“Cut-to-the-Chase” Recommendations
- Week Beginning -
Monday, November 27, 2017

by Ian Harvey

IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.


Option Trade - Five Below Inc. (NASDAQ:FIVE) Calls

Wednesday, November 29, 2017

** OPTION TRADE: Buy the FIVE DEC 15 2017 65.000 CALL at approximately $0.95.

Sell price is left to your own judgment.

Five Below Inc. (NASDAQ:FIVE), a specialty retailer offering a range of merchandise for teen and pre-teen customers, reports Q3 earnings on Thursday, and analysts expect EPS of 13 cents, a 30% jump, on 23% revenue growth to $245 million. The teen- and tween-focused retail chain is coming off a strong Q2, when fidget spinners fattened sales and margins.

Last quarter, the company outpaced the Consensus Estimate by 15.4%. Notably, it has surpassed earnings estimates in the trailing four quarters with an average beat of 8.7%.

The company has a remarkable history. It persisted with positive earnings surprise streak for the eighth straight quarter, when it reported second-quarter fiscal 2017 results.

The current Consensus Estimate for the quarter under review is 13 cents, compared with a year-ago earnings of 10 cents.

Store expansions and plans to remodel others also have helped attract customers.

Wall Street will likely be looking for the company to keep up those trends as it heads further into the holiday quarter, which it depends on for much of its sales.

Influencing Factors

he company's bottom-line growth in the quarter to be reported is likely to be driven by comparable sales, enhanced margins and effective execution of the strategic initiatives. Five Below remains committed toward expanding store base, as well as enhancing in-store experience to draw traffic and enhance customer base. In fact, the company's solid store remodeling is a major reason behind robust comps performance.

After reporting solid comps, in the first and second quarter of fiscal 2017, the company had raised full-year comps view, anticipating it to grow 3.5-4.5%, compared with 3-4%, guided earlier.

Enhancing margins is one of Five Below's key growth strategies. The company remains focused on achieving margin expansion through efficient cost structure, solid average net sales per store, supply-chain initiatives and focus on attaining economies of scale.

Further, the company estimates third-quarter and fiscal 2017 operating margins to grow modestly year over year.

FIVE’s earnings over the next few years are expected to increase by 85.67%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

Analysts and Hedge Funds Opinions

KeyCorp restated their hold rating on shares of Five Below, Inc. in a research report sent to investors on Friday, November 10th.

Several other analysts have also recently commented on the company…..

  • BidaskClub raised shares of Five Below from a “buy” rating to a “strong-buy” rating in a research note on Thursday, September 28th.
  • Dougherty & Co restated a “buy” rating on shares of Five Below in a research note on Friday, August 18th.
  • Jefferies Group LLC reiterated a “buy” rating and issued a $62.00 target price on shares of Five Below in a research note on Wednesday, August 23rd.
  • Zacks Investment Research upgraded shares of Five Below from a “hold” rating to a “buy” rating and set a $55.00 target price for the company in a research note on Wednesday, August 23rd.
  • Finally, Loop Capital set a $60.00 target price on shares of Five Below and gave the company a “buy” rating in a research note on Monday, August 28th.

Institutional investors that have recently made a change to their positions in the stock….

  • Jennison Associates LLC lifted its position in Five Below by 24.1% in the 3rd quarter. The fund owned 2,124,055 shares of the specialty retailer’s stock after acquiring an additional 412,641 shares during the quarter. Jennison Associates LLC owned 3.85% of Five Below worth $116,568,000 at the end of the most recent reporting period.
  • Advisor Group Inc. raised its position in Five Below by 71.7% in the third quarter. The institutional investor owned 10,081 shares of the specialty retailer’s stock after buying an additional 4,211 shares during the period. Advisor Group Inc.’s holdings in Five Below were worth $552,000 at the end of the most recent quarter.

Summary            

The stock broke out in October, entering a rising channel that is now guiding price action toward $65.

Mid- and small-cap retailers are gaining ground in a long overdue recovery rally, perfectly timed to a 2017 holiday season that should post healthy sales receipts for both brick-and-mortar and online operations. These three sector plays should benefit from this bullish wave, posting new highs well into 2018.

