Tech Stocks This Week: Facebook Surpasses $200, Red Hat Sinks, and More

So much for Facebook�(NASDAQ:FB) stock's sell-off earlier this year�sticking around. Shares of the social-network company have surged 26% since the beginning of April, reaching new highs and surpassing $200 for the first time this week. Meanwhile, investors punished security and software services company BlackBerry�(NYSE:BB) and open-source software vendor Red Hat�(NYSE:RHT) this week.

Here's what investors should know about these three top stories in tech.

Facebook's new features impress

Facebook is trading at about $202 at the time of this writing, and bullishness toward the company's stock comes as data privacy concerns fade away as the company demonstrates more ways to monetize its platform.

Image source: Getty Images.

Facebook introduced several new impressive features this week, including a subscription option for Facebook Group administrators and autoplay video ads within Facebook Messenger. But perhaps the one feature that could evolve into the biggest catalyst for Facebook is the company's new�long-form�video platform on Instagram, called IGTV. The platform's immersive mobile content better positions Facebook to vie for high-dollar TV advertising budgets.

While Facebook didn't demonstrate any ad products for IGTV, Instagram CEO Kevin Systrom said the platform could eventually debut ads. Investors almost certainly can count on ads, since Facebook will need to offer monetization strategies to creators in order to entice them to regularly create content on the platform.

By combining this new feature with Facebook's resources and Instagram's 1 billion monthly active users, IGTV represents the social network's best chance at competing more directly with Alphabet's�YouTube.

Facebook stock ended the week up nearly 2%, despite the S&P 500's 0.5% decline during the week.

BlackBerry's outlook for software and services revenue disappoints

As BlackBerry continues to transform into a software and services company, its enterprise software and services segment has been on a roll recently.

Software and services revenue in BlackBerry's just-reported fiscal first quarter was up 14% year over year on a non-GAAP�basis and 18% year over year on a GAAP basis. This momentum in software services was "driven by strong double-digit billings and an increase in recurring revenue," said BlackBerry CEO John Chen in the company's fiscal 2019 first-quarter earnings call.�

But investors may be concerned about management's outlook for software and services revenue to increase by just 8% to 10% year over year in fiscal 2019. This guidance, which marks a notable deceleration in the key metric, reflects the company's decision to stop selling its software and services on a licensing basis.�Instead, BlackBerry will attempt to sell customers its software and services on a subscription basis.

BlackBerry stock is down about 8.7% on Friday at the time of this writing. For the whole week, BlackBerry stock fell nearly 13%.

Red Hat falls despite better-than-expected results

Perhaps the most interesting story in tech this week came from open-source software vendor Red Hat. The sub-$2 billion company suffered a pullback when it posted its fiscal first-quarter results.

The stock's decline comes despite Red Hat reporting impressive non-GAAP earnings per share of $0.72 on revenue of $814 million. The two figures were up 24% and 20%, respectively, from the year-ago quarter. Further, both key metrics easily beat consensus analyst estimates for non-GAAP earnings per share of $0.69 and revenue of about $808 million.�

"We again delivered strong revenue growth in Q1 as customers continued to adopt our cloud enabling technologies for their applications," said Red Hat CEO Jim Whitehurst in a press release about the quarter.

Despite the solid results, investors may be fretting over the�worse-than-expected fiscal second-quarter earnings and revenue guidance.

Red Hat finished the week down about 19%, but the stock is up 18% year to date and 44% in the past 12 months.

Why I Hope Micron's Stock Declines...Even Though I'm a Shareholder

The objective of investing is, of course, for your stocks to go up over time (a shocking revelation, I know!). However, because Foolish, long-term investors advocate holding stocks for years, there might actually be times when you wish a stock you own would go down for an extended period, even if you already have a full position. I believe that's currently the case with Micron Technology (NASDAQ:MU), which has been one of my best-performing stocks this year. Read on to see why a drop in price could lead to good things for Micron investors.

