Is GoPro the Apple of action sports?

Yesterday GoPro (GPRO) started trading on the NASDAQ. The stock shot up more than 30 percent (from the IPO price) in their market debut Thursday, following an initial public offering that valued the sports camera maker at about $3 billion.

Like all ‘regular investors’, the IPO price ($24/share) was not something I was able to obtain. I was able to get shares at $29.50 shortly after it started trading freely on the NASDAQ.

I bought GoPro because I kept coming back to one thing “they might be the Apple (AAPL) of sports cameras” or whatever you might call that niche. I myself own a GoPro, but am somewhat embarrassed to admit it has not been used. At about $300 a piece they are not cheap, but also very affordable for what they are. Reminds me a bit of Apple iPhones, not cheap, but a decent price for what they are. GoPro sells a ton of accessories; mounts, waterproof cases, harnesses, floats, etc… Apple sells a ton of accessories…

Ok, antidotal at best so far, right?

Why do people like myself, and many of my friends go and get a GoPro? Hell, I have not even used mine yet.
The GoPro captures the same “it factor” that Apple captured, first with the iPod, then with the iPhone. Apple has milked that “it factor” for the past 2 to 3 years while the iPhone has been the inferior product on the market. It is only now that people are starting to consider leaving the iPhone for more powerful, larger, faster, generally “better” phones… Bring this back around to GoPro…

I think GoPro can milk this “it factor” for a while to come. They are the #1 action sports camera by miles, most people can’t even name a competitor product. Sure Sony, and others have products out there, but can you name them? I think GoPro can ride out a single product line, with accessories, for another few years without having to branch out too far from their core area.

As of the writing of this post the stock has opened up the first hour of trading +22% at $38.55

Microsoft - Upgraded

I have some personal experience with the new product offerings from Microsoft (MSFT), and there are some strong indications now that they are starting to “get it”. I was quite disappointed when they chose to not make the Surface tablet a ‘loss leader’ to get people onto the windows tablet (Win8 RT). However when the second generation Surface Pro2 came out we purchased a few to replace aging laptops for some executives. They have made excellent laptop replacements, and I have really come around to using the device as my everyday business computer. I turned in my old laptop and have been 100% on the Surface Pro since the second week I had it. I see similar behavior in the other users.

The Surface devices are a small part of the puzzle, but critical in my mind. These devices push people towards the full Microsoft offering which is becoming more and more heavily focused on their Cloud Platforms; Microsoft Office 365 and Azure. Moreover they are learning how to commercialize “service offerings” around what used to be simply licensed products. So while the end of their cash cow businesses was easy to spot and kept me from investing in MSFT, they have (unexpectedly) found a way to monetize those licenses as service offerings.

After maintaining a "market perform" rating on Microsoft (MSFT) for the past three years, one analyst has finally changed his tune and upgraded the stock to "outperform."

On Tuesday's episode of "Fast Money," FBR senior analyst Daniel Ives explained why he thinks now is the best time to own Microsoft.
"You finally feel like there's a pilot on the plane after 10 years of pain," he said, reflecting his belief in CEO Satya Nadella's vision. Part of that vision, according to Ives, centers on Microsoft's Office 365 and cloud strategies. "Everything we see in cloud really signifies a turnaround," he said. "We could view a $4 billion to $5 billion revenue stream."
Nadella's mobile strategy, including the decision to offer free Windows on mobile devices smaller than nine inches, could be another positive catalyst, Ives said. "What he's starting to do on mobile, and the turnaround, we could see an incremental 40 cents to annual earnings, and that gets us incrementally positive on the name," he said. Ives' boldest call focused on Microsoft's future in the handset market. "I think they could go from 2 percent market share to 10 percent. … Nokia is the X variable," he said.

Microsoft was the second-best performer in the Dow Jones Industrial Average on Tuesday, helped along by FBR Capital's upped rating and price target.

Value in big software names?

Value has ruled in software lately, and some of the top names have languished during the recent move to near record highs. Software analysts at UBS say they have spoken to clients and investors who have signaled to them that they may be ready to rotate back into the top growth software names as soon as late summer.

Here are the three top names to buy at UBS now.

Adobe Systems Inc. (ADBE) is a top tech stock that was manhandled during the sell-off in growth names that started in mid-March. The stock has still not recovered to where it was trading then, even though it has outperformed the Nasdaq composite. The company announced in the spring the availability of Lightroom mobile, a companion app to Lightroom desktop software, only available as part of Adobe Creative Cloud. The new Lightroom mobile app brings powerful Lightroom tools to the iPad, delivering photography essentials, such as non-destructive processing of files, and utilizing new Smart Preview technologies to free professional-class photo editing from the confines of the desktop. The UBS price target for this top name is $80. The Thomson/First Call price target is $72.81. Adobe closed Monday at $66.93 a share.

Oracle Corp. (ORCL) has sputtered over the past year, but it has finally started to perk up, and like Adobe has outperformed the Nasdaq also. The stock could still be giving investors a prime entry point. The technology giant is making a push into cloud computing, application virtualization and software-defined networking. The latter two should be key areas of revenue growth going forward. The UBS team also believes the company’s new database cycle is still in early innings with the move to 12c. The new separately priced 12c in memory option is coming soon, and they agree with many on Wall Street that the cloud/Fusion apps are improving rapidly. Shareholders are paid a 1.1% dividend. UBS has set a $42 price target, but the consensus target is at $42.51. Note that Oracle closed Monday $42.70.

Red Hat Inc. (RHT) is another high beta technology name that makes it onto the UBS screen for top growth stocks to buy. The company is the world’s leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers support, training and consulting services. This may be a top play for investors as the stock has underperformed the Nasdaq year-to-date — down 8.2% versus the 3.8% gain for the index. The company crushed Wall Street estimates in the most recent earnings cycle, and it could be poised to continue its winning ways for the rest of 2014. The UBS price target is $64, and the consensus target is $64.37. Red Hat closed Monday at $51.43.