Markets

Trefis Week in Review

The Week in Review

Below is a summary of the activity on Trefis during the past week that we thought you would find interesting.

Insights from the Week

Technology Media & Telecom

Developing markets like China and India have huge populations, but reliable broadband service as well as the growing need for network capacity is a concern in terms of penetration and speed …

While is seems both plans have their positives, AT&T has an easier plan and will retain customers who are nervous to try something new and get upgraded to iPad 2 with the same plan …

Although this deal means that Yahoo will lose the ability to proprietorially innovate its search business, the agreement will spur notable operating cost savings …

  • Salesforce.com's Stock is Quite Sensitive to R&D Spend on March 11, 2011

Unlike traditional on-premise software where the vendor needs to maintain different software versions at many client sites, cloud-based products require only a single version to be maintained …

  • SaaS Market Growth Trickles Down to Lift Oracle Stock on March 11, 2011

Oracle becomes the indirect beneficiary of SaaS applications market growth since these applications require database and middleware software to be deployed on servers …

  • Google's AdSense Gains from Groupon & Social Deals Bonanza on March 10, 2011

Groupon's attractive business model means that its ads carry higher user click through rates, as many users tend to click on the discounted offers …

  • Akamai - Digital Media Rising but Stock Falling on March 10, 2011

Akamai's stock, which shot upward in 2010, has dropped a healthy share of this gain in 2011, falling from a peak of over $54 to below $37 …

  • Are Tablets Bad News for Lexmark? on March 10, 2011

The recent rise in popularity of tablets, e-readers and other mobile devices has led to more and more people opting to go paperless and shift their content consumption to the digital stage …

  • 3 Key Trends to Watch for Facebook on March 10, 2011

Better demographic targeting will increase click through rates and prompt advertisers to bid higher to ensure that their ads are displayed to the proper users …

  • HBO Needs to Restrategize as Competition for Movie Distribution Intensifies on March 10, 2011

We believe it is unlikely that HBO and Netflix could reach some sort of distribution agreement as the economics wouldn't make sense and this could further eat into HBO's current business …

  • Credit Facebook for New Time Warner Content Offering on March 9, 2011

This is no doubt a good move by Time Warner as it gives the company a platform to tap the increasing base of users looking to consume traditional media entertainment online …

  • AMD's Macbook Pro Inclusion Signals Upside for Graphics Market Share on March 9, 2011

It seems like AMD is on the right track as it announced its 2nd generation DirectX 11 compatible graphics technology for notebooks under its Radeon 6000M series …

  • Nickelodeon Monkeying Around with Online Games, Stock Upside is Limited on March 9, 2011

Online multi-player games have attracted millions of players, with still-growing popularity, and Viacom is looking to capitalize on this trend with its own product …

  • As Tablets Soar, Intel's Stock Value Could Fall on March 9, 2011

We anticipate continued growth in notebook sales in 2011, driven by expansion in emerging markets, but our forecasts also suggest that the actual pace of growth will slow beyond 2011 …

  • Coverage Launch: Sirius XM Radio $1.97 on March 9, 2011

Sirius currently has a 60% penetration rate in the new automobile market and of those who purchase automobiles about 46% continue to use Sirius radio services after the trial period expires …

  • Bing Travel's New Features Step on Google and Expedia's Toes on March 9, 2011

While the quick comparison facilitated by Bing's new feature might make the travel bookings more convenient for users, it reduces the number of visitors to online travel sites like Expedia …

  • Time Warner Cable Expands Reach with Navisite Deal on March 8, 2011

Deals in this space provide an opportunity for companies like Time Warner Cable to entice business customers as IT spending improves alongside economic recovery …

  • EMC's New VNX Storage Line a Threat to NetApp on March 8, 2011

With EMC pushing into the SME market aggressively, NetApp may witness flat or even a decline in market share depending on the growth of this market and competition …

  • RBS Getting Back on Track with Help from UK Banking Operations on March 8, 2011

While corporate banking recorded pre-recession margins of 2.51%, the retail banking arm achieved an unprecedented interest yield of 3.91% …

