United Therapeutics (UTHR) reported a Q4 adjusted EPS of $2.88, beating the estimate $1.51 by $1.37. Revenues came in at $289 million, up 18.5% from $243.8 million a year earlier, missing estimates of $295 million. However, without the earnings adjustment, the company actually reported a loss of $30 million or 60 cents per share. The main reason was share-based compensation, which totaled almost $100 million for the quarter, reflecting the rise in UTHR stock price (options and shares given to employees have to marked-to-market every quarter). The CEO, Martine Rothblatt was very optimistic regarding 2014, because the company "will realize it's original founding purpose". She is referring to Orenitram, a pill for the pulmonary hypertension market approved by FDA in December 2013 and expected to be launched in the middle of 2014.

The stock was down almost 4% yesterday, but I remain bullish, as they have a market leadership in PH and the valuations are still reasonable (P/E 18, P/S 4.7) given their 20% growth.

Pegasystems (PEGA) ended the 4th quarter with a profit of 61 cents per share ($24 million), down from 65 cents a year earlier ($25.19 million) but 14 cents higher than the $0.47 estimate. Revenues grew 8% to $155.58, but missed expectations of $158 million. The company raised guidance for 2014, projecting revenues of $580 million and EPS of $1.56, higher than analyst estimates of $573 million and $1.48. 

PEGA stock was up 6% in after-hours, I'm still holding it although I might sell the entire position if I find a better opportunity, their growth seems to be slowing down.

The company operates the largest digital coupon marketplace in the world, essentially connecting consumers with top brands. As of December 31st 2013, they offered coupons from 70 000 retailers wtih 600 000 coupons each month, and received more than 550 million visits on their websites. They own the leading digital coupon sites in US (retailmenot.com), UK (vouchercodes.co.uk) and France (Poulpeo.com, Bons-de-Reduction.com, Ma-reduc.com). Around 78% of revenues come from USA, while the rest (22%) is international, which is growing considerably faster considering that in 2011 sales outside US represented only 9.7% of the total. 

The main difference between Groupon, is that SALE offers digital coupons used to get discounts on online purchases (you just copy a link at checkout and get a discount), whereas Groupon sells mostly "daily deals" for brick and mortar shops and establishments (customer has to print and present the coupon at redemption). On top of that, Retailmenot has been profitable for the past three years, while Groupon still struggles in this area. One of the contributors to this is that 95% of traffic to SALE's websites is from non-paid sources, in other words organic traffic. Also, the site has overtaken Groupon as the number 1. coupon website in US.

Recently, Groupon launched a program called "Freebies", which offers similar coupons like SALE, however the total portfolio represents less than one tenth of those on Retailmenot.com. As such, SALE can achieve much better economies of scale and profit margins, because their discounts and prices from retailers depend on volumes sold, which is much higher than other competitors.

RetailMeNot has several competitive advantages: 
1. Difficulty to find relevant coupons - consumers usually shop at different retailers for many different products, Retailmenot.com aggregates offers from 70 000 retailers and presents them in a very user-friendly form.
2. Insufficient infrastructure - many websites lack the infrastructure to periodically check all coupons, what leads to unreliable, expired digital coupons and customer frustration. SALE offers the largest, most comprehensive and up-to date portal.
3. Traditional coupons are inconvenient - hard to find and organize, and they are not easily available on-demand when you are shopping.

JP Morgan and some funds held preferred stock in the company, which was converted into common stock on IPO. The preferred dividends used to depress earnings quite heavily, as a result net income is expected to jump following their disposal. SALE stock trades at a forward P/E ratio of 31 and P/S of 10, which is still good considering they grew revenues by 55% and net income by 79% in the last quarter. Mobile revenues were up 180% to $11.7 million, while sales from international market grew 85% to $16 million. Total visits to their websites grew 24% to 184 million, suggesting that existing customers spent more money than last quarter using RetailMeNot coupons. The company has $165 million in cash and $80 million in total liabilities, while return on equity should reach 10% this year.

Risks
The biggest risk I see now is possible competition, while they are quite ahead of others, there are several sites offering similar coupons. They must keep getting more retailers into the platform and acquire additional sites to grow the coupon portfolio. 

Changshouhua Food Company (1006.HK) touched my stop-loss today, which was placed at 8 HKD,
representing a 20% loss. As a result, I sold the entire position at market. I hold only 5 stocks right now,
with 27% of portfolio in cash. Stock markets around the world have risen quite significantly in the past
few years, so a correction seems quite reasonable at these levels (at least that’s what everybody else
anticipates). However, there is still a lot of money on the sidelines, so I’ll be watching for any good
opportunities I will to deploy my cash regardless of short-term market volatility.

Click here for the list of remaining HK stocks in my portfolio. 

Today I'm selling my entire position in AMBA, the stock has broken several technical levels on high volume and that's never a good sign. I'm still bullish on the business, but when a stock dips like that it's time to get out!

I have been a bit idle in the last couple of days, I'm starting a new business plus testing some strategies on small cap stocks, so I'm updating the website now.

I have sold both MDCO and CELG, because they broke down and activated my stop-loss orders. I never regret selling stocks that go down, no matter how I like them, if they sink on the stop-loss level, they're out. I won't probably look at the again, unless they bounce back significantly and make new highs. Both are good stocks but their trends might be over.

A big disappointment was Blinkx (BLNX.L), which slumped 21% on an article by a Harvard Professor, Benjamin Edelman, who questioned it's sources of revenue. He looks like an expert on this subject (although he has paid to write the article and refuses to reveal the identity of the buyer),  and I have missed some things in my analysis, as the company might be using shady ad tactics to get traffic and extract money from advertisers. I'm not so sure if I would be able to discover such things even if I went into checked every detail in it's financial statements. My understanding of their business was not as deep as I thought. My stop loss got hit around 136, so I lost nearly 19% on a stock, which showed me a gain of 30% just two months ago. Too bad, but as they say, shit happens. For situations like this, I have stop losses and other stocks to diversify and limit a loss to my entire portfolio. Nevertheless, the UK Value/Growth portfolio got hit pretty hard, it's now up only 11% from November, down from 20% in January but still much better than -4.65% for the FTSE100.