Hewlett-Packard Rope a Dope Trick $HPQ

Hewlett-Packard announced that it will self amputate into two entities. HPE or Hewlett-Packard Enterprise will keep Meg Whitman so guess what part she thinks is better. The printers and personal computers will be set adrift in something else. Shareholders will need to guess at what has better prospects. Enterprise computers which sounds a lot like what IBM is trying to do or commodity products with hyper thin margins and nothing new or exciting on the horizon.

HP does have brand and it may well be that the printers and personal computers will attract a take-over offer by someone who wants to bulk up; or alternatively by someone who wants to prevent someone else from bulking up.

Either way it reminds me of a Viking’s funeral. You know where they put the olde king out onto a row-boat and set it on fire for a glorious send off. Then the new king does what he wants. That’s probably the fate of printers and personal computers.

Enterprise is hardly a new notion and has lots of contenders. What does HP or Meg Whitman have to offer. A promise of Blood, Sweat and Tears will not do it.

Meh you can do better with your money.

George Gutowski writes from a caveat emptor perspective.

Chesapeake Energy Bear Case Scenario Still Lives ? CHK, $COP, $CEO, $OIL, $GAZ, $OXY,

Chesapeake Energy is about to release earnings. Does the Bear Case Scenario still apply!

Chesapeake is highly levered to the price of natural gas. If they continue to rely on domestic consumption they will not overly reward the shareholders. If the product can find export markets than the stock will do well. So far its all about domestic consumption.

Management is repairing a terrible balance sheet through asset sales. If they cannot maximize asset sales look for dilutive equity issues. If the dilution is too great watch for a quasi distress sale into the rapacious arms of a cash rich oil and gas concern. Or even a knowledgeable private equity investor who will bite the bullet today and sell pretty tomorrow.

Investor nerves are  still raw. Any blip or concern will be hard to swallow; generating scrutiny and concern. Frequently called an over-reaction.

The stock is a behavioural finance case study.

George Gutowski writes from a caveat emptor perspective.

Zillow the Bear Case Scenario $Z, $SWPFF, $HLDVF, $WARFY, $SURDF, $XLF, $ITB, $IYR

Zillow is about to release earnings. Ponder the Bear Case Scenario and see if the long hold is warranted.

Zillow provides real estate and housing information. They react to demand by providing a service. They cannot generate interest in real estate and housing ownership. They have provided some technological innovations making it easier.

Until they develop some avatars that are useful at sales they will just be a sideshow in the housing world. In the meantime interest rates, general and local housing demands/trends, general employment and disposable income all drive housing demand.

Zillow just flaps in the wind reacting. There must be a better way to play the real estate market.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario Trip Adviser $TRIP, $FB, $TWTR, $GOOG, $YELP, $EXPE, $PCLN

Trip Advisor is about to release earnings. Ponder this Bear Case Scenario for this supposedly hot internet property.

Travel both consumer and business is very cyclical. Therefore revenues will go round on the roller coaster. Trip Advisor reduces everything to a commodity comparison. The high net worth traveller is not catered to. When will they wake up a recognize the dollar potential. comparing 5 stars to 2 star experiences is not the right way to go.

What; a  PE north of 30? You must be kidding. What’s left? Apparently not a dividend.

Trip Advisor has so many competitors who are well capitalized and motivated. The game is theirs to lose.

George Gutowski writes from a caveat emptor perspective.

Disney’s Bear Case Scenario $DIS, $TWX, $FOXB, $VIA, $CBS, $NFLX

Disney is about to release earnings. Can Mickey Mouse actually have a Bear Case Scenario.

Disney is nowhere on interactive. They cannot monetize games. They cannot miss this revenue stream forever.

Once movies have been exhibited Disney does not optimize commercialization. They still have not learnt to harness Netflix and relative competitors.

Disney is an ultra-popular brand. Technological piracy is a major risk. Disney bleeds everyday and cannot afford to let the problem go unchallenged.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario Groupon $GRPN, $TWTR, $FB, $GOOG,

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

Groupon is in the advertising business. Despite the initial buzz Groupon has not dominated the industry as expected. Too many others can provide something similar.

Advertising sales is a tough tough business. Groupon did not have enough magic formula to rule the market.

Groupon needs to deliver a constant stream of discounts. Vendors may not feel compelled to offer discounts as they manipulate their marketing programs. Groupon will not have a sufficiently steady revenue stream.

George Gutowski writes from a caveat emptor perspective.

Directv Bear Case Scenario $DTV, $CMSA, $TWC, $DISH, $NPSNY, $T, $VZ, $DIS, $CBS

Directv is about to release earnings. Basically it is a technology play wrapped up in a consumer spending model purveying entertainment. Ponder the Bear Case Scenario.

Directv must pay continuingly higher prices for its content. If it does not provide compelling content clients will see no reason to pay monthly subscription fees. The next NFL contract will be very very very expensive. Who needs it more?

Traditional telephone and cable companies can provide voice, data, internet, cable even olde school landline. Directv does not offer any of these really compelling offerings.

Latin America is a large rich market. Directv is facing increased competition from other providers. Price competition will drive margins down.

Satellites and associated infrastructure are expensive to maintain. Cable and telco repair is relatively simple when compared to problems with earth orbiting satellites.

George Gutowski writes from a caveat emptor perspective.

Nu Skin Bear Case Scenario $NUS, $HLF

Nu Skin is about to release earnings results. They are so closely peered and compared to Herbalife it is becoming increasing difficult to analyse Nu Skin without automatic comparison rightly or wrongly to Herbalife. Multi-level companies have difficulty sustaining themselves in the long run. Nu Skin cannot be a core holding in anyones portfolio.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario Sysco Corp $SYY, $JRONY, $CUYTY, $BZLFF, $GLAPY

Sysco Corp is about to release earnings. Ponder the Bear Case Scenario and see if the long position is still justified.

Sysco is subjecting itself to a major re-organization. This has been painful and problematic and un-ending. As this continues the changes will continue to distract management and not create shareholder wealth.

60% of sales are driven by the restaurant sector. Restaurants are not expected to surge in volume and therefore will not be profit drivers for Sysco.

Energy prices are volatile and affect distribution costs and packaging. Sysco may need to become smarter are some basic housekeeping issues.

George Gutowski writes from a caveat emptor perspective.

Bear Case Scenario for $AIG, $BRK.B, $AXAHF, $AZSEY

AIG that controversial survivor of the sub-prime mortgage crisis is about to release earnings. Last quarter investors realized the impact of Hurricane Sandy. Will the Bear Case Scenario hold up. Here’s a few points to ponder.

P&C insurance companies are infamous for under-reserving for losses and hoping investment returns skate them on side. AIG is also subject to the same temptations. Couple this with a yield driven propensity to invest in municipals with higher yields and much higher risk.

P&C And Life Insurance are radically different lines of business and operate to their own unique dynamics. While they may look diversified they also open the house to global risk driven by global financial factors. If you believe interest rates will rise this is not the place for your money.

AIG continues to operate in mortgage insurance. A stumble in the housing market will only create losses and bring back investor nightmares.

George Gutowski writes from a caveat emptor perspective.