  • Apple Still Holding its Ground in Notebooks Despite Tablet Popularity on March 8, 2011

Apple's share in the notebook market has increased from around 3.5% in 2005 to 4.8% in 2010, and we anticipate further gains beyond 6% by the end of our forecast period …

  • Priceline's Bet on Hotel Business Should Keep Paying Off on March 8, 2011

Priceline's robust growth in international bookings was primarily due to hotel reservations in Europe over Booking.com and in Asia over Agoda.com …

  • TV Channels Drive 79% of Viacom's Stock Value on March 7, 2011

As we've previously noted, the company's recent agreement with Hulu could provide a complementary revenue stream on top of its traditional distribution arrangements …

  • NYT Looks for New Revenue Streams to Supplement Print Ad Struggles on March 7, 2011

However, it is important to note that, when users go through Apple's app store to sign up for the subscription, Apple maintains a substantial 30% cut of the revenue …

  • CBS Acquires Clicker to Expand Digital Business and Tap Internet TV's Growth on March 7, 2011

Clicker could be used as a powerful tool to help sell more targeted ads for its digital content, which could command a higher price than other ads …

  • Growth in Server Shipments Means More to HP than IBM on March 7, 2011

Hardware constitutes a relatively smaller portion of our price estimate for IBM, making its stock value much less sensitive to changes in server forecasts …

(Trefis Pro Exclusive) Consumer, Retail & Automotive

  • P&G India Expansion Could Require Heavy Investment on March 10, 2011

The statistics not only necessitate pricing products competitively but also launching smaller sized product variants at lower price points to cater to such low economic demographic …

  • Nike's Air Freighting Raises Questions on Inventory Management on March 10, 2011

Given that Nike continuously introduces newer and more innovative products, it makes sense to keep leaner inventories to provide scope for selling newer products and switching out styles that don't sell …

  • India is Key to P&G's Additional Billion Customer Goal on March 9, 2011

While the Indian economy grew by 8.3% in 2010, the per capita spending on P&G products by the population of over 1.18 billion people was less than $1, still below the Asian average of $3 and well below U.S. at $96 …

  • McDonald's Could Be Looking at Upside from Customer Traffic Growth on March 8, 2011

While we anticipate 1.5% annual growth in customer traffic, the recent product initiatives and strong revenue growth could position the company for further upside to this metric …

  • Kimberly-Clark Shuts Pulp Business to Focus on Profitability & Core Brands on March 7, 2011

We highlighted that by engaging the customer better either through promotions or through lower priced strategies, it could better appeal to a broader and more price sensitive audience …

  • Best Buy's Upside Hinges on Consumers Stepping Up Electronics Purchases on March 7, 2011

While Wal-Mart sells almost every type of merchandise, Best Buy specializes in electronics and these items tend to sell at much higher prices compared to other types of merchandise …

  • Wal-Mart's U.S. Stores About Twice as Valuable as International Stores on March 7, 2011

We estimate that Wal-Mart's U.S. stores constitute about 61% of the company's equity value, vs. a 33% contribution from international stores …

(Trefis Pro Exclusive) Financial Services & Energy and Natural Resources

  • Barclays Adds Another 'Egg' to its Basket on March 11, 2011

The deal would give Barclays approximately 1.15 million credit card accounts, and the acquired assets would be integrated as a part of the group's Barclaycard division in the first half of the year …

  • U.S. Steel Records Loss in 2010, but Good Times Lie Ahead on March 11, 2011

But the fact that losses were in excess of $1.6 billion in 2009 shows that the company is recovering from the after-effects of the downturn …

  • Discover Gains From Lower Provisions But Regulations & Low Rates Are a Pain on March 11, 2011

In addition to regulation the low interest rate environment makes it difficult to earn a higher net interest yield as Discover earns less on outstanding balances and the spread between the borrow and lending rate is narrower …

  • JPMorgan Cutting Asset Management Fees to Fend Off Passive Funds on March 11, 2011

The new fund has scrapped an initial charge of 3.5%, which was levied on retail customers but has introduced a 10% performance fees on any return above the FTSE All-share index …

  • Considerations in Valuing Massey's Produced Coal Unit on March 10, 2011

The total coal sold to utility customers was around 3.6 times that for metallurgical customers and nearly 10 times that for industrial customers, making utility coal the most valuable division for Massey Energy …

  • BP's Alaskan Connection: Opportunity or Concern? on March 10, 2011

We believe the Alaskan project can increase our estimate for BP's crude oil and natural gas liquids production to about 1.7 million by the end of our forecast period, up from our base case estimate of about 1.4 million …

  • Suntech Power Could be Looking at Production Costs Below 80¢ Per Watt on March 9, 2011

Suntech Power has the advantage of lower production costs because of the Chinese government's incentives to local solar industry companies, as well as the lower cost of labor in the country …

  • Increased Options Trading to Lift Ameritrade? Not So Fast on March 9, 2011

With the number of retail investors exploring options trading along with normal equity trading on the rise, all online brokerage firms allow investors to undertake options trading …

  • Credit Suisse Adding Talent to High Grade Debt and ABS to Boost FICC Trading on March 8, 2011

We estimate that these assets took a step back again in 2010 though this should recover in 2011 and rise to nearly 5.2% by the end of the Trefis forecast period …

  • Mortgage Business is 30% of Wells Fargo's Value on March 8, 2011

The average outstanding balance on home mortgage loans has increased significantly from $122 billion in 2006 to $337 billion in 2010 …

  • A Relationship Between Giants - Cliffs Natural Resources & ArcelorMittal on March 8, 2011

ArcelorMittal's gain from its long-term contracts with Cliffs is that it obtains the required iron ore for its steel operations in North America at prices which have historically been about 10% lower than prevalent iron ore spot prices …

  • Subdued Construction Demand Could Weigh on Alcoa on March 8, 2011

While the global recession hit all industries, the dependence of aluminum producers on the construction industry magnified this effect …

  • BNY Mellon Targets Sovereign Wealth Fund Growth in AUM on March 7, 2011

We believe BNY Mellon, with its presence in 36 countries and over 100 markets, is well positioned to take advantage of this upcoming market to grow its asset management business taking it to level of market leaders like Blackrock and State Street …

  • Good Things Come in Aluminum Packages for Alcoa on March 7, 2011

The increase in use of recycled aluminium is the U.S. is what most likely prompted Alcoa's CEO Mr. Klaus Kleinfeld to predict flat growth in the usage of aluminum in the country for 2011 …

Summaries of Trefis Members' Recent Forecasts

  • Acquisitions Boost Oracle's Middleware License Market Share on March 11, 2011

While IBM competes with Oracle in the middleware market based on industry standards, its middleware components are not as integrated into a suite as are Oracle's …

  • Outlook for Freeport's Copper Sales from African Mines on March 11, 2011

Strong reserves coupled with increased plant capacity are expected to help increase the copper sold from the region …

  • McDonald's Customer Spending Levels Looking Up on March 10, 2011

McDonald's saw a slight spike in average spend in 2008 due to a rise in franchised restaurants in the U.S. and Europe as well as favorable currency impact with the U.S. dollar depreciating against the Euro …

  • Nike's Stock Value is Highly Sensitive to its Footwear Business on March 9, 2011

The growth Nike's global footwear share is mainly attributable to its continuous evolution of its product line and marketing initiatives targeting budding athletes at the college level and below …

  • Rise in User Accounts Drives PayPal's Contribution to eBay Stock Value on March 9, 2011

The growth is a reflection of eBay's concerted efforts to integrate PayPal into its "Marketplaces" segment and forge strategic relationships with a diversified group of leading online commerce portals like Blue Nile …

  • Slight Downside to Network Switches Profitability, but Cisco Still Undervalued on March 8, 2011

Cisco has very strong sales execution and also enjoys excellent brand recognition. These factors ensure that Cisco is considered to be a trusted and reliable brand by both enterprises and service providers …

Based on the history of the Federal Funds Rate and long-term expectations for economic recovery, we expect that the Federal Funds Rate will rise to near historical averages and that Schwab's borrowing costs will increase …

Strong reserves coupled with increased plant capacity are expected to help increase the copper sold from the region

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos