Daily Investment Tips

To know where a company stock is heading you need to look at future sales and profits. If the future revenues and profits will go up the stock will follow. One way companies boost sales and profits is by introduction of new products.

One company introducing new products is Starbucks, the coffee store power house. Speaking during the Shareholders annual general meeting, the CEO told shareholders what the company is brewing.

“Starbucks is firing on all cylinders,” CEO Howard Schultz told 2,000 shareholders. “We are now creating lots of Starbucks products to live outside of our stores.”

The move comes at a time the company is barreling into the multibillion-dollar consumer product goods segment. Starbucks executives say sales from this emerging side of the business will someday match sales from its retail stores.

According to annual reports, in 2011 Starbucks total sales was $11 Billion that brought in profits of $ 1.2 billion. If the company can double it sales to $22 Billion you can predict the profits will also rise. At the moment, Starbucks profit margins are at on average around 11%. By that estimate you can predict if revenues hit future target the profits will more than double. Some of the products they are introducing such as energy drinks have high profit margin.

written by Constantine Njeru \\ tags: Annual Reports, Coffee Store, Company Stock, Energy Drinks, Future Sales, Howard Schultz, Introducing New Products, Profit Margin, Profit Margins, Profits, Retail Stores, Shareholders, Starbucks, Starbucks Coffee, Target

Coca cola is loved by investors for their regular dividend payments. And the latest revenue forecast from Coke will make investors light up! Speaking in a marketing conferenc, Joseph V. Tripodi, executive vice president and chief marketing and commercial officer at Coca-Cola provided a road map for the company in the next 10 years.

For Coca-Cola, that means increasing its revenue to $200 billion in 2020 from $95 billion in 2008.

Joseph V. Tripodi, executive vice president and chief marketing and commercial officer at Coca-Cola, conceded that doubling revenue is “a big, hairy, audacious goal,” but said that global megatrends like urbanization and the rise of the middle class are in the company’s favor. “Every 30 days there’s the equivalent of a new Atlanta added to the world,” he said.

If coke hits those stellar numbers imagine what it would do for it’s P.E and the stock?

Source New York Times.

written by Constantine Njeru \\ tags: Coca Cola, Coke, Dividend Payments, Investors, Megatrends, Middle Class, New York Times, Road Map, Stock

On Feb. 22 Garmin, the makers of navigational devices beat expectations as it announced $910 million in sales in the fourth quarter, up 9 percent from a year earlier. Garmin’s quarterly profit increased 25 percent during the quarter, too, and it proposed paying out dividends of $1.80 per share over four quarters. Investors cheered the news, pushing the stock up 9.3 percent to close at $48.86.

The Future Of Garmin

To forecast Garmin stock you have to look at changes the company is undergoing. Although sales of navigation devices for cars continue to fall, the company has been investing money in developing new products.  Now, more than a third of the company’s revenue comes from GPS products that have nothing to do with cars.Devices for outdoor enthusiasts, such as handheld devices with topographic maps for hikers and tools for hunters to train and track their dogs. That’s followed by portable GPS gadgets and watches for athletes, particularly cyclists, runners, and golfers. Garmin also sells GPS products that are built into the dashboards of helicopters, airplanes, and ships.

As you can see this is a company that is re-inventing itself and it wont go the way of Kodak.

Garmin Stock Forecast and Prediction

Many analysts, including Goldman Sachsand JPMorgan Chase, are raising their target prices for Garmin. Some on Wall Street now see the stock trading as high as $60.

written by Constantine Njeru \\ tags: Goldman Sachs, Investing Money, Jpm, Jpmorgan Chase, Navigation Devices, Navigational Devices, Quarterly Profit, Stock Trading, Target Prices

When Warren Buffett made a $10 billion investment in IBM, we asked what had he seen? And the answer could be in a 12 May 2010, investor briefing report by IBM.

In that investor conference call, IBM chairman and CEO Sam Palmisano outlined his next five-year plan.

CEO Sam Palmisano told any one who cared to listen then that he expects earnings per share to be at least $20 and generate free cash flow of $100 billion for fiscal 2015. He was essentially claiming the company expected profit to double in six years time. That rate would equate to a 12.23% annual earnings growth rate, which is supremely impressive considering the size and maturity of the company.

