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726900.0
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2011-04-14 00:00:00 UTC
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Printer Business is Almost 25% of HP's Stock Value
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DELL
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https://www.nasdaq.com/articles/printer-business-almost-25-hps-stock-value-2011-04-14
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nan
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nan
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HP ( HPQ ) is the world's biggest PC manufacturer, ahead of big names like Dell ( DELL ) and Acer (TPE:2353). However, HP's service and printer businesses (specifically printer ink) are actually the two most valuable segments for the company's operations. These two segments together generate roughly 50% of the company's stock value by our analysis.
We currently have a $55.49 price estimate for HP's stock , implying 35% upside to market price. HP's printing business, which includes both printer and ink cartridge sales, represent nearly 23% of this estimated stock value.
Below we discuss the outlook for HP's printing business and the firm's share in the global printer market.
About HP's Printing Business
HP is the runaway market leader in the printer and cartridges space with almost 40% market share. Its competitors include Canon, Epson and Lexmark in the printer space.
HP's offerings include both the inkjet line of printers as well as laser printers. Laser printers include multi-functional printers (MFPs) as well as sole printers and inkjets include all-in-ones as well as sole printer models. Recently, the market has been moving more towards lasers and away from inkjets, with MFPs driving the growth.
Key Drivers of the Business
1. Worldwide printer market
2. HP's share in printer market
3. Ink & toner supplies per printer
Below we highlight each of these key drivers in additional detail.
1. Worldwide Printer Market
The worldwide printer market grew at a steady annual pace of 10% between 2004 and 2007. In 2008, it witnessed a decline due in part to the inkjet market. The worldwide printer market declined further in 2009 as the economy deteriorated, before picking back up in 2010. Going forward we estimate that the worldwide printer market will continue a moderate growth rate. See more…
2. HP's Share in the Printer Market
HP's market share grew from ~33% in 2004 to 40% in 2009 as the firm strengthened its #1 position atop the printer market. However, in 2010, HP's share in the printer market dropped, largely due to increased competition from Lexmark.
HP is still the undisputed king of the worldwide printer market and we only expect its market share to hover around 40% in the coming years. See more…
3. Ink & Toner Supplies per Printer
HP has seen a slight decline in the annual number of ink cartridges sold per printer, an effect driven by its high exposure to the declining inkjet market. As laser printers push inkjet printers out, HP (the inkjet supplies market leader) will likely see a decline in its ink cartridge per printer sales until the shift away from inkjet stabilizes. See more…
See our complete analysis of HP stock here
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.
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HP ( HPQ ) is the world's biggest PC manufacturer, ahead of big names like Dell ( DELL ) and Acer (TPE:2353). HP's printing business, which includes both printer and ink cartridge sales, represent nearly 23% of this estimated stock value. Below we discuss the outlook for HP's printing business and the firm's share in the global printer market.
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HP ( HPQ ) is the world's biggest PC manufacturer, ahead of big names like Dell ( DELL ) and Acer (TPE:2353). About HP's Printing Business HP is the runaway market leader in the printer and cartridges space with almost 40% market share. HP's Share in the Printer Market HP's market share grew from ~33% in 2004 to 40% in 2009 as the firm strengthened its #1 position atop the printer market.
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HP ( HPQ ) is the world's biggest PC manufacturer, ahead of big names like Dell ( DELL ) and Acer (TPE:2353). Laser printers include multi-functional printers (MFPs) as well as sole printers and inkjets include all-in-ones as well as sole printer models. HP's Share in the Printer Market HP's market share grew from ~33% in 2004 to 40% in 2009 as the firm strengthened its #1 position atop the printer market.
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HP ( HPQ ) is the world's biggest PC manufacturer, ahead of big names like Dell ( DELL ) and Acer (TPE:2353). HP's printing business, which includes both printer and ink cartridge sales, represent nearly 23% of this estimated stock value. About HP's Printing Business HP is the runaway market leader in the printer and cartridges space with almost 40% market share.
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cbd4b1fd-68c4-45ab-abff-c98a6f8a9a6d
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726901.0
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2011-04-11 00:00:00 UTC
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This Company is Sitting on a Mountain of Cash
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DELL
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https://www.nasdaq.com/articles/company-sitting-mountain-cash-2011-04-11
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nan
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nan
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When seeking out new investment ideas, I like to run stock screens to find companies that are inexpensive and relatively "safe." Of course, one of the safest kinds of companies is one that is profitable, yet also has lots of cash on the books. In fact, some companies are so cash-rich that even afteraccounting for any borrowings, their cash can equate to 20%, 30% or even 40% of the entire company's market value .
If you think about it, that also means these companies are fairly loathed by investors. It's not just that they have so much cash, it also means their market value has slumped so low that the company isn't really worth much more than that cash.
All of the companies on the list above have real problems. Cisco Systems (Nasdaq: CSCO ) , for example, has seen itsshares fall back to levels seen in 1998, as sales growth has slowed. And all of that cash can't always buy happiness. Dell (Nasdaq: DELL ) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to 6% in each of the next two years.
Perhaps the poster child of the "cash cowboys" is IAC Interactive (Nasdaq: IACI ) , which routinely carries more than $1 billion its books, yet has rarely traded at a premium like other high-flying Internet stocks. IAC started to build or buy an impressive roster of highly-trafficked websites such as Match.com and Evite.com. But the company's founder, Barry Diller, appears to be stuck in the mud recently, throttling back once-promising properties like Ask.com, or cutting losses in properties such as The Daily Beast by merging with traditional media companies ( Newsweek in this case). If Diller ever found his footing again, that massive cash balance could put IAC right back into the game.
Yet one cash-rich tech company may be able to turn a bulletproofbalance sheet back into a strategic weapon. I'm speaking of Electronic Arts (Nasdaq: ERTS ) , the video game developer that is undergoing a painful transition but should emerge far healthier when the transition is complete.
Electronic Arts is the largest developer of video games in the world, with more than $4 billion of sales in fiscal (March) 2010. Sales likely fell 10% in fiscal 2011 for a fairly obvious reason. Just as was the case with compact discs in recent years, consumers have started to lose their interest in buying packaged video games.
It took Electronic Arts far too long to realize that this was a permanent cultural change and management appeared slow-footed in its response. Yet, in recent quarters the company has gotten wise, pouring a lot more resources into games that can be downloaded digitally. The move is paying off: Electronic Arts is now the second-largest producer of video games played on Facebook and other social media sites. If this were a new young company seen as a social media play, then Electronic Arts would have the makings of a very hot initial public offering (IPO) . Some social media companies now look set to reap billions when they come public.
Well, it's too late for Electronic Arts to catch theIPO fever, but it's not too late for the company to boost its reputation on Wall Street. And that's what I see happening. The transition away from packaged video games toward digital downloads should help boost the company's margins. Simply put, it's a lot cheaper to skip the whole printing, shipping and stocking process that typifies traditional media sales.
Electronic Arts likely boosted download sales 30% in fiscal (March) 2011 to around $750 million. Every dollar of those sales carries much higher gross margins, which explains why third-quarter gross margins rose from 51% in fiscal 2010 to 58% in fiscal 2011. It also explains why analysts think profits will start rising much faster than sales -- they think sales will grow just 5% in fiscal (March) 2012, but earnings per share ( EPS ) should rise nearly 30% to $0.86. That trend of modest sales gains but fast-rising profits should continue in subsequent years as the migration to digitally-downloaded games continues.
A word of caution: Electronic Arts has invested heavily in a new edition of the storied Star Wars franchise, known as "The Old Republic." The massively multi-player online game is expected to do quite well, but repeated development delays have pushed its release out several quarters. That means Electronic Arts' results this summer may be a bit tepid before picking up again in the fall. However, investors may already be well-prepared for the anticipated hiccup.
Action to Take --> For a number of years, Electronic Arts' shareholders had been clamoring for a stock buyback. They finally got their wish. The company announced a $600 million share buyback program in February. With all that cash on the books, the buybacks may keep coming even after the current plan is finished. This is a clear-cut example when lots of cash (as a percent of market value) is a reason for optimism. If you're looking for a cash-rich rebound candidate to add to your portfolio, Electronic Arts looks like a good bet.
-- David Sterman
Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Dell (Nasdaq: DELL ) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to 6% in each of the next two years. Perhaps the poster child of the "cash cowboys" is IAC Interactive (Nasdaq: IACI ) , which routinely carries more than $1 billion its books, yet has rarely traded at a premium like other high-flying Internet stocks. Just as was the case with compact discs in recent years, consumers have started to lose their interest in buying packaged video games.
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Dell (Nasdaq: DELL ) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to 6% in each of the next two years. The transition away from packaged video games toward digital downloads should help boost the company's margins. Electronic Arts likely boosted download sales 30% in fiscal (March) 2011 to around $750 million.
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Dell (Nasdaq: DELL ) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to 6% in each of the next two years. In fact, some companies are so cash-rich that even afteraccounting for any borrowings, their cash can equate to 20%, 30% or even 40% of the entire company's market value . But the company's founder, Barry Diller, appears to be stuck in the mud recently, throttling back once-promising properties like Ask.com, or cutting losses in properties such as The Daily Beast by merging with traditional media companies ( Newsweek in this case).
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Dell (Nasdaq: DELL ) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to 6% in each of the next two years. If you think about it, that also means these companies are fairly loathed by investors. Electronic Arts is the largest developer of video games in the world, with more than $4 billion of sales in fiscal (March) 2010.
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7ca16bb0-75e6-4f8f-86b8-d1ad8ecb578e
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726902.0
|
2011-04-07 00:00:00 UTC
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iPad Outlook Encouraging, but Impact on Stock is Limited
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DELL
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https://www.nasdaq.com/articles/ipad-outlook-encouraging-impact-stock-limited-2011-04-07
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nan
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nan
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Apple's ( AAPL ) iPad 2 is off to a great start, building on momentum from the original version launched in April 2010. Apple recorded iPad 2 unit sales of close to 1 million in the very first week. Comparatively, it took the original version 28 days to hit that mark. Although these figures are highly encouraging, the iPad 2 will have tough competition from other products like Research in Motion's ( RIMM ) PlayBook, as well as Samsung's Galaxy tablet, Motorola Mobility's ( MMI ) Xoom, and Dell ( RIMM ) Streak - all of which are based on Google's ( GOOG ) Android OS.
Amid the excitement and competition for the iPad, it's interesting to note that the iPad represents only 7% of Apple's stock value by our analysis. Hence any sudden surge in iPad unit sales actually has a limited impact on Apple's stock value.
While we anticipate that Apple's iPad 2 unit sales will cross 54 million by the end of our forecast period, Trefis members predict more substantial growth towards 62 million.
We currently have a price estimate of $420 for Apple's stock , about 25% above market price.
iPad 2 - More Features at a Competitive Price
The iPad 2 has more features than its earlier version, including a faster A5 processor and front and rear facing cameras. It is designed to be thinner and lighter than the first iPad. It also has a better battery life of above 10 hours compared to Xoom's 8.3 hours and Galaxy's 6 hours. Apple has kept the pricing competitive for the basic model of iPad 2 at $499, with all the added features mentioned above.
But Competition Could Impact Sales
Google's Honeycomb, the Android version designed for tablets, is making inroads into the tablet market. It provides support for big screens (7 to 9 inch), a totally revamped user interface, extensive multi-tasking and multiple home screens among other features. Tablets made by Motorola, Samsung, Dell, Viewsonic, Asus, and LG are all powered by the Android OS.
If Google can mirror its smartphone OS success in the tablet market, Google could soon overtake Apple (see What Happens to Apple if Android Gains Steam in Tablets ). We have also previously highlighted how increased competition from Xoom in the high end of the tablet market could hinder average pricing and margins for Apple's iPad business segment (see Xoom Could Take a Bite Out of iPad's Profitability ).
Trefis Community Forecast
Trefis members forecast that iPad units sales will increase from about 15 million in 2010 (not a full year of sales) to 62 million by the end of our forecast period, compared to the baseline Trefis estimate of an increase to 54 million during the same period. The member estimates imply a slight upside to our $420 price estimate, given the iPad's relatively small (7%) contribution to Apple's overall stock value.
See our complete analysis for Apple's stock here
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.
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Although these figures are highly encouraging, the iPad 2 will have tough competition from other products like Research in Motion's ( RIMM ) PlayBook, as well as Samsung's Galaxy tablet, Motorola Mobility's ( MMI ) Xoom, and Dell ( RIMM ) Streak - all of which are based on Google's ( GOOG ) Android OS. Tablets made by Motorola, Samsung, Dell, Viewsonic, Asus, and LG are all powered by the Android OS. Apple's ( AAPL ) iPad 2 is off to a great start, building on momentum from the original version launched in April 2010.
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Although these figures are highly encouraging, the iPad 2 will have tough competition from other products like Research in Motion's ( RIMM ) PlayBook, as well as Samsung's Galaxy tablet, Motorola Mobility's ( MMI ) Xoom, and Dell ( RIMM ) Streak - all of which are based on Google's ( GOOG ) Android OS. Tablets made by Motorola, Samsung, Dell, Viewsonic, Asus, and LG are all powered by the Android OS. While we anticipate that Apple's iPad 2 unit sales will cross 54 million by the end of our forecast period, Trefis members predict more substantial growth towards 62 million.
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Although these figures are highly encouraging, the iPad 2 will have tough competition from other products like Research in Motion's ( RIMM ) PlayBook, as well as Samsung's Galaxy tablet, Motorola Mobility's ( MMI ) Xoom, and Dell ( RIMM ) Streak - all of which are based on Google's ( GOOG ) Android OS. Tablets made by Motorola, Samsung, Dell, Viewsonic, Asus, and LG are all powered by the Android OS. iPad 2 - More Features at a Competitive Price The iPad 2 has more features than its earlier version, including a faster A5 processor and front and rear facing cameras.
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Although these figures are highly encouraging, the iPad 2 will have tough competition from other products like Research in Motion's ( RIMM ) PlayBook, as well as Samsung's Galaxy tablet, Motorola Mobility's ( MMI ) Xoom, and Dell ( RIMM ) Streak - all of which are based on Google's ( GOOG ) Android OS. Tablets made by Motorola, Samsung, Dell, Viewsonic, Asus, and LG are all powered by the Android OS. We currently have a price estimate of $420 for Apple's stock , about 25% above market price.
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f8cc2563-af14-4c08-8ee1-a0289096500b
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726903.0
|
2011-04-05 00:00:00 UTC
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Technology Services Nearly 30% of IBM’s Value
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DELL
|
https://www.nasdaq.com/articles/technology-services-nearly-30-ibms-value-2011-04-05
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nan
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nan
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IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide and competes with firms like Oracle ( ORCL ) and Red Hat. The firm is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as EMC ( EMC ) and NetApp (NTAP) in the storage market.
We have a $185 Trefis price estimate for IBM's stock and estimate that the firm derives the bulk of its value from its middleware software and technology businesses which make up nearly 46% and 28% of the firm's equity value respectively.
In the past, we have discussed about the significance of middleware software business to IBM and the firm's focus to expand its offerings in the segment for future growth. (See IBM Smells Opportunity in CRM with Launch of Smarter Commerce Initiative )
4 Components of IBM's Technology Services
IBM's technology services division is comprised of four sub-divisions - strategic outsourcing, integrated technology services, maintenance services and business outsourcing.
1) Strategic outsourcing services of IBM are aimed at providing services and insights to clients that enable them to reduce costs and improve productivity and efficiency through outsourcing of processes and operations. Strategic outsourcing is the largest of IBM's service businesses and forms almost 53% of the firm's Global Technology Services (GTS) revenues and 33% of its overall global services revenues.
2) Integrated Technology Services (ITS) offered by IBM support a company's IT infrastructure with the use of IBM software and other resources. IBM's ITS portfolio complements hardware offerings from system and technology and software business. The key offerings are in the server management services and system oriented architecture. The segment contributes nearly 25% of GTS revenues.
3) IBM's maintenance offerings range from product maintenance to solution support in order to keep the client's IT infrastructure constantly available and running. IBM has expanded its portfolio to non-IBM IT products too, which is bringing in more business than before. Maintenance services contribute about 18% of GTS revenues.
4) Business transformation outsourcing services revolve around standardization of processes and operations in order to make a business more effective. Business outsourcing services is a relatively small part of the IBM service offerings making only about 4% of GTS revenues.
See our full analysis of IBM .
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.
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The firm is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as EMC ( EMC ) and NetApp (NTAP) in the storage market. In the past, we have discussed about the significance of middleware software business to IBM and the firm's focus to expand its offerings in the segment for future growth. IBM's ITS portfolio complements hardware offerings from system and technology and software business.
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The firm is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as EMC ( EMC ) and NetApp (NTAP) in the storage market. IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide and competes with firms like Oracle ( ORCL ) and Red Hat. (See IBM Smells Opportunity in CRM with Launch of Smarter Commerce Initiative ) 4 Components of IBM's Technology Services IBM's technology services division is comprised of four sub-divisions - strategic outsourcing, integrated technology services, maintenance services and business outsourcing.
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The firm is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as EMC ( EMC ) and NetApp (NTAP) in the storage market. IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide and competes with firms like Oracle ( ORCL ) and Red Hat. (See IBM Smells Opportunity in CRM with Launch of Smarter Commerce Initiative ) 4 Components of IBM's Technology Services IBM's technology services division is comprised of four sub-divisions - strategic outsourcing, integrated technology services, maintenance services and business outsourcing.
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The firm is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as EMC ( EMC ) and NetApp (NTAP) in the storage market. Strategic outsourcing is the largest of IBM's service businesses and forms almost 53% of the firm's Global Technology Services (GTS) revenues and 33% of its overall global services revenues. IBM's ITS portfolio complements hardware offerings from system and technology and software business.
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8e24db15-3406-4814-a1c5-8bd858427d37
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726904.0
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2011-04-05 00:00:00 UTC
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Do 7-Inch Tablets Stand a Chance?
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DELL
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https://www.nasdaq.com/articles/do-7-inch-tablets-stand-chance-2011-04-05
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nan
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nan
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A few months back, Apple's ( AAPL ) Steve Jobs called competitors' 7-inch tablets "Dead on Arrival". Naturally, tablet manufacturers are a bit more optimistic. So who is right? Here we take a look a closer look at Jobs' case. Challengers to Apple's market share in the tablet space include Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG.
We maintain a $420 price estimate for Apple stock , which is about 20% above market price.
A Look at Steve Jobs' Comments
Steve Jobs took a shot at the usability of the 7-inch tablets, claiming that tablets should have a 10-inch screen at a minimum. Apple has performed extensive user-testing, he noted, to reach these conclusions.
According to Jobs:
"One naturally thinks that a seven-inch screen would offer 70% of the benefits of a 10-inch screen. Unfortunately, this is far from the truth. The screen measurements are diagonal, so that a seven-inch screen is only 45% as large as iPad's 10-inch screen. You heard me right; just 45% as large…
… One could increase the resolution of the display to make up for some of the difference. It is meaningless, unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of the present size. Apple's done extensive user-testing on touch interfaces over many years, and we really understand this stuff. There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick or pinch them. This is one of the key reasons we think the 10-inch screen size is the minimum size required to create great tablet apps."
While some point to the increased mobility of the smaller tablets, Jobs also downplayed this advantage.
"Every tablet user is also a smartphone user. No tablet can compete with the mobility of a smartphone, its ease of fitting into your pocket or purse, its unobtrusiveness when used in a crowd. Given that all tablet users will already have a smartphone in their pockets, giving up precious display area to fit a tablet in our pockets is clearly the wrong tradeoff. The seven-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad."
What's Your Take?
Steve Jobs does make a compelling argument, and we remain cautious regarding the potential for 7-inch tablets to really elbow their way into the market. However, if these tablets do become a real threat, it could present downside to our forecast for Apple's iPad sales, as depicted in the chart above.
What's your take? You can test your forecast for iPad unit sales, and examine the impact on Apple's stock value, by dragging the trend line in the interactive chart above.
See our full analysis and $420 price estimate for Apple
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.
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Challengers to Apple's market share in the tablet space include Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick or pinch them. Steve Jobs does make a compelling argument, and we remain cautious regarding the potential for 7-inch tablets to really elbow their way into the market.
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Challengers to Apple's market share in the tablet space include Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. We maintain a $420 price estimate for Apple stock , which is about 20% above market price. See our full analysis and $420 price estimate for Apple The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Challengers to Apple's market share in the tablet space include Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. A Look at Steve Jobs' Comments Steve Jobs took a shot at the usability of the 7-inch tablets, claiming that tablets should have a 10-inch screen at a minimum. Given that all tablet users will already have a smartphone in their pockets, giving up precious display area to fit a tablet in our pockets is clearly the wrong tradeoff.
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Challengers to Apple's market share in the tablet space include Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. A Look at Steve Jobs' Comments Steve Jobs took a shot at the usability of the 7-inch tablets, claiming that tablets should have a 10-inch screen at a minimum. The screen measurements are diagonal, so that a seven-inch screen is only 45% as large as iPad's 10-inch screen.
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55990cf6-c7e6-4f30-93b5-18120eec7552
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726905.0
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2011-04-02 00:00:00 UTC
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Storage Software Worth 22% of NetApp’s Stock Value
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DELL
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https://www.nasdaq.com/articles/storage-software-worth-22-netapps-stock-value-2011-04-02
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nan
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nan
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NetApp ( NTAP ), the fourth largest player in the external disk storage market, creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with other storage majors like EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ).
We recently updated our NetApp model and now calculate a $54.76 price estimate for the company's stock , about 10% ahead of market price. While NetApp derives the bulk of its value from its storage hardware business, the storage software business is actually much more profitable. We estimate that storage software represents 22% of NeApp's equity value.
NetApp is a Big Player in Storage Software
NetApp has steadily gained share in the external disk storage market and was the fourth largest storage hardware vendor in the world (with 10% market share) in Q4 2010. NetApp also held a 9% share in the $3.4 billion storage software market in Q4'10 and was the fourth largest player in this segment behind EMC, Symantec (SYMC) and IBM.
We forecast NetApp's share in the storage software market will continue to grow alongside storage hardware growth, as vendors increasingly bundle storage software with hardware. This trend should allow NetApp to take market share from 'storage software only' vendors like Symantec.
Storage Software is a High Margin Business
Storage software sales have higher gross margin than hardware or service offerings, and thus contributes significantly to the firm's value. The cost of revenues is significantly low on software products, and we forecast storage software gross margin to remain constant going forward.
You can drag the trend lines in the interactive charts above to see the impact of various storage software market share and gross margin scenarios on NetApp's stock value.
See our complete analysis of NetApp stock here
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.
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It competes mainly with other storage majors like EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ). NetApp ( NTAP ), the fourth largest player in the external disk storage market, creates innovative storage and data management solutions for small and medium-sized companies around the world. NetApp also held a 9% share in the $3.4 billion storage software market in Q4'10 and was the fourth largest player in this segment behind EMC, Symantec (SYMC) and IBM.
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It competes mainly with other storage majors like EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ). NetApp ( NTAP ), the fourth largest player in the external disk storage market, creates innovative storage and data management solutions for small and medium-sized companies around the world. NetApp is a Big Player in Storage Software NetApp has steadily gained share in the external disk storage market and was the fourth largest storage hardware vendor in the world (with 10% market share) in Q4 2010.
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It competes mainly with other storage majors like EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ). NetApp is a Big Player in Storage Software NetApp has steadily gained share in the external disk storage market and was the fourth largest storage hardware vendor in the world (with 10% market share) in Q4 2010. We forecast NetApp's share in the storage software market will continue to grow alongside storage hardware growth, as vendors increasingly bundle storage software with hardware.
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It competes mainly with other storage majors like EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ). NetApp is a Big Player in Storage Software NetApp has steadily gained share in the external disk storage market and was the fourth largest storage hardware vendor in the world (with 10% market share) in Q4 2010. NetApp also held a 9% share in the $3.4 billion storage software market in Q4'10 and was the fourth largest player in this segment behind EMC, Symantec (SYMC) and IBM.
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1cc3ee32-8eb1-40bf-92cb-7c0bd5363076
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726906.0
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2011-03-29 00:00:00 UTC
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Xoom Could Take a Bite Out of iPad's Profitability
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DELL
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https://www.nasdaq.com/articles/xoom-could-take-bite-out-ipads-profitability-2011-03-29
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nan
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nan
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When Apple ( AAPL ) introduced the basic version of the iPad 2 for $499, it looked like a bargain compared to Motorola Mobility's ( MMI ) Xoom, priced at $799. But according to one analysis, it could be the Xoom tablet that is more cost effective. For example, the iPad 2′s basic version comes with Wi-fi and 16 GB of memory, while the Xoom comes with 3G network compatibility and 32 GB of memory. Maybe the iPad 2 will face stiffer competition from Xoom in the high-end tablet market than originally thought. Beyond Xoom, Apple will have to contend with a slew of other tablet players like Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG.
Here we take a look at how the Xoom could potentially shift the outlook for Apple's profitability from iPad sales. We estimate that iPad sales account for roughly 7% of our $420 price estimate for Apple . Our price estimate implies a roughly 20% premium to the stock's market price.
iPad Can Still Dominate the Low End of the Tablet Market
Since the pricing of the basic iPad 2 is still an attractive selling point, Apple is bound to dominate the low end of the tablet market. Given that the Xoom really only competes with the iPad 2 in the higher end of the market, our forecast of 24 million iPads sold in 2011 could still prove conservative.
High End Tablet Market is Also Key for Apple
Although offering a cheaper version of the iPad generates more unit sales, Apple records greater profitability from higher end models. For example, iPad's 32 GB version is priced $100 higher than the 16 GB version, but doesn't cost much more for Apple to build.
Hence, increased competition in the high end of the tablet market will hinder average pricing and margins for Apple's iPad business segment. Our interactive forecast chart above illustrates this effect, seen as a projected decline in average iPad pricing. However, intensified competition could spur further downside to our base case forecasts.
See our full analysis and $420 price estimate for Apple
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.
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Beyond Xoom, Apple will have to contend with a slew of other tablet players like Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG. When Apple ( AAPL ) introduced the basic version of the iPad 2 for $499, it looked like a bargain compared to Motorola Mobility's ( MMI ) Xoom, priced at $799. Hence, increased competition in the high end of the tablet market will hinder average pricing and margins for Apple's iPad business segment.
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Beyond Xoom, Apple will have to contend with a slew of other tablet players like Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG. iPad Can Still Dominate the Low End of the Tablet Market Since the pricing of the basic iPad 2 is still an attractive selling point, Apple is bound to dominate the low end of the tablet market. For example, iPad's 32 GB version is priced $100 higher than the 16 GB version, but doesn't cost much more for Apple to build.
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Beyond Xoom, Apple will have to contend with a slew of other tablet players like Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG. iPad Can Still Dominate the Low End of the Tablet Market Since the pricing of the basic iPad 2 is still an attractive selling point, Apple is bound to dominate the low end of the tablet market. High End Tablet Market is Also Key for Apple Although offering a cheaper version of the iPad generates more unit sales, Apple records greater profitability from higher end models.
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Beyond Xoom, Apple will have to contend with a slew of other tablet players like Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG. High End Tablet Market is Also Key for Apple Although offering a cheaper version of the iPad generates more unit sales, Apple records greater profitability from higher end models. For example, iPad's 32 GB version is priced $100 higher than the 16 GB version, but doesn't cost much more for Apple to build.
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49debf13-b8d4-4cfe-bcc1-4a4e86ecd5de
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726907.0
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2011-03-26 00:00:00 UTC
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The 3 Most Important Product Segments for Apple
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DELL
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https://www.nasdaq.com/articles/3-most-important-product-segments-apple-2011-03-26
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nan
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nan
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Apple ( AAPL ) is one of the most recognized companies in the world and known for its innovative products like the iPhone, Mac and iPad. Apple's iPhone competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), and Nokia ( NOK ) in the mobile phone market while it's Mac line of products compete with Dell ( DELL ) and HP (HPQ) in the PC market. Here we will analyze the these three most important products segment for Apple in terms of value that they contribute to our $420 price estimate for Apple stock . Our price estimate stands about 25% above market price.
Apple has a history of introducing successful products to the market, despite the fact that most of its products are sold at a premium to competitors. Apple's strategy of dominating the mobile computing market (PCs, tablets, netbooks) seems to be working as Apple successfully launched the iPad to tap the growing demand for mobile devices, which is taking share from other vendors' notebooks sales. Apple already has substantial market share in the high end of the notebook with its Mac line of products.
The 3 Most Important Product Segments for Apple
1) iPhone - 53% of the company's stock value
Although iPhone's share in the mobile phone market is still at around 3%, it's value to Apple comes by selling iPhones at a premium to its competitors. Apple sells iPhones at a high average pricing of around $600 and high gross margins of around 50%. See the top forecasts for iPhone division.
2) Macintosh - 17%
Macintosh division not only consists of notebooks and desktops that Apple sells, but also the software and peripheral hardware associated with Mac. The software includes the Mac operating system, iWork (to organize software, spreadsheets and presentations), MobileMe (to keep email, contacts, and calender-related data in sync with the Mac, iPhone, and iPod) to name a few. Peripherals are the accessories associated with the Mac, which includes keyboard, wireless mouse, etc. See the top forecasts for Macintosh division.
3) iPad - 7%
Apple launched iPad in April 2010 and it recently launched iPad 2. The iPad 2 got off to a great start during the first weekend of its launch, selling an estimated 400,000 to 500,000 units. Apple holds a substantial lead in the tablet market over competitors like Research in Motion, Motorola Mobility, Samsung, Dell and LG. Although we expect a faster iPad unit sales growth, the low contribution to our estimate for Apple stock is due to the fact that iPad pricing and margins are on the lower end. See the top forecasts for iPad division.
See our full analysis for Apple.
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.
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Apple's iPhone competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), and Nokia ( NOK ) in the mobile phone market while it's Mac line of products compete with Dell ( DELL ) and HP (HPQ) in the PC market. Apple holds a substantial lead in the tablet market over competitors like Research in Motion, Motorola Mobility, Samsung, Dell and LG. Apple ( AAPL ) is one of the most recognized companies in the world and known for its innovative products like the iPhone, Mac and iPad.
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Apple's iPhone competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), and Nokia ( NOK ) in the mobile phone market while it's Mac line of products compete with Dell ( DELL ) and HP (HPQ) in the PC market. Apple holds a substantial lead in the tablet market over competitors like Research in Motion, Motorola Mobility, Samsung, Dell and LG. Apple already has substantial market share in the high end of the notebook with its Mac line of products.
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Apple's iPhone competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), and Nokia ( NOK ) in the mobile phone market while it's Mac line of products compete with Dell ( DELL ) and HP (HPQ) in the PC market. Apple holds a substantial lead in the tablet market over competitors like Research in Motion, Motorola Mobility, Samsung, Dell and LG. Apple's strategy of dominating the mobile computing market (PCs, tablets, netbooks) seems to be working as Apple successfully launched the iPad to tap the growing demand for mobile devices, which is taking share from other vendors' notebooks sales.
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Apple's iPhone competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), and Nokia ( NOK ) in the mobile phone market while it's Mac line of products compete with Dell ( DELL ) and HP (HPQ) in the PC market. Apple holds a substantial lead in the tablet market over competitors like Research in Motion, Motorola Mobility, Samsung, Dell and LG. The 3 Most Important Product Segments for Apple 1) iPhone - 53% of the company's stock value Although iPhone's share in the mobile phone market is still at around 3%, it's value to Apple comes by selling iPhones at a premium to its competitors.
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00059a50-8171-4827-9d1d-0794b92a0cd8
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726908.0
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2011-03-25 00:00:00 UTC
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How Much Will Suppliers Gain from iPad 2 in 2011
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DELL
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https://www.nasdaq.com/articles/how-much-will-suppliers-gain-ipad-2-2011-2011-03-25
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nan
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nan
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Apple's ( AAPL ) iPad 2 got off to a great start during the first weekend of its launch, selling an estimated 400,000 to 500,000 units. Apple holds a substantial lead in the tablet market over competitors like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG.
How Much Will Suppliers Benefit from iPad 2 Sales in 2011?
Here we take a look at how much various iPad 2 component suppliers stand to gain from the product's success. We assume here that Apple will continue to source iPad 2 components from the same set of suppliers throughout 2011.
The chart below illustrates our analysis of the revenues various suppliers could earn from the iPad 2 during 2011. The right hand side of the chart highlights certain components that go into the iPad 2. Interestingly, although LG and Samsung find it difficult to compete directly against Apple's iPad, they stand to gain the most from iPad 2′s success.
We maintain a $420 price estimate for Apple stock , which is about 25% higher than market price.
Apple Could Sell Around 20 million iPad 2 in 2011
We estimate that Apple could sell around 24 million iPads in 2011. However, since the iPad 2 was released in March 2011, the number of iPad 2 unit sales might be closer to 20 million.
See our full analysis and $420 price estimate for Apple
LG Display Will Benefit Most
We estimate that LG Display will earn around $2.5 billion from the iPad 2 in 2011. LG supplies display and touchscreen interface components for the iPad 2 that cost around $127. Based on our estimate of 20 million iPad 2 units sold in 2011, we have arrived at the estimate of $2.5 billion revenues for LG Display from the iPad 2 in 2011.
Samsung Supplies Key Components
We estimate that Samsung will earn around $1.6 billion from the iPad 2 in 2011. Samsung supplies NAND Flash memory and DRAM, A5 processor and LCD timing controller components for around $66, $14 and $1 respectively as per our estimates.
Simplo Technologies Provides the Batteries for the iPad 2
Simplo Technologies supplies batteries for the iPad 2 at a price of around $25. Hence, we estimate that the company will earn around $490 million through iPad 2 sales in 2011.
Broadcom Supplies the Bluetooth, Wi-fi and Touch-Screen Control Components
We estimate that Broadcom earns around $9 from Bluetooth/Wi-fi components, $3.7 from touch-screen control and $2.6 from GPS components. The key takeaway here is that Broadcom supplies the GSM based GPS components, while Qualcomm ( QCOM ) supplies the CDMA-based GPS components. We estimate that CDMA penetration of mobile phones is around 40% as of 2010, a ratio that we have also applied to our iPad 2 estimates.
Based on these numbers, we estimate that Broadcom will earn around $280 million in revenues from the iPad 2 during 2011.
Infineon Supplies the Baseband, Radio Frequency Transceiver and Power Amplifier
We estimate that Infineon (now acquired by Intel (INTC)) earns around $14 from each GSM based iPad 2 sold by supplying baseband chipsets, RF transceivers and amplifiers. Hence we estimate that Broadcom will earn around $190 million from the iPad 2.
Qualcomm Benefits from CDMA-Based iPad 2 Components
Qualcomm supplies the CDMA-based GPS components, baseband chipsets, RF transceivers and amplifiers for the iPad 2, translating to roughly $110 million in revenues from the iPad 2 alone in 2011.
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.
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Apple holds a substantial lead in the tablet market over competitors like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. Apple's ( AAPL ) iPad 2 got off to a great start during the first weekend of its launch, selling an estimated 400,000 to 500,000 units. Samsung supplies NAND Flash memory and DRAM, A5 processor and LCD timing controller components for around $66, $14 and $1 respectively as per our estimates.
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Apple holds a substantial lead in the tablet market over competitors like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. The key takeaway here is that Broadcom supplies the GSM based GPS components, while Qualcomm ( QCOM ) supplies the CDMA-based GPS components. Infineon Supplies the Baseband, Radio Frequency Transceiver and Power Amplifier We estimate that Infineon (now acquired by Intel (INTC)) earns around $14 from each GSM based iPad 2 sold by supplying baseband chipsets, RF transceivers and amplifiers.
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Apple holds a substantial lead in the tablet market over competitors like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. Apple Could Sell Around 20 million iPad 2 in 2011 We estimate that Apple could sell around 24 million iPads in 2011. Based on our estimate of 20 million iPad 2 units sold in 2011, we have arrived at the estimate of $2.5 billion revenues for LG Display from the iPad 2 in 2011.
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Apple holds a substantial lead in the tablet market over competitors like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. The chart below illustrates our analysis of the revenues various suppliers could earn from the iPad 2 during 2011. Based on our estimate of 20 million iPad 2 units sold in 2011, we have arrived at the estimate of $2.5 billion revenues for LG Display from the iPad 2 in 2011.
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fc635f5e-5cb0-4805-88df-32fda6b5e8bc
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726909.0
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2011-03-24 00:00:00 UTC
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Supply-Related Issues from Japanese Earthquake Could Hit iPad Sales
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DELL
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https://www.nasdaq.com/articles/supply-related-issues-japanese-earthquake-could-hit-ipad-sales-2011-03-24
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nan
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nan
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A few weeks back, we noted that while Apple's ( AAPL ) products continue to see huge demand, a key concern for the company is management of supply-related constraints. The recent Japanese earthquake has now added to these concerns. According to market research firm iSuppli, the earthquake may cause logistical disruptions and supply shortages for the newly launched iPad 2. Although Apple remains king of the tablet market, it is expected to face a growing set of challengers in 2011 from Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG.
We maintain a $420 price estimate for Apple stock , roughly 25% above market price.
Apple's iPad 2 Sales Could Suffer
Apple recently released the iPad 2 and saw strong first weekend sales (an estimated 400,000 to 500,000 units). We estimate that Apple will sell about 24 million iPads in 2011.
According to a recent report from DisplaySearch, the total tablet market could reach 60 million units in 2011, with the majority of sales coming from Apple. While our forecast remains conservative compared to this estimate, we believe that potential supply constraints could push the realized total sales volume towards our 24 million unit estimate.
See our full analysis and $420 price estimate for Apple
We've previously discussed these supply constraints in a note titled " Will Supply Constraints Temper the iPhone's Impact for Apple? ", noting that management actually highlighted such issues as the main bottlenecks to meet the huge demand for its products.
So how does the earthquake in Japan change the equation? According to iSuppli's report, about five Japanese suppliers provide raw materials for the iPad 2. These materials inclue NAND flash memory, DRAM, electronic compass, touch screen overlay glass and the system battery. These are critical components for the iPad 2, and disruptions to their supply would likely hinder iPad sales.
Potential Impact on Our Apple Stock Price Estimate
Although supply constraints are a major concern for Apple, these particular issues arising from the Japanese earthquake could be more short-term and unlikely to alter our long-term projections. As we have already factored in the supply-related constraints in our base case forecasts, we see no material shift to our estimates. Moreover, the iPad constitutes only 7% of our $420 price estimate for Apple , meaning that any significant change to our unit sales forecasts would have a limited impact on our price estimate.
You can test this scenario by dragging the trend-line in the interactive chart above.
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.
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Although Apple remains king of the tablet market, it is expected to face a growing set of challengers in 2011 from Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. A few weeks back, we noted that while Apple's ( AAPL ) products continue to see huge demand, a key concern for the company is management of supply-related constraints. According to a recent report from DisplaySearch, the total tablet market could reach 60 million units in 2011, with the majority of sales coming from Apple.
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Although Apple remains king of the tablet market, it is expected to face a growing set of challengers in 2011 from Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. We maintain a $420 price estimate for Apple stock , roughly 25% above market price. According to a recent report from DisplaySearch, the total tablet market could reach 60 million units in 2011, with the majority of sales coming from Apple.
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Although Apple remains king of the tablet market, it is expected to face a growing set of challengers in 2011 from Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. Apple's iPad 2 Sales Could Suffer Apple recently released the iPad 2 and saw strong first weekend sales (an estimated 400,000 to 500,000 units). Potential Impact on Our Apple Stock Price Estimate Although supply constraints are a major concern for Apple, these particular issues arising from the Japanese earthquake could be more short-term and unlikely to alter our long-term projections.
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Although Apple remains king of the tablet market, it is expected to face a growing set of challengers in 2011 from Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG. The recent Japanese earthquake has now added to these concerns. While our forecast remains conservative compared to this estimate, we believe that potential supply constraints could push the realized total sales volume towards our 24 million unit estimate.
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5c9b1994-5ace-4780-9be8-b4fb55dba8d6
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726910.0
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2011-03-19 00:00:00 UTC
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IBM Smells Opportunity in CRM with Launch of Smarter Commerce Initiatives
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DELL
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https://www.nasdaq.com/articles/ibm-smells-opportunity-crm-launch-smarter-commerce-initiatives-2011-03-19
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nan
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nan
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IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide, and competes with firms like Oracle ( ORCL ) and Red Hat. IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as firms like EMC ( EMC ) and NetApp (NTAP) in the storage market.
In a recent development IBM announced the launch of a new software and consulting service targeted at helping companies swiftly adapt to rising customer demands in today's digitally transformed marketplace. The firm chooses to call this new emerging category "Smarter Commerce" keeping in line with its Smarter Planet initiative. We have earlier discussed IBM's focus on its Smarter Planet initiative and how the firm stands to benefit from it. (See IBM's Smarter Planet Initiatives Lay Groundwork for Growth )
We currently have a $185 Trefis price estimate for IBM's stock , about 15% above the market price. Software and services are the most valuable business divisions for IBM contributing nearly 46% and 42% respectively of the firm's equity value.
Smarter Commerce Opportunity
According to a recent IBM press release, "Today, 70% of a customer's first interaction with a product or services takes place online, 64% make a first purchase because of a digital experience and of the two billion people connected to the Internet, more than 600 million are on Facebook. This is compounded by an explosion of mobile purchases, which is tripling annually to $119 billion this year alone."
The era of mobile and social networks has not only introduced the world to new ways of buying and selling but has also empowered the consumers and raised their expectation of the entire customer experience and is continuing to do so. While earlier only retailers were impacted by the rising power and demands of consumers, now companies in a wide array of industries such as manufacturing, telecommunications, financial services and others feel the need to adapt to these changes. This has presented organizations with unseen challenges in securing customer loyalty. IBM's new software and service offering is aimed at addressing this very need of enterprise commerce activities.
IBM says, "Smarter Commerce is a smarter way for companies to buy, sell and market their products by integrating operations and enhancing interactions through community, collaboration, process and analytics - all within an industry context." ( (IBM Smarter Commerce , IBM))
We believe this new development will help extend IBM's leadership in business analytics and optimization sphere and estimate an upside to IBM's stock.
Potential Upside to IBM
IBM estimates the "Smarter Commerce" market opportunity at $70 billion driven by clients' need to meet the increasing demand for better customer experience. ((IBM Launches Software and Consulting Services to Help Businesses Adapt to Rising Customer Demands, IBM)) We believe IBM is the pioneer and industry leader in business analytics and optimization is well placed to capture a major share of this emerging market which will boost both its software and services revenues.
The new software offered by IBM draws on its market-leading WebSphere Commerce platform and will boost IBM's middleware license revenues as well as consulting services revenues. While we currently estimate IBM's middleware license revenues to grow from $5.5 billion in 2010 to $10.3 billion through our forecast period, a higher growth to $12 billion driven by IBM's new offerings will result in an upside of 5%-6% to our $185 Trefis price estimate for IBM's stock.
See our full analysis of IBM.
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.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. In a recent development IBM announced the launch of a new software and consulting service targeted at helping companies swiftly adapt to rising customer demands in today's digitally transformed marketplace. Smarter Commerce Opportunity According to a recent IBM press release, "Today, 70% of a customer's first interaction with a product or services takes place online, 64% make a first purchase because of a digital experience and of the two billion people connected to the Internet, more than 600 million are on Facebook.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. In a recent development IBM announced the launch of a new software and consulting service targeted at helping companies swiftly adapt to rising customer demands in today's digitally transformed marketplace. Potential Upside to IBM IBM estimates the "Smarter Commerce" market opportunity at $70 billion driven by clients' need to meet the increasing demand for better customer experience.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. ( (IBM Smarter Commerce , IBM)) We believe this new development will help extend IBM's leadership in business analytics and optimization sphere and estimate an upside to IBM's stock. ((IBM Launches Software and Consulting Services to Help Businesses Adapt to Rising Customer Demands, IBM)) We believe IBM is the pioneer and industry leader in business analytics and optimization is well placed to capture a major share of this emerging market which will boost both its software and services revenues.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. (See IBM's Smarter Planet Initiatives Lay Groundwork for Growth ) We currently have a $185 Trefis price estimate for IBM's stock , about 15% above the market price. ((IBM Launches Software and Consulting Services to Help Businesses Adapt to Rising Customer Demands, IBM)) We believe IBM is the pioneer and industry leader in business analytics and optimization is well placed to capture a major share of this emerging market which will boost both its software and services revenues.
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cafe801f-9644-4140-ac07-18c29a50083d
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726911.0
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2011-03-18 00:00:00 UTC
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Business Services Offerings Worth 20% of Dell's Stock
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DELL
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https://www.nasdaq.com/articles/business-services-offerings-worth-20-dells-stock-2011-03-18
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, as well as IBM ( IBM ) and others for IT services. Over the years, Dell has increasingly focused on expanding its revenues from consulting services such as infrastructure consulting and support services among others. In 2010, Dell witnessed an increase of $2 billion in its services revenues driven primarily by the Perot acquisition.
We currently maintain a $22.39 price estimate for Dell's stock , roughly 50% ahead of market price. Dell's services business, which includes managed services and consulting as well as the more recently acquired Perot Systems, accounts for close to 20% of the firm's equity value by our estimates.
Services Offered by Dell
Dell offers a number of managed, consulting and other services to its clients. Nearly half of Dell's workforce, 43,000 in number, is employed in the services business.
The interactive chart above depicts our forecasts for Dell's managed seats, which represents the total number of PCs that Dell is responsible for managing. Companies often use outsourced service providers, such as Dell, to function as an IT department supporting the company's desktops, notebooks, and printers. Dell's managed services business focuses on desktop outsourcing.
The managed services offerings include:
1. Desktop Management services offer IT support for both hardware and software. Dell can remotely fix, reset, patch, or update a variety of client software applications. In addition, Dell has a dispersed team of IT personnel across the U.S. that can respond in person to address hardware issues.
2. Data Handling and Security services include archiving and managing large amounts of data, and keeping the data secure.
3. Crisis Management services offer rapid-response support during system failures. Dell also offers email management services that include email archiving and security.
Apart from managed services, Dell and Perot Systems also offer consulting and other services including:
1. Infrastructure Consulting provides consulting services to clients to help them evaluate and implement efficient IT infrastructure.
2. Deployment Services helps firms get their systems set up and deployed efficiently.
3. Asset Recovery and Recycling Services enable firms to get rid of their old IT infrastructure and equipment in the most efficient manner through resale, recycling, and redeployment.
4. Training Services provides hardware and software training to help clients' employees get up-to-speed with the latest technologies.
5. Support Services include call centers for clients to contact when faced with PC, server, or storage problems.
See our full analysis and $22.39 price estimate for Dell's stock
Services Business Expected to Grow
We conservatively estimate that Dell's consulting and other services revenue will increase from $3.6 billion in 2010 to $4.1 billion by the end of our forecast period, driven by increased IT spending among corporations and the broader trend towards cloud computing. Demand for IT services is picking up as companies move to modernize their hardware and software systems to leverage new technology and improve productivity. Our projections imply a recovery off of the recent slowdown in IT spending.
You can drag the trend lines in the modifiable charts above to see how various scenarios for Dell's consulting & other services revenues could affect the company's stock value.
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.
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See our full analysis and $22.39 price estimate for Dell's stock Services Business Expected to Grow We conservatively estimate that Dell's consulting and other services revenue will increase from $3.6 billion in 2010 to $4.1 billion by the end of our forecast period, driven by increased IT spending among corporations and the broader trend towards cloud computing. You can drag the trend lines in the modifiable charts above to see how various scenarios for Dell's consulting & other services revenues could affect the company's stock value. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, as well as IBM ( IBM ) and others for IT services.
