|Bid||304.88 x 900|
|Ask||0.00 x 800|
|Day's Range||305.07 - 308.41|
|52 Week Range||204.95 - 310.46|
|Beta (3Y Monthly)||1.05|
|PE Ratio (TTM)||57.13|
|Earnings Date||Sep 17, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||313.12|
Adobe Inc NASDAQ/NGS:ADBEView full report here! Summary * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate Bearish sentimentShort interest | PositiveShort interest is extremely low for ADBE with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting ADBE. Money flowETF/Index ownership | NeutralETF activity is neutral. ETFs that hold ADBE had net inflows of $10.62 billion over the last one-month. While these are not among the highest inflows of the last year, the rate of inflow is increasing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Technology sector is rising. The rate of growth is very weak relative to the trend shown over the past year, and has continued to ease. However, the rate of expansion may accelerate in the coming months. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
About a year ago, I coined the high-growth STARS acronym on InvestorPlace, saying that these five growth stocks -- Shopify (NYSE:SHOP), The Trade Desk (NASDAQ:TTD), Adobe (NASDAQ:ADBE), Roku (NASDAQ:ROKU), and Square (NYSE:SQ) -- are the high quality, big return potential stocks that investors want to buy now and hold for the next several years.The idea behind the STARS acronym was simple. The market's favorite high-growth acronym -- FANG, which comprises Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) -- was becoming increasingly obsolete for investors. That's not to say that FANG companies have peaked. They haven't. They are still doing very well. But, they are such large companies and long FANG is such a crowded trade, that the long-term return potential in these names isn't what it used to be. It almost certainly isn't the best return potential investors can find in the overlap of growth and technology.STARS is exactly that. Each one of the STARS stocks is supported by huge secular growth trends, is small relative to their addressable markets, is unknown relative to the FANG stocks, and has huge upside potential in a multi-year window. That's why I told investors to forget FANG and buy the STARS stocks a year ago.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe results speak for themselves. Over the past year, the S&P 500 is up about 7.5%. Had you bought one share in each of the FANG stocks, you would be up just 5% over the past year. But, had you bought one share in each of the STARS stocks, you would be up more than 70% over the past year. Click to EnlargeIn other words, STARS stocks have generated more than 60 points of alpha over both the S&P 500 and FANG stocks over the past twelve months. * 7 Dependable Dividend Stocks to Buy This out-performance from the STARS group will continue. Without further ado, let's take a deep look at why you should buy each one of these high-quality growth stocks. STARS Stocks to Buy for the Long Run: Shopify (SHOP)Source: Shutterstock Trailing 12-Month (TTM) Gain: 90%The Bull Thesis Tag Line: "The Next Big Thing in Commerce"Core Bull Thesis: The secular bull thesis on e-commerce solutions provider Shopify is simple. Thanks to the widespread proliferation of the internet, the commerce world is two doing things: One, it's pivoting into direct retail, wherein brands and merchants are selling to and communicating with customers. Two, it's also pivoting into a decentralized model, wherein anyone can sell anything to anyone else.Shopify is at the heart of both these pivots, providing the tools which allow any seller to sell any item through any direct channel, and is thus levered to benefit from the expansion of these two huge secular tailwinds.These tailwinds are still in their early innings. Shopify's gross merchandise value represents less than 1.5% of global e-retail sales, and is growing at a steady 50%-plus pace. Further, Shopify just started to jump into the physical retail world, dramatically expanding this company's addressable market.As such, SHOP has the necessary room and firepower to keep growing at a robust rate for a lot longer.Key Growth Projections: * Shopify goes from 1.5% e-retail market penetration today, to 7.5% penetration by 2030, as direct decentralized retail trends gain mainstream traction. * Shopify goes from about 0% physical retail market penetration today, to about 0.5% penetration by 2030, as Shopify finds some success in the physical retail world. * Total gross merchandise volume (GMV) and Merchant Solutions revenue grow at about 30% annualized pace into 2030. * Subscription Solutions revenue grows at a high teens annualized pace, as Shopify continues to grow its merchant base. * Total revenue grows at a 25%-plus pace over the next decade. * Operating margins scale from 1% today, to 25% by 2030, as robust revenue growth drives significant operating leverage on already huge gross margins. * 2030 EPS settles around $25, versus projected EPS in 2019 of $0.60.Long-term Price Target: About $750, based on a commerce platform average 30-forward multiple