#$ddd

December 8, 2024:

December 12, 2024:

December 23, 2024

Ulta Beauty (ULTA): Many investors hold Ulta in high regards due to a track recorded extending of topping analyst’s top and bottom line targets. The cosmetics company delivered at least 20% growth in each of the past 8 quarters with double digit gains in key same store sales metrics. When you factor in that similar businesses struggled in recent years, Ulta’s gains look even more remarkable. Robust fundamental support over this time led to a predictable boom in the stock price. Shares boasted a 36% increase in the past 12 months and historically jump about 5% immediately through the print. Investors should still proceed with caution, considering Ulta faces tough comparisons and irrationally high earnings targets.

What are you expecting for ULTA? Get your estimate in here!

VeriFone Systems (PAY): Shares of VeriFone tumbled 22% in the past 12 months on the back of weak third and fourth quarters results to cap off fiscal 2016. Management’s comments following the third quarter, in particular, caused analysts to cut forward estimates. To offset additional losses, the company initiated a new restructuring program focused on streamlining operations and designing a long term growth strategy. Apart of that includes adopting Apple, Google and Samsung mobile payment applications into pre existing electronic payments systems. Nonetheless, currency headwinds, depressed consumer spending and ongoing restructuring costs could hamper financial performance for the fiscal first quarter.

What are you expecting for PAY? Get your estimate in here!

Stratasys (SSYS): 3D Systems dismal top line performance in Q4 portends weak results for Stratasys tomorrow morning. Financial performance for SSYS maintains a steady slide down with results in each of the past 5 quarters recording negative growth. In fact, sales for the third quarter missed the Estimize sales target by nearly 10%, but the stock still trades significantly higher compared to a year earlier. Shares jumped 25% in the past 12 months and tend to increase by 1% immediately through the print.

What are you expecting for SSYS? Get your estimate in here!

Zumiez (ZUMZ): The company reported a 14.3% increase in net sales with comparable sale gains of nearly 10% for the month of January. In the most recent monthly sales report management also raised fourth quarter sales and earnings guidance to the range of 60 to 66 cents per share. The biggest drivers of this recent success includes a more robust ecommerce platform, efficient customer service, and expanded lifestyle lineup. Despite a rosy financial outlook, the stock continues to struggle with share value down 15% in the past 3 months.

What are you expecting for ZUMZ? Get your estimate in here!

El Pollo Loco (LOCO): The company’s share of ups and down have driven investors loco during earnings season. After a strong second quarter which topped analyst’s targets on both the top and bottom line, LOCO followed it up with a disastrous third quarter that did the exact opposite. Consequently shares are down nearly 10% in the past 3 months and historically struggle through the 30 days after a report. The biggest concerns this quarter comprise rising labor costs and new store opening expenses and its impact on the bottom line.  

What are you expecting for LOCO? Get your estimate in here!

All of these stocks have gotten killed the past 30 months and are starting to put in long term bottoming formations. Look Below.

  All of them look the same including bubble parabolic highs followed by parabolic crashes.

These have now shown signs of life and long term bottoms. So the answer to my question is it is very possible and I believe they have. I have not touched these for a while but 3D printing is definitely in the future and will play a large role in many environments so I am looking at these again. Here are some close ups of the two best charts I see.

DDD has bottomed at the beginning of 2016 and gone sideways holding the pullback low for much the year. As long as this holds 12.50 I think this continues higher over the near term. With a 22% short float anything into the 17-18 range you are going to see a massive squeeze here.

SSYS bottomed at the same time that DDD did above. It has pulled back methodically throughout 2016 and I believe that if this gets above 21 again you are going to see it running to 30. This has a 12% short float so there are still a lot of people betting against it.

Definitely a sector to keep your eye on.

Home Depot (HD): Low interest rates and a bounceback in the housing market have led to robust earnings in recent quarters. Not only does Home Depot benefit from an increase in new home sales, but as home prices stay high, consumers tend to invest heavily into their properties. Strong job growth has also supported this ongoing trend, allowing consumers to spend on home improvement projects. In the second quarter, the home improvement retailer posted a 4.7% increase in comparable sales and 5.4% in United States stores. The company should continue to deliver encouraging results but faces a number of near term headwinds including intense competition and significant international exposure. Besides Lowe’s, consumers are starting to look towards online retailers like Amazon for their home improvement needs. This shift to e-commerce could have a lasting impact on Home Depot if it is not taken seriously in the immediate future.

Dick’s Sporting Goods (DKS): Dick’s has been gaining strength in recent quarters despite a pullback from apparel brands like Nike and Under Armour. Its efforts to expand its online capabilities along with strategic marketing and merchandising have helped drive traffic trends and sales. Dick’s has also benefited from a consolidation in the industry following the bankruptcy of Sports Authority stores. Dick’s now owns the intellectual property and much of the branding of the former retailer. Tomorrow’s report is forecasted to maintain its current trajectory but will more importantly shed some light on the pivotal holiday season to be reported in early 2017.