Why I like Micron

Micron's stock has been all the rage recently, nearly doubling in price over the past 12 months. As one of only three producers of dynamic random access memory (DRAM) and one of only six producers of NAND flash memory, Micron has benefited greatly from soaring memory prices. While the industry has traditionally been tied to the mobile and PC markets, demand for memory has expanded (even exploded) to cloud data centers, artificial intelligence workloads, and specialty embedded chips in connected devices and self-driving cars.

Micron is not without skeptics, though, especially those who believe we're at a peak in memory pricing. That's why Micron trades at a shockingly low forward price-to-earnings ratio of 5.5. Memory has been cyclical -- sometimes violently so -- and investors seem to be nervous about granting Micron an earnings multiple in line with the overall market, which currently trades at a forward P/E of 17.3, more than triple that of Micron.

That's fine by me, though. In fact, I hope Micron's valuation remains under pressure for the foreseeable future.

Why do I want Micron's stock to go down? Image source: Getty Images.

Paying owners $10 billion

After years of carrying billions in debt, Micron's recent success should allow the company to become "net debt neutral" -- having as much cash as debt -- by the end of this quarter. That would be the first time in many years that's happened.

MU Net Total Long Term Debt (Quarterly) data by YCharts.

Now that its balance sheet has been repaired, Micron will begin returning cash to shareholders in the form of a massive $10 billion share repurchase program that was announced at the company's May analyst and investor event.

There's one small catch, though: These stock buybacks won't kick in until the beginning of Micron's next fiscal year, which begins in September. Until then, Micron will pay down its secured debt, some of which is denominated in foreign currencies, requiring expensive currency hedges. After that point, the company's plan is to return at least 50% of its free cash flow to shareholders.

Go ahead, Mr. Market, make my day

In Warren Buffett's 2016 letter to shareholders, he discussed the topic of share repurchases at length, writing in part:

... repurchases only make sense if the shares are bought at a price below intrinsic value ... Consider a simple analogy: If there are three equal partners in a business worth $3,000 and one is bought out by the partnership for $900, each of the remaining partners realizes an immediate gain of $50. If the exiting partner is paid $1,100, however, the continuing partners each suffer a loss of $50. The same math applies with corporations...

Since we now know that Micron plans to begin buying back stock come September, I'm hoping for shares to languish. The lower the price, the more shares Micron can buy, and the larger the "gains" for us remaining owners. At the current $70 billion market capitalization, $10 billion could buy back almost 15% of the company.

And I may not have to wait that long for results -- the company could feasibly generate $10 billion in cash flow just in the upcoming year, should memory pricing remain stable.

But I need to be right

Of course, if my take on the memory industry is wrong, Micron's intrinsic value would not be as high as I might think, and the upcoming repurchases would be wasted on buying overpriced stock.

But despite recent gains, I still think Micron is undervalued, and that favorable changes to the memory industry will last longer than others think. Past cycles have caused the industry to consolidate to only a handful of players, and with demand for memory and storage exploding, I think profitability can hold up throughout the cycle better than in the past.

We'll find out more about the company's financial performance when Micron reports earnings on June 20. If profits continue to grow, retiring shares at today's prices should greatly benefit all shareholders. And if the company can retire shares at even lower prices come September, all the better for us long-term believers.

An Ethereum Futures Future? U.S. Commodities Giants Lie In Wait After SEC Surprise

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-895638624&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/895638624/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; A sign hangs outside the Cboe Global Markets, Inc. building. (Photo by Scott Olson/Getty Images)

