Bear Case Scenario AbbVie $ABBV, $JNJ, $NVS, $RHHBY, $PJP, $XPH, $IHE, $PPH

AbbVie is about to release earnings. Ponder the Bear Case Scenario:

AbbVie to lose close to $2 billion in sales over the 2013-14 time period as patents expire on cardiovascular drugs Niaspan, Trilipix, and Tricor. Not good.

Poor competitive position of HIV drug Kaletra will likely mean a slow sales decline over the next four years, creating a drag on overall company growth.

Besides the hepatitis C drugs, AbbVie’s pipeline prospects do not look robust as the company needs to help ensure long-term growth following the Humira patent loss.

George Gutowski writes from a caveat emptor perspective.

 

Bull Case Scenario Abbvie $ABBV, $JNJ, $NVS, $RHHBY, $PJP, $XPH, $IHE, $PPH

AbbVie is about to release earnings. Ponder the Bull Case Scenario:

Humira represents one of the top immunology drugs for RA, Crohn’s disease, and psoriasis.  It is expected to continue penetrating their respective markets.

Competitive RA threat from Pfizer’s Xeljanz will not likely take much share from Humira initially as Xeljanz’s safety and efficacy profile is still uncertain and the drug requires heavy monitoring during usage.

AbbVie has reached agreement Shire on the final terms of its takeover offer. This represents approximately $269 per Shire ADR.

Inversion tax strategy could cover a lot of bills when it works.

George Gutowski writes from a caveat emptor perspective.

Bull case Scenario Amazon $AMZN, $EBAY, $AZO, $AAPL, $BABA, $BIDU, $RENN

Amazon is about to release earnings. Ponder the Bull Case Scenario:

Amazon is a technological powerhouse. Pouring enormous cash flow into new development. The Kindle suite of products is very strong and successfully acquires loyal repeat customers as users shift to digital and cloud computing solutions. The new smart phone may turn out to be a strategic blocking move while at the same time developing another channel for paying customers.

Amazon can look forward to huge growth in under developed countries. Their potential competitors from China are still not significant threats.

Amazon has gross revenues equal to the totals of their next nine nearest non-auction competitors. There is no also ran in this race.

Amazon leads in all categories. There is no disruptive technology in sight.

George Gutowski writes from a caveat emptor perspective.

 

Bear Case Scenario Amazon $AMZN, $EBAY, $AZO, $AAPL, $BABA, $BIDU, $RENN

Amazon is about to release earnings. Ponder the Bear Case Scenario.

Amazon relies on several delivery customers and is vulnerable to their infrastructure issues. Last Christmas FedEx and UPS took some bad press as they were overwhelmed in the last few days before Christmas. Amazon may need to spend serious capital on infrastructure to overcome the issues. They also need to keep the delivery agents competitive. If they max out capacity economics will take over and delivery costs will increase. We’re talking wide body cargo jets and expensive crews and jet fuel.

E-commerce in developing countries looks lucrative. But many of these economies are not westernized. Regulations may be oppressive. Local politicians corrupt and looking for ways to augment their personal retirement plans. This will get tricky for unassuming naïve Americans who are used to ignoring politicians.

Margin expansion has not been satisfactory. While revenues may generate large volumes shareholders are looking for bottom line to substantiate valuations. Eventually stocks are present values of future returns. Investors have been waiting.

George Gutowski writes from a caveat emptor perspective.

Bull Case Scenario for Baidu $BIDU, $GOOG, $FB, $AMZN, $TCEHY, $BABA, $RENN

Baidu is about to release earnings. Ponder the Bull Case Scenario:

Baidu only serves 1.5% of China SME market. The growth potential is mind staggering as China modernizes.

Approximately 130 million mobile users make Baidu a dominant brand. They have a command of cultural sensitivities which western brands cannot fathom. They are expected to dominate in mobile search.

Baidu is sitting on top of an incredible amount of Chinese currency. They probably cannot be out spent within the Chinese domestic market.

Incremental improvements in  a large economy like China will translate to large bottom line benefits for Baidu.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario for Baidu $BIDU, $GOOG, $FB, $AMZN, $TCEHY, $BABA, $RENN

Baidu is about to release earnings. Ponder the Bear Case Scenario:

Low monetization in China mobile search means returns can be meagre and far off. Cheap smart phones equate to small e-commerce revenues.

Active expansion into non search arenas may jeopardize margins and distract management focus from established cash cows.

Alibaba offers pay for performance search for e-commerce customers. Baidu will have to compete against the concept which is deliciously alluring to those new to e-commerce.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario for Facebook $FB, $TWTR, $SOCL, $LNKD, $XLK, $SINA, $BABA, $BIDU, $RENN

Facebook is about to release earnings. Ponder the Bear Case Scenario:

The PE multiple is ridiculous. Like in the 90 range. Something is not sustainable. Facebook cannot soak up every advertising dollar.

Laws and regulations may prove to be more than speed bumps. While regulators may be looked at with disdain they have a way of extracting their revenge with costly process and requirements.

Can you imagine Christopher Columbus needing to prove that the voyage was safe.

Many advertisers are requiring closer correlation to sales results.

Not sure if the algorithms are structured properly. I keep getting useless ads for non starter offers while tracking my families different activities and exploits.

George Gutowski writes from a caveat emptor perspective.