Tuesday, July 31, 2007

So why don't I get more BIDU?

There are a core of stocks that I've looked at, studied, even (ahem) almost worshipped over the past few months.

I'm not proud about it. I've spent more time looking at their assets than I have with human beings sometimes. One of them is Google. Another is Baidu. I could not recommend a more sound stock than Google. So the Co spent a ton of money to hire key people near and afar. They missed "expectations" by $.08. They don't even guide anyone regarding expectations, so I doubt they're overly concerned about near-term fluctuations in a stock that they'll never spli, a la Warren Buffet's Berkshire Hathaway stock.

Baidu? The revenues still don't justify the market cap and stock, but that would be like quibbling over a young Babe Ruth and his growing weight problem. Can the guy pitch? Can he hit? Baidu is going to be a hall of famer one day, and it doesn't hurt to have your friendly neighborhood goverment backing you up.

Beyond those factors, nobody can really justify or deny a valuation of the stock. Well, there's Citigroup's Jason Breuschke, who downgraded BIDU at $197, then upgraded the stock at $215. He told TheStreet.com's Vishesh Kumar that China's warp-speed growth could eventually give Baidu a market cap of $35 to $45 billion. That's a share price of $1,500.

And yet, when I decided to enter the market and get some shares at the close today, Baidu and Google were shunned.

Early in the day, I kept my promise to self and got more Nintendo shares. The ones I should've got at $36, but instead got at $52 a few weeks ago, and at $62 today. It felt right. Maybe the timing will prove to be a mistake in this choppy, brutal market, but Nintendo is No. 1 on my list of best growth stocks. A buy based on due diligence never feels wrong.

After the bell, I also got more Apple on the dip, i.e. conspiracy trap, at $134. It wasn't the bottom of today's pullback, but I'm not complaining. Apple is my favorite Co in the world. Their PowerBook brought consistency and quality to an important part of my life when all other wanna-bes sucked royally. I don't even own an iPod or iPhone, but I know greatness when it is in front of me. Steve Jobs was made for Apple and vice-versa.

I also picked up a few shares of another company for my nephew. I've promised him that I'd buy stock for him on a monthly basis. This month, after studying the fundamentals, he wanted Under Armor. More than margins and revenues, he's sold on the quality of UA's products. I just regret that I didn't pay attention to the stock until the day after UA blew out earnings expectations. At $61, time will tell whether I got the shares at a real discount. UA raised guidance for the rest of the year, like CROX did last week, so I have reason to expect a win here.

Go figure. My nephew has stock in Nintendo and Under Armor. Pretty good for an 11-year-old.

Now only if his uncle can summon the will to get more BIDU and start a position in GOOG.

Pupule Paul is long BIDU, NTDOY.PK, AAPL and UA.

Baidu's morbid TV commercial

Funny, cunning and vicious. Yeah, and morbid. Baidu's statement to Google: We will annihilate you.

Baidu makes its point

Baidu vs. Google. Think it's not a real rivalry? Think again.

This Baidu TV commercial surfaced on the internet (see above) months ago, but it's popped up again and definitely is worth a watch. Note that though the entire advertisement is in Mandarin, it is absolutely clear which character represents Baidu, and which one represents the evil Western intruder. That would be the guy in a 19th-century tuxedo, who dies a miserable death in the end.

You gotta see it to believe it. I confess, it made me laugh a little at first, but there is just so much animosity in China dating back to the colonial era and the repressive regime that existed over the native people of the country. That residual antipathy certainly flavors this commercial.

After all, would we ever see someone die in a Coke-versus-Pepsi commercial? Would someone hack up a mouthful of blood and perish in a Wendy's-versus-Subway ad?

No question about it. The Chinese intend to win, from the business world right up to the top.

Pupule Paul is a teeny bit long BIDU.

Nintendo guru to unveil new characters in 2008

This has been a tough day, a stressful one, and not just because of the volatile market. So, a little fun is in order.

Nintendo genius Shigeru Miyamoto sat down recently and talked with Dean Takahashi of the San Jose Mercury News. In the transcript of the interview, Miyamoto shared news about new characters coming in 2008.

For fans of Nintendo games and consoles, and Nintendo stock, it's a must-read. Take a break, enjoy some info from the guru Nintendo's fun core.

Pupule Paul is long NTDOY.PK.

Bargain hunting can be dangerous

A bargain hunter's paradise? Perhaps.

While most investors are staying out of the water (and I still wish ABC hadn't cancelled Invasion), I can't help but scroll through my favorite stocks at discounted prices.

• AAPL. What gives? A dumbass rumor sent this down to $131. It's still a steal in after-hours at $132.86. I know there is an issue with the iPhone's security flaw. But this is my favorite Co in so many ways beyond my devotion to this aging PowerBook. Apple will fix the problem as long as Steve Jobs is cracking the whip.

• BIDU. This got knocked down to $199 before closing at $201.98. Stellar earnings and supreme confidence by CEO Robin Li. Oh, and they have the backing of the world's toughest gang, the Chinese government. You say protectionism, I say Big Bubba got their back.

• RIMM. I'm not a fan of the Blackberry. Never touched one. But the fundamentals and growth (hello China) are astounding. RIMM shares peeled back 2.7% to $214. Bargain? Maybe.

• GOOG. Down just 1% to $510. As much as I love the Co, I just don't look to GOOG for my buys. I probably should. These guys won't split the stock, won't give guidance to analysts ... they do things right.

• CEO. Yup, I am still high on CNOOC Ltd. It pulled back a couple of bucks to $118.60 by the close. Still trading at just 11 times earnings. CEO was a steal before this correction.

• GRMN. Losing 1.3% today doesn't make Garmin a big discounted stock at $83.90. But earnings are out tomorrow, and sales are healthy. With GPS showing up in and on almost everything these days, $83 could well be a discounted price. I just wonder if slowing auto sales will have an impact right away.

