The crushing austerity measures imposed by the IMF and the ECB a few years ago came along with grossly optimistic expectations from those financial institutions that cutting spending was just what the Greek economy needed to restore confidence. They felt the economy would rebound quickly after the fiscal adjustments were made. Instead, the recession turned in to a depression......which was inevitable as soon as austerity was inacted. Hopefully, this will serve as a lesson to deficit hawks like Ms. Merkel, whose policies have almost single handedly kept European growth well below its potential. Maybe it will dawn on Angela that not only does austerity not work, it causes the kind of social unrest that leads to the rise of unwanted political factions like extreme right wing groups........much like our own nitwits who got very bent out of shape when Bush caused deficits to soar by crashing the global economy.
Piper Jaffray’s Gene Munster reiterates an Overweight rating on the stock, and a $135 price target, after raising his own iPhone estimate for Q1 to 65 million from 61 million. He’s modeling $67.72 billion in revenue and $2.57 per share.
But, ”Regardless of whether Apple reports 65 million or significantly more phones, we believe the focus of the Dec-14 report will be on what the implied follow-through on iPhone growth is into the Mar-15 guide and ultimately through to the next product cycle.”
Over the past two years, the average q/q iPhone unit decline from December to March has been 18%. If you assume that sequential decline holds for this year, it would imply 53.3 million iPhones in March without the additional expected channel fill or 56.8 million with the additional fill (also adjusting our Mar-15 to reflect this estimate). We note this is in comparison to investor thinking for 54-58 million units and the Street at around 51 million. The bottom line is that assuming iPhone performs to expectations it could mean Apple will provide guidance with a high-end of $56 billion (the effective guide) or 5% upside to the Street.
Speaking of India.............
NEW YORK (TheStreet) -- Shares of SunEdison (SUNE - Get Report) are up 3.26% to $19.98 on Monday, rallying along with other solar energy companies, one day after President Barack Obama promised to provide financial support for India's major solar energy initiative to expand the technology nationwide, Bloomberg reports.
Yesterday, Obama said at a press conference in New Delhi that the U.S. will "stand ready to speed this advancement with additional financing," according to Bloomberg.
India aims to spread solar panels across an area three times the size of Mumbai by 2022, and would require about $160 billion, Bloomberg noted.
India is trying to find ways to meet its energy needs without adding to greenhouse gas emissions, as its growing population becomes increasingly vocal about pollution levels, Bloomberg added.
Maryland Heights, MO-based SunEdison is a developer and seller of photovoltaic energy solutions, with operations in India.
I used to think that way too. Refusing to "pay up" for a stock I felt had gotten away from me. In many cases it is a wise strategy, showing the discipline necessary to make money. And while I don't chase a stock neither do I dig in my heels if I think the stock has much more room to run. I think SWKS is one of those stocks with room to run. I won't bother writing where I think it is headed barring blah blah blah....you know the drill, something happens that management doesn't see coming right now. But I will say this. Barring blah blah, I predict they do $6 in non-GAAP EPS in 2016.
I didn't say SWKS is immune to a pullback on a big down day for the market. I said I didn't think $75 is a level we will see. Because unless we get a big downdraft pretty soon SWKS may be at $85 before one comes. Management just told us, relative to their business, it is safe to buy leading in to their Q2 report. Between now and then I expect the price will rise $10-15 from here, maybe quickly, because of the strength of the biz and how clearly they see the next 3-6 months unfolding.
Besides the price of oil and sentiment for its direction probably the most significant short term potential catalyst is going to be the next capital markets day or Q1 report, which ever comes first. We will get a general update on everything (lots of moving parts here) and most importantly the backlog and guidance for the rest of 2015. Keeping in mind both will be revised higher as the year goes on.
If you had listened to the CC you wouldn't be thinking about a pullback to $75.
I don't have a subscription to Barron's but we can all make an educated guess about the article's content relative to SUNE. Clearly the agreement China signed with the US with respect to carbon emissions being reduced signals China's seriousness to deal with their air pollution problem. So I'm sure the article suggested this was a positive for Chinese solar companies as they will participate in the build out. SUNE also has a footing in China though Xi is shifting policy to become even more domestic company centric so I continue to believe the biggest opportunity for SUNE lies in India.
