Dronamraju Ravi Prakash

that there's a company with a 1.3 million people subscribing to it's service, average subscription price is 20$, with a churn of 5.2% - trending lower - and expected to grow revenues coming year at a healthy clip of 50%.
In fact, analysts estimate avg. rev. growth for next 5 years should be about 47.5%. Sounds like a growth stock doesn't it? Good.
But are they investing too fast? What's their cash flow like? What price is that revenue growth?
Well they have impressive FCF margins of 40% not bad, and the subscriber acquisition costs are stable and about 10% of yearly subscription revenue/subscriber. what that means is they spend 10$ to bring in a subscriber, who spends 100$ a year on the site and they translate 40$ of that into FCF. Sounds very good.
Well the next question would be - what does it cost? Sounds like a good company, but what does it cost to get into this company?
I am going to talk about it soon.. but first.. i gotta talk about Chuck's new blog entry.

APPLE is always cool. It has been and it will be. What it hasn't been good at, is to translate that cool, hip image into appropriate shareholder value. Several emotional investors, who bought the product, loved it and invested in the company, learned to hate the stock.
This has been my experience, Loved the company, hated the stock. What i find intriguing, is sometimes the love of their products blinds good investment judgement. My good friend chuck here is clearly clinging on to some dream in this blog entry where the potential of apple as a high growth e-commerce play is brought up.
To be fair, apple has been firing on all cylinders. They came out with revenues of $1.7B and said they'd make about 1.9B$ in the calendar Q4. Great news. Puts them up at a P/e of 50 for the past fiscal year with growth hopes pinned heavily on the music service/ipods. would I take that risk? probably not.

As for my dear friend's hope of apple turning into a ecommerce play, i'd say that unless they start carrying products from other brands, possibly, other products not in the product line, i wouldn't consider them an ecommerce play.. Do i consider Dell an ecommerce play? No.. they have 10s of millions credit cards, but i don't buy books on dell.com.
I think the best hope for Apple is to parlay this IPOD/iTunes service into digi-music domination and substantial share of that huge 13B$ pie in the US and 17B$ pie worldwide..

-ravi

http://finance.yahoo.com/q?s=NOK
Been thinking about the upcoming christmas season. Nokia looks very well positioned for the christmas sales. A lot of new phones, with pictures and host of other features. The screen sizes are actually big enough that you can see pictures in them and the keyboards are pretty slickly integrated. Check out the nokia 3300, comes with an mp3 player included in it.
To be honest i really don't think it's a growth play. However, i think they have legs for one more bull market run. Their stock is depressed, with a forward p/e of just 19. They have healthy cash balance (12B), good seasonality support and excellent confluence of technology, product and demand. I think they have legs to run up to 25 during the x-mas season
On a related topic, another interesting thing to think about is this christmas season and how to play it.
May be that topic for another blog.

Ok. Investing is fun. In some ways it's addictive. So I am going to be keeping this journal of stocks i like and discuss investing ideas - primarily about stocks, but can be others - in this journal.