Unusual Options Activity In Met Life

MetLife, Inc. engages in
the insurance, annuities, employee benefits, and asset management businesses.  The company offers life, dental, group short-
and long-term disability, individual disability, accidental death and
dismemberment, vision, and accident and health coverages, etc. Serving
approximately 100 million customers, MetLife has operations in more than 40
countries and holds leading market positions in the United States, Japan, Latin
America, Asia, Europe and the Middle East.

MetLife was named Life
Insurance Company of the Year at the 2019 Middle East Insurance Industry Awards
(MIIA), organized by Middle East Insurance Review. As the fourth time recipient
of the award, MetLife was commended for its customer focus and recognized for
its efforts in enhancing the customer experience.

Last month, MetLife was
named one of America’s “Most Responsible Companies” by Newsweek
magazine. MetLife was the top-ranked insurance company on Newsweek’s inaugural
list, and number 19 of all 300 companies recognized.

Several months ago, MetLife got into the financial service business when it bought Bequest, Inc. Bequest helps customers draw up legally valid wills and estate planning documents online.

But an interesting move Metlife
made several weeks ago, was when it bought PetFirst Healthcare, a fast-growing
pet health insurance administrator.

The love affair with
pets, in particular cats and dogs goes back to the Egyptian times. Back in the
Egyptian times, dogs and cats were laid to rest in elaborate tombs decorated
with inscriptions, furnished with treasure and scented by incense. It’s
believed that dogs and cats improve human physical and mental health.

68% of households in
America have a pet. This is double the percentage of households that have
children. And pet owners will do practically anything or their cat or dog.

The pet insurance market is under-penetrated and fast-growing. The roughly 85 million families that own pets in the United States spend $18 billionii annually on veterinary care, yet, as of 2018, less than 2 percentiii of pets were insured. Following the acquisition, PetFirst will continue to market pet insurance through animal welfare societies and its direct-to-consumer channel. Beginning in the summer of 2020, MetLife will offer this pet insurance to employers through its leading group benefits distribution channel, reaching approximately 41 million employees and dependents across the U.S.

Katie Blakeley, CEO of PetFirst said, “For more than 15 years, we have proudly focused on developing products and services to meet the growing and evolving needs of pet parents across the U.S. During this time, we have seen pet insurance continue to gain importance as a valuable product for families. With MetLife’s tremendous reach and resources, we see a strong opportunity to help more pet parents get access to pet insurance and alleviate the potential financial burden of a sick or injured pet.”

Source

Metlife now offers a broader suite of products to serve their customers and their financial strengths is admired by investors.  So it only makes sense that yesterday, I noticed unusual options activity. The Smart Money bought over 50,000 March call options with strike price at $55.

What’s interesting about this trade is that price is approaching a weekly demand zone at $54.50. If I had to put my money on the zone or the Smart Money, my money would go to the Smart Money all the time. Stay tuned.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Tesla Continues To Beat The Odds

Earlier in 2019, a former hedge fund manager, Whitney Tilson said Tesla will be below $100 by the end of 2019. At the time, Tesla was trading at $295, but Whitney felt Musk has no more rabbits to pull out of his hat and therefore it was all downhill from there. Whitney also felt for the first time, the number of investors losing faith in Musk is starting to exceed the number of investors. Two months, Tesla announced that was looking to raise almost $3 billion in debt and equity, with Elon buying $25 million in stock as good faith, upping Elon’s stake in the company to 20%.

One of the more famous short sellers is Jim Chanos. Jim Chanos is an American investment manager and currently serves as president and founder of Kynikos Associates, a New York City registered investment advisor who is focused on short selling.

Jim is the same person that made headlines when he said Grubhub was a short due to Grubhub’s inability to make any money on each order. Weeks later, Grubhub announced dismal earnings and the stock tanked.

Regarding Tesla, there were rumors that Jim Chanos covered his shorts on Tesla, but it was in fact just a rumor. What concerns Jim is that Tesla’s valuation within a capital intensive business, making cars. Jim thinks the Model S is a great car, but the competition is knocking on the door. In addition, he feels demand for the Model 3 in North America has peaked. And lastly, Jim feels Elon’s behavior is “promotional,” meaning he promises the world, but under delivers.

