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S&P: Bullish sentiment prevails

Apple Drops Below $400 for First Time Since Dec. 2011

Wall Street expects the stock to keep tanking with no end in sight unless the tech giant can innovate and drag itself out of the mess. 

Sprint Nextel (S):Fundamentals not great at all

I wanted to start with large cap tech stocks as I cover the tech stock,. anyway. The Sprint Nextel (S) earnings report was out three days ago and I thought I'd do a bit of equity research on that. I know what your thinking: Where is the Apple equity research post that I promised. Well, I am here to tell you that it will come soon. Now lets look at a stock that is great candidate for shorting.

Price Action:

Sprint Nextel 10-Year Price Action

Source: DailyFinance

Sprint Nextel is up a 140% and why do I say to short the stock. Just take a look above at how the stock has been doing over the last 10 years.

Income Statement:

Here are the last five years income statement stats to note. The stock price going up this year must be due to the revenue rising persistently every quarter. However, the revenues are nowhere near the $40.1B revenue generated in 2007.

The negative net income and EPS numbers must be noted here for Sprint bears. 

Income Statement
Quarter	Sales	Growth	Net Income	Growth	EPS	Growth
2012 Q4	$9005	2.76%	-$1321	-72.23%	-$0.44	-69.23%
2012 Q3	$8763	-0.90%	-$767	44.18%	-$0.26	43.48%
2012 Q2	$8843	1.25%	-$1374	58.86%	-$0.46	-58.62%
2012 Q1	$8734	0.14%	-$863	33.77%	-$0.29	32.56%

Year	Sales	Growth	Net Income	Growth	EPS	Growth
2012	$35340	4.93%	-$4325	-49.65%	-$1.44	-50.00%
2011	$33680	3.44%	-$2890	16.60%	-$0.96	17.24%
2010	$32560	0.93%	-$3465	-42.24%	-$1.16	38.10%
2009	$32260	-9.48%	-$2436	12.88%	-$0.84	14.29%
2008	$35640	-11.12%	-$2796	90.62%	-$0.98	-51.24%

Note: All values in the tables are in Millions of USD (except for per share items)

Balance Sheet:

Sprint's balance sheet doesn't look to good either in the table below. The cash column is the only encouraging sign with it growing over the period shown as opposed to the others like equity that has declined on average 15.3%.

Relative to industry stalwarts such as AT&T (T) and Verizon Communications Inc. (VZ), Sprint lags behind.  

Balance Sheet
Year	Current Assets	Total Assets	Intangibles	Current Liabilities	Total Liabilities	Cash	Growth	Equity	Growth	Shares	Growth
2012 Q4	$13760	$51570	$22370	$8874	$44480	$8200	29.56%	$7087	-16.61%	3000	-0.10%
2012 Q3	$11610	$48970	$22390	$7947	$40470	$6329	-6.40%	$8499	-7.89%	3003	0.13%
2012 Q2	$11600	$49020	$22420	$7363	$39800	$6762	-10.70%	$9227	-12.87%	2999	0.07%
2012 Q1	$12220	$50620	$22400	$6439	$40030	$7572	35.29%	$10590	-7.35%	2997	0.03%
2011	$10340	$49380	$22430	$6499	$37960	$5597	2.27%	$11430	-21.44%	2996	0.27%
2010	$9880	$51650	$22700	$7891	$37110	$5473	39.48%	$14550	-19.61%	2988	0.50%
2009	$8593	$55420	$23460	$6785	$37330	$3924	5.51%	$18100	-9.14%	2973	4.06%

Note: All values in the table are in Millions

Bottomline:

Value investors are so not going to love this telecommunications stock. 

 

XOM NAV

I was busy doing an NAV analysis on Exxon Mobil (XOM) and it turned out that the stock is actually overvalued. The NAV per share is $65 if we take conservative growth rates. 

Download

(XOM-NAV-Conservative Analysis - Google Docs)

The Life of an Investment Banker

It's been awhile. I have some regrets that I didn't kick off this blog talking about the investment banker lifestyle.

If you wondered why you haven't heard from me lately, it was because I was getting more awesome.

 

This is me at a hotel room in Las Vegas taking Christmas Break early. That is what is called contrarian investing; I will be working my butt of during Christmas week. But then again, how can I call what I do work. I live, breathe and eat it. It gives me endorphins I could almost swear.

More on that pic of me: Did you notice how subtly I was showing off why I am such a good investment banker. There is of course the must have shades and then iPhone 4s to show everyone how tech savvy I am. Not to mention the fact that I was taking this pic while deciding which tie to wear.

I finally decided on the $100 Saks Fifth Avenue tie you see in that pic. No, I am not going to be wearing my Lacoste Sport Tee which I usually wear for a round of golf, etc. There is more to the pic - notice my $700 22k gold ring with a diamond stud too.

That's investment banking in a nutshell for you. There is the good side and then the not so good side.

For now, Nevada beckons. I love Las Vegas. Great lights and great women! What more could you ask for?