• UA. Under Armor blew out earnings expectations, raised guidance and zoomed up 17% to $64.75 today. Then came the broad market selloff, along with profit-takers. At $61.41, UA is still 12% up from yesterday's close. But short interest is 50%. FIFTY PERCENT. Very compelling here. I should get some shares for my nephew sometime soon.

Maybe it's too early to wade back in. Maybe buyers will get caught in the tide. The companies that have destroyed bears with an arsenal of great earnings are lovable. More lovable when they raise guidance. Those would include UA and CROX.

Pupule Paul is long AAPL and BIDU.

Apple's dark day: Conspirators rejoice?

So is it a conspiracy or not?

I love that word, conspiracy. The answer, before I go into more detail, is no. Of course it's no. The broader question is, how did a bogus question turn into a widespread rumor and assumed fact regarding Apple's iPhone? Even CNBC's Money Honey, Maria Bartiromo, said the rumor was triggering major selloffs of AAPL on the trading floor.

Apple shares sank to $131.52 near the close and finished at $131.76 at the bell. The stock is rebounding a bit in after-hours at $132.85. The rumor apparently started at TheStreet.com, which is primarily run by a former hedge-fund boss. The stock closed with a 6.8% decline, which should cover the bases for any and all hedgies who needed to cover. That is, if you believe there has been a conspiracy.

The market in general was unkind and moody, which set the stage for Apple's lousy day. Amazon took a 5% hit and closed near its low at $78.54. The Nasdaq closed down 37 points, or 1.4%, while the Dow Jones was down 146 points (1.1%). The DJ had been up more than 140 points early in the day.

So, with three pathetic days out of the last four, have the bears taken over the market for the rest of summer? Or is it simply major selling of winners by the street to cover for sub-prime hell?

Whatever the reason, the best companies with high-flying stocks are paying the price in the short term. Who dares to buy here instead of waiting out the storm?

Pupule Paul is long AAPL.

Rain falls on First Solar

This was a recipe for the blues.

A dismal market, particularly in the final 30 minutes, sent shares of First Solar tumbling. A less-than-scintillating earnings report sent shares from a mid-day high of $122 to a post-bell low of $98.37. Shares are trading at $103.20 in the after-hours market.

Though the Co increased year-over-year earnings to $77.9 million and met expectations with an EPS of $.07, it wasn't enough to support the stock. FLSR shares gained 100% in recent months.

Recent insider selling by CEO Michael Aheam and key investors from the Walton family weren't a positive sign for First Solar longs. While the selling was a big net return at a price of $107 per share, the stock continued to rise on momentum before tumbling today.

See the Q2 earnings report here.

Pupule Paul has no position in FSLR.

Strange as it ever was

If the markets were one person, full of constant pushes and pulls, how neurotic and quirky would he be?

One of the things I enjoy doing is watching the price action on my favorite stocks. It can be addicting, watching the momentum turn in the blink of an eye. Nothing to do with company fundamentals. Just the mood of the markets near and far based on just about anything.

That's why it's sometimes best for me to sleep through the market, as if I have a choice most times. In Hawaii, it's 3:30 a.m. when the opening bell sounds in NYC. The markets are the mad genius of an uncle that you like, but don't talk with a whole lot. He does most of the talking, and you just nod your head and stay focused on the stuff he says that actually makes sense.

This morning, the Nasdaq and Dow Jones have given up huge portions of their gains. The Nas even dropped into the red while GOOG, RIMM, BIDU and AAPL simultaneously went from nice gains to negative territory. While Google and RIMM are around break-even, BIDU traded as low as $205 and AAPL sank to $135. Both stocks are rebounding off those morning lows. Amazon has struggled through the session and is trrading at $80. The stock was as low as $78 earlier.

First Solar, which announces earnings after the bell, had an amazing $10 run in the final two hours yesterday. Today, FSLR has given back a chunk of those gains and traded as low as $113, a $7 drop.

There are a handful of stocks that have held their ground.

• CEO has kept its 3% gain and is locked at $120. I wrote the other day that this moves like a tech stock. That's not quite accurate. This oil and gas Co has moved up with great strength and momentum, which would be like a CROX or GRMN. But there's little volatility in CEO, which trades at a paltry 11 times earnings. A wise man would take this opportunity. I'm not there yet.

• Another stock that's standing its ground is the aforementioned GRMN, which reports earnings after tomorrow's close. After trading sideways for a couple of weeks, the stock broke out yesterday and has resumed its climb today. Garmin got up to $88.44 before retreating to $87, a gain of 2.2%. The growing cache of products makes GRMN an intriguing tech play even as the stock has been on an incredible rise.

• CROX is holding strong at $59, with an early-day high of $59.95. The Co destroyed earnings expectations last week, and the short interest of 32% is finally kicking in today and possibly will continue into tomorrow. The Co's presence at the World Shoe Association trade show in Las Vegas probably doesn't hurt either.

• China's leading portal, SINA, is up again. Sina is trading at $43.82, not far off its high, for a gain of 3.4%.

• One of the top gainers of the day is recent IPO lululemon athletica (LULU), which is defying basic convention. LULU is up 9.3% to $32.78 in its third day of trading. The stock was as high as $34.17 earlier. Daytraders are getting the most out of this stock, which opened at $18 on Friday. Investors have been wary to enter at these pricey levels, but I think the stock won't fall too dramatically because of the Co's strong appeal to yoga enthusiasts, i.e. female shoppers.

• Yingli Green Energy is up for a third day in a row. Today's move of 2.3% to $18.59 bodes well for the small solar company from China.

• Skins Inc. is on the move thanks to buzz at the WSA trade show. SKNN.OB is up 7.8% to $2.22, near its high for the day.

• Under Armor continues to mesmerize investors and watchers alike. The Co blew out earnings expectations before the bell and traded as high as $64.26 this morning. Profit-taking hasn't stopped the stock, probably because short interest is 50%. UA is trading at $63.65.

Pupule Paul is long BIDU, AAPL, CROX and SINA.

No chink in this Armor

There's no chink in Under Armor no matter every bear's attempt to maul the stock.

UA announced its earnings report this morning and investors responded by sending the stock from $55.18 to a pre-market high of $66. The Co also raised 2007 guidance. Here's the summary from Briefing.com:

7:16AM Under Armour beats by $0.08, beats on revs; raises Y07 outlook (UA) 55.18 : Reports Q2 (Jun) earnings of $0.11 per share, $0.08 better than the Reuters Estimates consensus of $0.03; revenues rose 50.6% year/year to $120.5 mln vs the $105.5 mln consensus. Gross margin for the quarter increased to 49.0% compared to 47.8% in the prior year due to a combination of factors including the previously disclosed shift of certain customer incentives to selling, general and administrative expenses, which were recorded as discounts in the prior year. Co raised guidance for FY07, sees FY07 revs of $580-590 mln vs. $583.30 mln consensus (previous guidance was $560-580 mln); sees annual income from operations in the range of $79-81 mln, previously expected $74.5-77.5 mln.

Shortsqueeze.com lists UA's short interest at a whopping 50%, which means the pain may not be over just yet for shorts.

Funny, or not so funny — UA is one of the stocks that my nephew expressed an interest in having. Of all the stocks that I've monitored for him recently, UA had slipped off my radar. I didn't get wind of UA's earnings date until yesterday. Though the stock has pulled back to $63.50, it'll take some inside-voice debating for me to chase it on my nephew's behalf. The stock is 15% up from yesterday's close.

He wears the product and believes strongly in the Co's fundamentals. It's a good problem, or challenge, for the day.

Pupule Paul has no position in UA.

Crocs, Skins in different worlds

It probably has much to do with the current three-day World Shoe Association trade show in Las Vegas, but the Crocs-Skins comparisons are neverending.

While Crocs has unmatched distribution systems and uses low-cost kiosks to make its product available on a massive scale, Skins has neither. That's why, when a story on Seeking Alpha spoke glowingly of Skins in terms of having a Crocs-type market potential, I had to disagree. I can see Skins as a potential buyout target of Crocs down the road, but not as a true peer in footwear.

The beauty of Crocs' primary best-seller, Caymans, is that they appeal to all ages, male and female. That won't be the case with the Skins shoe, which is contemporary, but not widely appealing. You won't find many 5-year-olds wearing them once they're out, supposedly in late August.

I like Skins' marketing program and early sales. But the shoe will cater to a niche market, completely opposite what Crocs has and will continue to do. Styles aside, Skins will sell for $150-$300, which is up to 10 times what a pair of Crocs Caymans costs.

Skins is one of the buzzwords at the trade show, and shares traded up a penny to $2.06 yesterday. Pre-market shows SKNN.OB with a bid price of $2.08.

CROX is trading at $57.88 in pre-market.

Pupule Paul is long CROX, no position in SKNN.OB.

Monday, July 30, 2007

A Un

In the middle of an otherwise generic strip mall is an understated little place called A Un.

Located on the first floor of McCully Shopping Center, it isn't exactly screaming for attention.

There are no windows that let passers-by peek in, but once you're in, it's a nice, low-lit bar with a very clean, Asian-influenced aesthetic.

A few friends and I enjoyed the fried garlic, fried octopus and a few beverages. The garlic cloves were crispy on the outside, as you can see, but very tender and even sweet inside. As an absolute lover of garlic, I was in heaven. Just dip the garlic in some shoyu and I'm happy.

The fried octopus was really unique. Though I've had my share of octopus, or tako, I'd never had them like this. Little tiny octopus that I'd seen in fish shops before, but never eaten. They were very good, better than they look in the photo.

These pics came from a visit there in June of 2006. We've been back a handful of times since. Always worth the visit. Thank you A Un!

Brew Review: Pilsner Urquell

Pilsner Urquell (Czech Republic)
Appearance (0 to 4 stars): 3. If I didn't know better, I'd say it looks like Miller Draft.
Aroma: 3. Yoikes. This even tastes a little like Miller Draft (which I happen to like).
Flavor: 3. Slightly bitter. Not subtle at all. You either like it or hate it. Definite aftertaste.
Texture: 2.5. Carbonated a bit too much. Probably tastes best on a friggin hot day while you're outdoors.
Drinkability: 3.

Overall score: 14.5 out of 20. I don't remember a whole lot about the other time I had this during college. Something along the lines of it was quite potent. Or was that Elephant? Uhh...
Cost: I forget.
On the label: (I'll do this later. The bottle's in the fridge and I only poured half of it out.)

Nice top

Yared sees CROX at $80 in 12 months

Whether his brilliant pieces show up on Blogging Stocks or Seeking Alpha, Georges Yared delivers the goods.

The Yoda of the bull market brings truth in the face of doubters, bears and shorts all the same. Today, he wrote about CROX's blowout earnings report at Seeking Alpha. Yared also raised his target price to $80 for the next year.

He hasn't been wrong yet.

Also, here's a link to Zacks Equity Research's "Bull of the Day" piece. A quick excerpt:

We maintain our Buy rating and increase our target price from $54 to $70.

I wonder what the time frame is for Zacks' target price.

Pupule Paul is long CROX.

Comparing LULU with feet on the ground

With lululemon athletica (LULU) on the minds of many traders and investors, here's a nice piece of comparative analysis at SmartGuyStocks.com.

It's no surprise, of course. Good as the Co is, it's a matter of time before valuation kicks in and the stock price levels out. I'll be watching the promising growth stock closely.

