By:
On:
In: Good company, Stock analysis
Tagged:
With: 0 Comments

Company name eBay Inc
Stock ticker EBAY
Live stock price [stckqut]EBAY[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Fair
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $86.1
Target stock price (averages with growth) $106.25
Target stock price (averages with no growth) $75
Target stock price (manual assumptions) $82.81

The following company description is from Google Finance: http://www.google.com/finance?q=ebay

eBay Inc. is a global technology company that enables commerce through three reportable segments: Marketplaces, Payments, and GSI. The Company by providing online platforms, tools and services to help individuals and small, medium and merchants around the globe engage in online and mobile commerce and payments, the Company can facilitate transactions. It has created an open source platform that provides software developers and merchants access to its applications programming interfaces, or APIs, to develop software and solutions for commerce. As of December 31, 2012, its Marketplaces segment had more than 112 million active users and more than 350 million listings globally, while its Payments segment had more than 122 million active registered accounts. During the fiscal year ended December 31, 2012, the Company completed three acquisitions, two of which are included in its Marketplaces segment and one in its Payments segment. In May 2012, the Company completed the sale of Rent.com.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

By:
On:
In: Commentary
Tagged: , , , , , , , , , , , , , , , , , , ,
With: 0 Comments

Many readers have reached out to me to ask about how to run a balanced portfolio. This article is designed to help you with general guidelines for developing such portfolio. A balanced portfolio should be 20-40% in index funds and 60-80% in individual stocks spread out among many industries. This allows you to have exposure to the general market, the international market, and the growth of truly well-run companies. The proportion of money between index funds and individual companies should be dictated by your age and how soon you will need the money to pay for life’s expenses.

The first thing to do is invest 20 to 40% of your portfolio in index funds. Divide these index funds into at least four categories:

  • international funds
  • bonds funds
  • small-cap or mid-cap funds
  • large-cap funds

I suggest that you balance your fund investments equally every year. This means that you would have 5% of your portfolio in each fund category. You may have to annually add money from the individual stock 80% of your portfolio to maintain at least 20% index fund exposure.

It really doesn’t matter which company manages the index fund you choose. There is some variation in international funds since they can track many different markets so you may need to study a bit for that component. There is little true variation in bonds funds so just find one that tracks the Barclays Capital Aggregate Bond Index. For the stock index funds, they should track one of the S&P indexes or one of the Russell indexes.

If you are over 65 then you may want to start dropping down to 60% of your portfolio being in individual stocks and 40% index funds. You definitely want to consider this if you are over 75 years of age. However, if you are under 65 then you probably should have a portfolio of stocks that is approximately 80% of your portfolio. At 65 you may think you need to be more cautious but there is a high probability that a 65 year-old person is going to live to be 90. If you have reached the glorious age of 75 then you are even more likely to live to 90.  With 25-45 more years of spending to do, you really need your money to continue to grow even if you are retired. As you approach 80 or 90 years, you may want to have a more even mix of stocks, bonds, and money-market cash. To understand this better, check out my whitepaper, Retire In Luxury.

Divide 80% of your portfolio into equal allotments that are larger than $5,000 per allotment. You should have at least 10 allotments in a balanced portfolio. You could have 20 or 30 allotments depending on the size of your portfolio. If you do not have $50,000 to divide 10 ways then divide your existing portfolio into $5,000 increments. You will find that you are much more efficient and profitable if you invest $5,000 or more using GOPM. If you have fewer than 10 allotments, be very diligent about getting a good mix of industries so that you are not overly hurt by any one trend.

Regardless of the number of allotments that you choose, you need to choose twice that number in stocks that you are tracking.  So if you have 10 allotments, you should track 20 stocks. This allows you to always have a stock that is rising to invest your money. Invariably, some of your tracked stocks will be going sideways or down but by tracking double the number you need, you are likely to have 10 that have upward momentum.

You should plan on investing in 10 to 30 companies at a time using the tools that I show in The Confident Investor. Grow your investment in any individual stock until you have doubled your money using GOPM (Grow on Other People’s Money).

