aMP Performance Update 3Q16

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Oct, 05, 2016
Sundeep Bajikar
aMP Performance Update

The chart shows acteve Model Portfolio (aMP) indexed value (net of fees) vs. the S&P 500 market index (indexed to 10/31/15), as of 9/30/16. The chart also shows the cash allocation in the portfolio. As of 9/30/16, nearly 50% of aMP assets were held in cash, given my view that the market environment was generally […]

$MU Revenue and Gross Margin Inflections

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Oct, 04, 2016
Sundeep Bajikar
DRAM, NAND, Stock Analysis

Micron’s F4Q16 (C3Q16) earnings report highlights a YoY revenue inflection (chart below), with YoY revenue growth expected to turn positive next quarter. Both higher bit shipments and prices for DRAM appear to be driving the inflection. Micron’s gross margins are also inflecting up – the chart below shows quarterly corporate average gross margins, […]

Preparing for a Lithium Rush

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Sep, 30, 2016
Sundeep Bajikar
Industry Analysis, Self-Driving Car

My view is that catalysts for self-driving cars will also drive a transition to battery-powered electric vehicles. A shift from human driver to machine driver will initially add significant new computational costs to the vehicle bill of materials (BOM). One way to accommodate such costs in the BOM is to replace IC engine powertrain with […]

$PLAB AMOLED Inflection in 2017

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Sep, 22, 2016
Sundeep Bajikar
4SAFEt, OLED, Self-Driving Car, Stock Analysis, VR/AR

Photronics (PLAB) makes photo masks for semiconductor and display panel manufacturing. The chart below shows PLAB’s revenue mix. Over the last 6 quarters, flat-panel display (FPD) revenues have grown on average at 18% YoY, while IC revenues grew at 4%. If the display industry inflects toward AMOLED, as I think it is likely to, PLAB’s […]

$INVN Valuation & Momentum Indicators

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Sep, 14, 2016
Sundeep Bajikar
4SAFEt, Self-Driving Car, VR/AR

The chart below suggests that INVN stock price is tracking below NTM EPS projections, an understandable dynamic following severe dislocation in Invensense’s gyro/OIS market share, particularly in Samsung smartphone. Invensense experienced elevated pricing pressure surrounding its loss of market share at Samsung. Pricing pressure translated into lower gross margins. At EV/S of ~1.8x […]

$AMZN Valuation Risk

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Sep, 12, 2016
Sundeep Bajikar
4SAFEt, Cloud Services, Stock Analysis

Let’s assume that sellside estimates are representative of investor expectations for $AMZN (as discussed in my book, that is not always the case). The NTM EPS chart below shows consensus projections through 2020. Sellside EPS estimates reflect expectations for continued strong, if not accelerating EPS growth over the next few years. Now look […]

3 Reasons to Own $MU

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Sep, 09, 2016
Sundeep Bajikar
4SAFEt, DRAM, NAND, Self-Driving Car, Stock Analysis, VR/AR

I believe there are 3 reasons to continue to own $MU: 1) early stage of a cyclical recovery, 2) technology catch-up, and 3) inexpensive play on VR/AR and Self-Driving Car. Cyclical supply/demand recovery: A combination of supply cuts and demand upgrades has pushed the memory industry into a favorable supply/demand environment, which is […]

aMP Performance Update 2Q16

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Sep, 01, 2016
Sundeep Bajikar
aMP Performance Update

The chart shows acteve Model Portfolio (aMP) indexed value (net of fees) vs. the S&P 500 market index (indexed to 10/31/15), as of 6/30/16. The chart also shows the cash allocation in the portfolio. As of 6/30/16, more than 40% of aMP assets were held in cash, given my view that the market environment was […]

Introducing acteve – active management redefined.

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Aug, 31, 2016
Sundeep Bajikar
4SAFEt, Financial Services

acteve LLC is a new type of investment advisory firm which focuses on just the function that individual investors (and many professional investors) would find difficult to accomplish on their own – that is portfolio construction and monitoring based on a disciplined, consistent and patient process for bottom-up stock selection. acteve delivers this function through […]

Comments Off on What is Institutional Arbitrage?
Jul, 21, 2016
Sundeep Bajikar
4SAFEt, Equity Research Process

I previously wrote that there are essentially 4 ways to beat the market, one of which is Institutional Arbitrage. Probably the simplest way to think of institutional arbitrage is to think of a process of deliberately doing something that institutional investors are unlikely to do. This is accomplished in a number of ways including – […]

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