on projected fiscal 2030 EPS of $25.Present Value: About $300, based on a 10% discount rate and a 2029 price target of $750. The Trade Desk (TTD)TTM Gain: 160%The Bull Thesis Tag Line: "The Future of Advertising"Core Bull Thesis: The secular bull thesis on The Trade Desk centers around something called programmatic advertising. Programmatic advertising is essentially automation in the ad industry. Before, ad spend allocation was largely a guess-and-check effort, while ad transactions were conducted between two human parties. Programmatic advertising automates both of those processes, leveraging AI and big data to optimize ad spend allocation and dynamically transact ads based on those optimal allocations. In this sense, programmatic advertising is the future of advertising.The Trade Desk is one of the most important players in the programmatic advertising world, and one of the fastest growing, too. But, ad spend through the TTD platform measures less than 1% of the near $300 billion global digital ad market. That market is rapidly marching towards $500 billion-plus levels. Eventually, most of that $500 billion-plus worth of spend will be transacted programmatically, and the lion's share of that programmatic spend will happen through TTD.As such, The Trade Desk has huge growth potential over the next several years through automation in the ad world, and if all that growth potential materializes as expected, TTD stock will fly higher from here.Key Growth Projections: * The global advertising market measures around $1 trillion by 2025, up from $650 billion-plus this year. * The digital ad market grows to around $650 billion by 2025, representing 65% share versus 45% share in 2018, as engagement and ad dollars continue to flow into the digital channel. * TTD grows its share in the digital ad market from less than 1% in 2018, to 2-2.5% by 2025, as programmatic advertising becomes more widely used across various ad formats and channels. * Gross spend on TTD and revenues grow at a 25%-plus pace into 2025. * Profit margins gradually move higher as robust revenue growth drives positive operating leverage on healthy gross margins. * 2025 EPS comes in around $15, versus 2019 estimates of $2.90. * 10 Stocks to Sell for an Economic Slowdown Long Term Price Target: About $375, based on a digital ad average 25-forward multiple on projected 2025 EPS of $15.Present Value: About $230, based on a 10% discount rate and a 2024 price target of 375. Adobe (ADBE)TTM Gain: 20%The Bull Thesis Tag Line: "The Cloud Giant in a Visually Dominated World"Core Bull Thesis: The secular bull thesis on cloud giant Adobe is predicated on two very simple ideas: First, the world is becoming increasingly obsessed with visuals. Consumers are increasingly engaged in visual-first social media apps, like Instagram and Snapchat. They are also spending more time on visual-content-heavy streaming platforms like Netflix. At the same time, businesses are increasingly using visuals to communicate with their customers, since these forms of communication are what resonates most deeply with today's consumer. Thus, both consumers and enterprises are shifting to a more visually-focused world.Second, Adobe is the unrivaled king in delivering visual solutions. Sure, there are a ton of Adobe competitors out there, but none really rival Adobe. They are all just knock-offs. Long story short, Adobe dominates the visual-focused industry, and when it comes to creating visuals on both the consumer side (e.g. editing a photo for Instagram) and the enterprise side (e.g. creating a visually aesthetic ad campaign), everyone turns to Adobe solutions.Put those two ideas together, and it becomes increasingly obvious that Adobe has plenty of room to grow over the next several years as both consumers and enterprises increasingly adopt visual-focused cloud solutions.Key Growth Projections: * Adobe's Document Cloud, Creative Cloud, and Experience Cloud businesses continue to grow at a robust pace over the next several years given digital and visual related tailwinds, and ultimately power about 15% annualized revenue growth into 2025. * Gross margins expand gradually towards 90% as Adobe benefits from steady but small price hikes given lack of competition. * Operating margins expand towards 50% as 15% revenue growth drives healthy operating leverage on huge gross margins. * EPS settles around $23 by fiscal 2025.Long Term Price Target: About $460, based on a growth average 20 forward multiple on projected fiscal 2025 EPS of $23.Present Value: About $290, based on a 10% discount rate and a fiscal 204 price target of $460. Roku (ROKU)Source: Shutterstock TTM Gain: 111%The Bull Thesis Tag Line: "The Cable Box of the Streaming World"Core Bull Thesis: When I first created the STARS acronym, the most controversial stock on the list was Roku, given what many perceived as huge competition risks. But, ROKU stock is up 111% over the past year as the company's secular bull thesis has drowned out competition risks.The core bull thesis here is that Roku is becoming the central access point (or "cable box") of the streaming world -- a platform