Qualcomm (QCOM: $60, up 7%) The company reported good results yesterday for its June quarter and issued a solid outlook for the current three-month period. The company earned $1.45 billion, or 97 cents per share, up from $1.2 billion, or 73 cents per share in the year-ago quarter, topping expectations.
Revenue hit $6.0 billion in the period, vs. expected revs of $5.6 billion. A year ago Qualcomm posted revenue of $5.8 billion.
Qualcomm said results in the latest quarter reflect "meaningful progress" with licensees in China as well as a strong new product ramp among original equipment manufacturers in that country.
Referring to the next generation of mobile telecommunications technology, the president was quoted as saying: "We are executing well on our strategic priorities, and we remain confident that our focused investments in 5G and other advanced technologies will create a strong foundation for long-term earnings growth."
BMR Take: We said just this week in the newsletter: “4% dividend, $80 billion market cap. We should see a slow and steady rise in revenues and earnings as the company moves into new markets.” We see nothing but good news ahead as the stock reaches for the 52-week high of $65 and our target of $62. We hereby raise our price target to $72 and our Sell Price from $39 to $52.
BTW, the market cap is now closer to $90 billion!
Microsoft (MSFT: $56, up 6% yesterday) Microsoft led all Dow components with a 5% jump after announcing strong quarterly results to close out its 2016 fiscal year. Revenue rose 2% as healthy growth in its cloud segment more than offset the declining personal computing division. The company hit $22.6 billion in revenue beating estimates of $22.1 billion. Profits also significantly outpaced targets, rising 11% year-over-year to $0.69 per share compared to the $0.57 per share that Wall Street was forecasting.
Microsoft's cloud services , called Azure, spiked to $12 billion as revenue doubled. It is on track to meet management's $20 billion annual goal by 2018, and now sits at over half the revenue of the company. Amazing.
BMR Take: We hereby raise the Price Target of Microsoft to $66 from $62. And note that $60 is the all-time high for the company reached in 1999! Look out ahead for this cash machine.
Netflix (NFLX: $86) The company reported second quarter EPS of $0.09, up from $0.06 a year ago. The consensus estimate was for EPS of $0.02. The company announced that it added 1.7 million subscribers in the quarter, which was below its forecast of 2.5 million. Second quarter EPS is expected to be $0.05. Street expectations are for EPS of $0.07.
BMR Take: We are very disappointed. Our overriding emotions are telling us to remove this stock from our Stocks For Success. But we can’t bring ourselves to do this at the moment. So what do YOU do? Be careful. Be very careful. With the very high PE (over 100) This stock could go to $70, or it could go back it $120. It’s like an Amazon. Trading at a triple-digit PE for years, and now producing profits.
Hedging your position in Netflix by selling calls against it is not a bad idea. You could even do a collar, whereby you sell a call and use that money to buy a put. This stock is not for the weak of heart. If you have any qualms about it, get out now and invest in something much more solid.
APPLE (AAPL: $99.50) The stock hit $100 yesterday and earlier today. This value stock is going to go a lot higher from here.
TESLA (TSLA: $220) Elon Musk, has published a new "master plan," which involves installing a solar panel system into cars, building heavier vehicles and introducing a ride-hailing business.
In a blog post, Musk espoused some bigger ideas for the company and its new potential acquisition of S0lar City. He discussed building semi trucks and buses, as well as pursuing self-driving technology, which would allow people to use their cars for ride-sharing.."
Mr. Musk acknowledged the scale of his ambitions: "Starting a car company is idiotic and an electric car company is idiocy squared." Analysts followed suit. One said: "As is typical, Elon Musk has laid out a grandiose plan for the future with no timeframes and few specifics, and no mention of how and when Tesla will be profitable."
BMR Take: Another volatile stock which could shoot to $300 or move to $150. Buyers beware.
Blackstone (BX: $27) The stock continues to trickle higher each day. See our newsletter this week.
CBRE: (CBG: $29) See comment just above for Blackstone, and repeat out loud for CBRE.
Under Armour (UA: $43) Is $50 on the horizon again? Look out ahead.