I have sold all of my Apple (AAPL) shares and used the funds to add to my existing eBay (EBAY) position as well as start a small position in Michael Kors (KORS). The 'Current Holdings' section has been updated. I intend to add either Apple or Microsoft (MSFT) shares in my nontaxable Roth IRA account at the beginning of next year.
Philip
Saturday, December 22, 2012
Monday, December 17, 2012
New Seeking Alpha Article
Check out my new article, which is my very first, at Seeking Alpha! Click the link here to view it. It is about Microsoft and Sony's lengthy process of updating their gaming consoles and the adverse effects it is having on the third-party video game developers like Electronic Arts and Activision Blizzard. Enjoy!
Philip
Philip
Wednesday, December 12, 2012
Check Out My Current Holdings
As promised I have dedicated a page of the blog to my current equity holdings. I will update this page whenever I add or subtract a company from my portfolio. Click on 'Current Holdings' to the right and have a look!
Philip
Philip
Tuesday, December 11, 2012
What Is Wrong With Electronic Arts?
I am a video-game enthusiast and I know quality games from the majority of poor ones that are released. Electronic Arts Inc. (EA) has put out a lot of high quality games this past year: Mass Effect 3 (the whole ending controversy aside), Madden 13 (the most innovative iteration in years), Tiger Woods 13 and the more recent Fifa 13. Sure, EA has had some duds this year as well, Medal of Honor Warfighter was downright terrible, but which major game publisher hasn't bombed out at least once a year?
With brand name, marquee franchises like Crysis, Battlefield, The Sims, Madden, Need for Speed, Fifa and Mass Effect (most of which are capable of churning out releases annually) one could think EA is in prime position to lead the video game sector. The problem is I've been thinking that for years now and it just never happens.
2012 was without a doubt a terrible year for the video game giant. The company sank over $100 million into a bungled Star Wars online multiplayer game that produced lackluster subscriber growth and soon went free-to-play, it managed to upset its consumer base at almost every turn (including skimping out on a proper ending for the much beloved Mass Effect series) and it won the dubious award of 'worst company in America' from voters at The Consumerist, EA wrestled that title away from Bank of America. As bad as the news was for Electronic Arts in 2012, the stock's performance was even worse. Take a look at the following one-year chart of EA's stock price, courtesy of Yahoo! Finance:
EA is down over 30% in the past year alone and is no where close to its all time highs set back in the mid 2000's, currently off more than 70%. The company has also managed zero equity growth over the last five years and almost zero Return on Capital growth. For the year ending March 2013, the average analyst estimate is for $4.1 billion in revenue, which is about 1% lower than last year's $4.14 billion. On top of that, debt and liabilities have been increasing quickly.
So, I ask again, what is going on?
Clearly, management has a part to play in such pathetic results. They have proven themselves unable to guide this company in the right direction. Current CEO John Riccitiello has been the subject of many rumors for dismissal but so far has managed to keep his job despite his company's terrible performance. Peter Moore is thought to be his future replacement.
The disturbing slowdown in overall video game sales has to be a big factor as well. Sales of games have dropped dramatically over the last year. But the real reason could be that of the impending console update. If you take a look at the sale figures for each major console in 2012 compared to the same time period for 2011, the results are not good: the Xbox 360 sold about 2.6 million fewer consoles, the Playstation 3 sold about 2 million fewer consoles and the Wii sold about 4 million fewer, which is a drop of over 50%. The Wii system's dramatic drop can be partly attributed to the release of the new Nintendo WiiU, but that still sold only about 800,000 units. Check out these latest results and more at VGChartz.com.
With most rumors suggesting a 2013 release for at least one of the big next-generation systems, Microsoft's Xbox and Sony's Playstation, gamers have simply not been buying new consoles like they used to. Less console sales equals less video games sales, that is an easy correlation to make. This slowdown in big hardware has no doubt affected games sales negatively over the last year.
But don't take my word for it, take the word of Yves Guillemot, CEO and co-founder of video game giant Ubisoft. He recently told Polygon, "We need new consoles. At the end of the cycle generally the market goes down because there are less new IPs, new properties, so that damaged the industry a little bit. I hope next time they will come more often." Check out the full article here.
So, are Microsoft and Sony partly to blame for Electronic Arts's struggles as of late? I'd say they definitely aren't helping much, that's for sure. It is obvious that EA is suffering through a downturn in the market in which they operate but any good management team has to have a plan to overcomes such difficulties. With the new console generation fast approaching I am curious to see what EA has in store for both consumers and investors.
Philip
Disclosure: I have no position in any of the stocks mentioned in this article.
With brand name, marquee franchises like Crysis, Battlefield, The Sims, Madden, Need for Speed, Fifa and Mass Effect (most of which are capable of churning out releases annually) one could think EA is in prime position to lead the video game sector. The problem is I've been thinking that for years now and it just never happens.
2012 was without a doubt a terrible year for the video game giant. The company sank over $100 million into a bungled Star Wars online multiplayer game that produced lackluster subscriber growth and soon went free-to-play, it managed to upset its consumer base at almost every turn (including skimping out on a proper ending for the much beloved Mass Effect series) and it won the dubious award of 'worst company in America' from voters at The Consumerist, EA wrestled that title away from Bank of America. As bad as the news was for Electronic Arts in 2012, the stock's performance was even worse. Take a look at the following one-year chart of EA's stock price, courtesy of Yahoo! Finance:
EA is down over 30% in the past year alone and is no where close to its all time highs set back in the mid 2000's, currently off more than 70%. The company has also managed zero equity growth over the last five years and almost zero Return on Capital growth. For the year ending March 2013, the average analyst estimate is for $4.1 billion in revenue, which is about 1% lower than last year's $4.14 billion. On top of that, debt and liabilities have been increasing quickly.
So, I ask again, what is going on?
Clearly, management has a part to play in such pathetic results. They have proven themselves unable to guide this company in the right direction. Current CEO John Riccitiello has been the subject of many rumors for dismissal but so far has managed to keep his job despite his company's terrible performance. Peter Moore is thought to be his future replacement.
The disturbing slowdown in overall video game sales has to be a big factor as well. Sales of games have dropped dramatically over the last year. But the real reason could be that of the impending console update. If you take a look at the sale figures for each major console in 2012 compared to the same time period for 2011, the results are not good: the Xbox 360 sold about 2.6 million fewer consoles, the Playstation 3 sold about 2 million fewer consoles and the Wii sold about 4 million fewer, which is a drop of over 50%. The Wii system's dramatic drop can be partly attributed to the release of the new Nintendo WiiU, but that still sold only about 800,000 units. Check out these latest results and more at VGChartz.com.
With most rumors suggesting a 2013 release for at least one of the big next-generation systems, Microsoft's Xbox and Sony's Playstation, gamers have simply not been buying new consoles like they used to. Less console sales equals less video games sales, that is an easy correlation to make. This slowdown in big hardware has no doubt affected games sales negatively over the last year.
But don't take my word for it, take the word of Yves Guillemot, CEO and co-founder of video game giant Ubisoft. He recently told Polygon, "We need new consoles. At the end of the cycle generally the market goes down because there are less new IPs, new properties, so that damaged the industry a little bit. I hope next time they will come more often." Check out the full article here.
So, are Microsoft and Sony partly to blame for Electronic Arts's struggles as of late? I'd say they definitely aren't helping much, that's for sure. It is obvious that EA is suffering through a downturn in the market in which they operate but any good management team has to have a plan to overcomes such difficulties. With the new console generation fast approaching I am curious to see what EA has in store for both consumers and investors.
Philip
Disclosure: I have no position in any of the stocks mentioned in this article.
Monday, December 10, 2012
Welcome!
Hello one and all and welcome to The Idea Share. My name is Philip J Saglimbeni and I am starting this blog as a supplement to my new ebook just released on Amazon Kindle. To all those who read my book, I want to first say thank you for purchasing it and I sincerely hope you enjoyed reading it. One of my biggest goals in life is to help others and I've found that I am best able to do that by sharing my knowledge of personal finance. I hope that everybody who reads my book learns at least something they never knew before. If I can manage to have done that then my book will have been a success.
For those who don't know, my ebook is entitled Growth Investing: Finding the Perfect Stock for You
.
It was released on December 2, 2012 for all Kindle enabled devices and is currently available to purchase for $2.99 or to borrow for free through Amazon Prime. The book focuses on my personal system for finding great growth stocks, one that I've used successfully for the last four years. It lays out an easy-to-follow process to help investors find growth stocks that are perfect for them to own.
It is my hope to use this blog as a tool to reach many other people and teach them about my investing style! I intend to write at least once a week about a stock or stocks that interest me and that I think could be of interest to others. I welcome any and all ideas from visitors and hope that we can get some interesting dialogue going.
I focus primarily on growth stocks, specifically ones that grow at least 10% a year. If you have read my ebook then you know that I do my best to offer full disclosure. I want people to know which stocks I own and why and so to ensure just that I will have a section of this blog dedicated specifically to my current holdings and I will do my best to keep it current and updated.
I also have other interests besides personal finance, including sports, cars, movies and television, video games and music and I will try my best to incorporate these other passions of mine into the blog. As long as there is a demand for these other types of posts I will try my best to keep them going.
Thank you and enjoy,
Philip
For those who don't know, my ebook is entitled Growth Investing: Finding the Perfect Stock for You
.
It was released on December 2, 2012 for all Kindle enabled devices and is currently available to purchase for $2.99 or to borrow for free through Amazon Prime. The book focuses on my personal system for finding great growth stocks, one that I've used successfully for the last four years. It lays out an easy-to-follow process to help investors find growth stocks that are perfect for them to own.It is my hope to use this blog as a tool to reach many other people and teach them about my investing style! I intend to write at least once a week about a stock or stocks that interest me and that I think could be of interest to others. I welcome any and all ideas from visitors and hope that we can get some interesting dialogue going.
I focus primarily on growth stocks, specifically ones that grow at least 10% a year. If you have read my ebook then you know that I do my best to offer full disclosure. I want people to know which stocks I own and why and so to ensure just that I will have a section of this blog dedicated specifically to my current holdings and I will do my best to keep it current and updated.
I also have other interests besides personal finance, including sports, cars, movies and television, video games and music and I will try my best to incorporate these other passions of mine into the blog. As long as there is a demand for these other types of posts I will try my best to keep them going.
Thank you and enjoy,
Philip
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