Is Ebay Fairly Priced?

Ebay (NASDAQ:EBAY) is a large cap stock with a market capitalization of $40.55 billion. The company is a commerce company, which operates through its Marketplace, StubHub and Classifieds platforms.

Ebay is located to the special retail industry, a part of the services sector. The biggest competitors are Amazon (NASDAQ:AMZN), Etsy (NASDAQ:ETSY) and Wayfair (NYSE:W). Here is a full list of my peer holdings for ebay:



The ebay stock is up 41.14% over the past year which is a clear outperformance compared to the S&P 500, Dow Jones and Nasdaq. 

Source: Googlefinance.com

EBAY outperformed the market in recent months. Is it now a good time to buy, not to buy, wait or sell the stock? In this article, I will check the financial and valuation figures of the company and give a clear statement to the current situation.

I developed a simple system to evaluate the financial health of a company. It looks at the following six key metrics...

- Profitability (+)

The profitability of EBAY is good. The operating margin of EBAY amounts to 24.90% compared to 12.58% of the peer average.



- Debt Situation (-)

I use the debt-to-equity ratio as qualified measure to evaluate the debt situation.

The debt-to-equity ratio for Ebay amounted to 0.77. Compared to the peer ratio of just 0.6, the online auction company seems to be working with a higher leverage, which is in general bad due to a higher financial risk.



- Dividend Yield (-)

Ebay pays no dividends. The peer average offers a ratio of 0.21%. Most of the peers don’t pay a dividend. Mercadolibre (NASDAQ:MELI) is the only company with quarter dividends.



- P/E Ratio (+)

The current price-to-earnings ratio of EBAY amounts to 5.3. Compared to figures from the peer group, which are valuated with an average ratio of 72.71, Ebay looks cheaper than other companies in the industry.

This impression is also intact when we look at the forward P/E ratios. Ebay’s forward P/E is 16.83.



- Capital Returns (+)

Capital returns are important for investors. Two most used ratios to evaluate the capital efficiency of a company are the return on equity and return on investment.

All return ratios have better values than the peer average.



- Sales and EPS Growth (-)

Sales and earnings growth figures are also very important for investors. Quarter over Quarter, Ebay is losing market share with a sales growth of just 3.7% compared to an peer average value of 29.26%.


Ebay receives a "Hold Positive" rating

Ebay passes three of my six key metrics. Similar to my investment rating scheme, EBAY receives a Hold Positive Rating from me.

Rating	# Metrics
Strong Buy	5 +
Buy	4 +
Hold Positive	3 +
Hold Negative	2 +
Sell	1 +

What do you think about ebay? Is it a buy, hold or sell?

How Tech Giants Amazon, Facebook, Microsoft, Apple and Google Make Money

Source: Barry Ritholtz

20 Large Caps With High Aggressive Earnings Growth For The Mid-Term

Dividend investors focus on dividend payments but you need also a focus on growth. 

Today I like to show you some of the highest growth large caps on the market. Intel bought the number one stock recently. Maybe you will find some attractive targets on the attached list.

But beware of the high valuation from most of the stocks. Consider only stocks with a good balance between high growth and modest valuation.

Here are the results from my high growth large cap screen...

These 20 Stocks Serve The Most Cash Reserves

Stocks with a high level of cash are better positioned in my view. They have enough room to think about growth opportunities and don't need to manage their debt.

Apple, Microsoft, Alphabet, Cisco and Oracle had amassed $504bn of cash by the end of 2015, nearly a third of the total $1.7tn held on the balance sheets of US non-financial companies, according to a new report from rating agency Moody’s. The top 50 holders accounted for $1.1tn of that amount.

These are the 20 most cash-rich companies on the us stock market...

What Hedgefund Managers Buy And Sell: Facebook In - Apple Out

Recently, the quarterly SEC disclosures hit that give us a peek into the activities of the world’s best billionaire hedge fund managers. 

Now, 13-F filings provide a ton of information, but you have to know exactly what to look for to make these filings useful. 

Waren Buffett also published his latest buys and sells. Buffett is long on Apple. Check out his latest dividend stock buys here.

With that being said here is what caught my eye from the holdings of the world’s best billionaire hedge fund managers:

14 Arguments For Apple Each Long-Term Investor Should Know Now!

Apple released recently its quarter results from the most important fiscal of the full year.

The number disappointed investors despite numbers at all time highs.

Apple is still the biggest company on the planet but if you compare the size with its business operations around the world, apple becomes modest.

These are now over 1 billion active iphone outside, which are potential iTunes sales machines.

The company owned store becomes more and more imporant. The core question is if we have seen the apple peak or will the tech giant become more dominant in the future with new products like iWatch, iTV and iCar?

Mid-Term AAPL Forecasts By Reuters,
Source: www.zonebourse.com

Make your own picture with these 14 facts from the latest Apple report...

A Solid Portfolio Of Stocks With A Strong Balance Sheet

A Solid Portfolio Of Stocks With A Strong Balance Sheet (click to enlarge)
Source: Goldman Sachs, MarketWatch

Do You Think Apple Is Big? This Company Is 11 Times Bigger Than The iPhone Maker!

16 Most Favored Stocks By Institutional Investors And Hedge Fund Managers

Institutional investors must know it better. That's a rule I often hear from friends but why should this be true? Maybe they are better informed because the shake hands with CEO's or politicians.

The second issue is that hedge fund managers have enough firepower to move the stock price in any direction.

However, don't think about why they are trading and let us look at the most favored stocks from big investor gurus.

Attached is the full list of the 16 most loved stocks. Do you like some of them?

These are the highest yielding results in detail...

Why Warren Buffett Won’t Buy Twitter

By Guest Author Insider Monkey. It’s widely assumed that Warren Buffett doesn’t invest in technology stocks, but in recent years, this belief has contrasted with reality. After accounting for zero percent of his equity portfolio at the end of 2010, the tech sector now makes up one sixth of Buffett’s stock holdings. At Insider Monkey, we’ve discovered that hedge funds and other prominent investors’ best stock picks exhibit market-beating potential, so it’s worth paying attention to these developments.

In the case of Buffett and Berkshire Hathaway, they're not your typical technology investors. They follow a very strict set of rules when selecting investments in this space, which, through our observations, boil down to finding tech companies that: (1) trade at very cheap multiples, (2) pay a dividend, and (3) have sustainable product offerings that will safeguard their survival over the next 15 to 20 years.

With this in mind, the next logical question in many Buffettologists’ minds is: will the Oracle buy shares of Twitter [TWTR] once it becomes a publicly traded entity?

This was the same question many Facebook [FB] enthusiasts asked after its IPO last year and to no surprise, many mega-investors bought in. Buffett didn’t, however, and it is evident that Facebook broke all three of the rules described above. The stock traded at more than 70 times earnings upon going public and there simply wasn’t any assurance that it wouldn’t go the route of MySpace, Digg, Xanga and the rest of social media’s fallen giants. It also didn’t offer a dividend, and still doesn’t to this day.

Twitter faces all three of the same problems.

According to most estimates, Twitter will be valued near $11 billion when it goes public, giving it a per share value between $19 and $20. At this price, the company will theoretically trade at about 18.3 times this year’s estimated revenue, which most conservative analysts expect to be around $600 million.

Facebook, meanwhile, is valued at a price-to-sales multiple near this mark, while LinkedIn [LNKD] is also in the same vicinity. It’s unreasonable to expect that Buffett would be attracted to a valuation in this range if he hasn’t been before.

Equally as important, we also expect that the billionaire will take issue with Twitter’s outlook over the next 15 to 20 years. While some may argue that the micro blogging service can generate more advertising revenue than a Facebook or a LinkedIn for example, there’s still no guarantee that Twitter will be around in two decades. Obviously, there’s no such thing as 100% certainty in any industry, but there are fewer risks facing Buffett’s favorite investments, like Wells Fargo [WFC] and Coca Cola [KO], than there are to any social media company.

Putting the final nail in the proverbial coffin, we also know that from Twitter’s S-1 filing, it has no plans to declare dividends “in the foreseeable future.”

So, if Warren Buffett won’t buy Twitter, what stock is responsible for the majority of his investment in the tech sector?

As reported in his latest 13F filing, the answer is IBM [IBM]. Buffett and Berkshire hold almost 15% of their $89 billion equity portfolio in the information technology giant, and it meets all three of our aforementioned criteria. IBM trades at a mere 9.9 times forward earnings, has five diversified business segments from IT infrastructure to software, and it pays a dividend yield above 2%.

Disclosure: none

Hurricane Sandy Destroys - These 22 Stocks Benefit Most From The Monster Storm Of The Millenium

The hurricane Sandy is forecasted as one of the worst storms ever. Whatever will happen, the stock market will survive and business goes on. I researched some interesting companies that could earn some extra money due to the after-effects of the storm Sandy. We have classified our results in industries and introduced some of the major leaders. These are the results:

1. Home Improvement

People who lost their homes and mobiles need to repurchase these products. Companies within the home improvement industry should benefit from the hurricane. The major leaders are Home Depot (HD) and Lowe’s (LOW).

2. Dining Restaurants

Humans who have left their homes need to stay away from home at friends or near family members. For a few days, diner restaurants could make some extra profits from this. Starbucks (SBUX), Dunkin Brands (DNKN) and McDonalds (MCD) are basic investments but a bit too big and well diversified that the super storm should have a significant influence.

3. Travel Companies

If people leave their homes, they need to choose a provider if they don’t have an own car. Lodging stocks, auto rents, Airlines, railroads are main benefiters.

4. Insurer

Insurer should make a loss. If the damages are higher than expected, reinsurance companies should be the biggest losers. If the damages are lower than estimated, insurer could benefit, especially some players from the property and casualty insurance industry. Market leader are Berkshire Hathaway (BRK.A, BRK.B), American International (AIG), Travelers (TRV) or even Allstate (ALL). 

5. Consumer Goods

People need to buy extra storage of food, water and batteries. Companies like Procter&Gamble (PG) have a big relationship to the consumer battery industry (Duracell). Otherwise, the company should benefit from replacement buys of flooded goods.

6. Diversified Machinery

Some companies from the diversified machinery industry have products against flooding. Companies like Xylem (XYL) and PentAir (PNR) produce pumps used in dewatering, drainage and other applications.

7. Stores

Grocery and discount stores should benefit from hamster purchases. Wal-Mart (WMT), Family Dollar Stores (FDO), Target (TGT) or Costco Wholesale (COST) are basic investments.

8. Media Companies

People are sitting in front of their media devices like smart phones, radio, television etc. Facebook (FB), News Corp (NWSA), NY Times (NYT) or even CBS Corporation (CBS) should generate a higher attention.

9. General Building

Cement companies like Eagle Materials (EXP), homebuilder, raw material companies should have a special bull market. Companies like Beacon Roofing Supply (BECN) have a great market position.

Whatever will happen, nothing is so bad to make too fast decisions. But an overreaction could give investors a great opportunity for long-term investors. These are my personal favorites to watch: