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Hot stock of the month – Drone Play

Saturday, June 6th, 2015

Ever heard of Ambarella Inc? It’s a semiconductor company making chips. Boring stuff, right? So far the stock has risen 87%. These folks make chips that go into many of GoPro’s cameras. On top of it, Ambarella makes chips for drone cameras as well. GoPro is going big on drones. For a smart drone play, Ambarella is the better bet than GoPro.

Ambarella announced earnings on Wednesday. The company significantly beat Wall Street’s revenue estimate of $67 million, coming in at $71 million for the quarter, a 73.5% increase year-over-year. Many analysts increased the price target to $123. The way the stock is trading, it may reach the target in next few months. On Friday, the stock closed at $103.33

Disclosure: I own shares and options of Ambarella at the time of this writing.

Related Link: Barron’s article on Ambarella

How to keep new year resolutions?

Thursday, January 1st, 2015

Most of us write new year resolutions on this day. However, only some of us are able to feel sense of achievement at the end of the year. Here are some tips to make sure you keep and succeed in your resolutions.

1. Make sure your resolutions follow SMART principle. Each resolution should be specific, measurable, actionable, realistic and time-bound. Believe me, if you can’t make your resolution adhering to SMART, you better remove it from your list to save you some frustration down the road.

2. Write positive resolutions. Meaning that, do not write “I will never ever eat that big fat pizza again”. That won’t work! Instead, write “I will eat more vegetables every day”.

3. Be realistic. You know your strengths and weaknesses more than anyone else in the world. Make your resolutions believable… to you!

4. Do some reverse engineering. Set a specific deadline for a goal and work backwards. Plan everything from now to that target date. Weekly plan works better.

These are simple, but proven tips. Try it out. Everyone in MoolaMania wish you and your family wonderful new year and prosperous days ahead! 2015 will be a pretty decent year for U.S. stock market. Plan well and profit well!

Apple in more stores

Thursday, January 12th, 2012

Target plans to add a “mini apple store” inside its stores. It’s a brilliant move for both Target and Apple. Apple computers are available in Frys and Best buy stores. By making its computers and devices available in Target, Apple is going to benefit from Target’s presence all over the U.S.

BTW, Apple’s chart shows the uptrend. I guess it’s time to pick up some more Apple shares.

Disclaimer: I own Apple shares.

Related Link: Apple Insider


Zynga sets offering price at $8.50 to $10

Sunday, December 4th, 2011

All right folks.. Zynga IPO is coming soon. The company sets the offer price in $8.50 – $10 range. The IPO is expected to hit Nasdaq in mid-December under the ticker ZNGA.

Zynga recorded earnings of $30.7 million for the first nine months of this year, on revenue of $828.9 million. It’s anybody’s guess whether Zynga will go in the way of LinkedIn that trades better than its debut price or Pandora that trades 33% lower than its debut price. I would be a buyer if Zynga really trades at $9 – $10 range on the first day. Zynga’s underwriters have an option to sell additional 15 million shares if the demand is strong. If the underwriters artificially increase the demand and hike the stock price, it’s better to stay away from that game. You can play Zynga games, but don’t play with your money! If the stock shoots up to unreasonable level on the first day, wait till it comes back down to earth.

Unemployment rates fell in many U.S. cities

Wednesday, September 28th, 2011

Although there is no net change in U.S. unemployment rate, many cities reported drop in unemployment rates. Unemployment rate in Mansfield, Ohio fell from 11.4% to 10.1%. Bismarck, N.D. reported the nation’s lowest unemployment rate, at 3%. Yuba City, CA and Modesto, CA also reported the drop of 1.6%.

Although the drop is not very significant, it’s a good start. News like this always come with a caveat — in this case, lots of people stopped looking for a job, they are not counted as unemployed.

Stock market is bleeding. Even the gold price is going down. I would stay away from the stock market until there is a strong evidence of job growth and improvement in overall U.S. job market.

Buy on the dip OR Run for your life?

Sunday, September 25th, 2011

Markets tanked…miserably. There is a fear, uncertainty and what not. The prices have come down a lot. Is it a good time to buy?

To answer this question, ask yourself another question “would you buy anything just because the price is cheaper compared to historical prices?”. Most sensible people would say no!

Price is just one part of the equation. If the fundamentals are good and you like the stock, it’s ok to buy the stock during dip. It may be even a better idea to sell puts for the stock you like.

Buying on the dip may make you feel better. But, would it grow your investments? Proper research is essential before you start buying on the dip.

Google is back on growth track

Thursday, July 14th, 2011

Google proved that it’s still a growth company. Google posted a quarterly profit of $2.51 billion, or $7.68 a share, up from $1.84 billion, or $5.71 a share, a year earlier. Total revenue was $9.03, up from $6.82 billion a year ago. Solid earnings boosted the stock price up by $67 after-hours.

Google CEO Larry Page mentioned that 10 million people have profiles in Google+ in just few weeks after its launch. 135 million Android devices have been activated so far. Android sees 550,000 activations per day meaning that consumers are buying that many new android phones per day all over the world.

For now, Google’s search business contributes most of its profits. However, Android and Google+ is going to contribute more profits to Google in the years to come.

Disclaimer: I own Google stock.

Related Link: Bloomberg Article

Groupon IPO

Sunday, June 5th, 2011

Following Linkedin IPO and its crazy valuation, Groupon is preparing for its IPO. The IPO could value Groupon in the border of $20 billion. Groupon filed form S1 with SEC. IPO may happen in 2-3 months. In the form S1 (page 12), Groupon mentioned that it spent $179 million in the first quarter of 2011 for online marketing. However, when the company calculated its first quarter margin, it conveniently ignored the $179 million online marketing expenses and calculated the profit for Q1 2011 as $82 million. If you include the online marketing expenses, the company really had the loss of $82-$179 = $97 million.

These IPOs definitely look sexy based on all the hype surrounding them. However, if you had burnt your fingers in dot com crash of 2000, you better stay clear of all these web 2.0 IPOs until the companies’ profit picture is more clear.

LinkedIn IPO

Wednesday, May 18th, 2011

LinkedIn is opening its doors to public investment (and scrutiny) on Thursday.  Its IPO is the hot topic today. It increased the offering price range from $32-$35 to $42-$45. It’s rare to see a company increasing the IPO price range by $10! It shows the real hot demand for a piece of LinkedIn. If all these hype reminds you of dot-com bubble of 90s, you are not alone. Many people think like that. This could be another hype that could end badly.

LinkedIn earned $15.4 million last year; its revenue was $243 million. If it can fetch $45 price tag per share, the market valuation would be approximately $4+ billion. In that case, market cap will be 258 times greater than 2010 profit and 17 times greater than 2010 revenues. LinkedIn warns that revenue gain would slow down this year and a loss is possible.

I am going to stay away from this IPO if the stock is priced at $45. You will see a lot of day traders hiking up the price on Thursday. Institutional investors that got into LinkedIn early also would try everything possible to hike up the first day price so that they can make huge profits. Invariably, the stock price will come down.

When Google went ahead with IPO, its market value was 16 times higher than previous year’s revenue. Google had better business model than LinkedIn. The hype surrounding LinkedIn is that it is the “first U.S. social media company going for IPO”. It doesn’t matter whether this is the first social media company or third one. What matters is how much money you can make if you buy the stock at inflated price.

The company’s stock ticker will be LNKD in New York Stock Exchange.

How to get financially fit in the new year

Tuesday, December 21st, 2010

Every year we come up with new year resolutions. Most of the resolutions’ vigor fade away as the days pass by. But, we never give up! We make another set of resolutions when the new year approaches.If you want to do this right, an interesting article from Wall Street Journal could help you.

Here is the summary of that article:

  • Max your 401k contributions.
  • Check where your moola goes, verify and validate all the cash flow
  • Lock up your credit/debit cards for a month
  • Check your current asset allocation in all the investment accounts and reshuffle
  • Knock off that nasty debt
  • Invest in yourself
  • Check your progress on the cash flow monitoring
  • Check if you can reduce your auto/home/medical insurance
  • Update your will
  • Open 529 accounts if you have children or grand-children

Read the article here for more details.

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