The TJX Companies (TJX): A weak retail environment has greatly benefited value channels like TJX’s catalogue of discount brands including Marshalls and its namesake TJ Maxx stores. The retailer has delivered positive comps for over 4 years on strong discount trends, sound marketing strategies, and expanding its online capabilities. Its loyal and growing customer base should continue to drive comparable sales for the upcoming quarter. During the second quarter conference call management indicated comparable store sales would grow between 2 and 3% but margins could see a setback from higher labor costs and ongoing currency headwinds.  

Stratasys (SSYS): 3D printers haven’t become a must have product that many experts predicted it would be, but they have certainly carved out a niche in several industries. Stratasys, in particular, has entered into several strategic partnerships with Boeing, Ford and Siemens to develop 3D printing technology for production applications. Additional efforts to produce affordable consumer products along with these partnerships will help drive revenue growth in the quarter. Of course 3D printing is still an expensive hobby that most consumers are putting off given the current economic environment. Meanwhile competition from 3D Systems will continue to pressure results moving forward.

Mobileye (MBLY): Many experts believe that driverless cars are a near term reality that will revolutionize the automotive industry. This is particularly beneficial for Mobileye which develops driver assistance systems for collision prevention and mitigation. Financial performance has gained traction in the recent years due to this ongoing trend but shares have lagged significantly. The stock is down 5% in the past 12 months and historically decline 1% immediately through the print.

3D Systems (DDD): While 3D printers have lost most of their mainstream appeal, it doesn’t mean they’ve been completely forgotten. 3D Systems is still thriving by selling printers to both commercial and recreational customers. Its portfolio of healthcare solutions are expected to drive longer-term growth. These include end-to-end simulation, training and planning and practicing surgical instruments and devices for personalized surgery. Precision surgical equipment is often very expensive which is why investors are so enthusiastic about these new affordable alternatives. Additionally, DDD unveiled its newest systems, Figure 4, earlier this year, which is being promoted as faster and more efficient than previous models. Heightened competition from heavy hitters like HP and Stratasys will continue to be near-term threats to earnings and revenue.

Fossil (FOSL): Shares of the watchmaker are down over 50% from a year earlier despite topping analysts estimates in 2 of the past 3 quarters. Fossil’s foray into wearable technology is proving to be a smart one, aiding in the near term turnaround. Some of this should also help offset the downturn in traditional timepieces  that has occurred over the past few quarters. The Estimize consensus is forecasting a rebound in comps this quarter to reflect an improving consumer spending environment and growing wearable tech sector.  

CyberArk (CYBR): Outside of Fortinet, the cyber security space is expected to continue growing at a rapid clip. The new and ongoing threats to our digital sovereignty will keep demand for these products rising higher. CyberArk is in a favorable position to tap these opportunities supported by frequent investments in its product suite and several strategic acquisitions. As the industry continues to grow, competition will also heighten. Already, the space is nearing saturation with a glut of names like Cisco, FireEye and Symantec to name a few.  

Skyworks Solutions (SWKS): The chipmaker was dealt a blow last week after Apple reported weaker than expected earnings. iPhone sales continued to slow down during the third quarter which is a poor sign for the companies that produce chips in the phone. Shares are still up 15% in the past 3 months as analysts expect the chipmaker to post a marginal improvement this quarter. The company remains well positioned to capitalize on the IoT on other higher growth technologies.

Qorvo (QRVO):  Qorvo is in a similar position as Skyworks following Apple’s weaker third quarter results. The chipmaker currently generates a majority of total revenue from the iPhone which is seeing demand fall. Fortunately, like Skyworks, Qorvo is positioned in many high growth markets to diversify its portfolio beyond the iPhone. Qrvo recently released two new products to its cable networking business that will help support the top line.

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Apple (AAPL) – The tech giant is getting ready for its big product presentation Wednesday, September 7. Some of the new devices rumored include an iPhone 7 and a new Apple Watch. 

Urban Outfitters (URBN) – Jefferies named the retailer a top pick, saying the company is “capitalizing on an improving fashion cycle and changes in footwear trends.” Jefferies has a $45 price target on the stock.

Marvell Technology (MRVL) – The company posted a 12% year-over-year drop in revenue, and its current quarter guidance fell short of Wall Street expectations. Marvell Technology reported an earnings per share forecast of 8 cents to 13 cents, compared to the Thomas Reuters consensus estimate of 14 cents.

3D Systems (DDD) – General Electric (GE) is buying two European 3-D companies for $1.4 billion, boosting the 3-D printing sector. 3D Systems is moving higher on the news.

Barnes & Noble (BKS) – The company is getting a boost following a write up in Barron’s over the weekend which called the stock undervalued and said shares are trading at a bargain price.

