Pick for Friday - NVDA

[MoMoney4Me]

NVDA - NVIDIA Corporation
Out tonight with earnings that blew the street away.
Already pulled back a bit past week or two and down Thursday.
At $28.47 it's a screaming buy.
If you can get in near $29, I see it breaking through $33 in short order.

http://www.thestreet.com/tech/semis/10285193.html?partner=msn

[NATHAN LLOYD]

Estimated EPS was .28 and the actual EPS was .23.


How exactly did they blow anything away?

[MoMoney4Me]

Read the full article, it clearly states two facts that are the leading contributors to what ultimately drives the price of a stock, that being increasing sales and accelerating earnings .

NVDA posted a better-than-expected quarterly profit and said it expected strong growth in chips for laptops to help offset seasonal weakness in PCs.

Nvidia's net profit for its first fiscal quarter was $90.7 million, or 23 cents per share, compared to $64.4 million, or 18 cents per share a year earlier.

Excluding one-time items, Nvidia earned $111.1 million, or 29 cents per share.

On that basis, the company had been expected to earn $87.4 million, or 23 cents a share, according to the average analyst forecast on Reuters Estimates.

Revenue rose 17 percent to $681.8 million from $583.9 million a year earlier, topping the average forecast of $660.8 million.

Gross margin jumped 2.3 percentage points to 42.5 percent, driven by the introduction of Nvidia's new GeForce 7 line of high-end graphics chips that can command premium prices.

Nvidia is making the new chips using the latest manufacturing technology that etches circuitry at a smaller scale, allowing it to cut costs by producing more chips from a single wafer of silicon.

"They are gaining share with a product that has a cost advantage over comparable products," said Hans Mosesmann, an analyst with Moors & Cabot.

Shares in Nvidia rose 1.4 percent to $28.88 in after-hours trading.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&symbol=NVDA.O&storyID=11003+12-May-2006+RTRS

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:re uters.com:20060512:MTFH43168_2006-05-12_00-04-19_N11339332&symbol=NVDA.O&rpc=44

[NATHAN LLOYD]

I like your Chihuahuas. I have one too. She's white and black.

I understand better now sorry to be pessimistic.

[NATHAN LLOYD]

Can you also explain these.

Gold was at it's highest in 6 years while everyone sold gold mining stocks yesterday.

How about PEIX that keeps going up without making a penny in earnings?

I can only explain it by thinking that the average invester is really very dense.

[NATHAN LLOYD]

Can you also explain these.

Gold was at it's highest in 26 years while everyone sold gold mining stocks yesterday.

How about PEIX that keeps going up without making a penny in earnings?

I can only explain it by thinking that the average invester is really very dense.

I meant 26 years.

[MoMoney4Me]

Well, as a pick for the day I have to say I'm eating crow.
My head has been chopped off and handed to me.
I still believe that after the market sell off you'll se NVDA begin to move to new highs as a result of yesterday's earnings report. Just going to take some patience.

As to the gold stocks, they've been on a tear lately so I think you're seeing a lot of profit taking at these levels. They'll rebound and move to newer highs soon as well.
I can't speak directly to PEIX as I have no knowledge of the company, but in relation to your comment, I have seen the best of breed sell off like this after runups and companies that are losing money continue to move higher when in fact they are narrowing their losses and might be moving toward profitability.
Sometimes it's the concept that the others have already attained their peak and might be slowing, whereas the unprofitable company is trading higher based on it's future prospects.

For instance, last year I sold shares on INTC, a large company making oodles of money at the time, and bought another semiconductor company ANAD. Anadigics has lost money for several years, but is narrowing those losses and expected to regain profitability later this year or early in 2007.
That has proven to be a very profitable move for me, during that period INTC is down about 20%, yet ANAD is up over 400% for me.

Like Cramer often says, "it does'nt matter where a stock has been, what counts is where is it going!"

[Luc1Grunt]

MoMo, I think youy are just 1 day early for eating any crow. RSI in the tank, hitting LBB today, stochastics are ALL below 10.......I do believe I will be in come monday IF the open stays up for the first half hour or so. This will be a real strong pick if it closes around 26.45

[MoMoney4Me]

MoMo, I think youy are just 1 day early for eating any crow. RSI in the tank, hitting LBB today, stochastics are ALL below 10.......I do believe I will be in come monday IF the open stays up for the first half hour or so. This will be a real strong pick if it closes around 26.45

I think if you're looking at NVDA as a long term stock, you'll be rewarded.
My short term eagerness for the stock has been tempered today by this report. http://www.forbes.com/2006/05/10/nvidia-0510markets17.html?partner=yahootix

It recommends ATI as a better alternative, but I'm down on that one too. I just bought 200 shares Wednesday afternoon at $85.23. As I'm typing it's trading at $77.80
That puts me down over 8% or almost $1500 in 2 days. OUCH !!!

I think you must have the guts for dips like this though and ride it out.

My outlook when I buy stocks are as follows:
swing trade = one I'll close in about a week or less
short term = up to 3 months
intermediate= up to a year
long term = average of 3 to 5 years

I often establish my position in a stock, and use half the shares to swing trade in and out on the up and downs, with an ultimate prospect of holding solid stocks for 3 years or longer.

[Luc1Grunt]

My observation was for a swing only (or shorter). 8% ouch, that is my usual stop for all stocks except a few with support a few cents below the magic number. Good luck, Luc

[Damon]

I think if you're looking at NVDA as a long term stock, you'll be rewarded.
My short term eagerness for the stock has been tempered today by this report. http://www.forbes.com/2006/05/10/nvidia-0510markets17.html?partner=yahootix

It recommends ATI as a better alternative, but I'm down on that one too. I just bought 200 shares Wednesday afternoon at $85.23. As I'm typing it's trading at $77.80
That puts me down over 8% or almost $1500 in 2 days. OUCH !!!


Do you mean Allegheny Technologies Inc. (ticker: ATI) or NVidia's main competitor, ATI Technologies Inc. (ticker: ATYT) as a better alternative to NVDA? I hope you didn't buy Allegheny while intending to buy ATI Tech. Judging by the price you paid, I'm guessing that's exactly what you did. ATYT is currently trading at just over $16.

[MoMoney4Me]

Do you mean Allegheny Technologies Inc. (ticker: ATI) or NVidia's main competitor, ATI Technologies Inc. (ticker: ATYT) as a better alternative to NVDA? I hope you didn't buy Allegheny while intending to buy ATI Tech. Judging by the price you paid, I'm guessing that's exactly what you did. ATYT is currently trading at just over $16.

Actually my response was in error based on the mistake in the article and my oversight. I actually bought the steel stock and it has no relation to NVDA. It was my intention to buy ATI as I did and not ATYT.

The article quoted from Yahoo was in error and had the ticker wrong. They should have it as ATYT being the better alternative to NVDA. I bought neither of them with the market conditions as they are yesterday and today.

The ATI I bought Wednesday before the past two day selloff, my bad timing on that one, but I see the materials going higher soon as well.

Please forgive any confusion I may have created in the prior post. I manage a portfolio of about 35 - 40 stocks at any given time. I should have picked up the error in Yahoo's article before the post.

If you go back and read it on Yahoo, be sure you are getting ATYT instead of ATI as the alternative to NVDA as they have it listed.

notice the error on Yahoo's article here : http://www.forbes.com/2006/05/10/nvidia-0510markets17.html?partner=yahootix

[Damon]

The really sad part is that when I bought NVDA just over a year ago, I was also going to buy an equal amount of their competitor ATI. I damn near made that mistake myself and bought Allegheny Technologies (ATI) instead of ATI Tech (ATYT), myself. Loooking back I REALLY wish I had made the accidental purchase - Allegheny is up 300% since then. http://www.cramersmadmoney.com/images/icons/icon9.gif

[who8me2k7]

The really sad part is that when I bought NVDA just over a year ago, I was also going to buy an equal amount of their competitor ATI. I damn near made that mistake myself and bought Allegheny Technologies (ATI) instead of ATI Tech (ATYT), myself. Loooking back I REALLY wish I had made the accidental purchase - Allegheny is up 300% since then. http://www.cramersmadmoney.com/images/icons/icon9.gif

maybe thats why the stock has gone up so much...people making mistakes to buy ATI Tech. :lol: