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A Complete Data Check on Alibaba Group Holding Ltd. ADR (NYSE: BABA)

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Today, we are going to evaluate Alibaba Group Holding Limited (BABA) so as to get clarity on this organization and its current standing from a fundamental perspective. In that process, we hope to give some insight into what this stock may offer as an investment opportunity for prospective investors. To accomplish that, we will be moving from top to bottom in our evaluation. As such, our first point of focus will be a look at the company from a revenue perspective.

Over the course of the prior fiscal quarter, the company saw sales of 7.34B[3. Sales mrq]. That number needs context to grant us any insight: by comparison, we can see an overall change in revenues, on a quarterly year/year basis, of 0.33%. However, in sequential terms, the situation looks a little different, with sales grow by 0.24% from quarter to quarter. While revenue analysis gives us a strong sense of changing demand trends in the company’s end market, and how the company is executing in terms of its relationship with potential customers, real shareholder value is only truly created by profitability. With this in mind, we turn to the company’s bottom line data.

Alibaba Group Holding Limited (BABA) may offer even more interest as an object of analysis if we zoom in a bit more and look at some of its core trends. For example, the cost of selling goods last quarter was 2.56B, which yielded a gross basic income of 4.79B.

The company’s recently reported data shows total diluted outstanding shares of 2.6B, which implies an overall EPS (or earnings per share) of 0.83. To give the reader a little context that number compares to an analyst consensus expected value of 1.69 in next fiscal quarter EPS data. Next, let’s look ahead at coming performance based on what analysts are projecting for the company more generally, before closing with a survey of the balance sheet and cash flow. Among analysts, the average recommendation for this stock is Buy. That number represents the product of the work of 47 analysts. It is important to consider the views of the analyst community even though we don’t suggest taking analyst recommendations as face value plans for action in a portfolio. The primary value of looking at analyst opinions is in knowing what sort of views may already be priced into the stock.

If we look at price targets, we can see that analysts currently have things pegged around an average target at about 197.94. When we look at next year, we can things shake out in terms of estimates of a fiscal year forecast to bring about 6.58 in terms of total EPS. That works out to a median P/E ratio basis valuation of right around 26.87 times earnings.

So far, we have covered how the company is doing on both the top and bottom line, as well as what professional analysts believe about its core trends and operational and financial performance going forward. However, we would be remiss if we did not also take a quick look at cash flows and the company’s balance sheet to round out our perspective on the name.

The last thing we like to look at for a company like is the balance sheet. That really is the heart of the company’s ability to weather tough times, and the basis for an experienced investor’s sense of the real downside risk inherent in a stock. So, as we like to see, the balance sheet is the seat of faith for the market. In this case, for BABA, the company has about 21.88B in cash in the bank, according to its most recent reports. That cash sits opposite about 2.43B in total current liabilities on the ledger. But balance sheet health isn’t a fixed idea. Trends matter. And the best way to understand real risk, particularly where debt levels are concerned, is to trace a line connecting the past with the future. In this case, the company’s debt has been growing. The company also has 80.22B in total assets, balanced by 29.4B in total liabilities. That should put things into perspective quite a bit more in terms of how one can justify the current market cap of the stock.

Finally, we want to take a peek at cash flows. In this case, the company saw free cash flowing at 3.18B last quarter, which represents a net change for the quarter in cash levels of 206.07M. That works out to about 3.7B in terms of cash flow on a net operating basis.

This is certainly an interesting story and one we plan to check back on soon.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Could investors throw in the towel on Melco Resorts & Entertainment Limited (MLCO)

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Melco Resorts & Entertainment Limited (MLCO) has been stirring up interest among traders, and the company’s financials and technicals may explain some of that focus. The stock is a player in the cannabis space, which puts it in a bit of a spotlight as well. All of these trends and figures deserve some scrutiny, so we thought it was a good idea to take a closer look at the stock today.

In a fast-growth market segment, such as anything even remotely related to the marijuana and cannabis space, the story is always about potential for robust top-line growth and strong flows of cash from principal operations. That means we need to focus on the balance sheet first and foremost, then turn our attention to sales data. Finally, we will take a look at the chart and get a sense of how this stock is being treated by investors and traders in recent action.

The company is currently sitting on 1.51B in cash and cash-equivalent securities at the present time. In a high-ROI market like the cannabis space, cash is king because it allows a company to deploy it with a high expected rate of return on that investment. And investors, in turn, are usually willing to pay up for access to that high rate of return.

Naturally, we also have to point out that the company is sitting on 3.86B in total standing liabilities right now. Any major growth in debt can handicap a company in the cannabis space because most of these companies already function in the high-risk quadrant of the portfolio template given their inherent legislative risk, and debt further distances that potential leap to institutional flows given the implicit additional risk of dilution that generally accompanies excessive debt.

So, how has the market been treating the stock? For that, we must turn to the technicals. As most traders know, the cannabis space has been a speculative darling, but volatility is particularly high in these stocks. Melco Resorts & Entertainment Limited (MLCO) has been no exception, with a beta of 2.15. With a market cap of 15.406B, shares most recently closed at 28.210. For some perspective, consider that it has traded as high as 30.49 over the past year, and as low as 18.78, but the stock’s current 50-day simple moving average is tracking right now at 27.79.

