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Trefis Top 5 – May 4 Insights (RIMM, NFLX, DISH, MT, CME)
5/4/2011 6:05:00 PM
Today we looked at Research in Motion's ( RIMM ) Blackberry 7 release to see if it might provide a much needed spark to RIM's smartphone efforts. We also zeroed in on the UK as an international market that Netflix ( NFLX ) might enter after Canada and perhaps Latin America. Dish Network ( DISH ) gets a big boost from its settlement with TiVo relating to its DVR technology, which has been a significant overhang for the stock - an item we discussed in a recent note. We briefly discuss the outlook for CME Group's ( CME ) interest rate trading outlook given recent developments. Finally, we released an earnings preview for ArcelorMittal ( MT ), which looks at what impact higher steel and input prices could have on earnings.
Can BlackBerry 7 Revive RIM's Smartphone Push?
Research in Motion ( RIMM ) recently announced the introduction of the latest version of its smartphone operating system BlackBerry 7, and unveiled two new BlackBerry Bold smartphones based on this OS. The new OS has a few improvements over preceding versions like faster performance for touch-screen navigation, web browsing, video and gaming and support for Near Field Communication (NFC) technology. In the U.S. smartphone market, RIM recently lost its top position to Google (GOOG) Android OS, and has faced stiff competition from Apple (AAPL). We believe that RIM desperately needs innovative products to help revive its business and meet our quite bullish $68 price estimate for RIM stock , which is about 40% above market price.
Will Netflix Enter the UK?
Netflix ( NFLX ) is enjoying rapid expansion riding on the popularity of DVD-by-mail and online streaming. In March, we wrote Are Netflix's International Ambitions Justified & Achievable? where we looked at whether market saturation was a significant risk for Netflix and if international expansion could help provide an additional source of subscriber growth. Netflix has signaled that it plans to expand abroad, and we believe that the UK could be high on the list of new markets in addition to Latin America.
Outlook for CME Group's Interest Rate Trading Volume
CME Group ( CME ) provides trading across major asset classes including interest rates, equity indexes, foreign exchange and energy. Interest rate contracts constitutes about 23% of out $323 price estimate for CME Group. Notably, interest rate trading volume for CME Group increased by 25% in Q1 2011. The company competes with NYSE Euronext (NYX), Nasdaq OMX (NDAQ) as well as others like BATS Global and Direct Edge.
Dish Saves 14% of its Value, and Perhaps More, By Settling Patent Dispute
Dish Network ( DISH ) recently settled its long-standing patent dispute with TiVo and released its Q1 2011 earnings, beating analyst estimates. Based on the company's improved financial performance in the recent quarter, we have upgraded our price estimate for Dish Network. Below we take a closer look at the dispute settlement. The company competes with satellite-TV providers like DirecTV (DTV), cable service providers like Comcast (CMCSA) and Time Warner Cable (TWC) and telecoms like AT&T (T) and Verizon (VZ).
ArcelorMittal Earnings Preview: What We're Watching
ArcelorMittal ( MT ) is expected to report its Q1 earnings on May 11th. The company reported subdued results for 2010, which were indicative of the slow recovery in the global steel industry after the economic recession. Here we highlight a few key trends in order to guide investors through the earnings release. The largest steel manufacturer in the world, ArcelorMittal competes with other international steel giants like BaoSteel, Posco (PKX), Nippon Steel and ThyssenKrupp.