Alvin Gonzales

Editor's Choice

• Water and the Negative Free Cash Flow Problem

  By Alvin Gonzales - December 4, 2012 | Tickers: AWK, WTR, SBS |

  The water utility industry is capital intensive. Regulatory agencies help companies cope with high costs by approving rate increases. In its 2011 annual report, American Water Works (NYSE: AWK), the largest investor-owned water and wastewater utility company in the US, states, “...based on certain legal and regulatory principles, utilities are entitled to recover, through rates charged to customers, prudent and reasonable operating costs as well as an opportunity to earn more »

• The Best Garbage Dividends

  By Alvin Gonzales - November 29, 2012 | Tickers: RSG, WCN, WM |

  Instead of focusing on potential ten bagger stocks, which are usually very risky, investors would be better off looking for stable businesses. While this approach seems boring, there is actually a mathematical reason for the approach. As a simple example, say an investor loses half or 50% of his money while gambling on penny stocks. To break even, that investor would have to double his remaining money. This simple example more »

• Storage Kings

  By Alvin Gonzales - October 23, 2012 | Tickers: STX, WDC |

  Seagate Technology (NASDAQ: STX) and Western Digital (NASDAQ: WDC) dominate the hard disk drive (HDD) market. In Q2 2012, the two companies combined for 87% of the market. The other 13% was owned by Toshiba. The HDD market has been recovering from last year’s devastating Thailand floods, which temporarily knocked Western Digital from its top spot. Thailand has 25% of the total HDD assembly facilities in the world (iSuppli more »

• Ultra Deepwater Growth Potential

  By Alvin Gonzales - October 2, 2012 | Tickers: DO, ESV, PACD, SDRL, RIG |

  Pacific Drilling (NYSE: PACD) is growing. Currently, the company has four drillships in operation and three more under construction. Recently, Pacific Drilling extended, until December, an existing option for construction of its eighth drillship by Samsung Heavy Industries. The company, which was founded in 2006 and went public in November 2011, is growing fast and has a lot of potential.

  Currently, Pacific Drilling has a market cap of $2.2 more »

• Nintendo Is Releasing a New Console; Microsoft and Sony Should Too

  By Alvin Gonzales - September 28, 2012 | Tickers: ATVI, AMD, MSFT, NVDA, SNE |

  Nintendo is planning to launch its next-generation console, the Wii U, in November. Nintendo’s previous console, the Wii, was released six years ago in 2006. Similarly, Microsoft’s (NASDAQ: MSFT) Xbox 360 and Sony’s (NYSE: SNE) PlayStation 3 were released in 2005 and 2006, respectively. The consoles are old and the gaming industry would benefit from a new generation.

  Currently, the U.S. gaming industry is on a more »

• Sell Apple and Buy Google and Microsoft

  By Alvin Gonzales - July 28, 2012 | Tickers: AAPL, ARMH, GOOG, INTC, MSFT |

  Is Apple (NASDAQ: AAPL) a great company? Yes, without a doubt. The maker of the iPod, iPhone, iPad, and Mac generates over $100 billion in revenue every year. The company has killer products, loads of cash, and has a cult like following. However, all that takes a back seat when one realizes that the market cap of Apple is greater than Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) combined.

  Apple more »

• Pacific Drilling: A Promising Multi Bagger of the Deep

  By Alvin Gonzales - July 20, 2012 | Tickers: CVX, ESV, PACD, RIG |

  Pacific Drilling (NYSE: PACD) has been quietly stacking up on drillships. The company, which was founded in 2006 and became public on November 11, 2011, currently operates four ultra deepwater drillships and has three more drillships under construction with Samsung Heavy Industries.

  The company has been growing quickly. As the following table shows, its initial four ships are all under contract and the Pacific Sharav, which is scheduled to be more »

• The Best of the Best: Diamond Offshore Drilling and Atwood Oceanics

  By Alvin Gonzales - May 29, 2012 | Tickers: ATW, DO, ESV, RDC, RIG |

  Investing in offshore oil drilling makes sense. The ocean covers 71% of the Earth’s surface (NOAA). If one assumes that the distribution of oil underneath the ocean floor is similar to the distribution of oil found inland, then one can see that there is huge potential in offshore oil drilling.

  Additionally, the area of the ocean that can be accessed by current drilling technology is large. Since the average more »

• Windows 8: Apple and Google Should Fear Microsoft

  By Alvin Gonzales - April 23, 2012 | Tickers: AAPL, GOOG, MSFT |

  The tablet world will erupt into a giant OS war later this year, when Microsoft (NASDAQ: MSFT) launches Windows 8. Currently, Apple (NASDAQ: AAPL) and the iPad have a 70% global tablet market share and tablets running Google (NASDAQ: GOOG) Android account for almost the rest (digitimes). Despite the challenges of fighting entrenched competition, Microsoft and Intel are aiming to reduce the iPad’s market share to less than 50 more »

• Cisco and the Golden Age of the Internet

  By Alvin Gonzales - April 16, 2012 | Tickers: CSCO, DELL, HPQ, IBM, JNPR |

  Cisco Systems (NASDAQ: CSCO) is a cash generating machine that is in a sector that is primed for strong growth. In its most recent quarter, Q2 of fiscal year 2012, Cisco reported record revenue of $11.5 billion, record earnings per share of $0.40, and an operating cash flow of $3.1 billion. Year over year, revenue increased by 11%, earnings per share increased by 48%, and operating cash more »

• Why You Shouldn't Stick a Fork in RIM

  By Alvin Gonzales - April 8, 2012 | Tickers: AAPL, BBRY, GOOG |

  Research in Motion (NASDAQ: BBRY), the maker of the iconic BlackBerry, looks like just another big name company that is about to kick the bucket. Executives are leaving the company in droves, their market share is shrinking, and their stock price has dropped from a high of almost $150 per share in 2008 to a measly $12.67 per share as of this writing. RIM ignored the emergence of strong more »