Five Below, Inc. has a 1 year low of $36.90 and a 1 year high of $60.12. The stock has a market cap of $3,280.00, a price-to-earnings ratio of 41.01, and a P/E/G ratio of 1.25 and a beta of 0.80.


Option Trade - Nutanix Inc. (NASDAQ:NTNX) Calls

Wednesday, November 29, 2017

** OPTION TRADE: Buy the NTNX DEC 15 2017 37.500 CALL at approximately $1.20.

Sell price is left to your own judgment.

Enterprise cloud company Nutanix Inc. (NASDAQ:NTNX), is scheduled to report first-quarter fiscal 2018 earnings on Thursday, November 30, 2017, after the market closes. The consensus estimate is for a loss of $0.26 per share on revenue of $266.73 million and the Earnings Whisper number is ($0.21) per share. Investor sentiment going into the company's earnings release has 77% expecting an earnings beat.

The company's guidance was for a loss of approximately $0.37 per share on revenue of $240.00 million to $250.00 million. Consensus estimates are for year-over-year earnings growth of 46.94% with revenue increasing by 59.90%.

The company beat the Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 12.85%. In the previous quarter, the company delivered a positive earnings surprise of 13.16%.

Moreover, the top-line performance has been consistent. The company beat the Consensus Estimate for revenues in each of the trailing four quarters.

Overall earnings estimates have been revised higher since the company's last earnings release.

Nutanix's stock has returned 29.1%% year to date; and have gained more than 20% in the last 1 month.

Nutanix went public on the NASDAQ Global Select Market on September 30, 2016, offering its shares at a price of $16.00 each. The stock received a warm reception from investors on its market debut, surging more than 130% that day. NTNX has thus far hit a low of $14.38 and a high of $34.83. The stock closed Friday's (Nov.24) trading at $34.30, up 3.38%.

Influencing Factors

Nutanix has been benefiting from prospects in the hyperconverged integrated systems (HCIS) market. Last quarter, the company's AHV built-in hypervisor saw 75% year-over-year growth in adoption (based on a four-quarter rolling average of nodes using AHV, as a percentage of total nodes sold).

Notably, customer count continued to be strong. In fiscal 2017, Nutanix added 875 new end-customers in the last quarter taking the count to 7051. Moreover, number of customers of more than $1 million deal increased 39% year over year to 43%.

As well, the company launched Xi Cloud Services in strategic partnership with Alphabet GOOGL division, Google.

Analysts and Hedge Funds Opinions

Nutanix has received a slew of analyst upgrades and bullish initiations.

Last Friday RBC Capital raised its price target ahead of what is expected to be "solid" fiscal first-quarter results. Analyst Matthew Hedberg raised his target to $37, which is 29% above Wednesday's closing price, from $34. He's had an outperform rating on the stock since he started covering it Oct. 25, 2016, about a month after the company went public. "Sentiment around the stock has improved since last quarter, but we still think expectations and valuation remain reasonable as we look for the opportunity around the pivot to software to be outlined and understood by investors," Hedberg wrote in a note to clients.

Also, in a Monday note, J.P. Morgan analyst Mark Murphy maintained his Neutral rating on shares of Nutanix but increased his price target for the shares from $26 to $30.

Murphy expects consistent F1Q results from Nutanix, with an upward bias to his forecasts.

The analyst said he expects Nutanix to continue to upend the IT infrastructure playbook, and accordingly he carries a positive fundamental bias.

The risk/reward is fairly balanced for now at current levels until the overall growth/margin equation improves, Murphy said.

J.P. Morgan highlighted the likelihood of Nutanix emerging as a pure software-only company and potential short-term oscillations in future quarters that stem from recent sales leadership changes.

Several other analysts have also recently commented on the company…..

  • Needham's Jack Andrews initiated coverage of Nutanix's stock with a Buy rating and $45 price target. Nutanix is uniquely positioned to deliver a "disruptive product that solves customer pain points," Andrews said.
  • Raymond James upped its price target to $32 (note this was in early November prior to the stock's spike) and upgraded the rating to Outperform from Market Perform.
  • Goldman Sachs (NYSE: GS) has maintained its hyper-bullish stance on the company, calling it a "once-in-a-decade" opportunity and placing Nutanix on its conviction list this summer.

Institutional investors that have recently made a change to their positions in the stock….

  • SG Americas Securities LLC lifted its position in Nutanix by 613.1% in the 3rd quarter.  The institutional investor owned 65,955 shares of the technology company’s stock after acquiring an additional 56,706 shares during the quarter. SG Americas Securities LLC’s holdings in Nutanix were worth $1,477,000 as of its most recent filing with the SEC.
  • Bristol Advisors LLC purchased a new stake in shares of Nutanix in the 2nd quarter valued at approximately $249,000.

Summary            

Nutanix's robust product portfolio through the launch of Nutanix Cloud and Xi cloud services along with networking and security will continue to boost clientele. Moreover, collaboration with the likes of International Business Machines Corporation IBM is a positive.

Nutanix has made a full recovery in recent months, within striking distance of the $37 price at which it closed its first day of trading in its September 2016 IPO.

The company has garnered newfound enthusiasm after a string of quarterly beats and analyst upgrades. It gained nearly 30% in October alone, followed by 20% gains in November to date.

Given the company's consistent trend of beating its forecasts as well as Wall Street consensus, this will likely be another quarter in which Nutanix exceeds even the higher end of its guidance range.

Nutanix Inc. has a 12-month low of $14.38 and a 12-month high of $34.85.


Option Trade - Guidewire Software Inc. (NYSE:GWRE) PUTS

Wednesday, November 29, 2017

** OPTION TRADE: Buy the GWRE DEC 15 2017 80.000 PUT at approximately $2.40.

Sell price is left to your own judgment.

Guidewire Software Inc. (NYSE:GWRE), the insurance software provider, is expected to report a fiscal first-quarter loss of 14 cents a share late today, Wednesday, reversing a 2-cent gain a year earlier. Revenue should advance 7% to $110.83 million. Guidewire is transitioning to a cloud-based subscription model, which depresses results in the near term.

Top and bottom line growth moved higher last quarter. Earnings were up 51%, compared to 14% in the prior report. Revenue increased from 25% to 28%.

Consensus analyst estimates call for EPS growth of -800% for the quarter, and -10% growth for the full year. Annual growth estimates were recently revised lower.

Guidewire Software shares have added about 6.1% in that time frame, outperforming the market.

But the recent positive trend is likely due for a pullback.

Influencing Factors

The company is slowly shifting to a subscription-based model from the regular term license model, which is expected to impact the top line going forward.

Term license revenues include advance payments whereas subscription-based revenues are a bit delayed. The shift in product mix will impact revenues. Management stated that a $6.1 million early payment recognized in this quarter will affect fiscal 2018 license revenue growth. It expects subscription sales to rise to 20% to 30% in fiscal 2018 from 6% in fiscal 2017.

Guidewire expects new risk products and embedded analytics to be in demand in the long run. Additionally cloud transition is also anticipated to expand its market presence, eventually driving revenues northward.

In fourth-quarter 2017, non-GAAP operating margin was 73.4%, down 30 basis points (bps) from the year-ago quarter. The decline was slight as the negative impact of higher mix of low-margin services revenues was offset by higher margin license revenues including advance payments.

Management stated that increased investments from private equity and venture capital firms in other industry players have increased competition. Guidewire is also investing more for an impressive product suite and a larger total addressable market, which will help it to gain an edge. This along with investments in cloud infrastructure based services is expected to adversely impact margins.

 Analysts and Hedge Funds Opinions

Zacks Investment Research downgraded shares of Guidewire Software, Inc. from a hold rating to a sell rating in a research report released on Tuesday, November 7th.

According to Zacks, “Guidewire Software's costs related to the shift from term license to a cloud-based model will put pressure on margins in the near term. The same will also hurt the top line as term license revenues include advance payments whereas subscription-based revenues are a bit delayed. However, it is a tailwind for the company in the long run as the industry shifts toward cloud infrastructure. Notably, regular customer addition via cross-selling of its product suites is a positive for the company. The company’s shares have outperformed the industry on a year-to-date basis.”

Several other analysts have also recently commented on the company…..

  • BidaskClub cut shares of Guidewire Software from a strong-buy rating to a buy rating in a research report on Wednesday, October 18th.
  • KeyCorp reiterated a “buy” rating and issued a $75.00 price objective on shares of Guidewire Software in a report on Friday, August 25th.
  • Piper Jaffray Companies restated a “buy” rating and issued a $80.00 price target on shares of Guidewire Software in a report on Sunday, August 27th.
  • Bank of America increased their price target on Guidewire Software from $74.00 to $76.00 and gave the stock a “neutral” rating in a report on Thursday, September 7th.

One analyst has rated the stock with a sell rating, four have assigned a hold rating, eight have given a buy rating and one has issued a strong buy rating to the company. The company currently has an average rating of Buy and an average target price of $80.11.

Institutional investors that have recently made a change to their positions in the stock….

Regis Management Co Llc decreased its stake in Guidewire Software by 11.46%. Regis Management Co Llc sold 9,025 shares as the company’s stock rose 11.16% with the market. The institutional investor held 69,732 shares of the technology company at the end of 2017Q2, valued at $4.79 million, down from 78,757 at the end of the previous reported quarter. Regis Management Co Llc who had been investing in Guidewire Software for a number of months, seems to be less bullish one the $6.07 billion market cap company.

Insider selling……….

  • CEO Marcus Ryu sold 25,000 shares of the firm’s stock in a transaction that occurred on Friday, September 1st. The shares were sold at an average price of $75.51, for a total transaction of $1,887,750.00.
  • Also, Director Craig Conway sold 600 shares of the firm’s stock in a transaction that occurred on Wednesday, November 15th. The stock was sold at an average price of $79.23, for a total transaction of $47,538.00.
  • Michael Polelle sold 208 shares of the company’s stock in a transaction dated Wednesday, November 15th. The shares were sold at an average price of $79.31, for a total value of $16,496.48.

Summary            

Guidewire Software has a market capitalization of $6,237.31, a P/E ratio of 197.07, a P/E/G ratio of 26.21 and a beta of 1.23. Guidewire Software, Inc. has a 12 month low of $49.18 and a 12 month high of $83.52.


Option Trade - Workday Inc. (NASDAQ:WDAY) Calls

Wednesday, November 29, 2017

** OPTION TRADE: Buy the WDAY DEC 15 2017 120.000 CALL at approximately $2.00.

Sell price is left to your own judgment.

Workday Inc. (NASDAQ:WDAY), the provider of cloud-based solutions for human capital management, isn't exactly a first-tier name in financial media, but it has been a first-rate performer in 2017. Workday, Inc. will report earnings today, Wednesday, November 29, 2017, after the market closes. The consensus earnings estimate is $0.15 per share on revenue of $540.79 million and the Earnings Whisper number is $0.17 per share.

The company's guidance was for revenue of $538.00 million to $540.00 million. Consensus estimates are for year-over-year earnings growth of 600.00% with revenue increasing by 32.03%.

Workday, Inc. has leveraged three earnings beats this calendar year into 75% gains since Jan. 1, and shares now sit near all-time highs.

Overall earnings estimates have been revised higher since the company's last earnings release.

Workday could be a future buy-out; and offer several substantial benefits for Microsoft, more especially its efforts to spearhead its cloud platform Azure.

Influencing Factors

Workday is likely to move up to targets of $124 and $140. WDAY is above the rising 50-day moving average line, as well as the rising 200-day line.

The daily On-Balance-Volume (OBV) line has been rising since late December and continues to support the advance, with signs of aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is pointed up.

The weekly MACD oscillator is above the zero line, and looks like it is crossing to the upside to a fresh go long signal.

Workday recently announced extended capabilities and tools delivered through a single, intuitive user interface to help organizations create a more connected and engaging digital experience for their people. With new functionality driving a more intelligent Workday home page for Workday Human Capital Management (HCM), employees will be able to easily perform various workplace tasks across Workday applications and third-party systems without needing to access an HR portal, log a service ticket, or call someone for support.

With the new people experience, workplace connections, tools for growth, and development opportunities will come together in a way that thoughtfully aligns with each stage of the employee journey to deliver personalized information and actions to an individual as it is needed. For example, employee-specific details pertaining to benefits, stock options, job tasks, IT requests, and more will be surfaced in a personal Workday home page for easy navigation and simplified task execution.

"Today's HR leaders accept that they must employ a network of solutions to fully support and enable their people, but will no longer settle for a subpar, disconnected portal that adds complexity and friction to the employee experience," said Cristina Goldt, vice president, HCM products, Workday. "Workday will fill the gap where HR portals have failed -- alleviating the frustration that people endure when having to move between various tools and resources. With the power of personalization and intuitive functionality woven into the core HR system, our customers can enable their people to perform tasks easily and efficiently, in turn, boosting engagement and productivity for the benefit of the business."

 Analysts and Hedge Funds Opinions

Workday, Inc. had its price objective boosted by Bank of America Corporation from $123.00 to $134.00 in a report published on Monday morning. The firm currently has a buy rating on the software maker’s stock.

Several other analysts have also recently commented on the company…..

  • Guggenheim started coverage on shares of Workday in a report on Monday, October 30th. They issued a neutral rating and a $105.00 target price on the stock.
  • UBS AG reissued a sell rating and issued a $95.00 target price (down previously from $121.00) on shares of Workday in a report on Thursday, November 9th.
  • Robert W. Baird reissued a buy rating and issued a $114.00 target price on shares of Workday in a report on Friday, November 10th.
  • Deutsche Bank AG reissued a hold rating and issued a $105.00 target price (up previously from $95.00) on shares of Workday in a report on Thursday, August 31st.
  • Finally, BMO Capital Markets reissued a market perform rating and issued a $117.00 target price (up previously from $110.00) on shares of Workday in a report on Friday, September 1st.

Five investment analysts have rated the stock with a sell rating, twenty-two have issued a hold rating, fourteen have issued a buy rating and one has assigned a strong buy rating to the company. The stock has an average rating of Hold and a consensus target price of $101.55.

Wall Street is hardly warm on Workday shares, with 22 of the 39 analysts covering the stock rating it "Hold," and another five considering WDAY a "Sell”; but this leaves plenty of opportunity for analyst upgrades.

Institutional investors that have recently made a change to their positions in the stock….

  • Mn Services Vermogensbeheer B.V. lifted its holdings in shares of Workday, Inc. by 6.4% in the 3rd quarter. The firm owned 21,594 shares of the software maker’s stock after buying an additional 1,300 shares during the period. Mn Services Vermogensbeheer B.V.’s holdings in Workday were worth $2,276,000 at the end of the most recent quarter.
  • HM Payson & Co. lowered its stake in Workday, Inc. (NASDAQ:WDAY) by 16.4% in the 3rd quarter. The institutional investor owned 7,600 shares of the software maker’s stock after selling 1,487 shares during the period. HM Payson & Co.’s holdings in Workday were worth $801,000 as of its most recent SEC filing.
  • Vanguard Group Inc. grew its position in Workday by 8.5% in the second quarter. Vanguard Group Inc. now owns 10,782,861 shares of the software maker’s stock worth $1,045,937,000 after acquiring an additional 846,809 shares in the last quarter.
  • Tybourne Capital Management HK Ltd. raised its stake in shares of Workday by 2.2% during the second quarter. Tybourne Capital Management HK Ltd. now owns 2,935,961 shares of the software maker’s stock valued at $284,788,000 after acquiring an additional 62,419 shares in the last quarter

Summary            

WDAY is still pointed up, with targets of $124 and $139/$140.