which consumers everywhere rely on to access their favorite streaming services like Netflix, HBO, Amazon Video, and the like.A year ago, there were concerns that Roku couldn't maintain this "cable box of the streaming world" positioning because bigger competitors would come in and gobble up its customer base. But, those concerns missed three big things: 1) Roku is content-neutral, it's competitors aren't, and this content neutrality ultimately makes for a more friction-less viewing experience; 2) Roku is already the runaway leader in this space, and consumers like the intuitive Roku UI; and 3) the streaming space will big enough to accommodate more than one service platform aggregator.As such, Roku has done nothing but rattle off big-growth quarter after big-growth quarter over the past year, and ROKU stock has more than doubled in the process. The streaming market globally is still relatively nascent, and ad dollars are just now starting to follow consumers into the streaming channel, so Roku's long-term growth narrative is in its first few innings. Over the next several years, the company will continue to rattle off big-growth quarters and ROKU stock will trend higher.Key Growth Projections: * The global streaming-video-on-demand (SVOD) market grows from roughly 300 million households today (25% TV household penetration), to around 600 million households by 2025 (35% TV household penetration, assuming mild global TV household growth). * Roku's platform goes from about 30 million accounts in 2018 (about 10% market share) to about 100 million by 2025 (about 17.5% share). * Average revenue per user rises at roughly 15% per year into 2025, as unit SVOD revenue moves higher due to higher streaming service prices and more streaming service subscriptions per account, and AVOD revenue moves higher from a higher inflow of ad dollar volume. * Total revenues rise at a 25%-plus pace into 2025. * Platform gross margins scale towards 70%, while player gross margins stay around 5%. * The opex rate drops to 40% as robust revenue growth drives significant operating leverage. * EPS settles around $5.50 by 2025. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Long Term Price Target: About $165, based on a big growth 30-forward multiple on projected fiscal 2025 EPS of $5.50.Present Value: About $100, based on a 10% discount rate and a projected 2024 price target of $165. Square (SQ)Source: Shutterstock TTM Gain: 22%The Bull Thesis Tag Line: "The Backbone of Modern Commerce"Core Bull Thesis: The secular bull thesis on Square is based on the idea that Square is transforming into the backbone of the the modern commerce world by creating a payments ecosystem tailored to 21st century consumption and retail habits.Consumers globally are pivoting away from cash transactions towards non-cash transactions, because non-cash transactions are significantly more convenient and more levered to digital shopping. As such, global non-cash transaction volume has risen at a steady 10%-plus clip for the past several years.Over the next several years, non-cash payments volume is expected to run at a 10%-plus pace, driven by heavier card usage in developed economies and broader urbanization and digitization in developing economies.Square has built a payments platform which helps merchants of all shapes and sizes process these non-cash transactions. On top of that, the company has developed a myriad of tangential solutions - such as a digital peer-to-peer payments app, an enterprise payroll app, and lending services - all of which are tailored to the consumption and retailing habits of the 21st century.Square is developing a payments ecosystem which is built for modern commerce. Yet, the platform still only accounts for 0.35% of all global retail sales. As such, the trends and addressable market here imply that Square has a lot of room and firepower to grow over the next several years.Key Growth Projections: * Global retail sales grow at a 5% compounded annual growth rate into 2025 to nearly $34 billion, due to inflation and global urbanization trends. * Square's market share of the global retail sales pool rises from 0.35% in 2018, to 1% by 2025, as the company expands its reach in the physical retail world from micro-merchants to bigger merchants, and as the company takes a deeper dive into the e-commerce world. * Square GPV grows at a 20%-plus annualized pace into 2025, while revenues grow at at 25%-plus annualized pace, driven by incremental revenue from hardware and ancillary solutions. * Profit margins move steadily higher over the next several years as increased scale drives positive operating leverage. * EPS settles around $4.50 by fiscal 2025.Long Term Price Target: About $135, based on a payments stock average 30-forward multiple on fiscal 2025 EPS of $4.50.Present Value: About $85, based on a 10% discount rate and a fiscal 2024 price target of $135.As of this writing, Luke Lango was long FB, AMZN, NFLX, GOOG, SHOP, TTD, ADBE, ROKU, and SQ. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post 5 STARS Stocks Smashing the Market (FANG Stocks, Too) appeared first on InvestorPlace.
