MRVL, JLG and some changes to STOP orders
MRVL stock price rose 10% today.
Sales up 34%
Earnings +100%
Margins are also increasing from 53.7% to 54.4%
This is important: semiconductor pricing power has moved to Marvell's advantage.
They also projected continuing sales growth of 13% sequentially. Given the margins, that means potential for even more earnings upsides. With the potential next quarter to show $1.30~$140 for 12 months earnings, that makes for a 40 P/E AFTER today's 10% price jump (it was ~60).
Quick note: many people use the P/E as shorthand for a fair valuation. Use it, but do some additional homework too. With a growing company (where earnings are growing 50%+), the first two quarters are irrelevant. If anything, by depressing the 12 month earnings, they are artifically raising the P/E. Annualize the recent 2 quarters and adjust if there is management guidance.
Google is a great example of this. P/E of 89. People cite that as a warning sign that the company is overvalued. But Y/Y earnings are up 10X. Apply my rule of thumb. If Google's earnings stay flat, that's $5.30 per share or a 75 P/E at $400 per share.
In the next 2 quarters, if Google's earnings grow 20% then the P/E is 66
In the next 2 quarters, if Google's earnings grow 50% then the P/E is 50
In the next 2 quarters, if Google's earnings grow 100% then the P/E is 38
That's why the stock keeps growing - if the earnings continue to grow >100%, the stock is relatively cheap.
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JLG stock also zipped up a tidy 14.5%
Sales +56%
Earnings were $28M or $0.53 per share (no Y/Y growth number because they had a $8M loss last year).
Using the rule of thumb, if earnings stay flat (which they won't), that's a 21 P/E at today's price.
Other highlights were accelerating sales growth (raised outlook from 15% to 20%+), dividend declared (puny, but still....), and a likely increase in prices to offset oil costs. ALso, PEG ratio has slipped <1.
Most important: trading volume rocketed from an average 500K shares daily to 3.1M shares.
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We are changing the stop limit orders for the stocks as follow
BCSI $37
PWR $13
WFMI $138
GILD $51
CERN $90
MRVL $50
JLG $40
GYI $82
JBLU $17.5
DESC $9
In two weeks we are already at the point where (on some stocks) we are now playing with the house's money (to use Vegas terms).
Sales up 34%
Earnings +100%
Margins are also increasing from 53.7% to 54.4%
This is important: semiconductor pricing power has moved to Marvell's advantage.
They also projected continuing sales growth of 13% sequentially. Given the margins, that means potential for even more earnings upsides. With the potential next quarter to show $1.30~$140 for 12 months earnings, that makes for a 40 P/E AFTER today's 10% price jump (it was ~60).
Quick note: many people use the P/E as shorthand for a fair valuation. Use it, but do some additional homework too. With a growing company (where earnings are growing 50%+), the first two quarters are irrelevant. If anything, by depressing the 12 month earnings, they are artifically raising the P/E. Annualize the recent 2 quarters and adjust if there is management guidance.
Google is a great example of this. P/E of 89. People cite that as a warning sign that the company is overvalued. But Y/Y earnings are up 10X. Apply my rule of thumb. If Google's earnings stay flat, that's $5.30 per share or a 75 P/E at $400 per share.
In the next 2 quarters, if Google's earnings grow 20% then the P/E is 66
In the next 2 quarters, if Google's earnings grow 50% then the P/E is 50
In the next 2 quarters, if Google's earnings grow 100% then the P/E is 38
That's why the stock keeps growing - if the earnings continue to grow >100%, the stock is relatively cheap.
----------------------------------------------------
JLG stock also zipped up a tidy 14.5%
Sales +56%
Earnings were $28M or $0.53 per share (no Y/Y growth number because they had a $8M loss last year).
Using the rule of thumb, if earnings stay flat (which they won't), that's a 21 P/E at today's price.
Other highlights were accelerating sales growth (raised outlook from 15% to 20%+), dividend declared (puny, but still....), and a likely increase in prices to offset oil costs. ALso, PEG ratio has slipped <1.
Most important: trading volume rocketed from an average 500K shares daily to 3.1M shares.
-----------------------------------------------------------------
We are changing the stop limit orders for the stocks as follow
BCSI $37
PWR $13
WFMI $138
GILD $51
CERN $90
MRVL $50
JLG $40
GYI $82
JBLU $17.5
DESC $9
In two weeks we are already at the point where (on some stocks) we are now playing with the house's money (to use Vegas terms).
posted by Andrew at
8:04 PM
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