Pupule Paul has no LULU.

Focus Media, Sina ready to bounce?

Focus Media stock has been in a seemingly bottomless pit for a few weeks now.

Not that FMCN has hit the bottom. More like the stock tripped off a cliff and is clinging on to a stray tree root, finding its footing on a ledge. That's what life with a delayed earnings report and an impending hearing with Nasdaq will do. Since hitting a high of $50 a month ago, the advertising company plunged to $44, then rallied up to $52.

Not all was well, however. Investors lost patience as the Co did little to explain the delay other than a situation involving two letters from a short seller regarding company activity in 2005. The stock hit $40 on Friday and today, showed some resillience with a minor gain.

American Bulls has FMCN on confirmed "Buy" status after today's market. The site also has a confirmed Buy on another Chinese stock, SINA. The stock ended a down turn by rallying for a 1.4% gain to $42.39 today.

Sina, the country's top portal, is relatively active compared to volatile stocks like Baidu. Speaking of Chinese stocks, China Analyst has released its list of U.S.-listed stocks from top to bottom in gains and losses year-to-date.

At the top is Trina Solar, with a gain of 228%. In all there are 86 listed stocks. While newer companies like Baidu rank pretty high (eighth), long-established stocks like China Mobile (CHL) and Aluminum Corp. of China (ACH) are among the Top 15. The success of Chinese stocks begs the question, of course, of whether they'll survive if and when the rising inflation rate gets out of hand there.

Pupule Paul is long FMCN, SINA and BIDU.

Alias babe and baby Crocs!

Yeah, I added more Crocs at the open today. I never plan to buy at the open. If anything, I normally buy at the close.

In this case, it was just as well since it was 3:35 a.m. here and I was about to fall asleep for the rest of the market. But that's not why I write. I just couldn't resist posting this link to Celebrity-Babies.com. Why? This link shows Jennifer Gardner and her baby, Violet. Guess what Violet's wearing on her teeny little feet? Thats right. Baby Caymans!

Or as they're officially called, "Mary Jane" Caymans. I see kids here in Honolulu wearing this shoe, too, in different colors. Orange seems to stand out the most.

But back to the Alias babe, Jennifer Gardner. Isn't that a cute pic? I love my Crocs.

Pupule Paul is long CROX.

Doc points to Dendreon's 'drug company incompetence'

Count Dr. Charles "Snuffy" Myers as one of the latest cancer specialists who faults a cruddy trial design by Dendreon as the primary reason for the FDA delay in approval of vaccine treatment Provenge.

His comments are available at PharmaLive.com. Here's an excerpt.

"Dendreon made major and obvious mistakes in developing Provenge. The FDA is not some sort of bad guy -- at least in this case and yet Dendreon's stock continues to rise," Myers' says. "The primary end point of a clinical trial seeking FDA approval should be either survival or improved quality of life, but Dendreon still chose to muddy the waters by changing endpoints midway through the clinical trial, forcing the FDA's hand with their poor design."

"This is actually the second time that we've had a useful drug fail in development. The other was Atrasentan (a.k.a. Xinlay)," Myers adds. "Again, it failed not because of the FDA but because of drug company incompetence. While the FDA is far from perfect, people need to understand who to blame in this case."

Myers, a prostate cancer survivor, writes for the newsletter ProstateForum.com.

Pupule Paul is long DNDN.

How far can the Wii go?

They use the Wii in gyms. Real gyms.

According to this story at Gaming Today, actual gym members at Studeo55 in Vancouver use the Wii for a workout. Boxing, tennis, bowling, they're all practical.

I just wonder what'll happen when The Sims is available on Wii.

Lowering the anchor at Nintendo Island

No, I'm not emotionally attached to my stocks.

OK, I am. A little. But not a lot. I don't even own a Wii, and my old PS2 has been collecting dust for a couple of years. And yet, when I cancelled my order to buy more shares of Nintendo this morning, I wondered if I'd regret it later.

Oh, I plan on getting more NTDOY.PK, no question about it. In fact, Nintendo is on my personal little list of Top 10 growth stocks.

1. Nintendo
2. Apple
3. Crocs
4. Baidu
5. Research in Motion
6. Google
8. Amazon
9. Foster Wheeler
10. (I can't find a stock that truly belongs here. Yet.)

So, my portfolio should reflect my analysis and gut feeling. Why didn't I push the pedal on Nintendo? I wanted a discount. I sort of got one. NTDOY.PK traded in the $62s when I pulled my order and then went down to $61-plus.

More than that, though, were other stocks that I want at a discount. I went and added a few more Crocs. Baidu was compelling at $207. The entire list was alluring, and there were also those small caps that I never seem to let go of. And then there were the IPOs like LULU and PWRD.

Ultimately, I need more Nintendo, but at the right price. I will not regret a buy there. Same with Apple in March. Now I know that Yingli may just go up with or without me. Same with other solars like Suntech (STP) and First Solar (FSLR), even if the latter misses earnings expectations tomorrow.

It's time to establish great anchors, and Nintendo will be at the top of my list again tomorrow. But I'll still rather buy shares of the Co than buy a Wii. For now.

Pupule Paul is long NTDOY.PK, AAPL, CROX and BIDU.

Like GRMN, amazed by CEO, in luv with AAPL

They're pricey, sexy and so unlike each other.

Garmin traded up 6.4% to $85.07 today. Even with slowing auto sales domestically, GPS is still a must. Garmin has made a lot of money for traders, but entering at this point is something that spooks me. I need to learn more about GRMN since I'm such a tech toy novice.

CNOOC Ltd. traded up 3.4% to $116.75. It moves like a tech stock. How does an oil and gas Co move like a tech stock? Amazing. I wrote about CNOOC over the weekend, and though I've been watching this for months, I just can't pull the trigger. During that time, the stock has ballooned without getting too puffy.

