The Week in Review
Given the positive response from our Pandora (
P
) webinar earlier this week, we have scheduled two more webinars
next week for Apple (
AAPL
) and LinkedIn (NYSE:LNKD). Among readers' favorites from the week,
we also looked at upside and downside cases for
RIM
(NASDAQ:RIMM) as its shares continue to fall further. We assess
Sirius XM's
(NASDAQ:SIRI) dependence on the auto industry, and we launch
coverage on Boeing (
BA
). We also looked at why AMD (
AMD
) and Nvidia (NASDAQ:NVDA) shares continue to slide and what might
add support to these stocks.
Insights from the Week
Technology Media & Telecom
Carriers are looking to deploy their own CDNs and Akamai does
not want to be left out of the network and would rather license its
CDN technology to these carriers that will provide business as well
as help telcos build out the capability more quickly …
- Sirius XM Stock Outlook is Hitched to Auto Industry on June
24, 2011
Sirius's CEO has indicated that Sirius could put its free cash
flow to use by buying shares or through cash dividends - though we
don't think this could happen before 2012 …
- 5 Reasons Why RIM Is Crumbling on June 24, 2011
RIM once was a great mobile phone company but it's behind the
times and its core competitive advantages are under siege. Its
attempts at a playbook are a move in the right direction but will
not move the needle …
- Portability & Cloud Services Lift SanDisk's Outlook on
June 24, 2011
The demand for "high quality" media consumption on the move is
likely to get a serious boost as a result of the iCloud and other
competing services …
- Upside & Downside Scenarios for AMD on June 24, 2011
AMD's margins have suffered significantly in the past as a
result of increased manufacturing costs and price competition.
However they started recovering in 2008 and have trended higher
…
- How Nokia Can Ring Up $9 on June 23, 2011
Although Nokia is bleeding market share rapidly as its profit
margins head south, we still believe that the market could be
over-reacting to Nokia's short-term woes …
- Norton's Everywhere Initiative Could be Symantec's Mobile
Money Maker on June 23, 2011
Capturing the mobile security opportunity will be important for
Symantec as the company itself acknowledges that by
2013 handheld devices will be the most popular way to access
the web …
- Sprint LTE Announcement Could Move the Stock on June 23,
2011
The main hang up centers around concerns over LightSquared's
signals interfering with other operators and defense GPS signals,
which the company claims is an easy fix …
- Time Warner Cable Acquires NewWave's Cable Systems on June
23, 2011
If we assume that Internet subscribers are a subset of pay-TV
subscribers here, Time Warner Cable's acquisition cost stands at
little over $3,700 per subscriber …
- Adobe Guidance Supported by New Release & Staying Nimble
in Japan on June 22, 2011
The company previously revised its revenue outlook lower in Q2
by $50 million due to the Japan disaster, which we discussed in our
earnings preview. The actual impact was only $10 million …
- What's Driving Nvidia's Stock Lower? on June 22, 2011
We think this move could be exaggerated due to recent market
pessimism and some short-term thinking on how Nvidia's graphics
business will hold up vs. AMD and Intel …
- Is AMD's Slide a Buying Opportunity? on June 22, 2011
While AMD's high leverage could partially be the reason behind
greater downfall of the stock, it also implies that stock has
opportunity to recover over time and might present an attractive
investment right now …
- Sprint Rolls Out Unlimited Data Plan for 4G Tablet to Drive
Adoption on June 21, 2011
By having customers subscribe to higher tiered plans and letting
allowing them access to WiMAx, Sprint could is opening the door on
more WiMax pricing plans in the future and will take advantage of
customers' increasing data use …
- IBM - the "True" #1 Global Enterprise Software Vendor on June
21, 2011
We believe that a higher than expected growth in middleware
software sales, as a result of IBM's recent push in this segment,
could result in a measurable upside to our $185 price estimate for
IBM's stock …
- RIM Still Blackberry Dependent Despite Playbook's Early
Success on June 21, 2011
We expect RIM's SG&A and R&D expenses as % of gross
profits to increase dramatically in 2011. We are optimistic that
this ratio will decline in 2012 as cost cutting efforts gain
traction and sales recover …
- Adjusting RIM Estimates on Difficult Outlook on June 20,
2011
The results for Q1 were also well below the previous guidance
provided by RIM, which is causing investor confidence in the stock
to collapse …
- 3 Key Trends for Pandora on June 20, 2011
Smartphone sales are expected to grow at a healthy pace going
forward and will drive continued growth in Pandora's listener
hours on mobile devices …
- Akamai Facing New Challenges in Value-Added Services on June
20, 2011
Cotendo is reportedly raising additional capital with investors
such as Juniper, and is emphasizing value-added services that could
challenge Akamai's position in this market …
- Adobe Earnings Preview: What We're Watching on June 20,
2011
Historically a new CS software version is released approximately
every 18 to 24 months, and Adobe has seen high volume sales
growth near its launch date …
- How Google's Flight Search Could Impact Expedia on June 19,
2011
Google does not plan to offer bookings in the near future, but
the addition of flight schedules to its search results could have a
