noah kiedrowski Archives - Page 25 of 45

HealthEquity - Breaking Out Above $80

Posted on June 16, 2018June 19, 2018 by Noah Kiedrowski

Introduction

HealthEquity Inc. (HQY) once again blew out the numbers when it reported its Q1 FY19 results with the stock following suit breaking out above $80 per share to an all-time high. I first profiled HealthEquity when it was trading in the sub $40 range as a play on a secular growth trend in the healthcare space regardless of legislative actions, drug pricing debate or rising insurance costs. HealthEquity is not an insurance company thus does not possess any liability for coverage in any capacity nor does the company play any role in the pharmaceutical supply chain.

HealthEquity is at the center of a healthcare paradigm shift where consumers are taking control of their healthcare dollars via leveraging Health Savings Accounts (HSAs). HealthEquity manages funds allocated for medical, dental and vision expenses that are deducted on a pre-tax basis and deposited into a dedicated HSA account. HealthEquity manages $6.9 billion in assets across 3.5 million accounts against a potential market maturity of $1 trillion in assets across 50-60 million accounts.

HealthEquity has posted annual revenue growth of 42%, 44%, 41% and 29% over fiscal years 2015, 2016, 2017 and 2018. The durability of this growth has a long runway due to the secular growth in the HSA market. The company is sitting on largely untapped revenue sources where the vast majority of account holders have yet to invest any HSA money in investment offerings. Expanding margins for greater profitability is also unfolding as the older the account, the greater the gross margins hence gross margins increased 269 basis points in the recent quarter. HealthEquity is currently sitting on a healthy balance sheet with ~$270 million in cash and cash equivalents with zero debt. HealthEquity is posting accelerating revenue, cash flow, margin expansion and income growth with a strong balance sheet. I feel that HealthEquity will continue to post strong growth as it services the double-digit HSA growth market and manages more assets, accounts, and investments within these accounts. HealthEquity may be a great long-term investment in the healthcare space that’s independent of the health insurances, pharmaceutical supply chain companies, drug makers or pharmacies. Continue reading "HealthEquity - Breaking Out Above $80" →

Goldman Sachs - A Compelling Long-Term Buy

Posted on June 2, 2018June 1, 2018 by Noah Kiedrowski

Favorable Backdrop and Financials

The latest Federal Reserve meeting indicated that interest rate increases might need to be accelerated while boosting its domestic GDP estimates for 2018 and 2019 alluding to a domestic and global economic expansion. Augmenting this economic backdrop is a record number of IPOs, a record number of global merger and acquisitions, rising interest rates, market volatility, deregulation and tax reform. All of these elements provide an ideal confluence that bodes well for the financial sector. The Goldman Sachs Group Inc. (GS) in particular looks to benefit in unique ways due to the consulting fees regarding mergers and acquisitions, trading around market volatility, launching of its cryptocurrency futures contracts as well as rising interest rates as Goldman Sachs has entered into the commercial banking segment when the bank acquired GE Capital’s savings business in 2016 assuming approximately $16 billion of deposits at the time. JP Morgan (JPM), Citi (C) and Bank of America (BAC) are all poised to benefit from the favorable economic backdrop as well however I feel Goldman is in a unique position to benefit across the board in all business segments. Goldman Sachs is relatively inexpensive based on historical standards after a string of quarterly results that have beat Wall Street’s estimates. Goldman Sachs offers a 1.3% dividend yield that was recently increased and a share buyback program to augment the overall favorable backdrop providing a compelling long-term buy. Continue reading "Goldman Sachs - A Compelling Long-Term Buy" →

Facebook Posts Revenue Growth Despite Public Relations Fiasco

Posted on May 19, 2018May 17, 2018 by Noah Kiedrowski

Introduction

Public relations fiasco is putting it lightly in the wake of the Cambridge Analytica data misuse scandal. Once the news broke that Facebook Inc. (FB) was behind the mishandling of user data that was shared with a politically connected firm during the 2016 presidential race, Facebook’s stock tumbled from $195 to $152 or a 22% slide. Mark Zuckerburg went into damage control mode via rolling out transparency tools, metrics, impacted user details and testifying before Congress. The border questions of potential regulation, public backlash, additional data misuse cases and whether or not any material impact to revenue, as a result, remain in question. Over the past few quarters, Facebook has ramped up spending on initiatives to combat fake news, ensure data integrity, implementing stringent guidelines on third-party data sharing and overall transparency within its platform. Thus far, the early fallout from the Cambridge Analytica scandal has been immaterial to revenue albeit the recent quarterly numbers only reflect roughly two weeks of post-scandal numbers. Facebook had already moved to overhaul its news feed in favor of “meaningful social interactions” versus “relevant content” to improve its user experience.