(Bloomberg) -- Microsoft Corp. and ServiceNow Inc., makers of cloud-based software, announced a partnership that will help ServiceNow sell to highly regulated industries and further integrate the companies’ technology. ServiceNow will use Microsoft’s Azure cloud to host workloads for the U.S. and Australian governments, the companies said Tuesday in a statement. The companies may allow other customers to run ServiceNow applications on Microsoft’s cloud, but didn’t specify when. This is the first time that ServiceNow has made its software available for use with a major public cloud-computing vendor.Microsoft will also sell ServiceNow applications, helpingServiceNow enter new segments and geographic markets. The agreement may bolster ServiceNow’s stated goal of reaching $10 billion in annual revenue. ServiceNow pitches itself as a “digital workflow company” that organizes the basics of business, such as setting up a help desk for IT operations or bringing on board new employees. Its decision to use Azure to run its software, instead of relying purely on in-house server farms, is key for Microsoft as it seeks more customers for its cloud infrastructure services. Market leader Amazon.com Inc. counts many of the biggest cloud-software application providers as clients, including Splunk Inc. and Okta Inc. “Microsoft was really best positioned as a broad strategic partner,” Lara Caimi, chief strategy officer of ServiceNow, said in an interview. “We were hearing from our customers that they wanted ServiceNow and Microsoft to work better together.”Microsoft will also use more ServiceNow software, adopting the company’s Information Technology & Employee Experience product “to improve operations, enhance employee experiences, and deliver stronger business outcomes,” according to the statement. For now, the software makers will integrate more capabilities from Microsoft's customer-relationship, accounting, and Office cloud applications with ServiceNow’s programs. The new deal with ServiceNow expands on a limited partnership the companies announced in October. Moving forward, ServiceNow will benefit from Microsoft’s security certifications as it pursues government contracts around the world. For Microsoft, the partnership will give the company another ally in the fast-growing cloud-applications space. The world’s largest software maker already partners with Adobe Inc. and SAP SE — companies that compete against a key Microsoft rival, Salesforce.com Inc. ServiceNow also goes toe-to-toe against Salesforce in help desk software, and Microsoft’s plan to sell ServiceNow products to customers fills a key gap in the Microsoft ecosystem. For its part, Salesforce has bought companies that are rivals of Microsoft, such as analytics company Tableau Software Inc. and Quip, which has a productivity suite.“It's a large vote of confidence in our platform,” said Gavriella Schuster, a Microsoft vice president.ServiceNow’s stock has gained 65% this year, closing at $293 on Monday in New York. Microsoft’s shares have jumped 35% this year to $136.96. The Redmond, Washington-based software maker is the world’s most valuable company by market capitalization.Microsoft and Santa Clara, California-based ServiceNow committed to collaborate on future solutions, and are currently hashing out some of the details. ServiceNow may join Microsoft’s Open Data Initiative, a pact with SAP and Adobe to use the same data model so mutual customers can move information among their various systems. To contact the authors of this story: Nico Grant in San Francisco at email@example.comDina Bass in Seattle at firstname.lastname@example.orgTo contact the editor responsible for this story: Andrew Pollack at email@example.com, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Facebook makes more profit per employee than any other tech company on the Fortune 500: A whopping $634,694 per year. Here's how that compares with other major tech employers like Google, Apple and Cisco.
These days, passive and index investing is all the rage. And there's a good reason for that, many active managers struggle to beat their benchmarks and produce market-beating returns. So, why bother then and pay the additional costs? But the truth is, there are places that active management can pay off. One such example could be among tech stocks.The technology sector continues to be a game of guessing and selecting the next big time. That often means the leaders of tomorrow are the mid- and small-cap tech stocks of today. Popular tech stocks indexes and exchanged-traded funds like the Technology Select Sector SPDR Fund (NYSE:XLK) are often top-heavy with the largest tech stocks around. There's nothing wrong with that. However, an active manager can find the best and most promising smaller stocks outside of the benchmark. Thereby, leading to higher returns.And the proof is in the pudding when you look deeper into key tech ETFs to buy.