When you have doubled your money in half of your companies, you may want to consider changing your allocation size to a larger allocation. This will allow you to continue to grow your investment in those great companies.

It is also possible to stop investing in any given company at half of an allotment or twice allotment depending on how you feel about that company. You should also factor the number of companies in the same industry you already having a portfolio. For instance, if you have 2 companies in nearly every industry except you only have one mining company, feel free to allow that mining company to grow to a double allotment. Similarly, if you have 3 software companies in your portfolio then you may want to limit one or all of them to a half allotment so that your portfolio is not overweight in that category.

Let me show you an example of a 50-year-old man (we will call him Bob) that has been able to save $150,000 in his IRA account.

  • $7,500 in an international index fund
  • $7,500 in a bond fund
  • $7,500 in a small-cap  or a mid-cap fund
  • $7,500 in a large-cap fund
  • $120,000 divided into 10 allotments of $12,000 each.  This means that Bob will purchase up to $12,000 in any stock on the 20 possibilities.

For the 20 stocks, Bob chose the following from the Confident Investor Watch List:

Apple Inc. Technology – Personal
Akamai Technologies Technology – Internet
Ansys, Inc. Technology – Enterprise Software
Atlas Pipeline Energy
Caterpillar, Inc. Manufacturing – Machinery
Chipotle Mexican Retail – Restaurant
Cirrus Logic Technology – Semiconductor
Deckers Outdoor Footwear
Ebay Inc. Retail – Web
Extra Space Storage Real Estate
Goldcorp Inc. Mining – Gold
Google Inc. Advertising – Web
Hms Holdings Corp Healthcare – Services
Helmerich & Payne Energy
Merck & Co., Inc. Pharmaceutical
Net Servicos de Comunicacao Telecommunications – International
Priceline.com Inc. Retail – Web
Boston Beer Alcohol Beverages
Washington Banking Finance
Yum! Brands, Inc. Retail – Restaurant

Bob will invest in these companies as indicated by the technical indicators described in my book, The Confident Investor.  You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in ebook formats for Nook, Kindle, and iPad.

By:
On:
In: Good company, Stock analysis
Tagged:
With: 0 Comments

Company name eBay Inc
Stock ticker EBAY
Live stock price [stckqut]EBAY[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $74.46
Target stock price (averages with growth) $109.25
Target stock price (averages with no growth) $96.04
Target stock price (manual assumptions) $65.96

The following company description is from Google Finance: http://www.google.com/finance?q=ebay

eBay Inc. (eBay) is a global commerce platform. The Company enables commerce through three reportable segments: Marketplaces, Payments and GSI Commerce (GSI). These segments provide online platform, services and tools to help individuals and small, medium and large merchants globally to establish online and mobile commerce and payments. In addition, through X.commerce, it has created an open source platform, which provides software developers and merchants access to its applications programming interfaces (APIs), to develop software and solutions for commerce. As of December 31, 2011, it had more than 100 million active users transacting on its sites, millions of merchants using one or more of its platforms, and a developer community with more than 800,000 members using its APIs. During the year ended December 31, 2011, the Company acquired Brands4friends and GittiGidiyor. In May 2012, PRIMEDIA announced that it completed the acquisition of eBay’s Rent.com subsidiary.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

 

By:
On:
In: Commentary
Tagged: , , ,
With: 0 Comments

This infographic shows that cloud computing is a major factor in the minds of IT executives. There are several ways to play the cloud computing wave with companies that are on my Watch List.

Google [stckqut]GOOG[/stckqut]

Google Inc. (Google) is a global technology company focused on improving the ways people connect with information. The Company generates revenue primarily by delivering online advertising. As of December 31, 2011, the Company’s business was focused on areas, such as search, advertising, operating systems and platforms, and enterprise. Businesses use its AdWords program to promote their products and services with targeted advertising. In addition, the third parties that comprise the Google Network use its AdSense program to deliver relevant advertisements that generate revenue. In June 2011, it launched Google+. In September 2011, the Company acquired Zagat. In May 2012, Google acquired Motorola Mobility Holdings, Inc. As of January 2012, over 90 million people had joined Google+. In April 2011, the Company acquired PushLife. On July 31, 2012, it acquired marketing start-up Wildfire. In September 2012, it acquired VirusTotal and Nik Software. (This text is from Google).

