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What equity valuations might be trying to tell you!
Hang on, according to the ‘experts’, this wasn’t supposed to happen! Having been fed a diet of gloom by everyone from Hedgies (Bridgewater), Academics/Economists (Dartmouth/MITI/Krugman), Banks (Citi) and wealthy investors (Mark Cuban – see end for links) should Trump get elected, markets have done what they do best and confound the experts, with US equity […]
Continue readingGartner Inc follow-up as US jobs data confirms softening trend for Info segment
Last month I flagged a warning on Gartner Inc. Consensus forecasts for a sustained rate of revenue growth over the next two years are clearly wrong. The question is whether they are too high or too low. In the blog piece on the subject I highlighted the correlation of the group’s organic revenue record to […]
Continue readingIf rates rise, it won’t have anything to do with the US jobs data
It’s the first Friday of the month again and I’ve woken to Punxsutawney Phil and predictions of imminent interest rate increases following the traditional release of the US non-farm payroll numbers; this time for November. Notwithstanding these are probably even less meaningful than normal given the Presidential elections at the beginning of the month it […]
Continue readingVodafone – Recovery play or just a value trap?
Are super-low interest rates good for capital intensive businesses such as the Telcos? Intuitively, the answer seems obvious, in that lowering funding costs ought to improve the marginal returns from employing that capital. An analogy might be with fuel prices for airline stocks, with again a seemingly clear inverse relationship. In both cases however you might […]
Continue readingGartner Inc – Consensus forecasts in straight lines are usually wrong
Nature may abhor a straight line, but analyst forecasts don’t seem to, even when estimating revenues for a business with an historic margin of error on revenues of over +/-4ppts. I take a look at Gartner as consensus forecasts predict what its never achieved before, a straight run of revenue growth and into a slowing […]
Continue readingSeasonal adjustments salvage what would have been a dire October non-farm payroll number
Think +142k in October for Private sector jobs was poor? How would you feel about +37k then? Unlike in some countries, the US government would never stoop so low as bend some piece of economic data to gain a political advantage ahead of an election. The recovery in Q3 GDP to +2.9% (‘real’) trumpeted a […]
Continue readingFacebook Q3 results: Shaking out the momentum traders, albeit still a little early for the deep value guys
It has a great model and enormous growth potential, but you’ll have to excuse my cynicism at the way revenues, margins and expectations were pumped up this year. (see my comment back in May after the Q1 results – http://growthrater.com/facebook-q1-beat-followed-controlling-shareholder-share-sale-ring-bells/#topbar_header) Having pushed higher yielding newsfeed-only advertising on mobile and saturated advertising loadings, we’ve […]
Continue readingUS Agency revenue growth plummets in Q3 – the canary in the mine
With less than a week to go and Trump edging ahead in some polls, albeit possibly still behind with regards electoral college votes, there’s going to be some sweaty palms in financial markets. A month ago, a Clinton victory may have seemed like a slam dunk and indeed one bookie (Paddy Power Betfair) was reported […]
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