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(B)(N) LNVGY Lenovo Group Limited ADR

January 30, 2014
The Verge Moto X Permanently $399 with no contract

The Verge Moto X Permanently $399 with no contract

Deal Book. Lenovo is on a roll and bought IBM’s x86 server business for $2.3 billion last week (Forbes, January 23, 2014, Lenovo Buying IBM Server Business For $2.3 Billion) and is buying Google’s Motorola Unit this week (Reuters, January 29, 2014, Lenovo nears $3 billion deal to buy Google’s Motorola unit). And investors have boosted the stock from $18 to $20 last year to the current $27 and well above the price of risk at $24 and rising. Please see Exhibit 3 below.

But Lenovo is also rolling with elite company and it’s possible – even probable – that the “big techs” have seen the future and are shedding some old skins and lines of business to bring forward a new decade of technological change and magic far removed from the more pedestrian 80’s and 90’s.

Investors are nervous and only understand their good fortune in Newtonian (17th century) terms (The Street, January 24, 2014, What Goes Up…Must Come Down) but are still willing to play and have bid up the “big techs” by 5% and $100 billion so far this year. Please see Exhibit 1 below.

Exhibit 1: The NYSE “Big Techs” – Fundamentals – January 2014

S&P 500 Big Tech - Fundamentals - January 2014

NYSE “Big Tech” – Fundamentals – January 2014

(B)(N) The Undervalued Big Tech - January 2014

(B)(N) The Undervalued Big Techs – January 2014

The “big techs” earned $150 billion last year and returned $40 billion or 26% to the shareholders for an aggregate dividend yield of 1.7%.

Should they earn less this year because the demand for copper and gold is low? Or because the government can pay its debts from a burgeoning tax base? Or because there might be 8 billion people on the planet in a few years?

Quantum Computing, You Say?

Quantum Computing, You Say?

We don’t know but we’re ready to roll too and not fall off the edge, so to speak. Of the twelve “big techs”, ten are in the Perpetual Bond™ at the present time (excusing Cisco and Samsung for the moment) and our estimate of the downside risk in the portfolio is minus (9%) but we’re ready for that as a profit-taking and buying opportunity at lower prices. Please see Exhibit 2 below.

Exhibit 2: (B)(N) The NYSE “Big Techs” – Prices & Portfolio – January 2014

(B)(N) NYSE "Big Techs" - Prices & Portfolio - January 2014

(B)(N) NYSE “Big Techs” – Prices & Portfolio – January 2014

(Please Click on the Chart to make it larger and again if required.)

Exhibit 3: (B)(N) LNVGY Lenovo Group Limited ADR – Risk Price Chart

(B)(N) LNVGY Lenovo Group Limited ADR

(B)(N) LNVGY Lenovo Group Limited ADR

Lenovo Group Limited is a personal technology company engaged in manufacturing & marketing of technology products & services such as personal computers, servers, laptops, workstations, mobile Internet devices, tablets & smart phone.

(Please Click on the Chart to make it larger if required.)

From the Company: Lenovo Group Limited, together with its subsidiaries, engages in the manufacture and distribution of IT products, and provision of IT services in worldwide. Its products include commercial and consumer personal computers, notebooks, desktops, servers, and workstations; mobile Internet devices, including tablets and smartphones; and accessories and parts, audio and video products, batteries and power products, cables and connectors, carrying cases, docks and port replicators, keyboards and mice, memory products, monitor accessories, monitors, security and storage products, tablet accessories, and wireless and networking products. The company also trades mobile phones and accessories; retails and services consumer electronic products; and offers repair services for computer hardware and software systems. It has a strategic partnership with EMC Corporation to develop network-attached storage products. The company was formerly known as Legend Holdings Limited and changed its name to Lenovo Group Limited in April 2004. Lenovo Group Limited was founded in 1981, has 35,000 employees and is headquartered in Morrisville, North Carolina, and is considered as a Red Chip company due to its listing on the Hong Kong Stock Exchange.

For more information on the chart elements and additional references to the theory, please see our Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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