Why would I mention my protective puts? It's just insurance in case of broad market collapse. I am not making money on the net position.
Amelanchere, thanks for the civil reply. My analysis was strictly geared toward commercial contracts, not government contracts. My concern is that there seems to be a lot of euphoria surrounding the one Clevekand Clinic contract from last week, and yet the numbers do not seem to warrent such euphoria (unless more hospital contracts come quickly on the heels of the Cleveland Clinic's).
I hold puts on FB for protection. Why don't you address my analysis instead of slinging ad hominums.
Looks like a forward multiple of 10x. The market has spoken. Like I said, EPS is the easy part. The market multiple is where you gamble. Lesson learned I hope.
"The initial phase of this LED retrofit project covers the Cleveland Clinic's main campus near downtown Cleveland and is expected to require approximately 250,000 TLEDs and take 18 to 24 months to complete."
A few things stand out.
1) It will be done in phases, and the first phase will take up to two years to complete.
2) The first phase requires 250,000 TLED units.
3) The rate of delivery is approximately 125,000 TLEDs per year.
Now for some assumptions. I'm going to be very generous and assume the company is selling TLEDs to commercial customers for a lofty $20/unit. I think that number is probably closer to $10, but I'm being extra liberal to accommodate the Bulls. At $20/unit, we're talking about $2.5 million of incremental revenue per year, given 125,000 units per year in phase one Cleveland Clinic.
We know that gross margin for commercial sales is targeted to be around 35%, which means Cleveland Clinic will add around $875k in gross income per year. Even if most of that hits the bottom line, we're talking about an incremental bump of .09 annual EPS. Assigning a multiple of 20 yields an incremental gain of $1.80 to the shareprice. This deal alone is not much to be excited about. The excitement comes in the form of hopes that having done one deal, that there will be additional commercial deals coming at a regular pace. But without new deals, this stock may have reached its peak for a while.
I can almost guarantee that a patient investor will be able to buy this stock at the 50-DMA as the broad market sells off. That would be a minimum target. Further downside to the 200-DMA is very possible if the market completely collapses.
Come back in 45 days and we'll have a talk. Macro trumps micro, almost every time.
No need to buy above 50-DMA during broad market crash. Just wait for the profit takers to bail. They will drive down this stock. No need to buy above $11.00. In fact, you could probably buy this at the 200dma in a bear market. Somewhere below $8 is a possibility.
Hard to find a better mega-cap growth stock with stealth value.
Yes, FB is overvalued because you say so. The market is made up of one person, and that person is you. Now everybody knows who is pulling the strings. Haha.
Compare to NFLX and AMZN, with PEG ratios of 21 and 9 respectively. It is a mystery why FB is always lumped together with these other stocks. Someone please explain. Cause if FB had same PEG valuation as NFLX, then FB shareprice would be over $1,000/share.
That bear wedge is a continuation pattern, upon which breaking, it resumes the downtrend. Be careful out there folks. This is not a good chart.
Looks like the mudslide has formed a mound of re-fried beans sitting just below the 200-dma. Not very tempting. I see a death cross looming.
Too funny. Have a goodnite baggies.
What that tells me is a lot of people are going to miss the boat, and end up chasing. $89 is too obvious an entry.
Looks like the street figured out the deception early.
Sentiment: Strong Sell