Technicals point to this thing rolling over--- very very overbought with the rest of the market. If momentum gets behind profit taking, this could really start moving south in a hurry. I would peg somewhere around $60 by end of January based on the volume picking up in out of the money puts.
Should we consider this an extension of the pharmacy operations, an extension of Minute Clinic type services, or a mixture of them both serving as a launching ground for further expansion in healthcare/pharmaceutical delivery services?
How is this news when according to the dates you provided these taxes came into effect nearly 11 months ago?
I'm really surprised that IAM didn't push their members to vote yes... after all, when they lose their jobs where are they going to get all of that union dues money from?
IAM might be too short a name... should be I AM soon to lose my job.... ooops!
This has been talked about by the company for nearly 2 years now. It is has been a known factor and is now resolved. The market looks at the future. This court case is no longer part of that future. Since SBUX trades based on out-year earnings and not necessarily on fundamentals, this should have no bearing on the valuation of the company.
A one off to earnings if they have to chalk it to earnings instead of just taking a cash charge from their coffers and credit line to make the payment. Then back to business. Since people are already valuing the company on earnings out to 2017 and further with its growth rate, why should you let something that will happen in the next 3 months cause you any disturbance? If anything, you should raising cash to take advantage of any pullbacks that this may cause. The payout should not upset their future expansion plans as it will not destroy their cash flow. They will still be rolling out Teavana locations, rolling out Columbia stores, rolling out in China and Asia, revamping product offerings in the US, rolling out more offerings for food and juice, rolling more products for Whole Foods and other organic outlets.
There is much more to consider here than a legal suit that has been well-broadcasted for 2 years.
Buying opportunity. The estimated size of the legal suit was well-known. They will owe roughly $2.8 billion and have $3.2 billion cash on the books. Plenty of free cash flow to cover short-term credit to fund any part of this deal. At least now this is known and can be factored into their value moving forward. Over and done with, wait for the details and buy the dip accordingly.
Roughly 100.90- 100.98 range I do believe. Hmmm... Lot of shaking of the tree for weak hands this morning on a revenue miss. They post solid year over year numbers but get hit because they miss the analyst expectations. The company is on track to grow earnings over 11% from last year and with next years estimates, will be roughly 16% growth over $5.55 for this year. Very good price at the moment. $101 for $5.55 full year 18.2 times earnings for a company expected to growth 16% in the coming FY. Pretty low on a PEG ratio.
That would be my target. Nice round numbers for market cap and stock price have worked exceedingly well for both BA and UTX.
Take Ba up to nice round $100.. then up to Market Cap of $100 B. UTX went to nice round $100, then to Market Cap $100.
I supposed MMM played the same round as well.
I would imagine BA joining the $150 team as a final surge, putting them solidly over the $100 B market cap. $150 is another nice looking psychological level that Wall Street seems to enjoy. At that point though one would believe BA would split the stock. BUT-- I think there is a new paradigm at work where DOW stocks don't split because of the heavy weight that IBM used to pull and that now IBM, GS, and V pull, countered only by CVX, MMM, UTX, and BA. If they want to remain influential on the index, they cannot split the stock.
Still fairly priced on a price to sales basis. If they are planning to build the production rate going forward, revenues will only continue to build, making this cheap on a forward price to revenues basis as well.
Funds want growth and diversification. Food play with high growth? Panera-- not growing. Buffalo Wild Wings-- not growing enough. YUM Brands-- too much liability with China scare. MCD-- trend is against them for food, beverages okay but Dunkin Brands and SBUX and Krispy Kreme better. What is left-- Chipotle.
All the funds now need to switch out of the others and into CMG to shore up their portfolios and prove having owned the stock that in the restaurant space that moved $70 on a single day.
Same for tech today. IBM was horrible but Google was great. Which do you think they want to own and have proof of owning? Why else do you think GOOG soared over the $1000 mark while IBM dropped 6.5% this week and is down 19.5% from it's 52 week high while the markets are making new all time highs?
More mechanisms at work here than "It's just over priced burritos!" and all that jibber jabber.
That's why the rest of us didn't short but bought under $400. Then we let those who screwed up and shorted drive the price higher for us once they realize the error of their ways.
Not irrational but market mechanics. 31 million shares outstanding, over 2 million short. That's a very tight situation especially when the longs continue holding and make the shorts pay up dearly to get clear of their positions. If there were 100 million shares out and only 2 million short and you had a day like this then that is irrational. Today = market governing dynamics.
Buying opportunity in that case. They are on solid footing and you can see where the market will price the company. If you think it's going to pull back, buy a put to collect the premium from that retracement. Then plow the cash into stock/call after the pullback.
The situation plays out as +60 then -10 to 20. You still have +40-50 net. What's the panic? If it retraces the gap, buying opportunity.
Article out already saying they Raised their guidance... Previous range was 2.50-2.60... now 2.53-2.57. They raised the bottom by .03 and lowered the top of the line by .03. How is that Raising guidance?
Spin doctors out in force for bagholders on this one after the run-up on.... fundamentals!?!?!?!
Some interesting potentials for the short-term on this one. The technicals guys will be playing this for a while since it busted out over the upper Bollinger Band yesterday and will need to trade under 80.61 to get back into that channel. On the downside, it could trade down to the bottom Bollinger Band which is currently sitting mid-70s. All of the other oscillators point to heavy overbought, but they have been signalling that for 4-5 months now. Previous pullbacks have provided excellent re-entry points and will most certainly do the same here, especially if Europe can keep itself in positive GDP going forward-- get some auto fleet upgrade cycles, especially in Easter Europe if the market for their goods in Western Europe picks up again.
I still think we could trade 15x forward on FY 2014 earnings. My previous post said $6 for the next year, but I was actually $1 light after double-checking current estimates which will likely be raised given their upbeat sentiment with the recent earnings release, but for now $7 is a good target in case things don't come through as strong as they believe. P/E of 15 against future $7 gives target price of $105. For what it's worth, E-Trade shows avg. estimate of $8+ for FY 2015. Assuming that holds, by middle of Fiscal Year 2014 we'll have $6.80 for twelve month trailing , full year of $7+ and forward year estimate of $8+. If we get P/E of 15 trailing or 15 on future earnings, which is roughly in line with 1-1.5x it's earnings growth rate of 10.9% based on move from $5.74 in 2012 to $8.69 in 2016, we end up with a target range of $102-120 by this time next year.
12 months for another $20, so long as this sector and the global auto industry prospects remain solid. 26% return from $81 in 12 months, and 36% if we pull back to $75 and you pick up the shares there. The P/E might look a bit steep vs. historical for MGA, but people will flock to the growth and search for best of breed and large exposure to the industry.
Hopefully you had a chance to get out ahead of this earnings report.
I missed today's move because I locked in profit on JAN 60 calls I sold the other day when it looked like the market, including MGA, was pointing to a pullback. Locked down 35% on BWA, 22% on TEN and 5% on MGA (didn't have them very long). Missed this additional 5% but got back in this morning for March 60 strike calls, for $20.48. Currently trading over $21 so there is a bit caught but I definitely missed the bulk of today--- sick to my stomach for my error.
I think we're looking at $85-90 on this one. Their growth is picking up steam and it is currently selling at it's growth rate. I think a bit more is justified, so maybe P/E of 15 on next years earnings of $6-- $90. BorgWarner is selling at forward of 16-17 and they don't nearly the same scope of products but they have the growth rate. MGA is showing that they have the growth rate as well.
Good move. I had JAN $70 call options I picked up 2 months ago for just shy of $26. Dumped them for $35.50 last week. Waiting for this to retest $100 and see if it holds. I don't follow the technicals as much as most people, but the MACD is rolling over as well as the RSI and the Williams %R. Bottom Bollinger is currently at $98 on a uptrend, so it could cross paths with the stock price somewhere around $100. I will be buying more call options for likely March or Jan15 at that point-- slowly adding beginning at $100 and adding at every $1-2 price drop from there if it continues south.
IF this sells off like that, will probably base at/around $100 and go sideways from there for a while for people to consolidate their positions. Some heavy hitters have breached $100 but failed to hit $110 or higher with the exception of MMM and CVX. UTX didn't reach, BA didn't reach it. JNJ, PG, HD trying to hit $100 and they are taking DOW component weight away from IBM with every tick. Notice that the DOW raced higher with IBM leading the charge to well over $200 a year ago.. Since then it has languished and drifted to low $190's while the others have moved considerably higher-- MMM, BA, CVX, HD, PG, JNJ, UTX. We are seeing a change in command here so IBM can be controlled without destroying the DOW average.
GE tried to make a push a year or so ago for the same thing with their Jenbacher's. Not sure if it caught on very well or not. Maybe the electricity output on them was too high for the grid to handle up there without infrastructure costs. Capstone turbines, though, might work if they use to the gas for smaller amounts of electricity and heat for the drilling crews and local towns-- or to power other types of on-site electricity needs? Mayhaps (maybe + perhaps = mayhaps).
It certainly doesn't help when Amazon is selling their 12oz bags of beans for $16 and you can buy them at the grocer's for $8. How do they expect to boost sales through online channels if they are allowing price gouging?