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Dell's managed services business focuses on desktop outsourcing. Dell also offers email management services that include email archiving and security. Apart from managed services, Dell and Perot Systems also offer consulting and other services including: 1.
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Services Offered by Dell Dell offers a number of managed, consulting and other services to its clients. Apart from managed services, Dell and Perot Systems also offer consulting and other services including: 1. See our full analysis and $22.39 price estimate for Dell's stock Services Business Expected to Grow We conservatively estimate that Dell's consulting and other services revenue will increase from $3.6 billion in 2010 to $4.1 billion by the end of our forecast period, driven by increased IT spending among corporations and the broader trend towards cloud computing.
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Services Offered by Dell Dell offers a number of managed, consulting and other services to its clients. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, as well as IBM ( IBM ) and others for IT services. Over the years, Dell has increasingly focused on expanding its revenues from consulting services such as infrastructure consulting and support services among others.
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d15a9584-28e3-4ce0-ab2f-6a31941f4e3b
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726912.0
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2011-03-16 00:00:00 UTC
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iPad 2′s Strong First Weekend Sales Can Bump Apple Shares Higher
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DELL
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https://www.nasdaq.com/articles/ipad-2s-strong-first-weekend-sales-can-bump-apple-shares-higher-2011-03-16
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nan
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nan
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Apple's ( AAPL ) iPad 2 sales got off to a great start during the first weekend of its launch having sold an estimated 400,000 to 500,000 units. The iPad 2 has a few superior features over its predecessor, including a faster A5 processor as well as front and rear facing cameras. Apple competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG in the tablet market. A few days back, we discussed the Apple's competitive position in the tablet market, and whether the iPad 2 can help Apple ward off new challengers (See Tablet Competitors Making a Charge, Can iPad 2 Hold the Line? ).
Here we will analyze how faster than expected iPad 2 sales could benefit our $420 price estimate for Apple stock . Our price estimate is about 20% higher than market price.
Our Quick Take
We estimate that the iPad accounts for around 7% of our estimate for Apple stock. The Piper Jaffray survey estimates that 400,000 to 500,000 iPad 2 could have been sold compared with 300,000 iPads sold during the first weekend. Moreover, 70% of iPad 2 buyers were new to the iPad, which will help expand Apple's customer base even more. This suggests that iPad 2 could be an even bigger success for Apple. We expect Apple to sell around 24 million iPads in 2011, compared to 15 million that it sold in 2010.
However, better than expected iPad 2 sales could create some upside to our estimate for Apple stock.
Similarly, the survey suggests that the % of buyers who purchased the higher capacity iPad 2 were considerably more than that for iPad. Since the 32 GB and 64 GB iPads are priced higher than 16 GB iPads, Apple also stands to gain from the higher average iPad pricing. We expect that iPad pricing could decline from $622 in 2010 to $585 in 2011.
However, if the survey estimations turn out to correct, the average iPad pricing could actually increase for 2011 instead of decline as we forecast. By dragging the trend lines above you can see how pricing and units sold will impact our base case scenario independently. To see the combined impact of multiple forecast changes visit our site.
See our full analysis and $420 price estimate for Apple
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.
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Apple competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG in the tablet market. Apple's ( AAPL ) iPad 2 sales got off to a great start during the first weekend of its launch having sold an estimated 400,000 to 500,000 units. The iPad 2 has a few superior features over its predecessor, including a faster A5 processor as well as front and rear facing cameras.
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Apple competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG in the tablet market. Here we will analyze how faster than expected iPad 2 sales could benefit our $420 price estimate for Apple stock . Since the 32 GB and 64 GB iPads are priced higher than 16 GB iPads, Apple also stands to gain from the higher average iPad pricing.
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Apple competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG in the tablet market. A few days back, we discussed the Apple's competitive position in the tablet market, and whether the iPad 2 can help Apple ward off new challengers (See Tablet Competitors Making a Charge, Can iPad 2 Hold the Line? The Piper Jaffray survey estimates that 400,000 to 500,000 iPad 2 could have been sold compared with 300,000 iPads sold during the first weekend.
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Apple competes with Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG in the tablet market. Here we will analyze how faster than expected iPad 2 sales could benefit our $420 price estimate for Apple stock . Our price estimate is about 20% higher than market price.
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f7957be9-12d8-443c-8fa4-1d6c105f4bdc
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726913.0
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2011-03-15 00:00:00 UTC
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Accenture Partnership Lifts NetApp
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DELL
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https://www.nasdaq.com/articles/accenture-partnership-lifts-netapp-2011-03-15
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nan
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nan
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NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
Over the years NetApp revenues coming from distribution partners (or the indirect channel) have grown significantly and now generate nearly 75% of its total sales. Some of NetApp's major distribution partners include Arrow Electronics, Avnet Hall-Mark and IBM.
In a recent development, NetApp expanded its partnership with consulting firm Accenture (ACN) with focus on joint development, marketing, and delivery of solutions concerning data center optimization and virtualization, cloud computing, and application optimization.
We believe this new development could add to the upside implied by our $63.09 price estimate for NetApp's stock , which is about 30% above market price.
Importance of Distribution Partners for NetApp
An important part of selling IT hardware for NetApp is having it sold as part of a solution that involves consulting and implementation. NetApp has witnessed an increasing share of its business being generated through distribution partners like Arrow, Avnet and IBM which made up 18%, 12% and 5% respectively of the firm's total revenues in its fiscal Q3 2011.
The partnership with Accenture will give NetApp the opportunity to expand into newer avenues by providing access to Accenture's client relationships.
We estimate that NetApp's share in the storage hardware market will increase from ~11% in 2010 to nearly 13% by the end of our forecast period. We've previously discussed the threat to NetApp's market share from increasing competition from EMC's new storage line targeted at small-to-medium business (see EMC's New VNX Storage Line a Threat to NetApp ). However, the partnership with Accenture could counteract this effect.
NetApp's Support and Consulting Services Should Get a Boost
The partnership with Accenture will not only help NetApp to grow its hardware business, but will also allow NetApp's Professional Services organization to expand its implementation capabilities by leveraging the consulting and integration services from a dedicated Accenture team.
You can drag the trend lines in the interactive charts above to see how various scenarios for storage hardware market share and services revenues as a percentage of hardware revenues affect NetApp's stock value.
See our full analysis and $63.09 price estimate for NetApp
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.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. Over the years NetApp revenues coming from distribution partners (or the indirect channel) have grown significantly and now generate nearly 75% of its total sales.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. In a recent development, NetApp expanded its partnership with consulting firm Accenture (ACN) with focus on joint development, marketing, and delivery of solutions concerning data center optimization and virtualization, cloud computing, and application optimization. We've previously discussed the threat to NetApp's market share from increasing competition from EMC's new storage line targeted at small-to-medium business (see EMC's New VNX Storage Line a Threat to NetApp ).
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Importance of Distribution Partners for NetApp An important part of selling IT hardware for NetApp is having it sold as part of a solution that involves consulting and implementation. We've previously discussed the threat to NetApp's market share from increasing competition from EMC's new storage line targeted at small-to-medium business (see EMC's New VNX Storage Line a Threat to NetApp ).
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp has witnessed an increasing share of its business being generated through distribution partners like Arrow, Avnet and IBM which made up 18%, 12% and 5% respectively of the firm's total revenues in its fiscal Q3 2011. We've previously discussed the threat to NetApp's market share from increasing competition from EMC's new storage line targeted at small-to-medium business (see EMC's New VNX Storage Line a Threat to NetApp ).
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61db3a31-421e-46f5-ba93-2f1402f36590
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726914.0
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2011-03-15 00:00:00 UTC
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Four Trends in Dell's Hardware Business Highlight Importance of Tablets
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DELL
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https://www.nasdaq.com/articles/four-trends-dells-hardware-business-highlight-importance-tablets-2011-03-15
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services. We have a $22.39 Trefis price estimate for Dell's stock , and we estimate that Dell's hardware business which includes notebooks & netbooks, tablets, desktops, printers and displays makes up nearly 33% of Dell's stock. Our price estimate is around 40% ahead of the current market price.
Below we discuss 4 key trends for Dell's hardware business and their potential impact on Dell's stock price:
1) Rising Popularity of Tablet PCs
With the launch of Apple's iPad in 2010, the demand for tablet PCs has increased at a rapid pace. We believe that this trend will continue as both phone and PC manufacturers like RIM, Motorola Mobility, Samsung, HP and Dell enter into the tablet market in a big way. Dell is planning to launch a number of tablet devices in 2011 targeting both consumers as well as enterprises and there could be tremendous upside potential if the firm manages to capture a decent share in this market.
We estimate Dell will sell around 700,000 tablets in 2011, capturing nearly 5% of android tablets sold in the market, and will increase sales to close to 2.3 million units by 2013. However, a greater market share would mean much higher sales for Dell's tablets and would result in upside to Dell's stock (See Dell to Make a Splash in Tablet Market with Enterprise Customers ). If Dell could sell around 4 million tablets by 2013, this would add about 4% upside.
2) Desktop Shipments Slow Down
There is an on-going mix shift toward notebooks & netbooks and now tablet PCs, as they become more powerful and affordable. Also the PC business is being increasingly commoditized with very low margins. We discussed this recently in a note titled Why Tablets Are Worth More Than Desktops for Dell . Dell could continue this business if volumes remain high; however, with the desktop market estimated to slow down significantly and as desktops increasingly give up ground to mobile devices, the profitability of Dell's desktop business could go down.
If our estimates for desktops sold decreased to around 125 million in the coming years, this would clip around 2% off our price estimate.
3) Fate of Displays Tied to Desktops
The upgrade cycle to LCD monitors saw Samsung takeover Dell as the market leader due to its leadership in the stand alone monitor market. Since displays are most commonly sold along with desktops, Dell's fortunes in the display market rest on the slowing desktop business. To compensate Dell could reduce prices, which would depress margins in an already low margin business.
4) Limited Market Share in Slowing Printer Market
Dell is a very small fish in the printer market with less than 5% market share. Also, overall printer sales have slowed with the emergence of notebooks and wireless networks for printer sharing. This will reduce the number of printers per PC and negatively impact Dell's printer business going forward.
Given the small contribution of displays and printers, declines in these businesses imply a downside of only 5% in our price estimate for Dell in our bearish scenarios and so are less meaningful drivers.
You can drag the trend lines above to see the impact of different hardware scenarios on Dell's stock.
See our complete analysis of $22.39 Trefis price estimate for Dell's stock .
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.
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We believe that this trend will continue as both phone and PC manufacturers like RIM, Motorola Mobility, Samsung, HP and Dell enter into the tablet market in a big way. Dell is planning to launch a number of tablet devices in 2011 targeting both consumers as well as enterprises and there could be tremendous upside potential if the firm manages to capture a decent share in this market. Given the small contribution of displays and printers, declines in these businesses imply a downside of only 5% in our price estimate for Dell in our bearish scenarios and so are less meaningful drivers.
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We have a $22.39 Trefis price estimate for Dell's stock , and we estimate that Dell's hardware business which includes notebooks & netbooks, tablets, desktops, printers and displays makes up nearly 33% of Dell's stock. Below we discuss 4 key trends for Dell's hardware business and their potential impact on Dell's stock price: 1) Rising Popularity of Tablet PCs With the launch of Apple's iPad in 2010, the demand for tablet PCs has increased at a rapid pace. 4) Limited Market Share in Slowing Printer Market Dell is a very small fish in the printer market with less than 5% market share.
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We have a $22.39 Trefis price estimate for Dell's stock , and we estimate that Dell's hardware business which includes notebooks & netbooks, tablets, desktops, printers and displays makes up nearly 33% of Dell's stock. However, a greater market share would mean much higher sales for Dell's tablets and would result in upside to Dell's stock (See Dell to Make a Splash in Tablet Market with Enterprise Customers ). Dell could continue this business if volumes remain high; however, with the desktop market estimated to slow down significantly and as desktops increasingly give up ground to mobile devices, the profitability of Dell's desktop business could go down.
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We have a $22.39 Trefis price estimate for Dell's stock , and we estimate that Dell's hardware business which includes notebooks & netbooks, tablets, desktops, printers and displays makes up nearly 33% of Dell's stock. This will reduce the number of printers per PC and negatively impact Dell's printer business going forward. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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27ecbba4-c4e2-43eb-a5e0-a4152e6d759a
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726915.0
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2011-03-10 00:00:00 UTC
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Upcoming Spin-Off Should Unleash IDT Corp.'s Value
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DELL
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https://www.nasdaq.com/articles/upcoming-spin-should-unleash-idt-corps-value-2011-03-10
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nan
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nan
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Mariusz Skonieczny submits:
IDT Corporation ( IDT ) is a company that has caused investors lots of pain and joy depending on when they purchased their shares. From the following price chart, you can see that it was trading as high as $41.84 per share on September 18, 2006, and as low as $0.71 per share on December 19, 2008. Now, it is back at around $25 per share.
[Click all to enlarge]
Business Description
IDT Corporation is a consumer services-focused company with operations primarily in the telecommunications and energy industries. The following is a chart showing IDT's lines of business:
Source: IDT Corporation's Investor Presentation
There are three main parts: IDT Telecom, Genie Energy, and Other.
IDT Telecom
Through IDT Telecom, the company provides various telecommunications services, including prepaid and rechargeable calling cards, a range of VoIP communications services and wholesale carrier services. Through this segment, it also provides consumers local and long distance phone services.
Genie Energy
Genie Energy consists of IDT Energy and Genie Oil & Gas. Through IDT Energy, the company resells natural gas and electricity to residential and small business consumers in eight utility markets in New York state. At the end of 2010, the company began adding customers in two utility territories in New Jersey and Pennsylvania. Through Genie Oil & Gas, the company has interests in oil shale projects in Colorado and Israel.
Other
Under the "Other" segment, the company owns interests in Fabrix, Zedge, intellectual property and real estate.
Why Did the Stock Originally Collapse?
In the early 2000s, IDT Corporation sold off Net2Phone to AT&T ( T ) and, as a result, had over $1 billion in cash. The former CEO wasted it by investing it in many unproven ventures while not really placing much emphasis on running the business in a profitable fashion. Soon, the company's cash went from billions to millions, and bloated operating costs helped burn it even faster. Because the company was on its way to bankruptcy, the stock price got crushed. The company also received a delisting notice from the New York Stock Exchange as its market capitalization fell below the required level.
Why Did the Stock Recover?
Howard Jonas, the founder, seeing his company disappearing, came back as CEO and orchestrated one of the most remarkable turnarounds ever. He cut the workforce by 80 percent from 5,000 to 1,000, gave up on unprofitable ventures, sold off real estate, and spun off certain businesses. Soon the business started turning a profit and its cash position started to grow again. The stock began to recover.
Why Is There Still More Room to Make Money?
Even though the stock price increased significantly since its lowest point in late 2008, there is still more opportunity to make money by investing in IDT. From the valuation point of view, based on the price you pay for the stock, you are getting much more in value. The following chart shows how much some of the segments are worth:
Source: IDT Corporation's Investor Presentation
IDT Telecom generates about $51 million in EBITDA, and based on the valuation methodology that the management provided in its investor presentation, this segment is worth between $180 and $275 million or $7.83 and $11.96 per share (23 million shares). This assumes multiples of 3.5 and 5.4 times EBITDA, which are low, but I believe this is justified considering that sometime in the future products such as prepaid calling cards, which represent a significant source of revenue, might not exist anymore. In the near future, they are not going anywhere. Because the value is between $7.83 and $11.96 per share, I will assign it a value of $10 per share.
IDT Energy generates about $36 million in EBITDA, and based on the valuation methodology that the management provided in the investor presentation, this segment is worth between $145 and $180 million or $6.30 and $7.82. This assumes multiples of 4 and 5, which some might argue are too low because this business is growing; the company is entering new markets such as Pennsylvania and New Jersey. However, to remain conservative, we will go with these multiples and estimate the value of this segment at $7 per share.
IDT also has $250 million in cash on the balance sheet, which is worth about $11 per share. So far, we have $10 per share for IDT Telecom, $7 per share for IDT Energy, and $11 per share of cash, for a total of $28 per share.
Today, you can pay about $25 per share for the stock of IDT and get $28 in value per share. But this $28 of value does not even include Genie Oil & Gas, Fabrix, Zedge, intellectual property, or real estate. You get all of these for free. However, some of these free options could be worth quite a bit in the future. Let us take a look.
Fabrix is an Israeli company in which IDT is a majority stake holder. Fabrix licenses a video software platform optimized for cost-effective video storage, high throughput streaming and intelligent content distribution. In other words, it provides software that allows you to rewind your TV without having a TiVo box or some other digital recorder because the channels are stored on back-end servers. This software is used by cable, telecommunications, Internet service providers and web-based video portals interested in offering personalized television applications and remote DVR storage capabilities.
In the past, we were forced to watch television programs at particular times, but now we are demanding more. We want to consume any kind of content, at any time, and on any device (TV, computer, or phone). Consequently, service providers must offer it to us or we will switch to someone who will. To achieve this, these companies need lots of storage and this is where Fabrix comes in as it provides them with a set of scalable video storage and delivery solutions.
At this point, it is hard to estimate how much Fabrix is worth because it does not contribute a significant amount of revenue to IDT. However, it is not costing the parent company any more because it is now operating on a break-even basis. That being said, we can still put a rough estimate of value based on what is already known. During the Investor Day Presentation, Jonas hinted that [[IBM]] and Dell ( DELL ) expressed interest in the possible investment or acquisition of Fabrix. There are rumors that IBM was willing to pay as much as $100 million for Fabrix. If the rumors are true, Fabrix would be worth $70 million or $3 per share because IDT owns 70 percent of it.
However, the rough estimate of value is only for today and it does not account for what Fabrix could be worth in the future. The management states that we are just at the beginning of the multi-billion dollar developing market and Fabrix has the leading technology. Currently, Fabrix is targeting companies that sell to customers in North America and Western Europe because these regions have lots of people who pay for content. The future market will be Asia.
As I mentioned before, Fabrix just started breaking even -- but this is about to change. In August 2010, a major cable operator, Cablevision ( CVC ), licensed Fabrix software to empower its cloud-based DVR offering. In January 2011, Cablevision started offering the network-based DVR service for which Fabrix is the primary vendor. Currently, this service is available only to residential customers located in the Bronx. This is obviously not reflected in IDT's financial statements yet.
Even though Fabrix has the potential to become a valuable asset for IDT, the market is assigning it no value. If its potential is realized, it will be a big winner, and if not, then there is no loss because we got it as a free option.
Zedge is a Norway-based company that provides a web-based, worldwide destination for the discovery and distribution of mobile content. Users go there to download wallpaper themes, ringtones, videos, texts, games, and soon, apps, for free. The site generates money through advertising.
The number of people using this site is exploding as people are shifting from desktop to mobile computing. According to management, there are currently approximately 40 million unique visitors per month as shown in the following graph:
Source: IDT Corporation's Investor Presentation
It is difficult to estimate exactly what it is worth today, but considering that it has 40 million unique visitors per month, it is definitely worth something. On September 23, 2008, Shaman II LP paid $1 million for 10 percent of Zedge. This implies that to these buyers Zedge was worth $10 million in 2008. Then, in March 2010, Shaman II LP paid $300,000 for an additional 1 percent ownership in Zedge, which implies that the value of Zedge to these same buyers increased to $30 million.
But in March 2010, Zedge had only 20 million unique visitors per month, and now, it has 40 million unique visitors per month. Considering that the number of users doubled since that transaction and the growth rate as shown in the graph appears to be accelerating, it would not be outrageous to conclude that Zedge may be worth about $60 million. Because IDT owns 81 percent of it, this translates into $49 million or $2 per share.
But the value of $2 per share is only as of today and does not account for what it could be worth in the future. The management believes it has substantial potential. Here is why. Zedge used to cost IDT millions of dollar per year but recently it has broken even, similar to Fabrix. As I mentioned before, Zedge generates revenue by advertising to 40 million users who download wallpapers and other cool things.
However, management is talking about increasing the number of users from 40 million to 500 million and eventually, to even a billion. Just to put things in perspective, Facebook has about 500 million users. If Zedge achieves 500 million users, it will become very valuable. The CEO joked that instead of IDT spinning Zedge out, Zedge will be the one spinning IDT out.
But is it possible to get to 500 million or a billion users? The management believes it is. Jonas argues that Zedge will be able to get to this number by offering free apps. Currently, Zedge attracts 40 million users by letting them download free wallpapers. Soon, it will start offering users free apps, and because people love apps and there are thousands of them, he says, this will drive traffic to these new levels.
Then, once Zedge starts offering apps, people will be using the site to search for the apps of their choice and when they perform these searches, Zedge will know exactly what they are searching for. This will be powerful information that will allow Zedge to target advertising that relates to these particular searches in a similar way that Google targets its advertising. Jonas said that this is where the big money will be made.
Similar to Fabrix, Zedge is completely ignored by the market even though it is not hard to see that it could become a big winner for IDT. Are the management's goals reasonable and will they be realized? I do not know, but I think of Zedge as a free option. At the price of $0, the price is right for me!
Real Estate
IDT Corporation owns a property at 520 Broad Street, Newark, NJ, which it used to occupy as its headquarters. After the company cut 80 percent of its workforce, it did not need as much space. Therefore, it vacated the property and leased 75,000 square feet of space at 550 Broad Street.
The property is a Class B downtown office building with 500,000 square feet of space and an 800-car parking garage. It was built in 1956. IDT is currently working on realizing value from this real estate. Assuming the property can be fully leased at a rate of $20 per square foot, it is worth about $80 million. After subtracting $26 million for the mortgage, this equates to a value of $54 million or a little over $2 per share.
While the property is valuable, it is important to realize that the $2 per share might never be realized. The property is mostly vacant, and IDT has to pay all the expenses associated with owning it, including the mortgage payment. Instead of being an asset, this property is draining resources and is more of a liability. Because the mortgage is non-recourse, I would not be surprised if the company decides to give the property back to the bank. Consequently, I am assigning $0 value to this real estate.
IP - Intellectual Property
IDT Corporation owns VoIP (Voice over Internet Protocol) patents. The company spent millions of dollars defending them and recently settled an infringement lawsuit with Skype. Because the use of VoIP is widespread, there might be many other infringement cases, and the company has decided to actively go after them. This means that it might be able to generate additional cash from VoIP patents. To unlock this value, IDT is in the process of spinning off this segment as a separate company. Because I have absolutely no idea what this could be worth I am assigning its intellectual property a value of $0.
Net Operating Losses (NOLs)
Because IDT experienced losses in the years before the turnaround, the company has federal and state net operating loss carry-forwards of approximately $225 million as of July 31, 2010. This translates into additional value of nearly $10 per share. This carry-forward loss is available to offset future U.S. federal and state taxable income. In order to take advantage of these net operating losses, IDT will have to stay profitable going forward, and since the turnaround process is now complete, this should not be a problem.
Genie Oil & Gas
Through Genie Oil & Gas, IDT has ownership interests in American Shale Oil ((AMSO)) and Israel Energy Initiatives (( IEI )), as shown in the following illustration:
Source: IDT Corporation's Investor Presentation
IDT owns 50 percent of AMSO and 89 percent of IEI. Through these two ventures, the company is attempting to produce oil from shale on a commercial scale.
In 2005, the U.S. Bureau of Land Management began the implementation of the Energy Policy Act passed by Congress, seeking proposals from the private sector to develop oil shale resources in economically and environmentally responsible ways. AMSO was selected with two other companies, Shell (RDS.A) and Chevron (CVX), to be involved in this project.
Consequently, effective January 1, 2007, it received a 10-year lease for research, development and demonstration in western Colorado. This lease covers an area of 160 acres. Once the company demonstrates the economic and environmental viability of its technology, it will be able to convert the initial lease to a commercial lease with 5,120 acres that contains approximately 10 billion barrels of oil equivalent.
In July 2008, the Israeli Ministry of National Infrastructure awarded IDT's Israel Energy Initiatives an exclusive Shale Oil Exploration & Production License. This is a three-year license that can be extended to a total of seven years, and it covers approximately 238 square kilometers in the South of the Shfela region in Israel. The area holds approximately 40 billion barrels of oil equivalent. After the company demonstrates commercially viable technology, it will be able to apply for a 30-year commercial lease from the Israeli government.
Through two long-term leases, IDT could potentially control a total of 50 billion barrels of oil equivalent (10 billion in Colorado and 40 billion in Israel), which would be extremely valuable. To put things in perspective, Exxon Mobil (XOM) has a resource base of over 84 billion barrels of oil equivalent. IDT's CEO states that if the shale project materializes, the company could be worth half as much as Exxon Mobil Corporation or approximately $200 billion. This would translate into a stock price of $8,700 per share versus $25 per share today. This is 348 times the current stock price.
Looking at these numbers, it is hard to believe that such a huge return is even possible. It seems like such a huge gamble if you consider yourself to be a conservative investor. But how can this be a gamble if you are not putting up any money?
Remember, from the previous section: If you buy IDT at today's prices, you are not even paying for this "lottery ticket." It comes as a free option. I do not play the lottery, but if you buy me the ticket, I will take it.
However, there are some very smart individuals who put real money into Genie Oil & Gas so that they can have the possibility of making these huge returns. On November 15, 2010, IDT announced that Rothschild and Rupert Murdoch have each purchased equity stakes in Genie, paying $11 million for a 5.5 percent stake. Based on this price, we can conclude that Genie might be worth $200 million or about $9 per share.
Whether it is possible for IDT to be worth half of Exxon Mobil is not really important. What is important is that if IDT succeeds, the oil shale project will be a huge winner for IDT and its shareholders. Despite the tremendous potential, oil production from shale is years away. Hopefully by 2018, it will become a reality.
In the meantime, to demonstrate the commercial viability of its technology on both of the oil ventures, IDT assembled a team of experts who are some of the best minds in the oil shale field to work on a non-traditional way of extracting oil from shale. The traditional way of extracting oil from shale requires digging up the rock and heating it to high temperatures. This takes a lot of energy and creates a tremendous amount of mess.
IDT's team came up with a different method, which consists of heating up the rock in the ground and extracting oil from the ground in liquid form. This method is cheaper and more environmentally friendly. It costs about $25 per barrel. With oil at over $100 per barrel, there is a decent margin to be earned.
Bringing the oil shale projects into commercial production will require capital. As a result, the market is worried that IDT will squander its cash on this project, which may never materialize. What the market is missing is that the majority of the capital will not come from IDT. If you go back to the previous chart, you will see that IDT only owns 50 percent of AMSO. This is because the company brought in a partner, Total S.A. (TOT), the French oil giant. Total S.A. owns the other 50 percent and is putting up the money to bring oil shale into commercial production.
From the same chart, you can also see that IDT owns 89 percent of IEI, which means that it does not have a financial partner similar to Total S.A. -- at least, not yet; the company is in the process of recruiting a well-capitalized partner who can take care of the bills in return for some potential action.
Sum of the Parts
If we conservatively account for the values of all of the parts, this is what we get:
Source: IDT Corporation's Investor Presentation
Catalysts
From the sum of the parts valuation, we can see that IDT is worth more than twice the price at which its stock is currently trading. The market is assigning virtually no value to the oil shale project, Fabrix, Zedge or intellectual property even though these segments should carry some value.
I believe that the market is ignoring these valuable segments because it is too difficult to understand IDT. From the market's point of view, IDT sells prepaid calling cards, is involved in reselling natural gas and electricity, and helps users download ringtones. What's next, a pet grooming business? It is simply too hard to understand what is going on
However, this is about to change as the company is preparing to execute a spin-off where the company's telecom business will be separated from its energy business. The spin-off is expected to be completed by the end of IDT's fiscal year, which ends July 31, 2011.
Lines of Business - Pre Spin-off
Source: IDT Corporation's Investor Presentation
Lines of Business - Post Spin-off
Source: IDT Corporation's Investor Presentation
I believe that the spin-off will be a catalyst that will benefit shareholders greatly. Currently, if you want to invest in IDT's Telecom business, you also have to invest in the oil shale project. But what if you simply do not want to be involved in the oil shale business?
On the other hand, if you want to invest in the oil shale venture, you also have to invest in IDT's boring telecom business. By separating IDT Telecom from Genie Energy, the company will satisfy both groups of investors. Those who are more adventurous will be happy to have a more pure play on oil shale, and those who are more conservative will be happy to invest in its telecom business.
After the spin-off, you will own both IDT Corporation and Genie Energy as separate stocks. As a sum, they will likely trade at higher prices than what IDT is currently trading for as one company. IDT Telecom will be spun off with some cash, and it will pay a dividend of $0.22 per quarter or $0.88 per year. Considering that this business generates lots of EBITDA, maintaining this dividend should not be a problem.
It is hard to say what price the new IDT Corporation will trade for, but if we assume a dividend yield of 4 percent, we will get a stock price of $22 per share. If we assume a dividend yield of 3 percent, we will get a stock price of $29 per share. At first, it might trade at a high dividend yield which means that the stock could trade below $20 per share, but, over time, it should adjust higher.
What will Genie Energy, with IDT Energy and Genie Oil & Gas, trade for? We established that IDT Energy is worth $7 per share, so it should not have a problem with trading for this much. However, the goal of this spin-off is for the market to assign some value to Genie. What will that value be? Your guess is as good as mine.
However, if it assigns a value of $9 per share based on what Rothschild and Rupert Murdoch paid for their 5.5 percent stake, then Genie Energy will trade for $16 per share. Plus, Genie Energy will be spun off with some of the $11 per share of cash. The management stated that the cash might be split equally between the two companies, which would mean that Genie Energy could get $5.50 of cash per share. If the market values this cash at only half of $5.50 per share, then we might get a stock price of something in the neighborhood of $19 per share.
If the market prices the new IDT Corporation at $29 per share (3 percent dividend yield) and Genie Energy at $19 per share, we will get a total of $48 per share. And, when Fabrix, Zedge, or oil shale realize some or all of their potential, then both of the newly created stocks will trade at much higher prices.
Besides the upcoming spin-off, another catalyst that is likely to push the stock price higher is the fact that research analysts are starting to cover this stock, thus generating more exposure among the investing community.
Conclusion
Even though the stock price of IDT Corporation increased significantly over the last two years, it is amazing that the potential for future returns remains large. The first pop is likely to occur after the spin-off. Additional value might be realized when some of the free options such as Fabrix, Zedge, and oil shale, reach some or all of their potential.
Disclosure: I, or persons whose accounts I manage, own shares of IDT Corporation. This report is not a solicitation to buy or sell securities. Neither Mariusz Skonieczny nor Classic Value Investors, LLC, is responsible for any losses resulting from purchasing or disposing shares of IDT Corporation. You are advised to consult your financial advisor or conduct the due diligence yourself.
See also Telefonica: Company With High Dividend Yields, Low Payout Ratios on seekingalpha.com
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.
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During the Investor Day Presentation, Jonas hinted that [[IBM]] and Dell ( DELL ) expressed interest in the possible investment or acquisition of Fabrix. This assumes multiples of 3.5 and 5.4 times EBITDA, which are low, but I believe this is justified considering that sometime in the future products such as prepaid calling cards, which represent a significant source of revenue, might not exist anymore. This software is used by cable, telecommunications, Internet service providers and web-based video portals interested in offering personalized television applications and remote DVR storage capabilities.
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During the Investor Day Presentation, Jonas hinted that [[IBM]] and Dell ( DELL ) expressed interest in the possible investment or acquisition of Fabrix. The following chart shows how much some of the segments are worth: Source: IDT Corporation's Investor Presentation IDT Telecom generates about $51 million in EBITDA, and based on the valuation methodology that the management provided in its investor presentation, this segment is worth between $180 and $275 million or $7.83 and $11.96 per share (23 million shares). Genie Oil & Gas Through Genie Oil & Gas, IDT has ownership interests in American Shale Oil ((AMSO)) and Israel Energy Initiatives (( IEI )), as shown in the following illustration: Source: IDT Corporation's Investor Presentation IDT owns 50 percent of AMSO and 89 percent of IEI.
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During the Investor Day Presentation, Jonas hinted that [[IBM]] and Dell ( DELL ) expressed interest in the possible investment or acquisition of Fabrix. The following chart shows how much some of the segments are worth: Source: IDT Corporation's Investor Presentation IDT Telecom generates about $51 million in EBITDA, and based on the valuation methodology that the management provided in its investor presentation, this segment is worth between $180 and $275 million or $7.83 and $11.96 per share (23 million shares). So far, we have $10 per share for IDT Telecom, $7 per share for IDT Energy, and $11 per share of cash, for a total of $28 per share.
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During the Investor Day Presentation, Jonas hinted that [[IBM]] and Dell ( DELL ) expressed interest in the possible investment or acquisition of Fabrix. The following chart shows how much some of the segments are worth: Source: IDT Corporation's Investor Presentation IDT Telecom generates about $51 million in EBITDA, and based on the valuation methodology that the management provided in its investor presentation, this segment is worth between $180 and $275 million or $7.83 and $11.96 per share (23 million shares). Today, you can pay about $25 per share for the stock of IDT and get $28 in value per share.
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28ba89e5-7938-4082-b0f0-69bfcdd03ce1
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726916.0
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2011-03-09 00:00:00 UTC
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Apple Still Holding its Ground in Notebooks Despite Tablet Popularity
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DELL
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https://www.nasdaq.com/articles/apple-still-holding-its-ground-notebooks-despite-tablet-popularity-2011-03-09
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nan
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nan
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Apple ( AAPL ) has a history of introducing successful products to the market, consistently recording rapid adoption despite the fact that its products are often sold at a substantial premium to competitors' devices. Apple already has a substantial share in the high end of the PC market with its Mac line of products, and the iPad now allows the company to tap the lower price range. Apple's competitors in these product segments include Dell ( DELL ), HP ( HPQ ) and Acer in the PC market, and Research in Motion ( RIMM ), Motorola Mobility ( MMI ) and Samsung in the tablet market.
Although surging tablet sales are eating into sales of more expensive PCs and netbooks, Apple's own position in the PC market actually remains unharmed. The reason for this is the company's ability to spark interest in new product launches like the MacBook Air.
Apple's Mac line of products accounts for 17% of our $420 price estimate for Apple stock , while iPad tblets represent an additional 7%. Our price estimate stands about 15% ahead of market price.
Apple Taking Share from Competitors
Market research firms are now predicting smaller growth in the overall PC market in the years ahead than previously anticipated. One report revised 2011 PC growth rate expectations from 15.9% to 10.5% for 2011, as the iPad and other tablets continue to cannibalize PC sales. However, we expect Apple to offset this trend with notable market share gains in both notebooks and desktops. 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.
See our full analysis and $420 price estimate for Apple
Apple is known for its consistent innovation in the PC market and steady string of successful product launches. The MacBook Air, released in October 2010, is one such example. According to a report, Apple shipped over 1 million MacBook Airs during the fourth quarter of 2010, out of a total of 2.9 million Mac notebooks that it sold during the quarter.
Strategy Working for Apple
Apple has had success growing its market share in the high-end of the PC market, and with the launch of the iPad, has also managed to elbow its way into the low-end market as well.
Although tablets are believed to have cannibalized a good chunk of PC sales, Apple's Mac sales have actually maintained a solid growth pace. Rather than cannibalizing Apple's own product sales, the iPad appears to be creating a halo effect and lifting sales for the company's other products (see our article Apple iPad Not Hurting Mac Sales ).
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.
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Apple's competitors in these product segments include Dell ( DELL ), HP ( HPQ ) and Acer in the PC market, and Research in Motion ( RIMM ), Motorola Mobility ( MMI ) and Samsung in the tablet market. Apple already has a substantial share in the high end of the PC market with its Mac line of products, and the iPad now allows the company to tap the lower price range. However, we expect Apple to offset this trend with notable market share gains in both notebooks and desktops.
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Apple's competitors in these product segments include Dell ( DELL ), HP ( HPQ ) and Acer in the PC market, and Research in Motion ( RIMM ), Motorola Mobility ( MMI ) and Samsung in the tablet market. Apple already has a substantial share in the high end of the PC market with its Mac line of products, and the iPad now allows the company to tap the lower price range. Although tablets are believed to have cannibalized a good chunk of PC sales, Apple's Mac sales have actually maintained a solid growth pace.
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Apple's competitors in these product segments include Dell ( DELL ), HP ( HPQ ) and Acer in the PC market, and Research in Motion ( RIMM ), Motorola Mobility ( MMI ) and Samsung in the tablet market. See our full analysis and $420 price estimate for Apple Apple is known for its consistent innovation in the PC market and steady string of successful product launches. Strategy Working for Apple Apple has had success growing its market share in the high-end of the PC market, and with the launch of the iPad, has also managed to elbow its way into the low-end market as well.
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Apple's competitors in these product segments include Dell ( DELL ), HP ( HPQ ) and Acer in the PC market, and Research in Motion ( RIMM ), Motorola Mobility ( MMI ) and Samsung in the tablet market. Apple already has a substantial share in the high end of the PC market with its Mac line of products, and the iPad now allows the company to tap the lower price range. See our full analysis and $420 price estimate for Apple Apple is known for its consistent innovation in the PC market and steady string of successful product launches.
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dcbb657c-538e-4310-98f1-b53eb6f8fd09
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726917.0
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2011-03-09 00:00:00 UTC
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EMC’s New VNX Storage Line a Threat to NetApp
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DELL
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https://www.nasdaq.com/articles/emcs-new-vnx-storage-line-threat-netapp-2011-03-09
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nan
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nan
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EMC ( EMC ), the global leader in the external disk storage market, unveiled a range of lower priced data storage products in January with the aim of expanding its offerings to a cloud platform which happens to be the fastest growing segment for data storage industry. This new development will help EMC to better serve small-to-medium sized clients and compete against NetApp ( NTAP ) in the cloud computing space. NetApp ( NTAP ) mainly competes with IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
With increased competition, we see downside to our $63.09 Trefis price estimate for NetApp's stock if EMC manages to take market share from NetApp in the small-to-medium storage market.
EMC Targets Small and Medium Businesses
EMC's new unified storage line, called VNX, is expected to be the cheapest in its class and will allow EMC to make inroads into the small and medium enterprise (SME) market. The new unified storage also combines EMC's Clarion and Celerra offerings into a single system for file, block and object data allowing users to manage data from a single device, reducing hardware requirements and simplifying data management.
Recently EMC also acquired Isilon Systems, a small storage maker with a cheaper and more flexible approach to network-attached storage to extend its cloud offering. Isilon's technology allows companies to quickly build large clusters of storage devices on inexpensive commodity hardware making EMC's offering more competitive to NetApp's.
Potential Downside to NetApp
Over the years, NetApp's strength in desktop virtualization and its unified storage strategy under a single OS has helped the company boost its external hardware market share. The firm controls nearly 25% of the small-to-medium storage market and has been the dominant player in the cloud storage offerings and lower priced data storage products competing with firms like IBM and HP that also compete in this market.
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. We currently forecast NetApp's share in total storage market will increase from just over 11% in 2010 to around 13% in the coming years. However if competition from EMC and others results in stable market share, this would imply about 12% downside to our price estimate for NetApp's stock .
You can drag the trend line above to see the impact of various storage hardware market share scenarios on NetApp's stock.
See our complete analysis of NetApp's stock .
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.
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NetApp ( NTAP ) mainly competes with IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. This new development will help EMC to better serve small-to-medium sized clients and compete against NetApp ( NTAP ) in the cloud computing space. Isilon's technology allows companies to quickly build large clusters of storage devices on inexpensive commodity hardware making EMC's offering more competitive to NetApp's.
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NetApp ( NTAP ) mainly competes with IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. With increased competition, we see downside to our $63.09 Trefis price estimate for NetApp's stock if EMC manages to take market share from NetApp in the small-to-medium storage market. The firm controls nearly 25% of the small-to-medium storage market and has been the dominant player in the cloud storage offerings and lower priced data storage products competing with firms like IBM and HP that also compete in this market.
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NetApp ( NTAP ) mainly competes with IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. EMC ( EMC ), the global leader in the external disk storage market, unveiled a range of lower priced data storage products in January with the aim of expanding its offerings to a cloud platform which happens to be the fastest growing segment for data storage industry. With increased competition, we see downside to our $63.09 Trefis price estimate for NetApp's stock if EMC manages to take market share from NetApp in the small-to-medium storage market.
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NetApp ( NTAP ) mainly competes with IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. With increased competition, we see downside to our $63.09 Trefis price estimate for NetApp's stock if EMC manages to take market share from NetApp in the small-to-medium storage market. The firm controls nearly 25% of the small-to-medium storage market and has been the dominant player in the cloud storage offerings and lower priced data storage products competing with firms like IBM and HP that also compete in this market.
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28796b26-2f97-44ef-9e89-b8d5fd4fc033
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726918.0
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2011-03-08 00:00:00 UTC
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Growth in Server Shipments Means More to HP than IBM
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DELL
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https://www.nasdaq.com/articles/growth-server-shipments-means-more-hp-ibm-2011-03-08
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nan
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nan
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IBM ( IBM ) barely edged HP ( HPQ ) in terms of 2010 worldwide server market share, according to data compile by IDC. For the full year 2010, IBM recorded a 31.9% share while HP came in at 31.8%. Other big players in the server market - Dell ( DELL ), Oracle ( ORCL ) and Fujitsu ( FJTSF ) - placed 3rd, 4th and 5th respectively.
Since HP and IBM are now pitching themselves as the leaders of the server market to boost sales, we became interested in comparing what the server business is worth to each firm, and what impact a gain in market share could have on their stock values.
Servers (including both industry servers and high-end systems) represent more than 10% of our $55.49 price estimate for HP stock . Comparatively, they make up only 3% of our $185 price estimate for IBM stock .
HP Hea
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Other big players in the server market - Dell ( DELL ), Oracle ( ORCL ) and Fujitsu ( FJTSF ) - placed 3rd, 4th and 5th respectively. For the full year 2010, IBM recorded a 31.9% share while HP came in at 31.8%. Since HP and IBM are now pitching themselves as the leaders of the server market to boost sales, we became interested in comparing what the server business is worth to each firm, and what impact a gain in market share could have on their stock values.
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Other big players in the server market - Dell ( DELL ), Oracle ( ORCL ) and Fujitsu ( FJTSF ) - placed 3rd, 4th and 5th respectively. Servers (including both industry servers and high-end systems) represent more than 10% of our $55.49 price estimate for HP stock . Comparatively, they make up only 3% of our $185 price estimate for IBM stock .
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Other big players in the server market - Dell ( DELL ), Oracle ( ORCL ) and Fujitsu ( FJTSF ) - placed 3rd, 4th and 5th respectively. IBM ( IBM ) barely edged HP ( HPQ ) in terms of 2010 worldwide server market share, according to data compile by IDC. Since HP and IBM are now pitching themselves as the leaders of the server market to boost sales, we became interested in comparing what the server business is worth to each firm, and what impact a gain in market share could have on their stock values.
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Other big players in the server market - Dell ( DELL ), Oracle ( ORCL ) and Fujitsu ( FJTSF ) - placed 3rd, 4th and 5th respectively. IBM ( IBM ) barely edged HP ( HPQ ) in terms of 2010 worldwide server market share, according to data compile by IDC. For the full year 2010, IBM recorded a 31.9% share while HP came in at 31.8%.
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4e116f42-bb32-4660-9cc0-c1f91d633abd
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726919.0
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2011-03-05 00:00:00 UTC
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Why Tablets Are Worth More Than Desktops For Dell
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DELL
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https://www.nasdaq.com/articles/why-tablets-are-worth-more-desktops-dell-2011-03-05
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
Could tablets be worth more to Dell than its traditional desktop business? Yes, even despite the fact that Dell is currently the second largest desktop vendor in the world. Higher growth expected in tablet unit sales coupled with significantly higher margin on tablet devices make this business much more valuable to the company.
We previously discussed Dell's foray into tablets ( Tablets to Help Push Dell Stock Above $20 ) and how the company is in prime position to capture a decent share of the enterprise tablet market, which could soon become as big as the consumer tablet market ( Dell to Make a Splash in Tablet Market with Enterprise Customers ).
We maintain a roughly $22 price estimate for Dell's stock , with tablets contributing a little over 5% of this value and desktops adding only 4%. Our price estimate currently implies a 45% premium to market price.
Tablets Expected to Exceed Desktop Sales
According to a Forrester analyst, tablets will surpass desktop sales by as early as 2013 if the current surge in demand continues. This surge was initially sparked by the launch of Apple's iPad in 2010. With a number of companies emphasizing new tablet launches, tablets could make up as much as 21% of the global PC market by 2013, up from 6% in 2010.
Desktops, on the other hand, could see their share drop from 32% in 2010 to 20% in 2013, according to Forrester research.
See our full analysis and $22 price estimate for Dell
Higher Margins Make Tablets More Profitable than Desktops
The EBITDA profit margin for Dell's desktops declined from around 7% in 2005 to nearly 4% in 2010 as the manufacturer cut down on prices in order to remain competitive. Tablets, on the other hand, had a significantly higher EBITDA margin of around 17% in 2010.
Although we do forecast a decline in tablet margins in the future, tablets should remain much more profitable than desktops. We estimate both tablet and desktop prices will decrease going forward due to increasing commoditization, but the decline for desktops will be accelerated by slowing demand and cannibalization from competing devices like notebooks and tablets. On the other hand, the decline in tablet pricing will be mainly a result of pricing pressure from other tablet vendors, and should not be as sever as that of desktop PCs.
See our full analysis and $22 price estimate for Dell
Drag the trend lines in the interactive charts above to see the affect of various sales and profit margin scenarios on Dell's stock value.
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.
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We maintain a roughly $22 price estimate for Dell's stock , with tablets contributing a little over 5% of this value and desktops adding only 4%. See our full analysis and $22 price estimate for Dell Higher Margins Make Tablets More Profitable than Desktops The EBITDA profit margin for Dell's desktops declined from around 7% in 2005 to nearly 4% in 2010 as the manufacturer cut down on prices in order to remain competitive. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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We previously discussed Dell's foray into tablets ( Tablets to Help Push Dell Stock Above $20 ) and how the company is in prime position to capture a decent share of the enterprise tablet market, which could soon become as big as the consumer tablet market ( Dell to Make a Splash in Tablet Market with Enterprise Customers ). See our full analysis and $22 price estimate for Dell Higher Margins Make Tablets More Profitable than Desktops The EBITDA profit margin for Dell's desktops declined from around 7% in 2005 to nearly 4% in 2010 as the manufacturer cut down on prices in order to remain competitive. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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We previously discussed Dell's foray into tablets ( Tablets to Help Push Dell Stock Above $20 ) and how the company is in prime position to capture a decent share of the enterprise tablet market, which could soon become as big as the consumer tablet market ( Dell to Make a Splash in Tablet Market with Enterprise Customers ). See our full analysis and $22 price estimate for Dell Higher Margins Make Tablets More Profitable than Desktops The EBITDA profit margin for Dell's desktops declined from around 7% in 2005 to nearly 4% in 2010 as the manufacturer cut down on prices in order to remain competitive. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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See our full analysis and $22 price estimate for Dell Higher Margins Make Tablets More Profitable than Desktops The EBITDA profit margin for Dell's desktops declined from around 7% in 2005 to nearly 4% in 2010 as the manufacturer cut down on prices in order to remain competitive. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services. Could tablets be worth more to Dell than its traditional desktop business?
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2a31de2d-c405-4c85-aa3c-0ff74e0ad51f
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726920.0
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2011-03-04 00:00:00 UTC
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Tablet Competitors Making a Charge, Can iPad 2 Hold the Line?
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DELL
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https://www.nasdaq.com/articles/tablet-competitors-making-charge-can-ipad-2-hold-line-2011-03-04
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nan
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nan
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Apple ( AAPL ), known for its ability to bring innovative products to market, recently unveiled the newest member of its tablet family, the iPad 2. iPad 2 has a few superior features over its predecessor, including a faster A5 processor as well as front and rear facing cameras. The new product is also lighter and thinner than the original. Apple has established itself as the dominant player in the tablet market, but 2011 could bring more meaningful competition to Apple with players like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG jumping onto the tablet bandwagon.
Here we take a look at Apple's competitive position in the tablet market, and examine whether the iPad 2 can help Apple ward off new challengers. We estimate that iPad sales account for roughy 7% of Apple's stock value, which we peg at $420 . Our price estimate currently stands about 17% ahead of market price.
See our full analysis and $420 price estimate for Apple
If the iPad 2 can help Apple keep competitors' tablets at bay, our forecasts for iPad unit sales could prove conservative, implying upside to our $420 price estimate for Apple .
Tablet Market Competition Heating Up
Apple sold around 15 million iPads in 2010, and we estimate that it could sell another 24 million in 2011. We project that this total will continue its steady climb towards 54 million by the end of our forecast period.
According to IDC, the tablet market is expected to grow from around 45 million units in 2011 to 71 million in 2012, and Apple's market share could reach 60% in 2011. This implies an expected 27 million iPads sold in 2011. Although our 24 million unit estimate seems a little conservative by comparison, we believe that Google's ( GOOG ) new Android operating system for tablets (Honeycomb) could pose a meaningful challenge to Apple.
We mentioned this concern in our recent note titled Google Brings Honeycomb to the Frontlines of OS Wars. On top of this, Research in Motion is expected to launch its PlayBook tablet in March 2011, and could leverage its dominant position in the enterprise segment to accelerate penetration of the tablet market (See Can RIM Leverage its Enterprise Market Presence to Lift Tablet Sales?). These factors will heighten competition in the tablet market and pose a threat to Apple's position atop the hill.
Can Apple Ward Off Competition with the iPad 2?
As we've mentioned, the iPad 2 is a step up from the original iPad, with a sleeker design and faster processing speed. The introduction of front and rear cameras also allows users to make visual "FaceTime" calls, a functionality that Apple originally introduced in the iPhone 4.
The iPad 2 also compares favorably to Motorola Mobility's Xoom tablet in a few key metrics. The chart below highlights specifications for the iPad 2 vs. the Xoom, as detailed by Business Insider.
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.
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Apple has established itself as the dominant player in the tablet market, but 2011 could bring more meaningful competition to Apple with players like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG jumping onto the tablet bandwagon. Although our 24 million unit estimate seems a little conservative by comparison, we believe that Google's ( GOOG ) new Android operating system for tablets (Honeycomb) could pose a meaningful challenge to Apple. We mentioned this concern in our recent note titled Google Brings Honeycomb to the Frontlines of OS Wars.
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Apple has established itself as the dominant player in the tablet market, but 2011 could bring more meaningful competition to Apple with players like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG jumping onto the tablet bandwagon. See our full analysis and $420 price estimate for Apple If the iPad 2 can help Apple keep competitors' tablets at bay, our forecasts for iPad unit sales could prove conservative, implying upside to our $420 price estimate for Apple . Tablet Market Competition Heating Up Apple sold around 15 million iPads in 2010, and we estimate that it could sell another 24 million in 2011.
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Apple has established itself as the dominant player in the tablet market, but 2011 could bring more meaningful competition to Apple with players like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG jumping onto the tablet bandwagon. See our full analysis and $420 price estimate for Apple If the iPad 2 can help Apple keep competitors' tablets at bay, our forecasts for iPad unit sales could prove conservative, implying upside to our $420 price estimate for Apple . Tablet Market Competition Heating Up Apple sold around 15 million iPads in 2010, and we estimate that it could sell another 24 million in 2011.
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Apple has established itself as the dominant player in the tablet market, but 2011 could bring more meaningful competition to Apple with players like Research in Motion ( RIMM ), Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG jumping onto the tablet bandwagon. See our full analysis and $420 price estimate for Apple If the iPad 2 can help Apple keep competitors' tablets at bay, our forecasts for iPad unit sales could prove conservative, implying upside to our $420 price estimate for Apple . Tablet Market Competition Heating Up Apple sold around 15 million iPads in 2010, and we estimate that it could sell another 24 million in 2011.
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16494868-4fbb-4b82-b7cd-1c967dee775c
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726921.0
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2011-03-02 00:00:00 UTC
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Can RIM Leverage its Enterprise Market Presence to Lift Tablet Sales?
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DELL
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https://www.nasdaq.com/articles/can-rim-leverage-its-enterprise-market-presence-lift-tablet-sales-2011-03-02
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nan
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nan
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Research in Motion ( RIMM ) is expected to launch its PlayBook tablet in March 2011. With the launch of PlayBook, RIM enters a tablet market currently dominated by Apple's ( AAPL ) iPad. However, Android-based tablets from Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG are also expected to gain meaningful entry into the market. According to IDC, a market research firm, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012. IDC estimates that Apple's share will be around 60%, while Android's share will be closer to 30% in 2011.
See our full analysis and $74.28 price estimate for Research in Motion
We estimate that PlayBook constitutes less than 6% of RIM's stock value. However, if RIM can accelerate its penetration into this market beyond our forecast, there could be upside to our $74.28 price estimate for RIM . Notably, our price estimate already implies roughly 10% upside to market price.
RIM Could Sell 4 Million PlayBooks in 2011
As per the IDC prediction mentioned above, the tablet market will likely be dominated by Apple's iPad and Android-based tablets in 2011. However, these estimates still leave about 10% market share up for grabs for operating systems like RIM OS and HP's ( HPQ ) webOS. If RIM could capture around 9% of the tablet market share in 2011, it could presumably sell 4 million PlayBooks. This 4 million figure is similarly predicted in a survey conducted by Royal Bank of Canada Capital Markets (RBC).
We conservatively expect that RIM will be able to increase its tablet sales to around 8.5 million units by the end of our forecast period. We believe that tablet growth for RIM will slow down as other big players like Cisco (CSCO), Toshiba and HP also enter the market. Additionally, the upcoming iPad 2 will create further competitive pressure on PlayBook's future growth prospects.
Enterprise Market a Bright Spot for RIM
As discussed above, RIM will face fierce competition in the consumer tablet market. The bright spot for RIM, however, is the enterprise market, a segment that its smartphones currently dominate with a 67% market share as of August 2010. RIM dominates the enterprise market because its smartphones accommodate the more stringent security requirements of enterprises.
RIM could leverage its established presence in the enterprise market to lift its tablet sales. RIM has also undertaken an initiative to improve its software design and performance through its acquisition of QNX in April 2010. RIM not only plans to introduce QNX OS in the upcoming tablet, but also in its future smartphone models. This initiative can improve its product portfolio, which is critical for sustained growth (See RIM Can Lift Market Share, Stock Value with Enhanced Product Portfolio ).
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.
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However, Android-based tablets from Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG are also expected to gain meaningful entry into the market. However, these estimates still leave about 10% market share up for grabs for operating systems like RIM OS and HP's ( HPQ ) webOS. This 4 million figure is similarly predicted in a survey conducted by Royal Bank of Canada Capital Markets (RBC).
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However, Android-based tablets from Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG are also expected to gain meaningful entry into the market. With the launch of PlayBook, RIM enters a tablet market currently dominated by Apple's ( AAPL ) iPad. RIM Could Sell 4 Million PlayBooks in 2011 As per the IDC prediction mentioned above, the tablet market will likely be dominated by Apple's iPad and Android-based tablets in 2011.
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However, Android-based tablets from Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG are also expected to gain meaningful entry into the market. RIM Could Sell 4 Million PlayBooks in 2011 As per the IDC prediction mentioned above, the tablet market will likely be dominated by Apple's iPad and Android-based tablets in 2011. Enterprise Market a Bright Spot for RIM As discussed above, RIM will face fierce competition in the consumer tablet market.
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However, Android-based tablets from Motorola Mobility ( MMI ), Samsung, Dell ( DELL ) and LG are also expected to gain meaningful entry into the market. With the launch of PlayBook, RIM enters a tablet market currently dominated by Apple's ( AAPL ) iPad. IDC estimates that Apple's share will be around 60%, while Android's share will be closer to 30% in 2011.
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e27e3fff-8a7d-49d6-82d6-a06eeff7cd61
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726922.0
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2011-02-26 00:00:00 UTC
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The Impact of Increased Tech Spending on IBM
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DELL
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https://www.nasdaq.com/articles/impact-increased-tech-spending-ibm-2011-02-26
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nan
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nan
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IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide, and competes with firms like Oracle ( ORCL ) and Red Hat. IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market.
We previously discussed the potential upside to IBM from improving margins (see our article Higher Margin on Software and Systems Reinforces Promising Outlook for IBM ). Here we take a look at a new source of upside - the trend of increased tech spending by large corporations. Increased tech spending during Q4 2010, after corporations delayed technology purchases and upgrades during the downturn, have stimulated rising profits for tech suppliers like IBM, EMC and SAP.
We currently have a $185 Trefis price estimate for IBM's stock , about 15% above market price. We estimate that middleware software is IBM's largest business segment, accounting for nearly 46% of the company's equity value followed by technology services, which constitute an estimated 28% of IBM's stock value.
Enterprise Tech Spending On the Rise in 2011
An analyst at ISI Group recently noted that companies witnessing growth of sales and margins in an improved economic environment are more willing to spend money on technology. He also pointed out that tech spending typically lags corporate profits by three quarters, indicating potential revenue growth on the horizon for firms like IBM.
During Q4 2010, IBM's global technology services segment recorded its first increase in revenue from existing accounts since late 2008, as corporate profits grew with improvement in the economic environment.
See our full analysis and $185 price estimate for IBM
Potential impact on IBM
We currently project a 12% increase in IBM's middleware license revenues for 2011, followed by steady growth throughout our forecast period. Drag the trend line in the interactive chart above to see the affect of various middleware license revenue scenarios on IBM's stock value.
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.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. He also pointed out that tech spending typically lags corporate profits by three quarters, indicating potential revenue growth on the horizon for firms like IBM. During Q4 2010, IBM's global technology services segment recorded its first increase in revenue from existing accounts since late 2008, as corporate profits grew with improvement in the economic environment.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. Here we take a look at a new source of upside - the trend of increased tech spending by large corporations. We estimate that middleware software is IBM's largest business segment, accounting for nearly 46% of the company's equity value followed by technology services, which constitute an estimated 28% of IBM's stock value.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. IBM ( IBM ) sells middleware software and technology services such as outsourcing and integration to large and medium sized businesses worldwide, and competes with firms like Oracle ( ORCL ) and Red Hat. We estimate that middleware software is IBM's largest business segment, accounting for nearly 46% of the company's equity value followed by technology services, which constitute an estimated 28% of IBM's stock value.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. We currently have a $185 Trefis price estimate for IBM's stock , about 15% above market price. We estimate that middleware software is IBM's largest business segment, accounting for nearly 46% of the company's equity value followed by technology services, which constitute an estimated 28% of IBM's stock value.
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44921c5d-5c23-4ec8-a38f-19a278004ccf
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726923.0
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2011-02-26 00:00:00 UTC
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Dell to Make a Splash in Tablet Market with Enterprise Customers
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DELL
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https://www.nasdaq.com/articles/dell-make-splash-tablet-market-enterprise-customers-2011-02-26
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services. We wrote a note recently about Dell's entry into the tablet market titled Tablets to Help Dell Push Stock Above $20 , and how its strong net cash position enables it to pursue the upcoming tablet market aggressively (see also: Should Dell Focus Its Net Cash Position on Investment in Tablet Technology ).
We currently have a $22.39 Trefis price estimate of Dell's stock which is significantly above the market price. We estimate that tablets already make up about 5.2% of Dell's stock value. You can see our driver forecasts for Dell's tablet business here to check for yourself how we arrive at the figure.
Enterprise tablet market has great potential
While Apple's iPad has so far dominated the tablet market, a flurry of Android based tablets are now coming to market offering consumers a wide variety of choices as well as improved capabilities. With a number of big players like Dell, HP and RIM entering the tablet market, we expect a surge in tablet adoption among enterprises.
According to research firm ChangeWave, about 7% of companies provided some of their employees with tablets and the figure is expected to double in the first quarter of 2011. Among the firms that indicated intent to purchase tablets in the first three months of 2011, 78% opted for iPad as their choice. About 9% of firms preferred Dell and RIM while 8% opted for HP. In another estimate by Barclay's Capital, Apple's iPad is expected to lock up 72% of the enterprise tablet market in 2011.
The enterprise opportunity is certainly a big one for tablets and thus leaders in the enterprise market - like Dell and HP for PCs and RIM for smartphones - are all vying for a piece of the potential enterprise tablet market.
Enterprise tablet market untapped
Dell has a number of tablets planned for launch in 2011 like Gallo, Opus One, Sterling, Silver Oak and Rosemount (Windows 7 based) that focus on the enterprise market. Dell is coming up with the largest number of devices in 2011 with screen sizes ranging from 5″ to 10″. For example, Dell Rosemount is equipped with a removable battery, which is one features many enterprise users would need for reliability when traveling for instance.
We currently forecast 5% market share for Dell in the Android tablet market which is expected to make up 30% of total tablet market in 2011. We expect the total tablet market will grow to 45 million units sold in 2011 and further to 71 million in 2012, in line with IDC estimates. However enterprise customers could account for up to 50% of tablets sold by 2015 according to some estimates, and assuming Dell has a high rate of adoption, this could add some upside to our estimates.
We estimate that if Dell's tablet sales increase to 8 million by 2015 representing roughly 10% market share in Android tablet market instead of our current forecast of 4 million or 5% share, there could be an upside of around 7% to our $22.39 Trefis price estimate for Dell's stock.
You can drag the trend lines above to see the impact of various tablet unit sales scenarios on Dell's stock.
Our complete analysis of Dell's stock is here .
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.
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For example, Dell Rosemount is equipped with a removable battery, which is one features many enterprise users would need for reliability when traveling for instance. We estimate that if Dell's tablet sales increase to 8 million by 2015 representing roughly 10% market share in Android tablet market instead of our current forecast of 4 million or 5% share, there could be an upside of around 7% to our $22.39 Trefis price estimate for Dell's stock. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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With a number of big players like Dell, HP and RIM entering the tablet market, we expect a surge in tablet adoption among enterprises. We currently forecast 5% market share for Dell in the Android tablet market which is expected to make up 30% of total tablet market in 2011. We estimate that if Dell's tablet sales increase to 8 million by 2015 representing roughly 10% market share in Android tablet market instead of our current forecast of 4 million or 5% share, there could be an upside of around 7% to our $22.39 Trefis price estimate for Dell's stock.
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We wrote a note recently about Dell's entry into the tablet market titled Tablets to Help Dell Push Stock Above $20 , and how its strong net cash position enables it to pursue the upcoming tablet market aggressively (see also: Should Dell Focus Its Net Cash Position on Investment in Tablet Technology ). We estimate that if Dell's tablet sales increase to 8 million by 2015 representing roughly 10% market share in Android tablet market instead of our current forecast of 4 million or 5% share, there could be an upside of around 7% to our $22.39 Trefis price estimate for Dell's stock. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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We estimate that tablets already make up about 5.2% of Dell's stock value. We estimate that if Dell's tablet sales increase to 8 million by 2015 representing roughly 10% market share in Android tablet market instead of our current forecast of 4 million or 5% share, there could be an upside of around 7% to our $22.39 Trefis price estimate for Dell's stock. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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cdd0aeee-a694-4523-a26f-3f57af01b472
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726924.0
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2011-02-22 00:00:00 UTC
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Trefis Insights from Last Week – Technology, Media & Telecom
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DELL
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https://www.nasdaq.com/articles/trefis-insights-last-week-technology-media-telecom-2011-02-22
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nan
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nan
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Insights from the Week- Technology, Media & Telecom (Week of Feb 14-18th)
Below is a summary of key insights we published last week across the technology, media, and telecom sectors. Among these, we discussed the impact of the Nokia ( NOK ) and Microsoft ( MSFT ) partnership on both businesses. We explored the potential impact of a less expensive iPhone model on Apple ( AAPL ) as media sources buzzed about this potential last week. Cisco's ( CSCO ) stock slumped 15% after it reported earnings, and we highlight that pricing pressures are valid but the market's negative reaction is overdone. We also took a look at how tablets could impact Dell's ( DELL ) business and what an NFL lockout could mean for DirecTV (DTV).
Technology Media & Telecom
Nokia-Microsoft's OS Impact on Android Limited for Now on February 18, 2011
This deal provides Microsoft with an opportunity to gain market share in both the smartphone operating system market and the search advertising market as it leverages Nokia's large global presence across the globe …
Are Cheaper iPhones a Good Move for Apple? on February 18, 2011
The move to offer cheaper iPhones should help Apple gain smartphone market share, but this could come alongside lower average pricing and reduced profit margins …
Nokia Partnership Provides Upside for Microsoft Stock on February 17, 2011
Through the Nokia partnership, Microsoft not only stands to gain licensing revenues for its operating system, but also search advertising market share…
Outlook for Motorola Solutions in the Enterprise Security Market on February 17, 2011
A hypothetical scenario in which Motorola Solutions' revenue from enterprise sales increases at rate of 10% to reach $4 billion by the end of our forecast period (vs. our $3 billion estimate) would imply 5% upside to our $35.49 price estimate for Motorola Solutions …
AT&T Pushes to Grow Cloud Based Mobile and IT Services on February 17, 2011
We estimate that enterprise segment constitutes around 8% of AT&T's price estimate and is thus not a great value contributor …
Nokia's Pact with Microsoft - The Long and Short of It on February 17, 2011
There is still hope for Nokia in the long-term, as the initiative will allow Nokia to concentrate on its hardware products post-transition and cut costs currently spent on software development …
Juniper's Shares Soar, Taking a Closer Look at its Switch Market Business on February 17, 2011
Juniper has a smaller presence in this market vs. other markets it competes in like edge and core routers, and we think this might be its biggest opportunity to grow …
Amazon, Apple & Google Benefit from Borders Bankruptcy on February 16, 2011
The reduction in brick-and-mortar distribution points for magazines is likely to drive publishers further into the arms of Apple and Google which are offering up their growing smartphone and tablet platform bases as potential salvation for the publishing industry …
Patch.com Can Lift AOL's Fortunes on February 16, 2011
Patch.com attracted around 3 million unique visitors during December 2010, which is about 80 times the number recorded a year earlier …
ESPN Leads the Charge for Disney's Media Network Profit Growth on February 16, 2011
ESPN is Disney's most valuable product segment, by our estimates, accounting for an estimated 28% of the company's stock value …
Upside and Downside Scenarios for NYT's Online Paywall on February 16, 2011
In a hypothetical scenario in which 1 million users register at the $10 per month web-only fee, it would imply $120 million in incremental annual revenues …
Time Warner's Digital Magazine Moves Provide Little Stock Upside on February 15, 2011
While no immediate plans exist in this regard, Time Warner has expressed interest in ultimately bringing its offering to Apple's gadgets …
OpenTable's International Growth Driven by toptable on February 15, 2011
Toptable.com generated about $3.1 million in revenues for OpenTable in Q4 2010 - more than 10% of the company's total revenue of $30.7 million for the quarter …
Sticking with Cisco at $24 Though Earnings Raise Concerns on Core Business on February 15, 2011
There is pricing pressure on the portfolio and that raises the question of whether Cisco will be able to sustain a successful product transition without sacrificing on pricing or profit margins too much …
What an NFL Lockout Would Mean for DirecTV on February 15, 2011
We believe the risk of customers switching to another service provider is limited, but the risk of losing revenue from NFL Sunday Ticket subscriptions looms …
Rising Smartphone Penetration Presents Upside to Verizon's Stock Value on February 14, 2011
It is clear that new customers are leaning towards smartphones, but older customers are upgrading as well, as evidenced by Verizon's aggressive smartphone penetration targets for the coming year …
Tablets to Help Push Dell Stock Above $20 on February 14, 2011
We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year …
Sprint Points to Higher Investment in Network Improvement on February 14, 2011
However, if Sprint can achieve its network improvements prior to 2015, and its spending levels subsequently drop, the company's value could get a significant lift…
Mobile Device Security Creates Attractive Growth Opportunity for Symantec on February 14, 2011
Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market …
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.
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on February 18, 2011 The move to offer cheaper iPhones should help Apple gain smartphone market share, but this could come alongside lower average pricing and reduced profit margins … Nokia Partnership Provides Upside for Microsoft Stock on February 17, 2011 Through the Nokia partnership, Microsoft not only stands to gain licensing revenues for its operating system, but also search advertising market share… Outlook for Motorola Solutions in the Enterprise Security Market on February 17, 2011 A hypothetical scenario in which Motorola Solutions' revenue from enterprise sales increases at rate of 10% to reach $4 billion by the end of our forecast period (vs. our $3 billion estimate) would imply 5% upside to our $35.49 price estimate for Motorola Solutions … AT&T Pushes to Grow Cloud Based Mobile and IT Services on February 17, 2011 We estimate that enterprise segment constitutes around 8% of AT&T's price estimate and is thus not a great value contributor … Nokia's Pact with Microsoft - The Long and Short of It on February 17, 2011 There is still hope for Nokia in the long-term, as the initiative will allow Nokia to concentrate on its hardware products post-transition and cut costs currently spent on software development … Juniper's Shares Soar, Taking a Closer Look at its Switch Market Business on February 17, 2011 Juniper has a smaller presence in this market vs. other markets it competes in like edge and core routers, and we think this might be its biggest opportunity to grow … Amazon, Apple & Google Benefit from Borders Bankruptcy on February 16, 2011 The reduction in brick-and-mortar distribution points for magazines is likely to drive publishers further into the arms of Apple and Google which are offering up their growing smartphone and tablet platform bases as potential salvation for the publishing industry … Patch.com Can Lift AOL's Fortunes on February 16, 2011 Patch.com attracted around 3 million unique visitors during December 2010, which is about 80 times the number recorded a year earlier … ESPN Leads the Charge for Disney's Media Network Profit Growth on February 16, 2011 ESPN is Disney's most valuable product segment, by our estimates, accounting for an estimated 28% of the company's stock value … Upside and Downside Scenarios for NYT's Online Paywall on February 16, 2011 In a hypothetical scenario in which 1 million users register at the $10 per month web-only fee, it would imply $120 million in incremental annual revenues … Time Warner's Digital Magazine Moves Provide Little Stock Upside on February 15, 2011 While no immediate plans exist in this regard, Time Warner has expressed interest in ultimately bringing its offering to Apple's gadgets … OpenTable's International Growth Driven by toptable on February 15, 2011 Toptable.com generated about $3.1 million in revenues for OpenTable in Q4 2010 - more than 10% of the company's total revenue of $30.7 million for the quarter … Sticking with Cisco at $24 Though Earnings Raise Concerns on Core Business on February 15, 2011 There is pricing pressure on the portfolio and that raises the question of whether Cisco will be able to sustain a successful product transition without sacrificing on pricing or profit margins too much … What an NFL Lockout Would Mean for DirecTV on February 15, 2011 We believe the risk of customers switching to another service provider is limited, but the risk of losing revenue from NFL Sunday Ticket subscriptions looms … Rising Smartphone Penetration Presents Upside to Verizon's Stock Value on February 14, 2011 It is clear that new customers are leaning towards smartphones, but older customers are upgrading as well, as evidenced by Verizon's aggressive smartphone penetration targets for the coming year … Tablets to Help Push Dell Stock Above $20 on February 14, 2011 We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year … Sprint Points to Higher Investment in Network Improvement on February 14, 2011 However, if Sprint can achieve its network improvements prior to 2015, and its spending levels subsequently drop, the company's value could get a significant lift… Mobile Device Security Creates Attractive Growth Opportunity for Symantec on February 14, 2011 Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market … The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. We also took a look at how tablets could impact Dell's ( DELL ) business and what an NFL lockout could mean for DirecTV (DTV). Cisco's ( CSCO ) stock slumped 15% after it reported earnings, and we highlight that pricing pressures are valid but the market's negative reaction is overdone.
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We also took a look at how tablets could impact Dell's ( DELL ) business and what an NFL lockout could mean for DirecTV (DTV). on February 18, 2011 The move to offer cheaper iPhones should help Apple gain smartphone market share, but this could come alongside lower average pricing and reduced profit margins … Nokia Partnership Provides Upside for Microsoft Stock on February 17, 2011 Through the Nokia partnership, Microsoft not only stands to gain licensing revenues for its operating system, but also search advertising market share… Outlook for Motorola Solutions in the Enterprise Security Market on February 17, 2011 A hypothetical scenario in which Motorola Solutions' revenue from enterprise sales increases at rate of 10% to reach $4 billion by the end of our forecast period (vs. our $3 billion estimate) would imply 5% upside to our $35.49 price estimate for Motorola Solutions … AT&T Pushes to Grow Cloud Based Mobile and IT Services on February 17, 2011 We estimate that enterprise segment constitutes around 8% of AT&T's price estimate and is thus not a great value contributor … Nokia's Pact with Microsoft - The Long and Short of It on February 17, 2011 There is still hope for Nokia in the long-term, as the initiative will allow Nokia to concentrate on its hardware products post-transition and cut costs currently spent on software development … Juniper's Shares Soar, Taking a Closer Look at its Switch Market Business on February 17, 2011 Juniper has a smaller presence in this market vs. other markets it competes in like edge and core routers, and we think this might be its biggest opportunity to grow … Amazon, Apple & Google Benefit from Borders Bankruptcy on February 16, 2011 The reduction in brick-and-mortar distribution points for magazines is likely to drive publishers further into the arms of Apple and Google which are offering up their growing smartphone and tablet platform bases as potential salvation for the publishing industry … Patch.com Can Lift AOL's Fortunes on February 16, 2011 Patch.com attracted around 3 million unique visitors during December 2010, which is about 80 times the number recorded a year earlier … ESPN Leads the Charge for Disney's Media Network Profit Growth on February 16, 2011 ESPN is Disney's most valuable product segment, by our estimates, accounting for an estimated 28% of the company's stock value … Upside and Downside Scenarios for NYT's Online Paywall on February 16, 2011 In a hypothetical scenario in which 1 million users register at the $10 per month web-only fee, it would imply $120 million in incremental annual revenues … Time Warner's Digital Magazine Moves Provide Little Stock Upside on February 15, 2011 While no immediate plans exist in this regard, Time Warner has expressed interest in ultimately bringing its offering to Apple's gadgets … OpenTable's International Growth Driven by toptable on February 15, 2011 Toptable.com generated about $3.1 million in revenues for OpenTable in Q4 2010 - more than 10% of the company's total revenue of $30.7 million for the quarter … Sticking with Cisco at $24 Though Earnings Raise Concerns on Core Business on February 15, 2011 There is pricing pressure on the portfolio and that raises the question of whether Cisco will be able to sustain a successful product transition without sacrificing on pricing or profit margins too much … What an NFL Lockout Would Mean for DirecTV on February 15, 2011 We believe the risk of customers switching to another service provider is limited, but the risk of losing revenue from NFL Sunday Ticket subscriptions looms … Rising Smartphone Penetration Presents Upside to Verizon's Stock Value on February 14, 2011 It is clear that new customers are leaning towards smartphones, but older customers are upgrading as well, as evidenced by Verizon's aggressive smartphone penetration targets for the coming year … Tablets to Help Push Dell Stock Above $20 on February 14, 2011 We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year … Sprint Points to Higher Investment in Network Improvement on February 14, 2011 However, if Sprint can achieve its network improvements prior to 2015, and its spending levels subsequently drop, the company's value could get a significant lift… Mobile Device Security Creates Attractive Growth Opportunity for Symantec on February 14, 2011 Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market … The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Technology Media & Telecom Nokia-Microsoft's OS Impact on Android Limited for Now on February 18, 2011 This deal provides Microsoft with an opportunity to gain market share in both the smartphone operating system market and the search advertising market as it leverages Nokia's large global presence across the globe … Are Cheaper iPhones a Good Move for Apple?
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on February 18, 2011 The move to offer cheaper iPhones should help Apple gain smartphone market share, but this could come alongside lower average pricing and reduced profit margins … Nokia Partnership Provides Upside for Microsoft Stock on February 17, 2011 Through the Nokia partnership, Microsoft not only stands to gain licensing revenues for its operating system, but also search advertising market share… Outlook for Motorola Solutions in the Enterprise Security Market on February 17, 2011 A hypothetical scenario in which Motorola Solutions' revenue from enterprise sales increases at rate of 10% to reach $4 billion by the end of our forecast period (vs. our $3 billion estimate) would imply 5% upside to our $35.49 price estimate for Motorola Solutions … AT&T Pushes to Grow Cloud Based Mobile and IT Services on February 17, 2011 We estimate that enterprise segment constitutes around 8% of AT&T's price estimate and is thus not a great value contributor … Nokia's Pact with Microsoft - The Long and Short of It on February 17, 2011 There is still hope for Nokia in the long-term, as the initiative will allow Nokia to concentrate on its hardware products post-transition and cut costs currently spent on software development … Juniper's Shares Soar, Taking a Closer Look at its Switch Market Business on February 17, 2011 Juniper has a smaller presence in this market vs. other markets it competes in like edge and core routers, and we think this might be its biggest opportunity to grow … Amazon, Apple & Google Benefit from Borders Bankruptcy on February 16, 2011 The reduction in brick-and-mortar distribution points for magazines is likely to drive publishers further into the arms of Apple and Google which are offering up their growing smartphone and tablet platform bases as potential salvation for the publishing industry … Patch.com Can Lift AOL's Fortunes on February 16, 2011 Patch.com attracted around 3 million unique visitors during December 2010, which is about 80 times the number recorded a year earlier … ESPN Leads the Charge for Disney's Media Network Profit Growth on February 16, 2011 ESPN is Disney's most valuable product segment, by our estimates, accounting for an estimated 28% of the company's stock value … Upside and Downside Scenarios for NYT's Online Paywall on February 16, 2011 In a hypothetical scenario in which 1 million users register at the $10 per month web-only fee, it would imply $120 million in incremental annual revenues … Time Warner's Digital Magazine Moves Provide Little Stock Upside on February 15, 2011 While no immediate plans exist in this regard, Time Warner has expressed interest in ultimately bringing its offering to Apple's gadgets … OpenTable's International Growth Driven by toptable on February 15, 2011 Toptable.com generated about $3.1 million in revenues for OpenTable in Q4 2010 - more than 10% of the company's total revenue of $30.7 million for the quarter … Sticking with Cisco at $24 Though Earnings Raise Concerns on Core Business on February 15, 2011 There is pricing pressure on the portfolio and that raises the question of whether Cisco will be able to sustain a successful product transition without sacrificing on pricing or profit margins too much … What an NFL Lockout Would Mean for DirecTV on February 15, 2011 We believe the risk of customers switching to another service provider is limited, but the risk of losing revenue from NFL Sunday Ticket subscriptions looms … Rising Smartphone Penetration Presents Upside to Verizon's Stock Value on February 14, 2011 It is clear that new customers are leaning towards smartphones, but older customers are upgrading as well, as evidenced by Verizon's aggressive smartphone penetration targets for the coming year … Tablets to Help Push Dell Stock Above $20 on February 14, 2011 We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year … Sprint Points to Higher Investment in Network Improvement on February 14, 2011 However, if Sprint can achieve its network improvements prior to 2015, and its spending levels subsequently drop, the company's value could get a significant lift… Mobile Device Security Creates Attractive Growth Opportunity for Symantec on February 14, 2011 Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market … The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. We also took a look at how tablets could impact Dell's ( DELL ) business and what an NFL lockout could mean for DirecTV (DTV). Insights from the Week- Technology, Media & Telecom (Week of Feb 14-18th) Below is a summary of key insights we published last week across the technology, media, and telecom sectors.
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on February 18, 2011 The move to offer cheaper iPhones should help Apple gain smartphone market share, but this could come alongside lower average pricing and reduced profit margins … Nokia Partnership Provides Upside for Microsoft Stock on February 17, 2011 Through the Nokia partnership, Microsoft not only stands to gain licensing revenues for its operating system, but also search advertising market share… Outlook for Motorola Solutions in the Enterprise Security Market on February 17, 2011 A hypothetical scenario in which Motorola Solutions' revenue from enterprise sales increases at rate of 10% to reach $4 billion by the end of our forecast period (vs. our $3 billion estimate) would imply 5% upside to our $35.49 price estimate for Motorola Solutions … AT&T Pushes to Grow Cloud Based Mobile and IT Services on February 17, 2011 We estimate that enterprise segment constitutes around 8% of AT&T's price estimate and is thus not a great value contributor … Nokia's Pact with Microsoft - The Long and Short of It on February 17, 2011 There is still hope for Nokia in the long-term, as the initiative will allow Nokia to concentrate on its hardware products post-transition and cut costs currently spent on software development … Juniper's Shares Soar, Taking a Closer Look at its Switch Market Business on February 17, 2011 Juniper has a smaller presence in this market vs. other markets it competes in like edge and core routers, and we think this might be its biggest opportunity to grow … Amazon, Apple & Google Benefit from Borders Bankruptcy on February 16, 2011 The reduction in brick-and-mortar distribution points for magazines is likely to drive publishers further into the arms of Apple and Google which are offering up their growing smartphone and tablet platform bases as potential salvation for the publishing industry … Patch.com Can Lift AOL's Fortunes on February 16, 2011 Patch.com attracted around 3 million unique visitors during December 2010, which is about 80 times the number recorded a year earlier … ESPN Leads the Charge for Disney's Media Network Profit Growth on February 16, 2011 ESPN is Disney's most valuable product segment, by our estimates, accounting for an estimated 28% of the company's stock value … Upside and Downside Scenarios for NYT's Online Paywall on February 16, 2011 In a hypothetical scenario in which 1 million users register at the $10 per month web-only fee, it would imply $120 million in incremental annual revenues … Time Warner's Digital Magazine Moves Provide Little Stock Upside on February 15, 2011 While no immediate plans exist in this regard, Time Warner has expressed interest in ultimately bringing its offering to Apple's gadgets … OpenTable's International Growth Driven by toptable on February 15, 2011 Toptable.com generated about $3.1 million in revenues for OpenTable in Q4 2010 - more than 10% of the company's total revenue of $30.7 million for the quarter … Sticking with Cisco at $24 Though Earnings Raise Concerns on Core Business on February 15, 2011 There is pricing pressure on the portfolio and that raises the question of whether Cisco will be able to sustain a successful product transition without sacrificing on pricing or profit margins too much … What an NFL Lockout Would Mean for DirecTV on February 15, 2011 We believe the risk of customers switching to another service provider is limited, but the risk of losing revenue from NFL Sunday Ticket subscriptions looms … Rising Smartphone Penetration Presents Upside to Verizon's Stock Value on February 14, 2011 It is clear that new customers are leaning towards smartphones, but older customers are upgrading as well, as evidenced by Verizon's aggressive smartphone penetration targets for the coming year … Tablets to Help Push Dell Stock Above $20 on February 14, 2011 We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year … Sprint Points to Higher Investment in Network Improvement on February 14, 2011 However, if Sprint can achieve its network improvements prior to 2015, and its spending levels subsequently drop, the company's value could get a significant lift… Mobile Device Security Creates Attractive Growth Opportunity for Symantec on February 14, 2011 Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market … The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. We also took a look at how tablets could impact Dell's ( DELL ) business and what an NFL lockout could mean for DirecTV (DTV). Insights from the Week- Technology, Media & Telecom (Week of Feb 14-18th) Below is a summary of key insights we published last week across the technology, media, and telecom sectors.
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06cf8c20-361d-4642-863b-63b71020ad4f
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726925.0
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2011-02-22 00:00:00 UTC
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H-P (HPQ) Q1 Preview: It's All About Tablets, CEOs, and Servers
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DELL
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https://www.nasdaq.com/articles/h-p-hpq-q1-preview-its-all-about-tablets-ceos-and-servers-2011-02-22
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nan
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nan
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Hewlett-Packard Company ( HPQ ) is trading lower today, ahead of the company's first quarter earnings report, expected out after the market closes today. Shares are down1.4% this afternoon.
HPQ is expected to report EPS of $1.29 on revs of $32.95 billion. Last quarter, the Palo Alto, CA-based computer giant reported EPS of $1.33 on revs of $33.3 billion, beating out consensus views calling for EPS of $1.27 with revs of $32.75 billion. Looking back one year, HPQ produced EPS of $1.10, excluding certain items, with revs of $31.2 billion, both topping estimates.
Shares gained 7.7% through the quarter to $45.69 at the end of January. The stock is up 5% since then, and finished 2010 about 19% lower.
A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines ( IBM ).
Data from Bloomberg has 28 analysts with a Buy on HPQ, 8 with a hold, and two suggesting to Sell. The analyst price target average is $55.20, with a high of $70 and low of $38. Shares have traded in a range of $54.75 - $37.32 over the last 52-weeks.
Summary
Last quarter, HPQ guided to Q111 EPS of $1.29 - $1.30 with sales of $32.98 - $33 billion.
Wells Fargo is looking for an in-line report from Hewlett-Packard, with EPS of $1.28 on revs of $32.8 billion. Enterprise spending, favorable component pricing, and a shift into higher margin products could give some upside to gross margins amid consumer PC buying weakness.
Wells comments: "We like the company's mobile strategy, and think that if they can execute with the new TouchPad, this should help margins in the consumer PC business over time."
Wells has a Market Perform on the shares, with a valuation range of $52 - $54.
J.P. Morgan is looking for EPS of $1.30 in the quarter. They recently made positive comments about H-P's tablet, which they believe could be a front-runner of non-Apple (Nasdaq: AAPL) tablet devices.
JPM also commented that: "Beyond tablets, we think that HP's plans to extend its webOS platform to notebook PCs could gradually chip away at the long-held dominance by Windows." They have an Overweight rating on the shares, with a price target of $57.
Janney Capital Markets is expecting EPS of 1.29 on revs of $32.96 billion. The firm notes that investors will be focused on comments from the new CEO, Leo Apotheker, what his views and observations so far are, but expect limited forward-looking statements from the former SAP AG ( SAP ) chief. Updates on key products and customer categories will be expected. Janney is looking for positive comments on emerging markets and what sort of traction H-P is regaining in China.
Service revs should be a lower growth story, offset by companies continued adaptation to newer servers in order to keep up with growth in digital content and upgrade servers.
Janney has a Buy rating on the shares, with a $56 fair value estimate.
From a trading prospective, the whisper number EPS is $1.31, exceeding the consensus by two-cents.
Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion. CEO Michael Dell commented that their IT solutions portfolio has never been stronger. Large Enterprise revs for the company grew 12% to $4.7 billion with Servers and Networking revs increasing 16% to $2.09 billion.
Hewlett-Packard is expected to release their Q111 earnings on Tuesday, February 22, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
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.
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A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines ( IBM ). Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion.
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A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines ( IBM ). Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion.
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EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion. A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines ( IBM ). Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting.
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Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines ( IBM ). EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion.
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64b8b1f4-6eba-4210-9b83-8b7a442f934c
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726926.0
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2011-02-22 00:00:00 UTC
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Can Dell Sustain Improved Profit Margins?
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DELL
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https://www.nasdaq.com/articles/can-dell-sustain-improved-profit-margins-2011-02-22
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nan
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nan
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Dell ( DELL ) reported strong results for Q4 2011 during its February 15th earnings release, with $15.7 billion in revenues (up 5% over the same period last year) and significant margin improvement. Dell is known for its product line of desktop and notebook PCs as well as its printers and PC displays. Dell primarily competes with HP ( HPQ ) and Acer (TPE:2353) at the top end of the PC market, as well as IBM ( IBM ) and others in the IT services business.
Revenue for Dell's fiscal year 2011 grew 16% from the previous year, reaching $61.6 billion. Dell saw revenue improvement across all business segments. While revenue growth was particularly strong in segments like services and servers & networking, which increased at 36% and 26% annually, other segments like desktops, notebooks & netbooks and storage also saw respectable sales improvement.
One particular highlight for the fiscal year was a 1% improvement in overall gross margin. Other expenses like SG&A and R&D also decreased as a percentage of sales, resulting in a 1.5% increase in the firm's operating margin.
Based on Dell's recent margin strength and improved outlook, we have updated our forecast for the company. We currently estimate that notebooks & netbooks comprise the largest source of value for Dell, representing 19% of our $22.39 price estimate for Dell stock . Our price estimate stands well ahead of market price.
See our full analysis and $22.39 price estimate for Dell
Dell Cuts Down on Expenses
During Dell's fiscal year 2011, the company's gross margin increased by 1% due in part to strong supply chain execution and continued broad component cost declines. With reductions in other expenses like SG&A and R&D as well, Dell's EBITDA margin for its notebook & netbook business saw an incremental 1.5% over 2009 levels. Similar EBITDA margin improvement was also observed by Dell's other business divisions.
While we currently forecast that EBITDA margins for Dell's notebooks & netbooks division will remain flat in the years ahead, potential difficulties in sustaining cost cuts could pressure profit margins and present downside to our price estimate for Dell stock.
Below are a few key concerns that we believe could potentially hinder Dell's notebook & netbook EBITDA margins in the years ahead.
1. Rising Popularity of Tablet Devices
Tables are rapidly increasing in popularity amongst consumers. It now seems realistic that tablets will soon give desktops, notebooks and netbooks a run for their money in the near future.
A flurry of new tablet launches could incite a pricing war across manufacturers. This would not be a welcome development given the tremendous R&D spending associated with the device's development. Overall, these factors could strain profit margins for manufacturers that are forced to significantly cut prices to remain competitive, thus dragging down profit margins on notebook & netbook sales.
2.Increase in Component Costs
As the economy continues its recovery and consumer demand increases, component costs for notebooks & netbooks will follow a similar path. This could further strain EBITDA margins on notebooks & netbooks, and pose a separate headwind to our bullish outlook for Dell.
Drag the trend line in the interactive chart above to see the affect of various notebooks & netbooks EBITDA margin scenarios on Dell's stock value.
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.
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With reductions in other expenses like SG&A and R&D as well, Dell's EBITDA margin for its notebook & netbook business saw an incremental 1.5% over 2009 levels. Below are a few key concerns that we believe could potentially hinder Dell's notebook & netbook EBITDA margins in the years ahead. Drag the trend line in the interactive chart above to see the affect of various notebooks & netbooks EBITDA margin scenarios on Dell's stock value.
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See our full analysis and $22.39 price estimate for Dell Dell Cuts Down on Expenses During Dell's fiscal year 2011, the company's gross margin increased by 1% due in part to strong supply chain execution and continued broad component cost declines. While we currently forecast that EBITDA margins for Dell's notebooks & netbooks division will remain flat in the years ahead, potential difficulties in sustaining cost cuts could pressure profit margins and present downside to our price estimate for Dell stock. Dell ( DELL ) reported strong results for Q4 2011 during its February 15th earnings release, with $15.7 billion in revenues (up 5% over the same period last year) and significant margin improvement.
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We currently estimate that notebooks & netbooks comprise the largest source of value for Dell, representing 19% of our $22.39 price estimate for Dell stock . See our full analysis and $22.39 price estimate for Dell Dell Cuts Down on Expenses During Dell's fiscal year 2011, the company's gross margin increased by 1% due in part to strong supply chain execution and continued broad component cost declines. While we currently forecast that EBITDA margins for Dell's notebooks & netbooks division will remain flat in the years ahead, potential difficulties in sustaining cost cuts could pressure profit margins and present downside to our price estimate for Dell stock.
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Dell ( DELL ) reported strong results for Q4 2011 during its February 15th earnings release, with $15.7 billion in revenues (up 5% over the same period last year) and significant margin improvement. Dell saw revenue improvement across all business segments. While we currently forecast that EBITDA margins for Dell's notebooks & netbooks division will remain flat in the years ahead, potential difficulties in sustaining cost cuts could pressure profit margins and present downside to our price estimate for Dell stock.
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223821c2-03f3-4967-acfc-bbfbdea47aef
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726927.0
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2011-02-16 00:00:00 UTC
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Stocks Higher on Earnings News; New Home Construction at 20-Month High
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DELL
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https://www.nasdaq.com/articles/stocks-higher-earnings-news-new-home-construction-20-month-high-2011-02-16
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nan
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nan
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Stocks are higher in mid-session trading as economic data and positive earnings--most notably from Dell ( DELL )--spur buying across sectors.
Dell ( DELL ) is higher after reporting Q4 revenue of $15.7 billion, in line with Street estimates. EPS was $0.48 per share on a GAAP basis and $0.53 per share on a non-GAAP basis, vs. Street estimates of $0.37 per share.
In the latest economic data, the Commerce Department reported the largest increase in new home construction in 20 months, although still well off the pace of a healthy economy.
Housing starts rose 15% to a 596,000-unit annual rate, the Commerce Department reported. That was higher than the 539,000-unit rate in a Bloomberg survey of economists. Meanwhile, the January core PPI rose by 0.5%, stronger than expected and the hottest reading since October 2008.
In company news:
Sanofi-Aventis ( SNY ) confirms it has struck a long-awaited deal to buy Genzyme Corp. ( GENZ ) for $20.1 billion or $74 a share in cash plus a contingent value right.
Shares of Goldman Sachs ( GS ) are higher after Bloomberg reported that it will shut its Global Macro Proprietary Trading desk. Goldman, which the report notes relies on fixed-income trading for the largest portion of its revenue, will close its unit to comply with the so-called Volcker rule.
Shares of Borders Group ( BGP ) are sharply lower after the troubled bookseller filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. Operating under Chapter 11, Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance. This financing should enable Borders to meet its obligations going forward, the company said in a statement.
TASER International (TASR ) announced that it has received considerable follow-on orders of TASER X26 and ADVANCED TASER M26 electronic control devices ECDs) and related accessories from two international customers.
Shares of Johnson & Johnson (JNJ) are higher despite reports that it recalled 70,000 syringes containing the antipsychotic drug Invega due to cracks in the syringes. The company says the issue, which was discovered during routine testing, is resolved and syringe production has continued.
Shares of Chevron (CVX) are higher after reports that Atlas Energy (ATL) shareholders approved the oil major's acquisition bid worth $3.58 billion. Almost 100% of owners of Atlas's shares voted in favor of the merger. Earlier this month Chevron said it would pay Atlas an additional 10 cents a share to settle litigation when its $3.59 billion acquisition is completed, Bloomberg reports. The settlement comes in response to Atlas shareholder lawsuits that claim company directors violated fiduciary duties by agreeing to an inadequate merger price.
In earnings news;
--Deere & Co. (DE) is up 3.46% out of the gate on Q1 EPS of $1.20 per share, topping the Street's consensus call for $0.99. Revenue was $6.119 billion, vs. expectations of $5.67 billion.
--Comcast is higher after the company reported 2010 Q4 revenue of $9.7 billion, ahead of the analyst view of $9.57 billion on Thomson Reuters. EPS was $0.36 and $0.35 per share,ex-items. Analysts were expecting $0.32 per share.
--Abercrombie & Fitch Co. (ANF) is up after reporting net income of $92.6 million, or $1.03 per share compared with $47.5 million, or 53 cents per share, last year. Ex items, earnings were $1.38 per share compared with 91 cents, topping analysts' consensus call for $1.31 per share.
--ING Groep (ING) ADRs are higher after the Dutch bank and insurer said it swung to a net profit in the fourth quarter thanks to strength at its banking arm. ING reported net profit of euro433 million ($586 million), compared with a loss of euro712 million in the same period a year earlier.
--Pan American Silver (PAAS) drops after it says Q4 EPS were $0.43, less than the Thomson Reuters mean for $0.47. Sales rose 24% to $191.1 million.