One of the reasons so many of these stocks have such wide swinging volatility is because the risks are large but so is the potential for huge growth given that most businesses in the cannabis-related space are in some way tethered to the upward growth potential of a new and emerging market. But another reason is that many are still trading with relative small outstanding cap tables. In this case, Melco Resorts & Entertainment Limited (MLCO) is pulling around 544.3M in outstanding shares.

Even so, liquidity is always important. At this point, the stock has a 3-month average for shares changing hands in a given session of 2.72M. If you’re curious about whether or not folks are becoming more or less focused on the name, consider that its most recent 10-day average trading volume stands at 2.96M by comparison.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Are Investors Wary Of NetApp, Inc. (NTAP)?

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NetApp, Inc. (NTAP) has been stirring up interest among traders, and the company’s financials and technicals may explain some of that focus. The stock is a player in the cannabis space, which puts it in a bit of a spotlight as well. All of these trends and figures deserve some scrutiny, so we thought it was a good idea to take a closer look at the stock today.

In a fast-growth market segment, such as anything even remotely related to the marijuana and cannabis space, the story is always about potential for robust top-line growth and strong flows of cash from principal operations. That means we need to focus on the balance sheet first and foremost, then turn our attention to sales data. Finally, we will take a look at the chart and get a sense of how this stock is being treated by investors and traders in recent action.

The company is currently sitting on 5.63B in cash and cash-equivalent securities at the present time. In a high-ROI market like the cannabis space, cash is king because it allows a company to deploy it with a high expected rate of return on that investment. And investors, in turn, are usually willing to pay up for access to that high rate of return.

Naturally, we also have to point out that the company is sitting on 2.17B in total standing liabilities right now. Any major growth in debt can handicap a company in the cannabis space because most of these companies already function in the high-risk quadrant of the portfolio template given their inherent legislative risk, and debt further distances that potential leap to institutional flows given the implicit additional risk of dilution that generally accompanies excessive debt.

So, how has the market been treating the stock? For that, we must turn to the technicals. As most traders know, the cannabis space has been a speculative darling, but volatility is particularly high in these stocks. {{companyAbbr_1}} has been no exception, with a beta of 1.87. With a market cap of 16.322B, shares most recently closed at 59.16. For some perspective, consider that it has traded as high as 65.58 over the past year, and as low as 37.43, but the stock’s current 50-day simple moving average is tracking right now at 61.39.

One of the reasons so many of these stocks have such wide swinging volatility is because the risks are large but so is the potential for huge growth given that most businesses in the cannabis-related space are in some way tethered to the upward growth potential of a new and emerging market. But another reason is that many are still trading with relative small outstanding cap tables. In this case, NetApp, Inc is pulling around 267.92M in outstanding shares.

Even so, liquidity is always important. At this point, the stock has a 3-month average for shares changing hands in a given session of 3.24M. If you’re curious about whether or not folks are becoming more or less focused on the name, consider that its most recent 10-day average trading volume stands at 2.96M by comparison.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Could investors throw in the towel on Lam Research Corporation (LRCX)

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Stock of Lam Research Corporation (LRCX) opened at $197.92 and last traded at $195.83 x 200. More than 1,966,106 shares exchanged hands compared to an average daily volume of 3,904,340 shares. At the current pps, the market capitalization stands at 32.283B.

Fundamentals you simply cannot ignore

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Lam Research Corporation (LRCX) currently has a Beta value of 1.44 . Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent. Next, let’s take a look at Lam Research Corporation (LRCX) current P/E ratio. Lam Research Corporation (LRCX) currently has a PE ratio of 21.76. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Lam Research Corporation (LRCX) beta and P/E ratio, the EPS cannot be ignored. Lam Research Corporation (LRCX) EPS for the trailing twelve months was 9.10. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Lam Research Corporation (LRCX) is estimated to release its next earnings report on 6 / 2018 (N/A-Not know at this time). It would be interesting to see how the earnings fair out considering the recent developments.

The Analyst Chirp:

Lam Research Corporation (LRCX) has received an average target price from analysts of $258.70 amounting to a recommendation rating of Buy. That comes from 22 different analysts. Perhaps, the driver for that assessment comes from the company’s valuations. Right now, we are looking at a median price-to-earnings ratio for this calendar year of 12.12. To give a sense of trend, the same data point on the estimate for next year is currently sitting at 12.43 times earnings. Drilling down a bit further, this quarter, we are looking at an average estimate from analysts for earnings per share level of 18.00. That shift to 18.00 heading into next quarter.

Other Stocks in same sector as Lam Research Corporation (LRCX):

Other notable stocks in similar sector as to Lam Research Corporation (LRCX) to consider are {{companyAbbrExt_1}}, {{companyAbbrExt_2}}, {{companyAbbrExt_3}} that last traded at ${{Bid_1}}, ${{Bid_2}}. ${{Bid_3}} respectively.

 

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE