Will Cliq Phone Give Motorola a New High?
Company's been on a run, but earnings expectations aren't sounding as good.
Asian stocks took a hit overnight. The Hang Seng and the Nikkei were off 1.08% and 2.32%, respectively. European stocks were lower early this morning, too. And here in the US, we're currently trading…
Here's what I'm focused on this morning:
Well, hold the phone. Looks like it got a nice little bounce on Friday because of excitement over the potential for its Cliq phone.
But can the momentum keep up? Is a new high in the cards?
1. It wasn't just Friday; the stock has been on a bit of a run over the last month or so. And I think its rally is for real and folks are paying attention in earnest.
2. The Cliq chatter could spill over into this week and we could indeed see a new high. If I'm right, it could cause even more talk and get the company more press.
3. One issue: I view this as a news/momentum play because frankly, the earnings expectations for this year and next hardly get my motor running.
It looks like the package-delivery giant expects to send in a pretty first quarter. In a release on Friday, it indicated it's looking for $0.58 in its first quarter -- not bad, given the estimate I'm seeing is for $0.49. And for the second quarter, it's looking for $0.65 to $0.95, which is decent because the Street is at $0.74.
1. It's nice to see the company set the bar where it did. And I sense that estimates for this year are going to be on the way up as a result.
2. But I wonder if it can keep on delivering positive surprises. It trades now at about 19.8 times next year's estimate (which is $3.91). That's not cheap. And to boot, the stock had a big run on Friday, climbing almost five points.
3. I like the company, and believe it has excellent potential down the line. But it's a bit ahead of itself, and for that reason, I'd rather wait for a pullback before picking up this package.
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