&l;span style=&q;font-weight: 400;&q;&g;&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;Chicago-based commodities giants Cboe and CME Group are exploring the ethereum cryptocurrency with a $49.6 billion market value in a number of different ways. The problem is, until last week, U.S. regulatory uncertainty was preventing them from taking one crucial step.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;While ethereum futures contracts that let owners bet for and against the cryptocurrency are already trading in the U.K., doubts about whether the U.S. Securities and Exchange Commission (SEC) would classify ethereum as a security&a;nbsp;was a concern to both exchanges and to many others in the industry.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Both Cboe and CME Group have been trading bitcoin futures since last year, following guidance that classified bitcoin as a commodity and left it squarely in the Chicago giants&s; domain. But with the distinct chance that ether, which had early on been purchased by a relatively small group of people, might be deemed a security, the companies were among countless others that were slowly building related products in the background, while waiting for additional clarity.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Then, on stage last week, SEC director William Hinman spoke ten magic words that brought that clarity and have sent much of the cryptocurrency world into a tizzy: &a;ldquo;C&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;urrent offers and sales of ether are not securities transactions.&a;rdquo;&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Cboe president Chris Concannon was on a flight from Chicago when he heard the news and tells &l;/span&g;&l;i&g;&l;span style=&q;font-weight: 400;&q;&g;Forbes &l;/span&g;&l;/i&g;&l;span style=&q;font-weight: 400;&q;&g;the first thing he did was call his director of communications to prepare for a deluge of requests from the media. The moment he and his team had been waiting for had finally happened, and it was time to act.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;&a;ldquo;We have been contemplating futures on ethereum for sometime,&a;rdquo; Concannon told &l;/span&g;&l;i&g;&l;span style=&q;font-weight: 400;&q;&g;Forbes&l;/span&g;&l;/i&g;&l;span style=&q;font-weight: 400;&q;&g;. &a;ldquo;This clearly makes the complexity of ether potentially being a security go away, and it certainly clears a path for launching a future on ether.&a;rdquo;&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;While Concannon was not able to publicly talk about whether the $15.6 billion Cboe is actively preparing to launch ethereum futures, he says the exchange has wanted to do so since&a;nbsp;it first started exploring cryptocurrency.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;To help jump-start that process, Cboe, the largest options and futures exchange in the U.S. with 22.95% of the market share, formed an exclusive partnership last year with the New York-based Gemini Trust Company, run by Tyler and Cameron Winklevoss. Using Gemini&s;s bitcoin market data for bitcoin derivatives and indices, Cboe launched the first bitcoin futures (XBT) contract in the U.S. in December 2017, and has since traded 680,000 contracts with a notional value of $6.85 billion, according to company documents. &l;/span&g;

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&l;span style=&q;font-weight: 400;&q;&g;Justification&a;nbsp;for the firm&a;rsquo;s entry into bitcoin comes from a 2015 decision from the Commodity Futures Trading Commission (CFTC) that officially recognized the cryptocurrency that doesn&s;t rely on a central authority&a;mdash;and any copy, or &a;ldquo;fork&a;rdquo; of its code&a;mdash;as a commodity. But ethereum, which kicked off in 2014 by selling a portion of its cryptocurrency prior to launch, has remained in a gray area, with many skeptics saying the cryptocurrency was more centralized than some wanted to admit.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;While the uncertainty has prevented regulated U.S. companies from offering ethereum futures, Cboe partner Gemini added ethereum to its trading platform in 2016 and since last July has been holding a daily ether auction at 4pm ET. Data from this auction would play a crucial role in the pricing of any ethereum futures contract Cboe might eventually launch, Concannon said.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;In fact, it is the Cboe partnership with Gemini that Concannon believes could accelerate his company&a;rsquo;s time to market if&a;nbsp;it ever decides to launch any number of cryptocurrency futures. In addition to bitcoin and ethereum, Gemini last month &l;a href=&q;/sites/michaeldelcastillo/2018/05/14/winklevoss-brothers-bitcoin-exchange-adds-zcash/#255468eb6b98&q; target=&q;_blank&q;&g;added&l;/a&g;&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;&a;nbsp;support for zcash, litecoin, and bitcoin cash, all of which are forks of bitcoin.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;&a;ldquo;That partnership was structured to allow us to roll out additional products on other currencies and literally use the same structure,&a;rdquo; said Concannon. &a;ldquo;So we don&a;rsquo;t have to do anything unique. It just follows in the same footsteps as the bitcoin future.&a;rdquo;&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;A week after Cboe launched the first ever regulated U.S. bitcoin futures, fellow Chicago commodities giant CME Group followed suit and started blazing its own trail toward possible ethereum futures adoption.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Unlike Cboe, which quickly got to market by partnering with Gemini, CME Group created its own bitcoin indices in partnership with U.K.-based Crypto Facilities. Called the &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;CME CF Bitcoin Reference Rate and CME CF Bitcoin Real Time Index, the increasingly &l;a href=&q;https://www.wsj.com/articles/u-s-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-1528492835&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;controversial &l;/a&g;indices were launched&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g; in November 2016 and generate a bitcoin price based on data contributed from participating exchanges.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;A&a;nbsp;little over a year after launching the indices, CME Group initiated its own bitcoin futures contracts (BTC) that rely on those indices. For the past three months, BTC future contracts have &l;a href=&q;ftp://ftp.cmegroup.com/bitcoinfutures/Bitcoin_Futures_Liquidity_Report.pdf&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;traded &l;/a&g;on average $130 million in notional volume per day, according to company data. &l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;While global head of CME Group&a;rsquo;s equity products Tim McCourt told &l;/span&g;&l;i&g;&l;span style=&q;font-weight: 400;&q;&g;Forbes &l;/span&g;&l;/i&g;&l;span style=&q;font-weight: 400;&q;&g;the exchange doesn&a;rsquo;t currently have plans to launch ethereum futures, a very familiar playbook as with bitcoin has already started to unfold. Just last month CME Group announced it had partnered with Crypto Facilities, the company that helped&a;nbsp;it with bitcoin futures, and launched an ether-dollar reference rate and real-time index.&l;/span&g;

