BlackBerry Bear Case Scenario If That is Possible. $BBRY, $NOK, $AAPL, $CSCO, $SSNLF, $MSFT, $ERIXF, $GOOG, $QCOM

BlackBerry (Nasdaq:BBRY) is about to announce earnings. Ponder this Bear Case Scenario.

Blackberry once the dominant leading brand in the smart phone business is now teetering on the edge of extinction. Staffs are being let go by the hundreds and thousands. Cost cutting is mission critical. Blackberry needs to put some revenue and marketing wins on the board and get the market believing they can come up with something compelling.

Blackberry is viewed through the prism of Apple and Samsung which are huge consumer product success stories. Investors who are looking for consumer product success from BlackBerry are misguided and will be disappointed. some stock is held by delusional holders who have not yet completed the cycle of despair.

BlackBerry holds thousands of patents which will eventually be commercialized. Unfortunately no one can give guidance on when this revenue stream may start and to what extent.

BlackBerry will probably become a specialized niche offering. If they can produce positive cash flow they will be able to reward shareholders proportionally. They just will not be the stars and darlings of the hyper behavioural crowd that chases stories and headlines.

This may be the ultimate value play. Buy ugly sell pretty. Looks ugly right now doesn’t it.

George Gutowski writes from a caveat emptor perspective.

Red Hat Linux Bear Case Scenario $RHT, $SAP, $CRM, $AMZN, $MSFT, $ORCL, $INTU, $ADBE, $WDAY

Red Hat (NYSE:RHT) is about to release earnings. Ponder this Bear Case Scenario:

Rapid rise of cloud computing will marginalize Red Hat offering. Amazon, Microsoft and Google among others are starting to eat Red Hats lunch.

If the open source community does not develop the Linux Kernel Red Hat will be forced to start spending serious capital on research and development. something they are not supposed to have to do.

Competing Linux OS service providers are popping up and competing for service revenue. So if the service revenue dries up where does the cash for R&D come from.

George Gutowski writes from a caveat emptor perspective.

GameStop Bear Case Scenario Hope or Despair $GME, MSFT, $SNE, $EBAY #Xbox, #PS4, $EA

GameStop (NYSE:GME) is about to release earnings. Ponder this Bear Case Scenario to decide if you have hope or despair.

Internet speeds and access are improving so rapidly games are downloadable and playable on-line. This eliminates the need for GameStop’s very existence.

Console games are competing in format against mobile and PC formats. Console games are questionable. Mobile is a done deal.

If games are sold without the right of transfer i.e.. there is a digital finger print. It will become near impossible for GameStop to make a market.

George Gutowski writes from a caveat emptor perspective.

Lulu Lemon Bear Case Scenario $LULU, $GPS, $IDEXY

Lulu Lemon (Nasdaq:LULU)  is about to release earnings results. Ponder this Bear Case Scenario:

Lulu has grown quickly from one store to over 200 outlets and has suffered from quality control issues. New management is in place but has not proven they have the issues under control.

Lulu’s rapid success has drawn the attention of other well capitalized competitor’s. Gaps Athleta and Lucy have credible and compelling offerings competing in the market place.

Lulu does not own or control any patents or licenses for fabric or design. They can break the ice and be copied immediately if they encounter any commercial success.

Lulu has a premium pricing strategy. Given any economic downturn or hiccup they will correlate with economic realities very quickly. Also the premium pricing makes them an easy target for knock off’s and me too competitors.

George Gutowski writes from a caveat emptor perspective.

Carnival Cruise Bear Case Scenario $CCL, $RCL, $PCLN

Carnival (NYSE:CCL) is about to release earnings. Ponder this Bear Case Scenario:

Carnival is reputed to be the worlds largest cruise line. As the cruise business goes so goes Carnival. With over 100 vessels the capital cost is enormous. Hotels are constantly refurbishing and upgrading. Hotels have learnt to franchise properties to manage capital. When will Carnival ponder this lesson.

With so many destinations Carnival runs the risk of sudden geo-political adversities. yes ships may be repositioned. But in the meantime cancellations and wasted marketing programs will be expensive.

Carnival has taken advantage of offshore costs for labour and commodities. This low-cost scenario will dissipate over time. Carnival will have a hard time maintain low costs.

High profile cruising accidents such as Costa Concordia, Costa Allegra, and Carnival Triumph continues impacting the brand image and quite possibly pricing power.

George Gutowski writes from a caveat emptor perspective.

Walgreen Bear Case Scenario $WAG, $CVS, $RAD, $SHPMY, $SHDMF, $WMT, #obamacare

Walgreen (NYSE:WAG) is about to release earnings. Ponder this Bear Case Scenario:

Walgreen customers have enormous purchasing power. If Walgreen gets the price point wrong they lose immediately and big time. Walgreen needs to develop a compelling reason why consumers walk into their stores. You can get Advil anywhere.

Grocery stores and other mass marketers are offering the same type of product. Competition is fierce.  Very little loyalty exists.

Drug benefit plans and various government entities are constantly squeezing prices and margins. At the present they have an overwhelming pricing power. Walgreen needs to become allied with this trend and not be in conflict.

George Gutowski writes from a caveat emptor perspective.

McCormick Spicy Bear Case Scenario $MKC, $IFF, $NSRGY, $DANOY, $ASBFY

McCormick (NYSE:MKC) is about to release earnings. Ponder this Bear Case Scenario:

McCormick has experienced 20%+ revenue growth in developing countries. If as and when the global economy shifts gears developing economies will slow down. Packaged spices are a new fangled idea and may not survive culturally.

McCormick is huge in the US and controls private label as well as its own brands. I’m waiting for some smart lawyer to start an anti-trust action and change the landscape. At the same time an activist hedge fund seeking short-term profits may take positions and demand divestitures.

In some markets the premium brands are so highly priced consumers are defaulting to private label. McCormick’s needs to figure out product ranges and price points a bit better. This may be a sign of entrenched arrogance.

George Gutowski writes from a caveat emptor perspective.