What I mean is, CEO trades at only 11 times earnings in a land that needs more and more energy. Sure, alternative energy is bumping up in China, but the need for CNOOC growth is real. Today's rise ended a four-day skid, but volume was mediocre, so I'll stay on the sideline with binoculars.

What about my favorite Co? That would be Apple. Though I consider Nintendo as a stock that has more upside, AAPL will still kick arse. I feel a little queasy about adding more shares without more info about the security flaw in the iPhone, but ultimately, I trust Steve Jobs as much as any CEO. They get serious work done there at Apple. Underpromise. Overdeliver. Basic tenets of great business.

AAPL pulled back to $139. I hesitated. It closed at $141.43. I'll hold out until after this week's Black Hat hackers conference. If AAPL has a solution for the iPhone problem, I want to shake the tree and collect more Apples.

These three stocks are in different worlds — wait, does the iPhone have a GPS system? — but longs are are happy bagholders, indeed.

Pupule Paul has a tiny position in AAPL.

LULU certainly no lemon

The more I read (and write) about lululemon athletica (the Co spells its name lower case), the more I like. It made $149 million last year despite a small market (Canada).

The recent IPO offering gives LULU a chance to broaden its horizons near and far. Having fiscal muscle makes a big difference. The stock traded up to $29.98 today, pulling back from a mid-day high of $31.85. LULU has a cultish quality thanks to its yoga roots and trademarked fabrics like Luon. As yoga grows in popularity across the U.S., lululemon products will succeed. After all, more women than men are into yoga, and women will spend money on quality fashion.

Nothing beats first-person testimony at the gym.

Pupule Paul has no position in LULU.

Hoku, Dendreon longs feel the pain

While I view some of my favorite stocks as pricey, they're doing better than small-cap underdogs HOKU and DNDN.

Hoku took another pummeling today, down 2.6% to $9.04. It's been a steep decline from a recent high above $14, but it's not a shock considering the Co is, at earliest, 18 months away from producing polysilicon. I'm bullish on the Co, but I'll wait this out before picking up more shares.

Dendreon had a freaky moment early in the day when CNBC's Mike Huckman gave viewers a teaser about the Co. That sent the stock on a wild ride from the $7.50 range to $7.93 in less than 10 minutes. Turns out, Huckman was referring (on his blog) to a lawsuit filed in Ohio against FDA honcho Andrew von Eschenbach in regards to prostate cancer immunotherapy treatment Provenge.

It didn't take long for buyers and sellers to get the marbles back into their heads. DNDN closed the day down 2.1% to $7.51.

Pupule Paul is slightly long HOKU and DNDN.

Perfect World, indeed

What about Perfect World?

The online gaming Co from China continues to score IPO gold. PWRD moved up 10% today, and now has run from $16 to $28 in three days of trading. This is on $11 million in revenues and $5 million in earnings. I'm not hating on PWRD. Just wary that the stock will cool off sooner rather than later. That's when I'll take a better look at an entry point.


Pupule Paul is not in a Perfect World.

Skin and Bones

Skins Inc. is compelling, but without a product for sale (yet), it's hard to jump in with two feet after the stock has nearly tripled in two months.

Word from the WSA trade show in Las Vegas was quiet. Rumors abound about another delay. But regardless of delays, I want to know how a Co with a niche appeal and no clear distribution system will sell a $200 pair of one-of-a-kind shoes.

I appreciate the cultish quality of any cool product. There's true devotion when a product really works well and looks great, which is why I ditched crappy PC laptops in favor of my PowerBook three years ago. But when I think of Crocs and its mass appeal, selling through kiosks (low cost, high returns), and a spectacularly effective distribution system, how can I be optimistic about SKNN.OB?

Time will tell, as always. The stock traded up 1 cent today to $2.06, retreating from a high of $2.12.

Pupule Paul has no Skins.

Bargain hunting for the best

I thought CROX, BIDU, RIMM and AMZN would be discounted buys today.

What's not to like about these four? They all blew out earnings recently, and CROX, in particular, has strength in two places: short interest of 32% and the stock is still down almost 5% from its high last week. Crocs had good news today on two fronts, which probably didn't hurt. I added CROX at $57, but left the other three alone.

BIDU kept pulling back to $207 after nearly hitting $212 earlier. I don't see the stock staying below $219, its all-time high, for very long. And yet, I kept waiting for a bigger discount. Maybe I'm too greedy. I don't necessarily think BIDU will be a $1,000 stock soon, as a few people think, but it's going to keep climbing whether anyone likes it or not.

RIMM is back in the green, up 2% to $220. Maybe it's a Blackberry thing, but since I've never touched one, I just don't feel any passion for the product or Co. Maybe that's something I need to work on, because I know the Co is extremely well run, and the creativity there is superb. Plus, recent inroads in China will yield more revenue.

Amazon has an amazing history of execution, and Jeff Bezos is one of the best CEOs on Earth. When he finally rockets into space, he'll be the best CEO out there, as well. But Barron's call for profit taking was silly. It'll be another day, perhaps, before the selloff settles. AMZN was down from $84.03 to $81.51 today before closing at $82.70.

That's a big discount price, and as Georges Yared writes, institutional buying will be the next chapter for AMZN. But I'll hold out another day or two. I'm learning to love a bargain, especially for one of my A- picks.

Pupule Paul is long CROX and a teeny bit BIDU.

Solar on fire from FSLR to YGE

The solar kids don't even know a storm just passed.

They just keep running around in glee. First Solar, with questions hovering over whether it'll make earnings expectations of 7-8 cents per share, finished strong today. While I slept (5-10 a.m. Hawaii time), the stock languished around $110 for much of the session. Then, with two hours left, FSLR went crazy and climbed to a $120 close.

