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Just found this thread. I was actually in this move from 2.25. AMD came up in a scan of 52 week lows, and it was completing the D leg of both a Gartley and a Bat pattern on the weekly. I got in after the morning star candle completed. Not the prettiest, but they fit the rules. Final target is the .382 retracement, and right now my trail stop is under the 34 EMA at 2.84.
After the massive move this week, and with only 1 week until expiration, it is a perfect time to sell some credit. I'm selling the $4 calls naked with a stop of the underlying at $4.
Can you help answer these questions from other members on NexusFi?
Model updated for restructuring charges and lower growth outlook.
My assumptions in the Levered Returns valuation models yield a fair value per share of $3.50, still 31% above its October 16th closing price of $2.67.
AMD represents a significant opportunity for long-term investors.
Q3 Earnings Announcement
Advanced Micro Devices (NYSE:AMD) announced its Q3 earnings on October 16th, which missed analyst estimates, and the company decreased its Q4 outlook. It was not a press release investors cheer for. However, I still believe the company has long-term growth potential as AMD applies its technical expertise in CPUs and GPUs and enters other processor applications. In addition to diversifying its offerings, AMD continues to lower its cost structure.
Updated Levered Returns Valuation Model
I have updated my Levered Return's 5-year discounted cash flow "DCF" analysis shown below (prior analysis can be found here). Key differences include:
Updated for Q3 results.
Projected revenue growth lowered to reach $5,691 million by fiscal year 2018 ($6,557 prior).
Projected EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) lowered to reach $580 million by fiscal year 2018 ($610 prior).
Slightly lowered the company's long-term terminal growth rate from 3.0% to 2.5%.
Adjusted the equity waterfall for the $57 million forecasted restructuring charges.
Oct 10/14 ........................ $4.00 ........................ 9.3% ..................... 8.7% ............... 208
Oct 21/14 ........................ $3.50 ........................ 4.0% ..................... 8.7% ............... 198
Well he/she dropped the target by over 10%....cut the sales growth by over half but somehow maintained the same margin and only a slight decrease in Operating profit even though there is over a 50% decline in forecast sales.
I also love this statement: AMD continues to lower its cost structure.
Really???? If I made such a statement it would be made on an observation of quarterly financial reports showing costs steadily dropping...or at least a negative slope
let us make our own analysis of their costs
I don't see a continuing drop in costs.....they look pretty constant to me.
When evaluating a Blogger analyst....especially one who does not reveal their name.... check out previous articles
this is dated July 9/14 and here is a quote of the conclusions
Well here is a chart for Clorox
I suppose in fairness he did pick a near top and it did pull back $6 but that is a far cry from the $20 pullback he suggests in his model...and even hanging onto that stock at $92.00 realizes a pretty good gain today.... I have to wonder if that model he uses still puts Fair value at $72.00
Here is another blog....this time on Kimberly Clarke
Well here is how good that prediction was in the short term
well 10 days later that "strong buy" plummeted 10% and 4 months later it has climbed back to where it was at the time of the post.
Personally I am not overly impressed with this group...turns out to be a group of bankers(if they are bankers) making these predictions.
Conclusion
Long term forecasts are fanciful dreams IMHO... this blogging group does not have a great track record so I would not believe them very much...ESPECIALLY in this case with AMD where they changed their forecast after just 11 days.
Hey remain calm please. I also post news stories, whether I agree with them or not. If I have something to say I'll comment on it, otherwise I just post the link if it is relevant to the thread.
I guess I should have said I don't care whether you think it is the right news article or not. If you do not like what is being posted then post your own articles.
I am posting articles that catch my eye that other traders may be interested in, Whether they are fluff or not, I don't care and I am not gonna make that judgement for another trader. Each trader needs to learn how to read between the lines and gather what they need to make a decision.
