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In order of how bullish you are on them LONG TERM

Google
Amazon
Apple
Microsoft
Yahoo
Baidu
Intel
Facebook
Sirius XM

Comments (21)

  • packmate's picture

    First impression:
    Apple
    Microsoft
    Google
    Baidu
    Amazon
    Intel
    Facebook
    Yahoo
    Sirius XM

  • LTN's picture

    1. Google
    2. Amazon
    3. Apple
    4. Facebook
    5. Baidu
    6. Intel
    7. Microsoft
    8. Sirius XM
    9. Yahoo

    I wouldn't say I'm especially bullish on anything past the first 2 in the long term and that's what I based my opinions on.

    Nobody can touch Google in terms of a search engine in the next 10 years. With Google glass, there is the potential for being the first to market and if it fails there was minimal harm done. The Android operating system is continuing to maintain solid market share and I believe current rumors are that they are in the process of creating hardware for their own phone. They've been on quite a run as of late, but eventually they'll start paying a dividend with their cash flow.

    Amazon is in a similar position. Economies of scale can help them beat out competition in pricing. On top of sales and royalties they also have growth in their amazon prime which includes the video streaming. They are slowly carving out a niche of programming that is appealing over Netflix. They recently snagged a bunch of popular children's shows that Netflix let go.The Kindle Fire may not be iPad worthy, but my hands on experience with the product has me confident in their product.

    Apple needs a win. With so much of that cash abroad and a debate-ably diminishing loyalty base I'm not sure about them. This iWatch I can see flopping. Think about it. It would pull data from bluetooth. My iPhone doesn't last a day as it is. If it's constantly sharing things with my watch it wouldn't stand a chance. They are experimenting with several different screens and colors for iPhones when their models performance hasn't kept up. Issues like battery life are an issue because they've rushed to market. The sentiment I'm getting is there is less interest in rushing out for the next iPhone and that they're fine waiting through a contract or longer instead of rushing for the newest and greatest one.

    Facebook is ranked up there because it's so intertwined with everything. Most apps make you use facebook to login. The problem I have with them in the long term is the amount of advertising they've had to put in front of us in order to satisfy shareholders. The first screen you see when you log in is disproportionately filled with ads compared to the information we're looking for. I can see Facebook going either way. They jumped some 27% today which shows they're making progress.

    Baidu is similar to Google on an online front. They are the search engine in China and with the growth in accessibility to smartphones and cheaper computers I am very bullish on the ability to capture this. I wouldn't put them at the level of Google because they aren't as diversified.

    Intel has been struggling and I see them as more of a stable demand than growing significantly faster than the overall market. I'm not all too sure which products they are in but I imagine the new consoles this fall will be of some benefit but I'm a bit more bearish on growth in electronics. There is no huge reason to upgrade tablets, smart phones and computers anymore. Computers are at the point where they come with more power and storage than you need. Cell phones don't have anything especially new anymore.

    Microsoft has too much risk in the near term for me. While I see a comeback, I think more downside will come. A failed launch of the Xbox will hurt the shares. I think for the new Xbox they'll lose the opening holiday season but in time they'll outpace the rivals. They have some secure microsoft office and xbox live revenue.

    Sirius XM has more positive in the short term than long term for me. With so many new music services coming out, it's just a matter of time before something new is able to take a chunk of their market share. This year alone we've seen several new offerings like spotify and soon apple will be taking market share. While they are different, they are providing the same content: music.

    Yahoo! is in last. The acquisitions are hopeless attempts at regaining relevance. The tumblr acquisition makes no sense to me nor is it much different than past acquisitions that they've closed or nearly destroyed as a result of their ownership. Over the long run, I wouldn't put my money in them.

  • Dhanam's picture

    1. Google
    2. Amazon
    3. Microsoft (people heavily underestimate transition to Office 365 subscription model and the potential of Azure)
    4. Apple
    5. Baidu
    6. Facebook
    7. Yahoo
    8. Intel
    9. Sirius XM

    I disagree with the above poster that Yahoo! is hopeless. There is a clear strategy here to make Yahoo a "mobile application/internet portal" of sorts with a tremendous amount of different services and offerings for mobile - much like how it was for desktop browsing way back in the day.

  • LTN's picture

    I don't disagree with Yahoo having potential, the question is whether they have better potential than the other 8 in the long term. They have the best chance of falling off the map in the next 10 years in my opinion which puts them at a distinct disadvantage when evaluating for a long term investment. I use Yahoo on the daily, but it's also one of the few sites I frequent that I don't access from my phone and they don't make money when my emails are being accessed through my phone application.

  • Take_It_To_The_Bank's picture

    Keep on sleeping on Intel, better engineering than any other chip company, better scale, better vertical integration, better margins, better engineers. Nothing is stopping them from overtaking smartphones/tablets.