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks That Should Be Every Young Investor's First Choice There are several tech ETFs and mutual funds that have managed to crush their benchmarks and the broader technology indexes for years. For investors looking for higher returns in the tech sector, the following three funds are a great bet. T.Rowe Price Science and Technology Fund (PRSCX)Earning an average of 20% per year over the last ten years sounds too good to be true. But that's exactly what the T. Rowe Price Science and Technology Fund (MUTF:PRSCX) has managed to do. PRSCX has managed to crush the S&P 500 by nearly 4% per year over that time. It has beaten the XLK as well. The secret is in the stock selection.Manager Ken Allen looks for tech stocks that have the potential for real earnings and revenue growth as well as those that are leading/growing their market share. This serves as an important hedge. Those companies, especially small tech stocks, that fall short of analyst expectations are often treated harshly by investors. But those that actually have the ability to keep churning out revenue and profit growth tend to keep on winning. As a result, PRSCX has been able to keep its returns consistent and high.As for those stocks themselves, the fund is able to not only bet here at home but overseas as well. Top holdings for the fund include U.S.-based Booking Holdings (NASDAQ:BKNG) and the Netherland's ASML Holdings (NASDAQ:ASML). The idea is not to find growth stories, but actual growth stocks. The fund is concentrated as well -- with $5.5 billion in assets spread over just 43 different names. Allen is willing to trade them too. Turnover for the fund is a high 88%. So, this is not one to keep in a taxable account.Expenses for PRSCX clock in at 0.79% or $79 per $10,000 invested. That's a little high when compared to indexing. However, given the mega-sized excess returns for the fund, that expense ratio is a small price to pay. The minimum investment is $2,500. Fidelity Select Software and IT Services Portfolio (FSCSX)One of the biggest trends in all of technology happens to be cloud computing. Being able to access software and apps on any device through the internet has completely changed how both consumers and enterprise customers function. And there's plenty of growth ahead as more firms take to the cloud. Which is why the Fidelity Select Software and IT Services Portfolio (MUTF:FSCSX) could be a great active mutual fund to buy.As the name implies, FSCSX hones in on those stocks that provide software and services related to networking and data warehousing. These days, much of the fund's portfolio reads like a who's who of the top cloud computing players. Microsoft (NASDAQ:MSFT), Salesforce (NASDAQ:CRM) and Adobe (NASDAQ:ADBE) are just some examples of top holdings. And it turns out, this is a great place to be.As cloud computing has grown, so has FSCSX. Over the last ten years, the mutual fund has managed to produce a near-22% annual return. That handily beats the S&P 500 and its benchmark -- the MSCI U.S. IM Software & Services 25/50 Index. That return has allowed the fund to score a coveted five-star rating from Morningstar. * 7 A-Rated Stocks to Buy for the Rest of 2019 Expenses for the fund run at 0.72%. But perhaps the best part is that thanks to recent changes at Fidelity, FSCSX's minimum has been lowered to $0, with additional investments at $0 as well. This can allow even the smallest investors to get better than benchmark returns in the tech sector. Red Oak Technology Select (ROGSX)Active management wins when it is highly selected and concentrated. That's just what the Red Oak Technology Select (MUTF:ROGSX) does. Jim Oelschlager and his team at Oak Associates first look for the most attractive sub sectors of technology. Then they look for great long-term winners among these tech sectors by placing plenty of weight on the durability of the business and the company's valuation. Individual tech stocks competitive advantages and sustainability are also key when building their portfolio. Oelschlager and his team specifically don't look for the hot stories or fads. You won't find Tesla (NASDAQ:TSLA) here.The result is very few bets that are held for a long time. Currently, ROGSX only holds just 35 different tech stocks. Turnover for the fund is just 9%. This focus on durability, moat, and holding has paid off over the long haul.In terms of returns, ROGSX has managed to outperform its benchmark by about a percentage point over the last decade. This highlights the more long-term focus of the managers. In the shorter-term, ROGSX's returns have been a bit bumpy. So, this is definitely one that you'll want to buy and forget about for a while. Expenses for the mutual fund come in at 1.01%.All in all, for those investors looking for long-term -- potentially decades-long -- exposure to tech stocks, ROGSX could be a great mutual fund to buy.As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy That Are Down in 2019 * 7 of the Best SPDR ETFs -- Besides SPY and GLD * 5 Dividend Stocks to Buy From Across the Globe The post 3 Tech Funds That Are Crushing Their Benchmarks appeared first on InvestorPlace.