Commodities are higher. April gold contracts are up $2, or 0.14%, to $1,376 an ounce while March crude oil contacts are up 0.68%, or $0.60, at $84.90 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 0.65% to $35.61 and the United States Natural Gas fund (UNG) is down 1.82% to $5.31.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.09% to $134.09. Market Vectors Gold Miners (GDX) is up 0.4% to $57.74. iShares Silver Trust (SLV) is down 0.33% to $29.90.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks are higher in mid-session trading as economic data and positive earnings--most notably from Dell ( DELL )--spur buying across sectors. Dell ( DELL ) is higher after reporting Q4 revenue of $15.7 billion, in line with Street estimates. In company news: Sanofi-Aventis ( SNY ) confirms it has struck a long-awaited deal to buy Genzyme Corp. ( GENZ ) for $20.1 billion or $74 a share in cash plus a contingent value right.
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Stocks are higher in mid-session trading as economic data and positive earnings--most notably from Dell ( DELL )--spur buying across sectors. Dell ( DELL ) is higher after reporting Q4 revenue of $15.7 billion, in line with Street estimates. --Comcast is higher after the company reported 2010 Q4 revenue of $9.7 billion, ahead of the analyst view of $9.57 billion on Thomson Reuters.
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Stocks are higher in mid-session trading as economic data and positive earnings--most notably from Dell ( DELL )--spur buying across sectors. Dell ( DELL ) is higher after reporting Q4 revenue of $15.7 billion, in line with Street estimates. EPS was $0.48 per share on a GAAP basis and $0.53 per share on a non-GAAP basis, vs. Street estimates of $0.37 per share.
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Stocks are higher in mid-session trading as economic data and positive earnings--most notably from Dell ( DELL )--spur buying across sectors. Dell ( DELL ) is higher after reporting Q4 revenue of $15.7 billion, in line with Street estimates. Operating under Chapter 11, Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance.
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b54a9b90-5223-4ba6-8933-369f32f6d327
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726928.0
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2011-02-16 00:00:00 UTC
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Mid-Day Update: Stocks Higher as Earnings Delight Street; Economic Data Supports
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DELL
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https://www.nasdaq.com/articles/mid-day-update-stocks-higher-earnings-delight-street-economic-data-supports-2011-02-16
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nan
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nan
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Here's where markets stand at mid-day:
-NYSE up 57.60 (+0.69%) to 8,441.27
-DJIA up 59.45 (+0.49%) to 12,286.09
-S&P 500 up 7.70 (+0.58%) to 1,335.48
-Nasdaq up 19.75 (+0.71%) to 2,824.10
GLOBAL SENTIMENT
Hang Seng up 1.12%
Nikkei up 0.57%
FTSE up 0.84%
MID-DAY NYSE INDEX WATCH
NYSE Energy up 1.14% at 13,685.56
NYSE Financial up 1.07% at 5,384.99
NYSE Health Care up 0.53% at 6,707.85
NYSE Arca Tech 100 up 0.61% at 1,178.62
UPSIDE MOVERS
(+) DELL (+10.1%) continues evening gain that followed earnings.
(+) GENZ (+1.4%) agrees to $74 per share SNY offer.
(+) FDO (+22.8%) continues to gain in wake of Trian Fund interest.
(+) THLD (+22.9%) gets FDA approval for Phase 3 trial of TH-302.
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(+) DELL (+10.1%) continues evening gain that followed earnings. (+) GENZ (+1.4%) agrees to $74 per share SNY offer. (+) FDO (+22.8%) continues to gain in wake of Trian Fund interest.
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(+) DELL (+10.1%) continues evening gain that followed earnings. NYSE Energy up 1.14% at 13,685.56 NYSE Financial up 1.07% at 5,384.99 NYSE Health Care up 0.53% at 6,707.85 NYSE Arca Tech 100 up 0.61% at 1,178.62 (+) FDO (+22.8%) continues to gain in wake of Trian Fund interest.
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(+) DELL (+10.1%) continues evening gain that followed earnings. NYSE Energy up 1.14% at 13,685.56 NYSE Financial up 1.07% at 5,384.99 NYSE Health Care up 0.53% at 6,707.85 NYSE Arca Tech 100 up 0.61% at 1,178.62 (+) GENZ (+1.4%) agrees to $74 per share SNY offer.
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(+) DELL (+10.1%) continues evening gain that followed earnings. Here's where markets stand at mid-day: -NYSE up 57.60 (+0.69%) to 8,441.27 -DJIA up 59.45 (+0.49%) to 12,286.09 -S&P 500 up 7.70 (+0.58%) to 1,335.48 -Nasdaq up 19.75 (+0.71%) to 2,824.10 Hang Seng up 1.12% Nikkei up 0.57% FTSE up 0.84%
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ee5367fe-f663-4c33-aceb-59ea8c2802c9
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726929.0
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2011-02-16 00:00:00 UTC
|
China Inflation: Getting Worse and Coming To A Wal-Mart Near You
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DELL
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https://www.nasdaq.com/articles/china-inflation-getting-worse-and-coming-wal-mart-near-you-2011-02-16
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nan
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nan
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By Dian L. Chu, EconForecast
On Tuesday Feb. 15, China reported its consumer prices (CPI) rose 4.9% year-over-year (yoy) in January, which came in less than expected. Economists were expecting 5.4% inflation, based on a Bloomberg survey.
However, after digesting the data, Asian markets closed mixed on that news, with China’s Shanghai Composite staying flat after a choppy trading session.
Well, the reason why markets reacted that way is because the lower figure is partly the beneficiary of a previously announced change--effective January 2011--in the weight of items included the CPI basket calculation.
Index Calculation Change
Food previously accounted for a third of the index calculation and was the main driver of inflation last year. According to Blomberg, National Statistics Bureau (NSB) said that a reweighting of the CPI, including cutting the contribution from food, boosted the headline rate by 0.024%.
Bloomberg quoted Mizuho Securities Asia Ltd. Saying that the CPI calculation shift effect is more like 0.2%. That is, without the change, the CPI may have been 5.1%.
Manwhile, NSB said the Producer Price Index (PPI) spiked 6.6% yoy in January after escalating at 5.9% in December. The component calculation of the PPI also has been revised, including an addition of about 2000 products to the basket and adjusting the weightings.
The change reduced January’s yearly PPI inflation by 0.05%, which means the index would have seen an increase of 6.65% without the basket change.
Spilled Over to Non-food
Chinese statistic bureau did not disclose a breakdown of the basket for either index. So, the alterations made it quite impossible to directly compare the January data on an apple-to-apple basis to earlier months. Nevertheless, there are still plenty of clues.
First of all, it is evident that there's now a broadening escalations spilled over to non-food items as well. Core inflation, stripped of food, rose 2.6% yoy, the highest in at least a decade after rising 2.1% yoy in December.
Residence costs jumped 6.8% from a year ago, the most since August 2008. Not to mention food prices soared 10.3% after rising 9.6% in December - Grain escalated 15.1%, fresh eggs climbed 20.2%, and fruit spiked 34.8% from a year ago, according to the official report.
Previous Tightening Not Enough
Regardless which way you calculate, January also marks the fourth straight month that the inflation has exceeded Beijing's 4% target. This clearly illustrates measures taken by the Chinese government, e.g., multiple interest rate hikes, raising bank reserves requirement, and letting Yuan appreciate, have not been enough to control surging prices.
Furthermore, I personally prefer PPI as an inflation predictor and indicator, as it shows the coming pricing pressure that could be passed down through the supply chain. And the current reading of 6.6% just further supports the view that China’s inflation is far from being under control.
Feed the Inflation
China’s inflation problem could be attributed mostly to the over abundant money supply, increasing domestic demand from a growing middle class, and bad weather hurting food supplies. On top of these existing culprits, China may also increase retail gasoline and diesel prices to reflect higher international crude prices, People’s Daily said Feb. 11. China last increased fuel prices by around 4% on December 22.
Moreover, the worst drought in 60 years hitting China northern “wheat belt” will only putting more upward pressure on the already rampant food price inflation, although Beijing so far has downplayed it.
Increasing Input Costs
China’s money supply surged 48% in two years (which is not that different from the U.S. Fed’s QE), the flood of liquidity has been used mostly to speculate on commodities/raw materials instead of stimulating consumption.
As traditional industries, such as steel and textile, are hurting from rising input costs, the most alarming sign is the widening gap between PPI and CPI. This suggests producers and manufacturers have not been able to pass through the cost increase.
Eat, Pass Through
So, eventually these companies most likely will eat some of the cost increase, which means shrinking margins, while exporting some more to their clients in Europe and the U.S. And the companies that import goods from China will face the same dilemma --absorb or pass through the price increase.
Since China’s economy relies heavily on manufacturing and traditional industries, the implication of lower profitability could pose a serious problem for many companies, and China’s economic growth.
No Way Out
The importing countries, meanwhile, will likely also suffer from lower corporate margins and high consumer inflation. The United States, a net importer with China in the supply chain of many corporations, will feel that inflationary pain all the way from this side of the Pacific Ocean.
Even if the U.S. switches to importing from other trading partners, it will not make much of a difference, as other emerging economies are also suffering from the similar inflation headache. For instance, India’s benchmark wholesale-price index rose 8.23% in January, Indonesia’s inflation is 7% and South Korea’s is 4.1%.
Coming to a Wal-Mart Near You
Many economists predict that China will likely be forced to take stronger measures that could slow economic growth. Reuters reported China may increase the bank deposit reserve ratio to 23% from the current 19.5%, and the People's Bank of China (PBOC) is also expected to permit the yuan to rise further, according to a report by the State Information Centre under the National Development and Reform Commission.
Japan’s Mizuho Research Institute predicted in December that China may raise interest rates up to six times by the end of 2011 (one rate hikes in Feb. 2011 so far).
Regardless when or what China’s doing to rein in inflation, it no doubt will put a brake on one of the very few bright spots in the world. While China’s busy tightening and dealing with the once in 60-year mass drought, consumer price inflation, and diminishing margins will likely crop up pretty much everywhere from mass retailers like Wal-Mart, Target, to high tech products from companies such as Apple, Hewlett Packard, and Dell.
Dian L. Chu, Feb. 15, 2011 | Facebook Page | Article Alert | Google Buzz
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.
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While China’s busy tightening and dealing with the once in 60-year mass drought, consumer price inflation, and diminishing margins will likely crop up pretty much everywhere from mass retailers like Wal-Mart, Target, to high tech products from companies such as Apple, Hewlett Packard, and Dell. Well, the reason why markets reacted that way is because the lower figure is partly the beneficiary of a previously announced change--effective January 2011--in the weight of items included the CPI basket calculation. Not to mention food prices soared 10.3% after rising 9.6% in December - Grain escalated 15.1%, fresh eggs climbed 20.2%, and fruit spiked 34.8% from a year ago, according to the official report.
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While China’s busy tightening and dealing with the once in 60-year mass drought, consumer price inflation, and diminishing margins will likely crop up pretty much everywhere from mass retailers like Wal-Mart, Target, to high tech products from companies such as Apple, Hewlett Packard, and Dell. By Dian L. Chu, EconForecast On Tuesday Feb. 15, China reported its consumer prices (CPI) rose 4.9% year-over-year (yoy) in January, which came in less than expected. Well, the reason why markets reacted that way is because the lower figure is partly the beneficiary of a previously announced change--effective January 2011--in the weight of items included the CPI basket calculation.
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While China’s busy tightening and dealing with the once in 60-year mass drought, consumer price inflation, and diminishing margins will likely crop up pretty much everywhere from mass retailers like Wal-Mart, Target, to high tech products from companies such as Apple, Hewlett Packard, and Dell. The change reduced January’s yearly PPI inflation by 0.05%, which means the index would have seen an increase of 6.65% without the basket change. Feed the Inflation China’s inflation problem could be attributed mostly to the over abundant money supply, increasing domestic demand from a growing middle class, and bad weather hurting food supplies.
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While China’s busy tightening and dealing with the once in 60-year mass drought, consumer price inflation, and diminishing margins will likely crop up pretty much everywhere from mass retailers like Wal-Mart, Target, to high tech products from companies such as Apple, Hewlett Packard, and Dell. By Dian L. Chu, EconForecast On Tuesday Feb. 15, China reported its consumer prices (CPI) rose 4.9% year-over-year (yoy) in January, which came in less than expected. Index Calculation Change Food previously accounted for a third of the index calculation and was the main driver of inflation last year.
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9b434cf7-ff2b-4faf-ad4e-523d3b4e3b57
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726930.0
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2011-02-16 00:00:00 UTC
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Opening View: DJIA Futures Point Higher on Earnings and M&A Activity
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DELL
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https://www.nasdaq.com/articles/opening-view-djia-futures-point-higher-earnings-and-ma-activity-2011-02-16
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nan
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nan
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DELL GENZkey technical hurdle
On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history. Commenting on the report, Todd Salamone, Senior Vice President of Research, noticed that the 50-day buy-to-open put/call volume ratio on the iShares MSCI Emerging Markets Index Fund ( EEM ) had recently rolled over near the ratio's December 2010 peak. Todd noted that the activity "does not look like hedge activity, but rather speculative activity that has potentially climaxed," and believes that this could have bullish implications for EEM.
In earnings news, Deere & Co. ( DE ) posted a first-quarter profit of $513.7 million, or $1.20 per share, as sales rose 27% to $6.12 billion. Wall Street analysts were expecting a profit of 97 cents per share on revenue of $5.59 billion. Looking ahead, Deere said it sees second-quarter revenue rising by 25% over the same quarter last year. For fiscal 2011, the company is expecting net income of about $2.5 billion, compared to the current consensus estimate of $2.37 billion.
After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share. However, revenue came in just shy of the consensus estimate for $15.75 billion. The company also said that it expects revenue growth of 5% to 9% for fiscal 2012.
Outside of earnings, Comcast Corp. ( CMCSA ) announced that it is increasing its annual dividend by 19% to 45 cents per share. The dividend will be payable on April 27 to shareholders of record as of April 6. The company also announced plans to buy back $2.1 billion in stock by the end of 2011.
Finally, while the news leaked to the Street late in yesterday's session, Sanofi-Aventis SA (SNY) officially confirmed this morning that it has reached a deal to buy Genzyme Corp. for $20.1 billion in cash plus a contingent value right. The deal values GENZ at $74 per share. The acquisition has been approved by boards of both companies, and is expected to close early in the second quarter of 2011.
Earnings Preview
On the earnings front, Nvidia (NVDA), NetApp (NTAP), Abercrombie & Fitch (ANF), OfficeMax (OMX), and Genzyme ( GENZ ) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
Today offers up the latest word on January's housing starts and building permits, the January producer price index (PPI), the twin industrial production and capacity utilization reports for January, the weekly U.S. petroleum supplies report, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. More data on domestic inflation arrives tomorrow, with the release of January's consumer price index (CPI). Also on Thursday's docket are weekly initial jobless claims, leading economic indicators, and the Philadelphia Fed business outlook survey. The economic calendar is bare on Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,364,445 call contracts traded on Tuesday, compared to 754,566 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average edged higher to 0.56.
**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**
Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.
Overseas Trading
Overseas trading is pointed broadly higher this morning, as nine of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.47%. Asian markets headed higher on Wednesday, with investor tensions easing in the wake of China's latest data on inflation. Japan's Nikkei extended its rally to three straight sessions, with exporters rallying on a weaker yen. Meanwhile, European stocks are trading broadly higher, as Sanofi-Aventis' deal to purchase Genzyme provided a shot in the arm for investor sentiment.
Currencies and Commodities
After sliding to an 11-week low yesterday, crude futures are looking to reclaim their footing this morning. With the official government report on weekly U.S. petroleum supplies set for release later today, the March crude contract has added 40 cents to trade at $87.97 per barrel. A weak U.S. dollar is helping provide ballast for commodities this morning, with the greenback extending its decline versus the euro. However, the greenback continues to edge higher versus the yen, extending its push into eight-week high territory versus the Japanese currency. As a result, the U.S. Dollar Index has dipped 0.16% in premarket trading. Finally, gold futures are off 60 cents at $1,373.50 an ounce in London, with the malleable metal struggling to extend yesterday's solid gains.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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DELL GENZkey technical hurdle On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history. After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share.
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After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. DELL GENZkey technical hurdle On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share.
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After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share. DELL GENZkey technical hurdle On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history.
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DELL GENZkey technical hurdle On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history. After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share.
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57cf3d9a-f384-41da-a427-3220b9e1faea
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726931.0
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2011-02-15 00:00:00 UTC
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Opening View: DJIA Futures Dip Ahead of Data Deluge
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DELL
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https://www.nasdaq.com/articles/opening-view-djia-futures-dip-ahead-data-deluge-2011-02-15
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nan
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nan
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Technically, the DJIA continues to stare up at resistance at the 12,300 level, even as the blue chip barometer consolidates along support above the 12,150-12,200 region. As for the SPX, traders should continue to keep a close eye on 1,333.58 -- a double of the index's March 2009 low . The broad-market index could find support in the 1,325 region, while a firmer backstop should materialize in the 1,320 area.
In earnings news this morning, Watson Pharmaceuticals Inc. ( WPI ) said that its fourth-quarter profit fell to $18.3 million, or 15 cents per share, from $56.9 million, or 51 cents per share, a year ago. On an adjusted basis, earnings were 93 cents per share. Revenue rose 21% to $952.7 million. Wall Street was expecting earnings of 93 cents per share on revenue of $927.8 million.
After the close last night, FedEx Corp. ( FDX ) cut its third-quarter earnings outlook due to severe winter storms and higher-than-expected fuel costs. FDX now sees third-quarter earnings of 70 cents per share to 90 cents per share, down from prior guidance for earnings of 95 cents per share to $1.15 per share. Wall Street had set its sights on a profit of $1.06 per share from the shipping specialist. "We experienced significant network disruptions in the U.S. and Europe and unusually high costs from severe winter storms," said Alan Graf, FedEx's chief financial officer.
Finally, Marriott International Inc. ( MAR ) posted a fourth-quarter profit of $173 million, or 46 cents per share, up from $106 million, or 28 cents per share, in the same quarter last year. On an adjusted basis, earnings came in at 39 cents per share. Revenue rose to $3.64 billion. Analysts were expecting a profit of 36 cents per share on revenue of $3.58 billion. Marriott also announced that it plans to divide itself into two publicly traded companies later this year by spinning off its timeshare business.
Earnings Preview
On the earnings front, CIT Group ( CIT ), Dell ( DELL ), Fossil (FOSL), Tesla Motors (TSLA), and ValueClick (VCLK) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
The latest ICSC-Goldman Sachs chain store sales report, January retail sales, the Empire State manufacturing survey, the December business inventories report, and the NAHB housing market index are slated to hit the Street today. Tomorrow offers up the latest word on January's new housing starts, the January producer price index (PPI), weekly U.S. petroleum supplies, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. Inflationary data continues to roll in Thursday, with the release of January's consumer price index (CPI). Also on Thursday's docket are weekly jobless claims, leading economic indicators, and the Philadelphia Fed business outlook survey. The economic calendar is bare on Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,551,520 call contracts traded on Monday, compared to 815,067 put contracts. The resultant single-session put/call ratio arrived at 0.53, while the 21-day moving average held at 0.55.
**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**
Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.
Overseas Trading
Overseas trading is mixed this morning, as six of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.02%. Asian stocks didn't stray far from breakeven, as traders reacted to news that China's consumer price index (CPI) rose 4.9% in January. The figure was above December's 4.6% rise, but below economists' forecasts for a 5.4% increase. Meanwhile, strong earnings reports from Barclays PLC (BCS) and Danone SA have provided a boost for European markets. Additionally, the U.K.'s CPI rose 4% in January from 3.7% in December.
Currencies and Commodities
The U.S. dollar is headed lower in premarket trading this morning, as the greenback is showing weakness in the wake of Chinese inflation data. At last check, the U.S. Dollar Index was down 0.32% at 78.37. The weakening dollar is having a buoying effect on commodities. Specifically, the March crude futures contract is up 16 cents at $88.89 per barrel, while gold futures have added $7.60 to trade at $1,372.70 an ounce in London.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Earnings Preview On the earnings front, CIT Group ( CIT ), Dell ( DELL ), Fossil (FOSL), Tesla Motors (TSLA), and ValueClick (VCLK) are slated to release their quarterly earnings reports. "We experienced significant network disruptions in the U.S. and Europe and unusually high costs from severe winter storms," said Alan Graf, FedEx's chief financial officer. Asian stocks didn't stray far from breakeven, as traders reacted to news that China's consumer price index (CPI) rose 4.9% in January.
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Earnings Preview On the earnings front, CIT Group ( CIT ), Dell ( DELL ), Fossil (FOSL), Tesla Motors (TSLA), and ValueClick (VCLK) are slated to release their quarterly earnings reports. After the close last night, FedEx Corp. ( FDX ) cut its third-quarter earnings outlook due to severe winter storms and higher-than-expected fuel costs. FDX now sees third-quarter earnings of 70 cents per share to 90 cents per share, down from prior guidance for earnings of 95 cents per share to $1.15 per share.
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Earnings Preview On the earnings front, CIT Group ( CIT ), Dell ( DELL ), Fossil (FOSL), Tesla Motors (TSLA), and ValueClick (VCLK) are slated to release their quarterly earnings reports. In earnings news this morning, Watson Pharmaceuticals Inc. ( WPI ) said that its fourth-quarter profit fell to $18.3 million, or 15 cents per share, from $56.9 million, or 51 cents per share, a year ago. FDX now sees third-quarter earnings of 70 cents per share to 90 cents per share, down from prior guidance for earnings of 95 cents per share to $1.15 per share.
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Earnings Preview On the earnings front, CIT Group ( CIT ), Dell ( DELL ), Fossil (FOSL), Tesla Motors (TSLA), and ValueClick (VCLK) are slated to release their quarterly earnings reports. ** Trading the News: A Contrarian View. Additionally, the U.K.'s CPI rose 4% in January from 3.7% in December.
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b9a0492d-0afb-453a-b155-cc69df82d342
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726932.0
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2011-02-15 00:00:00 UTC
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Apple's Mac Notebook Prices More Resilient Than Our Estimates
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DELL
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https://www.nasdaq.com/articles/apples-mac-notebook-prices-more-resilient-our-estimates-2011-02-15
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nan
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nan
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The average price of Apple's ( AAPL ) Mac notebook has been declining since 2006, with the highest decline seen in 2008 led by weaker consumer demand due to a sluggish economy. We expect the decline to continue with ongoing commoditization of notebooks and competition from cheaper netbooks and tablets like the iPad. The decline should however occur at a slower rate as demand for notebooks is still significant compared to desktops. Apple primarily competes with PC makers like Dell ( DELL ), HP ( HPQ ) and Acer, all of which have seen greater notebook price erosion than Apple historically.
While we estimate the average price of Mac notebooks will decrease to about $875 by the end of Trefis forecast period, Trefis members predict Mac's price will decline slower than our expectations reaching close to $1,120. The optimistic member estimates have little impact on Apple's stock because Mac notebooks constitute only around 7% of Apple's stock price based on our estimates.
We currently have a Trefis price estimate of $420 for Apple's stock , ahead of the current market price of $359.
Increasing Commoditization of Notebooks
Notebooks are now entering the mature phase of product cycle. Although the demand for notebooks is still relatively high, the costs of product components are declining. These are signs that the notebook market is being increasingly commoditized, which has resulted in intense competition among notebook makers, in turn causing price erosion.
Competition from Netbooks and Tablets
Netbooks and mini notebooks are sold as low as $200 - a price more affordable by consumers when compared to notebooks. Hence netbooks and tablets are likely to increase their share in the larger PC market, thereby pushing the average price of notebooks down. There was speculation last year that Apple's iPad is perhaps cannibalizing the company's Mac sales. So far, the Mac has withstood any such pressure from the iPad, with sales of both products recording strong growth in the last three quarters.
However, the Mac will continue to be under pressure from the iPad as the price paid and value derived from an iPad versus a Mac become more prominent in the future. We earlier wrote how Apple would find it difficult to raise or maintain prices on its notebooks in the future as some customers will view the iPad as a cheaper substitute without having to leave the Apple family. (See iPad's Influence on Mac Notebook Pricing )
Trefis Community Forecast
Trefis members forecast Mac notebook pricing will decrease from $1,280 in 2011 to around $1,140 by the end of the Trefis forecast period compared to the baseline Trefis estimate of a decrease from $1,190 in 2011 to $875 during the same period. The member estimates imply a small upside of around 2% to the Trefis price estimate for Apple's stock.
Our complete analysis for Apple's stock is here .
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.
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Apple primarily competes with PC makers like Dell ( DELL ), HP ( HPQ ) and Acer, all of which have seen greater notebook price erosion than Apple historically. We expect the decline to continue with ongoing commoditization of notebooks and competition from cheaper netbooks and tablets like the iPad. Hence netbooks and tablets are likely to increase their share in the larger PC market, thereby pushing the average price of notebooks down.
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Apple primarily competes with PC makers like Dell ( DELL ), HP ( HPQ ) and Acer, all of which have seen greater notebook price erosion than Apple historically. We expect the decline to continue with ongoing commoditization of notebooks and competition from cheaper netbooks and tablets like the iPad. While we estimate the average price of Mac notebooks will decrease to about $875 by the end of Trefis forecast period, Trefis members predict Mac's price will decline slower than our expectations reaching close to $1,120.
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Apple primarily competes with PC makers like Dell ( DELL ), HP ( HPQ ) and Acer, all of which have seen greater notebook price erosion than Apple historically. While we estimate the average price of Mac notebooks will decrease to about $875 by the end of Trefis forecast period, Trefis members predict Mac's price will decline slower than our expectations reaching close to $1,120. The optimistic member estimates have little impact on Apple's stock because Mac notebooks constitute only around 7% of Apple's stock price based on our estimates.
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Apple primarily competes with PC makers like Dell ( DELL ), HP ( HPQ ) and Acer, all of which have seen greater notebook price erosion than Apple historically. We expect the decline to continue with ongoing commoditization of notebooks and competition from cheaper netbooks and tablets like the iPad. While we estimate the average price of Mac notebooks will decrease to about $875 by the end of Trefis forecast period, Trefis members predict Mac's price will decline slower than our expectations reaching close to $1,120.
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f75cd74b-799c-41bb-85d8-e0d504c53e97
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726933.0
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2011-02-15 00:00:00 UTC
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Tablets to Help Push Dell Stock Above $20
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DELL
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https://www.nasdaq.com/articles/tablets-help-push-dell-stock-above-20-2011-02-15
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nan
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nan
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Dell ( DELL ) has now entered the tablet race with the launch of the Streak 7 this month. According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Motorola Mobility ( MMI ) and LG all launching tablets and expected to be the major companies in this market.
We estimate that tablets will contribute about 6% to Dell's stock value; however, if Dell can create more success with tablets than our forecast, there could be upside to the $20.84 Trefis price estimate for Dell's stock , which is significantly above the current market price.
Dell to Capture 5% Share of Android Based Tablets in 2011
The Streak 7 is a tablet device with a 7 inch screen based on Google's Android 2.2 operating system. The Dell Streak 7 has been launched at a crucial point as Android based tablets become increasingly popular and are gaining market share from the tablet market leader in Apple's iPad.
In Q4 2010, sales for Android based tablets increased significantly to 22% of global tablet shipments, up from just 2.3% in Q3 2010, with the launch of Samsung's Galaxy Tab. Given the rapid adoption of Android based tablets so far, Dell's two different Android based tablets puts it in a prime position to win market share.
However, the fact that Streak 7 is based on Android 2.2, some users might hold out for Android's newest version 3.0 called Honeycomb, which is specifically designed by Google for tablets.
We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year. However, as the Android tablet market grows, we believe Dell will be able to at least hold on to its share, if not grow it using its innovative technologies and new products as well as sales capabilities. We estimate Dell's tablet sales will continue to grow at the same rate as the Android based tablet market reaching 5 million units by the end of our forecast period.
However, there could be an upside of around 8% to our estimate for Dell's stock if the tablet unit sales increase at a much faster rate to reach 8 million by the end of the Trefis forecast period.
Dell's Tablet Pricing Could Decline
Dell's Streak 7 at $450 is priced at the lower end of the tablet market. However with the Streak 10 expected to launch soon, we expect the average pricing of Dell's tablet will increase in 2011. Dell Streak 10 will be a 10 inch tablet device, and we estimate it will be priced at the high end of the tablet market around $700-$800. As a result, we believe the average tablet pricing should be around $550 for Dell in 2011. Increasing competition in future could force Dell to reduce tablets pricing beyond our current forecast of around $410 by the end of Trefis forecast period.
However, if Dell is able to control its pricing declines, and if the tablets pricing declines slowly to reach around $500 by the end of Trefis forecast period, there could be additional upside to our estimate for Dell stock.
You can drag the trend lines above to see the impact of various tablet unit sales and tablet pricing scenarios on Dell's stock.
See our analysis of the $20.84 Trefis Price estimate for Dell's stock.
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.
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We estimate that Dell will be able to capture a modest 5% market share of Android based tablets in 2011 behind competitors like Samsung and Motorola selling close to 700,000 units during the year. However, there could be an upside of around 8% to our estimate for Dell's stock if the tablet unit sales increase at a much faster rate to reach 8 million by the end of the Trefis forecast period. Dell ( DELL ) has now entered the tablet race with the launch of the Streak 7 this month.
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We estimate that tablets will contribute about 6% to Dell's stock value; however, if Dell can create more success with tablets than our forecast, there could be upside to the $20.84 Trefis price estimate for Dell's stock , which is significantly above the current market price. Dell to Capture 5% Share of Android Based Tablets in 2011 The Streak 7 is a tablet device with a 7 inch screen based on Google's Android 2.2 operating system. We estimate Dell's tablet sales will continue to grow at the same rate as the Android based tablet market reaching 5 million units by the end of our forecast period.
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We estimate that tablets will contribute about 6% to Dell's stock value; however, if Dell can create more success with tablets than our forecast, there could be upside to the $20.84 Trefis price estimate for Dell's stock , which is significantly above the current market price. We estimate Dell's tablet sales will continue to grow at the same rate as the Android based tablet market reaching 5 million units by the end of our forecast period. Dell's Tablet Pricing Could Decline Dell's Streak 7 at $450 is priced at the lower end of the tablet market.
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We estimate Dell's tablet sales will continue to grow at the same rate as the Android based tablet market reaching 5 million units by the end of our forecast period. Dell's Tablet Pricing Could Decline Dell's Streak 7 at $450 is priced at the lower end of the tablet market. However with the Streak 10 expected to launch soon, we expect the average pricing of Dell's tablet will increase in 2011.
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e7c15bf4-e535-451a-bf5a-44597d43ac6f
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726934.0
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2011-02-12 00:00:00 UTC
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Growing Notebook & Netbook Market Will Boost Dell's PC Business
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DELL
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https://www.nasdaq.com/articles/growing-notebook-netbook-market-will-boost-dells-pc-business-2011-02-12
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nan
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nan
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We expect the growth in notebooks and netbooks will benefit computer makers like Dell ( DELL ), Apple ( AAPL ) and HP ( HPQ ). Dell's PC market share, in particular, has been declining over the years. It's trying to improve its position by building up on its cloud offerings, and expanding its foray into tablets. This combined with the booming notebook and netbook market should help Dell regain its lost market share.
While we anticipate global shipments of notebooks and netbooks will reach 380 million by the end of Trefis forecast period, Trefis members expect the sales will near 420 million. We currently have a Trefis price estimate of $20.84 .
After Notebooks, Netbooks Take the Lead
The global sales of notebooks and netbooks combined have grown at a rate of above 25% annually over the past few years with an increasing consumer shift from static desktops to mobile notebooks. The sales have risen from an estimated 62 million in 2005 to around 203 million in 2010. We expect the growth in notebooks and netbooks to continue, although at a slower pace, due to maturing of the notebook market. However, netbooks and tablets will continue to rule the PC market with newer technologies and rapid innovation in terms of product design and features.
The beginning of the last decade saw a consumer shift from desktops to notebooks. The increasing adoption of notebooks has resulted in a steady growth of the PC market though this was subdued somewhat during the economic crisis. We expect growth to resume as notebook growth should remain at moderate levels as notebooks have crossed the early growth phase of the product cycle and now starting to mature as an industry.
A majority of the growth in coming years will come from netbook sales as they gain increasing popularity worldwide, and rapid innovation and competition will make them cheaper and efficient.
Tablets, Cloud Offerings Should Drive Dell's PC Share
Dell surpassed Acer to become the second largest PC sales vendor in Q4 2010 aided by strong emerging market sales realizing 4.2% YOY growth compared to Q4 2009. Dell is also expanding its presence in tablets and cloud offerings with plans to acquire cloud-service companies like Compellent Technologies, Insite One, and SecureWorks (See Should Dell Focus its Net Cash Position on Investment in Tablet Technology? ). The company recently unveiled a 10-inch Windows 7 based tablet, one of the 39 new products showcased at the company's "Dell Means Business" event in San Francisco.
Trefis Community Forecast
Trefis members forecast for global notebook & netbook shipments will increase from 266 million in 2011 to 418 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 259 million to 381 million during the same period. The member estimates imply an upside of just under 5% to the Trefis price estimate for Dell's stock.
Our complete analysis for Dell's stock is here .
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.
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Tablets, Cloud Offerings Should Drive Dell's PC Share Dell surpassed Acer to become the second largest PC sales vendor in Q4 2010 aided by strong emerging market sales realizing 4.2% YOY growth compared to Q4 2009. We expect the growth in notebooks and netbooks will benefit computer makers like Dell ( DELL ), Apple ( AAPL ) and HP ( HPQ ). Dell's PC market share, in particular, has been declining over the years.
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Tablets, Cloud Offerings Should Drive Dell's PC Share Dell surpassed Acer to become the second largest PC sales vendor in Q4 2010 aided by strong emerging market sales realizing 4.2% YOY growth compared to Q4 2009. We expect the growth in notebooks and netbooks will benefit computer makers like Dell ( DELL ), Apple ( AAPL ) and HP ( HPQ ). Dell's PC market share, in particular, has been declining over the years.
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Tablets, Cloud Offerings Should Drive Dell's PC Share Dell surpassed Acer to become the second largest PC sales vendor in Q4 2010 aided by strong emerging market sales realizing 4.2% YOY growth compared to Q4 2009. We expect the growth in notebooks and netbooks will benefit computer makers like Dell ( DELL ), Apple ( AAPL ) and HP ( HPQ ). Dell's PC market share, in particular, has been declining over the years.
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Tablets, Cloud Offerings Should Drive Dell's PC Share Dell surpassed Acer to become the second largest PC sales vendor in Q4 2010 aided by strong emerging market sales realizing 4.2% YOY growth compared to Q4 2009. We expect the growth in notebooks and netbooks will benefit computer makers like Dell ( DELL ), Apple ( AAPL ) and HP ( HPQ ). Dell's PC market share, in particular, has been declining over the years.
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534c4f07-c71a-4b9b-aeeb-d9d019e7db0e
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726935.0
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2011-02-09 00:00:00 UTC
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This May Be the Best Bet on the Tablet Revolution
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DELL
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https://www.nasdaq.com/articles/may-be-best-bet-tablet-revolution-2011-02-09
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nan
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nan
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Last month, the world's top high-tech manufacturers gathered in Las Vegas for the annual Consumer Electronics Show. They hobnobbed. They exchanged business cards. But most important, they introduced their latest innovations to the world.
Remember, this is the venue where we got our first real glimpse of VCRs (1970), CD players (1981), and DVDs (1996).
This year there was one category that really stole the show -- tablet computers. More than 80 different tablets were put on display. And the crowd has been buzzing ever since.
In dollar terms, tablet sales could generate $34 billion in revenue by next year. And the total will rise dramatically in a short period of time. That spells plenty of opportunities for investors who know where to look.
The critics are quick to claim that tablets have had plenty of time to catch on (they've been around since the 1990s); they'll never be much more than a niche product. I think that view is flawed.
Today's tablets are years ahead of previous generations -- they can play MP3s, read e-books, stream movies, surf the Internet or video chat with friends. The combination of better applications and advanced wireless technologies has laid the foundation for the "Age of the Tablet."
Citigroup analysts believe sales could reach 35 million units this year -- and that could be a lowball estimate -- eMarketer is banking on 70 million, while ISI Group is expecting volume to reach 90 million by 2012. Research firm Gartner is forecasting that global tablet sales could skyrocket to 208 million by 2014.
That's a 10-fold increase from today's levels.
There's no arguing the direction of the market -- it's just a matter of how high and how fast. I believe tablets will soon take a large bite out of handheld gaming consoles, e-readers and other single-function devices and overtake laptops within the next three years.
Apple (Nasdaq: AAPL ) gives us a bullish clue that the transfer of power is already taking place. The company recently ordered 65 million iPad display screens from vendors. You don't place an order like that without being confident that business is about to ramp up considerably.
The handful of companies at the front of the $34-billion market
In many regards, it's still Apple against the rest of the world. But this one-sided contest is about to become anyone's ballgame.
Samsung's new Galaxy Tab is widely considered the first real threat to the iPad. The flashy device features front and rear-facing cameras, full 1080 HD video and a host of other bells and whistles. Samsung shipped more than 1 million units in its first two months.
All four major wireless providers carry the device, which dramatically widens the distribution channel. And Verizon (NYSE: VZ ) , AT&T (NYSE: T ) , Sprint (NYSE: S ) and T-Mobile are all happy to help push sales -- considering the accompanying data plans typically bring in $30 a month or more.
Not far behind, well-respected tech outfits like Dell (Nasdaq: DELL ) , LG, Vizio, Cisco (Nasdaq: CSCO ) , Sony (NYSE: SNE ) and Toshiba will all soon enter the field, along with scores of lesser-known manufacturers competing at different price points. They will all be jockeying for position in a booming market.
Companies like Qualcomm (Nasdaq: QCOM ) , NVIDIA (Nasdaq: NVDA ) and Skyworks Solutions (Nasdaq: SWKS ) will be busy supplying internal chips and other components.
It's pretty easy to see that competition in the field will be brutal across all aspects of the tablet market. But there is one place where I think a single company is going to end up with the bulk of the business -- the special glass that goes into every tablet made.
Action to Take--> One company has emerged as the world's dominant supplier, Corning (NYSE: GLW ) . The firm's future lies in Gorilla Glass, which is engineered at the molecular level to be thin, strong and scratch-resistant.
Without getting too technical, Gorilla Glass is sensitive to the touch, yet nearly impervious to damage. Those attributes make the glass an ideal cover for smartphones, tablets, laptops, LCD monitors and the newest 3-D televisions.
Thanks to Gorilla Glass, Corning's Specialty Materials segment posted impressive 77% revenue growth last quarter. And with the market growing by leaps and bounds, I'm expecting this one segment to produce more than $1 billion in sales next year, quadruple what it made last year. That's a nice slice of a still-young tablet market.
-- Nathan Slaughter
P.S. -- There's an interesting way to make money that's getting a lot of attention lately. In short, a Texas man has figured out how to collect an extra $3,000 to $6,600 each and every month by simply owning shares of some of the safest stocks on the planet. If this sounds like something you're interested in, keep reading…
Disclosure: Neither Nathan Slaughter nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Not far behind, well-respected tech outfits like Dell (Nasdaq: DELL ) , LG, Vizio, Cisco (Nasdaq: CSCO ) , Sony (NYSE: SNE ) and Toshiba will all soon enter the field, along with scores of lesser-known manufacturers competing at different price points. Today's tablets are years ahead of previous generations -- they can play MP3s, read e-books, stream movies, surf the Internet or video chat with friends. I believe tablets will soon take a large bite out of handheld gaming consoles, e-readers and other single-function devices and overtake laptops within the next three years.
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Not far behind, well-respected tech outfits like Dell (Nasdaq: DELL ) , LG, Vizio, Cisco (Nasdaq: CSCO ) , Sony (NYSE: SNE ) and Toshiba will all soon enter the field, along with scores of lesser-known manufacturers competing at different price points. The company recently ordered 65 million iPad display screens from vendors. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. © Copyright 2001-2010 StreetAuthority, LLC.
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Not far behind, well-respected tech outfits like Dell (Nasdaq: DELL ) , LG, Vizio, Cisco (Nasdaq: CSCO ) , Sony (NYSE: SNE ) and Toshiba will all soon enter the field, along with scores of lesser-known manufacturers competing at different price points. Citigroup analysts believe sales could reach 35 million units this year -- and that could be a lowball estimate -- eMarketer is banking on 70 million, while ISI Group is expecting volume to reach 90 million by 2012. Companies like Qualcomm (Nasdaq: QCOM ) , NVIDIA (Nasdaq: NVDA ) and Skyworks Solutions (Nasdaq: SWKS ) will be busy supplying internal chips and other components.
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Not far behind, well-respected tech outfits like Dell (Nasdaq: DELL ) , LG, Vizio, Cisco (Nasdaq: CSCO ) , Sony (NYSE: SNE ) and Toshiba will all soon enter the field, along with scores of lesser-known manufacturers competing at different price points. The company recently ordered 65 million iPad display screens from vendors. The handful of companies at the front of the $34-billion market In many regards, it's still Apple against the rest of the world.
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f7c85eed-f4a1-4055-9ab1-ea49457de2eb
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726936.0
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2011-02-08 00:00:00 UTC
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Xoom and Tablets to Make up 20% of Motorola Mobility's Value
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DELL
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https://www.nasdaq.com/articles/xoom-and-tablets-make-20-motorola-mobilitys-value-2011-02-08
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nan
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nan
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Motorola Mobility ( MMI ) has now entered the tablet market and is expected to launch the Xoom tablet in February 2011. According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG posing the biggest threat as competitors to Motorola Mobility.
We estimate that Tablets constitute around 20% of the Motorola Mobility stock; however, if Motorola can create more success with tablets than our forecast, there could be upside to our $25.45 Trefis price estimate for Motorola Mobility stock , which is about 16% below the current market price.
Xoom will be the first tablet on Google Android's newest version 3.0, called Honeycomb, which is specifically designed for tablets. It will have some attractive features like support for big screens (7 inch to 9 inch), a totally new user interface, extensive multi-tasking and multiple home screens among other features.
DigiTimes expects that around 700,000 to 800,000 Xoom tablets will be sold in Q1 2011 itself. We expect around 4 million tablets to be sold by Motorola in 2011, and we estimate that this number could increase to around 8.5 million annually by the end of Trefis forecast period, which could be a conservative estimate.
This growth is slower than the overall tablet market (as predicted by IDC), which means that Motorola's tablets could represent around 30% by the end of 2011 and decline gradually as more competitors enter the fray. We expect that other big players like Cisco ( CSCO ), Toshiba and HP (HPQ) will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. These in addition to Apple's iPad 2 will create further pressure on Motorola's future market share.
However, there could be an upside of around 10% to our estimate for Motorola Mobility stock if the tablet unit sales increase at a faster rate to reach 12 million by the end of Trefis forecast period.
Motorola Mobility's tablet pricing could decline
Xoom is a 10 inch tablet with support for 3G and 4G network and comes with higher specifications than the iPad in terms of RAM. It also features front and back cameras, which the iPad does not have. Motorola Xoom is expected to be priced at $700 and so is considered a high end tablet.
However, according to the Q4 2010earnings conference call management also indicated that Motorola will come up with 7 to 11 inch tablets and some versions will have only Wi-fi ability while some will have 3G or 4G access as well.
The tablets with lower screen size and that have Wi-fi only access will be lower priced than Xoom. Due to this reason we believe the average tablet pricing should be around $550 for Motorola. Increasing competition in future could force Motorola to reduce tablets pricing further, and we expect that it could decline to around $410 by the end of Trefis forecast period.
However, if Motorola is able to control its pricing declines, and if the tablets pricing declines slowly to reach around $500 by the end of Trefis forecast period, there could be an upside of 5% to our estimate for Motorola Mobility stock.
You can see the complete $25.45 Trefis Price estimate for Motorola Mobility stock here .
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.
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According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG posing the biggest threat as competitors to Motorola Mobility. We expect that other big players like Cisco ( CSCO ), Toshiba and HP (HPQ) will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. However, there could be an upside of around 10% to our estimate for Motorola Mobility stock if the tablet unit sales increase at a faster rate to reach 12 million by the end of Trefis forecast period.
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According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG posing the biggest threat as competitors to Motorola Mobility. We expect that other big players like Cisco ( CSCO ), Toshiba and HP (HPQ) will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. We estimate that Tablets constitute around 20% of the Motorola Mobility stock; however, if Motorola can create more success with tablets than our forecast, there could be upside to our $25.45 Trefis price estimate for Motorola Mobility stock , which is about 16% below the current market price.
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According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG posing the biggest threat as competitors to Motorola Mobility. We expect that other big players like Cisco ( CSCO ), Toshiba and HP (HPQ) will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. We estimate that Tablets constitute around 20% of the Motorola Mobility stock; however, if Motorola can create more success with tablets than our forecast, there could be upside to our $25.45 Trefis price estimate for Motorola Mobility stock , which is about 16% below the current market price.
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According to IDC, the tablet market is expected to grow from around 45 million in 2011 to 71 million in 2012, with players like Apple ( AAPL ), Research in Motion ( RIMM ), Samsung, Dell ( DELL ) and LG posing the biggest threat as competitors to Motorola Mobility. We expect that other big players like Cisco ( CSCO ), Toshiba and HP (HPQ) will also enter the tablet market, in addition to existing players Apple iPad, RIM Playbook, Dell and LG. It will have some attractive features like support for big screens (7 inch to 9 inch), a totally new user interface, extensive multi-tasking and multiple home screens among other features.
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a66d3c29-9ce4-4954-b84f-711e2c49c6de
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726937.0
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2011-02-08 00:00:00 UTC
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Upside to NetApp as SME's Increase IT Spend
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DELL
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https://www.nasdaq.com/articles/upside-netapp-smes-increase-it-spend-2011-02-08
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nan
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nan
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NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
NetApp's storage hardware helps customers manage data efficiently and keep their information both available and secure. NetApp's storage software enables customers to use all features and functions related to data storage. Features enabled by NetApp's software include back-up and recovery, replication and retention.
The prolonged economic slowdown has caused a slowdown on the IT refresh cycle. In a lot of cases IT infrastructure is getting old and companies are looking at what to do next. In 2010 nearly 19% of total IT dollars were spent on hardware and infrastructure capabilities, with storage representing a large portion of this. Gartner predicts a further 3% rise in IT spending reaching $2.5 trillion in 2011.
Below we review the potential impact of upcoming IT trends on our $64.48 price estimate for NetApp's stock.
NetApp a Visionary in Backup/Recovery Space
In a recent report by research firm Gartner, which categorizes enterprise disk-based backup/recovery providers based on their strategic vision and ability to execute, NetApp was placed in the "visionaries" quadrant. NetApp's Vice President, Chris Cummings, believes that the firm's positioning in this quadrant is an indication of NetApp's longstanding history of innovation in backup and recovery solutions, and reflects the efficiency, performance, and cost savings that the firm provides to its customers.
Given NetApp's strong positioning in the data storage space and the fact that it is among the pioneers of virtualization storage solutions, the fastest growing segment in the data storage industry, we believe NetApp stands to benefit significantly as IT spending increases in 2011.
See our full analysis and $64.48 price estimate for NetApp
Potential Upside to NetApp
We currently forecast NetApp's share in the storage market will increase going forward from 11.5% in 2010 to about 13% by the end of our forecast period. However, a 2% increase in NetApp's storage market share by the end our forecast period would imply 13% upside to our $64.48 price estimate for NetApp's stock, which already stands ahead of market price.
Below we list a few key factors that could help NetApp increase its share in the storage market:
1. NetApp's unified storage strategy has been very successful in the market and has enabled it to gain a leadership share in this segment.
A unified storage system supports NAS, Fiber Channel SAN and iSCSI SAN in a single system. Advantages of NetApp's products are:
Easier Deployment - several applications can be provisioned on a single array.
Simplified Management - customers can manage all of their storage resources from a single console.
Reduced Total Cost of Ownership - customers do not need two separate storage networks for their block-level and file-level data, lowering their initial capital expenditures. In addition, operating expenses are lower as less support staff is required.
2. NetApp's key customers are small and medium enterprises (SMEs) which comprise a fast growing segment within storage.
The unified storage market is primarily driven by SMEs as the performance requirements of SMEs are less stringent than those of large enterprises. Thus as IT spending increases, NetApp has significant upside potential as it is well-positioned to capture the bulk of the demand coming from the SMEs.
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.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. Reduced Total Cost of Ownership - customers do not need two separate storage networks for their block-level and file-level data, lowering their initial capital expenditures.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp's storage hardware helps customers manage data efficiently and keep their information both available and secure. See our full analysis and $64.48 price estimate for NetApp Potential Upside to NetApp We currently forecast NetApp's share in the storage market will increase going forward from 11.5% in 2010 to about 13% by the end of our forecast period.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Given NetApp's strong positioning in the data storage space and the fact that it is among the pioneers of virtualization storage solutions, the fastest growing segment in the data storage industry, we believe NetApp stands to benefit significantly as IT spending increases in 2011. See our full analysis and $64.48 price estimate for NetApp Potential Upside to NetApp We currently forecast NetApp's share in the storage market will increase going forward from 11.5% in 2010 to about 13% by the end of our forecast period.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. NetApp's storage hardware helps customers manage data efficiently and keep their information both available and secure.
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0c7bcdc5-60a3-4ee4-b14a-c20792b5fe0e
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726938.0
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2011-01-29 00:00:00 UTC
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NetApp Stock Upside / Downside Scenario in Storage Hardware Business
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DELL
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https://www.nasdaq.com/articles/netapp-stock-upside-downside-scenario-storage-hardware-business-2011-01-29
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nan
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nan
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NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market and currently has just under 12% market share in the total external storage market in the world.
We estimate that NetApp's Storage Hardware business accounts for nearly 41% of the $64.48 Trefis price estimate for NetApp's stock , which is about 18% above the current market price.
Below we look at potential upside and downside scenarios for NetApp given shifts in two important components of its value - storage hardware market share and storage hardware gross margin.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market and currently has just under 12% market share in the total external storage market in the world. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. We estimate that NetApp's Storage Hardware business accounts for nearly 41% of the $64.48 Trefis price estimate for NetApp's stock , which is about 18% above the current market price.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market and currently has just under 12% market share in the total external storage market in the world. We estimate that NetApp's Storage Hardware business accounts for nearly 41% of the $64.48 Trefis price estimate for NetApp's stock , which is about 18% above the current market price. Below we look at potential upside and downside scenarios for NetApp given shifts in two important components of its value - storage hardware market share and storage hardware gross margin.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market and currently has just under 12% market share in the total external storage market in the world. We estimate that NetApp's Storage Hardware business accounts for nearly 41% of the $64.48 Trefis price estimate for NetApp's stock , which is about 18% above the current market price. Below we look at potential upside and downside scenarios for NetApp given shifts in two important components of its value - storage hardware market share and storage hardware gross margin.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market and currently has just under 12% market share in the total external storage market in the world. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. We estimate that NetApp's Storage Hardware business accounts for nearly 41% of the $64.48 Trefis price estimate for NetApp's stock , which is about 18% above the current market price.
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f5d3c913-acf0-4893-8a3a-bce44d9eea19
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726939.0
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2011-01-27 00:00:00 UTC
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Should Dell Focus its Net Cash Position on Investment in Tablet Technology?
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DELL
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https://www.nasdaq.com/articles/should-dell-focus-its-net-cash-position-investment-tablet-technology-2011-01-27
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
Dell currently has a net cash balance of about $8 billion; we estimate that this net cash position represents nearly 22% of Dell's stock value, which is notably higher than for most competitors like HP, Intel ( INTC ) and even Apple.
HP has a net debt of $4.7 billion (or $2 per share). Similarly, Intel's net cash balance of $7 billion (or 4.4% of company value) is also lower than Dell's. While Apple's net cash balance at $60 billion is way beyond Dell's $8 billion in absolute terms, its contribution to Apple value (estimated at 15%) is relatively lower than for Dell.
We currently have a $19.25 price estimate for Dell's stock , well ahead of market value.
What Can Dell Do with its Substantial Net Cash Position?
Dell is already showing continued strength in PC shipments (see Dells Continued Strength In PC Shipments Could Raise Stock Outlook ). However, the PC market in general is under threat of increasing tablet popularity. With a flurry of media tablets lined up for launch in 2011, the PC shipments could take a hit as consumers opt for the new products.
Apple has had considerable success with the iPad, and HP is working on an innovative cloud-based tablet to provide the ultimate cloud experience. With a lot of research going on in both the tablet and cloud computing space, it seems that personal computing is heading for a big shift where all computing will be handled in the cloud and the device (tablet or other) will just be a terminal. This might spell doom for PC manufacturers like Dell and HP, which derive a significant portion of their company value from the PC segment, if they do not make a swift move into the tablet market.
If Dell's global notebook & netbook shipments decline during our forecast period, vs. our base forecast of a substantial uptick, there could be significant downside to our $19.25 price estimate for Dell's stock.
Drag the trend line in the modifiable chart above to see the affect of various global notebook and netbook shipment forecasts on Dell's stock value.
Should Dell Invest More in New Tablet Technology?
The big question that arises now is whether Dell should invest more resources into the new tablet technology? The answer, we believe, is a definitive Y-E-S.
While some might think that Dell is off to a slow start compared to some its competitors in the tablet market, the technology is only at its beginning and has great potential for further development and refinement as the cloud offering increases. The opportunity for further tablet penetration into the mass market is the primary reason why Dell should increase its focus on this market.
Dell should channel more resources into the tablet technology before it's too late. With a significant net cash balance, Dell is in an excellent position and more than capable technologically to aggressively pursue large upsidei n the tablet market. According to our estimates, the iPad alone is currently worth $29 billion to Apple, representing about 7% of company value.
Dell Expanding Cloud Offering
Dell, which recently announced plans to acquire cloud-service companies like Compellent Technologies, Inc., Insite One, Inc. and SecureWorks Inc, is already building up its cloud offerings. With the cloud expected to change the way applications are delivered and services are consumed, this is a step forward for Dell. (See Dells Strategic Shift to Cloud Lifts Stock Outlook)
As tablets are projected as "the device" to make possible the widespread implementation and use of cloud technology (due in part to portability), it seems strategically appropriate for Dell to launch a competitive device for the tablet market that will better enable users to access and utilize its cloud services more efficiently.
See our complete analysis of Dell's stock here .
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.
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While some might think that Dell is off to a slow start compared to some its competitors in the tablet market, the technology is only at its beginning and has great potential for further development and refinement as the cloud offering increases. With a significant net cash balance, Dell is in an excellent position and more than capable technologically to aggressively pursue large upsidei n the tablet market. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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Dell currently has a net cash balance of about $8 billion; we estimate that this net cash position represents nearly 22% of Dell's stock value, which is notably higher than for most competitors like HP, Intel ( INTC ) and even Apple. Dell is already showing continued strength in PC shipments (see Dells Continued Strength In PC Shipments Could Raise Stock Outlook ). Drag the trend line in the modifiable chart above to see the affect of various global notebook and netbook shipment forecasts on Dell's stock value.
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Dell currently has a net cash balance of about $8 billion; we estimate that this net cash position represents nearly 22% of Dell's stock value, which is notably higher than for most competitors like HP, Intel ( INTC ) and even Apple. While Apple's net cash balance at $60 billion is way beyond Dell's $8 billion in absolute terms, its contribution to Apple value (estimated at 15%) is relatively lower than for Dell. (See Dells Strategic Shift to Cloud Lifts Stock Outlook) As tablets are projected as "the device" to make possible the widespread implementation and use of cloud technology (due in part to portability), it seems strategically appropriate for Dell to launch a competitive device for the tablet market that will better enable users to access and utilize its cloud services more efficiently.
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We currently have a $19.25 price estimate for Dell's stock , well ahead of market value. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services. Dell currently has a net cash balance of about $8 billion; we estimate that this net cash position represents nearly 22% of Dell's stock value, which is notably higher than for most competitors like HP, Intel ( INTC ) and even Apple.
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0f51b5bd-4910-4eb7-96c7-f13a7c176d18
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726940.0
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2011-01-25 00:00:00 UTC
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Higher Margin on Software and Systems Reinforces Promising Outlook for IBM
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DELL
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https://www.nasdaq.com/articles/higher-margin-software-and-systems-reinforces-promising-outlook-ibm-2011-01-25
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nan
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nan
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IBM ( IBM ) competes with Oracle ( ORCL ) and Red Hat in the middleware software market. IBM charges for new software licenses, maintenance of existing licenses and services associated with its popular middleware software. IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market.
In its Q4 earnings press release, IBM reported strong performance with revenues and margin improvements across several segments. Revenue increased for all segments except global financing, and gross margin improvement was reported in the software and system & technology business segments.
We currently estimate that middleware software is the largest value driver for IBM, contributing 46% of our $185 price estimate for IBM's stock. Comparatively, servers & storage makes up only 4% of company value. While our price estimate is nearly 20% ahead of market price, there could be further upside to this number if IBM can maintain higher margins going forward.
Growth in Software Business
IBM's software segment had a very strong quarter with revenue of $7 billion, an increase of 7% over the same period last year. The growth was particularly strong in key branded middleware, with WebSphere up 32% year-over-year (YOY), Tivoli up 12% YOY, Rational up 10% YOY, and Information Management up 10% YOY. Growth has come alongside economic recovery and a broad PC refresh cycle.
Gross margin for the segment increased 0.9% for 2010 and software profit increased $1 billion over last year.
If IBM can maintain improved middleware software gross margins going forward, leading to higher EBITDA margins for the segment, we estimate a potential 5% upside to our $185 price estimate for the company's stock.
Improved Server Margin
The systems and technology segment also had a tremendous quarter with revenue increasing to $6.3 billion, up 21% YOY. Revenue growth was driven by double-digit improvement in System z, System x, power entry systems, disk storage, retail store solutions and microelectronics.
IBM gained 3 points of market share in total servers with System z revenues increasing 69% year to year. Storage hardware revenue grew 8% YOY while retail store solutions and microelectronics OEM increased 26% and 30% YOY respectively.
Servers gross margin showed notable improvement, up roughly 0.8 percentage points for the year due to a better product mix as shipment of high end servers picked up, particularly in Q4. If sustained, this improvement could further lift our $185 IBM price estimate .
Drag the trend lines in the modifiable charts above to see how various trends in middleware and server EBITDA margins could affect IBM's stock value.
Register to win a free iPad. Visit our home page attrefis.comfor details.
Our complete analysis of IBM's stock is here .
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.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. In its Q4 earnings press release, IBM reported strong performance with revenues and margin improvements across several segments. Improved Server Margin The systems and technology segment also had a tremendous quarter with revenue increasing to $6.3 billion, up 21% YOY.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. Revenue increased for all segments except global financing, and gross margin improvement was reported in the software and system & technology business segments. Growth in Software Business IBM's software segment had a very strong quarter with revenue of $7 billion, an increase of 7% over the same period last year.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. Revenue increased for all segments except global financing, and gross margin improvement was reported in the software and system & technology business segments. Growth in Software Business IBM's software segment had a very strong quarter with revenue of $7 billion, an increase of 7% over the same period last year.
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IBM is also among the global leaders in business systems and competes with hardware vendors like HP ( HPQ ) and Dell ( DELL ) in the server market as well as storage firms like EMC ( EMC ) and NetApp (NTAP) in the storage market. We currently estimate that middleware software is the largest value driver for IBM, contributing 46% of our $185 price estimate for IBM's stock. If IBM can maintain improved middleware software gross margins going forward, leading to higher EBITDA margins for the segment, we estimate a potential 5% upside to our $185 price estimate for the company's stock.
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55b707bb-1dda-44fb-be44-47eb1da80ff5
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726941.0
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2011-01-19 00:00:00 UTC
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Dell's Strategic Shift to Cloud Lifts Stock Outlook
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DELL
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https://www.nasdaq.com/articles/dells-strategic-shift-cloud-lifts-stock-outlook-2011-01-19
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nan
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nan
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
Over the past month, Dell has announced plans to acquire three smaller cloud-service companies - Compellent Technologies, Inc., Insite One, Inc. and SecureWorks Inc. These acquisitions expand Dell's enterprise-class storage solutions, global IT-as-a-Service offerings and information security expertise. Dell previously missed out on a large cloud opportunity when it lost the bid for 3Par to HP (See HP Emerges as Victor Over Dell in Battle for 3Par ).
We maintain a $19.25 price estimate for Dell's stock , well above market price. Below we discuss why the cloud opportunity is attractive to PC makers, and highlight the potential upside to Dell.
1. Cloud to Drive Growth in Data Storage
Cloud and virtualized environments offer greater utilization of resources, cost advantages, scalability and ease of use. These advantages have attracted increasing attention from a wide array of organizations and, accordingly, storage virtualization (part of virtualized infrastructure) has witnessed tremendous growth. We anticipate this trend will continue for the foreseeable future, with storage virtualization accounting for a substantial portion of storage demand in the years ahead.
To capitalize on this trend, Dell entered into a $960 million agreement to acquire Compellent, a provider of highly-virtualized storage solutions with automated data management features for enterprise and cloud-computing environments. We believe this move will enable Dell to better compete with other virtualized storage providers like EMC ( EMC ), NetApp (NTAP) and HP that have made similar acquisitions.
2. Cloud Provides a Hedge Against Slowing Demand for Hardware
We previously discussed Dell's increasing shift to service operations (See Dell's Consulting & Services - 13% of Stock Value and Growing ). This shift has occurred alongside declining market share for Dell in hardware products (including PCs & servers). The hardware market overall has experienced a slowdown in growth due to heightened competition from newer devices (like tablets). On the other hand, services offer more reliable revenue streams and can be leveraged by firms like Dell that already have established relationships with large organizations.
Dell's recent acquisitions represent another strategic shift, as cloud-based services are widely perceived as a game-changing opportunity for businesses. More importantly, since these initiatives follow a service model, they allow firms to generate recurring subscription/maintenance revenues. This is particularly attractive to Dell as it competes with giants like HP and IBM for high-value enterprise customers.
You can drag the trend line in the chart above to see the impact of various storage share scenarios on Dell's stock value.
Register to win a free iPad. Visit our home page attrefis.comfor details.
Our complete analysis of Dell's stock is here .
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.
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To capitalize on this trend, Dell entered into a $960 million agreement to acquire Compellent, a provider of highly-virtualized storage solutions with automated data management features for enterprise and cloud-computing environments. On the other hand, services offer more reliable revenue streams and can be leveraged by firms like Dell that already have established relationships with large organizations. Dell's recent acquisitions represent another strategic shift, as cloud-based services are widely perceived as a game-changing opportunity for businesses.
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We believe this move will enable Dell to better compete with other virtualized storage providers like EMC ( EMC ), NetApp (NTAP) and HP that have made similar acquisitions. Cloud Provides a Hedge Against Slowing Demand for Hardware We previously discussed Dell's increasing shift to service operations (See Dell's Consulting & Services - 13% of Stock Value and Growing ). Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services. Dell previously missed out on a large cloud opportunity when it lost the bid for 3Par to HP (See HP Emerges as Victor Over Dell in Battle for 3Par ). Cloud Provides a Hedge Against Slowing Demand for Hardware We previously discussed Dell's increasing shift to service operations (See Dell's Consulting & Services - 13% of Stock Value and Growing ).
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Cloud Provides a Hedge Against Slowing Demand for Hardware We previously discussed Dell's increasing shift to service operations (See Dell's Consulting & Services - 13% of Stock Value and Growing ). This is particularly attractive to Dell as it competes with giants like HP and IBM for high-value enterprise customers. Our complete analysis of Dell's stock is here .
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9ff28c96-5838-4a31-bd39-d5d57ae3fea3
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726942.0
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2011-01-19 00:00:00 UTC
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These Companies are Sitting on Billions of Dollars
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DELL
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https://www.nasdaq.com/articles/these-companies-are-sitting-billions-dollars-2011-01-19
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nan
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nan
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The S&P 500 pushed back above 1,100 in September 2010, past the 1,200 mark in early December and is already on the cusp of 1,300. With that kind of upward move, it's reasonable to feel cautious. You want to participate in this impressive rally, but don't want to give up big gains if the market shifts direction. That's why defensive stocks make real sense right now. [My colleague Tom Hutchinson agrees ]
I'm not talking about low beta stocks that tend to ignore market gyrations. I'm talking about stocks with plenty of cash. Cash serves as a backstop in tough times and a competitive weapon in good times. And no sector is sitting on mountains of cash like the tech sector.
Surprisingly, even after this sharp upward move in the markers, a number of tech stocks hold enough cash to account for a decent chunk of the entire stockmarket value . The table below highlights nine tech stocks that sport at least 25% in theirmarket value in net cash.
Will these companies go on a buying spree (either of other companies or their own stock)? Or might they hang onto that cash to weather any upcoming pullback in theeconomy ? Either way, it's nice to have such options. Let's look at some of the most intriguing cash-rich plays among these tech stocks.
A brief recap...
I've covered a few of these names in the recent past. I recently noted that Earthlink (Nasdaq: ELNK ) has developed a misunderstood, but potentially lucrativebusiness model as it moves away from being a dial-up Internet access provider.
I discussed Dell's (Nasdaq: DELL ) prodigiouscash flow that complements its hefty cash hoard back in November . Dell is still a company in search of growth (perhaps enabled by a recent acquisition spree), but itsbalance sheet remains stunningly strong. Cash could account for more than 40% of its market value by the end of 2011.
Two more candidates
It would be awfully tempting to get behind Comtech Telecommunications (Nasdaq: CMTL ) , as this provider of satellite and microwave communications systems remains nicely profitable even as it enters a cyclical slump which will likely lead to a 20% drop in sales this year. But it's unwise to spend time on stocks that lack any near-term catalysts, and aside from a current stock buyback, there are few timely virtues. Nevertheless, keep an eye on the M&A space. Some investors suspect that Comtech will be a buyer or a seller in 2011.
Verisgn (Nasdaq: VRSN ) highlights a tangible benefit that a bulletproofbalance sheet can bring. In late December, it paid out a $3 a share one-timedividend . And it could afford to do so several times more in coming years if it so choose.
An intriguing small business play
My favorite name in this table is Intermec (NYSE: IN ) , which is a leading player in the field of barcode scanning, right behind Motorola Mobility's (NYSE: MMI ) Symbol division.
A wide range of retailers, along with companies operating massive warehouse/logistics operations, use these scanners to track goods as they work though the supply chain. Thanks to the economic slowdown, many customers decided to hold off on scanning system upgrades, leading Intermec to post a 25% drop in sales in 2009. Sales were flattish in 2010, but a recently rising backlog along with feedback from customers implies that sales could rebound 10% in 2011.
This is known as a "late-cycle play," as Intermec's customers tend to invest more heavily in capital spending when an economic rebound is fully underway. A bullish sign: Intermec just announced that 2010 fourth-quarter sales came in ahead of prior forecasts. The company also announced an acquisition of Vocollect Inc., which will enable workers to use voice commands to track goods as they move through the warehouse. This should enable a truly "hands-free" environment, yieldingproductivity gains in the warehouse.
Intermec also holds an interesting wildcard that may be overlooked by many investors: The company owns a wide range of patents in the field of radio frequency identification (RFID), which allows for more advanced forms of asset tracking. The technology has not supplanted barcodes as many had expected just a few years ago, but it is starting to make serious inroads. Intermec stands to collect hefty royalty streams if RFID becomes even more widely adopted.
Back when RFID was in the spotlight in 2006 as a key emerging technology, Intermec'sshares hit $35. These days,shares trade for a third of that value. A rebounding core business, an appealing new acquisition and a potential RFID kicker could be what Intermec finally needs to break out of its current two-year trading range. It's hard to pin specific upside for theseshares , although a reboundingeconomy could set the stage for a sustained double-digit rebound in sales and even more robustprofit growth.
Action to Take --> You can sleep better at night with these cash-rich stocks. And although Intermec is my favorite on this list, any one of these strong balance sheet stocks should provide ample downside protection even if the market swoons.
P.S. -- We've just identified six surprising events that could break your portfolio wide open in 2011. Knowing these pivot points in advance lets you focus your investing strategy like a beam of light in the dark... and make a lot of money in a hurry. Get them free by simply watching this video presentation.
Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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I discussed Dell's (Nasdaq: DELL ) prodigiouscash flow that complements its hefty cash hoard back in November . Dell is still a company in search of growth (perhaps enabled by a recent acquisition spree), but itsbalance sheet remains stunningly strong. Two more candidates It would be awfully tempting to get behind Comtech Telecommunications (Nasdaq: CMTL ) , as this provider of satellite and microwave communications systems remains nicely profitable even as it enters a cyclical slump which will likely lead to a 20% drop in sales this year.
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Dell is still a company in search of growth (perhaps enabled by a recent acquisition spree), but itsbalance sheet remains stunningly strong. I discussed Dell's (Nasdaq: DELL ) prodigiouscash flow that complements its hefty cash hoard back in November . Thanks to the economic slowdown, many customers decided to hold off on scanning system upgrades, leading Intermec to post a 25% drop in sales in 2009.
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I discussed Dell's (Nasdaq: DELL ) prodigiouscash flow that complements its hefty cash hoard back in November . Dell is still a company in search of growth (perhaps enabled by a recent acquisition spree), but itsbalance sheet remains stunningly strong. Surprisingly, even after this sharp upward move in the markers, a number of tech stocks hold enough cash to account for a decent chunk of the entire stockmarket value .
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I discussed Dell's (Nasdaq: DELL ) prodigiouscash flow that complements its hefty cash hoard back in November . Dell is still a company in search of growth (perhaps enabled by a recent acquisition spree), but itsbalance sheet remains stunningly strong. Let's look at some of the most intriguing cash-rich plays among these tech stocks.
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2a535f11-c78d-4af9-8117-64e11e262480
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726943.0
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2011-01-15 00:00:00 UTC
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NetApp's Targets Virtualization With Akorri Acquisition Adding 20% Upside Potential
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DELL
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https://www.nasdaq.com/articles/netapps-targets-virtualization-akorri-acquisition-adding-20-upside-potential-2011-01-15
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nan
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nan
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NetApp ( NTAP ), the third largest player globally in the external disk storage market, recently announced that it would acquire Akorri Networks, a virtualization software company in an "all cash" deal though the amount was not disclosed. NetApp creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
The announcement sent NetApp's stock higher and is generally perceived as a terrific deal for NetApp. It will position NetApp to better compete with EMC, IBM and HP.Below we quantify the impact of Akorri acquisition on our $64.48 Trefis price estimate for NetApp's stock , which is about
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ), the third largest player globally in the external disk storage market, recently announced that it would acquire Akorri Networks, a virtualization software company in an "all cash" deal though the amount was not disclosed. NetApp creates innovative storage and data management solutions for small and medium-sized companies around the world.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ), the third largest player globally in the external disk storage market, recently announced that it would acquire Akorri Networks, a virtualization software company in an "all cash" deal though the amount was not disclosed. It will position NetApp to better compete with EMC, IBM and HP.Below we quantify the impact of Akorri acquisition on our $64.48 Trefis price estimate for NetApp's stock , which is about
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ), the third largest player globally in the external disk storage market, recently announced that it would acquire Akorri Networks, a virtualization software company in an "all cash" deal though the amount was not disclosed. It will position NetApp to better compete with EMC, IBM and HP.Below we quantify the impact of Akorri acquisition on our $64.48 Trefis price estimate for NetApp's stock , which is about
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ), the third largest player globally in the external disk storage market, recently announced that it would acquire Akorri Networks, a virtualization software company in an "all cash" deal though the amount was not disclosed. NetApp creates innovative storage and data management solutions for small and medium-sized companies around the world.
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f936fe55-435e-4e5d-b7d8-3a0f444a2232
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726944.0
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2011-01-11 00:00:00 UTC
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5 Component Suppliers Will Get $17 Billion from Apple in 2011
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DELL
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https://www.nasdaq.com/articles/5-component-suppliers-will-get-17-billion-apple-2011-2011-01-11
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nan
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nan
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Apple's ( AAPL ) success has come from its popular products including the Mac, iPod, iPhone and iPad. In the process, Apple has become the second most valuable public company in the world with a market cap of more than $300 billion. Apple traditionally competes with large manufacturers like Dell ( DELL ) and HP ( HPQ ) in the personal computer market, Research in Motion ( RIMM ) and Nokia ( NOK ) in the mobile phone market, and Amazon (AMZN) in the e-reader market.
Besides driving value for Apple, the company's popular products are delivering value to component suppliers worldwide. We estimate that five leading Apple component suppliers will account for roughly $17 billion of Apple's direct costs in 2011, or 31% of the total $56 billion in expected direct costs.
These suppliers provide the key components for Apple products that are typically assembled by third party vendors in Asia (Foxconn, Quanta Computer, etc.). Our research shows that the main beneficiaries of Apple's success (from a component supplier perspective) are Samsung, LG Display (LPL), Intel (INTC), Infineon (IFNNY) and Broadcom (BRCM).
For the purposes of our analysis, we have assumed that Apple will continue to source components from the same set of suppliers for its key products in 2011. The chart below illustrates our estimates of the revenue these suppliers are expected to earn next year strictly from their business with Apple.
Samsung is Well Ahead of the Pack
We estimate that Samsung will earn around $7.8 billion from Apple in 2011. Based on our projections that Samsung will generate about $150 billion in revenues during 2011, this means that Apple alone could represent around 5% of Samsung's 2011 revenues.
Samsung supplies A4 processors and NAND Flash memory for the iPhone 4 and iPad. The company also supplies DRAM Memory for the iPhone 4 and iPod as well as AC Power Adaptors for Macs. Based on the data provided by iSuppli, we estimate that Samsung earns around $64 on each iPhone 4, $88 on each iPad, $19 on each Mac, and $27 on each iPod. These numbers become substantial when combined with our estimated unit sales totals for 2011 of 69 million iPhones, 20 million iPads, 50 million iPods and 17 million Macs. There could even be significant upside to our estimates if the sales mix of large memory devices (e.g. 64 GB iPhone and iPod Touch) were to increase in 2011.
LG Display Comes in a Distant Second
We estimate that LG Display will earn around $4.2 billion from Apple in 2011. If LG Display can generate revenues of $26 billion in 2011 (as per our estimates), it would place Apple as the source of 16% of LG Display's total revenues next year.
LG Display supplies both the LCD display and touchscreen interface for the iPhone 4, iPad and iPod Touch, and earns an estimated $29 on each iPhone 4 and iPod Touch, and $80 on each iPad. The iPod Touch has similar features to the iPhone 4, excluding mobile phone capabilities. Hence we believe that the LCD display and touchscreen interface cost for the iPhone 4 will be the same for the iPod Touch as well. We also estimate that Apple will be able to sell around 22 million iPod Touch units, out of the total 50 million iPods that we expect to be sold in 2011.
Intel's Revenues are Particularly Sensitive to Mac Demand
We estimate that Intel will earn around $2.5 billion from Apple in 2011. Based on our projections of $45 billion in total revenues for Intel next year, Apple will likely constitute more than 5% of Intel's revenues during 2011. Intel earns the most from Apple's Mac units, with its Core 2 Duo Processor for Mac Mini reportedly costing $118, a substantial amount given that the low-end price for Mac Mini is $599. The $118 price tag is ahead of Intel's average price for notebook microprocessors in 2010 of about $102 .
We estimate that Intel earns about $154 on each Mac, meaning that 5% of its revenues are exclusively sensitive to Mac sales. This $154 is based on average Mac pricing of around $1,300 , wherein we have applied a 50% premium on Intel's average microprocessor price and 30% premium to Mac Mini's microprocessor cost.
Infineon and Broadcom Heavily Depend on Apple's Success
We estimate that Infineon and Broadcom will earn around $1.5 billion and $1.3 billion, respectively, from Apple in 2011. With Infineon's revenues expected to be around $5 billion (including the Wireless Solutions business sold to Intel), Apple could single-handedly provide a whopping 30% of the company's revenues in 2011. We anticipate that Broadcom's revenues for 2011 will be around $7 billion, meaning that Apple could represent around 14% of Broadcom's revenues next year.
Infineon sells Baseband chips and transceivers used in iPhone 4 and iPad, while Broadcom sells Wi-fi/Bluetooth chips used in iPhone 4 and iPad, GPS system used in iPhone 4 and WLAN chips used in Macs.
We estimate that Infineon earns around $14 on each iPhone 4 and $27 on each iPad, while Broadcom earns around $10 on each iPhone 4, $12 on each iPad and $23 on each Mac.
While Apple investors keep close watch over impending unit sales reports, these five key suppliers could also find their future fortunes to be notably dependent on Apple's continued success.
Register to win a free iPad. Visit our home page attrefis.comfor details.
You can see the complete $418 Trefis Price estimate for Apple stock here.
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.
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Apple traditionally competes with large manufacturers like Dell ( DELL ) and HP ( HPQ ) in the personal computer market, Research in Motion ( RIMM ) and Nokia ( NOK ) in the mobile phone market, and Amazon (AMZN) in the e-reader market. These suppliers provide the key components for Apple products that are typically assembled by third party vendors in Asia (Foxconn, Quanta Computer, etc.). Our research shows that the main beneficiaries of Apple's success (from a component supplier perspective) are Samsung, LG Display (LPL), Intel (INTC), Infineon (IFNNY) and Broadcom (BRCM).
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Apple traditionally competes with large manufacturers like Dell ( DELL ) and HP ( HPQ ) in the personal computer market, Research in Motion ( RIMM ) and Nokia ( NOK ) in the mobile phone market, and Amazon (AMZN) in the e-reader market. These numbers become substantial when combined with our estimated unit sales totals for 2011 of 69 million iPhones, 20 million iPads, 50 million iPods and 17 million Macs. LG Display supplies both the LCD display and touchscreen interface for the iPhone 4, iPad and iPod Touch, and earns an estimated $29 on each iPhone 4 and iPod Touch, and $80 on each iPad.
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Apple traditionally competes with large manufacturers like Dell ( DELL ) and HP ( HPQ ) in the personal computer market, Research in Motion ( RIMM ) and Nokia ( NOK ) in the mobile phone market, and Amazon (AMZN) in the e-reader market. LG Display supplies both the LCD display and touchscreen interface for the iPhone 4, iPad and iPod Touch, and earns an estimated $29 on each iPhone 4 and iPod Touch, and $80 on each iPad. Infineon and Broadcom Heavily Depend on Apple's Success We estimate that Infineon and Broadcom will earn around $1.5 billion and $1.3 billion, respectively, from Apple in 2011.
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Apple traditionally competes with large manufacturers like Dell ( DELL ) and HP ( HPQ ) in the personal computer market, Research in Motion ( RIMM ) and Nokia ( NOK ) in the mobile phone market, and Amazon (AMZN) in the e-reader market. LG Display supplies both the LCD display and touchscreen interface for the iPhone 4, iPad and iPod Touch, and earns an estimated $29 on each iPhone 4 and iPod Touch, and $80 on each iPad. Intel's Revenues are Particularly Sensitive to Mac Demand We estimate that Intel will earn around $2.5 billion from Apple in 2011.
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b86ef36d-e70d-430d-9762-dee279d27677
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726945.0
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2011-01-06 00:00:00 UTC
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NetApp Positions Itself for Pickup in Enterprise Spending
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DELL
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https://www.nasdaq.com/articles/netapp-positions-itself-pickup-enterprise-spending-2011-01-06
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nan
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nan
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NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
NetApp's storage hardware helps customers manage data more efficiently and keep the information available and secure. NetApp's storage software enables customers to use all features and functions related to data storage. Features enabled by NetApp's software include back-up and recovery, replication and retention.
Below we review the potential impact of upcoming IT trends on our $64.48 Trefis price estimate for NetApp's stock , about 12% above the market price.
Rise in IT Outsourcing
NetApp's CEO Tom Georgens discussed the outlook for 2011 and was optimistic about NetApp's business while being cautiously optimistic on the broader corporate spending outlook. We believe NetApp is a company that is well positioned to benefit if enterprise spending picks up. NetApp recently completed the biggest quarter and a half of hiring indicating that NetApp is preparing for big trends coming up.
Rising Demand for Storage Virtualization from Increasing Adoption of Cloud
The cloud creates some interesting opportunities as many corporations are thinking of or in the middle of redesign their IT architecture. CIO's are considering whether they want to spend heavily to upgrade and maintain proprietary expensive IT networks which need more storage and expanded capabilities - or can they outsource some of this to the cloud?
The main fear now centers onthe cloud's reliability and performance. We admit the migration to the cloud won't happen over night. But as more firms adopt cloud-based services and service providers establish credibility, we expect to see that this migration to pick up in 2011. At some point this migration will accelerate as this technology is widely embraced and this could occur in the near future.
We have earlier discussed how NetApp's stands to benefit from increasing demand from cloud. (See How NetApp Benefits from Cloud Demand )
Mobile Computing
Other area of focus for NetApp in 2011 will be mobile technology where its presence so far has been minimal. Successfully integrating mobile technology into the broader IT infrastructure is now a priority for most firms. Given expanded network access and the proliferation of intelligent devices, mobile computing will have a large impact on business and thus IT requirements going forward .
NetApp realizes this potential (as it once did for virtualization - long before its competitors) and appears willing to spend resources on this vision.
Enterprise IT Spending to Increase
As 2010 closes, IT budgets are finalized for 2011. The prolonged economic slowdown has caused a slowdown on the IT refresh cycle. In a lot of cases IT infrastructure is getting old and companies are looking at what to do next. Gartner predicts a 3% rise in IT spending reaching $2.5 trillion in 2011 and a survey by Forrester Research suggests that CIOs will spend more.
We estimate there could be an upside of 6% to our $64.48 Trefis price estimate for NetApp's stock if global demand for storage increases by 50% in 2011, more than our current forecast of 40%. On the other hand, a slower increase in demand for storage (30%) in 2011 would result in a 7% decline to our estimate of NetApp's stock.
Our complete analysis of NetApp's stock is here .
Register to win a free iPad. Visit our home page attrefis.comfor details.
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.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. CIO's are considering whether they want to spend heavily to upgrade and maintain proprietary expensive IT networks which need more storage and expanded capabilities - or can they outsource some of this to the cloud?
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Rise in IT Outsourcing NetApp's CEO Tom Georgens discussed the outlook for 2011 and was optimistic about NetApp's business while being cautiously optimistic on the broader corporate spending outlook. Rising Demand for Storage Virtualization from Increasing Adoption of Cloud The cloud creates some interesting opportunities as many corporations are thinking of or in the middle of redesign their IT architecture.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Rise in IT Outsourcing NetApp's CEO Tom Georgens discussed the outlook for 2011 and was optimistic about NetApp's business while being cautiously optimistic on the broader corporate spending outlook. (See How NetApp Benefits from Cloud Demand ) Mobile Computing Other area of focus for NetApp in 2011 will be mobile technology where its presence so far has been minimal.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. We believe NetApp is a company that is well positioned to benefit if enterprise spending picks up. We have earlier discussed how NetApp's stands to benefit from increasing demand from cloud.
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c10a9152-fb66-4855-add6-4584b34eb601
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726946.0
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2011-01-06 00:00:00 UTC
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Betting Against Facebook
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DELL
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https://www.nasdaq.com/articles/betting-against-facebook-2011-01-06
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nan
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nan
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ChartProphet submit:
Facebook has transformed the way we live and interact, has flooded the world with opportunities in a rapidly-developing social-media era, and may have even become the "second internet."
But with dot-com bubble valuations, growth limitations, and potential legal hurdles standing in the way - are we nearing "social network overload"? And if the social-media craze is overdone, are there ways to make money in the case of a "social media crash"?
There is no doubt that Facebook is one of the most dominant and exciting companies around, with seemingly nothing holding it back from becoming the first website, or internet-based company, to have control over every country in the world.
Just take a look at Facebook's global dominance (click to enlarge images):
With an ever-growing worldwide recognition as THE social network, and continuous penetration into competitive markets of emerging countries which offer a nearly-untouched consumer base with multiple avenues for giant profits, Facebook's hype is absolutely warranted. It is a platform for connecting with people, a source of news and updates, and an ever-evolving landscape for gaming, business, media, and technology.
Yet with all the massive potential it offers, how can we be assured that Facebook's dominance will actually translate into profits? And how can we determine if expectations are getting ahead of themselves? After a period of tremendous growth that has seen Facebook's user base grow from 150 to 600 million and its perceived value rise from less than $10 billion to over $50 billion (in less than 1 year!), is it time to jump in before it really takes off? Or is the Facebook hype and mass-awareness a sign of irrational exuberance for a business model founded on free-usage and mirage-like profit potential?
4 Reasons Facebook Could Succeed
1)It Is Becoming the "Second Internet." Already the largest networking, photo, and gaming site, with very impressive upcoming opportunities in apps, television, its own email service, and just about every aspect of the internet, Facebook is not too far from being a one-stop source for people to manage their social lives, stay informed about current events, and find great deals on everything from travel to clothing. In fact, with over 30 billion pieces of content (links, news, blogs, photos, etc.) shared each month, developers from over 190 countries building with the Facebook platform, an average of 10,000 new websites being integrated with Facebook every day, and the recognition that Facebook is likely the number one means for interconnectedness and mass-exposure, it is not a complete shock that Facebook took over Google's ( GOOG ) title of "most-visited site" in the US for 2010. If a monopoly on the internet is ever possible, Facebook may have the best chance.
2)Much Room Left for New Ideas and Opportunities. It may have already revolutionized the ways in which we communicate, behave, and spend, but there is still much growth left in this rapidly-developing social cyber-world. Far from exhausting its innovative talents, Facebook continues to impress us with new apps, new ways of engaging its user base, and big dreams for the future. And many believe that the money will soon flow into Facebook once it firmly takes hold. If Facebook does figure out a way to improve its advertising capabilities and monetize its grasp on such a massive audience, it could very well be just in its beginning stages.
3)Many More People Still Left to Join. Surpassing the 500-million user mark in July 2010, and currently having an estimated user base of more than 600 million users, there may still be plenty more people left to join. The world population is nearing 7 billion! And though many will not be able to join due to age, lack of the necessary technology, or simply lack of interest, Facebook founder Mark Zuckerberg has said that "it is almost a guarantee" that Facebook will hit the 1 billion mark.
Take a look the following chart:
As you can see, Facebook's exponential growth since late 2004 is indicative of the tremendous momentum it has gained. If momentum continues as it has been thus far, the 1 billion mark isn't a far stretch, though we do have to keep in mind that previous performance is no guarantee for future results and that it may be much harder to convince another 500 million people to join the site than it was to convince existing users.
4)Still No Mass Investor Participation. After 5 years of enormous success and public attention, Facebook is still a private company! Companies generally go public in order to raise money for expansion and to allow insiders to sell their share of the company. But Facebook has been avoiding the usual need to go public by raising $1 billion in funding (compared to only $25 million raised by Google before going public in 2004), and by allowing its private shares to be traded in secondary markets created by companies such as SecondMarket and SharePost, which allow for insiders and shareowners to sell their privately-held shares to institutions and wealthy investors who are willing to pay big bucks for a stake in what could be a highly-valuable IPO in the future. In other words, private Facebook stock is currently being bought and sold in a secondary market even though the company isn't public. And though Zuckerberg recently said "Don't hold your breath" when it comes to a Facebook IPO any time soon, an investment in the company now could be very profitable if Facebook does end up going public.
And with Goldman Sachs ( GS ) announcing this week that it will invest $500 million in Facebook, creating a "special purpose vehicle" to allow its wealthy investors to buy a stake in the company, the mass-investing phase in Facebook may only be starting.
On the one hand, more investment funds may soon offer Facebook shares to individuals, which will further inflate Facebook's share value; companies like Felix Investments, EB Exchange Funds, and GreenCrest Capital have already opened Facebook funds in the past year. On the other hand, all this increased investor appetite for Facebook may force Facebook to go IPO earlier than it has been planning to, which could launch the mass-investment phase as the average investor jumps into Facebook stock with hopes it will become the next Google.
Or, in a third scenario, Facebook investing could turn out to be a terrible decision if the inflated private-share prices turn out to be the result of greedy speculation, or if the company and its IPO fail to be as successful as most people believe they will be.
7 Reasons Facebook Could Fail
1)Extreme Valuations. Facebook shares being traded on the secondary market are valuing the company at over $50 billion. That makes it bigger in valuation than Boeing ( BA ), which is both America's largest exporter and one of the 30 companies in the Dow Jones Industrial Average ((DJIA)). The $50 billion valuation also makes Facebook worth over 60% as much as Amazon ( AMZN ), one of the worldwide leaders in online retail - ranging from books to consumer electronics (including its Kindle) to shoes (it owns Zappos).
The $50 billion valuation wouldn't be so much of an issue if Facebook was producing proportional revenues to justify its market cap. And surely much of the money that has been invested in Facebook is being invested because of the potential future profits that Facebook may produce.
But Facebook has yet to truly prove its money-making abilities. While it did more than double its revenues of approximately $800 million in 2009 to $2 billion in 2010, it is still far from producing the revenues necessary to justify a $50 billion valuation. Take Boeing ( BA ), for example: with a market cap of $49 billion, it far outperforms Facebook's $2 billion in revenues with over $65 billion in revenues. Amazon ( AMZN ), which is valued at less than twice what Facebook is valued at, still earns 15X more in revenues. And Dell ( DELL ), which is valued at half of Facebook's valuation, earns 30X as much as Facebook.
Another sign of massive speculation and unproven valuation is Facebook's P/E ratio. The P/E ratio, or price-to-earnings ratio, is a measure of how much investors are willing to pay today for a company's earnings tomorrow . If a company is expected to grow rapidly, and therefore "prove itself" by earning the required revenues, investors will pay higher multiples for the company's stock; a company with a bright future would therefore be proportionally more expensive than a failing company. But while investors generally benefit from paying more for growth companies, there are big risks involved in overpaying. A 20 or 30 P/E ratio is historically reasonable for a growth company, and a 50 or 60 P/E ratio may sometimes prove profitable; but massive and dangerous investment bubbles have formed and collapsed when P/E ratios reached extremely lofty levels, such as the dot-com bubble that saw the P/E ratios of many overly-hyped companies reach over 100, only to send those companies' stock prices crashing down once reality set in.
So why is Facebook's P/E ratio pointing to extreme valuations and potential over-speculation? Because based on its $50 billion valuation and $2 billion in revenues, it currently has a P/E ratio of over 100, with some estimates as high as 400! Compare that to P/E ratios of 22 for Apple (AAPL), 24 for Google ( GOOG ), and 68 for Netflix (NFLX), and it is very obvious that Facebook has yet to prove itself, if at all possible at these valuations.
Here's what happened to some of the most promising companies in the dot-com bubble, who carried P/E ratios as high as Facebook currently does:
These companies did maintain their leading positions, and remained some of the biggest companies in the world even after the bubble collapsed. But that didn't stop their stock price from dropping as much as 90%. Sure, Facebook has the potential to earn the huge amounts expected; but are expectations way ahead of profits?
2)Unproven Ability to Monetize. As mentioned above, Facebook is yet to prove its ability to turn big profits. As a free social-media platform, Facebook's main service provides it with zero payment. Instead, Facebook must generate revenues by offering advertising and other fee-related services. The problem, however, is that Facebook is struggling with monetizing its business. Firstly, Google still dominates the internet advertisement space; it had a head start, currently has a much more efficient system for targeting ads at the right audience, and is better able to mesh its advertising segment with its search business. Secondly, Facebook hasn't proven that it can truly become ad-friendly; unlike Google, which places well-targeted ads to individuals actually searching for something, Facebook is attempting to advertise to individuals who may be using the site strictly for its social aspect and could very well be annoyed by such intrusive ads.
Social media is hard to monetize, and Facebook hasn't yet figured out how to make the big profits expected of it; but that hasn't stopped venture capitalists from funneling millions of dollars into Facebook and anything related to social-media or the accompanying apps. Yet it may be important to take note that Facebook is not only valued at extreme levels, but is also severely lagging in revenues when compared to the first 6 years of Google. If it can't match Google's initial growth, why should we assume it could be the "next Google," let alone value it at $50+ billion?
3)Growth Limits and Waning Interest. Facebook is taking over the world, but how much growth is left until it does so? And if it does establish itself all over the world, what growth will then follow?
Facebook has already captivated 600+ million people, and has convinced them to join. It has also spread around the world like an infectious social-media disease, transmitted from friend to friend and further developing the global Facebook obsession. Yet while countries such as Indonesia, Russia, and India (among many others) continue to show strength in adopting Facebook, there is no guarantee that the current Facebook adoption rate will continue. Instead, as opposed to the mainly-American audience Facebook was geared towards until recently, Facebook now faces different cultures with different needs, expectations, and potential political ramifications. China and Japan remain two of Facebook's biggest challenges. If Facebook is able to firmly take hold of these competitive arenas, it will prove itself as the sole worldwide king of social-media; if it fails to take control, it may set itself up for very dangerous failed-expectations. Either way, however, worldwide domination may already be factored into most people's investment models or expectations. Facebook's growth may therefore be broken down into three outcomes - world domination, failed penetration into China and other important markets, or waning interest which sees Facebook losing even its current user base. I'd bet on something closer to world domination, but the threats of slowing growth, waning interest, and expectations that may have already factored in Facebook's global dominance may make Facebook a very dangerous investment.
In fact, Facebook growth in the US may be peaking. After a record 133.5 million unique visitors in October, Facebook saw a slight drop to 132.7 million unique visitors in November. Worldwide, Facebook saw an added 14 million unique visitors; but stagnant US growth and a decline in interest could be a warning of what's to come.
(Source: InsideFacebook.com)
Moreover, Facebook may actually begin to lose users. If months like June 2010 are any indication, Facebook is not immune to negative growth:
As you can see, Facebook's US growth may be slipping. Not only was growth negative for the 18 to 44 age range, but Facebook may be losing what many consider to be its most lucrative and vital demographic - the 18-35 year olds. Facebook may have simply lost its luster once everyone's parents and grandparents were able to join; it may no longer be as "cool" as it once was.
4) MySpace Part 2? Until Facebook stole the spotlight, MySpace was by far the most dominant and promising social-networking site in the world. It is true that MySpace wasn't as widespread then as Facebook currently is; and it is also true that Facebook offers critical features that were unavailable on MySpace and that make Facebook more connected and more dominant than any of its predecessors. But what says that Facebook's fate won't ultimately follow in MySpace's footsteps? MySpace was the supreme site for years, only to have its title taken away by Facebook's superior competition and by the growing disinterest among MySpace users. Though Facebook does seem to be better geared for competition and continued dominance, there is no guarantee that it will remain on top forever; a revolutionary competing site could theoretically usurp Facebook of its power. And if a better competitor doesn't show up, growing disinterest and "Facebook fatigue," as some have called it, pose the added threat. People are very fickle; Facebook is not immune to fads and constantly-changing interests.
5) Privacy Issues. As a social network founded on openness and shared personal information, such as pictures and daily activities, Facebook has had to deal with many privacy issues. With much private, and potentially dangerous, information open to the public, the threats of identity theft, stalking, and defamation are much bigger than many realize. And Facebook has had to revise their privacy policies and attempt to appear more transparent on numerous occasions due to constant public criticism and potential legal issues.
Privacy issues remain one of Facebook's biggest challenges. People generally prefer that their information be kept private, or at least that its sharing will be limited to people they know and trust. Facebook's policy, however, is less transparent than it would have us believe. While Facebook does appear to be strongly supportive of its users' privacy, it faces very difficult challenges in ensuring that privacy. Their privacy policy states the following:
As you can see, Facebook generally maintains its right to provide users' information to "pre-approved" third party websites and applications. Not only is Facebook tracking your activity, but "when one of your friends visits a pre-approved website or application, it will receive General Information about you." And while Facebook does allow users to change their privacy settings, it is really hard to determine how much of each user's personal information is actually protected. And even if Facebook makes sure to protect your information, who says the third-party vendors who somehow get their hands on your information aren't abusing it?
Facebook is vulnerable to many threats which could jeopardize its user safety and, in turn, its success. Facebook reserves the right to share or store much of its users' information, which allows it to harvest information and collect data about users. This data mining is generally done for behavioral targeting in Facebook advertisements, but it is not a stretch to say that Facebook is both sharing our personal information and developing a system of surveillance to monitor our activities. Forget Big Brother, Facebook is watching.
And if data mining and information-sharing aren't enough of a scare, the increasing threats of spam, spyware, and fake accounts are making the trade-off between networking and privacy much less attractive. In fact, a researcher recently compiled a list of over 170 million Facebook users and uploaded it on Pirate Bay for anyone to download. The ease with which an ill-intentioned person could access such vital information makes Facebook a haven for hackers, criminals, and data miners looking to wreak havoc or earn ethically-questionable profits. If Facebook doesn't tackle the privacy issue before it gets out of hand, it could face growing resentment, a loss of its users, and substantial legal issues.
(Source: Pirate Bay/Screenshot by CNET)
6) Mass Awareness Signals Peak. The best investments are made before the whole world knows about them. The most fashionable clothing is coolest before everyone is wearing it. The most talked-about news story is most interesting before everyone has already "discussed it to death." The same may be said regarding Facebook - the best time to join Facebook or invest in it is before everyone knows about it and uses it. And based on a few signs, Facebook's popularity may have peaked.
2010 was Facebook's biggest year in many ways. It saw an added 250 million users, the most for a year since it was founded; it neared $2 billion in revenue; it was able to penetrate very important markets in its quest for global growth; it completely revamped much of its online design and introduced tremendously innovative and promising features; and it even took over Google's spot as number one most visited website in the world. But nothing has grabbed the media's attention more than the release of the Facebook movie, The Social Network , and the tremendous honor of having Facebook founder and CEO, Mark Zuckerberg, named "TIME Person of the Year." Not only did The Social Network receive exceptionally positive reviews from critics, but it also opened at #1 in theaters and has grossed nearly $200 million since its release in October 2010.
But the tremendous attention Facebook has received may be signaling a peak in popularity. While it is true that Facebook still has plenty of growth left and many exciting opportunities remaining for the future, is there that much room left for the "Facebook obsession" to grow? After a movie based on it came out, its CEO winning "TIME Person of the Year," and an upcoming special on CNBC entitled "The Facebook Obsession," how much better can things really get? If anything, most people's attention and love for Facebook is near its maximum levels; and with everyone from grandparents to 10 year olds now on Facebook, it could be just a short while before many users lose interest.
7) Risky Derivatives and SEC Investigation. Goldman Sachs ( GS ) along with a Russian investment firm announced this week that they will be investing $500 million into Facebook, ultimately allowing its wealthy investors to invest up to a total of $1.5 billion into the company. Goldman Sachs will be providing the investment opportunity by creating a "special-purpose vehicle" which will sidestep one of the most critical laws regulating initial public offerings. The law states that companies with more than 499 investors must disclose important financial information in order to limit investor risk and maintain financial integrity - something Facebook has been avoiding since its founding. Zuckerberg wants to keep Facebook a private company, and continues to do so by limiting the number of investors to below 500. The problem now faced, however, is that Facebook is using a tricky loophole to maintain that number under the 499 limit.
Goldman Sachs is a prime example of how such a loophole is used. Even though Goldman will have multiple investors buying stock in Facebook, Goldman will technically only be considered 1 investor on Facebook's books. In other words, even though Facebook says it currently has less than 500 investors, there are probably many more that are either unaccounted for or simply lumped together as pooled money and counted as 1. Adding to this law-avoidance, it appears that the investment risk involved in Facebook is much greater than many believe. Not only are the investments in Facebook being made in a private company with highly inflated and hard-to-value shares, but the secondary markets in which Facebook shares are being traded are completely unregulated and unsecured. The risks involved with investing in a private company such as Facebook are tremendous, and investment in Facebook is by no means recommended for the average investor. Goldman Sachs' creation of a "special-purpose vehicle" - another term for "derivatives" - is not too much different than the "special-purpose vehicle" it created to pump its mortgage-backed securities to its uninformed investors who eventually saw their investments collapse while Goldman walked away mostly unaffected. Facebook may sound like a better bet, but it could be just as risky and ill-advised as any other asset-backed security or derivative.
This hasn't escaped the attention of regulatory authorities either. The SEC is currently investigating Facebook and Goldman Sachs to figure out exactly what is happening with the investments. The SEC knows both companies are avoiding the 500 shareholder laws, and it may begin to clamp down on these shady practices. The SEC could end up forcing Facebook to go IPO in order to avoid these issues, or it could prevent some of these shady investment practices. Though a push for an IPO may make a current investment in Facebook fairly lucrative, the potential risks involved with private-company derivatives are tremendous. Add to that the sensationalism involved in these private shares and the unheard-of $50 billion valuation for a private company with inadequate and unproven revenues, and Facebook could very well be a social-media bubble.
As we've mentioned again and again, Facebook is one of the most interesting and dynamic companies in history. It has revolutionized technology, social networking, and the future of how we live and interact. There is no doubt Facebook has a lot of potential and many opportunities to become one of the biggest companies in the world, already having control over the bulk of the globe and now the #1 most visited website. There are many more people for Facebook to "convert," many more ideas for it to develop and introduce, and many more investors for it to convince on its way to becoming the "second internet."
But while investors are clamoring to snap up shares in the private company, and the media continues to be infatuated with anything related to social-media, there are many issues lurking that could set Facebook up for serious problems. For one, its valuations are currently at extreme levels not seen since the dot-com bubble; its revenues are by no means enough to justify its $50 billion market cap. Second, it hasn't truly proven itself as a profit-generating business; since its business model was essentially founded on a free service, it has been facing difficulties in monetizing its business. Thirdly, though it has grown extremely rapidly thus far, we should not expect Facebook to continue seeing such astronomical growth; at some point it will have saturated the market. Moreover, while it aims at global growth, it could start losing some of its current users due to disinterest, new competitors, or harmful privacy policies. It could also face some legal troubles both on the privacy front and in its shady and avoidant investment practices. There are so many potential issues involved that could hamper Facebook's growth, jeopardize it legally, or simply see it fail to meet expectations, that an investment in Facebook carries a tremendously higher risk than reward. Money could potentially be made, but the dot-com bubble valuations and the housing-meltdown-like derivatives make investing in Facebook extremely dangerous.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I will gladly purchase put options in Facebook if offered.
See also eBay Earnings: A Credit Perspective on seekingalpha.com
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.
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And Dell ( DELL ), which is valued at half of Facebook's valuation, earns 30X as much as Facebook. Already the largest networking, photo, and gaming site, with very impressive upcoming opportunities in apps, television, its own email service, and just about every aspect of the internet, Facebook is not too far from being a one-stop source for people to manage their social lives, stay informed about current events, and find great deals on everything from travel to clothing. The $50 billion valuation also makes Facebook worth over 60% as much as Amazon ( AMZN ), one of the worldwide leaders in online retail - ranging from books to consumer electronics (including its Kindle) to shoes (it owns Zappos).
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And Dell ( DELL ), which is valued at half of Facebook's valuation, earns 30X as much as Facebook. And with Goldman Sachs ( GS ) announcing this week that it will invest $500 million in Facebook, creating a "special purpose vehicle" to allow its wealthy investors to buy a stake in the company, the mass-investing phase in Facebook may only be starting. A 20 or 30 P/E ratio is historically reasonable for a growth company, and a 50 or 60 P/E ratio may sometimes prove profitable; but massive and dangerous investment bubbles have formed and collapsed when P/E ratios reached extremely lofty levels, such as the dot-com bubble that saw the P/E ratios of many overly-hyped companies reach over 100, only to send those companies' stock prices crashing down once reality set in.
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And Dell ( DELL ), which is valued at half of Facebook's valuation, earns 30X as much as Facebook. shared each month, developers from over 190 countries building with the Facebook platform, an average of 10,000 new websites being integrated with Facebook every day, and the recognition that Facebook is likely the number one means for interconnectedness and mass-exposure, it is not a complete shock that Facebook took over Google's ( GOOG ) title of "most-visited site" in the US for 2010. On the one hand, more investment funds may soon offer Facebook shares to individuals, which will further inflate Facebook's share value; companies like Felix Investments, EB Exchange Funds, and GreenCrest Capital have already opened Facebook funds in the past year.
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And Dell ( DELL ), which is valued at half of Facebook's valuation, earns 30X as much as Facebook. Because based on its $50 billion valuation and $2 billion in revenues, it currently has a P/E ratio of over 100, with some estimates as high as 400! People generally prefer that their information be kept private, or at least that its sharing will be limited to people they know and trust.
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d1316395-b30d-41ae-8da0-b56bd6797fdb
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726947.0
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2011-01-06 00:00:00 UTC
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iPad to Continue its Reign Despite Flurry of Tablets in 2011
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DELL
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https://www.nasdaq.com/articles/ipad-continue-its-reign-despite-flurry-tablets-2011-2011-01-06
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nan
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nan
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Apple's ( AAPL ) iPad, which competes with Amazon's ( AMZN ) Kindle and Barnes and Noble's ( BKS ) Nook in the e-reader market, is continuing to see substantial growth in sales, and we expect this trend to continue. The tablet PC market has grown exponentially with leading PC makers like Dell ( DELL ) and HP ( HPQ ) introducing their own versions of tablets like the Streak and Slate, respectively, in order to compete better with the iPad.
Though we expect Apple to face competition from a flurry of tablet devices, many of which are being showcased the Las Vegas Consumer Electronics Show (CES) taking place this week, we believe that Apple will continue to dominate the tablet device market for the foreseeable future.
While we expect iPad unit sales will touch close to 30 million by 2013, Trefis members predict sales will reach almost 40 million. Though this is well above our current estimates, it has a limited impact on the stock right now given the iPad accounts for around 7% of our estimate price estimate.
We currently have a Trefis price estimate of $418 for Apple's stock , about 27% above the current market price of $330.
( Register to win a free iPad. Visit our home page attrefis.comfor details.)
Strong Apple Sales Numbers and Forecast
Apple announced that within 28 days since the launch of the iPad on April 3, 2010, the company made sales of 1 million, and sales of more than 12 million apps from the App Store and over 1.5 million ebooks from the new iBookstore. This milestone is less than half the days it took to achieve with the iPhone.
According to eMarketer estimates, iPad sales will cross 19 million in 2011 and 30 million in 2012. It also predicts that the tablet market will diversify further and that iPad's share of the tablet market will reduce from 88% currently to 69% in 2012, however it will still retain its high market share.
Declining Pricing, Attractive Features Should Boost Sales
We expect the average iPad pricing to decline from $640 currently to around $540 by 2013. Lower prices should increase demand for iPad and hence boost sales. The company already has basic features like browsing web, reading and sending emails, sharing photos. If Apple is able to add more services like a camera, OLED display and a removable battery, this will give more traction to sales.
Trefis Community Forecast
The Trefis community expects the iPad sales to increase from around 28 million in 2011 to 56 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 20 million to near 46 million during the same period. The member estimates imply an upside a small upside to the Trefis price estimate for Apple's stock.
Our complete analysis for Apple's stock is here .
Register to win a free iPad. Visit our home page attrefis.comfor details.
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.
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The tablet PC market has grown exponentially with leading PC makers like Dell ( DELL ) and HP ( HPQ ) introducing their own versions of tablets like the Streak and Slate, respectively, in order to compete better with the iPad. Though we expect Apple to face competition from a flurry of tablet devices, many of which are being showcased the Las Vegas Consumer Electronics Show (CES) taking place this week, we believe that Apple will continue to dominate the tablet device market for the foreseeable future. The company already has basic features like browsing web, reading and sending emails, sharing photos.
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The tablet PC market has grown exponentially with leading PC makers like Dell ( DELL ) and HP ( HPQ ) introducing their own versions of tablets like the Streak and Slate, respectively, in order to compete better with the iPad. We currently have a Trefis price estimate of $418 for Apple's stock , about 27% above the current market price of $330. Declining Pricing, Attractive Features Should Boost Sales We expect the average iPad pricing to decline from $640 currently to around $540 by 2013.
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The tablet PC market has grown exponentially with leading PC makers like Dell ( DELL ) and HP ( HPQ ) introducing their own versions of tablets like the Streak and Slate, respectively, in order to compete better with the iPad. While we expect iPad unit sales will touch close to 30 million by 2013, Trefis members predict sales will reach almost 40 million. Strong Apple Sales Numbers and Forecast Apple announced that within 28 days since the launch of the iPad on April 3, 2010, the company made sales of 1 million, and sales of more than 12 million apps from the App Store and over 1.5 million ebooks from the new iBookstore.
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The tablet PC market has grown exponentially with leading PC makers like Dell ( DELL ) and HP ( HPQ ) introducing their own versions of tablets like the Streak and Slate, respectively, in order to compete better with the iPad. We currently have a Trefis price estimate of $418 for Apple's stock , about 27% above the current market price of $330. It also predicts that the tablet market will diversify further and that iPad's share of the tablet market will reduce from 88% currently to 69% in 2012, however it will still retain its high market share.
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6106c572-64c2-4e4d-9bee-af0da54399ca
|
726948.0
|
2011-01-05 00:00:00 UTC
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Desktop Market Share Stabilization Could Bolster Dell's Stock
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DELL
|
https://www.nasdaq.com/articles/desktop-market-share-stabilization-could-bolster-dells-stock-2011-01-05
|
nan
|
nan
|
Dell ( DELL ) is known primarily for its product line of desktop and notebook PCs, printers, and PC displays. Dell, currently the third largest PC vendor in the world, primarily competes with HP ( HPQ ) and Acer (TPE:2353) at the top end of the PC market.
We currently have a $19.25 Trefis price estimate for Dell's stock , which is well ahead of market value. Desktops sales constitute roughly 3% of our estimated stock value (vs. notebook & netbook sales which represent a much more substantial 18%).
We recently discussed upside to Dell's stock value from increased notebook and netbook sales (See Dell Could Draw Upside from Notebook PC Market Share ). Here we highlight the impact from potential stabilization in the company's desktop PC market share.
Desktop Market
Dell has also seen shaky market share in its desktop segment. We project a sharp decline in Dell's market share over the next few years from above 15% in 2010 to 11% by the end of our forecast period, and consider the following factors in our projections:
1. Increasing popularity of Apple's iMac desktop PC
Desktop sales increased in Oct 2010 for the first time in 24 months, through strong performance of Apple's ( AAPL ) iMac line that has boosted year-over-year shipments by approximately 3%, compared to last year's 12% slippage. In 2010, Apple's iMac accounted for nearly 25% of the desktop market growth. Given the increasing popularity of iMac PC's in emerging countries and the launch of new and innovative products from Apple, Apple's iMac is expected to drive the growth (if any) in the worldwide desktop PC market going forward and increase its market share at the cost of other major players like Dell, HP etc.
2. Dell's competitors offer more attractive prices
Dell will face intense competitive pressure in the years ahead, particularly across lower priced desktops. We expect that Dell's competitors, which historically have offered better pricing than Dell, will continue to beat Dell on pricing and, correspondingly, erode Dell's market share.
PC Sales Improvement Could Present Upside for Dell
Despite its recent loss of share to Acer and HP, Dell might be regaining its position. As we've previously noted in our article emphasizing notebook and netbook trends, Dell increased Q3′10 PC shipments by 9.3% over the same period last year while HP's sales declined by 0.2% and Acer's dropped 0.7%. These figures include desktop sales, in addition to notebook and netbook sales.
Corporate PC demand in the third quarter was particularly evident: desktop PC shipment sales rose sequentially by 11 percent in the third quarter, compared to only a 4.2 percent increase for notebooks according to iSuppli.
Among the top five manufacturers, Dell, Lenovo, and Asus saw solid growth while HP and Acer dipped. Dell's results illustrate its ability to capitalize on the corporate PC market refresh cycle.
If Dell is able to maintain constant market share in the desktop PC market, vs. our base projection of a 4.5% decline, it could generate nearly 5% upside to our price estimate. We note that this upside is limited as the company's stock value remains much more sensitive to notebook and netbook sales.
See our full company breakdown and estimates for key drivers to Dell's stock value in the display below.
Our complete analysis of Dell's stock is here .
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.
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Given the increasing popularity of iMac PC's in emerging countries and the launch of new and innovative products from Apple, Apple's iMac is expected to drive the growth (if any) in the worldwide desktop PC market going forward and increase its market share at the cost of other major players like Dell, HP etc. As we've previously noted in our article emphasizing notebook and netbook trends, Dell increased Q3′10 PC shipments by 9.3% over the same period last year while HP's sales declined by 0.2% and Acer's dropped 0.7%. Dell ( DELL ) is known primarily for its product line of desktop and notebook PCs, printers, and PC displays.
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We recently discussed upside to Dell's stock value from increased notebook and netbook sales (See Dell Could Draw Upside from Notebook PC Market Share ). Dell ( DELL ) is known primarily for its product line of desktop and notebook PCs, printers, and PC displays. Dell, currently the third largest PC vendor in the world, primarily competes with HP ( HPQ ) and Acer (TPE:2353) at the top end of the PC market.
|
We recently discussed upside to Dell's stock value from increased notebook and netbook sales (See Dell Could Draw Upside from Notebook PC Market Share ). Given the increasing popularity of iMac PC's in emerging countries and the launch of new and innovative products from Apple, Apple's iMac is expected to drive the growth (if any) in the worldwide desktop PC market going forward and increase its market share at the cost of other major players like Dell, HP etc. We expect that Dell's competitors, which historically have offered better pricing than Dell, will continue to beat Dell on pricing and, correspondingly, erode Dell's market share.
|
We currently have a $19.25 Trefis price estimate for Dell's stock , which is well ahead of market value. We recently discussed upside to Dell's stock value from increased notebook and netbook sales (See Dell Could Draw Upside from Notebook PC Market Share ). As we've previously noted in our article emphasizing notebook and netbook trends, Dell increased Q3′10 PC shipments by 9.3% over the same period last year while HP's sales declined by 0.2% and Acer's dropped 0.7%.
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32bfca89-997a-49bd-b04a-1de0d26720e0
|
726949.0
|
2011-01-04 00:00:00 UTC
|
Stocks Slip Despite Positive Economic News; Investors Look to Fed Minutes This Afternoon
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DELL
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https://www.nasdaq.com/articles/stocks-slip-despite-positive-economic-news-investors-look-fed-minutes-afternoon-2011-01-04
|
nan
|
nan
|
Stocks are mixed at mid-session after Inflation in Europe overshadowed new economic reports that saw an unexpected jump in factory orders and an increase in Christmas retail sales--both suggesting economic expansion. Investor attention will be focused on the Federal Reserve's December monetary policy meeting minutes, which will be issued this afternoon.
US retailers saw sales rise 3.6% last week compared to the year-earlier period as shoppers took advantage of post-Christmas discounts according to an index of sales released by Goldman Sachs and the International Council of Shopping Centers.
November factory orders in the US rose 0.7% compared with a forecast for a 0.1% drop. Demand for capital equipment drove gains.
At 2 p.m. ET, the Fed's December monetary policy meeting minutes will be released. Investors will be closely watching for a central bank assessment that at least matches the general enthusiasm that Wall Street has shown over the economy in recent weeks. Optimistic sentiment has sent the averages to multiyear highs without much of a consolidation phase.
In company news:
General Motors ( GM ) shares are higher after it reported a 7.5% increase in December domestic sales, lifting sales on the year to 2.22 million, up from 2.08 million last year. The automaker sold 224,185 cars and trucks. Ex discontinued brands, sales of GM's four remaining lines jumped 15.5% to 223,932 vehicles last month. Meanwhile, shares of Ford Motor ( F ) are just higher after the automaker reported that December sales jumped about 7%,
Shares of Abbott Laboratories ( ABT ) are higher even as copyright protection for the company's HIV drug Kaletra was rejected in India, which will allow other generic drug companies to manufacture copies, Bloomberg reports. The product generated about $1.37 billion in sales in 2009.
Coffee chain Starbucks ( SBUX ) is down following a Bloomberg report that says the company could miss a jump in home brewing unless it can break a pact that links it to Kraft Food's Tassimo machine, which competes with the best-selling Keurig home brewer. Under terms of the agreement, Starbucks can't put its coffee in the Keurig.
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Financial terms for the ShareWroks deal, however, were not disclosed.
American Express (AXP) is up as shares get support from Jim Cramer at CNBC, who named the stock as one of his Dow Leaders in 2011. According to Cramer, AXP could jump 40% to $60 by the end of 2011 in a broad based advance for financial companies, based on improved overseas growth. The stock recently reported a 17% increase in year-over-year revenues, although Cramer cautioned that AXP is still "misunderstood and underestimated."
Shares of Celgene (CELG) are down after the biotech firm said it has submitted new marketing applications for its blood cancer drugs Revlimid and Istodax, Reuters reported. Revmid--in combination with other drugs--treats multiple myloma. Istodax is for patients with peripheral T-cell lymphoma.
Apple's (AAPL) iOS--the operating system for its iPhone smartphone--is still the No. 1 mobile operating system over Google's Android OS, according to the latest survey from Nielsen, as reported by Bizjournals.com Apple's iOS has 28.6% of the smartphone market. That was narrowly ahead of Research in Motion's (RIMM) Blackberry OS at 26.1% and Google's (GOOG) Android at 25.8%. Still, Google's Android is said to be the most popular among new smartphone buyers.
American International Group (AIG) shares are down after the firm received a proposal from a local Taiwan company to buy a stake in AIG's Taiwan unit, Reuters reported. AIG has been trying to sell the unit for 15 months. The proposal from home security company Taiwan Secom Group is seen as pleasing regulators but likely is contrary to what AIG is aiming to do.
BP (BP) ADRs are just higher following an earlier report from London's Daily Mail that Royal Dutch Shell (RDS.A) is mulling an opportunistic takeover of BP because of its vulnerability following the Gulf of Mexico spill. The report says Shell's board decided against a bid due to its concern over legal liabilities but that it remains interested in a merger.
Commodities are down. February gold contracts are down $38, or 2.66%, to $1,385 an ounce while February crude oil contacts are down 2.58%, or $2.36, at $89.19 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 2.87% to $37.93 and the United States Natural Gas fund (UNG) is down 0.48% to $6.28.
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 2.11% to $135.09. Market Vectors Gold Miners (GDX) is down 3.14% to $58.83. iShares Silver Trust (SLV) is down 2.6% to $29.20.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Investors will be closely watching for a central bank assessment that at least matches the general enthusiasm that Wall Street has shown over the economy in recent weeks.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Investor attention will be focused on the Federal Reserve's December monetary policy meeting minutes, which will be issued this afternoon.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. In company news: General Motors ( GM ) shares are higher after it reported a 7.5% increase in December domestic sales, lifting sales on the year to 2.22 million, up from 2.08 million last year.
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Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Investor attention will be focused on the Federal Reserve's December monetary policy meeting minutes, which will be issued this afternoon.
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f4bcbb1f-ca18-45bd-9783-b949bbb09181
|
726950.0
|
2011-01-04 00:00:00 UTC
|
Mid-Day Update: Stocks Lower After Europe Inflation Overshadows Upbeat Retail Sales, Factory Orders; Fed Meeting Minutes on Tap
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DELL
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https://www.nasdaq.com/articles/mid-day-update-stocks-lower-after-europe-inflation-overshadows-upbeat-retail-sales-factory
|
nan
|
nan
|
Here's where markets stand at mid-day:
-NYSE down 46.05 (-0.57%) to 7,997.92
-DJIA down 9.99 (-0.09%) to 11,660.76
-S&P 500 down 6.46 (-0.51%) to 1,265.34
-Nasdaq down 22.82 (-0.85%) to 2,2668.74
GLOBAL SENTIMENT
Hang Seng up 0.99%
Nikkei up 1.65%
FTSE up 1.93%
MID-DAY NYSE INDEX WATCH
NYSE Energy down 0.67% at 12,555.26
NYSE Financial down 0.64% at 5,010.71
NYSE Health Care up 0.07% at 6,556.38
NYSE Arca Tech 100 down 0.81% at 1,091.22
UPSIDE MOVERS
(+) BP (+2.1%) gaining but off early highs; subject of article about interest from Shell, reacting to presumed resumption of Gulf of Mexico drilling.
(+) WAG (+0.9%) added to Goldman's Conviction Buy list.
(+) XOMA (+22.6%) inks development commercialization pact.
(+) VECO (+0.9%) upgraded.
(+) PLUG (+15.9%) offers upbeat sales comments.
(+) CCL (+0.6%) upgraded.
(+) RBS (+1.1%) upgraded.
(+) DRYS (+1.5%) inks new contracts.
(+) NTWK (+2.3%) inks strategic understanding with SANY auto finance.
(+) RPC (+28%) remains active gainer over several sessions.
DOWNSIDE MOVERS
(-) NKE (-2.4%) removed from Goldman's Conviction Buy list.
(-) BGP (-9.4%) down as financial situation remains in focus; some execs leaving; gets delivery pledge from vendor.
(-) NLY (-2.6%) continues evening decline that followed planned share issuance.
(-) SJM (-3.1) downgraded, price target lowered.
(-) OPTR (-1.8%) gets orphan drug status for Fidaxomicin.
MARKET DIRECTION
Stocks are mixed at mid-session after Inflation in Europe overshadowed new economic reports that saw an unexpected jump in factory orders and an increase in Christmas retail sales--both suggesting economic expansion. Investor attention will be focused on the Federal Reserve's December monetary policy meeting minutes, which will be issued this afternoon.
US retailers saw sales rise 3.6% last week compared to the year-earlier period as shoppers took advantage of post-Christmas discounts according to an index of sales released by Goldman Sachs and the International Council of Shopping Centers.
November factory orders in the US rose 0.7% compared with a forecast for a 0.1% drop. Demand for capital equipment drove gains.
At 2 p.m. ET, the Fed's December monetary policy meeting minutes will be released. Investors will be closely watching for a central bank assessment that at least matches the general enthusiasm that Wall Street has shown over the economy in recent weeks. Optimistic sentiment has sent the averages to multiyear highs without much of a consolidation phase.
In company news:
General Motors ( GM ) shares are higher after it reported a 7.5% increase in December domestic sales, lifting sales on the year to 2.22 million, up from 2.08 million last year. The automaker sold 224,185 cars and trucks. Ex discontinued brands, sales of GM's four remaining lines jumped 15.5% to 223,932 vehicles last month. Meanwhile, shares of Ford Motor ( F ) are just higher after the automaker reported that December sales jumped about 7%,
Shares of Abbott Laboratories ( ABT ) are higher even as copyright protection for the company's HIV drug Kaletra was rejected in India, which will allow other generic drug companies to manufacture copies, Bloomberg reports. The product generated about $1.37 billion in sales in 2009.
Coffee chain Starbucks ( SBUX ) is down following a Bloomberg report that says the company could miss a jump in home brewing unless it can break a pact that links it to Kraft Food's Tassimo machine, which competes with the best-selling Keurig home brewer. Under terms of the agreement, Starbucks can't put its coffee in the Keurig.
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Financial terms for the ShareWroks deal, however, were not disclosed.
American Express (AXP) is up as shares get support from Jim Cramer at CNBC, who named the stock as one of his Dow Leaders in 2011. According to Cramer, AXP could jump 40% to $60 by the end of 2011 in a broad based advance for financial companies, based on improved overseas growth. The stock recently reported a 17% increase in year-over-year revenues, although Cramer cautioned that AXP is still "misunderstood and underestimated."
Shares of Celgene (CELG) are down after the biotech firm said it has submitted new marketing applications for its blood cancer drugs Revlimid and Istodax, Reuters reported. Revmid--in combination with other drugs--treats multiple myloma. Istodax is for patients with peripheral T-cell lymphoma.
Apple's (AAPL) iOS--the operating system for its iPhone smartphone--is still the No. 1 mobile operating system over Google's Android OS, according to the latest survey from Nielsen, as reported by Bizjournals.com Apple's iOS has 28.6% of the smartphone market. That was narrowly ahead of Research in Motion's (RIMM) Blackberry OS at 26.1% and Google's (GOOG) Android at 25.8%. Still, Google's Android is said to be the most popular among new smartphone buyers.
American International Group (AIG) shares are down after the firm received a proposal from a local Taiwan company to buy a stake in AIG's Taiwan unit, Reuters reported. AIG has been trying to sell the unit for 15 months. The proposal from home security company Taiwan Secom Group is seen as pleasing regulators but likely is contrary to what AIG is aiming to do.
BP (BP) ADRs are just higher following an earlier report from London's Daily Mail that Royal Dutch Shell (RDS.A) is mulling an opportunistic takeover of BP because of its vulnerability following the Gulf of Mexico spill. The report says Shell's board decided against a bid due to its concern over legal liabilities but that it remains interested in a merger.
Commodities are down. February gold contracts are down $38, or 2.66%, to $1,385 an ounce while February crude oil contacts are down 2.58%, or $2.36, at $89.19 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 2.87% to $37.93 and the United States Natural Gas fund (UNG) is down 0.48% to $6.28.
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 2.11% to $135.09. Market Vectors Gold Miners (GDX) is down 3.14% to $58.83. iShares Silver Trust (SLV) is down 2.6% to $29.20.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. Investors will be closely watching for a central bank assessment that at least matches the general enthusiasm that Wall Street has shown over the economy in recent weeks.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. In company news: General Motors ( GM ) shares are higher after it reported a 7.5% increase in December domestic sales, lifting sales on the year to 2.22 million, up from 2.08 million last year.
|
Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. In company news: General Motors ( GM ) shares are higher after it reported a 7.5% increase in December domestic sales, lifting sales on the year to 2.22 million, up from 2.08 million last year.
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Dell Inc.( DELL ) announced Tuesday its plans to acquire information-security services firm SecureWorks, Inc. The acquisition comes three weeks after DELL's announcement that it had agreed to acquire Compellent Technologies (CML) for $820 million. (+) BP (+2.1%) gaining but off early highs; subject of article about interest from Shell, reacting to presumed resumption of Gulf of Mexico drilling.
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e5fed7be-b5ac-4d23-9b95-98642860d4bd
|
726951.0
|
2011-01-04 00:00:00 UTC
|
Dell Could Draw Upside from Notebook PC Market Share
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DELL
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https://www.nasdaq.com/articles/dell-could-draw-upside-notebook-pc-market-share-2011-01-04
|
nan
|
nan
|
Dell ( DELL ) is known primarily for its product line of desktop and notebook PCs, printers, and PC displays. Dell, currently the third largest PC vendor in the world, primarily competes with HP ( HPQ ) and Acer (TPE:2353) at the top end of the PC market.
We currently have a $19.25 Trefis price estimate for Dell's stock , which is well ahead of market value. Notebooks & netbooks constitute nearly 18% of our estimated value while desktops contribute a mere 3%.
Over the past few years, Dell has lost notebook market share to more innovative and better priced HP and Acer notebooks. We project a gradual decline in the years ahead driven by the following factors.
1. Loss of Share to HP and Acer
Dell has lost significant market share in the notebook & netbook segment (18% in 2005 to 12.0% in 2009) to HP and Acer. Declines will likely continue going forward due to continuing competitive pressures, particularly in lower priced desktops and notebooks where competitors with well-recognized brand names (like HP, Acer etc.) offer aggressively priced products and more relevant feature sets.
2. Higher Average Prices for Dell Could Spell Additional Share Losses
Dell's overall average selling prices have been higher than those of its competitors, which appears to be a conscious decision to realign its pricing strategy, concentrate on solution sales, and drive a better mix of products and services. The decision is hampering Dell's top-line revenue growth, however, as consumers select more competitively priced Acer and HP products.
But Recent Sales Improvement Could Counter this Trend
Despite its recent loss of share to Acer and HP, Dell might be regaining its position. For Q3'10, Dell increased PC shipments by 9.3% over the same period last year (including notebooks, netbooks, and desktop computers) while HP's sales declined by 0.2% and Acer's by 0.7% over the same period.
Among the top five manufacturers, Dell, Lenovo, and Asus saw solid growth while HP and Acer dipped.
Potential Upside Scenario
We currently project declines for Dell's share in notebook and netbook sales. However, if Dell is able to counter this forecast and continue its recent sales improvement trend, there could be a significant upside to the company's stock value.
To highlight this sensitivity, we estimate that a 3% increase in Dell's market share of notebooks & netbooks through our forecast period, vs. our current projection of a 1% decline, would generate 10% upside to the $19.25 Trefis price estimate for Dell's stock .
However, competition stemming from the popularity of tablets (including Apple's iPad) is a reason to be cautious regarding upside from increased PC shipments. We've previously discussed how tablets like Apple's iPad have cannibalized notebook sales (See iPad's Influence on Mac Notebook Pricing ).
See our full company breakdown and estimates for key drivers to Dell's stock value in the display below.
Our complete analysis of Dell's stock is here .
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.
|
The decision is hampering Dell's top-line revenue growth, however, as consumers select more competitively priced Acer and HP products. However, if Dell is able to counter this forecast and continue its recent sales improvement trend, there could be a significant upside to the company's stock value. Dell ( DELL ) is known primarily for its product line of desktop and notebook PCs, printers, and PC displays.
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Loss of Share to HP and Acer Dell has lost significant market share in the notebook & netbook segment (18% in 2005 to 12.0% in 2009) to HP and Acer. But Recent Sales Improvement Could Counter this Trend Despite its recent loss of share to Acer and HP, Dell might be regaining its position. To highlight this sensitivity, we estimate that a 3% increase in Dell's market share of notebooks & netbooks through our forecast period, vs. our current projection of a 1% decline, would generate 10% upside to the $19.25 Trefis price estimate for Dell's stock .
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Loss of Share to HP and Acer Dell has lost significant market share in the notebook & netbook segment (18% in 2005 to 12.0% in 2009) to HP and Acer. Higher Average Prices for Dell Could Spell Additional Share Losses Dell's overall average selling prices have been higher than those of its competitors, which appears to be a conscious decision to realign its pricing strategy, concentrate on solution sales, and drive a better mix of products and services. To highlight this sensitivity, we estimate that a 3% increase in Dell's market share of notebooks & netbooks through our forecast period, vs. our current projection of a 1% decline, would generate 10% upside to the $19.25 Trefis price estimate for Dell's stock .
|
We currently have a $19.25 Trefis price estimate for Dell's stock , which is well ahead of market value. Loss of Share to HP and Acer Dell has lost significant market share in the notebook & netbook segment (18% in 2005 to 12.0% in 2009) to HP and Acer. For Q3'10, Dell increased PC shipments by 9.3% over the same period last year (including notebooks, netbooks, and desktop computers) while HP's sales declined by 0.2% and Acer's by 0.7% over the same period.
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49223541-73db-4c07-8d39-c709a294353d
|
726952.0
|
2011-01-04 00:00:00 UTC
|
Lexmark Market Share Recovery on Laser Printer Focus Gives Upside for Stock
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DELL
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https://www.nasdaq.com/articles/lexmark-market-share-recovery-laser-printer-focus-gives-upside-stock-2011-01-04
|
nan
|
nan
|
Lexmark's ( LXK ) market share in laser printers has consistently declined in the past few years because of declining share of Dell ( DELL ) in Lexmark's revenues and faster growth by competitors HP ( HPQ ), Samsung and Canon.
As Lexmark increases its focus in laser market, we expect it to gain some share from smaller players, which should stall further decline in its market share.
We currently have a Trefis price estimate of $39.90 for Lexmark's stock , about 11% above the current market price of $35.52.
Declining Dell Share and Faster Growth by Competitors
Dell's share in Lexmark's revenues has declined slightly from 15% in 2006 to 13% in 2008. We forecast Dell will exit the printer business, which could hurt Lexmark, as it will lose close to 10% of its revenue share. Hence, we don't expect the market share to grow rapidly in the future-despite its focus on laser printer market.
Companies like HP have a much wider distribution network and geographic presence compared to Lexmark. Hence, even though the printers might be comparable in quality, HP is selling much more than Lexmark.
Lexmark Narrowing Focus on Laser Printers
Lexmark has narrowed its focus in the inkjet market to "all-in-one" printers and is increasing its focus in the laser market as that is the future of the printing business. As the costs of making a laser printer decline, prices will also decline helping consumers migrate to laser printers given their faster speed and inexpensive per page printing cost when compared to inkjet printers.
With its increasing focus on the laser market, we expect Lexmark to gain back some market share from smaller players, which should help it plug its declining market share.
Member Forecast
The laser printers and cartridges business is very crucial for Lexmark as it constitutes around 78% of its stock price, based on our estimates. The Trefis community estimates that Lexmark laser printer market share will gain ground and capture about 4.75% of the market share by 2013 and trend to 5% by the end of the forecast period. This scenario adds around 18% to the Trefis price estimate which forecasts flat market share of 4% from 2011 onward.
Ourcomplete analysis for Lexmark's stock is here.
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.
|
We forecast Dell will exit the printer business, which could hurt Lexmark, as it will lose close to 10% of its revenue share. Lexmark's ( LXK ) market share in laser printers has consistently declined in the past few years because of declining share of Dell ( DELL ) in Lexmark's revenues and faster growth by competitors HP ( HPQ ), Samsung and Canon. Declining Dell Share and Faster Growth by Competitors Dell's share in Lexmark's revenues has declined slightly from 15% in 2006 to 13% in 2008.
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Lexmark's ( LXK ) market share in laser printers has consistently declined in the past few years because of declining share of Dell ( DELL ) in Lexmark's revenues and faster growth by competitors HP ( HPQ ), Samsung and Canon. Declining Dell Share and Faster Growth by Competitors Dell's share in Lexmark's revenues has declined slightly from 15% in 2006 to 13% in 2008. We forecast Dell will exit the printer business, which could hurt Lexmark, as it will lose close to 10% of its revenue share.
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Lexmark's ( LXK ) market share in laser printers has consistently declined in the past few years because of declining share of Dell ( DELL ) in Lexmark's revenues and faster growth by competitors HP ( HPQ ), Samsung and Canon. Declining Dell Share and Faster Growth by Competitors Dell's share in Lexmark's revenues has declined slightly from 15% in 2006 to 13% in 2008. We forecast Dell will exit the printer business, which could hurt Lexmark, as it will lose close to 10% of its revenue share.
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Lexmark's ( LXK ) market share in laser printers has consistently declined in the past few years because of declining share of Dell ( DELL ) in Lexmark's revenues and faster growth by competitors HP ( HPQ ), Samsung and Canon. Declining Dell Share and Faster Growth by Competitors Dell's share in Lexmark's revenues has declined slightly from 15% in 2006 to 13% in 2008. We forecast Dell will exit the printer business, which could hurt Lexmark, as it will lose close to 10% of its revenue share.
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9bd723a6-9316-4422-93d2-140eb02b2b98
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726953.0
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2010-12-25 00:00:00 UTC
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NetApp Could Hit $90 on Growth in Hardware Storage Business
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DELL
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https://www.nasdaq.com/articles/netapp-could-hit-90-growth-hardware-storage-business-2010-12-25
|
nan
|
nan
|
NetApp's ( NTAP ) storage hardware market share in terms of gigabytes has been increasing consistently over the years, with 201o witnessing high growth led by success of its unified storage strategy and rising demand by enterprises for high-end storage hardware via cloud computing.NetApp competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
While we expect NetApp's hardware storage share to rise to 13% in the coming years, Trefis members project a higher growth level reaching close to 17% by 2013, translating into an upside of 38% to our price estimate for NTAP stock.
We currently have a Trefis price estimate of $64.48 for NetApp's stock , about 16% above the current market price of $55.35.
NetApp Benefits from Single Operating System
NetApp has a single operating system Data ONTAP which supports all of its hardware platforms such as NAS, Fiber Channel SAN and iSCSI SAN. NetApp's products offer several advantages: easier deployment of applications, easier management of storage resources, reducing total cost of ownership for customers, and access to many software features like data backup and retention, provisioning, and automated tiering.
Increasing Demand for Virtualization of Storage Services
There is rising demand for high-end storage hardware from cloud-service providers as cloud storage becomes increasingly used by businesses. According to IDC, storage is the fastest growing cloud service, growing from 9.0% of all cloud service revenues in 2009, or $1.6 billion, to an estimated 14.0% in 2013 or over $6 billion of worldwide IT cloud services revenues.
More than 10% of NetApp's hardware shipped is built on Performance Acceleration Module (PAM) technology, and we believe this shift will drive growth for NetApp's high-end storage hardware in the future.
Member Forecast
The Trefis community forecasts NetApp's storage hardware market share will rise from 13% in 2011 to almost 17% by 2013, compared to the baseline Trefis estimate of inch higher from around 12 to 13% during the same period.
The member estimates imply an upside of 38% to the Trefis price estimate for NetApp's stock, signifying the importance of storage hardware business for the company. This would imply a price estimate of close to $90.
Ourcomplete analysis for NetApp's stock is here.
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.
|
NetApp's ( NTAP ) storage hardware market share in terms of gigabytes has been increasing consistently over the years, with 201o witnessing high growth led by success of its unified storage strategy and rising demand by enterprises for high-end storage hardware via cloud computing.NetApp competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. While we expect NetApp's hardware storage share to rise to 13% in the coming years, Trefis members project a higher growth level reaching close to 17% by 2013, translating into an upside of 38% to our price estimate for NTAP stock. NetApp Benefits from Single Operating System NetApp has a single operating system Data ONTAP which supports all of its hardware platforms such as NAS, Fiber Channel SAN and iSCSI SAN.
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NetApp's ( NTAP ) storage hardware market share in terms of gigabytes has been increasing consistently over the years, with 201o witnessing high growth led by success of its unified storage strategy and rising demand by enterprises for high-end storage hardware via cloud computing.NetApp competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. According to IDC, storage is the fastest growing cloud service, growing from 9.0% of all cloud service revenues in 2009, or $1.6 billion, to an estimated 14.0% in 2013 or over $6 billion of worldwide IT cloud services revenues. Member Forecast The Trefis community forecasts NetApp's storage hardware market share will rise from 13% in 2011 to almost 17% by 2013, compared to the baseline Trefis estimate of inch higher from around 12 to 13% during the same period.
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NetApp's ( NTAP ) storage hardware market share in terms of gigabytes has been increasing consistently over the years, with 201o witnessing high growth led by success of its unified storage strategy and rising demand by enterprises for high-end storage hardware via cloud computing.NetApp competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. While we expect NetApp's hardware storage share to rise to 13% in the coming years, Trefis members project a higher growth level reaching close to 17% by 2013, translating into an upside of 38% to our price estimate for NTAP stock. The member estimates imply an upside of 38% to the Trefis price estimate for NetApp's stock, signifying the importance of storage hardware business for the company.
|
NetApp's ( NTAP ) storage hardware market share in terms of gigabytes has been increasing consistently over the years, with 201o witnessing high growth led by success of its unified storage strategy and rising demand by enterprises for high-end storage hardware via cloud computing.NetApp competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. While we expect NetApp's hardware storage share to rise to 13% in the coming years, Trefis members project a higher growth level reaching close to 17% by 2013, translating into an upside of 38% to our price estimate for NTAP stock. We currently have a Trefis price estimate of $64.48 for NetApp's stock , about 16% above the current market price of $55.35.
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d6dbfdef-f6e9-4e3c-92a3-e0bda6fb5299
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726954.0
|
2010-12-21 00:00:00 UTC
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Microsoft’s Tablet Headwind Could Hurt Its Stock
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DELL
|
https://www.nasdaq.com/articles/microsofts-tablet-headwind-could-hurt-its-stock-2010-12-21
|
nan
|
nan
|
According to a New York Times report, Microsoft ( MSFT ) is expected to unveil tablet PCs utilizing a customized form of its Windows 7 operating system at the 2011 Consumer Electronics Show in Las Vegas. According to the report, the tablet devices will be built by Samsung (SEO:005930) and Dell ( DELL ), and will feature Windows OS. With this release, Microsoft hopes to compete with Apple ( AAPL ) iPad. However, we believe Microsoft may struggle in its attempt due to a few key headwinds.
Microsoft is reportedly working on development of Windows 8, which will be better suited for touch screen tablet devices. However, Windows 8 is expected to be released by 2011-end, by which time the tablet market will be more competitive, with Google ( GOOG ) Android tablets, Research in Motion ( RIMM ) PlayBook tablets, and Apple iPad expected to capture most of the tablet market. We believe Microsoft's weak strategy and late entry into the tablet market could hurt its sales, which could weigh on its margins.
We estimate that Microsoft's Windows OS generates roughly 42% of the company's stock value. Our price estimate for Microsoft stands at $31.56 , roughly 13% ahead of market value.
Microsoft Faces Headwinds in the Tablet Market
As discussed above, Microsoft plans to launch tablets on a customized version of Windows 7. Even though Windows 7 OS was successful on PCs, a tablet requires a completely different OS. The most important aspect for a tablet is the compatibility with touch screen interface, and the customized version of Windows 7 may not provide the same effect. Another factor is the OS compatibility with tablet processors. The Windows OS compatibility with Intel (INTC) processors on PCs is well known. However, most of the tablets are equipped with ARM processors, and hence the Windows OS would be required to be tweaked in order for it to work with the ARM processor. Windows 8 should fit these basic requirements for a tablet, but by the time it's ready by 2011-end, Microsoft would have to navigate much higher competition.
Downside to Microsoft Stock
As discussed above, Microsoft could struggle in the tablet market due to a weak strategy and late entry into the tablet market. There is a risk that Microsoft could end up incurring more R&D and marketing expenses to compete in the tablet market. This could pressure margins in the long term. We expect Microsoft's OS operating margins to decline from around 79% in 2007 to around 64% in 2010, and to continue to decline to around 60% by the end of Trefis forecast period.
There could be a downside of 10% to our estimate for Microsoft's stock if Windows OS margin declines to around 45% by the end of Trefis forecast period, instead of the 60% that we forecast.
You can see the complete $31.56 Trefis Price estimate for Microsoft stock here .
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.
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According to the report, the tablet devices will be built by Samsung (SEO:005930) and Dell ( DELL ), and will feature Windows OS. According to a New York Times report, Microsoft ( MSFT ) is expected to unveil tablet PCs utilizing a customized form of its Windows 7 operating system at the 2011 Consumer Electronics Show in Las Vegas. The most important aspect for a tablet is the compatibility with touch screen interface, and the customized version of Windows 7 may not provide the same effect.
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According to the report, the tablet devices will be built by Samsung (SEO:005930) and Dell ( DELL ), and will feature Windows OS. Downside to Microsoft Stock As discussed above, Microsoft could struggle in the tablet market due to a weak strategy and late entry into the tablet market. We expect Microsoft's OS operating margins to decline from around 79% in 2007 to around 64% in 2010, and to continue to decline to around 60% by the end of Trefis forecast period.