With earnings due out tomorrow, did somebody leak something? Perhaps drawing a residual effect, tiny Yingli Green Energy moved up 6.4% to $18.16. YGE has spent the early part of the day up about 20-40 cents before making the move for a gain of $1.09.

Shares of YGE were at $16 just two sessions ago. Will it pull back or trade with its sector?

I think of First Solar as overpriced, especially after today's 8% run to $120. This Co doesn't even have more revenues than tiny Yingli. What FSLR has is a unique product and major financial muscle, i.e. the Walton family, and scored a $1 billion secondary offering recently. That's clout. Still, I might step into the Yingli Green House simply because of the sector's heat and Yingli's location. China is spending big on alternative energy.

A buy into Yingli would be counter, in a way, to my small holding in Hoku Scientific. The latter has a non-binding contract with a Yingli competitor, big boy Suntech. I like the fundamental numbers of STP very well. STP traded up 1% to $39.89.

Can FSLR run up again tomorrow before earnings? After trading sideways since July 9, today's big move on strong volume is clearly bullish. Hmm...

At this point, STP looks like a safe investment compared to its peers in the sector, while YGE has a lot of upside. I can't let go of FSLR though, because of its "thin film" technology. Cheaper to make, not quite as efficient as silicon ... but profitable.

How much so? Tomorrow's earnings report awaits.

Pupule Paul has no position in these stocks.

Crocs keeps moving forward

Good news for CROX shareholders on two fronts this morning.

The Co announced an agreement to acquire Bite Footwear for as much as $3.5 million should Bite hit earnings targets. Crocs will implement its proprietary Croslite into Bite's products. Also, at the WSA trade show in Las Vegas, Jibbitz will unveil a new line of customizable hand bags and messenger bags. Jibbitz is entirely owned by Crocs.

As usual, Crocs CEO Ron Snyder and his board aren't about to sit still. Ever. They're in acquisition mode 24/7, and Crocs will continue to increase earnings thanks to a highly effective distribution system.

CROX is trading up 1.4% to $56.51 in pre-market action.

Pupule Paul is long CROX.

Who's the Lulu now?

You may or may not care for stock blogs that don't include "real' names of their writers.

Me? I don't mind. When the information is pertinent and accurate, I don't mind at all. When the writing is entertainment, even better. That's why I feel compelled to pay closer attention to lululemon athletica (LULU) — yes, the Co writes its name in lower case — as it hit big on IPO day (Friday). All because of the Talented Blonde.

She first caught my attention with her bullish stance on Crocs a few months back. I'd already bought my first few shares, but I always like to see more analysis regardless of which side the writer is on. With her lululemon post, titled "Is Lulu a baby CROX?", she provides a first-hand customer point of view, as well as a quick summary of the Co's fundamentals.

LULU priced at $18, the high end of projections, and closed at $27.61 on its first day of trading. Until Aug. 2, the stock trades on NYSE as LULUV.

Out here in Hawaii, I'd heard of the Co only recently in IPO media coverage. Besides, being a middle-aged male, women's fashion might as well be nuclear science for me. lululemon's roots are in yoga, which would be another form of an alien activity to me, but there's no denying its popularity.

Back in March, when the IPO filing was announced, Luke Sklar of market research firm Sklar Wilton & Associates pointed to lululemon's unique technology. Interviewed by the Financial Post, Sklar gave Lululemon's proprietary stretch fabric, Luon, a big thumbs up.

"Women are convinced it makes their butts look better," Sklar told the Financial Times.

If Luon, Silverescent and Vitasea sound like a magic potions and bring to mind Crocs' dynamite Croslite material, you aren't alone. Though LULU has upside, its products are high end, nothing like Crocs' affordable, long-lasting sandals. Unlike Crocs, Lululemon has been the object of suitors like Nike in the past.

With sales at $149 million in its last fiscal year, LULU has some legs to stand on. Whether it's a buy at $27 on Day 2 of public trading, time will tell.

Pupule Paul has no position in LULU.

Studying Solar: First Solar

Can Yingli Green Energy or any other solar Co take a First Solar type of rocket ride?

FSLR went from $27 in January to a recent high of $119. At a current PPS of $110, FSLR has a market cap of $8 billion with a P/E of 479, forward P/E of 95 and a whopping PEG rate of 3.10.

Unbelievably, FSLR has revenue of just $188 million, lower than Yingli. The company raised $1 billion recently in a secondary offering at a price of $107 per share. The offering is a huge boost, obviously.

One of the biggest differences between First Solar and Yingli is quarterly revenue growth. FSLR's rate is 391%. The Co has $324 million in cash and total debt of $95 million. Positive. Though there are 73 million shares outstanding, only 18 million are in the float.

Forbes.com reported that CEO Michael Aheam and members of the Walton family have filed with the SEC to sell shares. Aheam plans to sell roughly 15% of his holdings, while the Waltons will sell about 10% of their stake. The Waltons own 53% of the Co.

Tomorrow is a big day for First Solar. Earnings will be out and expectations hover around 7 or 8 cents per share. Short interest is 18%. The narrowest miss could send FSLR for a slide, so I don't anticipate buying shares until after tomorrow.

It's certainly a lot of information to absorb for a solar ignoramus like me. Is FSLR's dedication to cadmium telluride — less efficient yet more affordable than silicon — the wave of the future? The market says yes. What makes this a little more interesting for me is that I've been highly interested in Hoku Scientific, a company that is planning to build a facility in Idaho for polysilicon production.

Yingli, First Solar, Hoku. Being a lifelong resident of Hawaii — I've never understood why solar energy was never a focal point here — the sector is nothing short of fascinating to me now.

Pupule Paul has no position in YGE and FSLR, but is a bit long HOKU.

Studying Solar: Yingli Green Energy

Last night, I did something I hadn't done in weeks, maybe months. I visited a dozen or so blogs that I'd bookmarked back in February, March and April.

