Massive crash, down more than 20% in the last few days. I can't find any news other than the general bear sentiment in the Chinese market following the fear of a massive flu pandemic. Momo had rallied for weeks, so probably a lot of people that wanted to secure some profit. I expect this fall to be short lasting and should bottom out at between 27 and 30.
I will have to adjust my near term target, after what seems like some profit taking and noise from Chinese flu panic (hopefully it will get under control soon)
Seems to be correct so far:)
Yandex is the Russian Google. The company was founded in 2004 and provides search engine related services, online advertising, classifieds, email and various tech products such as cloud computing mainly in Russia and eastern Europe. The stock crashed 25% in october 2019 when the Russian legislation tried to pass laws that let the government have total control of all email and online communication activity. The fear of this becoming a reality rapidly evaporated and the stock has rallied 50% in the past couple of months.
Yandex has super strong moat and are expected to grow earnings and revenue at more than 30% for the next few years. They have no debt and loads of cash. Current valuation is at a P/E of 46 with a forward P/E of around 25. Taking the extra risk of operating mainly in Russia and compared to the rest of the Russian market the current price is somewhat steep and depends on Yandex really delivering on their growth targets. The current price is also closing in at all time highs at a level that the stock price has not managed to break the previous 4 times it was this high, we might therefore see a retraction in the short term.
I'm expecting a slight upward trend over the next couple of years.
Momo Inc is a Chinese social entertainment platform founded in 2011. The company has has an explosive growth in revenue for the last few years with a 50% yearly growth in 2018 and 2019 and at the same time posting great earnings with a profit margin of 15-25%.
Momo is valued at $8billion. The market leader YY is valued at $5 billion even though their revenues are 30% higher, reflecting the markets belief in Momo's continued growth. Both companies have about the same forward P/E of 12, which is indeed very cheap for fast growing companies. YY however has a more solid balance sheet with less debt and almost twice the cash reserve.
2020 will be very interesting as people will be very curious to see which of the two companies manages to grow faster and wether Momo are closing in on the market leader. If they do manage to do this it would be super positive for the stock price development. On the other hand, if Momo posts a bad quarter with declining user growth the stock will be punished hard.
I believe Momo will increase over the next two years, but it will be a bumpy road.
58.com is the leading classifieds site in China. The competition is increasing, but at the same time the Chinese classifieds market is growing fast.
58.com had a ok 2019Q3 with good YoY growth in revenue and earnings, but the user growth in their main business areas was less impressive. The market however seemed more impressed than me and the stock has gone up with 30% since mid november 2019.
The company is super solid with a strong balance sheet and no debt. The stock price is closing in on a technical resistance level at around 68 and the stock might have problems blowing past that level in the short term. I expect a slightly upward trend going forward over the next two years.
Apple is of course a legendary strong business with super strong moat. People with iPhone and Mac's don't really care about the price, they just are not interested in changing to something else that's cheaper. They are up 100% in the last year and almost 30X from 2008!
Their expected growth is however moderate compared to other tech companies and their pricing of P/E 26 is expensive, but same as the market average. They are trying to capture market shares in streaming etc and this might prove to be expensive, but for a $1 trillion company with $100 billions in cash they can affard burning some cash.
I expect a flat development within a narrower range than I would normally set.
Zynga is a company that creates social games across multiple platforms. The company was founded in 2007 and based in San Francisco and have had a slow return from the dead after their stock plunged 85% back in 2012 when they has problems following up with new titles after successes as FarmVille and MafiaWars. After managing to turn things somewhat around, posting a topline growth and positive earnings in 2018 the stock is up more than 300% since 2018.
Their balance sheet is super strong with $1.4 billions in cash, $560 million in debt on a $7 billion valuation. Their current valuation with a P/E north of 100 is based on Zynga managing to reach their growth expectations of about 30% in earnings and revenue growth per year over the next few years.
The social gaming space is crowded and the stock price development depends on Zynga managing to deliver on the high revenue growth expectations that the market has. One slightly bad quarter can make the stock crumble. I set my price expectations in a broad range without much upward movement.
Express is a fashion retail company, mainly operating in the US with a total of about 630 stores and an ecommerce website, but also with franchisees in Latin Amerika. It offers clothing and stuff for men and women. The company has seen declining revenue and declining earnings over the last few years. In 2019 the company posted slightly negative earnings for Q1 to Q3 and stock holders saw the price crashing, but since the bottom in september 2019 the stock is up about 150%, partly as a result of the management launching a share repurchase program in late 2019, but it's still down 80% from the top back in 2013.
