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.

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

Facebook releases earnings shortly. Ponder the Bull Case Scenario:

Facebook is the most used website on the internet. It simply cannot be ignored. Advertising dollars are being spent just so advertisers can say we are there.

The cost of ads is still relatively low cost making it very affordable. Facebook input costs are still relatively low so there is a positive margin.

Facebook is collecting very valuable data on users and activities. They can go to clients and target ads to exactly the right person at exactly the right time. recent controversy about making people sad or happy is a privacy canard. Facebook stature with media, marketing and political propagandists went up a few notches. Seriously if you can make someone’s mood change the capitalist ramifications are mind-blowing.

George Gutowski writes from a caveat emptor perspective

Bear Case Scenario for Pepsi $PEP, $KO, $DPS, $XLP, $STBFY, $SCG, $SGAR, $CANE

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

Cola consumption is on the  decline. The flagship product is shriveling.

Cash strapped governments may decide to impose taxes on sugary drinks which will alter pricing elasticity.

Pepsi is number two and has not really been able to move the dial.

Keurig may prove to be a game changing home run bases loaded for Coca-Cola. The resulting power of Coca-Cola may be more than Pepsi can withstand. Cash is king.

The snack business is all about salt, sugar and carbs. All the very things that doctors tell us to avoid. as the diabetes epidemic takes its toll watch for regulatory back lash.

George Gutowski writes from a caveat emptor perspective.

Bull Case Scenario for Pepsi $PEP, $KO, $DPS, $XLP, $STBFY, $SCG, $SGAR, $CANE

Pepsi is about to release earnings. Ponder the Bull case Scenario.

Pepsi  owns Frito-Lay which is the worlds largest snack company. The synergistic benefits are only now being exploited.

Diversification into snack foods is financially wise and reduces risks.

Pepsi leads in many non carbonated beverages.

Coca-Cola may become distracted with Keurig and take their eye off the ball.

While cola is suffering Mountain Dew is growing rather nicely thank you very much.

George Gutowski writes from a caveat emptor perspective.

 

Bull Case Scenario Altria $MO, $PM, $BTI, $JAPAF, $ITYBY

Altria is about to release earnings. With 80% of profits going to dividends ponder the Bull Case Scenario.

Altria controls 50% of the market in the United States. The products are clearly addictive and Altria has pricing power. Unemployed dead beats will pay an extra dime whenever they need to.

The Marlborough brand is huge some 42% of market. As regulations become tighter the opportunity for new brands or brand rotation diminishes and becomes almost non existent.

Altria does not have risks from input costs and can be expected to keep chugging along.

E-cigarettes are replacement products. However market adoption patterns are still to new to apply trends.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario Altria $MO, $PM, $BTI, $ITYBY, $JAPAF

Altria is about to release earnings. With 80% of profits going to dividends ponder the Bear Case Scenario.

North American markets are in a secular decline. The trend is irreversible. The most committed customers are dying.

Altria is heavily exposed to North American markets and is at risk for higher taxes at all levels of government.

Altria is also viewed with great hostility by health regulators and the medical field. They will always be looking to restrict and curtail.

George Gutowski writes from a caveat emptor perspective.