Workday has a 12-month low of $65.79 and a 12-month high of $116.89. The company has a debt-to-equity ratio of 0.16, a quick ratio of 1.54 and a current ratio of 1.54.


Option Trade - Marvell Technology Group Ltd. (NASDAQ:MRVL) Calls

Tuesday, November 28, 2017

** OPTION TRADE: Buy the MRVL DEC 15 2017 24.000 CALL at approximately $0.60.

Sell price is left to your own judgment.

Semiconductor maker Marvell Technology Group Ltd. (NASDAQ:MRVL) will report its third-quarter numbers after the market closes today, November 28. The company is expected to report earnings of $0.32 per share, up from $0.20 during the same period last year; on revenue of $611.13 million --   and the Earnings Whisper number is $0.34 per share. Investor sentiment going into the company's earnings release has 79% expecting an earnings beat.

The company's guidance was for earnings of $0.30 to $0.34 per share on revenue of $595.00 million to $625.00 million. Consensus estimates are for year-over-year earnings growth of 45.45% with revenue decreasing by 6.62%.

Chip makers have been hot this year, and MRVL has enjoyed major gains. The company has put together of string of four quarterly reports that topped estimates on both the top and bottom line, and if it can extend that streak the stock should manage to build on its recent gains.

Short interest has decreased by 33.0% since the company's last earnings release while the stock has drifted higher by 43.1% from its open following the earnings release.

Overall earnings estimates have been revised higher since the company's last earnings release.

The company recently announced the acquisition of Cavium ( CAVM ), and Wall Street reacted positively. The company's CEO, Matt Murphy, noted that the acquisition will make the company a leader in silicon, software and solutions for the entire tech industry. At this time, enthusiasm is high in the stock, and barring a huge earnings miss, the stock should close out the year near a record high.

The stock has trended sharply higher over the last three months, with shares up 69.8% on the year.

Influencing Factors

There are plenty of long-term benefits that Cavium could bring, as it could turn out to be a great fit for Marvell's existing business, allowing it to move into the lucrative networking and data center space.

Storage is Marvell's biggest business, supplying 52% of the total revenue last quarter, but the company is facing headwinds because of the weakness in the traditional hard-drive market.

Not surprisingly, Marvell's revenue in the fiscal year that ended in January 2017 was down almost 13% year over year. But the good news is that the increasing adoption of solid-state drives (SSDs) is helping Marvell make a comeback, pushing its storage revenue up by 13% during the second quarter.

SSDs now supply a quarter of the chipmaker's storage revenue, thanks to the rapid adoption of its controller products for this market. More specifically, Marvell has shipped over 50 million SSD controllers in just 18 months, and the trend is set to continue because of potential expansion of this market.

SSD shipments are expected to increase at an annual pace of 14.7% over the next six years, according to one estimate, driven by their adoption in cloud computing applications and data centers.

Marvell forecasts that the Cavium acquisition will boost its serviceable addressable market to at least $16 billion. This is significantly higher than the $3.4 billion annual revenue that the combined company will have.

Cavium counts key server players such as Dell, IBM , and Hewlett-Packard Enterprise as customers after it acquired QLogic last year in a $1.3 billion deal. QLogic got 60% of its revenue from the above-mentioned companies, which control 52% of the total server market.

Additionally, Cavium will help Marvell make inroads into the server microprocessor market through the former's Thunder X2 server chip. Cavium and Microsoft announced earlier this year that they are collaborating to evaluate an ARM-based Thunder X2 chip in the Azure cloud platform. Now that Marvell will be able to lay its hands on this chip, it will be able to take advantage of the growing adoption of ARM microprocessors in the cloud.

Analysts and Hedge Funds Opinions

Marvell Technology had its price target lifted by analysts at BMO Capital Markets to $25.00 in a research note issued to investors on Monday. The brokerage currently has a “market perform” rating on the semiconductor company’s stock. BMO Capital Markets’ price objective would suggest a potential upside of 6.97% from the stock’s previous close.

Also, Marvell Technology Group‘s stock had its “outperform” rating reiterated by stock analysts at Cowen Inc. in a research note issued on Monday. They currently have a $29.00 price objective on the semiconductor company’s stock, up from their previous price objective of $21.00. Cowen Inc’s price objective would indicate a potential upside of 21.85% from the stock’s previous close.

Several other analysts have also recently commented on the company…..

  • Oppenheimer Holdings, Inc. upped their target price on Marvell Technology Group from $23.00 to $30.00 and gave the company an “outperform” rating in a report on Tuesday, November 21st.
  • Barclays PLC raised shares of Marvell Technology Group from an “equal weight” rating to an “overweight” rating and boosted their target price for the company from $20.00 to $30.00 in a research note on Tuesday, November 21st.
  • Needham & Company LLC upped their target price on Marvell Technology Group from $21.00 to $25.00 and gave the company a “buy” rating in a report on Tuesday, November 21st.
  • Zacks Investment Research upgraded Marvell Technology Group from a “hold” rating to a “buy” rating and set a $23.00 target price for the company in a report on Tuesday, November 21st.
  • Finally, Loop Capital restated a “buy” rating and set a $26.00 target price on shares of Marvell Technology Group in a report on Tuesday, November 21st.

One equities research analyst has rated the stock with a sell rating, six have issued a hold rating, twenty have issued a buy rating and one has issued a strong buy rating to the stock. The stock currently has an average rating of “Buy” and a consensus target price of $24.93.

Institutional investors that have recently made a change to their positions in the stock….

  • Krilogy Financial LLC boosted its position in Marvell Technology Group by 1.6% in the second quarter. Krilogy Financial LLC now owns 15,600 shares of the semiconductor company’s stock worth $258,000 after purchasing an additional 250 shares during the last quarter.
  • Utah Retirement Systems boosted its position in Marvell Technology Group by 0.4% in the second quarter. Utah Retirement Systems now owns 73,725 shares of the semiconductor company’s stock worth $1,218,000 after purchasing an additional 300 shares during the last quarter.
  • M&T Bank Corp boosted its position in Marvell Technology Group by 1.3% in the second quarter. M&T Bank Corp now owns 30,943 shares of the semiconductor company’s stock worth $512,000 after purchasing an additional 402 shares during the last quarter.

Summary            

In all, investors have several reasons to remain upbeat about Marvell Technology going into its upcoming earnings report. And, a strong outlook from the chipmaker should confirm that it is making the right moves to position itself for long-term growth.

Marvell Technology Group has a market capitalization of $11,689.16, a P/E ratio of 30.51, a PEG ratio of 1.68 and a beta of 1.05. Marvell Technology Group has a 52 week low of $13.59 and a 52 week high of $24.22.


Option Trade - Momo Inc (ADR) (NASDAQ:MOMO) Calls

Monday, November 27, 2017

** OPTION TRADE: Buy the MOMO DEC 15 2017 35.000 CALL at approximately $1.20.

Sell price is left to your own judgment.

Momo Inc (ADR) (NASDAQ:MOMO), China's fast-growing social entertainment platform, will report earnings tomorrow, November 28, before the market opens. The consensus earnings estimate is $0.38 per share on revenue of $341.00 million and the Earnings Whisper number is $0.40 per share.

The company's guidance was for revenue of $337.00 million to $342.00 million. Consensus estimates are for year-over-year earnings growth of 100.00% with revenue increasing by 117.13%. Revenue more than tripled in each of the five previous quarters.

Once, just a location-based social platform, MOMO has overtime transformed into a social and entertainment platform, where friends and family can interact using multiple features. Momo started as a free, location-based instant messaging app. Remember, in China there’s a huge shift of younger people from the country to the big cities where all the jobs are.

That means there’s a lot of social dislocation as young people flock to cities where they may not know anyone. An app like Momo helps make that isolation a shared experience and it turns the hardship into an advantage.

Momo now has 91 million monthly active users; up from last quarter’s 85 million. It’s a very popular app that continues to grow. But its biggest driver so far has been its live video. This is where the current — and many say future — growth lies for the company and its competitors.

Influencing Factors

This past quarter, video accounted for more than 80% of Momo’s net revenue. And net revenue grew 215% in Q2 compared to the same quarter a year ago. And to any concerns of a slowdown, MOMO has launched a number of video initiatives including a live audio-video social game called Werewolf that is going viral. What this shows is Momo has built a huge base and even if the growth of adoption of video slows from here, the company’s penetration is still very early. It has built the breadth and it is now focusing on depth.

After the recent price decrease in MOMO Inc. (MOMO), the stock has once again become attractive to investors looking for substantial capital gains. MOMO is not just a dating and video app anymore but is converting to a complete entertainment platform for its users. The company has also been successful in positioning itself to counter the strict regulations and increasing traffic acquisition cost (TAC). Moreover, the user base and engagement is increasing owing to the branding efforts of the company.

Besides Werewolf, other prominent features and their benefits to MOMO include:

  • Live Streaming: Similar to 'Facebook Live' feature, MOMO has tried to attract people who have a high need of being social and has introduced a mechanism that allows talented presenters to penetrate the market. This enables MOMO to not be dependent on the top presenters. A smart move!
  • Short Video: The short video feature introduced in the start of 2017 diverts the users straight to checkout, thus increasing the average revenue per user.

Momo’s branding campaign that started in April has created awareness among users and has lifted the image of the brand. Going forward, MOMO aims to tilt more towards direct pay channel marketing and its budget will be allocated accordingly.

Moreover, the structural change introduced in the homepage of the app gives a ‘party theme feel’ and has increased user engagement. This increased user engagement means that the users stick around the app longer thus have a higher retention rate. This is helpful in terms of MOMO’s monetization efforts and they can further leverage these numbers for increased monetization techniques. In addition, MOMO has had more time spent on its live streaming feature than other competitors like YY and Inke which are fundamentally created for livestream.

Analysts and Hedge Funds Opinions

Momo Inc. has been assigned a consensus recommendation of “Buy” from the sixteen analysts that are covering the company. Two analysts have rated the stock with a hold recommendation, eleven have issued a buy recommendation and two have assigned a strong buy recommendation to the company. The average 12 month target price among analysts that have covered the stock in the last year is $43.94.

Several other analysts have also recently commented on the company…..

  • TheStreet raised Momo from a “c+” rating to a “b” rating in a research report on Monday, August 7th.
  • Vetr downgraded Momo from a “strong-buy” rating to a “buy” rating and set a $42.25 price target on the stock in a research report on Monday, September 4th.
  • Jefferies Group LLC reaffirmed a “buy” rating and issued a $54.00 target price on shares of Momo in a research report on Tuesday, October 3rd.
  • Finally, Goldman Sachs Group Inc began coverage on Momo in a research report on Wednesday, August 30th. They issued a “buy” rating and a $56.00 target price on the stock.

Institutional investors that have recently made a change to their positions in the stock….

  • Public Employees Retirement System of Ohio boosted its stake in shares of Momo by 12.4% in the third quarter. Public Employees Retirement System of Ohio now owns 613,232 shares of the information services provider’s stock valued at $19,219,000 after buying an additional 67,533 shares during the period.
  • GSA Capital Partners LLP bought a new stake in shares of Momo in the third quarter valued at approximately $1,191,000.
  • California Public Employees Retirement System boosted its stake in shares of Momo by 20.0% in the third quarter. California Public Employees Retirement System now owns 171,886 shares of the information services provider’s stock valued at $5,387,000 after buying an additional 28,686 shares during the period.

Summary            

Momo stock is surprisingly cheap relative to many of China's high-flying internet stocks. The shares are trading for a reasonable 19 times this year's projected profit and a mere 14 times next year's bottom-line target.

Hence, owing to the above positive catalysts in MOMO like user engagement, positioning strategies and monetization potential, it is believed that the company’s stock price should be at least $48 which is at least 40% upside.

Momo has a market capitalization of $6,244.56, a P/E ratio of 24.89 and a beta of 1.77. Momo has a 1 year low of $16.73 and a 1 year high of $46.69.






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