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Posts Tagged Dennis Biray

Is The Sun Shining For Sun Microsystems?

Apr 12

Posted by admin in Stocks Mutual Funds

If you invested in the technology sector during the late 1990s, you probably became very encouraged from the amazing capital gains you earned during this time period. Sun Microsystems (SUNW) is no exclusion this system, reaching record highs in of 80.00 in 2001. However, like most of the rest of the technology sector, Sun experienced losses hurting every investor still stuck with the overbought equity. However, five years later as the dust has settled, does Sun pose itself to be a reasonable investment?

Economically speaking, technology stocks have increased during periods of inflation and have fallen during periods of recession. As inflation have been rising the past few years as represented with the continued increase in interest rates, you would have expected a gallant corporation in Sun to increase back to its glory days right? While such a sentiment is usually an excellent one, Sun has failed to provide investors with any comfort. Through the past three years, Sun has experienced no growth whatsoever despite indications of head and shoulders technical situations. Supporting a resistance level of 5.25 and a supporting level of 3.50, a timely speculator is able to make good short term investments, but long term investors are not able to help their fixed-income desires. What makes matters worse for investors looking at Sun is the potentially hard landing recession in store for the US economy. During such a period with the decrease in employment and domestic income, consumers have less money to purchase luxury goods such as Sun?s software products, and as a result revenue for the corporation will go down.

When such happens to a company, a decrease in quantity demanded for elastic goods will hurt the profits which have already been hampered for Sun. With an unusual decrease in margins in terms of revenue and profit over the last three years sustaining poor operating margins, there is little optimism in terms of future growth for this company. If you do own this company, I would suggest selling immediately, as I really doubt Sun will reach 5.00 again for the next few years. While the company is respectable and well known as a large capitalization equity, like Microsoft and other companies, Sun looks like it has lost its original steam and will be more of a nuisance to investors rather than capital gainer.

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Lennar Corporation: Buy Or Sell

Apr 10

Posted by admin in Stocks Mutual Funds

As many investors look into equity searches to diversify their portfolio, housing always comes up as an enigma especially with the so called bubble it has been put in. Coming off record sales and inventory numbers from a few years back, the housing market has struggled the past few months on increasing interest rates and a slowdown of the economy. As I type this, you may think I am foolish for even suggesting looking into housing venture as an equity investment, but on the contrary as an investor you should know to do the reversal of what everyone expects in this situation.

Looking at a specific stock in Lennar Corporation (LEN) as just an example can define why now is a good time to invest in the housing market. Over the previous five years, after incredible gains of near 300% from 2002 to 2005, Lennar has appeared to depreciate in 2006 posting capital losses for investors of nearly 33%. Such a fall can be attributed to the increasing interest rates which make consumers wary to buy new houses. When prices are inflated and mortgages are at all time highs, there is going to be a cornucopia of unsold houses in the market which does not bode well for corporations such as Lennar. However, now with interest rates looking to be hiked for the last time and possibly even cut in the near future, the housing market may see the thrills shown during the glory days of a few years back. While everyone supposes that the economy is going through a recession, I expect a soft landing situation which does not affect the economy too negatively. With interest rates having a strong probability to decrease in the following months, buying shares of a housing company like Lennar can be strongly advocated at such a low price.

While most any large capitalization equities will be adequate for potential investors, I chose Lennar for both its technical and fundamental aspects. Always having excellent margins in terms of growth in revenue and profit from year to year, I expect such earnings to continue to grow even higher. While the next few quarters may not be suitable to the envisions potential investors have, such news is already taken account of in this rational expectation market as the only indicators which should have any affect on the stock would be positive corporate news or a decrease of interest rates. With the probability of such statements higher than the negative sentiments turned into reality, Lennar should have now hit its low and continue its rise.

Already grown nearly 8000% in its near 20 year career, housing will continue to be a tremendous factors in the coming decades and should prove to be no problem in terms of future competition or structurally ousted fundamentals. Supporting positive surprises each quarterly update, investing in Lennar, while of course risky during this stage of the economy, can become a tremendous asset this time next year. Having already felt the effects of the ?housing bubble? sentiment, I can only see future growth in terms of shares for the company and capital gains for investors.

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Coca-Cola Vs. Pepsi: Which Stock Is A Better Buy?

Apr 10

Posted by admin in Stocks Mutual Funds

Possibly one of the biggest rivals in Corporate America today, the battle between Coca-Cola (KO) and PepsiCo (PEP) continues to baffle not only consumers but investors as well in determining which product is a better buy. While both companies have had recent problems in emerging nations such as India by having their products be condemned for improper ingredients, a shakeup like this might be necessary to promote future growth for possibly undersold equities.

In terms of fundamentals, Pepsi seems to have the slight advantage. While Coca-Cola does have the higher figures, Pepsi has the better margins in terms of operating margins, revenue, and profit which is more important for growing companies. Pepsi also has, according to Yahoo Finance, been upgraded more times than Coca-Cola during the last few months, signaling a favorable sentiment among investment banks. In terms of guidance, both companies look to secure better procedures in the emerging markets with their products which should hurt earnings for a while but eventually boost them due to economies of scale. However, recently Pepsi has had positive surprise EPS statements during its quarterly results. While Coca-Cola has also reported similar reports, the findings were at a much smaller margin, barely affecting shares.

What is more important, in determining a choice between these equities, is the technical analysis involved. During the past year Coca-Cola has only remain in a five dollar range, showing little fluctuation patterns for speculators or investors. While such a figure may be encouraging for fixed income advocates, in reality, since 2000, Coca-Cola has barely fluctuated at all in its 20 point range, showing no signs of potential growth. While the situation is unfortunate, it looks as if, like Microsoft, Coca-Cola has increased in terms of value to its maximum, and pretty soon diseconomies of scale may be evident for this once prosperous company causing shares to drop in the future. On the other hand, Pepsi has seen continued growth throughout its tenure in a nice steady growth pattern. While speculators may not be encourage by the slow appreciation of the stock, long term investors may favor such a pattern as it does not seem the price of Pepsi has peaked. The company is still in the prime of its career and should carry the stock to higher numbers in both fundamentals and shares for at least one more decade. By investing now, investors have the opportunity to see Pepsi rise to near 80-100 points by 2010 and possibly even further by 2015. While the wait may be more tedious than other penny-stocks, the process will be relativity stress free as investors will be allowed to see their capital gains appreciate over the years. Such as a process is also favorable with its dividend payoff which allows for reinvestments to increase gains.

What I also like about Pepsi currently is its recently appointed CEO with an Indian background who may look more favorable than Coca-Cola to the emerging markets. Such a basic presence may add increased pressure to Coca-Cola to spend more money on advertisements and other apparels to strike a similar chord in these markets as its soft drink counterpart. While it is genuinely assumed that Coca-Cola is the king of its industry, times are slowly changing for the worse for this tremendous corporation and looking more and more favorable its hated rival in PepsiCo.

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A New Rival For EBay? Should This Interest You?

Apr 5

Posted by admin in Investing, Stocks Mutual Funds

If you have read my other articles regarding choosing stocks to invest in you have by now known that I like cheap volatile stocks. While the stock discussed in this article is relatively cheap, the volatility is quite high and can drastically change capital losses to capital gains quite in a short amount of time.

Looking more in terms of the public equity itself, as EBay has grown to be nearly a decade old, it was inevitable that competitors were around looking to take some of the concentration ratio away. GMarket, another ecommerce website, hopes to provide such extravagant competition to CEO Meg Whitman?s firm. Already proving to be more popular in the Asian market in countries such as Korea, GMarket is hoping to expand and provide extra benefits which EBay does not offer to entice more users. As EBay?s price has fallen dramatically over the past year, GMarket, which recently opened as an IPO, hopes to take advantage of such activity and prove to be the next big internet phenomenon.

Supporting a resistance level of near 15.50 and a support level of near 13.00, GMarket is a perfect opportunity for timely investors to rack in capital gains at little expense. Fluctuating between these levels for the past month, an investor is able to make an easy 20% profit in one to two weeks time if the stock is bought around the low of 13.00. In fact, with an estimated one year estimate of 20.00, truthfully buying at any point less than 15.00 may be a bargain. If EBay continues a downward trend and GMarket is able to obtain some control of the market, there is even potential for the company to reach 50.00 in a few years time.

While technical analysis and potential are good starting points to be optimistic about GMarket, even by looking at the fundamentals it is evident this company has a bright future. With 2nd quarter results initially confirming a one year growth of revenue of 165% and a one year growth of earnings near 135%, GMarket covers all its bases in regards to positive criticism from investors. Recently given the light to outperform the market by a few respectable brokers, gives me the assurance to agree with such sentiment and allows to label GMarket as a strong buy for both risky investors wanting to make a quick profit as well as long term investors eager for growth making this an excellent stock to invest in regardless of future ambitions.

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Is Disney A Magical Purchase?

Jun 22

Posted by admin in Stocks Mutual Funds

With the NHL, NFL, and NBA seasons ready for a new year, the large conglomeration of Disney (DIS) looks to boost guidance for its many enterprises during the fall to winter seasons. As a Dow component, Disney has helped propel the recent rally by recently reaching a 52 week high in aims of a very favorable market according to recent trends. However, with a recession looming should you be involved in such a company who basis a lot of its products on consumer expenditures?

The answer to this question simply is yes. It is true that the economy should be headed for a recession in the near future, but it does not necessarily mean that shares of Disney should fall. Recognized as one of the premier brands to both children and adults, even if income of consumers will fall as usually accustomed too during times of slow economic growth, the mass-branding Disney has propelled with its ESPN and ABC brands along with its origin television, movie, and theme park basics should have no problem attracting customers. The real growth however, should be apparent and incredible in the next few quarters. With three of the major four sports beginning this season, along with new premieres on ABC as well as other Disney affiliates, profits should rise to new levels signaling strength in this industry. As incomes have not fallen significantly yet, and employment still remains incredibly high, margins should surprise future and current shareholders as a net positive more than anything.

Some investors may be hesitant to believe such sentiments, but by looking at current trends of how Disney tends to perform during the months from October to April, the signs almost all lead to positive indicators. Except for 2001, which may have been the result of a total derail, shares of Disney have tended to rise each of these months signaling from about a decade signaling strong capital gains for investors. If such a trend was not reason enough to believe in Disney, when looking a fundamentals, there is almost no other company that can match Disney?s production. Posting positive margins on almost all levels each quarter each year along with a strong dividend ratio and PE ratio relative to its peers, the fundamentals for Disney should not be a negative detriment to any investor who studies this equity. It may be true that some of these margins may reduce in terms of percentages once the recession hits, but I believe that by April of 2007 any impact will be negligible in terms of investors warranting strong capital gains. Thus, I would strongly advise buying Disney at its current price but to be wary of keeping your shares past next April.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

Writen By : Dennis Biray

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Is It A Buy Inside J C Penney?

Apr 10

Posted by admin in Stocks Mutual Funds

Until this morning (November 3, 2006) I believed that much of the retail industry was overbought, and that any capital gains accumulated during the industry?s incredible run should be taken off the market into other areas. However, after seeing that the unemployment level of 4.4% is the lowest amount in over five years, I foresee a tremendous opportunity for a department retailer such as J C Penney (JCP) to go even higher in terms of share price, even as it has recently reached record highs.

Such analysis can be made for a myriad of reasons. Many investors have seemed to realize that certain components of the retail industry have outperformed other areas. While through the early 2000s, many discount retailers earned better fundamentals in terms of revenue and earnings, from analyst understandings, it seems that the market concentration of valued stocks has shifted from such discount stores of Wal-Mart and Costco to more departmental companies such as J C Penney. With this Plano, Texas located company to produce its quarterly results next Thursday (November 9, 2006), there is a strong possibility, if the other stocks are any indication that shares of J C Penney will be favorable to the shareholder and sustain such optimism for at least the next six months.

Referring back to the introduction, I stated the unemployment landmark for a number of reasons. As I originally believed that the economy was slowing down in a more dramatic fashion than appears to be, such analysis would contribute to the assessment of a poor share price in the future for retailers such as J C Penney. However, as more people are obtaining jobs, and as more wages continue to rise coupled with a terrible savings rate for domestic consumers, there is a good possibility that a company such as J C Penney can benefit immensely from such readings. As more consumers have more discretionary income to spend, rather than going to discount stores such as Wal-Mart to purchase normal goods, these same consumers, especially during the holiday season, will tend to switch their purchases to more luxury goods found in departmental stores. As that happens, the fundamentals for J C Penney should sky rocket as both the fact that Americans have more money and the fact that the time has come for holiday shopping, for the next two quarters, at very least, J C Penney should support the necessary numbers to boost the share price of this stock to even more record highs.