Since Adobe (NASDAQ:ADBE) moved its applications to clouds and began selling them as a service early this decade, Adobe stock has been a rocket ship with seemingly unlimited fuel.Source: Marcin Wichary via FlickrOver the last five years alone it has risen 326%. If you bought it 10 years ago, near the bottom of the recession, your gains have been 819%. By comparison, Microsoft (NASDAQ:MSFT), whose Azure cloud hosts Adobe applications, is up "only" 480%.This is possible because of the economics of cloud, built on open source software and commodity hardware. The biggest benefits of open source go to the users, not the developers, and Adobe is a cloud user.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks That Should Be Every Young Investor's First Choice Adobe Stock Valuation ConcernsWith an opening July 3 price of $302, and a market cap of $146.3 billion, Adobe shares are in nosebleed territory. It's a place they've been before this decade, consolidating and then rushing higher on results.The latest results, delivered June 18, were once again above analyst expectations, with year over year growth of 25%. Adobe earned $632 million, $1.29 per share fully diluted, on revenue of $2.744 billion. Earnings beat elevated estimates by almost 3%.Shares rose 4.6% after the earnings beat and have kept rising since. Adobe now trades at a whopping 16 times last year's sales and 56 times last year's earnings.The time to be bullish, some say, is over. The marketing-based Experience Cloud carries lower margins than the Creative Cloud, which includes such products as Illustrator, Acrobat and Photoshop, the bears grumble, and it's growing fastest. Sweet Smell of SuccessMeanwhile, Adobe has broken ground on a second office tower in downtown San Jose, where it has long dominated the skyline. The new tower will serve 4,000 people, with 700,000 square feet on 18 floors. For San Jose, technically the Bay Area's largest city but long seen as a sleepy suburb until landing the new San Francisco 49'ers stadium, it's a very big deal.Adobe continues to break new ground on its software products, the latest innovation being a tool that can tell when the Face Liquify feature of its Photoshop has been used to enhance someone's face. As more-and-more fake photos and videos are released such security tools are becoming important. Spotting fakes provides a rich vein of future growth. Adobe has also released enhancements that let users erase background objects, so the definition of fake keeps shifting.For that reason, and Adobe's stellar track record this decade, there remain Adobe bulls. Adobe is a disrupter, they say, and that's where you want to be in the current market. Analysts who pounded the table for the stock before earnings looked prescient when the numbers came out. As more marketers in more places gain the scale to afford subscriptions, they see it as wise to let their bets on Adobe ride. The Bottom Line on Adobe StockThe cloud decade shows no immediate signs of ending. But it does show signs of maturing.Whether Adobe can lead in the next phase of technology, as artificial intelligence mediated by cloud gets into devices you see every day, is uncertain. But the company has the scale and the talent to keep moving forward.Until the ground truly shifts under Adobe's feet, I'd let my investment here ride. But for a young investor looking for the returns Adobe has delivered over the last 10 years, it's time to look elsewhere.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in MSFT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Should Be Every Young Investor's First Choice * 5 IPO Stocks to Buy -- According to Wall Street Analysts * The Top 10 Best Sectors in the Market for 2019 The post Adobe Stock Is Teetering on Overvalued, but It Isn't There Yet appeared first on InvestorPlace.
Today we'll look at Adobe Inc. (NASDAQ:ADBE) and reflect on its potential as an investment. In particular, we'll...
BHP, Foot Locker, Adobe, Oracle and Salesforce highlighted as Zacks Bull and Bear of the Day
For the first time since 2016, earnings are expected to fall year-over-year. Is it a sign of a slowdown or a red herring for investors?
Normally, a competitor's increased presence, especially in one's own turf, represents serious trouble. And under this context, consumer technology giant Microsoft (NASDAQ:MSFT) should be worried. Recently, a developer for the open-source platform Linux accidentally revealed that Linux-based operating systems had greater presence in Microsoft's Azure cloud network than Microsoft-based OS'. Does this signal a dumping opportunity for Microsoft stock?Source: Shutterstock At first glance, the suddenly dominant presence of Linux may startle stakeholders of Microsoft stock. After all, Linux is a free and open-source collaboration, meaning that it's impossible to profit from its mere existence. Of course, that philosophy runs counter to Microsoft's legacy revenue channels, where it sold programs and updates to those programs.By all accounts, it was an extremely profitable venture. But this latest bit of Microsoft news demonstrates that we're no longer in the 20th century. And despite the optics, the Linux development is a long-term positive for MSFT stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 F-Rated Stocks to Sell for Summer How so? Because MSFT is, when it comes to software-related ventures, moving firmly toward the Software as a Solution (SaaS) model. Not only that, but the rise of Linux helps shift the narrative to the concept that Microsoft stock will now trade on the fundamentals of service offerings, not standalone products.For management, it doesn't really matter that Linux is the go-to choice for Azure users. For one thing, there's the fact that Azure is cheaper to run on Linux than on any other platform. Even Microsoft benefited from Linux's streamlined and efficient architecture to power its Internet of Things (IoT) devices.In other words, MSFT stock wins as long as Microsoft is somehow involved in the process. Office 2019 Offers Insight Into "New" MSFT StockWhen Microsoft 2019 launched