Lee Samaha

Editor's Choice

  • A Semiconductor Play With a Promising Outlook

    By Lee Samaha - April 22, 2013 | Tickers: ALTR, ARMH, INTC, TSM | Editor's Choice

    Investing in Intel (NASDAQ: INTC) is a bit like betting on an old and slightly out of shape, but hard hitting fighter. Mr. Market keeps landing quick jabs and slows his opponent down. The odd cheeky hook to the body gets slipped in, and your fighter starts to slow and look out of place. He is way down on points by the middle rounds, so, he starts throwing haymakers, and more »

  • Can Dell & Hewlett-Packard's Restructuring Actually Work?

    By Lee Samaha - August 24, 2012 | Tickers: DELL, EMC, FTNT, HPQ, INTC | Editor's Choice

    Two tech bellwethers reported this week and it was a pretty grim outlook from both of them. The issues with Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) are not so much their exposure to technology as their exposure to old technology. In other words, far too many of their profit centers appear to be within a structural decline and it is going to take time for them to adjust to more »

  • How to Properly Diversify Your Portfolio

    By Lee Samaha - August 3, 2012 | Tickers: CAT, C, INTC, JNJ, VRTX | Editor's Choice

    Very few professional investors would advocate a portfolio of equities without insisting diversification. It is certainly a worthy aim, but what is puzzling is that so few seem to understand it or at least make the effort to think in non-conventional terms about. In my humble opinion the conventional and consensus opinion on the subject is plain wrong and investors with even a rudimentary understanding of the underlying issues can more »

  • Why this IT Security Play Looks Undervalued

    By Lee Samaha - July 22, 2012 | Tickers: CHKP, CSCO, FFIV, FTNT, JNPR | Editor's Choice

     

    Technology investors can be forgiven for thinking that the sky was about to fall on them in the last few months. Granted, some companies have given eye watering warnings and the macro environment has unquestionably weakened, however, a ‘one size fits all’ approach in technology investing has rarely been more ill advised. Not all companies are seeing revenues collapse and because catastrophe is priced in, there is upside even if more »

  • China's Telecom Spending Weakens, is Telco Threatened?

    By Lee Samaha - July 19, 2012 | Tickers: CIEN, CSCO, FNSR, JDSU | Editor's Choice

    China’s ZTE Corp surprised the market with a grim pre-announcement on Friday and the Hong Kong-listed stock was the latest in the telecom sector to crash on Monday. Whereas other stocks in the sector have disappointed on weakness in North American service provider spending, part of what ZTE is saying is related to China’s spending. The company makes around 50% of its revenues from telecom network equipment and more »

  • A Mixed Outlook for Outsourcing Firms

    By Lee Samaha - July 5, 2012 | Tickers: ADP, NSP, PAYX | Editor's Choice

    Paychex (NASDAQ: PAYX) has a lot of interesting qualities that could appeal to an investor. Aside from a 4% yield it has minimal European exposure and is primary a play on US growth. It is also heavily exposed to US employment and small business growth. Despite the gloomy data recently there are grounds for optimism as things appear to be improving. In summary, I think Paychex’s weak growth numbers more »

  • This Digital Media Play is Stronger Than it Appears

    By Lee Samaha - June 22, 2012 | Tickers: ADBE, ADSK, FB, GOOG, IBM | Editor's Choice

    Adobe Systems (NASDAQ: ADBE) became the latest technology company to lower guidance as a result of European difficulties and the market immediately marked the stock down. As ever, rational investors will reflect on the results in the context of the long term picture rather than reacting in a knee jerk fashion. So is there a case to be made for Adobe?

    I happen to think there is.


    Adobe's Results more »

  • How Long Before Facebook Disappears?

    By Lee Samaha - June 8, 2012 | Tickers: FB, GOOG, YHOO, ZNGA | Editor's Choice

    A financial analyst hit the mainstream headlines recently when he declared that Facebook (NASDAQ: FB) could disappear in 5-8 years, in a similar manner to how Yahoo! (NASDAQ: YHOO) has declined. It is a bold claim, but is it grounded in reality? I happen to think it is.

    Time and time again, we have seen the pace of technological change leave behind companies that were once seen as insurmountably dominant more »

  • What You Need to Know About Europe and Your Company

    By Lee Samaha - May 29, 2012 | Tickers: AAPL, FB, GE, JPM, NTAP | Editor's Choice

    Investing is a complex game. For all the focus on bottom up fundamentals, sometimes it is really macro considerations that guide stock prices. Or rather, sometimes macro events pre-empt the changes in the underlying earning potential. I think we are seeing that now, with the investment focus firmly on events in the Euro Zone and particularly Greece. These issues may seem tangential, but a lot of US companies have been more »

  • What Campbell's Soup is Telling the Market about the Consumer

    By Lee Samaha - May 24, 2012 | Tickers: CPB, HNZ, MCD, PG, YUM | Editor's Choice

    Theoretically, the Campbell Soup Company (NYSE: CPB) should be the perfect stock for this kind of economically uncertain environment. The idea, at least, is that its end demand is relatively stable and even if there is a global slowdown in growth, it could expand margins through lower cost inflation. In addition, it generates large amount of cash flow and pays a big dividend.

    Of course, that’s the theory. In more »

  • A Buying Opportunity in the Auto Parts Companies?

