to put on some more exposure in the low $34s (or lower) via some calls/call spreads. I'll stay patient as its possible that some negative euro news may provide entry.
In short, I've added to this name after taking gains on Qualcomm
(QCOM) and other techs earlier this year into the big bouts of weakness and have made this a nearly full-sized core position. Given the growth catalysts I see into the future I intend to make this an overweight in time. If I have to do it into future strength, so be it.
(FNSR): Does Thai flooding offer opportunity here? Yesterday I posted a note
about the huge weakness in the fiber optics sector. I won't reiterate the whole note here but I penned that this flooding will not affect all the names in this group to near the extent it's having on contract manufacturer Fabrinet
(FN). Given Finny's diverse manufacturing processes, much of it in China, it may be able to garner materially increased share in the short term, and its been gaining share over the last couple years anyway. Moreover, while many have dramatically lowered long-term price targets into the low $20s I am still standing by my low $40s to mid $50s potential on this name. Shorter term, I think the $17s and lower present a solid value area and prices into the mid $20s will offer upside resistance.
Positions in GOOG, MRVL, BRCM, QCOM, FNSR
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.