Allison Ostrander – Market and Induvidual Stock Comments – Fri 6 Dec, 2019

A new indicator with some trading strategies for next week

Allison Ostrander kicks off today by sharing a new indicator that she recently developed. Claiming that this indicator can be a crystal ball we look at a few charts that Allison is trading heading into the weekend.

I asked Allison off mic about GLD, GDX, and SIL. Here is what she had to say…

Last week GLD printed a bullish divergent bar and saw follow through off a higher this week. This week appears to be a normal bar for GLD.

GDX and SIL were both similar to GLD bullish divergent bar last week and follows through with a higher high this week. And the current bar appears to be normal

I will note that GDX did make a bullish divergent bar last month (November) on a monthly chart, so this month or in next couple of months there is a high probability GDX will see a higher high above 28.16

Click here to listen to the webinar where Allison outlines this new indicator.

Allison Ostrander – Market and Induvidual Stock Comments – Wed 5 Jun, 2019

A Tech Sector Outlook Both Technically and Now Politically

Allison Ostrander, Director of Risk Tolerance at Simpler Trading joins me to look into the recent news regarding the major tech companies and Congress launching an antitrust investigation. Interestingly the drop on Monday brought the stocks right down to strong support on many of the charts. We refer to the charts of Facebook, Google, and Amazon to weigh in on if the selloff is done for now.

Click here to visit the Simpler Trading website and follow along with what Allison is focusing on.

Joel Elconin – Benzinga Pre-Market Prep Show – Tue 30 Apr, 2019

Recapping Earnings From Amazon and Google and The Run So Far This Year In The Broad Averages

Joel Elconin, Co-host of the Benzinga Pre-Market Prep Show joins me today to recap the recent earnings released out of Google and Amazon. Google’s earnings miss has gaped the stock down 7% while Amazon’s good earnings are supporting the recent move higher (while not back to all-time highs). We also look ahead to Apple’s earnings and comment on the overall health of the US markets considering the almost 15% move so far year to date.

Click here to find out more about the Benzinga Trading Summit in New York on June 20th.

The Next $1 Trillion Company Just Emerged…

This post The Next $1 Trillion Company Just Emerged… appeared first on Daily Reckoning.

I can’t believe I’m saying this…

But even with a $630 billion valuation, the market still doesn’t love Alphabet (GOOG) nearly enough.

The market is missing something huge about Alphabet. Investors are completely ignoring a “hidden asset” that Alphabet owns which alone is worth more than most publicly traded companies.

I believe that factoring in the value of this “hidden asset” justifies a total valuation for Alphabet of at least $1 trillion!

That means Alphabet’s share price has almost 70 percent upside from where it trades today — just on properly valuing this one “hidden asset” alone.

Alphabet’s Hidden Asset Is Hiding in Plain Sight!

Alphabet owns the Android operating system — the software used in phones made by Samsung, LG, Sony, Huawei, Google and many more. Currently Android has over 2 billion users worldwide.

To date, Alphabet has made almost no effort to monetize the value of these 2 billion Android users.

That lack of effort was intentional. The plan all along has been to use Android as a way to drive users to the Google search product. I’d call it a loss leader, but I don’t think it was actually losing money.

Now, for the first time Alphabet will begin charging smartphone manufacturers a licensing fee to pre-install on smartphones the bundle of Gmail, YouTube, Maps, Play Store, Search and Chrome.

Initially, this licensing fee will only be rolled out in Europe. Realistically, it will eventually go global because the dollars involved are enormous and because eventually monetizing Android has been the plan all along.

As I noted, currently there are more than 2 billion Android devices active globally and almost 1.2 billion units are sold each year.1 The chart below shows Android sales chugging along at more than 300 million a quarter for several years now.

Andriod dominates

People sure do buy a lot of phones!

The question we need to answer is how much Alphabet could make off of these 1.2 billion Androids being sold per year.

I don’t think $15 per installation of the Gmail, YouTube, Maps, Play Store, Search and Chrome bundle is an unrealistic number relative to the total cost of a smartphone and importance of these apps.

With 1.2 billion Androids sold annually at $15 per installation, we are looking at $18 billion of incremental revenue for Alphabet!!  Wow.

Now for some cool foreshadowing…

If we look back to 2010, Alphabet’s then CEO Eric Schmidt said this:

If we have a billion people using Android, you think we can’t make money from that? All it would take is $10 per user per year…” 2

As I said, monetizing Android was in the plans all along.

With the 2 billion users that Android currently has and Schmidt’s $10 per user estimate, that would result in a $20 billion revenue stream.  Interestingly enough, that is almost exactly my estimate for the potential from licensing.

There is big cash flow coming for Alphabet from Android, you can be sure of that.

What a $20 Billion Cash Flow Increase Would Mean For Alphabet

Please take a look at the chart below and appreciate it for how incredible it truly is.

This chart depicts Alphabet’s annual EBITDA (earnings before taxes, depreciation, and amortization). EBITDA is basically a proxy for pre-tax cash flow.

Not much more than a decade ago Alphabet was not generating any cash flow.

In 2018, the number is well in excess of $30 billion. That is just staggering.

Alphabet's cash flow

While I want you to appreciate that amazing chart, what I want you to take away from it is that even for Alphabet a $20 billion increase in cash flow is a very big deal.

Finally monetizing Android could increase cash flow by 65 to 70 percent and cause a similar increase in Alphabet’s share price. I certainly think it would be enough to push Alphabet’s total market valuation over $1 trillion, which is more than $350 billion higher than where it is today.

I believe that makes Android the most valuable hidden asset on the planet… which is why this tech giant deserves a place in your portfolio.

Here’s to looking through the windshield,

Jody Chudley

Jody Chudley
Financial Analyst, The Daily Edge

1 Global smartphone sales to end users from 1st quarter 2009 to 2nd quarter 2018, by operating system (in million units)
2 Eric Schmidt on Google’s Next Tricks

The post The Next $1 Trillion Company Just Emerged… appeared first on Daily Reckoning.