Akamai [stckqut]akam[/stckqut]

Akamai Technologies, Inc. (Akamai) provides content delivery and cloud infrastructure services for the delivery of content and applications over the Internet; ranging from live and on-demand streaming video capabilities to conventional content on Websites, to tools that help people transact business and reach out to new and existing customers. The Company provides private content delivery networks, Internet-based delivery of applications, such as store/dealer locators and user registration, software distribution capabilities, real-time ad targeting solutions, content targeting technology and enhanced security features. It offers application and cloud performance services, solutions for digital media and software distribution and storage, Website optimization services, network operator solutions, online advertising-related services and other specialized Internet-based offerings. In March 2012, the Company acquired Cotendo, Inc. In September 2012, the Company acquired FastSoft Inc. (This text is from Google).

Amazon [stckqut]amzn[/stckqut]

Amazon.com, Inc. (Amazon.com) serves consumers through its retail Websites and focuses on selection, price, and convenience. The Company’s four customer sets include consumers, sellers, enterprises and content creators. It also manufactures and sells Kindle devices. It offers programs, which enable sellers to sell their products on its Websites and their own branded Websites and to fulfill orders through it. We serve developers and enterprises of all sizes through Amazon Web Services (AWS), which provides access to technology infrastructure. In addition, it generates revenue through other marketing and promotional services, such as online advertising, and co-branded credit card agreements. The Company operates in two segments: North America and International. In June 2012, the Company acquired the publication rights from Avalon Books to over 3,000 backlist titles predominantly in the Romance, Mystery and Western categories. (This text is from Google).

eBay [stckqut]ebay[/stckqut]

eBay Inc. (eBay) is a global commerce platform. The Company enables commerce through three reportable segments: Marketplaces, Payments and GSI Commerce (GSI). These segments provide online platform, services and tools to help individuals and small, medium and large merchants globally to establish online and mobile commerce and payments. In addition, through X.commerce, it has created an open source platform, which provides software developers and merchants access to its applications programming interfaces (APIs), to develop software and solutions for commerce. As of December 31, 2011, it had more than 100 million active users transacting on its sites, millions of merchants using one or more of its platforms, and a developer community with more than 800,000 members using its APIs. During the year ended December 31, 2011, the Company acquired Brands4friends and GittiGidiyor. In May 2012, PRIMEDIA announced that it completed the acquisition of eBay’s Rent.com subsidiary. (This text is from Google).

The above infographic was not created by me. It was originally found on CloudTweaks. It is my belief that CloudTweaks owns the copyright to that image and all of its rights. It is recreated here simply for the convenience of my readers but they are encouraged to click through to the original site to see the full details of the infographic.

 

By:
On:
In: Good company, Stock analysis
Tagged:
With: 0 Comments
Company name eBay Inc.
Stock ticker EBAY
Live stock price [stckqut]EBAY[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good
ANALYSIS
Confident Investor Rating Good
Target stock price (TWCA growth scenario) $59.12
Target stock price (averages with growth) $81.04
Target stock price (averages with no growth) $63
Target stock price (manual assumptions) $44.87

The following company description is from Google Finance: http://www.google.com/finance?q=ebay

eBay Inc. (eBay) bring together buyers and sellers every day on a local, national and international basis through a range of Websites. It provides online marketplaces for the sale of goods and services, as well as other online commerce, or ecommerce, platforms and online payment solutions to a diverse community of individuals and businesses. It operates in two business segments: marketplaces and payments. eBay generates two types of net revenues: net transaction revenues, marketing services and other revenues. Its net transaction revenues are derived from listing fees and final value fees, which are fees payable on transactions completed on its marketplaces trading platforms, and fees paid by merchants for payment processing services. In June 2010, the Company acquired RedLaser. In December 2010, it acquired Critical Path Software. In June 2011, it acquired GSI Commerce, Inc. In August 2011, the Company acquired Zong. In August 2011, the Company acquired Magento, Inc.

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.