Short sellers have long targeted Tesla shares and currently have almost a $10 billion bet against the Tesla according to data from the financial analytics firm S3 Partners. The 28 million shares shorted amount to 21% of total shares outstanding, according to S3.

But there is one bull, who has been bullish on Tesla for many years.

Catherine’s firm focuses disruptive technologies and thinks electric there will be millions and millions of cars on the road faster than people realize. She believe Tesla isn’t a car company, but a technology company, Tesla is one of her fund’s largest holdings. In February of 2018 she went on CNBC and said she believes Tesla could hit $4000 and that her bear case was $600.  In recent weeks, she went back on CNBC and reiterated her targets for Tesla.

Tesla Inc (NASDAQ: TSLA) shares gained 3% on Friday after the company reported better-than-expected fourth-quarter delivery numbers. The electric vehicle stock is now up 99% in just the past six months, but Tesla short sellers are seemingly still not convinced the rally will last.

Tesla reported 112,000 vehicle deliveries in the fourth quarter, beating consensus analyst estimates of 106,000 vehicles. For the full year, Tesla delivered 367,500 vehicles in 2019, up 50% from 2018. The 367,500 deliveries was on the low end of the company’s 2019 guidance range of between 360,000 and 400,000 deliveries.

On Friday, S3 Partners analyst Ihor Dusaniwsky said there are still 27.64 million shares of Tesla held short, a position worth about $11.89 billion. That short interest represents about 20.6% of Tesla’s float.

Source

If the current price action doesn’t scare the Shorts, Tesla delivered the first China-made Model 3 one week ago. During their fourth quarter earnings call, Tesla announced that factory has already demonstrated production run-rate of 3,000 units per week and they have the necessary means to get to 150,000 units / year or 40% of Tesla’s current annualized global deliveries.

The fact that price broke out last month, the chart suggest the Shorts are due in for more pain ahead.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Worst Stocks Of This Decade

Yesterday, I wrote a post about Facebook. Mark Zuckerberg was onto something in his dorm room at Harvard before he dropped out to focus on Facebook. The company went public in 2012, dropped 50%, switch their focus to mobile and the stock price hasn’t looked back. If one invested $1000 in Facebook during the IPO, you would be up over $5000 or a 500% ROI.

But all that is glitter is not gold. “All that glitters is not gold” is an aphorism stating that not everything that looks precious or true turns out to be so. This can be applied to just about any experience in life. It could also be applied to the stock market.

So the worst stocks of the decade go to:

  1. Apache. Ten-year performance: -78%
  2. Freeport-McMoRan. Ten-year performance: -68%
  3. Devon Energy. Ten-year performance: -66%
  4. The Mosaic Company. Ten-year performance: -65%
  5. CenturyLink. Ten-year performance: -63%
  6. Kraft Heinz. Ten-year performance: -56%
  7. Perrigo. Ten-year performance: -54%
  8. Under Armour. Ten-year performance: -54%
  9. Occidental Petroleum. Ten-year performance: – 51%
  10. Schlumberger. Ten-year performance: -31%

Now if you know these companies, 40% of the companies on the list were in the oil and gas industry. The oil and gas sector (aqua block) was the worst performing sector this year.

Source

  1. Technology: 48%
  2. Communication: 32%
  3. S&P 500: 31%
  4. Financials: 31%
  5. Industrials: 28%
  6. Staples: 27%
  7. Discretionary: 27%
  8. Real Estate: 26%
  9. Materials: 22%
  10. Health Care: 20%
  11. Energy: 10%

And Energy compared to the SPY has under-performed going back for five years.

Now the Dow Dogs involves buying the ten stocks with the highest yields among the thirty in the Dow Jones Industrial Average at the end of each year then holding them until the end of the next year. I don’t know what they call the worst stocks of the decade and potentially hold them for 10 years. But that’s what the Smart Money is doing.

Over the last several weeks, I have been posting about the bullishness going on in the oil and gas industry by way of the Smart Money buying up assets. In particular Sam Zell, Steven Cohen, Ken Griffin and Ray Dalio, all billionaires are buying distressed oil assets in the US.

I have to start looking at this sector as well. Besides that’s the premise of my trading edge, follow the Smart Money. I’m feeling the trade that Ray Dalio bought more of. Ray didn’t become wealthy by buying asset at high prices. Recently Ray’s hedge fund bought an additional 1,177,026 shares to the fund, increasing his stake to over 2.5 million shares.

EQT Corporation operates as a natural gas production company in the United States. It produces natural gas, natural gas liquids (NGLs), and crude oil. EQT is the largest natural gas producer in the U.S. with its asset base located in the heart of the Appalachian Basin with a focus in Pennsylvania, Ohio and West Virginia.

I would like to see price close above $13 as confirmation that price will continue to rise.

I thought EQT Corp was a Master Limited Partnership, but they aren’t, so don’t they pay much dividends. Thus, I’m not interested in own the stock, but look what I just found. The Smart Money already bought LEAP options going out to January of 2021. So best believe I will be buying some options on Monday.

Look at that, went from taking about the worst stocks of the decade to wanting to get in the worst sector of decade on Money.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

So Was The FDA Approval Already Priced Into Amarin’s Stock???

Amarin Corporation plc, a pharmaceutical company, engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States.

The company’s lead product is Vascepa, a prescription-only omega-3 fatty acid capsule, used as an adjunct to diet for reducing triglyceride levels in adult patients with severe hypertriglyceridemia. It is also involved in developing Vascepa for the treatment of patients with high triglyceride levels who are also on statin therapy for elevated low-density lipoprotein cholesterol levels.

About a year ago, Amarin published results from a study that show patients who took Vascepa in addition to a statin experienced a 25% reduction in risk of a heart attack, stroke or other serious cardiac event, compared with patients who took a placebo instead of Vascepa. Thus, Amarin wants to get Vascepa approved for other use, which could potentially generate up $2 billion in sales.

Assuming avg. P/E of 15-24 for companies in the pharmaceutical space and Amarin’s market cap, if Vascepa sales can reach $2 billion in the years to come, the stock would be worth approx $125.

Yesterday, the FDA approved the label extension for Vascepa, but the stock price seem bored by the announcement.

Amarin (AMRN) investors are scratching their heads as to why the stock tumbled following the announcement that the FDA has approved the label extension of the company’s fish oil drug, Vascepa.

That’s good news for Amarin, but less good news for long-term investors. You see, according to the principle of “buy the rumor, sell the news,” the major catalyst for Amarin stock to rise has now been removed, and traders who were awaiting the FDA approval have now reaped all the gains they’re going to get from that particular catalyst. Hence, they’re selling the stock today.

One of these sellers, Stifel’s Derek Archila, wrote in a research note to clients, “We are taking profits post approval and heading to the sidelines.” Indeed, the analyst downgraded AMRN from Buy to Hold, while slightly raising the price target to $28 (from $26), which still implies about 20% upside from current levels.

Source

Many think Amarin’s stock price at $22.88 is a steal and think the stock is worth $50 in the future.    According to FiercePharma, market chatter is now valuing the company at a $20 billion market cap, or $55 a share, if the company is acquired.  So is the stock still worth a buy?

NOTE: since Sept of 2018, the stock has increased from $3 to a little over $20 in 14 months.

To answer the question if the stock is still worth a buy or not, you have to know your time horizon.  Once you know your time horizon, than you can select your target price.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Tandem Diabetes Is Worth Keeping An Eye On

Tandem Diabetes Care, Inc., a medical device company, designs, develops, and commercializes various products for people with insulin-dependent diabetes in the United States.

Diabetes is a chronic disease that occurs either when the pancreas does not produce enough insulin or when the body cannot effectively use the insulin it produces. Insulin is a hormone that regulates blood sugar. Hyperglycaemia, or raised blood sugar, is a common effect of uncontrolled diabetes and over time leads to serious damage to many of the body’s systems, especially the nerves and blood vessels

More than 100 million U.S. adults are now living with diabetes or prediabetes, according to a new report released today by the Centers for Disease Control and Prevention (CDC). The report finds that as of 2015, 30.3 million Americans – 9.4 percent of the U.S. population –have diabetes. Another 84.1 million have prediabetes, a condition that if not treated often leads to type 2 diabetes within five years.

Source

The company’s flagship product is the t:slim X2 insulin delivery system that comprises t:slim X2 pump, its 300-unit disposable insulin cartridge, and an infusion set. It also provides t:slim X2 Insulin Delivery System with Basal-IQ Technology; t:slim X2 with G5 Integration; and Tandem Device Updater that allows users to update their pump’s software

Tandem’s t:slim X2 is the smallest durable insulin pump on the market at present and is the only pump in the US market that offers remote software updates. Also, the insulin pump integrates with Dexcom’s G6 continuous glucose monitoring (CGM) system, is the first automated insulin-delivery system approved for use in children as young as six years old.

Tandem Diabetes Care (TNDM) also sells disposable products that are used together with pumps and are replaced every few days.These disposable products are great because they produce reoccurring revenue (think of the disposable razors for the Gillette razor blade…which I hate buying because I know they are overpriced).

Since 2012,Tandem has sold over 72,000 pumps in the US, but 63,000 pumps have been sold in the last four years. In addition, Tandem is also going international to capture opportunities after Johnson & Johnson’s exit from the insulin pump market. This is good because Tandem has penetrated less than 1% of the total addressable diabetes market worldwide.

In recent weeks, Tandem attained Health Canada approval for the t:slim X2 insulin pump with Basal-IQ technology. This approval is expected to accelerate Tandem Diabetes’ global pump shipments and expand its customer base.

But just the other day, Tandem got better news.

Tandem Diabetes (TNDM) nabbed Food and Drug Administration clearance for a new diabetes management system Friday — prodding TNDM stock to pop midday.

The FDA cleared a diabetes management system dubbed Control-IQ to work with Tandem’s insulin pump, dubbed t:slim X2. The closed loop system works with Dexcom’s (DXCM) continuous glucose monitor. The devices automatically adjust insulin to prevent high and low blood sugar.

With the clearance, the FDA also created a new category for interoperable medical devices, known as an automated insulin dosing system. This diabetes management system has the potential to rival devices from Medtronic (MDT).

Source

The potential to take on Medtronic is a big deal as Medtronic is the 800 lb gorilla in the room. One should keep Tandem on their radar screen and the levels to pay attention to are the weekly zones near $80 and near $45.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Taiwan Semiconductor…Another Derivative Play On Apple

Taiwan Semiconductor Manufacturing Company Limited (TSM), together with its subsidiaries, engages in manufacturing, selling, packaging, testing, and computer-aided design of integrated circuits and other semiconductor devices. The company manufactures masks and electronic spare parts; researches, develops, designs, manufactures, sells, packages, and tests color filters; and offers customer and engineering support services.

(TSM) is the world’s largest manufacturer of semiconductors.  TSM has been involved with chip design since the 1980s and today produces chips for some of the largest clients in the world. 

One such company is Apple.  TMS produces chips for Apple and gets 20% of its sales from Apple.

Two months ago Apple reportedly boosted component orders for the iPhone 11.  In particular, Apple bumped up orders for the $699 iPhone 11 and the $999 iPhone 11 Pro.  Some analysts are thinking Apple can sell up to 185 million iPhone 11s.   In addition, according to one analyst, Apple AirPods are seeing a surge of demand and could face holiday shortage.

Are you connecting the dots yet?

Apple (AAPL) iPhone chip supplier Taiwan Semiconductor Manufacturing (TSM) saw healthy sales growth in November thanks to strong demand for smartphone processors. Taiwan Semiconductor stock spiked to a record high on the news Thursday.

Taiwan Semi reported revenue of $3.54 billion in November. Sales rose 1.7% from the previous month and popped 9.7% year over year in local currency.

“We think this is largely due to smartphones (seasonal ramp) along with a recovery in data center chips,” RBC Capital Markets analyst Mitch Steves said in a report to clients

Source

The chart suggests to look for a pull back to go long near the $52 level.

Another derivative play on Apple is Qualcomm.  Qualcomm Incorporated designs, develops, manufactures, and markets digital communication products worldwide and the company happens to be right in the center of 5G.