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&l;span style=&q;font-weight: 400;&q;&g;Rolled out in phases, the index&a;nbsp;became a full &a;ldquo;industrial&a;rdquo;-scale service earlier this month, and while the number of subscribers isn&s;t being revealed, a CME Group spokesperson told &l;em&g;Forbes&l;/em&g; the company&a;rsquo;s ether landing page had been visited 5,200 times since launch. McCourt says CME Group is gauging interest in the index from existing market participants and could build any number of services based on demand.&l;/span&g;

&a;ldquo;Just like the bitcoin future was designed and deployed in response to customer demand,&a;rdquo; said McCourt, &a;ldquo;so will any further product development, whether it be ether or other tokens, crypto or digital assets.&a;rdquo;

&l;span style=&q;font-weight: 400;&q;&g;In spite of CME Group&a;rsquo;s denial that it has any plans to follow its bitcoin futures with an ethereum futures product, a closer look at the exchange&a;rsquo;s past work with Crypto Facilities provides some hard evidence of what this &q;customer demand&q; might look like.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Long before CME Group had launched bitcoin futures, its partner, Crypto Facilities, had started offering the contracts, and it continues to expand its related services. Founded in 2015, the London-based startup has been years ahead of the curve in the cryptocurrency futures space. Overseen by the less stringent&a;nbsp;U.K. regulator, the Financial Conduct Authority (FCA), as far back as October 2016 Crypto Facilities had started trading XRP futures, and last month, just a week before CME Group revealed its ether indices, Crypto Facilities launched the first regulated ethereum futures using those same indices.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;In the short time since those ethereum futures were launched, they have grown to represent a tenth of the total value, and company founder and CEO Timo Schlaefer expects $150 million in transaction volume this quarter alone. &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;Monthly XRP volumes are now at about $125 million,&a;nbsp;compared with $30 million in February, he said, and total futures trading volumes are up 84% in Q1 2018 compared to Q4 2017, he added.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;&a;ldquo;We see a strong demand for reliable and trusted price points for the top cryptocurrencies,&a;rdquo; said Schlaefer.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;But of course, it&a;rsquo;s not all upside in the nascent world of cryptocurrency futures. Beyond increasing concerns that the ability to short bitcoin has contributed to the cryptocurrency&a;rsquo;s drop in price from $19,000 last year to $6,420 today, a rising tide of concerns relates to even more malicious manipulations.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;Last week, the CFTC demanded data from several exchanges associated with the CME CF Bitcoin Reference rate. In spite of a number of safeguards in place for the reference rate, including a volume-weighted median of data and discarding outlier data points, concerns have persisted that the largely unregulated nature of the underlying exchanges providing the data is a potential weakness in the system.&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;To help address these concerns and more, Crypto Facilities last month hired Sui Chung, the former managing director of E&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;uromoney Institutional Investor&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;, to oversee the index and pricing product business. While acknowledging the concerns, Chung detailed the cryptocurrency futures weighting process in an email to &l;em&g;Forbes&l;/em&g;&a;nbsp;and stood by the data:&l;/span&g;

&l;span style=&q;font-weight: 400;&q;&g;&a;ldquo;We are always reviewing the adoption and liquidity levels of tokens to understand if the market requires and we can produce reliable, trusted and robust price points.&a;rdquo;&l;/span&g;&l;/p&g;

Hot Low Price Stocks For 2019

tags:LMAT,CNSL,BRKR,SMBC,

(Editor's note: There is much greater liquidity on the Frankfurt Stock Exchange under ticker Z01).