Despite all the headlines regarding the privacy scandal, Facebook posted a monster blowout for its Q1 2018 numbers. Daily active users rose 13% to 1.45B for March, and monthly active users also rose 13%, to 2.2B as of March 31, 2018. Ad revenues grew by 50% to $11.8 billion from a year-ago $7.9 billion. As a result, many Wall Street firms have increased their target prices as a result of Facebook’s monster growth. Wedbush raised its target to $275, Mizuho to $255; SunTrust to $230; Goldman Sachs to $225, Deutsche Bank to $205 and Stifel Nicolaus to $175. Facebook remains incredibly cheap considering its phenomenal growth with a P/E of 28.7 and PEG of 1.08 at a stock price of $174. I maintain my long thesis with a price target of $220 by the end of 2018. Continue reading "Facebook Posts Revenue Growth Despite Public Relations Fiasco" →

Disney's Growth and Netflix's Valuation Parity

Posted on May 12, 2018 by Noah Kiedrowski

Content Juggernaut:

The Walt Disney Company (NYSE:DIS) just posted back-to-back record-shattering $200-plus million weekend openings at the box office in its Marvel franchise posting $202 and $258 million for Black Panther and Avengers: Infinity War, respectively. Wall Street hasn’t seemed to notice nor recognize Disney’s box office feat as of late. Black Panther shattered all previous President’s Day weekend records and became the third highest grossing movie of all-time domestically and ultimately grossing $1.34 billion worldwide and becoming the eighth highest grossing movie of all-time. Avengers: Infinity War posted the biggest box office weekend of all-time with $258 million while breaking the previous record set by Star Wars: The Force Awakens by $10 million. Avengers went on to set a new worldwide record over its opening weekend, posting $630 million in box office gross. In its first 11 days of release, Avengers: Infinity War grossed over $1 billion worldwide, making it the fastest movie to reach that milestone without any help from the Chinese market. Disney is in its own league and competing with itself at the box office with its Marvel and Star Wars properties. Which begs the question, is content really king as Disney is ignored and Netflix has reached parity with Disney in terms of market capitalization?

Ant-Man and The Wasp, Solo: A Star Wars Story and The Incredibles 2 are around the corner. Meanwhile Disney's Parks and Resorts are posting strong growth while shoring up its stalling Media Networks segment with a confluence of growth catalysts via streaming with Hulu (30% stake and will likely be expanded to a majority 60% stake after the Fox acquisition), BAMTech, Sling, ESPN streaming service and a Disney branded service coming in 2019. Disney is closing the gap in streaming as Hulu grows much more rapidly than Netflix and in the backdrop, ESPN and direct to consumer Disney branded streaming service comes to fruition. Disney recently reported Q2 FY2018 revenue growth across every business segment with overall revenue growth of 9%. Disney offers a compelling long-term investment opportunity considering the growth, Fox acquisition, pipeline, Media Networks remediation plan, diversity of its portfolio, tax reform, share repurchase program and dividend growth. Continue reading "Disney's Growth and Netflix's Valuation Parity" →

The Worst Is Over For Hasbro

Posted on May 4, 2018May 8, 2018 by Noah Kiedrowski

Introduction:

Hasbro Inc. (NASDAQ:HAS) released earnings that were rife with headwinds attributable to the bankruptcy of Toys"R"Us. Hasbro reported a year-over-year overall revenue decline of 16% and missed on EPS by $0.24. Hasbro cited the liquidation of Toys"R"Us and retail inventory overhang, primarily in Europe, as drags on revenue domestically and internationally. Revenue in North America fell 19% while international revenue fell 17% year-over-year during the quarter. Despite the negative headline numbers, the stock bounced to the upside after the earnings call commentary painted a positive long-term narrative while weathering the Toys"R"Us liquidation. The stock responded by moving from $79 to $87 or 10% to the upside post-earnings. Hasbro is navigating the challenging retail landscape and provided positive commentary on the conference call for future growth avenues. As the company realigns and efficiently manages the Toys"R"Us liquidation, this challenging backdrop will likely resolve to Hasbro's benefit as there are many current and future growth catalysts despite the supply chain disruption.

Hasbro has many current and future growth catalysts with major billion dollar movie franchises in the fray while riding the coattails of Black Panther into the home entertainment window which posted record-breaking numbers with $685 million domestically and $1.33 billion internationally at the box office. Combine this success with the upcoming Marvel and Star Wars movies including Avengers: Infinity War, Star Wars Han Solo and Ant-Man and The Wasp to highlight a few major films. Hasbro recently increased its dividend from $0.57 to $0.63 per share. Hasbro has excellent Q2-Q3 2018 catalysts, boasts a ~3% dividend yield, weathering the Toys"R"Us liquidation and putting forth initiatives within Hasbro Studios to further propel growth thus presenting a compelling long-term buy. Continue reading "The Worst Is Over For Hasbro" →

Tag: noah kiedrowski

HealthEquity - Breaking Out Above $80

Introduction

Goldman Sachs - A Compelling Long-Term Buy

Favorable Backdrop and Financials

Facebook Posts Revenue Growth Despite Public Relations Fiasco

Introduction

Disney's Growth and Netflix's Valuation Parity

Content Juggernaut:

The Worst Is Over For Hasbro

Introduction:

It’s not goodbye, it’s hello Magnifi!