significant impact on online travel agencies such as Expedia …
(Trefis Pro Exclusive) Consumer, Retail, &
Automotive
- Home Depot's Wind Power Products Add to Renewables Line Up on
June 24, 2011
Last year, Home Depot received a significant boost through
Senate's energy measures, which allocated $5 billion in rebates for
home owners who upgraded to energy-efficient insulation, windows
and heating and cooling equipment …
- What Could L'Oreal Gain from Bidding for Avon? on June 23,
2011
But where L'Oreal still misses out is from direct selling which
Avon Products champions, which could make it an attractive
acquisition target for L'Oreal …
- Revlon Needs Debt Makeover as Bills Come Before Beauty on
June 22, 2011
Investors' concerns regarding Revlon's debt levels underlies
this stock volatility though its recent efforts to refinance some
of its existing debt has helped to alleviate concerns …
- How P&G Gains Market Share in Tough Times on June 22,
2011
While the cash-starved players have no choice but to squeeze
R&D budgets, the bigger ones could continue investing in
product innovation and delight the consumer with improved products
…
- Web Sales Could Lift Ann's Shares Higher on June 21,
2011
We currently forecast Ann Taylor e-commerce sales to be ~$105
million in 2011. However, better than expected growth in web sales
at Ann Taylor- in line with Q1 results - would mean an upside to
our estimate for Ann …
- GameStop Coverage Launch: $38 Trefis Price Estimate on June
21, 2011
The company registered 62% growth in 2010 and 53% in Q1 of 2011
in its digital revenues. We expect GameStop to show double digit
growth in its digital receipts going forward …
- Best Buy Mobile and Online Sales Drive BestBuy's Q1 Revenues
on June 21, 2011
BestBuy Mobile witnessed an impressive 25% growth in the quarter
and same store sales were down 1.7%, both of which were better than
what many analysts had expected …
- P&G CEO Ad Spend Moving Online to Reach Emerging Markets
on June 21, 2011
Robert McDonald highlighted that the advertising spend will
continue to be around 10% of sales, which alleviates our concerns
with regards to the operating margin being strained further to meet
the demand for new product launches …
- Gap CEO Announces Changes to Get Back on Track on June 21,
2011
This move comes from the fact that outlet stores provide higher
return on capital and Banana stores provide higher margins of close
to 17% to the company …
(Trefis Pro Exclusive) Financial Services
- Gov't Ownership Overhang Weighing on AIG on June 24,
2011
The Treasury's ownership in the company has declined from 92% to
77%, and it still has around 1.5 billion shares available to sell
over the next couple of years - or in other words - whenever it can
…
- Goldman Sachs Asset Mgmt's Lackluster Outlook on June 23,
2011
However, if the current volatility in commodities and emerging
markets persists, and is further compounded by factors such as the
continuing sovereign debt problems in Europe, there can be a
downside to our forecasts …
- Citi Targets Expanding Operations in China & Russia on
June 23, 2011
We expect this consolidation in Russia to help Citibank
establish its business in an under served market where only about
25% of the 142 million Russians have a bank account of any sort
…
- Fewer Stiffs Using Capital One Plastic as Card Defaults Drop
on June 23, 2011
In March 2010, the industry wide charge-off rate peaked at 10.9%
but has declined ever since. The current charge-off rate is still
higher than 3.82% that the industry enjoyed before the recession
…
- How Schwab Gains from Offering Free ETF Trading on June 22,
2011
ETFs have been a popular instrument among investors because they
can be traded on exchanges like stocks, offer diversified exposure
for lower fees. As a result, ETFs have grown in recent years to
become almost a trillion-dollar market …
- Barclays Sets Ambitious 2-Year Targets, Banking on Capital
Markets Recovery on June 22, 2011
These targets have been described as ambitious by market
analysts, with the company's largely Europe-centric operations
taking a hit in recent quarters - and the situation in the region
not expected to improve in the near future …
- Upside & Downside Scenarios for AIG's Stock on June 21,
2011
As the company narrows its focus on core P&C insurance and
life insurance businesses after selling many of its other
businesses, its market share could increase to 13% by the end of
our forecast period, leading to just about 20% upside …
- Bank of America Reports Decline in Credit Card Defaults on
June 20, 2011
Declining delinquencies indicate that the bank may report
further decline in charge-off rates in coming months which could
boost the credit card operating margin for the Bank …
- Declines in Trading Forces Morgan Stanley to Cut Costs on
June 20, 2011
An estimated 16% decline in Q2 trading revenues caused by a
slowdown in fixed-income, currencies and commodities trading is
forcing Morgan Stanley to resort to cost cutting to resize its
business and maintain profit margins …
- American Express Launches a New Prepaid Card on June 20,
2011
Credit card transactions in the US grew by slightly less than 4%
to reach $1.96 trillion in 2010, whereas debit card transactions
grew by almost 14% to cross $1.8 trillion over the same period
…
(Trefis Pro Exclusive) Energy & Natural
Resources
- Rio's Chinese Contracts Reflect Lower Iron Ore Spot Prices on
June 24, 2011
The prices for iron ore rallied in 2010 jumping close to 20%.
