Blackberry Black Swan Event. What Valuation if Market Collapses in Fall. $BBRY Will it Stick Babee

Blackberry (Nasdaq:BBRY) looks like a take-over maybe this fall. But wait a second. Take-overs are at a premium. What if the market corrects sharply in the fall. It’s happened before. So how do you squeeze the last penny out of the offer when everyone else is fighting off margin calls.

Black Swans and the Law of Unintended Consequences may rule.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @ financialskepti

Which entry point for Facebook. $FB None just slit your wrists.

Every once in a while I can’t resist and look at the senior Black Swan in the market place. Facebook (Nasdaq:FB) So the investors buying today at around $26.23 and a 1222 PE ratio based on trailing 12 months; are they smarter than the investors of yesterday at around $24.75 and a 1221 trailing 12 month PE. Or is it the other way around.

Its close. Really close.

George Gutowski writes from a caveat emptor perspective.

Twitter has Bigger Problem with Burger King $BKW $TWIT $FB

Burger King (NYSE:BKW) twitter account was hacked. Why. Because they could. Today Burger King is embarrassed and scrambling. No one blames them as a corporation.

The question becomes who is ultimately responsible for security. Was Burger King incompetent or where they following the rules as laid out by Twitter.

I use twitter a lot and am constantly annoyed by accounts which have been hacked and suddenly dysfunctional twits are streaming all over the world. Happens daily.

Twitter needs to get its security in line. Twitter is still a compelling social media platform. but questions are starting to appear. Twitter needs to fix this immediately if not sooner.

In the meantime Burger King lawyers must be reviewing a lawsuit. You cannot rely on an unstable partner and keep being hit by this nonsense.

Twitter maybe  about to experience a Black Swan consequence.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski

Toyota Motor Sucker Punch One Day Maybe Soon $TM

Toyota Motors (NYSE:TM) has a Black Swan paddling in some time soon. If you believe in independent directors this company is not for you. They simply do not have one. All the directors are senior level Japanese Toyota executives who have been politically savvy enough to climb the corporate rungs and sit at the upper levels.

The probability of group think is astounding. Corporate radicals need not apply. You can talk all you want about Japanese culture and Toyota’s track record but as we all know nothing goes in a straight line forever. This Achilles heel will cause serious damage to shareholder wealth one day.

By the way not to sound xenophobic but if you are not Japanese this board will not care about you.

It’s that simple.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or follow his evil twin brother who is writing a Wall Street Murder thriller at twitter@georgegutowski

Monsanto Not Impressing Everyone. $MON $DD $SYT

black swan

black swan (Photo credit: Heiaken)

Monsanto (NYSE:MON) just released impressive earnings. the share price has been on quite a tear for the past six months. I have called for an increased dividend to confirm managements belief of a strong future.

Now listen to the folks a FT “Lex” team. They have a few questions. The Lex Team has raised concerns about Monsanto’s premium valuation (relative to DuPont and Syngenta). The concerns arise from material legal disputes with customers in Brazil, stagnant R&D spending and M&A activity.

I have been known to admire a few Black Swans and this time the gaggle seems to read FT. This is an excellent example of long tail risk which can just change the game over night and supposedly surprise everyone.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or follow his evil twin brother who is writing a Wall Street Murder thriller at twitter@georgegutowski

JM Smuckers Dividend May Be in Danger #BlackSwan Event Comes From Diabetes Epidemic $SJM $MCD

English: Smuckers sign

English: Smuckers sign (Photo credit: Wikipedia)

JM Smuckers (NYSE:SJM) is starting to get some financial press about what a great dividend stock it is. Trading at near its 52 week high the dividend yield is about 2.3%. But wait the pundits point out the dividend has increased smartly and may be expected to do the same in the near future.

A little analysis is thrown in about how well positioned it is because of low coffee prices and how well it does in other products such as peanut butter, jams, lards, baking mixes, frostings. About half their gross income comes from sugars and carbs.

If you follow pharma or maybe read a thing or two about Obama Care and health care costs you can only be painfully aware of the obesity and diabetes epidemic that engulfs America and much of the western world.

So about 50% of the Smuckers dividend is earned at creating obesity and diabetes. We all know officially the Board of Directors never approved that business model in so many words. But that is how the arithmetic shapes up.

America is under siege with poor nutrition. More Americans are becoming interested in healthy eating habits. So if you want some quick dividend analysis the sugar and carbs offerings is going into a Black Swan scenario soon.

Quick service restaurants such as MacDonald’s (NYSE:MCD) have come out with salad offerings only because of public pressure. Smuckers is nowhere near attempting something healthy. This humpty dumpty has financial cholesterol. You don’t feel it until the stroke and then its too late.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or his evil twin who is writing a Wall Street murder thriller at twitter@georgegutowski

Aspen Technology Black Swan Event Coming Soon $AZPN

Image representing Aspen Technology as depicte...

Image via CrunchBase

Aspen Technology has had a good run over the past year (Nasdaq:AZPN). Here are a few concerns about potential Black Swan events.

Firstly the CEO Mark Fusco is selling. Never a good sign when the Number 1 guy wants to unload.

Secondly there is a history of accounting problems. When you read the following list just play the mission impossible theme song in your head. You know the one with the lite fuse leading to the big explosion. Here we go:

The company’s fiscal 2005 annual report, revealed six material weaknesses:

  1. inadequate staffing and ineffective training and communication within our accounting and finance organization;
  2. ineffective revenue recognition controls;
  3. inadequate financial statement preparation and review procedures;
  4. ineffective and inadequate controls over the accounts receivable function;
  5. inadequate controls over the accounting for taxes; and
  6. inadequate controls over bank accounts.

Then for good measure the company lurched forward annually displayed significant accounting problems:

  1. In 2006  “inadequate and ineffective controls over accrual of goods and services received,”
  2. In 2007 “inadequate and ineffective controls over the recognition of revenue.”
  3. in 2008, “inadequate and ineffective controls over the accounts receivable function;”
  4. in 2009  “inadequate and ineffective monitoring controls;”
  5. in 2010 “inadequate and ineffective controls over the periodic financial close process;”
  6. in 2011 “inadequate and ineffective controls over the recognition of professional services revenue;” and finally,
  7. in 2012 the company still reported “ineffective controls over income tax accounting and disclosure.”

Every year the company is declaring inadequate and ineffective controls. This will eventually lead to a Black Swan event of major importance. It’s just that simple.

The short position is a measely 2.52%. Uptick/downtick money flow ratio comes in a 0.68. Money is leaving the stock if your paying attention.

George Gutowski writes from a cavest emptor perspective. Follow him on twitter@financialskepti