(ZNGA) Barron's(7/30) A Return Visit To Earlier Stories: Beaten-Down Zynga Is Worth A Look
A cash-rich Zynga could be a good speculative bet after shares of the
social- games maker were crunched last week, falling 35.7% to $3.09 after news
of disappointing second-quarter profits and financial guidance for the rest of
this year. Zynga (ticker: ZNGA) now is valued for not much more than its net
cash position of $1.5 billion, or around $2 a share. The company also owns
its headquarters building in San Francisco, for which it paid $233 million in
the quarter. While earnings and cash flow projections for 2012 have fallen
sharply, the company isn't burning cash.
Barron's was skeptical of social-networking stocks, including Zynga, a
year ago ("Yes, It's a Bubble," July 25, 2011). Zynga subsequently went public
at $10 a share, raising $1 billion.
Zynga offers a play on the success of the its recent game launches,
including The Ville and Bubble Safari, as well as FarmVille 2, expected later
A chastened group of formerly bullish Street analysts downgraded Zynga in
the wake of the earnings news. With so many giving up on the company, it may be
time to take a look.
(SBUX) Starbucks sell-off provides a buying opportunity, Barron's contends
Despite Starbucks' (SBUX) lowered guidance, longer-term trends remained
positive, Barron's says. Analysts highlighted Starbuck's continued solid U.S.
same-store-sales trends, potentially lower coffee costs over FY13-FY15, and a
large long-term worldwide single cup opportunity. Additionally they are positive
on Starbuck's expansion into the fruit beverage and at-home single cup coffee
markets. Starbucks' robust 20% long-term earnings growth far exceeds that of the
industry. The stock also offers a 1.5% yield and a 30.9% return on equity is one
of highest among its peers.
(YHOO) Hedgie Peter Schoenfeld says Yahoo! holds appeal., Barron's reports
Hedge-fund Peter Schoenfeld Asset Management oversees roughly $2B in
assets. Its $1.4B PSAM WorldArb fund seeks to exploit pricing anomalies in
securities of firms involved in corporate, tax, or regulatory events -- such as
takeovers, bankruptcies, liquidations, and spinoffs. Some names that hold appeal
according to Schoenfeld are: Royal Bank of Scotland Group (RBS), Liberty Media
(LMCA), United Parcel (UPS) and Yahoo! (YHOO). Schoenfeld says he's extremely
happy with the new board, and thinks Yahoo!'s new CEO Marissa Mayer will try to
monetize some of their investments. "If executed properly the stock should be
trading in the low to mid 20s," up from $15.95 last week.
Thanks for checking - Feel free to contact me regarding trading services, education and access to my daily guest appearance broadcast. Tim@affinitytrading.com
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