Some folks go fishing on Sundays. Hopefully, I'll make a habit of visiting some of the most compelling stock bloggers around. I can't recall which of them suggested YGE, but looking at this solar company's numbers has me pessimistic.

Yingli Green Energy is yet another Chinese solar power producer that is somewhere between the land of speculation and the forest of riches. China is, of course, pushing hard in alternative energy. Air pollution is a major problem, shortening lives and endangering basic health in many cities. The problem is growing, extending to rural areas that are becoming more industrialized.

At a PPS of $17.07, Yingli is trading 58% higher than its opening-day close of $10.80 on June 8. The stock traded at a high of $20.40 on July 12 before pulling back for the next seven sessions to $15.01 on July 20. Five sessions later, the stock seems to have consolidated, even through the selloff in the Dow Jones and Nasdaq.

YGE has a market cap of $1.1 billion on revenues of $246 million. The stock trades at 266 times earnings. Not a typo. The forward P/E is 2.8. Again, not a typo.

PEG is 1.30, pretty robust. Profit margin is 10% and operating margin is 20%. While quarterly revenue growth is 113%, quarterly earnings growth is negative (-66%).

The Co has less than $14 million in cash with debt of $187 million. Not impressive.

There are 64 million outstanding ADSs with a float of only 26.6 million. I'm almost 100% sure that the difference is because of government holding in the Co, as is the case with many Chinese stocks.

Only one brokerage house, CIBC, has any coverage. CIBC rates YGE "Sector Perform." Some big names were involved with bringing the Co public. Goldman Sachs was global coordinator, UBS AG led underwriting, along with Piper Jaffray and CIBC. (Piper Jaffray is owned by UBS.)

I'll continue to watch this Co. Why? I haven't paid much attention to solar stocks, with the exception of Hoku Scientific, which hasn't been a solar-oriented Co for very long.

Is there any logical way to explain a 60% spurt for a Co. that is basically losing money and has little significant revenue? Not really. The only explanation is that Yingli is in a hot sector in a fast-growing mastodon known as China.

Extra point: YGE does have a new contract to provide modules to Control y Montages Industriales CYMI S.A. of Spain. Coincidentally, Spain is also where First Solar does business.

Pupule Paul has no position in YGE and FSLR, but is a bit long HOKU.

Sunday, July 29, 2007

Brew Review: Rogue Dead Guy

Rogue / Dead Guy (USA)
Appearance (0 to 4 stars): 3.5. Though I poured it slowly as always, it's sudsy at the top, caramel colored underneath.
Aroma: 3. Nice, but nothing unusual, unique or special.
Flavor: 3. Nice, goes down good, probably tastes better with a meal.
Texture: 3. A bit too carbonated for my taste. When I want fizz, I drink a 7-Up.
Drinkability: 3.5. I may sound like I'm complaining a lot about this brew, but it's actually solid. In the back of my mind, Dead Guy compares rather unfavorably it to the great brews, but it is still far, far superior to Budweiser.

Overall score: 16 out of a possible 20.

Cost: $5. 650 mil, fairly big brown bottle.
On the label: A eye-catching dark red label with a skelton guy sitting on a barrel. Rogue makes a number of different brews, and this is the first of many I'll be tasting by them this year. The company is based in the Northwest, hence the proud old English banner at the bottom: "Oregon Brewed".

See more at the Rogue Brewery site.

Rumorville: No Blu-ray for Wii

Between Blu-rays and Wiis and all things techno in between, it's fascinating.

The latest squashed rumor was about Nintendo R&D using the Wii as a device to watch movies via Blu-ray technology. According to docadamsaudio.com's account of a GameHead interview, someone outside the Co stumbled into the R&D department at Nintendo and all heck broke loose.

Sounds too much like something out of a 1970s Kikaida-Dr. Gill-Dr. Komyoji encounter.

In any event, Nintendo of America chief Reggie Fils-Aime promises a "surprise" in September. Oh well. I won't be holding my breath. I care more about the Co's stock than its games and technology. That could change, however. That Wii thingamajig is truly hypnotizing.

Saturday, July 28, 2007

To Skins or not to Skins

That's right, Skins Inc., the latest hot footwear Co is on my radar. In earlier pieces, I noted that the Co will present its first shoe at a footwear conference. Well, that conference begins on Monday, and there's optimism (again) that the shoe will be available to consumers in the coming week.

For the longs who held tightly to their shares through major volatility (from $2 to 76¢ in May), yesterday's closing price of $2.05 is vindication. With a float of 22 million shares, only a speculator would step in and buy on Monday. How many traders are going to trade the conference with a 100% or 150% gain? How many traders are going to add shares on the conference, knowing that the shoe is finally going to hit the market soon (they hope)?

My biggest question about the Co is whether there's a large enough niche out there for a shoe with a transplant insole, or "bone." The marketing site is impressive and the shoe looks like art. The Co — and inadvertently, shareholders — went through pains and delays to find the right maker, which wound up being in Italy.

Again, a niche in the footwear industry, appealing like Crocs, but very different in terms of potential demographics and breadth. Crocs shoes cover the gamut. Skins is appealing to a certain category of shoe wearers.

There are also questions about the Co's insider selling. Director Stephen Hochberg sold 150,000 shares in eight transactions during Q2. His sale prices ranged from 80¢ to $1.34.

Still, there's something to be said for a Co that has a cultish following. I'm not bullish on SKNN.OB at $2.05, but I'll be watching closely on Monday.

Is it time to scoop up your favorite stocks?

Was this February 27 all over again?

Thursday and Friday's selloffs had that gloomy feeling for investors in indexes and blue chips on the Dow Jones. For tech stocks, however, many longs were giddy.