Express Inc has a super solid balance sheet, no debt and 170 million in cash on a market cap of 300 million. The market then clearly expects the company to slowly die, which is understandable given that the company's exposure to physical stores is huge and almost no one expects shopping malls to be the future of shopping.
Express Inc is trying to renew itself and launched a new brand strategy and got a new CEO in 2019. The company clearly still has a lot of runway with it's cash reserve and the development will thus be totally dependent on if the company can manage to renew the publics interest in their clothing. The 2019Q4 results will have a huge impact on the price development as investors are waiting to see signs if their new strategy works or not.
I think the company will manage to be successful, at least in the short run to increase their sales and earnings and I'm therefore bull. I don't have any great reasons to believe so, but I have taken a closer look at their website and I like what I see. Also the management shows confidence in the future by starting the share repurchasing program.
The messaging/picture/video app that only people under 25 understands how works went public in early 2017. Since then they have been busy losing money. Snap has had a bumpy road, falling 75% from 22 to 5.5 and now back at 17.3. Snapchat’s user growth slowed to almost nil in 2018, but for 2019 they grew their daily active users form 186 millions to 210 millions. They have also worked more on monetisation lately and their revenue growth exceeds their user growth and they are expected to grow revenues by 25%/year for the next few years before finally maybe posting their first earnings in 2023.
Snapchat’s cash reserve of $2.3 billion might just be enough if everything goes as planned, but things seldom do, so I give it a 60% chance that they need to issue more shares to finance their losses.
The main question, as it so often is, is if Snapchat has any real moat? They definitely got network effects, but I don’t think they will be able to capture enough of the more mature people in the market in competition with Facebook in the west, and local varieties around the world. The service do have an impressive user base and can definitely be the target of a takeover, but I if that happens I belive it will be on a far lower price level.
Their valuation of 16 times sales is almost all based on future hopes and dreams and the ride is therefore likely to be rocky going forward, but downwards I think.
Sina is a Chinese online media company that has been around since 1999. Sina provides news related products in a whole range of different verticals. Sina has not been an enjoyable investment, falling 70% from it’s top back in 2010! What makes Sina interesting is not it’s media news business (Who cares? Definitely has not exited investors for the last decade), but their 46% stake in Weibo (Chinese twitter). Sina’s current market cap is $3 billion and their Weibo shares alone are worth around $5 billion, AND they’ve got $2.9 billion in cash. They do have some debt and are currently priced at P/B 1.
Apparently it seems like investors are afraid that Sina will be busy burning cash for the next few years, ensuring that the investors never will get their values realised. Recently however Sina announced that they will buy back $500 million worth of their own shares, which built some confidence in investors that Sina’s management is not complete idiots after all. The share quickly increased by 20%.
Sina then is mostly about Weibo. The Weibo stock is down about 64% from the top, maybe somewhat because of their slowing growth. Weibo is however very profitable and with $2.4 billion in cash, giving them financial leeway.
Sina’s own media news business is actually still growing and they are profitable and priced at a forward P/E of 15.
I believe Sina is way underpriced and may be target for an acquisition. Their core business is not sexy and Weibo have had some issues lately, but Sina’s share repurchasing program seems to me to prove that their management are intending to realise shareholder value.
The number one online streaming platform in China. With services aimed at gaming, dating, music, live performance etc. YY is trying to expand globally and acquired the Singapore based live-streaming app Bigo-Live in the second quarter of 2019. The YY stock has fallen 55% from the top in 2018, which partly can be attributed to declining earnings, increased competition and a negative sentiment in general for Chinese tech stocks.
YY posted a $963 million revenues for 2019Q3, representing an immense 68% YoY growth, but their earnings fell from $90 million to $15 million. Attributing the poor development in earnings to implementing Bigo-Live into their business. The live streaming space is growing rapidly and YY's main competitor Momo is at least for now growing even faster (Momo is valued at far steeper multiples than YY) and YY is trying to dominate the space and grow globally - which for now they seem to be very successful at.
YY is valued at around a $5 billion market cap with a trailing P/E of 15, forward P/E of 12, P/B 1.1, very low debt and super solid balance sheet.
I believe YY is way undervalued. Their business has strong network effects, a growing user base and a real moat, they are growing at an extreme pace and impressively still posting positive earnings while doing so. At the current pricing they are priced far below the average US stock (US average market P/E is around 25) and with very attractive future growth prospects.
Aurora cannabis operates in 25 countries and produce cannabis in 15 countries and own companies in the whole value chain. They have aggressively acquired companies for the last few years, financed by issuing new stocks which has diluted current investors. It has been a rough year for Aurora investors with a 80% crash from the top.
Financials: Market cap 2.1 Billions. P/B of about 0.5, but only $190 million in cash. P/S of 7.1. There is always a question how much are those assets really are worth if they were to try and liquidate some assets to improve runway? Currently their aggressive growth and expansion plan results in the company loosing money like crazy. 14% of shares shorted. Aurora expects their revenue to triple from around $200million in 2019 to $600million in 2020. Aurora has lately started to cut costs and slow expansion plans, but they will still probably have to raise more capital within a year regardless of their austerity measures.
Crowded space with many players trying to grow. The market is expected to grow substantially globally with a doubling within 2023 from todays total sales. Currently there are industry wide problems with sales licences and slow rollout of dispensaries, which makes it difficult to get products to market. This should however be a passing problem. Even though there is a movement of countries legalising cannabis products, this might stop at one point and even be rolled back if proves of negative effects starts to pile up.
The most important question in all of this is probably if Aurora will be able to operate with high margins and thus create a good business over time if they manage to tackle current problems and get out on the other side. Owning more of the value chain could help them, but my opinion is that cannabis is more like producing rice than it is a brand name like apple. I therefore believe that there are little chance of maintaining high operating margins over time.
Beyond meat creates plant based products that imitate meat products such as burgers, sausages and ground beef. They went public in may 2019 and after a 670% rally from $25 to $235 they are now back at about $80. The stock really crashed after the company released a somewhat disappointing 2019Q2 results and at the same time insiders, including the CEO were cashing out like crazy - which understandably did not build trust. They currently grow at about 30% per quarter and their products are getting available in selected stores and restaurants. Their sales are still tiny with 2019Q3 sales of $90 millions and even posted a $4 million profit for that quarter. Expected sales for 2020 is $360 millions which at the current pricing gives them a P/S of 14 - which is still crazy high. If things goes as planned they will have a P/E of 35 in 2023, which still is, expensive! Low debt, $350 million in cash and a market cap of about $5 billion gives them a lofty P/B of 13.
Competitive environment: The big players as Nestle, Morningstar Farms, Gardein, Tyson foods etc are also in this market and Beyond meats marketshare in the US for the meatless market is about 3%, but they are currently growing faster than the competition. The overall market for meatless is growing at about 25% a year and if BeyondMeat actually manages to capture significant market shares they definitely have a good business going on, and also potentially a candidate for takeover by one of the larger players in the food market. However, for their current valuation to make any sense everything has to go their way in the next few years.
Vegan and meatless has a lot of tailwind which I believe will help to keep the stock price higher than what is rational at this point, I therefore forecast a flat development over the next couple of years within a broad range since the volatility and uncertainty will be high.
Baidu is the dominant search engine provider in China (70% market share) and described as chinas Google. Baidu has had a good run lately with a 30% + gain over the past couple of months after falling more than 60% from the top. I believe that there still is significant upside, this is why:
Why it's down from the top: In 2019Q3 Baidu returned a loss for the first time since 2005, combined with no top line revenue growth. A slowing Chinese economy resulted in companies cutting their advertising spending, hurting Baidu’s main business which is advertising (73% of total revenue). Baidu has a 48% ownership of IQ (Chinas Netflix) which looses money like crazy, but at the same time had a 40% YoY growth 2019Q3, now with 100 million users. There certainly are risks that Baidu will keep pouring money into IQ without getting any return in the long run.
Why Baidu has a big upside: Baidu’s core business as a search engine ecosystem provider has massive moat and the Chinese internet user population and online ad spending is still expected growing about 15% a year. They are expected to have a 15% increase in total revenues for 2020. Invest heavily in research and development (Cloud computing, AI, autonomous driving). Super solid balance sheet, low debt and with a lagging P/E of about 8.
There was a 10:1 split, so everyone got 10 shares for every share they owned
Good points, will be exiting to see when they start monetizing a larger userbase
Fast, well known and a strong ecosystem. I expect a slightly upward trend
The possibility of a new conflict in the middle east seems to make people nervous and less trusting in their monetary systems - will be exiting to see how the price develops alongside the conflict.
I think the year will start strong for crypto
It seems like crypto got a boost in general from the political uncertainty following the killing of the Iranian general in Irak
I don't expect any big changes for ripple going forward
Exciting company with good growth and solid balance sheet. About to break even after losing money for a few years. Steeply priced at 5 times revenue. Competition increasing from apple and youtube and a lot of smaller players. I'm expecting low margins and a race to the bottom. This I believe will result in a declining stock price over the next couple of years.
Insane returns with a 40X the last 7 years. Very expensive priced at more than 100 times earnings. Competition increasing from apple, amazon, hbo and youtube. Not sure that netflix has that much mout. I'm expecting a sharp decline over the next couple of years.
Super solid, ok return on assets, reasonable priced at 29 times earnings, good growth potensial, more so in revenues than earnings (it's hard to invent a new money printing machine like adwords). I'm expecting a slightly upward trend
Strong growth, no debt, loads of cash and strong moat. Reasonable prices at about 32 times earnings. I'm expecting a slight upward trend
Microsoft has had an epic run with a 5X for the last 6 years. The growth is still strong, insane ROE. Super solid company with loads of moat and reasonable growth potential. Price at about 30 times earning the pricing is steep (but what's not expensive these days?), but quite reasonable. I'm expecting a slight upward trend.
Great company with high ROE, solid balance sheet, high growth - all the good stuff:) Still expensive based on their earnings. PE about 85, but unlike most tech companies they actually have earnings. I don't really see that much upside potential over the next two years since they are already very expensive, but also limited downside.
Shopify has a great platform, actually used it myself back in the day. Currently priced at about 40 times sales the current pricing is just stupid. The company will probably do well, and even though they are loosing about $100 million a year they will be fine with $5B in cash. Even with insane growth for the next 5 years the company is way overpriced. Will probably crash when reality kicks in - maybe if they manage to earn money for the first time, then people will add up the numbers and realize that they better sell as fast as possible.
Wow, the Slack stock will be demolished! Currently about 600 million $ in revenue, negative earnings on a 12 billion valuation. It just does not add up. Facebook with messenger, microsoft with teams etc.. The competition is steep. There is no way they will be able to grow their user base and profit margins enough to make the valuation sane. They are also running out of cash and the insiders are all selling. Sell sell sell :D
Everyone likes Musk and Tesla, but their valuation makes no sense whatsoever. Tesla is priced like a tech company with insane network effects etc, but they are not. Tesla is making cars and are losing a lot of money in the process. Currently they are valued at about three times sales, Volkswagen as a counter example is valued at about 35% of sales and priced at an PE of about 7, with about 60% of their market value in cash!
Car stocks are very cyclical and with the likelihood of a recession or financial turmoil increasing this will likely crush the Tesla stock as they will probably have to raise more money regardless of the financial climate since they currently have 5 billion$ in cash and are losing about 1 billion $ a year. Another important consideration is that Tesla's competition is increasing all the time by established competitors releasing new models that are at least as good as Tesla's cars.
Uber is losing about 20-30 cent on every dollar of revenue (cash flow). Analysts estimate that they should break even in about 2025, which I'm really not convinced they will. Their current cash reserve will hold them afloat for about 3 years. Their current market value is about 50 billion $, but with a 13 billion revenue and 3.5 billion negative cash flow.
For this valuation to be anything but dreams and hopes they will have to grow their revenues by several hundred percent and at the same time increase their profit margins from -30% to +10%. Which I don't belive they will manage. Mostly because the ride hailing market has proven to not have the scale advantages one maybe believed before, with new competitors entering and often able to deliver a service better adapted to local circumstances. I belive people will start to recognise all this within a couple of years. Bear
Taking no risk at the forecast:P
Just made it with the forecast.
I think the prices will recover in the new year :) Bull
This is really crashing!
I'm more bearish than I used to be.
Good thoughts :)
Monero is what crypto currency should be; untraceable, fast and vibrant community. Of course great for criminals, bbut I bbelieve more and more people are starting to getting serious about their privacy as well. I'm bull :D
Faster than bitcoin, but bitcoin will figure that out. Will be really dependent on building partnerships and get real world use. Read something about a potential collaboration with Amazon, but haven't heard anything about that lately.
Ripple is great for fast transactions, but I don't see the long term case for increasing value since there are many potential alternatives. And people don't really care what backend technology get's their transaction go through.
Ethereum works well for building decentralized applications, but the competition is huge and the network effects limited compared to say a currency.
As far as I know, the adoption of bitcoin is accelerating. Also, interest rates are going towards zero or negative all around the world and people are starting to fear the central banks' ability to pay their obligations. Bitcoin as a storage of value similar to gold should be increasingly attractive. I'm therefore bullish
Well-calibrated. Correct 80 % of the time.
Total score: 4199.01