    By Lee Samaha - May 22, 2012 | Tickers: AAP, AZO, F, GPC, ORLY | Editor's Choice

    As everybody knows, it takes two to make a market and right now we are locked in an almost titanic battle between bears and bulls, The defensives and dividend plays are holding up whilst cyclical sectors like technology are hated. Conversely, the market crushed a stock, which I consider to be a counter-cyclical. Go figure!

    Advance Auto Parts (NYSE: AAP) gave notice of weaker sales in April and, the market more »

  • GameStop's Competitive Challenges are Increasing

    By Lee Samaha - May 22, 2012 | Tickers: AMZN, BBY, GME, WMT | Editor's Choice

    GameStop (NYSE: GME) gave a disappointing  set of Q1 results which sent the shares sharply lower. The outcome will –no doubt - delight the legions of bears who are short the stock, but is it now becoming a contrarian restructuring play?

    Sadly, I think not. This business looks to be structurally challenged, and, despite sterling efforts by the management, it is hard to get too excited by its prospects.

     

    GameStop Earnings more »

  • Are Discount Stores Still Good Value?

    By Lee Samaha - May 15, 2012 | Tickers: DG, DLTR, FDO, ROST, TJX | Editor's Choice

    As Jamie Dimon just found out at JPMorgan, managing risk is a whole lot harder than it appears. What makes it difficult is that it is easy to be seduced into thinking we are managing risk if we accept the consensual view. Unfortunately, the ‘consensual view’ of managing risk is -- by definition -- one that many people hold and the price of carrying it tends to go up. If that position more »

  • Cisco's Weak Guidance: Is it a Company Issue or is Tech in Trouble?

    By Lee Samaha - May 11, 2012 | Tickers: CSCO, EQIX, FFIV, FTNT, XXIA | Editor's Choice

    Whenever a technology bellwether like Cisco Systems (NASDAQ: CSCO) reports results, the market takes immediate notice. With the dust now settling over a disappointing outlook statement, it's time to look in greater depth at Cisco and formulate some conclusions for the wider technology market.

    The broad-based sell-off was understandable and no self-respecting investor would ignore CEO John Chambers’ commentary, however, I think there is more to this than just more »

  • Rackspace and Equinix, a Tale of Two Cash Flows

    By Lee Samaha - May 11, 2012 | Tickers: DLR, EQIX, INXN, RAX | Editor's Choice

    Superficially, Equinix (NASDAQ: EQIX) and Rackspace (NYSE: RAX) have a lot in common. Both are high growth plays in the cloud computing sector. They also seem to be in similar stages of development in their industry life cycle. In other words, they are generating high revenue growth, but little cash flow. However, I would argue that they have different business models and, going forward, we could see divergence in some more »

  • What is Really Guiding this Stock's Performance?

    By Lee Samaha - May 10, 2012 | Tickers: CSCO, GE, GS, HD, LOW | Editor's Choice

    I’m a big fan of George Soros and his theory of reflexivity. I thought it would be interesting to explore some of the themes within it and, expand upon them in order to see how it might manifest itself into specific investments.  Before engaging in this, here's a quick primer on what my take is on Soros’ reflexivity theory and, a key issue within it.

    Essentially, Soros’ idea more »

  • Estee Lauder and the Cosmetics Market

    By Lee Samaha - May 9, 2012 | Tickers: AVP, IFF, NUS, REV, EL | Editor's Choice

    In summary, I think there are attractive reasons to hold Estee Lauder (NYSE: EL) but on a risk/reward basis the stock is hardly a good value. That may seem a glib observation and, it doesn’t take much to look at a stock on a PE of 28 and say it's ‘overvalued, but that shouldn’t detract from the subtle complexity of the underlying profit drivers here. Many more »

  • How to Profit from Rising Protein Prices

    By Lee Samaha - May 2, 2012 | Tickers: CALM, MON, SAFM, SFD, SYT | Editor's Choice

    One of the market's favored investment themes is the long term uptrend in soft commodity prices. The central thesis being that, as the numbers of the middle class expand within emerging markets, they will tend to eat more protein. In general, it takes 7-8 times as much feed (wheat/soya/corn/barley etc) in order to produce a protein meal, as it would to give the same meal made more »

  • Credit Services Companies Set For Long Term Growth

    By Lee Samaha - April 30, 2012 | Tickers: AXP, COF, DFS, MA, V | Editor's Choice

    Once upon a time, credit services companies were seen as defensive stocks. The thesis used to be that loans expanded when the economy was doing well, which led to increased profits. Then when it faltered, the policy response of interest rate cuts, tended to increase net interest income as rate differentials got wider. Of course, when the economy did slow, worsening credit quality leads to increased loan loss provisions which more »

  • Ignore the Market Noise, Check Point's Results Were Positive for IT Security

    By Lee Samaha - April 24, 2012 | Tickers: CHKP, CSCO, FFIV, FTNT, JNPR | Editor's Choice

    Sometimes investors will do the funniest things. Israeli IT security company Check Point Software (NASDAQ: CHKP) gave pretty steady results and the market greeted them by selling the stock down to as low as 10% on the day. Go figure!

    In a sense, I suspect this sort of thing runs in line with current market jitters. Technology companies like Riverbed and Cree have given results and been summarily massacred when more »

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