If the two-day selloff proves to be a healthy capitulation, Monday could be buy-in time for some of my favorite stocks.

This has been a great stock in the past two months, a gas and oil company that thrives in the shadow of its big brother, PetroChina. CNOOC (CEO on the NYSE) traded in a range of 80-92 from August to June, but soared to $124 by July 17. A minor pullback to $112 since then came with the territory. This stock trades at 11 times earnings. Cheap? I think so.

In addition, a new contract with Guandong province (that's Southeast China's hot province) is a first for the province and a sign of more revenue to come. Only one-third of the total shares outstanding are publicly traded (145 million), while margins are insanely attractive.

Profit margin is 34%, operating margin 48%, return on equity 34%. Even CNOOC's gross margin of 64% trumps PetroChina (60%).

China's 11.9% year-over-year growth for Q2 is a highly bullish sign, and CNOOC is in position to benefit the growth and investors alike. This is a B+ pick that I've never pulled the trigger on, but boy, is it tempting.

[Ed's note, Sunday, July 29: Reuters reported on Friday that Warren Buffett has sold nearly 17 million shares of PetroChina. How this affects CNOOC, we shall soon see.]

High P/E. Yes. Nobody in his or her right mind would argue that a P/E of 45 is low.

Priced to perfection? Sure. Despite blowout numbers, AAPL ($143) is nearly 4% off its high based on no news in the past two days. The stock is prone to profit taking and volatility, but there's also no arguing with mammoth revenues and fierce growth.

No corporation has mastered the art of marketing, cost control and distribution better than Apple. Is it a buy here? Let me put it this way: If your long-lost billionaire uncle gave you free shares of AAPL, would you turn him away? Of course not. If he came to you with a plan to give you AAPL shares at a 4% discount, would you accept?

Apple longs would, cash reserves not withstanding. One item clearly worth noting is the iPhone's security flaw. That issue will be pushed hard at the Black Hat 2007 conference next week in Las Vegas. In other words, Apple has one week to get this problem fixed before the gang of hackers gets its claws on the product.

Georges Yared, the Yoda of the bull market, insists that big houses are going to march into this stock en masse in the coming weeks. I can't doubt him. He's been right, accurate and precise.

AMZN at today's $84 price may seem pricey compared to Tuesday's $69 bargain. The Q2 earnings report changed everything. Again. Two down days since the run to $88 on Wednesday may have given believers a chance to buy another winning ticket.

And if Yoda is right, you best move quickly.

A Chinese search engine with 100 times less revenue than Google. How will BIDU win in China? One, Robin Liu is a seasoned veteran of the search engine wars, going back to his start at Infoseek. Two, the Chinese government is clearly protectionist when it comes to homegrown corporations that have great potential. That includes Baidu.

The stock is down from its lofty post-earnings high ($219) and closed down 2% to $204 yesterday. A miniscule float (19 million shares) makes this rocket another tempting buy.

Rick Aristotle Munarriz is the only Motley Fool writer I have consistently agreed with. Check out his piece on Baidu's prospects.

Yes, CROX. Considering that the stock is up only 11% from its pre-Q2 earnings report is staggering. Shares have come down nearly 7% from their mid-day high of $59.

With the Co guiding expectations higher and growth continuing to shoot through the roof, this is another stock that is on the verge of increased institutional buying. Or so it seems.

I've entered the stock at $40 and $50, and another entry at $55 is highly reasonable. Short interest is 32%, giving longs two proper reasons to expect another climb to new heights.

The run to $61 has been fueled by pure, blissful numbers. Where NTDOY.PK will finally stop, nobody knows. The way the stock has run since November, this breather off the earnings numbers is normal. However, trying to time an entry point is tough. There is no sign of bad news for the Co as long as the Wii sells like crazy.

The stock pulled back significantly today in Tokyo, but only $1 on the U.S. pink sheets. Tough call short term, but long term, $61 or $63 won't matter a ton. This is going up, up, up.

Electronic Arts is sorry it missed the boat, but who can blame them? A couple of years ago, most gamers viewed the PS3 and Xbox as the wave of the future, and so did EA, which developed only two games for the Wii at the start.

My goodness, imagine how much Wii revenues will expand as every gaming company, including EA, jumps on the bandwagon.

It's a Perfect World (so far)

Chinese stocks tumbled yesterday, but what about IPO baby Perfect World?

You may have heard about this gaming company, but how many of us actually know much about their revenues and margins? On Thursday, PWRD opened at 11 a.m. Eastern time with a $16 tag. By day's end, PWRD traded at $20.

Yesterday, PWRD finished at $25.58, a 60% gain from Thursday's open. With a tiny float of 11.8 million shares, this stock will certainly crash as quickly as it rose. The question is, when?

Perfect World develops three-dimensional online games. Its role-playing games include: Legend of Martial Arts, Zhu Xian, Perfect World and Perfect World II.

Earnings? Yes. The Co earned $5.1 million on more than $11 million in revenues as of Q1. Thursday's IPO and Friday's hot close gives the Co a market cap of $302 million.

Perfect World's SEC filing is pretty cool. It even has art from the Co's games.

Yared knocks it out of the park with Crocs, Kyphon

Georges Yared speaks.

You might want to listen. The Yoda of the bull market rang this week two more stocks he has put on a pedestal for a long time: Crocs and Kyphon.

In his analysis of Crocs' earnings report, Yared points to the Co's marvelous distribution system and stupendous margins. For me, the fact that there are still haters of Crocs' stock and products means that short interest — currently 32% — will still be around to boost the stock to infinity and beyond.

Kyphon, one of Yared's 25 Stocks for the Next 25 Years, is the third from that group to be bought out in the past month. The medical device company will be sold to Medtronic for $71 per share. When Yared selected KYPH on May 14, the stock was at $45. That's a nice gain of 57%.

Yoda has struck again.