  • FutureWaller's picture

    1. Google
    2. Google
    3. Amazon
    4. Microsoft
    5. Baidu
    6. Yahoo
    7. Apple
    8. Intel
    9. Facebook
    10. Sirius XM

  • Bullet-Tooth Tony's picture

    Google
    Amazon

    Baidu
    Intel
    Apple
    Microsoft
    Yahoo

    Facebook
    Sirius XM

  • blackthorne's picture

    Long SIRI. Love how its almost dead last in every list so far. This is how value investors are able to generate alpha. Off the least sexy but most powerful businesses.

    Look at the FCF generation. Negative working capital business. Churn is sub 2%. Long term contracts keep low content rates locked in. Low touch system with no competition. Contracts with manufacturers 4 years down the line to prevent other in app competition (through 2017). Manufactures also subsidize subscriptions. ~50% conversion rate. Close to 25% penetration to date and growing. Used car market untapped market coming into play.

    John Malone owns 50%...

    Thread's like this where you can separate the pros from the rookies. Some of the other companies listed are great but certainly no value play to say the least.

    Growth gets all the glory

  • Beny23's picture

    1. Google
    2. Apple
    3. Amazon
    4. Microsoft
    5. Intel
    6. Baidu
    7. Sirius XM
    8. Facebook
    9. Yahoo

  • In reply to blackthorne
    Tximu's picture

    What about the short term?

    Well, not just SIRI. What about all of them in, let's say, 2 months?

  • awawgoian's picture

    Facebook
    Amazon
    Apple
    Microsoft
    Yahoo
    Intel
    Google
    Baidu
    Sirius XM

  • Bullet-Tooth Tony's picture

    blackthorne:

    Long SIRI. Love how its almost dead last in every list so far. This is how value investors are able to generate alpha. Off the least sexy but most powerful businesses.

    Look at the FCF generation. Negative working capital business. Churn is sub 2%. Long term contracts keep low content rates locked in. Low touch system with no competition. Contracts with manufacturers 4 years down the line to prevent other in app competition (through 2017). Manufactures also subsidize subscriptions. ~50% conversion rate. Close to 25% penetration to date and growing. Used car market untapped market coming into play.

    John Malone owns 50%...

    Thread's like this where you can separate the pros from the rookies. Some of the other companies listed are great but certainly no value play to say the least.

    Growth gets all the glory

    Sorry, but it isn't just lack of growth. You are missing a few things.

    1) Sirius is a valuation play? Trading at 21x EBITDA 32x forward P/E, 7x Rev... yea, a real "value" play right there.

    2) Pandora. As much as I dislike the non-proprietary business model of Pandora, it will continue to eat up market share from SXM, particularly in the Auto market. It's only a matter of time before several alternatives offer live sports and just as many options as SXM. It's growth prospects are limited to the turnover of existing automobiles, which has some legs, but it's similar to the Apple story w/growth.

    3) Negative WC isn't sustainable and additional investments need to be made. SXM really scaled back and became lean, but I think it killed any chances to see innovation and long-term growth.

  • thepie's picture

    Personally wouldn't touch any of them outside of GOOG, AAPL and INTC just based off of not knowing enough (Baidu, FB) not having an opinion (MSFT, SIRI) or just straight up disagreeing with bullish sentiment (YHOO and yup, AMZN)

    I liked GOOG/AAPL/INTC a few months ago, still like AAPL at this price and haven't checked out the other two in a while.

    YHOO might be interesting, no idea on valuation levels, but I fundamentally disagree with the AMZN long thesis. Wouldn't short it in a million years, but wouldn't ever go long.

    The rest is a giant heap of meh/too hard to me so I wouldn't touch them either. Much better opportunities elsewhere imo, but that's a different thread.

  • thepie's picture

    I also like how we mentioned SIRI as a value play off of those valuations and completely ignored apple lol. sure, valuations aren't everything but I would've figured that would come up before anything else.

    How's the negative WC not sustainable by the way? From my (very) limited knowledge I'd assume they bill their consumers before they ever have to pay royalties to artists, creating a negative AR/AP balance that I'd imagine is pretty sizeable.

  • Bullet-Tooth Tony's picture

    thepie:

    I also like how we mentioned SIRI as a value play off of those valuations and completely ignored apple lol. sure, valuations aren't everything but I would've figured that would come up before anything else.

    How's the negative WC not sustainable by the way? From my (very) limited knowledge I'd assume they bill their consumers before they ever have to pay royalties to artists, creating a negative AR/AP balance that I'd imagine is pretty sizeable.

    I meant the change likely isn't going to grow much more negatively, regarding his FCF comment.

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  • blackthorne's picture