As I say such a sentiment, there is also a hint of cautiousness involved too. As the Federal Reserve has indicated by its previous three meetings that they are more than likely completed raising rates, and the next move would be to decrease rates, such would not be too favorable for companies like J C Penney. In order for rates to be decreased there would have to be a significant pullback in the economy where the unemployment rate surpasses about 5.5-6%, and economic growth slows down to less than 1%. If such is the case, then consumers will be more hesitant to purchase products from departmental stores such as J C Penney and move their purchases to discount retailers, as what happened in the early 2000s. However, because of the lag indication, and also because there seems to still be a strong sense of economic growth illustrated by the revised unemployment rations, J C Penney, at least for the next six months should provide investors will a good opportunity to continue or even begin to earn more capital gains.

Therefore, with pretty solid fundamentals, especially in recent years and quarters, J C Penney should not disappoint investors in the next couple of earning sessions. Provided, that this company has beat the bottom line figure every time in the last four quarters, I am expecting an even bigger positive surprise margin when the results pour in next week. Again, while J C Penney may not be completely suitable for a long term investor (even though it had only moved sideways during the last recession), in the short run there is pretty sure bet that the share price will rise dramatically.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

Writen By : Dennis Biray

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Electronic Arts: Buy Or Sell

Apr 9

Posted by admin in Stocks Mutual Funds

As the new generation of video games will finally take over this November with the release of Nintendo?s Wii and Sony?s PS3, should you, as an investor, be interested in purchasing shares of affected companies such as Electronic Arts (ERTS)? An answer to this question may unfortunately surprise you.

Known for its Madden and Sims series, EA according to many investors and experts, is any excellent purchase for a long term investor. However, if you look more profoundly at the different indicators influencing this company, you will understand that, while there is potential for EA to produce in terms of a higher share price in the short run, in the long run I do not see too much optimism for fixed investors. Looking first at the fundamentals, EA has not been producing at a very favorable level. It?s true that three out of the last four earnings results have been surprising in a positive note relative to the bottom line, but on the other hand, in terms of margin growth in areas such as revenue, profit, and operating income, there is actually a loss from last year to this year. While many can argue that such loss is common to many companies, during times of growth, looking at the case of EA, such a sentiment should not be the case. During times of economic expansion and high growth, companies such as video game producers should be generating at extraordinary levels. I say this because, throughout this time period, many consumers have found not only jobs, but jobs with high levels of income to represent the growing ambitions companies have. When such is the case, there is a shift in demand for normal goods to more luxury goods as consumers are now able, especially with a negative spending rate, to consume more at higher levels. As this occurs, a company like EA should be the beneficiary of such a favorable economic setting and take distinct advantage in terms of profit. However, as this is not the case for Electronic Arts, such pessimism only adds another negative aspect into the purchase of shares for this company.

In response to this argument, another counterargument may be made with respect to the release of Nintendo?s and Sony?s new consoles. As these amazing graphic producers will be released, it should be obvious that there should be more of a chance for the fundamentals to grow. While such is a valid statement, if you look at how EA preformed when the previous generation of video games were released, you may encounter a different opinion. After Microsoft?s Xbox and Nintendo?s Gamecube released in November of 2001, one year to that month EA was only standing with a share price only 40% higher. While you may call that a pretty good year in terms of higher capital gains, I believe much of that growth can be attributed to continuing momentum from previous years and less about the actual release of the system, as other competitors in the video game industry such as Activision, THQ, and Konami all reported negative growth in terms of share price for that same time period. In addition to that, during a time of affluence in the United States and most of the world such as Japan, where video games are immensely popular, EA only reported a share price growth of negative 10% in 2005, and so far in 2006 has only broke even. Also, another idea to keep in mind is that EA?s share price actually dropped close to 15% since Microsoft?s release of Xbox 360 last year which should have actually produced a tremendous gain for the Madden giant.

Thus, when examining the data in terms of fundamentals and current trends for Electronic Arts, while there may be some potential this year to grow relative to the release of the Wii and PS3, do not expect such share price growth to sustain for long. It is hard to argue against such a company which has produced video games recognizable to almost everyone, video game player or not, but with poor fundamentals, which is probably related to poor management, I do not like EA?s long term potential to accumulate much capital gains for its investors.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit www.biraynetworks.co.nr

Writen By : Dennis Biray

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