Indices closed near lows of the day.
S&P 500 @ 1514.68
RSI @ 55.34
CMF @ 0.169
Internals were :
Down volume led by 1.02 to 1 in NYSE & 1.03 to 1 in Nasdaq
Declining stocks led by .94 to 1 in NYSE & 1.02 to 1 in Nasdaq
Net new 52 wk highs were leading by 174 in NYSE & 74 in Nasdaq
VIX closed UP 5.30% @ 15.51
Oil closed @ $92.05
Gold closed @ $1578.10
Stocks which were UP1% or more included HLF,PANW,CSOD,
M,DNKN,HMC,LVS,BIDU,FFIV,COH,GMCR,FB,STLD,
MLNX,MU.....
AH ER :
PANW Down 3.48%
CRM UP 4.80%
AH Futures Down
AH Asian Markets Mixed
AH Oil Down
AH Gold UP
About market, TAPE rested today with politicians created usual uncertainty. Majority are expecting a pullback which is obvious with higher volume on down days. I do not believe that we are on the verge of major pullback yet. It is important to book gains @ this stage. It is also prudent to monitor your exposure, no need to stretch to max. I expect indices to conquer new highs.
BLOG does NOT give buy or sell.
Saleem
11 comments:
Hey Saleem,
Ok, so I finally got through the SPLK and SONS conference call transcripts having listened to PANW live (since they only provided next Q guidance during the call).
PANW beat and then guided inline, but they always guide conservatively given as evidenced by their nice beat this quarter. Not too much new in the conference call besides the usual taking new customers and expanding within existing customers. They claim to have the only "real" next gen firewall out there, and their Wildfire malware protection is gaining traction above their expectations. Deferred revenue increased 92.2% YoY continuing to build on that recurring revenue stream. I suspect the sluggish reaction in after hours is somewhat due to the >10% runup it had since FIRE's earnings just last week.
SPLK seemed a really exciting conference call. They beat handily and offered guidance above the street and were still conservative about it. They also signed their first 8-figure deal ($20M) and are just starting to transform the way businesses think about using their mountains of data. Adding this huge deal and several other large deals, their deferred revenue increased 55.4% sequentially! Really SPLK can be a part of any facet of a large business, touching and improving the way the company operates or interacts on all levels--it really seems like we are in the early innings of this story as businesses retrain themselves to think and use big data resources to their constant advantage. SPLK should remain one of my main holdings.
As for SONS, they slighly missed on revenues and beat on earnings for this quarter, and guided up (according to Yahoo! estimates) for both revenues and earnings next quarter. Importantly, their new growth driver of SBC products will finally overtake in revenues versus their declining legacy products during 2013. I think this marks a key inflection year for the company as this happens. Their market share in the SBC market has grown from just under 3% a year ago to over 20% now (matches with what I heard about taking share from APKT) and they expect that momentum to continue. A big win and deployment at Verizon is a testament to their successful shift in strategy last year to focus on the burgeoning SBC market. Couple that with cost-cutting efforts last year and still this year, and they should steadily improve their revenue and margin profile throughout 2013. I like the story and will stick with it for now.
That's about all for now--it should be interesting tomorrow! :)
Stocktrader
Hi Stocktrader,
Thanks for in-depth analysis of cc & business model of PANW,SPLK & SONS..
SPLK analysis by you gave me good prospect of its future & is now on my
to monitor list.
Saleem
Hey Saleem,
Here's an analyst note this morning:
09:06 ET (SPLK) Splunk has enormous growth opportunities, says Cowen
Cowen believes Splunk has enormous growth opportunities beyond IT ops, and despite expectations for increased competition, the firm believes Splunk is the one to beat. Cowen cited new deal closings, deferred revenues, and the likelihood that price is not a gating factor to adoption. Shares are Outperform rated.
Stocktrader
Hi Stocktrader,
Analyst note matches your analysis.
Thanks !
Saleem
Hey Saleem,
I wrote up a commentary on RDN a couple days ago but it got eaten by the blog when I tried to post it. Maybe I'll do it again some time but I'm watching RDN and MTG for exposure to housing...and it's been a wild ride for both recently.
Stocktrader
Hey Saleem,
I'm also watching BSFT--it became a massive takeover target after the nearly 50% haircut it took this month. The desirable piece for acquirers (and BSFT itself) is still there obviously, but the wireline legacy winddown this year hurt the stock tremendously.
Stocktrader
Hi Stocktrader,
Sometimes post gets lost IF not signed in...that is the only explanation i can think of.
I will look forward to your post about RDN & MTG.....
BSFT i will look into it.
Saleem
Hi Stocktrader,
BSFT eps expectations have been slashed by 50%....that should explain 50% haircut......
Saleem
Hey Saleem,
Yes, the cut in earnings guidance was definitely the catalyst for that fall. My point is that it resets the bar, and the takeover potential increased dramatically due to the lower stock price but the desirable assets were unaffected from an earnings power perspective.
To that end, I couldn't resist but deploy my remaining cash (from the YNDX sell Wednesday) by buying BSFT @ 21.206. The price action today looks good and I think there's numerous fundamental reasons to own it. At worst, I think downside is limited.
Stocktrader
Hey Saleem,
I forgot to mention, I actually went through the BSFT conference call transcript two nights ago to gauge whether SONS might have similar problems on their earnings release last night. I decided SONS wouldn't (and that worked out), but it also helped me understand what exactly happened to BSFT, which has given me the comfort to buy it now.
I am obviously fairly new to the story, but a couple of pieces lined up for me to want to initiate the position now.
Stocktrader
Hi Stocktrader,
BSFT is oversold big time & i agree that downside is almost non-existent after today's low.
Good luck with BSFT.
Saleem
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