This run fizzled out after the Chinese demand for the ore declined
in February this year leading to just a 1% increase in the prices
this year …
- Why Barrick Gold is Pursuing Copper on June 24, 2011
Industrial demand for copper is the single most significant
driver for its prices, outstripping supply by 300,000 tons to
almost 1 million tons this year …
- Suntech CEO: US and China Driving Solar Industry's Growth on
June 23, 2011
In 2010, Suntech generated nearly 70% of its revenues from
Europe, 15% in the US and slighly more than 5% in China
underscoring the industry's reliance on European demand …
- Chevron's Marketing & Transportation Units Add Little Zip
to Stock on June 23, 2011
Although marketing & transportation operations generate
significant revenues for Chevron, the value contribution is limited
to around 4% of Chevron's stock by our analysis …
- Duke Energy Increases Quarterly Dividend on June 23,
2011
This dividend represents an annual yield of about 5.3% based on
the company's closing price of $18.80 per share on Tuesday …
- SunPower Sets Record in Solar Panel Efficiency on June 22,
2011
We expect these enhanced features in the E20 solar panels to
more than offset any price premiums on the product, providing a
significant competitive advantage over its competitors …
- Fundamental Drivers to Silver Wheaton's Rally on June 22,
2011
We saw a sharp mover higher in silver spot prices last week in
part due to strong fundamental demand from major markets like India
and China in addition to overall risk-off trade in global equity
markets …
- First Solar's US Sales Could Grow 5x in 5 years on June 22,
2011
With the growth in the solar sector worldwide largely driven by
European countries in the past, near term incremental growth will
come from the U.S. …
- ConocoPhillips to Explore Offshore Bangladesh on June 22,
2011
The company is expected to invest about $111 million in its
first round of exploration and may be able to conduct exploration
in the remaining areas of the block depending on the solution of
the dispute …
- Alcoa Gains from Fuel Efficiency Focus at Paris Air Show on
June 22, 2011
Alcoa is the largest provider to the aerospace industry in terms
of market share with these operations generating almost $3
billion in revenues for the company …
- Rio Tinto Buys Tata Steel's 26% Stake in Riversdale on June
21, 2011
The deal will give Rio Tinto full control over the coal miner
and helps to secure coal assets for mining requirements in case of
rising fuel prices …
- Duke Energy CEO: Depending on Natural Gas is Risky for U.S.
on June 21, 2011
He emphasizes the inherent risk that lies in reducing the fuel
diversification of fuel types for U.S. energy consumption needs
…
- Iron-Ore Oversupply Could Impact Rio Tinto on June 20,
2011
The company recently said in a press statement that it's
accelerating its iron ore expansion program in the Pilbara region
of Western Australia with US$676 million funding …
- First Solar Can Weather the Storm in Italy on June 20,
2011
Although the Italian government previously decided to continue
its current incentive programs for solar projects through the end
of August, the industry anticipates significant cut-backs in
subsidies and other incentives at the end of the period …
(Trefis Pro Exclusive) Industrials &
Transportation
- Boeing Coverage Launch: $87 Trefis Price Estimate on June 24,
2011
The commercial airplanes division is the single-largest
contributor to Boeing stock value, primarily due to the expected
commercial launch of the Boeing 787 Dreamliner in the latter half
of 2011 …
Given the pressure for cleaner and safer fracking techniques,
companies drilling for oil & gas in shale deposits may have to
hasten the adoption of these newer technologies …