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Fitbit Versa plus competition and pricing notes ?2


A subscriber writes:
There are now leak posts about the new Fitbit versa possibly coming soon? Possibly having same Fitbit os also.

It does look good on picture. Do you think this can have any material affect on stock price?
I linked to the original leak of the photos in my post in the FIT section of the website on Monday morning, but I'd like to thank this subscriber for the article citation, as it does add a little more information, including the Versa name.  How accurate that information will turn out to be is questionable, but it seems quite believable.  I've already written about how Fitbit is being forced to compete on price rather than features so far, and simply eliminating the GPS is a way get another product out quickly while lowering the price.  Removing the GPS will also mean that you'll have to take your phone with you for many of the workout features currently offered with the Ionic, thus I would expect that the glitchy music storage capabilities might also be removed, thereby making the price reduction dramatic, and potentially increasing battery life.

So, if the question is whether or not the watch itself will have a lasting material impact on stock price, I'd say it might, but Versa availability could just as easily turn out to be a sell-the-news event, depending on the details.  I would really like to see an offering that includes a microphone and Pebble's full range of messaging capabilities, but I am hardly a mainstream consumer.  I think the subscriber's opinion that the picture looks good is important too.  Still, my guess is that the Versa will most likely just help Fitbit survive its current purgatorial quest to improve its software, and thus compete more effectively.  I still see the software as key to consumer preference, and thus everything else the company wants to achieve.  I think the latest news on competition from Apple amongst health care partners supports all my commentary on that point. 

On the other hand, if the question was, do I think the leaks will move FIT in the short term, then my answer would be that I think it already has been responsible for the recent bump up from below $5.  Further news concerning an actual release date (I don't know what's meant by soon, but see no reason why it couldn't be released this summer) could create more upside volatility, but I have little interest in playing that game.  News sometimes represents opportunity, but more often an opportunity to sell, especially with no-dividend stocks.  One thing that running this service has reemphasized to me is that I am MUCH more patient, vigilant, and fundamentally focused than most investors.  The best buying opportunities are often during news droughts for companies with good conservative management.

That's exactly what I think is behind each of these stocks: CVA, AES, NYLD, CTL, CQH, BGCP and SLB (in approximate order of current price preference, since I've been getting questions).  Consequently, whereas some fret about price declines, I am often quite happy at the opportunity to add and adjust at low-price/high-yield.  Put another way, I've typically found myself hoping for value rather than worrying about price in recent years.  To that end, I will note that questions at Covanta's recent Raymond James presentation showed that analysts still have only the most basic understanding, if any at all, on how the company actually functions in the real world.

AES may also be seeing some more share price pressure due to a General Electric press release which reads like an aging, half-bald, pot-bellied athlete trying to claim he's still hot stuff.  My take is that the 20MW/80MWh pre-launch commitment is laughable.  For comparison, when I first wrote on AES Corp, over 7 months ago, the company was already completing the world's largest battery installation at 37.5MW/150MWh and sPower had a pipeline of 2GW.  The battery market will take off, and GE will get its slice, particularly in the U.S.  However, I see the global market as being more valuable over the long term and Siemens' MindSphere support systems as being more adaptable than GE's expensive one-size fits all Predix approach.

For those interested in GRoDT stocks, RESN, WPRT, and CUI could be added, but with so many good yields right now, my personal appetite there is subdued.  Wesport just got a pat on the back for its technology, and Park City has been escalating its feud with Resonant.  Again, if the activist effort were to succeed, you'd see a quicker, though maybe smaller, payout in RESN, but that outcome still seems very unlikely.

Individual tastes and financial details can make all the difference in trading decisions, so even ranking that list is difficult, because it depends on how much one values safety and hold duration over potential return.  For instance, CTL would still be more towards the front, for those who want to see results sooner and are not too worried about risk and volatility.  Other stocks like IDTI have appreciated back to the range where I might hold them, but would no longer buy, despite continual innovation.  With so many other good choices, there some pressure to sell and move on.  That was definitely the case with HIMX, but recent price declines bring the stock more in line with my neutral outlook from the last report.  Of course, all of this will be colored by market direction in the medium to long term.  Looking past this morning's jobs reports, Tuesday is likely to offer a more concentrated and meaningful set of new developments, with CPI, another treasury auction, and Pennsylvania's special election.  No matter what your investing style, I think the volatility we're seeing in this potentially transitional market phase offers a broader set of opportunities than we've seen in many months.