A Realistic Look At The Companies In The CNBC Stock Draft 2012 - Part 1

Reggie Middleton's picture

 

For those who didn't see the CNBC Streetsigns show yesterday, I have put together a brief (often not so) fundamental overview of the stocks that were available for drafting in during the airing, along with my comments and opinions. Yesterday I released the analysis of Apples Q2 earnings, and I'm sure it contained content that you didn't read anywhere else.

 cnbc_draft_pick_collage

Here’s the list of stocks:

  • Apple: Reviewed in depth and in detail yesterdayFor those who do not subscribe, I suggest you ask a friend who does to share with you the difference between last month's valuation note target price (page 10 of File Icon Apple Margin & Valuation Note) and the price of Apple today, the day after earnings (just the difference, mind you - no giving away the BoomBustBlog content for free). Then ask them bout the logical argument behind the concern with Apple and the extremely volatile price action of the last few weeks. Subscribers, please download File Icon Apple 2Q2012 results analysis.
  • Starbucks: 
    • The company is expected to benefit from
      • Continued momentum and dollar share gain in the K-Cup segment
      • Ramp up of multiple key revenue drivers
      • Moderation of coffee prices, benefiting future margins. Coffee price have fallen 37% since hitting a 10 year high on 3rd  May 2011 
      • The Company is entering into strategic partnership in different location; is seeking expansion in emerging economies including China and India
      • The stock ($59.5) is close to 52- week high ($ 62.0)
      • Starbucks Sales in China Contribute to Earnings Rise: New York Times‎ - 11 hours ago Earnings increased 18 percent to $309.9 million, or 40 cents a share, in the second quarter, propelled by more traffic in its stores and big
      • Starbucks announced that it continues to target approximately 10% revenue growth, driven by mid-single-digit comparable store sales growth in fiscal 2012
  • Priceline.com:
    • S&P upgraded the company to ‘BBB’ from ‘BBB-‘
    • Priceline business model of offering discount travel rates on car rentals, hotels, and flights has helped it stay afloat despite a weak U.S. economy and a slowdown in Europe
    • Company fourth-quarter net profit was $226 million, or $4.41 per share, compared with $136 million, or $2.66 per share, a year ago
      1. Bookings gained more than 50 percent from a year ago.
      2. 80% of operating revenue came from outside US, the company still has room left to run in emerging markets like Asia and Latin America
    • High growth and steady margins are strong positives for the stock
    • The recent launch of its Booking.com Tonight application is getting a lot of attention from travelers who book hotel reservations or car rentals at the last minute
    • The company’s business model is less resilient to the current economic turmoil

    The stock is continuously performing despite negative economic conditions (YTD:  +55%, 6M: +43%)

I will continue snapshots and opinions of all of the other companies (excpt the oil company) in two separate posts. 

Relate Video 

Reggie Middleton on CNBC Stock Challenge... I'm at 5:28 discussing Google.

Additional commentary and footage...