Author Archives: Scalper1

SigFox ‘Internet of Things’ Plan Challenges AT&T, Verizon, T-Mobile

Internet-of-Things (IoT) startup SigFox says it will expand its wireless network using unlicensed frequencies to 100 U.S. cities, posing a challenge to AT&T ( T ), Verizon Communications ( VZ ) and T-Mobile ( TMUS ). The IoT refers to wireless technology that connects industrial, medical, automotive and consumer devices to the Internet. Wireless networks operated by Verizon and AT&T are competing with non-cellular technologies  — mainly Wi-Fi, Bluetooth and ZigBee — in IoT deployment. AT&T, Verizon and T-Mobile have been counting on the IoT, also called machine-to-machine communications (M2M), as a growth driver amid fierce price competition in wireless data services. Both AT&T and Verizon have been focused on Web-connected cars, as well as “smart cities” that have remote monitoring of street lights, utility meters and road conditions. France-based SigFox has been targeting industrial IoT applications. SigFox uses unlicensed, Wi-Fi-type radio frequencies to connect M2M devices. It’s well-funded , having raised more than $150 million from investors, according to TechCrunch. SigFox began testing its technology in Silicon Valley in 2014. According to SigFox, it has 7 million devices connected to its network in 18 countries. “U.S. is a huge growth market for Internet of Things connectivity, especially in smart cities, utilities, shipping and agriculture sectors that require large-scale and cost-effective communication,” said Allen Proithis, president of SigFox North America, in a press release. AT&T and Verizon are pushing the federal government to make high-frequency radio spectrum available for 5G services, which include low-power IoT applications.

Can Alibaba Beat Earnings Expectations On This Important Metric?

China e-commerce giant Alibaba Group ( BABA ) will post quarterly earnings before the market open Thursday, with investors hoping for a strong boost in the value of goods sold on its various platforms. Analysts are looking for the China e-commerce giant to report revenue of $3.58 billion, up 33% in local currency, and EPS of 56 cents, up 21% in local currency, for the company’s fiscal Q4 ended March 31. Alibaba reported better-than-expected fiscal Q3 earnings, but shares fell 4% that day due to a slowdown in a key metric known as gross merchandise volume. GMV is the total value of goods sold on the Alibaba platforms. In fiscal Q3, Alibaba’s GMV rose 23% to $149 billion, slowing from an increase of 28% in fiscal Q2. For the March quarter, Wall Street expects Alibaba is to report GMV growth of 22%, to $112 billion. Among those looking above that consensus, ITG Investment Research analyst Henry Guo projects GMV growth of 23.5%, while RBC Capital Markets analyst Mark Mahaney pegs it at a more optimistic 29%. Mahaney rates Alibaba stock outperform, with a price target of 89. Alibaba stock was down a fraction, near 75.50, in morning trading in the stock market today . The stock is up 27% from a seven-month low of 59.25 touched on Feb. 9. Alibaba competes with JD.com ( JD ), Baidu ( BIDU ) and Tencent Holdings ( TCEHY ) in various segments of China’s Internet economy. JD is China’s largest online direct-sales retailer, Tencent dominates in messaging and gaming, and Baidu is China’s search leader. The four are the largest Internet companies in China and have been investing aggressively in new areas to spur growth. JD is scheduled to report earnings before the market open on May 9.

Best And Worst Q2’16: Consumer Discretionary ETFs, Mutual Funds And Key Holdings

The Consumer Discretionary sector ranks fifth out of the ten sectors as detailed in our Q2’16 Sector Ratings for ETFs and Mutual Funds report. Last quarter , the Consumer Discretionary sector ranked fifth as well. It gets our Neutral rating, which is based on aggregation of ratings of 13 ETFs and 19 mutual funds in the Consumer Discretionary sector. See a recap of our Q1’16 Sector Ratings here . Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the sector. Not all Consumer Discretionary sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 389). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Consumer Discretionary sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings PowerShares Dynamic Retail Portfolio (NYSEARCA: PMR ), PowerShares S&P SmallCap Consumer Discretionary Portfolio (NASDAQ: PSCD ), and Guggenheim S&P 500 Equal Weight Consumer Discretionary ETF (NYSEARCA: RCD ) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings ICON Consumer Discretionary Fund (MUTF: ICCCX ), Rydex Series Leisure Fund (RYLIX, RYLAX) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. PowerShares Dynamic Leisure & Entertainment Portfolio (NYSEARCA: PEJ ) is the top-rated Consumer Discretionary ETF and Fidelity Select Leisure Portfolio (MUTF: FDLSX ) is the top-rated Consumer Discretionary mutual fund. PEJ earns a Very Attractive rating and FDLSX earns an Attractive rating. SPDR S&P Retail ETF (NYSEARCA: XRT ) is the worst rated Consumer Discretionary ETF and Rydex Series Retailing Fund (MUTF: RYRTX ) is the worst-rated Consumer Discretionary mutual fund. XRT earns a Neutral rating and RYRTX earns a Very Dangerous rating. 451 stocks of the 3000+ we cover are classified as Consumer Discretionary stocks. Carnival Corporation (NYSE: CCL ) is one of our favorite stocks held by PEJ and earns an Attractive rating. Since 1998, Carnival has grown after-tax profit ( NOPAT ) by 6% compounded annually. The company currently earns a 7% return on invested capital ( ROIC ), which is improved from the 4% earned in 2013. Over the past five years, Carnival has generated a cumulative $8 billion in free cash flow ( FCF ). Best of all, CCL is currently undervalued. At its current price of $49/share, CCL has a price-to-economic book value ( PEBV ) ratio of 1.0. This ratio means that the market expects Carnival’s NOPAT to never meaningfully grow from current levels. If Carnival can grow NOPAT by just 4% compounded annually for the next decade , the stock is worth $68/share today – a 39% upside. Amazon.com (NASDAQ: AMZN ) remains one of our least favorite stocks held by RYRTX and earns a Dangerous rating. Over the past decade, Amazon’s economic earnings have declined from $242 million to -$508 million. The company’s ROIC has declined from 27% in 2005 to 6% in 2015, which represents a clear sign that Amazon’s low margin, grow at all costs business strategy has been an inefficient use of capital. Worst of all, the expectations baked in AMZN already imply the company will be wildly profitable. To justify the current stock price of $667/share, AMZN must grow NOPAT by 22% compounded annually for the next 20 years . In this scenario, 20 years from now, Amazon would be generating over $8 trillion in revenue. Such expectations seem irrationally exuberant and make AMZN one to avoid. Figures 3 and 4 show the rating landscape of all Consumer Discretionary ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.