some food for thought:
GM% of 29.5% will probably be around 30.5-31.5% as 2/3 of the legacy inventory they have been dumping has been worked off in Q3. Q4 and a little in Q1 will still remain but the company will see an uptick in GM% due to their higher margin busienss taking a footing in Q4. By the way, comparason to the holiday season last year....24.5% GM. They will smoke this.
Home store will be completly operational in March 2014- this is a big deal - high margin business.
They will get back to the more typical GM% of 37-39%. The street is expecting Q1 of 2015. There is whisper that they may be able to pull this in by 1 to 2 quarters.
High interest - I think $45M in interest payments. That is about $.15 in earnings or I read about 2-3% in GM% - that is a big deal. But SGNA is coming down faster so it is primarily a wash.
Bottom line - if they can do a $4.5M holiday quarter at 31% GM and indicate that next year they get back to about 37% on a $14B dollar year the shorts will get crushed. 90M - 100m shares to cover folks...
If the stock pushes out 150M in profit on $14B (they typically pushed out $250M- 300M on $17B) - the CO will earn roughly $.65 x a 13X multiple - I see the $8.5 price but the squeeze should push it up combined with historical profit projections.
especially given the the year so many have had. Just dump your losers to offset the broader gains. This is what happened with BBY and this is what will happen with JCP. Why wouldn't Bass and other hedges sell their positions to offset gains in other positions and lower tax exposer. Picking this up in the $7's may be worth a swing. They should have a $4.5B quarter given the comps, don't know how profitable it be but it may not take much. The short interest is 30% and growing again… close to 100 million shares….that is a lot of buyers.
$4B this afternoon, $3B tomorrow, $5B on Friday
I don't think you will see that kind of correction this year. Maybe some trimming but they have to show NFLX on the books for year end. Q1 is a different story.
He didn't answer the question about the set top box but clearly a direction they want to go.
That would put pressure on NFLX for sure.
I would be surprised if it did just that....so far the popular trade is working
can't catch a break..TWTR, DDD, FB, LNKD...all down big. Though NFLX would give us a taste as well.
If the company pulls down $ 4 bucks in earnings next year and grows 30% for the next five years, the stock should trade at 60x next years earnings or $240 bucks. Even is you use the same logic on 60X 2015 projected earnings of $5.2 the stocks should be around $312. Pushing it higher here is setting up for a strong pullback in 2014
when a stock has 90% institutional ownership you are correct but it is tough to get the stock to move like that until one of the dominos falls. With the exception of Carl, These guys are holding on to their shares and not looking to make any moves.
Several outside reversal bars on the chart that never seem to play out. The week before earnings, the day after earnings, even 4 trading sesssions ago....none of them ever play out. That is what makes this stock so hard to trade. The spikes up and down are random and difficult to predict, and the premium on options are so expensive it makes it hard to make money if you trade it.
It can move $22 dollars in one day - I don't get the point. I can assure you that 6% is not the thing separting TW from considering NFLX . . . .
He said that rates would be near zero for a long time....this does not mean the fed could not start tapering. I think this is the fed trying to separate out tightening from tapering. The asset purchase program is going to start to wind down soon and December may be the time to do it - it's one of the strongest months historically and everybody is anxious to buy any dips to catch up to the S&P so the drop may be minimal if they announce tapering
really - you think there will be that kind of move to the downside given the monthly comments by JCP? The sales results have been reported monthly. What is unknown is the impact of discounting on GM, the overall opex structure (they have the costs of a $17B company and it should be aligned with a $12-14B co) All issues they were working on.
Guidance is absolute KEY for the holiday quarter. If they can clip last year by 10-15% that would send the stock north....