The Elevator Pitch

Zooplus (OTC:ZOPLY) (OTC:ZLPSF) is the leading online retailer of pet food and supplies in Europe. Generally, in a commoditized market such as selling pet food, the lowest cost provider with the best customer service has the "right to win". We believe that Zooplus will be this winner, given its structural cost advantage versus its competitors (which we explore below). Additionally, customer satisfaction is extremely high, and we can clearly see customers' appreciation for the company's value proposition, as evidenced by the 94% sales retention rate. These unbeatable low prices and high customer satisfaction have led to a 31% annualized sales growth rate since 2010, while still possessing a long runway for continued expansion.

We believe the market is underestimating the long-term earnings power of the firm and consequently significantly undervaluing the company. For instance, the stock is currently trading at 0.9x 2016 sales while comparable acquisitions have taken place at 2-6x multiples. Additionally, we believe at maturity, the business will have normalized operating margins of 8-10%, implying a valuation of ~10x normalized EBIT.

Hot Low Price Stocks For 2019: LeMaitre Vascular, Inc.(LMAT)

Advisors' Opinion:

• [By Lisa Levin]

  Shares of LeMaitre Vascular, Inc. (NASDAQ: LMAT) were down 20 percent to $31.235 after the company reported weaker-than-expected Q1 results.

  Essendant Inc (NASDAQ: ESND) was down, falling around 24 percent to $7.255 after reporting downbeat quarterly earnings.

• [By Brian Feroldi]

  In response to reporting first-quarter�results, shares of�LeMaitre Vascular (NASDAQ:LMAT), a medical device maker focused on niche products used during�vascular surgery, fell 20% as of 10:35 a.m. EDT on Thursday.

• [By Lisa Levin]

  Shares of LeMaitre Vascular, Inc. (NASDAQ: LMAT) were down 17 percent to $32.19 after the company reported weaker-than-expected Q1 results.

  LKQ Corporation (NASDAQ: LKQ) was down, falling around 16 percent to $31.49 following weaker-than-expected quarterly earnings.

Hot Low Price Stocks For 2019: Consolidated Communications Holdings Inc.(CNSL)

Advisors' Opinion:

• [By Shane Hupp]

  Get a free copy of the Zacks research report on Consolidated Communications (CNSL)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  Consolidated Communications (NASDAQ: CNSL) is one of 74 public companies in the “Telephone communication, except radio” industry, but how does it contrast to its peers? We will compare Consolidated Communications to related companies based on the strength of its analyst recommendations, profitability, earnings, dividends, institutional ownership, valuation and risk.

Hot Low Price Stocks For 2019: Bruker Corporation(BRKR)

Advisors' Opinion:

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Bruker (BRKR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Bruker (BRKR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Max Byerly]

  Get a free copy of the Zacks research report on Bruker (BRKR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Hot Low Price Stocks For 2019: Southern Missouri Bancorp, Inc.(SMBC)

Advisors' Opinion:

• [By Joseph Griffin]

  Southern Missouri Bancorp (NASDAQ: SMBC) and First Connecticut Bancorp (NASDAQ:FBNK) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

• [By Joseph Griffin]

  Southern Missouri Bancorp (NASDAQ:SMBC) was downgraded by equities researchers at BidaskClub from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Monday.

• [By Joseph Griffin]

  Keefe, Bruyette & Woods initiated coverage on shares of Southern Missouri Bancorp (NASDAQ:SMBC) in a research note issued to investors on Thursday. The brokerage issued a market perform rating on the savings and loans company’s stock.