during last year's fall season, it perplexed many observers. By that time, the tech firm had decisively entered the SaaS arena, and for good reasons. Namely, SaaS makes perfect sense for MSFT stock on multiple levels.First, subscription-based models utilize an ongoing contractual relationship. While the subscriber has to pay constantly, they also have access to the SaaS entity's service umbrella. Thus, when the need for updates arise -- and that need perpetually exists -- the platform automatically refreshes with relevant features.Second, the subscription model can quickly convert prospective buyers due to their much cheaper initial cost outlay. Once subs are on board, companies have greater chances to convert them to higher-margin services. Such strategies have rejuvenated Microsoft stock in the past. They've also done wonders for Adobe (NASDAQ:ADBE).So when MSFT launched Office 2019, the computing public viewed it as one of the strangest pieces of Microsoft news. Unlike Office 365, Office 2019 was not an SaaS platform. Instead, it was a one-shot offering for whom Microsoft termed "customers who aren't ready for the cloud."Not ready for the cloud? This is the kind of language that, if you didn't understand the context, would cause panic on Microsoft stock. Thankfully, you just need to read between the lines to see what management is up to.And no, the leadership team haven't lost their minds. Simply, Microsoft Office 2019 is a way to soak up demand from those who aren't ready for SaaS; I'm thinking students or non-technical startups.But the real beauty of Office 2019 is its limitations. Using it makes customers wonder, what if? Microsoft readily answers that question with their suite of SaaS services. Granted, it's a long-winded approach to lift MSFT stock, but it works. Microsoft Isn't Microsoft, and That's Just Perfect!A decade ago, the old Microsoft would freak out that another competing OS is legitimately flexing its muscle. That iteration would probably fight fire with fire, leading to a series of bloated and bumbling systems. * 10 Stocks That Should Be Every Young Investor's First Choice Thankfully, we're living in the era of the upgraded MSFT. In this version, the company has realized tech's economies of scale, that open source can foster more utilitarian solutions. Better yet, new management has embraced this. Instead of fighting a losing battle, they're redirecting their efforts into their core strengths. That's a key difference between the Microsoft stock of old versus the one we see today.And what exactly are Microsoft's strengths? They are innovation and an unbeatable brand in PC-related software solutions. With these components, Microsoft assures itself relevancy despite losing dominance in certain market subsegments. Ultimately, that's why stakeholders can continue to trust MSFT stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best Stocks to Buy and Hold Forever * 10 Small-Cap Stocks That Look Like Bargains * 10 Names That Are Screaming Stocks to Buy The post Why Microsoft Stock Owners Shouldnat Worry About Linux appeared first on InvestorPlace.
Editor's note: This article is a part of InvestorPlace.com's Best Stocks for 2019 contest. John Jagerson and Wade Hansen's pick for the contest is Adobe (NASDAQ:ADBE).Since December 2018, we have been recommending Adobe (NASDAQ:ADBE) as a long position because its fundamentals are undervalued. ADBE's market position is dominant in its media products and the company has been steadily growing by adapting its Creative and document management solutions to mobile. We feel that these factors will protect the company from the emerging economic headwinds both in the U.S. and outside.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFrom a technical perspective, ADBE has been able to outperform its benchmark indexes and most of its peers despite a choppy year for stocks so far. Now that we have another two quarters of data since we began recommending ADBE stock, it's time to revisit our analysis and see if we can still make the same judgement. Valuing ADBEWe believe that ADBE's ability to grow its profit margins has positioned it well in each of its three main segments: Digital Media, Digital Expertise and Publishing. The media segment includes their Creative products like Photoshop and their document services, which accounts for more than 70% of their revenue.The most recent quarterly report on June 18 showed Creative revenues were up by 22% on a year-over-year basis. The emphasis on services and subscriptions has increased ADBE's gross margin to 85% and net margins are at 23% over the same period. The company did suffer a little over the last two quarters due to adverse currency conversion rates, but to put it in perspective, from a margin standpoint, ADBE is outperforming Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), and Amazon (NASDAQ:AMZN); it's also just behind the most recent report from Microsoft (NASDAQ:MSFT). * 7 Restaurant Stocks to Put on Your Plate Besides the favorable comparison between ADBE and their peers, we believe the company's growth has not been fully priced into the stock. As you can see in the following chart, revenue and EPS have been rising with the stock's price, but its earnings multiple remains near historical lows. If we were to adjust the EPS line to use constant dollars, the trend of the P/E ratio and EPS would be even more impressive. Click to EnlargeThe point behind a value-price comparison like this is to determine if investors are paying more, or less, for each dollar of earnings than they have in the past. Because growth is still strong, paying less for the stock now indicates the likely probability that the shares are still undervalued. Technical PositionLike the stock averages themselves, ADBE's share price drew down in April and May as traders worried about the impact of slowing economic growth and the trade war. Total revenue from the Europe Middle East Africa (EMEA) region was 27% in the most recent quarter and 15% was from Asia. Outside the US, economic performance and stock markets haven't recovered from the bear market of late-2018 to the extent the U.S. has, and we feel this has also dragged on ADBE's share price.However, ADBE's current technical breakout following their earnings report from an inverted "head-and-shoulders" pattern looks to be a strong bullish momentum signal. This stock tends to have reliable technical patterns which we have been commenting on in our previous recommendation updates including the double bottom in February, bullish diamond in April, and the double-bottom retest at the beginning of June. Click to EnlargeIn the short term, a Fibonacci-based target of the inverted head-and-shoulders pattern would indicate an upside target in the $313 per share range. Historically, patterns like this can play out very quickly, but 60-days is closer to the long-term average. A Few Issues to Watch for AdobeAs previously mentioned, a quarter of Adobe's sales come from Europe. Adobe may see its revenues softening, especially in document services if the European economy continues to weaken and the Brexit outlook gets worse due to new conservative leadership in the U.K. Adobe's continual investment in developing end-to-end document signing and processing puts it at the forefront of the global supply chain. However, recent trade wars could stall that income growth in the short term.The company has placed an emphasis on lower-end media solutions and document management that are focused on mobile users which should help insulate the company from some economic issues because these products are broadening their customer base. We believe the long-term impact of this focus will be similar to what happened when the company shifted to cloud-based services and will increase margin growth. * 7 Stocks on Sale the Insiders Are Buying As noted in ADBE's recent earnings release, a rising dollar was a negative for earnings. The Fed is hinting at a strong possibility of interest rate cuts in the short term, which could help weaken the dollar and improve performance. However, even with the Fed's potential cuts in July and December, the battle for a cheaper currency may be tough to win against the European Central Bank (ECB) which has promised to be ready with easing of its own if market conditions worsen in Europe. This is a systemic issue that will affect most large companies but is something to keep your eye on this summer.InvestorPlace advisors John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next trade and get 1 free month today by clicking here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post Best Stocks for 2019: Adobe Stock Is Up 30% YTD -- And Still Undervalued appeared first on InvestorPlace.
Editor's note: This column is part of our Best Stocks for 2019 contest. Jason Moser's pick for the contest is Teladoc Health (NYSE:TDOC).Teladoc looked like it was going to end the quarter in fourth or even fifth place. But after a rally that started last Wednesday, TDOC stock slid past Adobe (NASDAQ:ADBE), Amazon (NASDAQ:AMZN) and Charlotte's Web (OTCMKTS:CWBHF) for a second-place finish.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo how does TDOC look going forward? TDOC's First Quarter EarningsTeladoc's first quarter was a good one. Revenue of $128.6 million marked growth of 43% (23% organic) and total U.S. paid members are now at 26.7 million along with 10.2 million visit fee-only users. Total visits of 1,063,000 represented 29% organic growth.It's also worth noting that this represented the first quarter where the business crossed 1 million doctor's visits, and that was actually in spite of a weaker flu season. International visits grew from basically nothing a year ago to 282,000 this quarter.Gross margin was 65.3% versus 70% a year ago and as we've seen in previous quarters this investment in behavioral along with a more comprehensive offering. TDOC's balance sheet remains in good shape considering the deals the company has made recently with $479 million in cash and equivalents and $450 million debt. It's also worth noting that debt is in convertible notes that don't even come due until 2022 and 2025. Looking Ahead for TDOCThe business is still unprofitable but what else is new? Profitability will come in time and management reiterates that the company will be cash flow positive for the first time in 2019 so we'll hold them to that target. * 7 Restaurant Stocks to Put on Your Plate The CVS and Aetna relationships have never been stronger and we should expect some additional news regarding Teladoc and Aetna at some point in the near future as well.CEO Jason Gorevic likes this business because there are so many levers for growth. I tend to agree; healthcare is a phenomenally large global market opportunity.One final note, the CFO search is over as Mala Murthy has joined the Teladoc team. A seasoned vet, Murthy comes to the company from American Express so it's encouraging to see the team in a good place going forward.As of this writing, Jason Moser, a senior analyst with The Motley Fool, held shares of TDOC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post Best Stocks for 2019: Teladoc Stock Is Here to Stay appeared first on InvestorPlace.
Stock futures: Chips and China names led Monday's stock market rally. But Microsoft, Adobe, ServiceNow are among five top software stocks rising and reclaiming buy points.
Adobe has driven north of 20% revenue growth for every quarter year-over-year since 2015. ADBE has surge more than 313% in 5 years, and potential investors keep missing the boat. The stock is on track for their 8th consecutive year of double-digit returns.
Adobe's earnings grew 10% in each of the past two fiscal quarters. But that represents a decline from 40% or greater growth in the previous nine quarters.
Insider Monkey tracks hedge funds, billionaires, and prominent value investors for a very simple reason: their consensus picks generally outperform the market. We aren’t the only research shop broadcasting this fact using a bullhorn. Here is what strategist Ben Snider said in Goldman Sachs’ periodic hedge fund report: “Despite the strong track record of popular […]