When they make bold forecast / prediction like this, they mean business,

In May 2007 it introduced a three-year plan to achieve $10 per share by the end of 2010. It hit that target one year early, at the end of 2009.

The CEO back then said that this impressive earnings growth would primarily come from greater focus on more profitable business lines like software. He avowed that IBM will continue to create solutions that help their clients increase efficiency through cloud computing services and infrastructure and electricity monitoring and analytics systems.

IBM Stock Prediction & Forecast

As we write this, IBM stock is at 188 and has a EPS of 12.64 and PE of 14.93. If indeed by 2015 the EPS hits $20 and we give it a very conservative PE of 10, the stock will be at $200. Keep in mind, Historically, IBM has traded for 12.2x to 18.1x cash earnings per share.

You can read and listen to that IBM Conference call at IBM Investor relations page.

written by Constantine Njeru \\ tags: Cash Earnings, Ceo, Computing Services, Conference Call, Earnings Growth, Earnings Per Share, Free Cash Flow, IBM, Investor Conference, Investor Relations, Profitable Business, Sam Palmisano, Stock Prediction, Warren Buffett

These days, Apple is worth about $375 billion, with shares up about 25 percent, to $403, this year. If the stock gains an additional 12 percent, Apple will have the world’s largest market value, surpassing ExxonMobil. In the last 11 years Apple has risen from low tens to the current levels.

Many are wondering am I late to the party, has the stock risen too high and you might buy at the top?

Analyst interviewed by Businessweek magazine think, Apple best days are still ahead and the stock is still rated a buy.

White isn’t worried about Apple’s abruptly coming down to earth. If anything, he and a handful of other analysts think Apple watchers on Wall Street may be substantially underestimating the potential of the company, which still only has a single-digit market share in mobile phones and personal computers. “I don’t remember a company of this size growing at this pace,” says White, who recommends the stock and predicts it could be worth $617 billion within a year—the Street’s highest target. “We can’t even model out some of the possibilities: an Apple TV set, huge growth in China, businesses racing to buy Apple laptops. It’s like a religion. It sounds crazy, but it could still be early for Apple.”

To understand the confidence don’t look at the raw number, look at the fundamentals. While Apple shares have soared higher, they’ve become cheaper in relation to earnings. The reality is, Apple profits have been growing faster than the share price.

written by Constantine Njeru \\ tags: 11 Years, Apple Laptops, Apple Stock, Apple Tv, Businessweek, Businessweek Magazine, Buy Laptops, China Businesses, Coming Down To Earth, Exxonmobil, Handful, Market Share, Mobile Phones, Personal Computers, Possibilities, Share Price, Stock Analyst, Stock Gains, Target, Wall Street

Nearly every analyst following Apple Inc, rate Apple shares a “buy”. Goldman Sachs has a target of $485, Credit Suisse is at $500 JPMorgan Securities analyst Mark Moskowitz has a price target of $450 and Ticonderoga Securities leads the pack at $612.

Trying to find an analyst who thinks you should sell Apple stock is like trying to find a needle in a haystack.

written by Constantine Njeru \\ tags: Apple Stock Price, Credit Suisse, Goldman Sachs, Jpmorgan Securities, Mark Moskowitz, Needle In A Haystack, Securities Analyst, Stock Analyst, Stock Price Target, Ticonderoga

Facebook revenues in 2010 was near $2billion. Many facebook analysts are trying are trying to crunch the numbers and make a forecast for facebook revenues.  An interesting facebook revenue forecast comes from the writer, Adam Rifkin. In a techcrunch article, he shows the ways that Facebook’s annual revenues could grow from $2 billion to more than $30 billion in five years a diverse set of revenue streams.

The author shows different ways that Facebook will make money.

Facebook Ads

Facebook Credits

Facebook Search

Facebook Games

Facebook pages & Places

The article is not about the revenue streams Facebook has; it’s about the revenue streams they’re about to have.

Read the whole article at techcrunch

written by Constantine Njeru \\ tags: Adam Rifkin, Ads, Amp, Different Ways, Facebook, Money Search, Revenue Projection, Revenue Streams, Search Games, Search Pages, Writer Adam

Apple stock has been a high flier for the last 10 years. One anlayst thinks Apple stock could even soar to $600. Ticonderoga Securities thinks Apple’s stock could skyrocket north of $600.

This bold prediction was made after CNBC reported, Apple has just inked a Iphone deal with China mobile. Analyst prediction was based on the following facts:-

• China Mobile is the world’s largest wireless carrier, which has 611 million wireless subscribers.
• In the US, when Verizon got hold of the Iphone, we saw a rise in demand in Iphone. This trend could repeat in China
• Heavy option buying on Apple stock.

written by Constantine Njeru \\ tags: 10 Years, Apple Stock, Bold Prediction, Buying Stock, China Mobile, Cnbc, High Flier, Iphone, Nbsp, Soar, Ticonderoga, Verizon, Wireless Carrier, Wireless Subscribers

At $500 – 600 Google stock might seem expensive but if you look at Google fundamentals you may understand why 35 out of 38 Google analysts polled by Thomson Financial rate Google shares a Buy.

Google Stock Forecast : Google Stock prediction : Google stock outlook

One fundamental that makes a good case for Google stock to rise higher is data on internet advertising.

The nation’s top 100 advertisers direct just 5.5% of their total ad spending to the web, according to industry trade publication Advertising Age. Meanwhile, Internet advertising is expected to hit 9% of total ad spending by 2011, according to Jupiter Research, an industry research firm.

Paid search advertising, which is Google’s bread and butter, accounts for 40% of total ad spending on the Net and is the fastest growing category, helped by the fact that it’s both cost effective and highly scalable.

“Even at 40%, search has just barely scratched the surface,” Aggarwal says. “We think advertisers on a long-term basis are going to embrace search. Google, with the largest market share, is the biggest beneficiary of that growth.” Data Source: smartmoney.com article.

Although Google has been accused of being a one trick-pony that relies 99% on advertising, the above data shows Google core business of  search advertising is solid and the company will continue on the path of higher revenues, higher profits that translates to a higher stock price.

Facebook : The elephant in the room

Facebook is growing fast and attracting advertisers but i don’t think Facebook is a threat to Google business. Google is good at search advertising while Facebook is good at display advertising.

written by Constantine Njeru \\ tags: Advertisers, Advertising Age, Aggarwal, Amp, Bargain, Beneficiary, Bread And Butter, Core Business, Data Core, Data Source, Display Advertising, Facebook, Google, Google Google, Googles, Internet Advertising, Investing Stocks, Jupiter Research, Market Share, Nbsp, Profits, Search Advertising, Search Google, Shares, Show Business, Smartmoney, Stock Forecast, Stock Outlook, Stock Prediction, Stock Price, Term Basis, Thomson, Thomson Financial, Trade Publication, Trick Pony

Forecaster Harry Dent has made a big splash after he came out with a bold prediction that a Major Crash is around the corner.

Harry Dent Dow Forecast : Harry Dent Stock Market Forecast

Harry Dent has looked at his charts and predicts the Dow will trade as high as 13,200 by mid-summer 2011 and the S&P 500 as high as 1430, or more-than 7% above current levels.

“Then we could see another major crash,” Dent says, forecasting the Dow could trade as low as 3300 in a worst-case scenario. “Bubbles go back to where they started or a little lower,” he says. “The stock market bubble started at (Dow) 3800 in late 1994.”

Harry Dent Gold Forecast : Commodities Forecast : Oil Forecast

Dent predicts the Dow’s crash will play out over several years, he foresees present danger in gold, silver, oil and other commodities. “All investors should lighten up on or sell oil, silver, and gold as the U.S. dollar looks like it has bottomed and should rise ahead,” he writes in the March issue of HS Dent Forecast.

written by Constantine Njeru \\ tags: Amp, Bold Prediction, Bubbles, Crash, Dow, Forecast Forecaster, Gold Commodities, Harry Dent, Investment, Investors, Present Danger, Silver And Gold, Stock Forecast, Stock Market Bubble, Worst Case Scenario