Could semiconductor stocks lead the market in 2015?
Intuitively, one would think yes. New cellphones and computers need chips. The Internet of Things movement may gain traction and pull more demand for the tiny integrated circuits. Finally, Moore's Law implies that old chips will get replaced by faster, better ones.
Consider these five factors that may prove compelling for growth investors to focus their attention on the semiconductor names.
•Relative strength . IBD's stock research tables show the Chips sector move to the top among 33 distinct sectors as of Monday's paper. (See Page B8.)
A stock that's backed by a strong industry sector possesses higher odds of posting big gains.
Viewed from a more granular level, the Electronics-Semiconductor Fabless group is ranked No. 8 out of 197 industry groups for six-month relative price performance. The Semiconductor Manufacturing group is rated 33rd.
•The group has Young Turks. According to IBD's research tables, at least six companies have come public within the past 15 years and host EPS and RS ratings of 80 or higher.
Ambarella's (NASDAQ:AMBA) excellence in both company fundamentals and stock technicals awards the stock status as an IBD Sector Leader.
Sector Leaders continue to outperform the general market, up 16.5% over the past 12 months vs. 12.2% for the S&P 500 through Thursday last week.
Ambarella went public in October 2012. It's extended from a proper buy point for now.
•Serious top-line growth. Ambarella has grown its sales by at least 25% in the past two quarters.
Ambarella is not alone.
BETHESDA, Md., Jan. 23, 2015 (GLOBE NEWSWIRE) -- TerraForm Power, Inc. (TERP) ("TerraForm Power") today announced that its indirect subsidiary, TerraForm Power Operating, LLC (the "Issuer"), priced $800 million aggregate principal amount of 5.875% senior notes due 2023 (the "Notes") in connection with their previously announced private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The closing of the offering is expected to occur on January 28, 2015, subject to customary closing conditions.
The Notes will be senior obligations of the Issuer and will be guaranteed by the Issuer's direct parent, TerraForm Power, LLC, and each of the Issuer's existing and future subsidiaries that guarantee its senior secured credit facility, subject to certain exceptions. TerraForm Power will not guarantee the Notes.
The Issuer intends to use the net proceeds to fund, in whole or in part, renewable energy projects ("Eligible Green Projects"). Specifically, the Issuer intends to use the net proceeds from the offering, together with contributed net proceeds from public and private equity offerings of Class A common stock by TerraForm Power, to fund the full purchase price of the previously announced acquisition of certain power generation assets from First Wind, to repay existing indebtedness of the Issuer that was used to purchase or develop other Eligible Green Projects, and to pay fees, expenses and other costs related thereto.
Because I find the language used here intriguing.
Donald Palette (VP and CFO):
Thanks, Vijay. Our allocation strategy, I think we've been pretty clear that we're -- and we're going to continue to focus on trying to distribute about 40% of the free cash flow to shareholders. We returned over 35% in 2014.
We initiated a dividend in 2014, and we've actually increased that in two quarters in 2014. And we've repurchased a significant amount of shares. We're going to continue to do both of those.
As far as the dividend, the model looks really good. Earnings look good. At a minimum, we're going to look at adjustments to that on an annual basis. THAT'S AT A MINIMUM.
So we like -- having a strong cash balance gives us a competitive advantage. We like being in that position.
We know they have guided for distribution of 35-40% of FCF. We also know, based on their expected share count of 194M, that 194M x the annual divi of $0.52 = about $100M.
Can anyone make an educated guess on annual FCF and what that implies for how much cash will get used for a divi or buyback this year?
One thing is for sure. With SWKS' management being as confident as they are about the state of the business it is going to attract a lot of fund money. Because fund guys, really all of us investors, are always in search of the highest growth by the safest means possible.
Yeah, that cash or some of that cash is going to be put to use to expand the business at some point. I like that they have a very strict approach to acquisitions so you know if they make one it will be immediately accretive to EPS.