Qualcomm just announced their Snapdragon 865 5G chip which is capable of processing 2 gigapixels per second while delivering speeds of up to 7.5Gbps 5G connectivity.

Apple has plans on selling four new iPhones next year that could all be compatible with ultra-fast 5G wireless networks.

The chart suggests Qualcomm will continue to move higher to at least the $100 level.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Can Bill Ackman Do It Again With Agilent???

Trading is nothing but a numbers game…you hope your loses are smaller and hope your winners are much larger than your loses.  Take the billionaire, Bill Ackman of Pershing Square.  The hedge fund’s returns fell 4% in 2017, dropped 13.5% in 2016 and declined 20.5% in 2015, but lets look at some of his recent winners.

A year ago, billionaire, Bill took a $1 billion size position in home improvement Lowe’s because he thought there were opportunities to improve its supply chain to serve customers better and enhance the customer experience through strategic brands and differentiated in-store experiences.  I personally thought Bill was going to take another lost, but boy was I wrong. Bill got in the stock in May of 2018 and thus far that $1 billion is now worth $1.3 billion, a nice paper profit of $300 million thus far.

But Bill’s bigger win was in Chipotle.  Back in 2016, Bill’s Pershing Square bought almost 10% of the shares.  Bill thought Chipotle had a strong brand, differentiated offering, enormous growth opportunity, and was undervalued.

The following year Chipotle hired a new CEO, Brian Niccol.  At Taco Bell, Niccol was known for food menu innovation as well as driving technological advancements to the customer ordering process.  Under Brian’s leadership, digital sales quickly grew as Brian had hoped is that more and more customers will skip other eateries and just order their food at Chipotle.  And then a year later, Brian introduced a loyalty program.

And look what the stock has done since 2016….WOW.

And Chipotle is the gift that keeps on giving as Chipotle made up of 14% of Bill’s hedge fund returns of through mid-2019.

In the most recent news, Bill bought 2.9 million shares in Agilent Technologies on Monday. Agilent provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide.  Essentially Agilent is a lab testing equipment maker.

Billionaire investor William Ackman’s hedge fund Pershing Square Capital Management said Monday it bought shares in testing equipment company Agilent Technologies Inc, only its second new investment this year as the fund has reported a 51% return.

Agilent Technologies’ stock price jumped nearly 5% in after-hours trading after Ackman’s investment was made public in a regulatory filing. Ackman’s $7 billion fund earlier in the year bought Berkshire Hathaway Inc shares.

The filing did not say whether the Agilent investment will be active or passive, and Ackman’s spokesman declined to comment. The filing showed that Pershing Square owned 2.9 million shares at the end of September and did not say how big the position is currently. At Monday’s stock price, that stake would be worth $246 million.

Source

The fact that Bill and Warren Buffett own Agilent, something must be up. I really like the monthly demand near $60, but something tells me price isn’t going to get there anytime soon.

But there is also a great level at the weekly demand at $70 to go long as well.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Warren Buffett’s Holy Grail Investment Strategy

The other day, I revealed why Warren Buffett is so success.  So, if you want to emulate Buffett’s successful, just buy companies that pay dividends and buy back their stock.  Did you know financials almost make up 50% of Berkshire Hathaway’s portfolio.  So if you really want to emulate Buffett’s success, just buy financial stocks.

Berkshire’s 8 biggest
positions in financial stocks going back to the third quarter were:

Bank of America Corp.
(BAC), $25 billion,

American Express Co.
(AXP), $19 billon,

Wells Fargo & Co.
(WFC), $18 billion,

U.S. Bancorp (USB), $6.7
billion,

JPMorgan Chase & Co.
(JPM), $6.2 billion,

Goldman Sachs Group Inc.
(GS), $3.6 billion,

Bank of New York Mellon
Corp. (BK), $3.4 billion,

Moody’s Corp. (MCO), $5.1
billion

The word “dividend” tends
to have this calm, soothing effect on investors because you know the company
offering dividend has a profitable and viable business model so in good times
and bad times, you can sleep better at night and dividends act like compound
interests if reinvested to grow ones portfolio exponentially.   For example, Wells Fargo and Bank of America
are set to bring in more than $1.5 billion in dividend income for Buffett over
the next year.  That $1.5 billion is almost
2% of his net worth.

Because I’m on this dividend
discovery journey, highest dividend yielding companies within Buffett’s
portfolio are the following:

Occidental Petroleum
Corporation (8.32% yield), together with its subsidiaries, engages in the
acquisition, exploration, and development of oil and gas properties in the
United States and internationally. The company operates through three segments:
Oil and Gas, Chemical, and Midstream and Marketing. 

The Kraft Heinz Company (5.16%
forward yield) manufactures and markets food and beverage products in the
United States, Canada, Europe, the Middle East, and Africa. Its products
include condiments and sauces, cheese and dairy, meals, meats, refreshment
beverages, coffee, and other grocery products, as well as infant and nutrition
products

General Motors Company (4.30%
forward yield) designs, builds, and sells cars, trucks, crossovers, and
automobile parts worldwide. The company operates through GM North America, GM
International, GM Cruise, and GM Financial. It markets its vehicles primarily
under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, Jiefang, and Wuling
brand names

Suncor Energy Inc (4.07% forward
yield). operates as an integrated energy company. The company primarily focuses
on developing petroleum resource basins in Canada’s Athabasca oil sands;
explores, acquires, develops, produces, and markets crude oil and natural gas
in Canada and internationally; transports and refines crude oil; markets
petroleum and petrochemical products primarily in Canada.

Wells Fargo & Company
(3.83% forward yield), a diversified financial services company, provides
retail, commercial, and corporate banking services to individuals, businesses,
and institutions. It operates through three segments: Community Banking,
Wholesale Banking, and Wealth and Investment Management.

STORE Capital Corporation
(3.50% forward yield) is an internally managed net-lease real estate investment
trust, or REIT, that is the leader in the acquisition, investment and
management of Single Tenant Operational Real Estate

United Parcel Service,
Inc (3.34% forward yield) provides letter and package delivery, specialized
transportation, logistics, and financial services. It operates through three
segments: U.S. Domestic Package, International Package, and Supply Chain &
Freight.

Phillips 66 (3.20%
forward yield) operates as an energy manufacturing and logistics company. It
operates through four segments: Midstream, Chemicals, Refining, and Marketing
and Specialties (M&S).

Restaurant Brands International
Inc (3.05% forward yield). owns, operates, and franchises quick service
restaurants under the Tim Hortons (TH), Burger King (BK), and Popeyes (PLK)
brand names.

The PNC Financial
Services Group, Inc (3.02% forward yield). operates as a diversified financial
services company in the United States. The Retail Banking segment offers
deposit, lending, brokerage, insurance, and investment and cash management
services to consumer and small business customers through a network of branches.  The Corporate & Institutional Banking
segment provides secured and unsecured loans, letters of credit, equipment
leases, global trade services, as well as foreign exchange, derivative, etc.

The Coca-Cola Company (2.95%
forward yield)., a beverage company, manufactures and distributes various
nonalcoholic beverages worldwide. The company provides sparkling soft drinks;
water, enhanced water, and sports drinks; juice, dairy, and plant based
beverages; teas and coffees; and energy drinks.

Dividend stocks offer a number of advantages to investors, but I would say the number one reason is best said by Buffett himself.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Unusual Option Activity In Nuance Communications

Nuance Communications, Inc. provides conversational artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze, and respond to people – amplifying human intelligence to increase productivity and security. It offers customers high accuracy in automated speech recognition, natural language understanding capabilities, dialog and information management, biometric speaker authentication, text-to-speech, and domain knowledge along with professional services and implementation support.

Nuance Communications, Inc. has this AI tool called Lightning Engine™ that combines voice biometrics and natural language understanding (NLU) that allows consumers to set up a unique voice profile as part of an organization’s account enrollment. When they contact that organization on a voice channel, all they need to do is speak naturally and their identity is confirmed almost immediately.  Many months ago my bank asked me with I wanted to set this up, so instead of remembering a password or a pin, the next time I’m on the phone, all I have to do is speak to confirm my identification.

This isn’t really value added to the bank, well I guess it is in a way.  For example, if people forget their password or pin, well it will take time to reset it, taking away time from other things the bank personnel has to do. 

Here’s a concrete valued added example Nuance Communication products offer. 

Police officers face unique reporting challenges. For instance, they can spend an hour or more typing up a single incident report. For police sergeants, paperwork can consume up to 45 percent of the workday. Heavy documentation demands can impact the timely filing of reports, limit community visibility, and even put their safety at risk. There is a better way.

Ensure timely filing of incident reports. Eliminate the need to decipher handwritten notes or try to recall details from hours before. Officers simply speak to create detailed and accurate incident reports, 3 times faster than typing and with up to 99% recognition accuracy – all by voice.

Source

Several weeks ago, Nuance Communication Inc. reported their fourth quarter earnings which beat expectations.  The company reported net income of $108.1 million, or 37 cents a share, compared with a loss of $35.1 million, or 13 cents a share, in the year-ago period.  In addition, revenue rose to $487.8 million compared with $479.4 million in the year-ago quarter.

The company’s stock is up more than 20% for the 3rd quarter and more than 50% for the year.   However, the Smart Money thinks there is more room for the stock to run. As they bought call options that expire in January,

and longer term call options in April.

If the Smart Money is going to be right, price must first get through the weekly supply at $18.50.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Two Gems Within The Data Center REIT Sector

Software as a service (SaaS) aka THE CLOUD is a business model in which software, centrally hosted, is licensed on a subscription basis and is centrally hosted.  One force driving these companies’ growth is soaring demand for data centers to support cloud computing.

And it doesn’t matter what size company you have:

*Start-ups – an idea / viable business model can get up and running quickly with minimal capital and operating cost.

*Small to medium-sized businesses – can take advantage of the scalability in storage and networking capabilities on demand as their business grows.

*Larger business – can help increase operational efficiency, productivity and agility.

REITs are companies that own or finance some type of real estate property. During economic troubled times, Smart Money rotates into REITs because they act like bonds, meaning the stock dividends are equivalent to coupon rates, the yield paid by a fixed-income security.

The data center REIT sector is relatively new compared to other REITs. Salesforce was an early pioneer of moving their CRM services to the cloud in the early 2000s. The company’s founder, Benioff’s vision was that software should be delivered 24/7 to people over the cloud.  Most data center REITs were founded around 2000 and make up a small percentage of REITs overall.

As data becomes an integral part of everything we do, data center real estate investment trusts (REITs) have become more important. 

The data center REIT sector is relatively new compared to other REITs. Most data center REITs were founded around 2000.  This was the around the same time Salesforce migrated its services to the cloud in the early 2000s. The company’s founder, Benioff’s vision was that software should be delivered 24/7 to people over the cloud.  Now Salesforce shares the cloud pie with Apple, Amazon, Facebook, Google, and Microsoft who have huge appetites for access to data centers.  These companies are building their own data centers, but because of the demand, are turning to data center REITs to fill that void.  But it’s also financial services, insurance and retail companies that are shifting from owning and operating their own data centers to third-party data center operators.

The relentless growth of wireless data, public cloud, digital content, social media, and ecommerce continues to fuel the need for more data center space.  The beauty of data center REITs is that their growth isn’t dependent on consumer spending, population growth or unemployment like traditional REITs.  And might I add, the Trade War between the US and China has not barring on data REITs growth.  

Two companies that I want to give some shine to are QTS Realty Trust and CyrusOne.

Image result for QTS Realty Trust, Inc. logo

QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout primarily North America and Europe. Through its software-defined technology platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity and premium customer service to leading hyperscale technology companies, enterprises, and government entities. QTS owns, operates or manages 26 data centers and supports more than 1,100 customers primarily in North America and Europe.

The chart suggests it’s not a buy yet, as price is just below the monthly supply at $55.

Image result for CyrusOne logo

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. It’s America’s third largest data-center provider and its solutions allow customers take advantage of cloud platforms such as Amazon Web Services and Microsoft Azure.

The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including more than 200 Fortune 1000 companies. 

In 2018, CyrusOne have the most data center properties under construction in the U.S., at six and had the most preconstruction data center development properties at 24.

The chart suggests to go long at the monthly demand at $56.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.