Do you know what’s happening in this picture? Literally one of the most important events in human history.

But here’s the most amazing part of the story: Hardly anyone paid attention at the time.

Wilbur and Orville Wright conquered flight on December 17th, 1903. Few inventions were as transformational over the next century. It took four days to travel from New York to Los Angeles in 1900, by train. By the 1930s it could be done in 17 hours, by air. By 1950, six hours.

Unlike, say, mapping the genome, a lay person could instantly grasp the marvel of human flight. A guy sat in a box and turned into a bird.

But days, months, even years after the Wright’s first flight, hardly anyone noticed.

Here’s the front page of The New York Times the day after the first flight. Not a word about the Wrights:

Two days after. Again, nothing:

Three days later, when the Wrights were on their fourth flight, one of which lasted nearly a minute. Nothing:

his goes on. Four days. Five days, six days, six weeks, six months … no mention of the men who conquered the sky for the first time in human history.

The Library of Congress, where I found these papers, reveals two amazing details. One, the first passing mention of the Wrights inThe New York Times came in 1906, three years after their first flight. Two, in 1904, the Times asked a hot-air-balloon tycoon whether humans may fly someday. He answered:

That was a year after the Wright’s first flight.

In his 1952 book on American history, Frederick Lewis Allen wrote:

Several years went by before the public grasped what the Wrights were doing; people were so convinced that flying was impossible that most of those who saw them flying about Dayton [Ohio] in 1905 decided that what they had seen must be some trick without significance — somewhat as most people today would regard a demonstration of, say, telepathy. It was not until May, 1908 — nearly four and a half years after the Wright’s first flight — that experienced reporters were sent to observe what they were doing, experienced editors gave full credence to these reporters’ excited dispatches, and the world at last woke up to the fact that human flight had been successfully accomplished.

The Wrights’ story shows something more common than we realize: There’s often a big gap between changing the world and convincing people that you changed the world.

Jeff Bezos once said:

Invention requires a long-term willingness to be misunderstood. You do something that you genuinely believe in, that you have conviction about, but for a long period of time, well-meaning people may criticize that effort … if you really have conviction that they’re not right, you need to have that long-term willingness to be misunderstood. It’s a key part of invention.

It’s such an important message. Things that are instantly adored are usually just slight variations over existing products. We love them because they’re familiar. The most innovative products — the ones that truly change the world — are almost never understood at first, even by really smart people.

It happened with the telephone. Alexander Graham Bell tried to sell his invention to Western Union, which quickly replied:

This `telephone’ has too many shortcomings to be seriously considered as a practical form of communication. The device is inherently of no value to us. What use could this company make of an electrical toy?

It happened with the car. Twenty years before Henry Ford convinced the world he was onto something, Congress published a memo, warning:

Horseless carriages propelled by gasoline might attain speeds of 14 or even 20 miles per hour. The menace to our people of vehicles of this type hurtling through our streets and along our roads and poisoning the atmosphere would call for prompt legislative action. The cost of producing gasoline is far beyond the financial capacity of private industry… In addition the development of this new power may displace the use of horses, which would wreck our agriculture.

It happened with the index fund — easily the most important financial innovation of the last half-century. John Bogle launched the first index fund in 1975. No one paid much attention to for next two decades. It started to gain popularity, an inch at a time, in the 1990s. Then, three decades after inception, the idea spread like wildfire.

It’s happening now, too. 3D printing has taken off over the last five years. But it’s hardly a new invention. Check out this interview with the CEO of 3D Systems in … 1989. 3D printing, like so many innovations, had a multi-decade lag between invention and adoption. Solar is similar. Photovoltaics were discovered in 1876. They were commercially available by the 1950s, and Jimmy Carter put solar panels on the White House in the 1970s. But they didn’t take off — really take off — until the late 2000s.

Big breakthroughs typically follow a seven-step path:

First, no one’s heard of you.

Then they’ve heard of you but think you’re nuts.

Then they understand your product, but think it has no opportunity.

Then they view your product as a toy.

Then they see it as an amazing toy.

Then they start using it.

Then they couldn’t imagine life without it.

This process can take decades. It rarely takes less than several years.

Three points arise from this.

It takes a brilliance to change the world. It takes something else entirely to wait patiently for people to notice. “Zen-like patience” isn’t a typical trait associated with entrepreneurs. But it’s often required, especially for the most transformative products.

When innovation is measured generationally, results shouldn’t be measured quarterly. History is the true story of how long, messy, and chaotic change can be. The stock market is the hilarious story of millions of people expecting current companies to perform quickly, orderly, and cleanly. The gap between reality and expectations explains untold frustration.

Invention is only the first step of innovation. Stanford professor Paul Saffo put it this way:

It takes 30 years for a new idea to seep into the culture. Technology does not drive change. It is our collective response to the options and opportunities presented by technology that drives change.