| Stock (Symbol) | Stock Price | |
SouFun (SFUN) |
$77 |
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| Data is as of | Expected to Report | Sector |
December 4, 2013 |
2/3 – 2/7 |
Retail & Travel |
| Sharek’s Take | ||
 SouFun (SFUN) reported splendid results last quarter, but management guided down this quarter’s revenue est $15 million even though lastqtr sales beat estimates by $14 million. Wouldn’t you guide up? Is management underpromising to over deliver? Yes, I think so. The company bragged that in 2013 was the 4th consecutive year (since its IPO) it beat the street. 2014’s sales est is for 22.5%-25% growth, and 20% to 22.5% is the highest they ever gave. But SFUN had 48% growth last year, and obviously crushed the twenty-something estimate. I also see in my notes from last year that old 2013 profit estimates were $1.90. SFUN ended up making $3.63 last year. I feel the estimates are misleadingly low, and SFUN will continue to grow at a rapid rate. At 20 times earnings this stock possesses huge upside and remains my top pick. |
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| One-Year Chart | ||
 80% profit growth last quarter, yet the P/E is still only 20. Notice the stock tried to break out, but wasn’t able to because of the lowered guidance. Twenty percent growth coming? Look at SFUN’s Annual Profits on the right. Nothing in the past (2010-2013) makes me think 20% growth is coming anytime soon. |
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| Earnings Table | ||
 89% profit growth last quarter on a 47% increase in sales. 2013 sales were up 48%, so revenue growth hasn’t slowed much. Still, there might be a real estate correction in China and we need to be aware of this.SFUN crushed earnings estimates once again. The company is doing this every quarter. Annual Profit Estimates keep jumping higher. This reminds me of Lululemon when it skied higher years ago, as the quarterly estimates always look regular and the company keeps beating the street to deliver stellar profit growth. Quarterly estimates fell, as you would expect. We’ll see. |
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| Fair Value | ||
 Last qtr I stated “It’s conceivable SouFun can make $5 a share in 2014 or 2015“. Now we see that $5 estimate. Still, I’m taking my Fair Value P/E on SFUN down from 40 to 35. There’s still tons of upside, I just don’t want to be overly bullish |
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| Ten-Year Chart | ||
 SFUN went on a parabolic move recently, which is dangerous, but the stock seems to be settling down for a bit, which is good. 17% profit growth is expected this year, I think SouFun will have no trouble beating that. Still, I should be a little cautious as a real estate correction could hurt results. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
1 of 25 |
SouFun has been growing like gangbusters and since it has a P/E of only 20 the potential is enormous. I think management was underpromising to over deliver and if results come in over expectations the stock could break out and go on another run. SFUN is currently my top stock in the 25 stock the Growth Portfolio and 11 stock Aggressive Growth Portfolio Power Rankings. There is risk and reward here. |
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Aggressive Growth Portfolio
1 of 11 |
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