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According to the report, the tablet devices will be built by Samsung (SEO:005930) and Dell ( DELL ), and will feature Windows OS. However, Windows 8 is expected to be released by 2011-end, by which time the tablet market will be more competitive, with Google ( GOOG ) Android tablets, Research in Motion ( RIMM ) PlayBook tablets, and Apple iPad expected to capture most of the tablet market. Microsoft Faces Headwinds in the Tablet Market As discussed above, Microsoft plans to launch tablets on a customized version of Windows 7.
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According to the report, the tablet devices will be built by Samsung (SEO:005930) and Dell ( DELL ), and will feature Windows OS. However, Windows 8 is expected to be released by 2011-end, by which time the tablet market will be more competitive, with Google ( GOOG ) Android tablets, Research in Motion ( RIMM ) PlayBook tablets, and Apple iPad expected to capture most of the tablet market. Even though Windows 7 OS was successful on PCs, a tablet requires a completely different OS.
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ffcedd1f-1bab-41da-b61a-7d8d670af813
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726955.0
|
2010-12-17 00:00:00 UTC
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How NetApp Benefits from Cloud Demand
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DELL
|
https://www.nasdaq.com/articles/how-netapp-benefits-cloud-demand-2010-12-17
|
nan
|
nan
|
NetApp ( NTAP ) creates innovative storage and data management solutions for small and medium-sized companies around the world. It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market.
Cloud Computing, also known as IT as a Service (ITaaS), is increasingly being adopted as a way for IT organizations to decrease costs, improve efficiency, and enhance business agility. We believe that NetApp is very well positioned to benefit from this surge in demand of Cloud Computing. We currently have a Trefis price estimate of $64 for NetApp's stock , about 22% above its current market price.
Transition to Cloud
IT budgets in most organizations have historically remained stubbornly flat, but demands on IT continue to rise year over year. Increasing requirements for business agility, reducing costs, and improving efficiencies has forced organizations to implement private clouds. Cloud Computing enables IT departments to overcome the short comings of traditional environments - built and optimized to run specific applications, delivering poor server and storage utilization (on average, 10-15% utilization for servers and 30-40% for storage).
Cloud computing derives its usefulness from virtualization. Once the IT infrastructure is virtualized, firms have the foundation of a shared IT infrastructure of pooled computer, network, and storage resources to delivery capacity on demand and meet fluctuations in resource requirements. The improved ability to scale infrastructure up or down to meet dynamically changing and new business needs increases business ability while shared IT infrastructure not only reduces hardware acquisition costs but also results in significant savings in IT staffing costs and data center space, power, and cooling. Increased efficiency results from the standardization, better resource allocation and utilization, simplified and automated provisioning processes, and overall operational efficiency improvements in the automation of all aspects of IT management.
In a recent IDC survey of IT decision makers, 44% of respondents indicated that they were considering implementing a private cloud-a cloud deployment contained within the corporate firewall to meet the needs of internal customers.
How NetApp Benefits
NetApp can benefit in multiple ways from demand for cloud services:
(1) Higher storage market share
NetApp has been helping companies evolve to a private cloud infrastructure since before the term cloud became popularized. NetApp private cloud solutions are based on its industry-leading data and storage management technology.
We believe NetApp's share in storage market will rise as firms adopting Cloud Computing will increasingly turn towards NetApp, one of the pioneers of the industry with proven products and expertise, in order to effect a massive change in their IT infrastructure that will help them remain competitive.
(2) Higher software licenses and demand for consulting services
In addition to witnessing increasing hardware sales, NetApp will see a surge in software license and maintenance as well as support and consulting services revenues, which are dependant on hardware sales, given the newness of the technology provided.
We estimate there could be a upside of 20% upside to the Trefis price estimate for NetApp's if its share in the storage market increases to 16% by 2017 as against our current estimate of 13%.
Ourcomplete analysis for NetApp's stock is here.
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.
|
It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Cloud Computing, also known as IT as a Service (ITaaS), is increasingly being adopted as a way for IT organizations to decrease costs, improve efficiency, and enhance business agility. Increasing requirements for business agility, reducing costs, and improving efficiencies has forced organizations to implement private clouds.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. Increasing requirements for business agility, reducing costs, and improving efficiencies has forced organizations to implement private clouds. How NetApp Benefits NetApp can benefit in multiple ways from demand for cloud services: (1) Higher storage market share NetApp has been helping companies evolve to a private cloud infrastructure since before the term cloud became popularized.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. How NetApp Benefits NetApp can benefit in multiple ways from demand for cloud services: (1) Higher storage market share NetApp has been helping companies evolve to a private cloud infrastructure since before the term cloud became popularized. We believe NetApp's share in storage market will rise as firms adopting Cloud Computing will increasingly turn towards NetApp, one of the pioneers of the industry with proven products and expertise, in order to effect a massive change in their IT infrastructure that will help them remain competitive.
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It competes mainly with EMC ( EMC ), IBM ( IBM ), HP ( HPQ ) and Dell ( DELL ) in the external disk storage systems market. We currently have a Trefis price estimate of $64 for NetApp's stock , about 22% above its current market price. Increasing requirements for business agility, reducing costs, and improving efficiencies has forced organizations to implement private clouds.
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0043ab2e-ca28-4ab4-8bd5-29138b059d6d
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726956.0
|
2010-12-16 00:00:00 UTC
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Cloud Competition Will Continue to Be Significant - Who Will Prosper?
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DELL
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https://www.nasdaq.com/articles/cloud-competition-will-continue-be-significant-who-will-prosper-2010-12-16
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nan
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nan
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Michael Filighera submits:
MOVING THE MARKET
The popularity of cloud-computing has been on the rise for the past few years, and correspondingly, there has been a marked increase in M&A activity recently. For example, this week's deal between Dell ( DELL ) and Compellent ( CML ) for nearly $1B, demonstrates the vibrancy of the industry.
Cloud technology uses the internet and remote servers to enable users to access their data and applications from any computer with internet access, thereby removing the need to purchase, update and/or install software on local machines. The growth of cloud-computing has been marked by three phenomena:
Increased M&A activity among big players in the technology industry including Dell, Microsoft ( MSFT ), Hewlett Packard ( HPQ ) and Amazon ( AMZN ).
Increased use of smartphones, tablets and desktop units that rely on cloud-computing.
The adoption of this technology by corporate end-users, based on its efficiency as well as in response to budget constraints on capital expenditures for in-house hardware and software solutions.
REVERE'S OUTLOOK
While cloud-computing has been relied upon by both corporate users and consumers for a few years, its popularity has dramatically risen recently. In fact, large technology players such as Dell, Google (GOOG), Microsoft, HP, and [[IBM]] have significantly increased their resources, amount of capital invested, and efforts in this sector.
Given these signs of increased competition for positions in this sector as well as the pent-up demand for upgrades to desktop machines due to businesses postponing IT upgrades during the recent recession, we believe competition in the clouds will continue to be significant.
Some big players currently competing in cloud-computing are:
Amazon - EC2 Platform
Microsoft - Windows Azure, Office 365
IBM - Smart Business Cloud
Salesforce.com - Force.com cloud based CRM system
Growth in this sector is further evidenced by the rising percentage of CIOs who said they plan to adopt cloud computing for at least 10 percent of their applications. This year, 70 percent of CIOs state they plan to make the move to cloud-computing, up from 36 percent last year, according to Morgan Stanley's October 2010 CIO survey. A separate study conducted by San Francisco based 451 Market Monitor estimates that the cloud-computing market will grow to $16.7B in revenue by 2010, with a projected compounded annual growth rate of 24% over the next 3 years.
REVERE RESEARCH REVEALS
Given the anticipated growth in the cloud-computing sector, we used the Revere Hierarchy to identify sectors and companies that are most likely to either drive or benefit from this growth. These sectors include:
E-Commerce Service Providers
Hosting Services
Disk Storage Systems
E-Commerce Service Providers
These providers are focused on services that facilitate 3-commerce applications, specifically helping consumers and businesses do the following:
Bill Payment/Banking: Companies that provide cloud-based platforms for banks, other financial institutions, utilities, etc. to provide online services to their customers.
Electronic Document Processing: Processing services that allow businesses to use the Internet to submit transaction-related documents such as payroll, taxes and benefits administration.
Internet Merchant Services: Technologies and services that provide hosting and/or payment processing infrastructure for e-commerce storefronts and credit card acceptance, shopping carts, procurement services, etc.
Two focused companies within this sector are showing strength as earnings growth begins to reaccelerate:
EasyLink Services International Corp (ESIC) with a 110 percent two-year return.
Digital River, Inc. (DRIV) with a 275 percent two year return. (See below for additional info on DRIV.)
Hosting Services
This sector is comprised of companies that provide services that enable end-users to access application functionality through the Internet and a Web browser. The host generally supplies the hardware, software, technical support and network services, without the initial investment involved in purchasing technology. Companies in this sector include application service providers, data center providers, co-location providers and online meeting providers.
Some top-performing examples of companies in this sector are:
Rackspace Hosting, Inc. (RAX) with a 462 percent two-year return.
SAVVIS, Inc. (SVVS) with a 271 percent two-year return
Terremark Worldwide, Inc. (TMRK) with a 252 percent two-year return.
Disk Storage Systems
Companies in this sector provide hard disk-based equipment designed to serve the data storage needs of multiple users, usually in a business environment.
Two top-performing companies in this sector are:
EMC Corp (EMC) with a 276 percent two-year return.
Crossroads Systems, Inc. (CRDS) with a 64 percent two-year return.
Conclusion
Sectors that support cloud-computing are well-positioned for growth over the near to midterm as businesses continue to increase their usage of this technology as a way to stay current with software upgrades and to reduce their IT capital expenditures and administrative costs. In addition, consumers will also drive growth of this technology with their continued rapid adoption of smartphones and tablets, which increasingly rely on cloud-computing for their email and other application services.
The endorsement of cloud-computing by big players in the technology world is adding to the growth of this market as they make both organic investments and acquisitions of smaller, innovative firms. Examples include Dell's announced purchase of Compellent, Microsoft's upcoming launch of Office 365 (Office in the Cloud) along with their Windows Azure platform, HP's acquisition of 3PAR (a leading storage solutions provider in the data center and cloud-computing markets), as well as Amazon's EC2 platform, which is already well on the way to capitalizing on this market.
Companies to Consider for the Long-term:
click to enlarge
Rackspace Hosting (RAX)
Asset utilization increased on a consistent basis and revenue per server on an annualized basis has increased over the last four years.
RAX is well poised to capitalize on the continued growth within the cloud-computing market.
Digital River (DRIV)
Benefits from the ongoing rapid growth of 3-commerce with a focus in digital goods (software and games).
Growth is reaccelerating (2007: $349M, 2008 $394M, 2009: $404M) as margins are again improving after last year's major customer loss (Symantec)
VMware (VMW)
Third quarter results showed revenues increasing 45.8 percent year over year.
VMware, with its lead on virtualization technology, will be a strong candidate in capitalizing on growth in cloud-computing.
VMware is well hedged against potential revenue disruptions in the U.S. as it generates approximately half of its revenue from its international customers. Its international revenue grew by 44 percent last quarter.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
See also Seven Stocks Insiders Couldn't Wait to Sell on seekingalpha.com
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.
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The growth of cloud-computing has been marked by three phenomena: Increased M&A activity among big players in the technology industry including Dell, Microsoft ( MSFT ), Hewlett Packard ( HPQ ) and Amazon ( AMZN ). In fact, large technology players such as Dell, Google (GOOG), Microsoft, HP, and [[IBM]] have significantly increased their resources, amount of capital invested, and efforts in this sector. For example, this week's deal between Dell ( DELL ) and Compellent ( CML ) for nearly $1B, demonstrates the vibrancy of the industry.
|
Examples include Dell's announced purchase of Compellent, Microsoft's upcoming launch of Office 365 (Office in the Cloud) along with their Windows Azure platform, HP's acquisition of 3PAR (a leading storage solutions provider in the data center and cloud-computing markets), as well as Amazon's EC2 platform, which is already well on the way to capitalizing on this market. For example, this week's deal between Dell ( DELL ) and Compellent ( CML ) for nearly $1B, demonstrates the vibrancy of the industry. The growth of cloud-computing has been marked by three phenomena: Increased M&A activity among big players in the technology industry including Dell, Microsoft ( MSFT ), Hewlett Packard ( HPQ ) and Amazon ( AMZN ).
|
For example, this week's deal between Dell ( DELL ) and Compellent ( CML ) for nearly $1B, demonstrates the vibrancy of the industry. The growth of cloud-computing has been marked by three phenomena: Increased M&A activity among big players in the technology industry including Dell, Microsoft ( MSFT ), Hewlett Packard ( HPQ ) and Amazon ( AMZN ). In fact, large technology players such as Dell, Google (GOOG), Microsoft, HP, and [[IBM]] have significantly increased their resources, amount of capital invested, and efforts in this sector.
|
Examples include Dell's announced purchase of Compellent, Microsoft's upcoming launch of Office 365 (Office in the Cloud) along with their Windows Azure platform, HP's acquisition of 3PAR (a leading storage solutions provider in the data center and cloud-computing markets), as well as Amazon's EC2 platform, which is already well on the way to capitalizing on this market. For example, this week's deal between Dell ( DELL ) and Compellent ( CML ) for nearly $1B, demonstrates the vibrancy of the industry. The growth of cloud-computing has been marked by three phenomena: Increased M&A activity among big players in the technology industry including Dell, Microsoft ( MSFT ), Hewlett Packard ( HPQ ) and Amazon ( AMZN ).
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2b8be865-36dd-4b6b-abeb-727b54f19afb
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726957.0
|
2010-12-13 00:00:00 UTC
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Dell puts finishing touches on acquisition, data storage industry expected to adjust accordingly
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DELL
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https://www.nasdaq.com/articles/dell-puts-finishing-touches-acquisition-data-storage-industry-expected-adjust-accordingly
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nan
|
nan
|
Dell ( DELL ) topped off its acquisition of Compellent Technologies ( CML ) in a deal worth $820 million, the Wall Street Journal reports .
The deal comes after Dell lost a high-stakes bidding war with Hewlett-Packard ( HPQ ) for 3Par (PAR) as the data storage industry continues growing. Once Dell lost to Hewlett-Packard, speculation about its interest in Compellent Technologies increased. Compellent's shares also tripled in value since August.
The process of acquiring Compellent was a "very friendly relationship during discussions relative to the transaction" and that the deal includes a "reasonable" break-up fee, according to conference call remarks from Dave Johnson, senior vice president for corporate strategy at Dell.
The accepted deal was Dell's offer to pay $27.89 per share, which totals $820 million. The deal is expected to close in early 2011.
Another Dell official said the deal will help propel the industry forward by offering clients one type of storage for all needs. Rivals will be influenced to put effort into keeping up.
"We, on the other hand, are building it from scratch," Brad Anderson, Dell enterprise products senior vice president, told the Wall Street Journal. "We like that position, frankly."
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.
|
The deal comes after Dell lost a high-stakes bidding war with Hewlett-Packard ( HPQ ) for 3Par (PAR) as the data storage industry continues growing. The process of acquiring Compellent was a "very friendly relationship during discussions relative to the transaction" and that the deal includes a "reasonable" break-up fee, according to conference call remarks from Dave Johnson, senior vice president for corporate strategy at Dell. "We, on the other hand, are building it from scratch," Brad Anderson, Dell enterprise products senior vice president, told the Wall Street Journal.
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Dell ( DELL ) topped off its acquisition of Compellent Technologies ( CML ) in a deal worth $820 million, the Wall Street Journal reports . "We, on the other hand, are building it from scratch," Brad Anderson, Dell enterprise products senior vice president, told the Wall Street Journal. The deal comes after Dell lost a high-stakes bidding war with Hewlett-Packard ( HPQ ) for 3Par (PAR) as the data storage industry continues growing.
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Dell ( DELL ) topped off its acquisition of Compellent Technologies ( CML ) in a deal worth $820 million, the Wall Street Journal reports . The deal comes after Dell lost a high-stakes bidding war with Hewlett-Packard ( HPQ ) for 3Par (PAR) as the data storage industry continues growing. The process of acquiring Compellent was a "very friendly relationship during discussions relative to the transaction" and that the deal includes a "reasonable" break-up fee, according to conference call remarks from Dave Johnson, senior vice president for corporate strategy at Dell.
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Dell ( DELL ) topped off its acquisition of Compellent Technologies ( CML ) in a deal worth $820 million, the Wall Street Journal reports . The accepted deal was Dell's offer to pay $27.89 per share, which totals $820 million. "We, on the other hand, are building it from scratch," Brad Anderson, Dell enterprise products senior vice president, told the Wall Street Journal.
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56242d4e-0774-4966-a3cb-179fdeaa7233
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726958.0
|
2010-12-11 00:00:00 UTC
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Dell – 4 Concerns for Company's Outlook
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DELL
|
https://www.nasdaq.com/articles/dell-4-concerns-companys-outlook-2010-12-11
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nan
|
nan
|
Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
We estimate that Dell generates roughly 22% of its stock value through its desktop and notebook/netbook operations. Although our current price estimate for Dell at $19.25 stands well above the current market value, we highlight four reasons to be cautious regarding the company's outlook.
1) Lower Margin Outlook
Competition in the notebook and desktop business has intensified as more competitors move into this business. Over the years, Dell has lost share in the PC business to HP and Acer and we foresee a decline going forward given increasing popularity of Apple's Mac notebooks. As PC sales are pressured and fixed costs in the manufacturing business continue to remain high, Dell could see lower profit margins in the future.
The chart below examines Dell's stock price sensitivity to changes in profit margin, the amount of revenue that flows through to operating profit, for its notebook and netbook segment.
2) Broader Slowdown in Technology Sector
An overall slowdown in IT spending by businesses could hurt both Dell's hardware and services businesses. Although not included in our base case forecasts, Cisco's ( CSCO ) weaker than expected earnings have prompted concern regarding a broad slowdown in technology spending.
Contract notebook manufacturers are also running below expectations, a possible sign of weak notebook demand. As we approach the holidays, the personal consumer segment for PCs typically picks up. If this disappoints, we could see a broader pullback in the tech sector.
The chart below examines Dell's stock price sensitivity to changes in global netbook and notebook demand.
3) Increased Focus on Services Business
Dell's services business, which we estimate accounts for roughly 23% of its stock value, has been the company's biggest value driver over the past few years. However, it is not Dell's traditional business and strategic mistakes here could be costly. Further, if the recent strength in IT budgets among corporations does not hold up (as the company currently expects) services revenue could decline.
The chart below examines Dell's stock price sensitivity to changes in consulting and other services revenue.
4) Significant Expenditures to Support Business Growth
Dell is also planning to spend significantly to expand its PC business, especially in China, reporting that it will spend $100 billion in the next decade. Whether this investment will ultimately pay off is unclear. In the meantime, such heavy capital expenditure will erode Dell's free cash flows.
See our complete analysis for Dell's stock is here
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.
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Over the years, Dell has lost share in the PC business to HP and Acer and we foresee a decline going forward given increasing popularity of Apple's Mac notebooks. As PC sales are pressured and fixed costs in the manufacturing business continue to remain high, Dell could see lower profit margins in the future. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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The chart below examines Dell's stock price sensitivity to changes in profit margin, the amount of revenue that flows through to operating profit, for its notebook and netbook segment. The chart below examines Dell's stock price sensitivity to changes in global netbook and notebook demand. Dell ( DELL ) competes with personal computer manufacturers like HP ( HPQ ), Apple ( AAPL ), Acer (TPE:2353) and Toshiba, and increasingly against IBM ( IBM ) and others for IT services.
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The chart below examines Dell's stock price sensitivity to changes in profit margin, the amount of revenue that flows through to operating profit, for its notebook and netbook segment. 2) Broader Slowdown in Technology Sector An overall slowdown in IT spending by businesses could hurt both Dell's hardware and services businesses. 3) Increased Focus on Services Business Dell's services business, which we estimate accounts for roughly 23% of its stock value, has been the company's biggest value driver over the past few years.
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As PC sales are pressured and fixed costs in the manufacturing business continue to remain high, Dell could see lower profit margins in the future. 2) Broader Slowdown in Technology Sector An overall slowdown in IT spending by businesses could hurt both Dell's hardware and services businesses. 3) Increased Focus on Services Business Dell's services business, which we estimate accounts for roughly 23% of its stock value, has been the company's biggest value driver over the past few years.
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8269b015-d85a-4fd7-a088-a3167c11f7b7
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726959.0
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2010-12-09 00:00:00 UTC
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Stocks Mixed at Mid-Session; Positive Employment Data Provides Support
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DELL
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https://www.nasdaq.com/articles/stocks-mixed-mid-session-positive-employment-data-provides-support-2010-12-09
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nan
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nan
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Stocks are mixed at mid-session after new economic data showed a brighter employment picture and households in the U.S. reduced debt for the 10th straight quarter. Adding to the mix are renewed concerns over the European debt situation and a mixed bag of corporate news.
First-time claims for unemployment benefits dropped to 421,000 last week, the second-lowest level this year, besting economists' call for 428,000 claims. The four-week average also fell to the lowest level since 2008. Also, new data from the Federal Reserve showed that household debt fell at an annual rate of 1.75% in the third quarter to $13.4 trillion, according to MarketWatch.
In company-specific news:
Shares of Teva Pharmaceuticals ( TEVA ) are higher after the company said it expects its treatment for multiple sclerosis to receive approval from U.S. health regulators within two years after a clinical trial met its goal, according to a report.
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard ( HPQ ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
Sportswear retailer luluemon athletica ( LULU ) is higher after it reported a 72% jump in profits to $96.8 million and a 56% increase in revenues in fiscal Q3. It said it expects Q4 revenues should range between $210 million to $215 million and a comp-stores increase in the high teens. Earnings per share should be in the range of $0.46 to $0.48.
State Street (STT) is down after it said it will post a Q4 loss due to sales of $11 billion of securities, but the sales will enhance its capital ratios. The company said it would record an after-tax loss of $350 million for the quarter, but operating earnings are still expected to top year-earlier results. State Street plans to sell $11 billion of U.S. non-agency mortgage-backed securities and asset-backed securities and non-U.S. mortgage-backed and asset-backed securities.
Shares of Sirius XM Radio (SIRI) are higher after the company said that talk-show host Howard Stern is staying for five more years. Stern's show will run through 2015. Under the deal, Sirius can reportedly transmit Stern's programming to mobile devices.
Breast cancer drugs from Pfizer (PFE), AstraZeneca (AZN), and Novartis (NVS) increase risks to the heart, according to a study as reported by Bloomberg. The trial found that women are 26% more likely to develop heart disease than an older therapy. The drugs are Pfizer's Aromasin, AstraZeneca's Arimidex, and Novartis' Femara.
ADRs of Infineon Technologies (IFNNY) are down even as CEO Peter Bauer said the company's sales target for the current fiscal year may be "conservative," Bloomberg reported. Infineon's chips are used in cars, mobile phones and other electronics.
Shares of Devon Energy Corp (DVN) are down after saying yesterday that capacity problems on Enbridge Inc (ENB) pipelines connecting Canada with U.S. refiners were having "a meaningful impact" on its heavy oil operations. Enbridge acknowledges some shippers have experienced disruptions while space is created in receiving tanks although a spokeswoman told Bloomberg it expects to meet apportioned nominations by month s end.
Shares of Jackson Hewitt (JTX) are sharply higher in the regular session after the company said in a SEC filing it entered into a program agreement with Santa Barbara Tax Products Group (TPG) for TPG to be the assisted refund provider at certain JTX Service locations for the 2011 tax season. The agreement is for the 2011 tax season. It says it believes that it has now secured 100% assisted refund coverage for the 2011 tax season.
Commodities are mixed as February gold contracts are up $7, or 0.51%, to $1,390 an ounce while January crude oil contacts are down 0.02%, or $0.02, at $88.26 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 0.21% to $37.88 and the United States Natural Gas fund (UNG) is down 2.54% to $6.14.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.59% to $135.58. Market Vectors Gold Miners (GDX) is up 0.05% to $61.23. iShares Silver Trust (SLV) is up 1.34% to $28.07.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard ( HPQ ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
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Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard ( HPQ ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
|
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard ( HPQ ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
|
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard ( HPQ ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
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3e2ccc9f-fcd0-41d8-9cae-ccc3751e2932
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726960.0
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2010-12-09 00:00:00 UTC
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Mid-Day Update: Stocks Mixed as Investors Digest Employment, Household Debt Data; Europe Weighs
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DELL
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https://www.nasdaq.com/articles/mid-day-update-stocks-mixed-investors-digest-employment-household-debt-data-europe-weighs
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nan
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nan
|
Here's where markets stand at mid-day:
-NYSE up 4.30 (+0.06%) to 7,754.62
-DJIA down 30.42 (-0.27%) to 11,342.06
-S&P 500 up 0.66 (+0.05%) to 1,228.94
-Nasdaq up 2.68 (+0.10%) to 2,611.84
GLOBAL SENTIMENT
Hang Seng up 0.34%
Nikkei up 0.52%
FTSE up 0.23%
MID-DAY NYSE INDEX WATCH
NYSE Energy down 0.32% at 11,975.48
NYSE Financial up 0.52% at 4,859.24
NYSE Health Care down 0.09% at 6,343.15
NYSE Arca Tech 100 down 0.19% at 1,078.62
UPSIDE MOVERS
(+) TEVA (+6.5%) gaining on drug study development.
(+) SIRI (+6.5%) re-signs Howard Stern.
(+) WAG (+0.1%) upgraded.
(+) LULU (+18.7%) beats with earnings.
(+) USAT (+8%) reports upbeat connections data.
(+) HD (+0.7%) upgraded.
(+) SWC (+2.0%) upgraded.
(+) ASML (+6.5%) lifts bookings estimate.
(+) SFD (+9.6%) swings to Q2 profit.
(+) CIEN (+13.1%) issues mixed results, guidance.
(+) ASYS (+1.7%) inks new orders.
DOWNSIDE MOVERS
(-) NVDA (-2.1%) down as Apple ( AAPL ) picks Intel ( INTC ) for MacBook.
(-,+) LOW (-2.0) downgraded.
(-) JNJ (-0.8%) downgraded.
(-) CML (-13.8%) down after early-week surge as Dell merger talks ramp up.
MARKET DIRECTION
Stocks are mixed at mid-session after new economic data showed a brighter employment picture and households in the U.S. reduced debt for the 10th straight quarter. Adding to the mix are renewed concerns over the European debt situation and a mixed bag of corporate news.
First-time claims for unemployment benefits dropped to 421,000 last week, the second-lowest level this year, besting economists' call for 428,000 claims. The four-week average also fell to the lowest level since 2008. Also, new data from the Federal Reserve showed that household debt fell at an annual rate of 1.75% in the third quarter to $13.4 trillion, according to MarketWatch.
In company-specific news:
Shares of Teva Pharmaceuticals ( TEVA ) are higher after the company said it expects its treatment for multiple sclerosis to receive approval from U.S. health regulators within two years after a clinical trial met its goal, according to a report.
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard (HPQ) in a bidding war for storage firm 3Par. Dell and Compellent have entered into an exclusive agreement to negotiate a merger in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash.
Sportswear retailer luluemon athletica (LULU) is higher after it reported a 72% jump in profits to $96.8 million and a 56% increase in revenues in fiscal Q3. It said it expects Q4 revenues should range between $210 million to $215 million and a comp-stores increase in the high teens. Earnings per share should be in the range of $0.46 to $0.48.
State Street (STT) is down after it said it will post a Q4 loss due to sales of $11 billion of securities, but the sales will enhance its capital ratios. The company said it would record an after-tax loss of $350 million for the quarter, but operating earnings are still expected to top year-earlier results. State Street plans to sell $11 billion of U.S. non-agency mortgage-backed securities and asset-backed securities and non-U.S. mortgage-backed and asset-backed securities.
Shares of Sirius XM Radio (SIRI) are higher after the company said that talk-show host Howard Stern is staying for five more years. Stern's show will run through 2015. Under the deal, Sirius can reportedly transmit Stern's programming to mobile devices.
Breast cancer drugs from Pfizer (PFE), AstraZeneca (AZN), and Novartis (NVS) increase risks to the heart, according to a study as reported by Bloomberg. The trial found that women are 26% more likely to develop heart disease than an older therapy. The drugs are Pfizer's Aromasin, AstraZeneca's Arimidex, and Novartis' Femara.
ADRs of Infineon Technologies (IFNNY) are down even as CEO Peter Bauer said the company's sales target for the current fiscal year may be "conservative," Bloomberg reported. Infineon's chips are used in cars, mobile phones and other electronics.
Shares of Devon Energy Corp (DVN) are down after saying yesterday that capacity problems on Enbridge Inc (ENB) pipelines connecting Canada with U.S. refiners were having "a meaningful impact" on its heavy oil operations. Enbridge acknowledges some shippers have experienced disruptions while space is created in receiving tanks although a spokeswoman told Bloomberg it expects to meet apportioned nominations by month s end.
Shares of Jackson Hewitt (JTX) are sharply higher in the regular session after the company said in a SEC filing it entered into a program agreement with Santa Barbara Tax Products Group (TPG) for TPG to be the assisted refund provider at certain JTX Service locations for the 2011 tax season. The agreement is for the 2011 tax season. It says it believes that it has now secured 100% assisted refund coverage for the 2011 tax season.
Commodities are mixed as February gold contracts are up $7, or 0.51%, to $1,390 an ounce while January crude oil contacts are down 0.02%, or $0.02, at $88.26 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 0.21% to $37.88 and the United States Natural Gas fund (UNG) is down 2.54% to $6.14.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.59% to $135.58. Market Vectors Gold Miners (GDX) is up 0.05% to $61.23. iShares Silver Trust (SLV) is up 1.34% to $28.07.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
(-) CML (-13.8%) down after early-week surge as Dell merger talks ramp up. Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard (HPQ) in a bidding war for storage firm 3Par.
|
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. (-) CML (-13.8%) down after early-week surge as Dell merger talks ramp up. Earlier this year, Dell lost out to Hewlett-Packard (HPQ) in a bidding war for storage firm 3Par.
|
Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. (-) CML (-13.8%) down after early-week surge as Dell merger talks ramp up. Earlier this year, Dell lost out to Hewlett-Packard (HPQ) in a bidding war for storage firm 3Par.
|
(-) CML (-13.8%) down after early-week surge as Dell merger talks ramp up. Shares of Compellent ( CML ) and Dell ( DELL ) are mixed in regular-session trading afer the companies said they are in advanced discussions regarding a possible business combination involving the two companies. Earlier this year, Dell lost out to Hewlett-Packard (HPQ) in a bidding war for storage firm 3Par.
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6ed6784d-2e63-4aa3-b198-33ddc5ca52c6
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726961.0
|
2010-12-08 00:00:00 UTC
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Dell's Consulting & Services – 13% of Stock Value and Growing
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DELL
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https://www.nasdaq.com/articles/dells-consulting-services-13-stock-value-and-growing-2010-12-08
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nan
|
nan
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Dell's ( DELL ) revenues from consulting services such as infrastructure consulting, deployment services, asset recovery and recycling services, training services, and support services have been rising despite a small dip in 2008 due to the economic slowdown. As clients seek to improve their overall IT infrastructure and make processes more efficient, and as corporate spending resumes, we expect to see further growth in Dell's consulting services going forward.
Dell competes with HP ( HPQ ), IBM ( IBM ), and Accenture ( ACN ) in infrastructure consulting. We estimate that this division alone accounts for around 13% of Dell's value and combined with Perot Systems totals 23% of Dell's value - the largest independent division in our forecast. We currently have a Trefis price estimate of $19.25 for Dell's stock , which is about 41% above the current market price of $13.65.
Discretionary Spending for Consulting Services
Infrastructure consulting, which entails providing consulting services to clients to help them evaluate and implement efficient IT infrastructure, is a discretionary part of spending that clients typically cut down on during a slowdown. Similar is the case with asset recovery and recycling services, as firms prefer to continue with old equipment to minimize spending.
Dell also helps firms get their systems set up quickly through its deployment services. Since this segment is again not business-critical, companies opt for cheaper vendors to do the same.
Growth Expected on Support Services
Consulting and other services revenue has increased from $1.6 billion in 2004 to $3.6 billion in 2010. We expect this growth to continue, although at a slower rate, led by growth in support services segment. These services are indispensable to a business during a slowdown or otherwise. Support services are generally provided from cheaper offshore locations such as India and China, and hence we do not expect much decline in these services.
Member Forecast
While the baseline Trefis estimate indicates an increase in Dell's consulting and other services revenues from $3.6 billion in 2011 to over $4 billion by the end of our forecast period, the Trefis community predicts an increase from almost $4 billion to $6 billion during the same period. The member estimates chip in around 2-3% to the Trefis price estimate for Dell's stock. You can modify these assumptions to make your own forecast.
Ourcomplete analysis for Dell's stock is here.
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.
|
As clients seek to improve their overall IT infrastructure and make processes more efficient, and as corporate spending resumes, we expect to see further growth in Dell's consulting services going forward. Dell also helps firms get their systems set up quickly through its deployment services. Dell's ( DELL ) revenues from consulting services such as infrastructure consulting, deployment services, asset recovery and recycling services, training services, and support services have been rising despite a small dip in 2008 due to the economic slowdown.
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Dell's ( DELL ) revenues from consulting services such as infrastructure consulting, deployment services, asset recovery and recycling services, training services, and support services have been rising despite a small dip in 2008 due to the economic slowdown. As clients seek to improve their overall IT infrastructure and make processes more efficient, and as corporate spending resumes, we expect to see further growth in Dell's consulting services going forward. Dell competes with HP ( HPQ ), IBM ( IBM ), and Accenture ( ACN ) in infrastructure consulting.
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Dell's ( DELL ) revenues from consulting services such as infrastructure consulting, deployment services, asset recovery and recycling services, training services, and support services have been rising despite a small dip in 2008 due to the economic slowdown. Member Forecast While the baseline Trefis estimate indicates an increase in Dell's consulting and other services revenues from $3.6 billion in 2011 to over $4 billion by the end of our forecast period, the Trefis community predicts an increase from almost $4 billion to $6 billion during the same period. As clients seek to improve their overall IT infrastructure and make processes more efficient, and as corporate spending resumes, we expect to see further growth in Dell's consulting services going forward.
|
Dell's ( DELL ) revenues from consulting services such as infrastructure consulting, deployment services, asset recovery and recycling services, training services, and support services have been rising despite a small dip in 2008 due to the economic slowdown. As clients seek to improve their overall IT infrastructure and make processes more efficient, and as corporate spending resumes, we expect to see further growth in Dell's consulting services going forward. The member estimates chip in around 2-3% to the Trefis price estimate for Dell's stock.
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d95bf884-56a3-44a2-88a9-cd108e66c213
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726962.0
|
2010-12-02 00:00:00 UTC
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Despite Glamour, iPad Still a Small Portion of Apple Value
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DELL
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https://www.nasdaq.com/articles/despite-glamour-ipad-still-small-portion-apple-value-2010-12-02
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nan
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nan
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According to a recent survey, Apple's ( AAPL ) iPad is expected to be a seasonal favorite during the holidays with 9% of holiday shoppers planning to buy an iPad in the next 90 days.
Apple competes with players like HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung Electronics (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) that all have or plan to launch tablets, as well as Amazon (AMZN) that sells the well known Kindle e-reader.
Despite the large amount of attention the iPad receives, we estimate that the iPad constitutes only 7% of Apple's intrinsic stock value and therefore any significant jump in sales would have a limited independent impact on Apple's stock. Further, we anticipate that declining iPad gross profit margins in coming years could pose a headwind to the iPad unit's profitability and restrict additional upside to Apple's intrinsic value.
Our price estimate for AAPL still remains roughly 32% above market value, at $418.
iPad Unit Sales Could Surprise, but What is the Impact?
We estimate that Apple could sell around 12.5 million iPads for 2010, having already sold around 7.5 million iPads through the end of September 2010. According to Gartner, a market research firm, tablets market sales could triple to around 55 million by 2011, well ahead of our 20 million estimate.
Although holiday season sales could surprise, we still note a price sensitivity for Apple stock of less than 1% to a 10% change in 2013 iPad unit sales.
Competition Could Pressure iPad Pricing and Profit Margins
Another headwind to iPad profitability stems from declining profit margins. We estimate Apple's average iPad price to be $640 in 2010, a notable premium compared to the Amazon's Kindle priced at $189 and netbooks which typically cost below $400. If Apple cuts iPad prices aggressively in the future to remain competitive with other tablet/netbook/e-reader manufacturers, profit margins will be negatively affected.
We estimate Apple's iPad profit margin will be around 30% for 2010 and anticipate a gradual decline in the years ahead limiting the company's profitability from any substantial pickup in iPad sales. In another article we wrote how competitors with smaller tablets, added features and the popular multi-media player Adobe Flash - which the iPad does not support - might add competitive pressures that could weigh on margins. (See Ipad's Challenge for Next Year .)
While we are optimistic on Apple overall, the benefit to its stock price from the iPad could be limited for the time being.
Ourcomplete analysis for Apple's stock is here.
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.
|
Apple competes with players like HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung Electronics (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) that all have or plan to launch tablets, as well as Amazon (AMZN) that sells the well known Kindle e-reader. If Apple cuts iPad prices aggressively in the future to remain competitive with other tablet/netbook/e-reader manufacturers, profit margins will be negatively affected. In another article we wrote how competitors with smaller tablets, added features and the popular multi-media player Adobe Flash - which the iPad does not support - might add competitive pressures that could weigh on margins.
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Apple competes with players like HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung Electronics (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) that all have or plan to launch tablets, as well as Amazon (AMZN) that sells the well known Kindle e-reader. Further, we anticipate that declining iPad gross profit margins in coming years could pose a headwind to the iPad unit's profitability and restrict additional upside to Apple's intrinsic value. Competition Could Pressure iPad Pricing and Profit Margins Another headwind to iPad profitability stems from declining profit margins.
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Apple competes with players like HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung Electronics (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) that all have or plan to launch tablets, as well as Amazon (AMZN) that sells the well known Kindle e-reader. Despite the large amount of attention the iPad receives, we estimate that the iPad constitutes only 7% of Apple's intrinsic stock value and therefore any significant jump in sales would have a limited independent impact on Apple's stock. Competition Could Pressure iPad Pricing and Profit Margins Another headwind to iPad profitability stems from declining profit margins.
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Apple competes with players like HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung Electronics (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) that all have or plan to launch tablets, as well as Amazon (AMZN) that sells the well known Kindle e-reader. Despite the large amount of attention the iPad receives, we estimate that the iPad constitutes only 7% of Apple's intrinsic stock value and therefore any significant jump in sales would have a limited independent impact on Apple's stock. Our price estimate for AAPL still remains roughly 32% above market value, at $418.
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0c50e459-9e33-4a5e-a609-d9c34327ed3e
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726963.0
|
2010-12-01 00:00:00 UTC
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Microsoft Windows Pricing Impact on Stock
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DELL
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https://www.nasdaq.com/articles/microsoft-windows-pricing-impact-stock-2010-12-01
|
nan
|
nan
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The average price that Microsoft ( MSFT ) charges PC manufacturers like Dell ( DELL ) and HP ( HPQ ) for its Windows operating system ( OS ) has been declining since 2008, led by an increasing mix of netbooks among PC Sales. A sharp increase in emerging markets demand also lifted demand for lower priced notebooks.
Microsoft sells a variety of Windows editions: Home Premium, Professional/ Business and Ultimate editions of Windows Vista and Windows 7, as well as tablet editions. Microsoft competes with Apple's ( AAPL ) Mac OS, which owns a small share of the PC operating system market.
We estimate that the average pricing declined from a high of $77 in 2007 following the release of Vista to around $60 in 2010.
While we currently forecast a gradual decline in average prices to around $60 in the coming years, Trefis members predict a slightly better scenario projecting the pricing to average around $58 over our forecast period. The member estimates imply a modest upside of around 3% to our price estimate for MSFT stock.
We currently have a Trefis price estimate of $30.67 for Microsoft's stock , about 21% above the current market price of $25.31.
Higher Mix of Netbooks in PC Sales
Netbooks, which are smaller versions of notebooks in terms of size, pricing and performance, are seeing rising sales over the past few years. Netbooks are a good option for consumers who are mainly looking for web browsing and who use light applications that don't require a lot of processing power.
Many PC makers are choosing Linux, an open source OS, for their netbooks since Linux is free. Microsoft is trying to counter this trend by introducing stripped down versions of Windows at cheaper prices. And we expect the increasing mix of netbooks will keep average Windows pricing down.
Demand Growth in Emerging Markets
The majority of PC growth in the coming years is expected to come from emerging countries like India, China and Brazil. Consumers in these markets are price-conscious and inclined to buy lower-priced computers.
In a competitive PC hardware pricing environment, Microsoft cannot afford to sell its Windows OS for high prices. As emerging markets form a bigger share of the PC market, Microsoft's overall OS average pricing should fall.
Member Forecast
The Trefis community projects Windows pricing for PC makers to trend slightly above our estimates $60 to $58 in the coming years vs. our forecast of a decline to around $53. Higher average prices could come from increased sales of Windows 7 and companies replacing old PCs with new ones. (See Microsoft Rises on PC Refresh Cycle ). The member estimates imply a slight upside to the Trefis price estimate for Microsoft's stock.
Ourcomplete analysis for Microsoft's stock is here.
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.
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The average price that Microsoft ( MSFT ) charges PC manufacturers like Dell ( DELL ) and HP ( HPQ ) for its Windows operating system ( OS ) has been declining since 2008, led by an increasing mix of netbooks among PC Sales. Microsoft competes with Apple's ( AAPL ) Mac OS, which owns a small share of the PC operating system market. Netbooks are a good option for consumers who are mainly looking for web browsing and who use light applications that don't require a lot of processing power.
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The average price that Microsoft ( MSFT ) charges PC manufacturers like Dell ( DELL ) and HP ( HPQ ) for its Windows operating system ( OS ) has been declining since 2008, led by an increasing mix of netbooks among PC Sales. Demand Growth in Emerging Markets The majority of PC growth in the coming years is expected to come from emerging countries like India, China and Brazil. Member Forecast The Trefis community projects Windows pricing for PC makers to trend slightly above our estimates $60 to $58 in the coming years vs. our forecast of a decline to around $53.
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The average price that Microsoft ( MSFT ) charges PC manufacturers like Dell ( DELL ) and HP ( HPQ ) for its Windows operating system ( OS ) has been declining since 2008, led by an increasing mix of netbooks among PC Sales. We currently have a Trefis price estimate of $30.67 for Microsoft's stock , about 21% above the current market price of $25.31. In a competitive PC hardware pricing environment, Microsoft cannot afford to sell its Windows OS for high prices.
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The average price that Microsoft ( MSFT ) charges PC manufacturers like Dell ( DELL ) and HP ( HPQ ) for its Windows operating system ( OS ) has been declining since 2008, led by an increasing mix of netbooks among PC Sales. We currently have a Trefis price estimate of $30.67 for Microsoft's stock , about 21% above the current market price of $25.31. And we expect the increasing mix of netbooks will keep average Windows pricing down.
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63187786-c568-4372-b4da-1e67aec4746a
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726964.0
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2010-12-01 00:00:00 UTC
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Lowered PC Shipment Forecasts Negative for Microsoft
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DELL
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https://www.nasdaq.com/articles/lowered-pc-shipment-forecasts-negative-microsoft-2010-12-01
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nan
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nan
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Gartner, a market research firm, recently issued a revised forecast for PC shipments in which it lowered the PC market outlook for 2010 and 2011. According to the report, the emergence of tablets and smartphones and the weak economic outlook in developed markets could slow the growth of PC sales.
Microsoft ( MSFT ) depends largely on the PC market growth and hence any bad news regarding the PC market outlook could impact its stock. In addition to Microsoft, other stocks sensitive to PC sales like HP ( HPQ ), Dell ( DELL ), Apple ( AAPL ), Intel ( INTC ), AMD (AMD) and Nvidia (NVDA) could be affected.
PC Market Outlook More Muted
Although Gartner predicts a respectable growth rate for PC shipments of around 14% in 2010 and 16% in 2011, it is lower than the 19% 2010 estimate it predicted in its August report.. We estimate that the notebooks and netbooks market will grow from 86 million in 2007 to 203 million in 2010, and that it will reach 381 million by the end of Trefis forecast period. This is an estimated 10% growth rate over the Trefis forecast period.
Tablets and Smartphones the Culprit
Gartner has revised its PC shipment estimates lower for 2010 and 2011 due to the economic slowdown in developed markets and cannibalization from tablets and smartphones. Since these devices offer many similar functions as PCs, users are delaying buying PCs.
If this trend continues, the PC market growth could slow down even more. There could be downside of around 5% to the $31.56 Trefis price estimate for Microsoft's stock if the notebooks and netbooks market growth slows down to an average of 6%, instead of 10% as we forecast. This indicates that notebooks and netbooks shipments would increase slowly to 300 million by the end of Trefis forecast period vs. 380 million as we forecast.
You can see the complete $31.56 Trefis Price estimate for Microsoft stock here .
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.
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In addition to Microsoft, other stocks sensitive to PC sales like HP ( HPQ ), Dell ( DELL ), Apple ( AAPL ), Intel ( INTC ), AMD (AMD) and Nvidia (NVDA) could be affected. According to the report, the emergence of tablets and smartphones and the weak economic outlook in developed markets could slow the growth of PC sales. There could be downside of around 5% to the $31.56 Trefis price estimate for Microsoft's stock if the notebooks and netbooks market growth slows down to an average of 6%, instead of 10% as we forecast.
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In addition to Microsoft, other stocks sensitive to PC sales like HP ( HPQ ), Dell ( DELL ), Apple ( AAPL ), Intel ( INTC ), AMD (AMD) and Nvidia (NVDA) could be affected. According to the report, the emergence of tablets and smartphones and the weak economic outlook in developed markets could slow the growth of PC sales. PC Market Outlook More Muted Although Gartner predicts a respectable growth rate for PC shipments of around 14% in 2010 and 16% in 2011, it is lower than the 19% 2010 estimate it predicted in its August report.. We estimate that the notebooks and netbooks market will grow from 86 million in 2007 to 203 million in 2010, and that it will reach 381 million by the end of Trefis forecast period.
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In addition to Microsoft, other stocks sensitive to PC sales like HP ( HPQ ), Dell ( DELL ), Apple ( AAPL ), Intel ( INTC ), AMD (AMD) and Nvidia (NVDA) could be affected. Gartner, a market research firm, recently issued a revised forecast for PC shipments in which it lowered the PC market outlook for 2010 and 2011. Microsoft ( MSFT ) depends largely on the PC market growth and hence any bad news regarding the PC market outlook could impact its stock.
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In addition to Microsoft, other stocks sensitive to PC sales like HP ( HPQ ), Dell ( DELL ), Apple ( AAPL ), Intel ( INTC ), AMD (AMD) and Nvidia (NVDA) could be affected. Microsoft ( MSFT ) depends largely on the PC market growth and hence any bad news regarding the PC market outlook could impact its stock. PC Market Outlook More Muted Although Gartner predicts a respectable growth rate for PC shipments of around 14% in 2010 and 16% in 2011, it is lower than the 19% 2010 estimate it predicted in its August report.. We estimate that the notebooks and netbooks market will grow from 86 million in 2007 to 203 million in 2010, and that it will reach 381 million by the end of Trefis forecast period.
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db570fa1-68d9-4bad-a75b-c71636050f76
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726965.0
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2010-11-25 00:00:00 UTC
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Dell Has 30% Upside Led by Services Unit
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DELL
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https://www.nasdaq.com/articles/dell-has-30-upside-led-services-unit-2010-11-25
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nan
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nan
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Dell ( DELL ) reported better than expected Q3 earnings driven by higher sales and margins. Dell's services revenue in particular grew by 55% (or $2 billion) for the first nine months of fiscal year 2011, largely due to last year's acquisition of Perot System by Dell.
Dell competes with PC makers like HP ( HPQ ), Apple ( AAPL ), Acer and Toshiba, and increasingly against IBM ( IBM ), HP and others for IT services.
We believe the services business is the biggest value driver for Dell accounting for 25% of the business. Our Trefis price estimate of $18.60 for Dell's stock is around 30-35% above the current market price, and we note if the Managed Services and Consulting business grows at 10% annually, this would add another $2 to our price estimate.
Dell's reported earnings showed a pick-up in sales on the heels of strong corporate segment spending confirming that the corporate refresh cycle is underway. Profit margins also came in at higher levels due to lower component cost, though we expect this to normalize in coming quarters. Management raised the earning guidance from mid-teens to 30% for the full year. Michael Dell also pointed to continued growth in the services segment and emphasized the transition of the company from a IT hardware company to a IT services company.
We wrote recently about the PC refresh cycle after Microsoft's earnings as corporates are investing in IT hardware and services to replace old systems. (See Micrsoft Rises on PC Refresh Cycle. )
This follows a slowdown in IT spending in recent years. The demand for services is picking up as companies see hardware and software upgrades as investments in a company's future that help increase productivity and reduce future costs. This should continue to support the IT hardware and software industry.
Managed Services and Consulting currently makes up 25% of our estimates for Dell, and if this unit grows at 10% annually versus our current low single-digit estimate, this would add another $2 to our price estimate - or an additional 15% of the current market price.
You can drag the forecast trend-lines above to express your own view, and see the sensitivity of Dell's stock to IT Services and Consulting business.
Ourcomplete analysis for Dell's stock is here.
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.
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You can drag the forecast trend-lines above to express your own view, and see the sensitivity of Dell's stock to IT Services and Consulting business. Dell ( DELL ) reported better than expected Q3 earnings driven by higher sales and margins. Dell's services revenue in particular grew by 55% (or $2 billion) for the first nine months of fiscal year 2011, largely due to last year's acquisition of Perot System by Dell.
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Dell ( DELL ) reported better than expected Q3 earnings driven by higher sales and margins. Our Trefis price estimate of $18.60 for Dell's stock is around 30-35% above the current market price, and we note if the Managed Services and Consulting business grows at 10% annually, this would add another $2 to our price estimate. Dell's services revenue in particular grew by 55% (or $2 billion) for the first nine months of fiscal year 2011, largely due to last year's acquisition of Perot System by Dell.
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Our Trefis price estimate of $18.60 for Dell's stock is around 30-35% above the current market price, and we note if the Managed Services and Consulting business grows at 10% annually, this would add another $2 to our price estimate. Michael Dell also pointed to continued growth in the services segment and emphasized the transition of the company from a IT hardware company to a IT services company. Managed Services and Consulting currently makes up 25% of our estimates for Dell, and if this unit grows at 10% annually versus our current low single-digit estimate, this would add another $2 to our price estimate - or an additional 15% of the current market price.
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Dell's reported earnings showed a pick-up in sales on the heels of strong corporate segment spending confirming that the corporate refresh cycle is underway. You can drag the forecast trend-lines above to express your own view, and see the sensitivity of Dell's stock to IT Services and Consulting business. Dell ( DELL ) reported better than expected Q3 earnings driven by higher sales and margins.
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2c097614-437b-4e9a-af43-bbc86bd37e8a
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726966.0
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2010-11-25 00:00:00 UTC
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iPad's Influence on Mac Notebook Pricing
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DELL
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https://www.nasdaq.com/articles/ipads-influence-mac-notebook-pricing-2010-11-25
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nan
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nan
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The average price of Apple's ( AAPL ) Macintosh (Mac) notebook has declined from an estimated $1,460 in 2007 to around $1,230 in 2010, led by greater demand for notebooks over desktops causing PC manufacturers like Apple, HP ( HPQ ) and Dell ( DELL ) to increase production and lower prices in order to boost sales.
Despite the weak economy, Apple's notebook prices have remained more resilient than competitors while gaining market share suggesting it has more room to use pricing to stimulate demand. However, Apple's own iPad gives customers another choice for a mobile computing device without leaving the Apple family of products, and this fact combined with hyper competition in the notebook market, might add downward pricing pressure for Mac's notebook line.
We estimate that notebook sales make up 8% of our current Trefis price estimate of $418 for Apple's stock , which is about 36% above the current market price of $307.
iPad Weighing on Mac Prices
There is a growing consensus that tablets like the iPad are cannibalizing sales of notebooks. In a September 2010 article in Wall Street Journal , Best Buy CEO Brian Dunn said that internal estimates showed that the iPad had cannibalized sales from laptop PCs, especially netbooks, by as much as 50%. Most data includes netbooks as a subset of the overall notebook market.
Another article in Fortune, sourcing Morgan Stanley/NPD research, states that tablet cannibalization is one of the key factors responsible for the negative growth in the notebook market in the past 8 months.
In a previous article dated April 3, we explored the implications of the iPad on Mac sales and suggested that since a significant portion of Mac notebook buyers were primarily content consumers rather than content creators, Mac notebook cannibalization from the iPad could be significant.
In hindsight, the iPad created a new market for tablets which to this point has not affected Mac notebooks noticeably. It also took share from the netbook market where Apple was not active.
Pricing vs. Market Share
Apple was forced to cut prices of its MacBook Pro and MacBook Air products by between 6% and 28% last year, which is uncustomary for the company. Its price declines are still less than those for competitors HP and Dell.
Going forward, we believe that the iPad's pricing in the market place is below that of notebooks and above that of netbooks. This could make it hard for Apple to raise (or maintain) prices on its notebooks in the future as some customers will view the iPad as a cheaper substitute without having to leave the Apple family - or conversely a cheaper way to join the Apple family without buying a notebook.
We expect modest price cuts could play a role in increasing Apple's notebook market share from an estimated 6.5% in 2010 to 10.5% in 2017. (chart above)
The Trefis community expects Mac notebook pricing to decrease from $1,200 in 2011 to $995 by 2017, compared to the Trefis baseline estimate of a decrease from $1,170 to $860 during the same period suggesting slight upside from our price estimate.
Ourcomplete analysis for Apple's stock is here.
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.
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The average price of Apple's ( AAPL ) Macintosh (Mac) notebook has declined from an estimated $1,460 in 2007 to around $1,230 in 2010, led by greater demand for notebooks over desktops causing PC manufacturers like Apple, HP ( HPQ ) and Dell ( DELL ) to increase production and lower prices in order to boost sales. Its price declines are still less than those for competitors HP and Dell. In a September 2010 article in Wall Street Journal , Best Buy CEO Brian Dunn said that internal estimates showed that the iPad had cannibalized sales from laptop PCs, especially netbooks, by as much as 50%.
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The average price of Apple's ( AAPL ) Macintosh (Mac) notebook has declined from an estimated $1,460 in 2007 to around $1,230 in 2010, led by greater demand for notebooks over desktops causing PC manufacturers like Apple, HP ( HPQ ) and Dell ( DELL ) to increase production and lower prices in order to boost sales. Its price declines are still less than those for competitors HP and Dell. We estimate that notebook sales make up 8% of our current Trefis price estimate of $418 for Apple's stock , which is about 36% above the current market price of $307.
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The average price of Apple's ( AAPL ) Macintosh (Mac) notebook has declined from an estimated $1,460 in 2007 to around $1,230 in 2010, led by greater demand for notebooks over desktops causing PC manufacturers like Apple, HP ( HPQ ) and Dell ( DELL ) to increase production and lower prices in order to boost sales. Its price declines are still less than those for competitors HP and Dell. However, Apple's own iPad gives customers another choice for a mobile computing device without leaving the Apple family of products, and this fact combined with hyper competition in the notebook market, might add downward pricing pressure for Mac's notebook line.
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The average price of Apple's ( AAPL ) Macintosh (Mac) notebook has declined from an estimated $1,460 in 2007 to around $1,230 in 2010, led by greater demand for notebooks over desktops causing PC manufacturers like Apple, HP ( HPQ ) and Dell ( DELL ) to increase production and lower prices in order to boost sales. Its price declines are still less than those for competitors HP and Dell. iPad Weighing on Mac Prices There is a growing consensus that tablets like the iPad are cannibalizing sales of notebooks.
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84c89064-3677-4aa9-928a-a729ed1fd5ab
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726967.0
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2010-11-23 00:00:00 UTC
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iPad's Challenge for Next Year
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DELL
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https://www.nasdaq.com/articles/ipads-challenge-next-year-2010-11-23
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nan
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nan
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Apple ( AAPL ) sold around 4.2 million iPads in Q3 and captured around 95% of the tablet market according to research done by Strategy Analytics. Gartner predicts tablet sales of 55 million in 2011, and if Apple captures 80% of this market, this translates to 44 million sold. This is double our 20 million estimate for next year and would add around 5% upside to the $418 Trefis price estimate for Apple's stock . However, competing tablets will flood the market next year and could take more market share than we currently expect.
HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) are all angling for a piece of the tablet market and have either recently launched tablets or are planning to launch one early next year.
While Apple has distribution and first mover advantages, competitors with smaller tablets, added features and the popular multi-media player Adobe Flash - which the iPad does not support - might put up a stiff fight in the tablet market.
Distribution Advantage for Now
HP could only take orders for 9,000 units of its Slate tablet in the first few days of its launch. In comparison, Apple sold 300,000 iPads on the first day of its launch. Apple's planning and well established distribution channels allowed it to handle the surge in demand which helped establish the tablet market.
These distribution channels for the iPad are growing as well. Since July 2010, Apple has been selling the device at Best Buy, Target, Wal-Mart and Amazon.com, in addition to company-owned stores and its website.
Also expansion into international markets, including China where the iPad launched in Sep 2010, is expected to fuel more growth. We currently estimate that Apple will sell 12.5 million iPads in 2010 and 20 million in 2011, which may look quite conservative given demand growth. You can adjust these assumptions in the chart above.
Price, Screen Size and Flash the Concerns
However, other tablets may take some market share from the iPad by offering new features at a lower pricing point. For example, the Samsung Galaxy Tab tablet is much smaller size (7 inches) and so can fit into a coat pocket. It has two cameras, one in the front and one in the back, while the iPad currently doesn't have a camera.
Companies might also look to lower prices to attract more budget conscious customers potentially affecting Apple's pricing strategy. Companies like HP, Cisco, Dell and RIM have strong relationships with corporate customers and could offer attractive pricing to these clients to establish an enterprise market for tablets.
Moreover, almost all competitors other than Apple will support Adobe Flash, which is a multi-media platform that adds animation and interactivity to web pages. Apple chose to support HTML5 instead of Flash in a much-publicized attack from Steve Jobs on Adobe.
Currently 75% of all online videos still use Flash, and it could remain the preferred online video platform in the near future, which could be a competitive disadvantage to the iPad.
Though Apple's iPad has set the standard for tablets, the number of competitors entering the market with different offerings could take share from Apple.
You can see the complete $418 Trefis Price estimate for Apple stock here .
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.
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Companies like HP, Cisco, Dell and RIM have strong relationships with corporate customers and could offer attractive pricing to these clients to establish an enterprise market for tablets. HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) are all angling for a piece of the tablet market and have either recently launched tablets or are planning to launch one early next year. Apple ( AAPL ) sold around 4.2 million iPads in Q3 and captured around 95% of the tablet market according to research done by Strategy Analytics.
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HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) are all angling for a piece of the tablet market and have either recently launched tablets or are planning to launch one early next year. Companies like HP, Cisco, Dell and RIM have strong relationships with corporate customers and could offer attractive pricing to these clients to establish an enterprise market for tablets. This is double our 20 million estimate for next year and would add around 5% upside to the $418 Trefis price estimate for Apple's stock .
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HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) are all angling for a piece of the tablet market and have either recently launched tablets or are planning to launch one early next year. Companies like HP, Cisco, Dell and RIM have strong relationships with corporate customers and could offer attractive pricing to these clients to establish an enterprise market for tablets. Apple ( AAPL ) sold around 4.2 million iPads in Q3 and captured around 95% of the tablet market according to research done by Strategy Analytics.
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HP ( HPQ ), Dell ( DELL ), LG Electronics (SEO:066570), Research in Motion ( RIMM ), Samsung (SEO:005930), Toshiba (TYO:6052), and Cisco ( CSCO ) are all angling for a piece of the tablet market and have either recently launched tablets or are planning to launch one early next year. Companies like HP, Cisco, Dell and RIM have strong relationships with corporate customers and could offer attractive pricing to these clients to establish an enterprise market for tablets. While Apple has distribution and first mover advantages, competitors with smaller tablets, added features and the popular multi-media player Adobe Flash - which the iPad does not support - might put up a stiff fight in the tablet market.
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40e5eff0-9bff-4433-801b-b49b263e0b1d
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726968.0
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2010-11-19 00:00:00 UTC
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Opening View: DJIA Futures Retreat as China Lifts Reserve Ratio
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DELL
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https://www.nasdaq.com/articles/opening-view-djia-futures-retreat-china-lifts-reserve-ratio-2010-11-19
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nan
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nan
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The Dow Jones Industrial Average (DJIA) soared more than 170 points on Thursday, but enthusiasm for a potential solution to Ireland's debt crisis wasn't enough to power the DJIA past the 11,200 level and its 20-day moving average. Unfortunately, the DJIA may be hard pressed to make a serious run at overhead resistance today, as China is once again front and center after Beijing raised its reserve requirement ratio for banks. Along those lines, Federal Reserve Chairman Ben Bernanke criticized Beijing's currency policy, saying that China's undervalued currency is hurting the global economy. As a result, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 22 points and 3.7 points below fair value, respectively. Technical support for the Dow resides near 11,100, while the SPX should find a floor near 1,185.
In equity news, Harrah's Entertainment Inc. announced that it is canceling its $500 million initial public offering, "due to market conditions." Harrah's had planned to sell 31.25 million shares for an estimated price of $15 to $17 per share. The stock would have traded under the name Caesars Entertainment Corp. with a symbol of CZR.
On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. Adjusted income was 45 cents per share. Analysts had expected earnings of 33 cents per share, on revenue of $15.7 billion.
Elsewhere, Intuit Corp. ( INTU ) reported a net loss of $70 million, or 22 cents per share. On a non-GAAP basis, INTU lost 12 cents per share, as revenue grew to $532 million. Analysts were expecting a loss of 12 cents per share on revenue of $520.4 million. (Editor's note: The original version of this article incorrectly reported INTU's earnings.)
Salesforce.com Inc. ( CRM ) reported net income of $21.1 million, or 15 cents per share. Earnings on a non-GAAP basis would have been 32 cents per share for the recent period. Revenue grew 30% to $429 million. Analysts were expecting earnings of 31 cents per share on revenue of $409.8 million.
Earnings Preview
On the earnings front, AnnTaylor Stores Corp. ( ANN ), H.J. Heinz Co. ( HNZ ), and Yingli Green Energy Holding Co. Ltd. (YGE) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
There are no reports slated for release today. Looking ahead, we cram an entire week's worth of data into two days due to the Thanksgiving holiday. There are no reports slated for release on Monday, while Tuesday offers up the second estimate on third-quarter gross domestic product, accompanied by October's existing home sales. The Street will be drenched in data on Wednesday, with October's personal income and spending reports, October durable goods orders, weekly initial jobless claims, November's University of Michigan consumer sentiment index, October's new home sales, weekly U.S. petroleum supplies, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. The market is closed for Thanksgiving on Thursday, and there are no economic reports slated for release on Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,535,754 call contracts traded on Thursday, compared to 832,801 put contracts. The resultant single-session put/call ratio arrived at 0.54, while the 21-day moving average held at 0.59.
**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**
Overseas Trading
Overseas trading is struggling once again this morning, as only three of the 10 foreign indexes that we track are trading in positive territory. The cumulative average return on the collective stands at a loss of 0.41%. In Asia, markets ignored the possibility for a weekend rate hike out of Beijing, closing mostly higher on the session. Along those lines, the People's Bank of China announced after the close of regular trading that it will raise banks' reserve requirement ratio by half of a percentage point on Nov. 29. Meanwhile, European markets are broadly lower as traders search for safe havens ahead of any weekend developments in Ireland's debt crisis. European Union and International Monetary Fund representatives are currently in Dublin to discuss potential solutions.
Currencies and Commodities
More weakness for the U.S. dollar is having a modest buoying effect on commodities this morning. As Europe comes closer to sorting out Ireland's debt issues, the euro has advanced against the greenback, sending the U.S. Dollar Index lower by 0.4% to 78.30 at last check. Meanwhile, crude futures have added 11 cents to $82.53 per barrel, and gold for December delivery had added $4.50 to trade at $1,357.50 an ounce in London.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. Unfortunately, the DJIA may be hard pressed to make a serious run at overhead resistance today, as China is once again front and center after Beijing raised its reserve requirement ratio for banks. There are no reports slated for release on Monday, while Tuesday offers up the second estimate on third-quarter gross domestic product, accompanied by October's existing home sales.
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On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. Unfortunately, the DJIA may be hard pressed to make a serious run at overhead resistance today, as China is once again front and center after Beijing raised its reserve requirement ratio for banks. Along those lines, the People's Bank of China announced after the close of regular trading that it will raise banks' reserve requirement ratio by half of a percentage point on Nov. 29.
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On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. The Dow Jones Industrial Average (DJIA) soared more than 170 points on Thursday, but enthusiasm for a potential solution to Ireland's debt crisis wasn't enough to power the DJIA past the 11,200 level and its 20-day moving average. The Street will be drenched in data on Wednesday, with October's personal income and spending reports, October durable goods orders, weekly initial jobless claims, November's University of Michigan consumer sentiment index, October's new home sales, weekly U.S. petroleum supplies, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting.
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On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. As a result, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 22 points and 3.7 points below fair value, respectively. In equity news, Harrah's Entertainment Inc. announced that it is canceling its $500 million initial public offering, "due to market conditions."
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b4dabad3-dfda-4bdb-b311-8a97537b00c8
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726969.0
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2010-11-19 00:00:00 UTC
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AMD vs. Intel – Can the Little Guy Win Market Share?
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DELL
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https://www.nasdaq.com/articles/amd-vs-intel-can-little-guy-win-market-share-2010-11-19
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nan
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nan
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Intel ( INTC ) dominates the notebook processor market with an estimated 86% market share while AMD ( AMD ) controls almost 14% by our estimates. We currently have a Trefis price estimate of $25.53 for Intel's stock and a p rice estimate of $8.07 for AMD's stock.
While Intel dominates, competition is becoming more intense with each company rolling out newer integrated computing and graphics platforms. At the core of this is a fight for market share.
We forecast market share remaining stable for both currently but note that a hypothetical 5 percentage point increase implies 2.5% upside in our share price estimate for Intel and 11% for AMD. So the little guy clearly has more to gain. See our modifiable charts below.
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Intel ( INTC ) dominates the notebook processor market with an estimated 86% market share while AMD ( AMD ) controls almost 14% by our estimates. While Intel dominates, competition is becoming more intense with each company rolling out newer integrated computing and graphics platforms. We forecast market share remaining stable for both currently but note that a hypothetical 5 percentage point increase implies 2.5% upside in our share price estimate for Intel and 11% for AMD.
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Intel ( INTC ) dominates the notebook processor market with an estimated 86% market share while AMD ( AMD ) controls almost 14% by our estimates. We currently have a Trefis price estimate of $25.53 for Intel's stock and a p rice estimate of $8.07 for AMD's stock. We forecast market share remaining stable for both currently but note that a hypothetical 5 percentage point increase implies 2.5% upside in our share price estimate for Intel and 11% for AMD.
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Intel ( INTC ) dominates the notebook processor market with an estimated 86% market share while AMD ( AMD ) controls almost 14% by our estimates. We currently have a Trefis price estimate of $25.53 for Intel's stock and a p rice estimate of $8.07 for AMD's stock. We forecast market share remaining stable for both currently but note that a hypothetical 5 percentage point increase implies 2.5% upside in our share price estimate for Intel and 11% for AMD.
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Intel ( INTC ) dominates the notebook processor market with an estimated 86% market share while AMD ( AMD ) controls almost 14% by our estimates. While Intel dominates, competition is becoming more intense with each company rolling out newer integrated computing and graphics platforms. We forecast market share remaining stable for both currently but note that a hypothetical 5 percentage point increase implies 2.5% upside in our share price estimate for Intel and 11% for AMD.
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424ab754-e057-48b5-be5d-cda50d02ccc6
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726970.0
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2010-11-19 00:00:00 UTC
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How bull is playing Hewlett-Packard
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DELL
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https://www.nasdaq.com/articles/how-bull-playing-hewlett-packard-2010-11-19
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nan
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nan
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Hewlett-Packard reports earnings after the bell Monday, and one trader is looking for some good news.
optionMONSTER's Heat Seeker tracking system detected the purchase of about 6,600 December 45 calls for $0.37 and the sale of a matching number of December 39 puts for $0.57. The transaction accounted for more than one-third of total options volume in the stock so far today.
HPQ is up 0.26 percent to $41.80 in morning trading but has been underperforming the broader technology sector and even traditional laggard Dell over the last three months since the surprise ouster of former CEO Mark Hurd in August.
Since then the company issued a bullish profit forecast for 2011 and acquired such companies as ArcSight and 3Par to expand in the fast-growing cloud-computing space.
DELL also reported strong earnings yesterday afternoon as component prices fell. Revenue, however, missed estimates.
The trade on HPQ is designed to leverage a rally in the share price. The investor was paid $0.20 to enter the position and will earn infinite profits if the stock pushes above $45 by expiration. It also stands to lose money on a close below $39.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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HPQ is up 0.26 percent to $41.80 in morning trading but has been underperforming the broader technology sector and even traditional laggard Dell over the last three months since the surprise ouster of former CEO Mark Hurd in August. DELL also reported strong earnings yesterday afternoon as component prices fell. The investor was paid $0.20 to enter the position and will earn infinite profits if the stock pushes above $45 by expiration.
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HPQ is up 0.26 percent to $41.80 in morning trading but has been underperforming the broader technology sector and even traditional laggard Dell over the last three months since the surprise ouster of former CEO Mark Hurd in August. DELL also reported strong earnings yesterday afternoon as component prices fell. Hewlett-Packard reports earnings after the bell Monday, and one trader is looking for some good news.
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HPQ is up 0.26 percent to $41.80 in morning trading but has been underperforming the broader technology sector and even traditional laggard Dell over the last three months since the surprise ouster of former CEO Mark Hurd in August. DELL also reported strong earnings yesterday afternoon as component prices fell. The investor was paid $0.20 to enter the position and will earn infinite profits if the stock pushes above $45 by expiration.
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HPQ is up 0.26 percent to $41.80 in morning trading but has been underperforming the broader technology sector and even traditional laggard Dell over the last three months since the surprise ouster of former CEO Mark Hurd in August. DELL also reported strong earnings yesterday afternoon as component prices fell. Hewlett-Packard reports earnings after the bell Monday, and one trader is looking for some good news.
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2b7f998d-3a91-4ed7-a9d1-d870e8d061e3
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726971.0
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2010-11-12 00:00:00 UTC
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Could Dell's PC Business Double its Stock Price?
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DELL
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https://www.nasdaq.com/articles/could-dells-pc-business-double-its-stock-price-2010-11-12
|
nan
|
nan
|
In recent years, Dell's stock price has shrunk considerably and is now around half of its $30 level in 2007 at $14 today. This is due to a slowdown in tech spending, company specific issues and greater competition from competitors like HP ( HPQ ), Apple ( AAPL ) and, more recently, Acer and Toshiba. Surprisingly, our current estimates show that Managed Services and Consulting account for 20% and cash 15% of Dell's company value.
We wanted to explore what scenarios could help Dell regain the $30 level by looking specifically at its traditional notebook and desktop businesses. The key drivers to these businesses are: 1) pricing, 2) market share and 3) profit margins (measured by EBITDA).
By looking at scenarios with our modifiable charts, we estimate that the notebook unit could add around $8.00 and the desktop unit could chip in another $4.00 to our current prices estimate of $18.38 for Dell's stock , which is about 30% percent above its current market price.
+$8 Notebook Segment
Notebooks and netbooks sales make up 16% of the Trefis price estimate for Dell compared to under 4% for its desktop unit. For the notebook business we currently forecast that average prices will decline by over 50% from $828 in 2010 to $398 in 2016 due to cheaper notebooks and netbooks being sold in emerging markets. If Dell can maintain a drop of around 25% to $600 instead, similar to the drop in prices between 2006 and 2009, this makes up about 40% of the price increase.
By extension better pricing should translate to improved profit margins estimates, and if we estimate a modest improvement in blended EBITDA margin (Dell does not break out its margins by notebooks and desktops) of 7% by 2016 between its notebook and desktop businesses versus remaining at 5% as we currently expect, then we are almost to our $8.00 improvement.
Finally, we assume that notebook market share grows to 17% by 2016 from our current estimates of 14% in 2010 with gradual declines thereafter. These combined actions add $8.00 to the stock price estimate.
+$4 Desktop Segment
Dell's desktop business has struggled in recent years in part due to a slowdown in corporate spending. We wrote earlier this week that the corporate PC refresh cycle has begun in earnest according to Microsoft ( MSFT ) management. ((See Microsoft Rises on PC Refresh Cycle )) If corporate IT budgets indeed pick up meaningfully, Dell could be a leading beneficiary.
Our current estimates forecast desktop prices to drop dramatically to around $200 by 2016 from current levels of $630. If desktop prices drop by about half of this amount to $400 by 2016, the desktop business receives a small boost.
Then Dell simply needs to maintain current market share levels of around 16% versus our estimated declined to 12% by 2013, and once we factor in the better blended notebook and desktop profit margin of 7% mentioned above, the desktop unit adds $4.00 to our price estimate.
You can see the complete$18.38 for Dell's stock here.
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.
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((See Microsoft Rises on PC Refresh Cycle )) If corporate IT budgets indeed pick up meaningfully, Dell could be a leading beneficiary. In recent years, Dell's stock price has shrunk considerably and is now around half of its $30 level in 2007 at $14 today. Surprisingly, our current estimates show that Managed Services and Consulting account for 20% and cash 15% of Dell's company value.
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By extension better pricing should translate to improved profit margins estimates, and if we estimate a modest improvement in blended EBITDA margin (Dell does not break out its margins by notebooks and desktops) of 7% by 2016 between its notebook and desktop businesses versus remaining at 5% as we currently expect, then we are almost to our $8.00 improvement. +$4 Desktop Segment Dell's desktop business has struggled in recent years in part due to a slowdown in corporate spending. Then Dell simply needs to maintain current market share levels of around 16% versus our estimated declined to 12% by 2013, and once we factor in the better blended notebook and desktop profit margin of 7% mentioned above, the desktop unit adds $4.00 to our price estimate.
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By looking at scenarios with our modifiable charts, we estimate that the notebook unit could add around $8.00 and the desktop unit could chip in another $4.00 to our current prices estimate of $18.38 for Dell's stock , which is about 30% percent above its current market price. By extension better pricing should translate to improved profit margins estimates, and if we estimate a modest improvement in blended EBITDA margin (Dell does not break out its margins by notebooks and desktops) of 7% by 2016 between its notebook and desktop businesses versus remaining at 5% as we currently expect, then we are almost to our $8.00 improvement. Then Dell simply needs to maintain current market share levels of around 16% versus our estimated declined to 12% by 2013, and once we factor in the better blended notebook and desktop profit margin of 7% mentioned above, the desktop unit adds $4.00 to our price estimate.
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By looking at scenarios with our modifiable charts, we estimate that the notebook unit could add around $8.00 and the desktop unit could chip in another $4.00 to our current prices estimate of $18.38 for Dell's stock , which is about 30% percent above its current market price. Then Dell simply needs to maintain current market share levels of around 16% versus our estimated declined to 12% by 2013, and once we factor in the better blended notebook and desktop profit margin of 7% mentioned above, the desktop unit adds $4.00 to our price estimate. In recent years, Dell's stock price has shrunk considerably and is now around half of its $30 level in 2007 at $14 today.
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815c70d7-5977-49a3-a1fc-9a38ef135800
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726972.0
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2010-11-08 00:00:00 UTC
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Mid-Day Update: Stocks Retreat From Prior Week's Rally; Gold Hits Record $1,400 Per Ounce
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DELL
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https://www.nasdaq.com/articles/mid-day-update%3A-stocks-retreat-from-prior-weeks-rally-gold-hits-record-%241400-per-ounce
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nan
|
nan
|
Here's where markets stand at mid-day:
-NYSE down 33.24 (-0.42%) to 7,768.03
-DJIA down 45.72 (-0.40%) to 11,398.36
-S&P 500 down 3.92 (-0.32%) to 1,221.93
-Nasdaq down 0.13 (-0.01%) to 2,578.81
GLOBAL SENTIMENT
Hang Seng up 0.35%
Nikkei up 1.11%
FTSE down 0.43%
MID-DAY NYSE INDEX WATCH
NYSE Energy down 0.30% at 11,807.16
NYSE Financial down 0.69% at 4,947.19
NYSE Health Care down 0.38% at 6,49..69
NYSE Arca Tech 100 up 0.22% at 1,050.39
UPSIDE MOVERS
(+) INTC (+1.0%) upgraded.
(+) YHOO (+1.2%) is subject of WSJ article saying AOL interested in at least a tie-up.
(+) CNIT (+0.5%) reports improved quarter.
(+) IDT (+12%) announces dividend, spin-off plans, stock exchange offer.
(+) SOLR (+7.6%) sets buyback.
(+) SVNT (+3.8%) upgraded.
(+) ATHX (+6.2%) gets FDA OK for Phase 2 trial of MultiStem.
(+) ANR (+7.9%) gets favorable Barron's coverage.
DOWNSIDE MOVERS
(-,+) MCD (0.0%) choppy trade; sales October same-store sales up 6.5%.
(-) DISH (-2.8%) downgraded.
(-) SIGA (-9.6%) to appeal SBA decision.
(-) IRE (-0.8%) continues sharp slide amid debt, austerity concerns in Ireland.
MARKET DIRECTION
Stocks are lower at mid-day as investors retreat after Friday's Federal Reserve-induced rally. Last week, the Fed announced it would purchase up to $600 billion in U.S Treasuries in an effort to boost the economy. In the wake of six consecutive positive sessions, the Dow Jones Industrial Average is moderately lower while gold futures hit a record $1,400 an ounce this morning.
The move by the Federal Reserve received some criticism from officials at several major economies because of concerns about trade imbalances, which could be a sticking point at this week's meeting of the G-20 nations in South Korea.
No major economic news is due out on today.
In company news, an experimental pill for rheumatoid arthritis developed by Pfizer ( PFE ) cut pain and inflammation in 71% of patients in a study. The results could help the drug maker supplant injectable drugs with $12 billion in annual sales, Bloomberg reported. The treatment reduced inflammation by 20% or more for patients after six months, the report said.
Morgan Stanley ( MS ) will buy the remaining stake in a joint venture with Citigroup's ( C ) Smith Barney on dates set in the original deal, Bloomberg reported, citing CEO James Gorman. Morgan Stanley has flexibility in how fast it will increase its 51% sake in the joint venture, the report says.
Republic Airways ( RJET ) says it will sell 12 million shares of its common stock in an underwritten public offering. In addition, the company intends to grant the underwriters a 30-day option to purchase up to an additional 15% of shares sold.
Eli Lilly ( LLY ) shares are just higher after the company said it would buy privately-held Avid Radiopharmaceuticals for an upfront payment of $300 million and up to $500 million in additional payments contingent upon potential future regulatory and commercial milestones, according to a statement. With the purchase, Eli Lilly gets access to compunds Avid is developing that detect and monitor chronic diseases such as Alzheimer's.
Amazon.com ( AMZN ) is trading higher after it said this morning it is buying privately held Quidsi, the owner of Diapers.com and Soap.com. Amazon is paying $500 million in cash and assuming $45 million in debt to expand its online retail empire, but said Quidsi will continue to operate independently. The acquisition is expected to close in December.
Google ( GOOG ) and Dell ( DELL ) are planning to move ahead with more acquisitions, which will likely keep M&A active in the sector, Bloomberg reported. Google will probably buy more companies about the size of YouTube and DoubleClick while Dell will make more purchases in its push to double the size of its data-center business to $30 billion in revenue, the report said.
McDonald's Corp. ( MCD ) is down despite reporting that global sales at stores opened at least a year grew by 6.5%, topping its previous forecast for 5% to 6% sales growth. Domestically, sales rose 5.6%.
The commission appointed by President Barack Obama to investigate the BP ( BP ) oil spill in the Gulf of Mexico found no evidence thus far that employees put profits before safety, Bloomberg reported citing comments from Chief Counsel Fred Bartlit. Critics have said that BP cut corners in order to reduce costs, the report noted. "We have not seen a single instance where a human being made a conscious decision to favor dollars to safety," Bartlit said, as quoted by Bloomberg.
Harris Corp. ( HRS ) is lower after announcing this morning that it will buy a communications services business from Schlumberger Ltd. ( SLB ) for $397.5 million in cash. The business unit, Global Connectivity Services, is expected to have pretax earnings of $41 million on revenue of $170 million in 2010, the company said.
JDS Uniphase ( JDSU ) is up after Barron's says the company is well positioned to benefit from the Internet. Barron's noted improving results and demand for optical products as people want more high-speed Internet access.
In the latest earnings news:
--Uranium Resources ( URRE ) is up after it says Q3 net loss was $0.04 per share, flat from a year ago.
--Sysco Corp. ( SYY ) is down after the food service distributor reported first quarter profit in line, but revenue short of estimates. The company posted a profit of $299.1 million, or 51 cents a share, down from $326.2 million, or 55 cents a share a year ago. Revenue rose 7.4% to $9.75 billion. Analysts polled by Thomson Reuters had expected earnings of 51 cents a share on revenue of $9.55 billion.
--Comverge ( COMV ) said Q3 sales were $51.7 million, below the Thomson Reuters mean for $56.4 million. Non-GAAP EPS was a penny per share, a penny below estimates. It sees FY sales between $118 to $125 million, below forecasts for $134.63 million.
--ShengdaTech ( SDTH ) says Q3 net sales from continuing operations were $34.4 million, more than the Thomson Reuters mean for $31.8 million. Net income was $0.13 per share, a penny above estimates. FY sales are seen between $123.0 million to $126.0 million, below estimates for $128.9 million.
Commodities are mixed. December gold contracts are up $2, or 0.18%, to a record high of $1,400 an ounce, while December crude contacts are down 0.22%, or $0.19, at $86.66 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is down 0.58% to $37.43 and the United States Natural Gas fund ( UNG ) is up 3.18% to $5.84.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.32% to $136.81. Market Vectors Gold Miners ( GDX ) is up 1.41% to $60.94. iShares Silver Trust ( SLV ) is up 2.14% to $26.76.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Google ( GOOG ) and Dell ( DELL ) are planning to move ahead with more acquisitions, which will likely keep M&A active in the sector, Bloomberg reported. Google will probably buy more companies about the size of YouTube and DoubleClick while Dell will make more purchases in its push to double the size of its data-center business to $30 billion in revenue, the report said. In the wake of six consecutive positive sessions, the Dow Jones Industrial Average is moderately lower while gold futures hit a record $1,400 an ounce this morning.
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Google ( GOOG ) and Dell ( DELL ) are planning to move ahead with more acquisitions, which will likely keep M&A active in the sector, Bloomberg reported. Google will probably buy more companies about the size of YouTube and DoubleClick while Dell will make more purchases in its push to double the size of its data-center business to $30 billion in revenue, the report said. The business unit, Global Connectivity Services, is expected to have pretax earnings of $41 million on revenue of $170 million in 2010, the company said.
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Google ( GOOG ) and Dell ( DELL ) are planning to move ahead with more acquisitions, which will likely keep M&A active in the sector, Bloomberg reported. Google will probably buy more companies about the size of YouTube and DoubleClick while Dell will make more purchases in its push to double the size of its data-center business to $30 billion in revenue, the report said. Eli Lilly ( LLY ) shares are just higher after the company said it would buy privately-held Avid Radiopharmaceuticals for an upfront payment of $300 million and up to $500 million in additional payments contingent upon potential future regulatory and commercial milestones, according to a statement.
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Google ( GOOG ) and Dell ( DELL ) are planning to move ahead with more acquisitions, which will likely keep M&A active in the sector, Bloomberg reported. Google will probably buy more companies about the size of YouTube and DoubleClick while Dell will make more purchases in its push to double the size of its data-center business to $30 billion in revenue, the report said. The business unit, Global Connectivity Services, is expected to have pretax earnings of $41 million on revenue of $170 million in 2010, the company said.
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9e44a536-a7b0-439c-9d14-5f828cb14f54
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726973.0
|
2010-11-04 00:00:00 UTC
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U.S. Indexes Posting Strong Gains in Mid-Day Trading; Investors Positive on Fed Bond-Buying Move
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DELL
|
https://www.nasdaq.com/articles/us-indexes-posting-strong-gains-mid-day-trading-investors-positive-fed-bond-buying-move
|
nan
|
nan
|
Stocks are broadly higher, extending prior session gains, after the Federal Reserve announced additional steps to spur the U.S. economy. Investors mostly shrugged off new data that showed an increase in jobless benefits claims.
Earlier, the Fed announced plans to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month and slightly above what Wall Street was expecting.
Along with that, the Fed will also keep reinvesting principal payments from its securities holdings. Stocks were choppy after the announcement, having gained in the build-up to the official announcement.
A separate report from the Labor Department showed a 20,000-person jump in weekly jobless benefits claims after recent declines. Economists predicted a slightly smaller rise.
The cost of a 30-year fixed mortgage rose to an average of 4.24% this week, according to Freddie Mac, up from an average of 4.23% last week and up from an all-time low, dating back to 1971, of 4.19% last month. The average rate on 15-year fixed loan fell to 3.63% from 3.66% last week, while five-year adjustable-rate mortgages fell to their lowest level, 3.39%, in at least five years, down from 3.41%.
In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. The company does not plan to concentrate on making large acquisitions in the near future, the report said.
JPMorgan Chase ( JPM ) said its will start refiling foreclosure documents in a couple of weeks. JPMorgan, along with several other banks, temporarily stopped home seizures after finding problems with foreclosure documents For its part, JPMorgan halted foreclosure proceedings in 40 states, affecting about 127,000 loans, the report said.
Walgreen Co. ( WAG ) said it has increased its share of the retail pharmacy market to 19.5% from 18.2% in 2008, according to a Reuters report. The drugstore chain--the largest in the U.S.--also said it is on track to meet its goal of $1 billion in savings for 2011, the report said.
Shares of Ford Motor ( F ) are in solidly positive territory a day after the company reported sales that outperformed the U.S. auto industry. Yesterday, Ford said U.S. October sales increased by 19.2% to 157,935 vehicles from 132,483 a year ago. Also yesterday, General Motors filed for a $13 billion initial public offering that places a value of $49 billion on that automaker, assuming the exercise of all warrants, Reuters reported.
Tesla Motors, Inc. ( TSLA ) is higher after the company said Panasonic Corp. had invested $30 million through a private placement of stock. Panasonic bought the shares at $21.15, a discount to Tesla's Wednesday close of $21.77. The stock is up about 40% since it went public on June 29, according to MarketWatch.
BHP Billiton Ltd ( BHP ) is surging after the Canadian government rejected the company's $40 billion bid for Potash Corp of Saskatchewan ( POT ). While BHP has been given the opportunity to review its options and 30 days to review its bid, most analysts expected the deal to fall through.
In the latest earnings news:
--Onyx Pharmaceuticals Inc ( ONXX ) is higher in morning trade after its third quarter results jumped on the back of license deal worth $59 million.
--Sunrise Senior Living ( SRZ ) are higher as the company reported that it swung to a profit in its third quarter, helped by buyout fees related to its settlement with HCP ( HCP ), Reuters reported. Sunrise ( SRZ ) reported Q3 revenue of $383.3 million, up from $361.5 million in Q3 last year. Net income was $0.33, vs. a year ago loss of $0.88 per share.
--Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations. Adjusted EPS was $2.19 versus the $2.24 consensus.
--Liz Claiborne ( LIZ ) is higher after it narrowed is Q3 loss compared with a year ago on cost cutting and higher margins, although it still missed the Street on earnings and sales.
--Whole Foods Market Inc ( WFMI ) is higher as the organic supermarket group reported strong earnings results for the fourth quarter and raised its full-year outlook.
--Kohl's ( KSS ) is down after it says October same-store sales fell 2.5%. It sees Q3 EPS between $0.57 to $0.58, consistent with the low end of its previous guidance of $0.57 to $0.63, including an accounting correction resulting from recently identified errors in the company's accounting for leased properties.
--Qualcomm ( QCOM ) is up near 6%, after the company reported fourth quarter results that beat expectations on the back of strong smartphone sales.
--Cablevision Systems Corp ( CVC ) is lower after the cable group reported third quarter earnings that fell short of expectations.
Commodities are mixed as December gold contracts are up $41, or 3.04%, to $1,378 an ounce while December crude contacts are up 1.89%, or $1.60, at $86.29 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is up 1.5% to $37.29 and the United States Natural Gas fund ( UNG ) is down 1.81% to $5.42.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is down 2.4% to $134.73. Market Vectors Gold Miners ( GDX ) is down 3.79% to $59.40. iShares Silver Trust ( SLV ) is down 3.55% to $25.11.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. In the latest earnings news: --Onyx Pharmaceuticals Inc ( ONXX ) is higher in morning trade after its third quarter results jumped on the back of license deal worth $59 million. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations. --Whole Foods Market Inc ( WFMI ) is higher as the organic supermarket group reported strong earnings results for the fourth quarter and raised its full-year outlook.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. --Sunrise Senior Living ( SRZ ) are higher as the company reported that it swung to a profit in its third quarter, helped by buyout fees related to its settlement with HCP ( HCP ), Reuters reported. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. Earlier, the Fed announced plans to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month and slightly above what Wall Street was expecting. Yesterday, Ford said U.S. October sales increased by 19.2% to 157,935 vehicles from 132,483 a year ago.
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ae5758dc-189b-4737-bcd7-78f64cff48a1
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726974.0
|
2010-11-04 00:00:00 UTC
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Mid-Day Update: Stocks In Strong Advance as Investors Cheer Fed Move, Shrug Off Jobless Data
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DELL
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https://www.nasdaq.com/articles/mid-day-update-stocks-strong-advance-investors-cheer-fed-move-shrug-jobless-data-2010-11
|
nan
|
nan
|
Here's where markets stand at mid-day:
-NYSE up 133.17 (+1.75%) to 7,741.58
-DJIA up 177.63 (+1.58%) to 11,392.76
-S&P 500 up 17.10 (+1.44%) to 1,215.16
-Nasdaq up 31.60 (+1.24%) to 2,571.11
GLOBAL SENTIMENT
Hang Seng up 1.62%
Nikkei up 2.17%
FTSE up 1.8%
MID-DAY NYSE INDEX WATCH
NYSE Energy up 2.59% at 11,791.71
NYSE Financial up 1.82% at 4,886.26
NYSE Health Care up 0.47% at 6,526.74
NYSE Arca Tech 100 up 1.01% at 1,044.27
UPSIDE MOVERS
(+) WFMI (+13.9%) continues evening gain that followed solid earnings.
(+) QCOM (+6%) continues evening gain that followed upbeat earnings.
(+) F (+4.7%) gaining in active volume after encouraging October sales.
(+) M (+4.3%) gains after Oct. sales.
(+) URRE (+7.6%) inks LOI with Cameco unit.
(+) ARO (+1.3%) down after sales data.
DOWNSIDE MOVERS
(-) ALU (-7.7%) draws negative reaction to revenue news.
(-) COCO (-8.9%) downgraded.
(-) KSS (-2.4%) gains after dip in sales, backing EPS guidance.
(-) SIRI (-0.64%) gains after earnings.
MARKET DIRECTION
Stocks are broadly higher, extending prior session gains, after the Federal Reserve announced additional steps to spur the U.S. economy. Investors mostly shrugged off new data that showed an increase in jobless benefits claims.
Earlier, the Fed announced plans to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month and slightly above what Wall Street was expecting.
Along with that, the Fed will also keep reinvesting principal payments from its securities holdings. Stocks were choppy after the announcement, having gained in the build-up to the official announcement.
A separate report from the Labor Department showed a 20,000-person jump in weekly jobless benefits claims after recent declines. Economists predicted a slightly smaller rise.
The cost of a 30-year fixed mortgage rose to an average of 4.24% this week, according to Freddie Mac, up from an average of 4.23% last week and up from an all-time low, dating back to 1971, of 4.19% last month. The average rate on 15-year fixed loan fell to 3.63% from 3.66% last week, while five-year adjustable-rate mortgages fell to their lowest level, 3.39%, in at least five years, down from 3.41%.
In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. The company does not plan to concentrate on making large acquisitions in the near future, the report said.
JPMorgan Chase ( JPM ) said its will start refiling foreclosure documents in a couple of weeks. JPMorgan, along with several other banks, temporarily stopped home seizures after finding problems with foreclosure documents For its part, JPMorgan halted foreclosure proceedings in 40 states, affecting about 127,000 loans, the report said.
Walgreen Co. ( WAG ) said it has increased its share of the retail pharmacy market to 19.5% from 18.2% in 2008, according to a Reuters report. The drugstore chain--the largest in the U.S.--also said it is on track to meet its goal of $1 billion in savings for 2011, the report said.
Shares of Ford Motor ( F ) are in solidly positive territory a day after the company reported sales that outperformed the U.S. auto industry. Yesterday, Ford said U.S. October sales increased by 19.2% to 157,935 vehicles from 132,483 a year ago. Also yesterday, General Motors filed for a $13 billion initial public offering that places a value of $49 billion on that automaker, assuming the exercise of all warrants, Reuters reported.
Tesla Motors, Inc. ( TSLA ) is higher after the company said Panasonic Corp. had invested $30 million through a private placement of stock. Panasonic bought the shares at $21.15, a discount to Tesla's Wednesday close of $21.77. The stock is up about 40% since it went public on June 29, according to MarketWatch.
BHP Billiton Ltd ( BHP ) is surging after the Canadian government rejected the company's $40 billion bid for Potash Corp of Saskatchewan ( POT ). While BHP has been given the opportunity to review its options and 30 days to review its bid, most analysts expected the deal to fall through.
In the latest earnings news:
--Onyx Pharmaceuticals Inc ( ONXX ) is higher in morning trade after its third quarter results jumped on the back of license deal worth $59 million.
--Sunrise Senior Living ( SRZ ) are higher as the company reported that it swung to a profit in its third quarter, helped by buyout fees related to its settlement with HCP ( HCP ), Reuters reported. Sunrise ( SRZ ) reported Q3 revenue of $383.3 million, up from $361.5 million in Q3 last year. Net income was $0.33, vs. a year ago loss of $0.88 per share.
--Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations. Adjusted EPS was $2.19 versus the $2.24 consensus.
--Liz Claiborne ( LIZ ) is higher after it narrowed is Q3 loss compared with a year ago on cost cutting and higher margins, although it still missed the Street on earnings and sales.
--Whole Foods Market Inc ( WFMI ) is higher as the organic supermarket group reported strong earnings results for the fourth quarter and raised its full-year outlook.
--Kohl's ( KSS ) is down after it says October same-store sales fell 2.5%. It sees Q3 EPS between $0.57 to $0.58, consistent with the low end of its previous guidance of $0.57 to $0.63, including an accounting correction resulting from recently identified errors in the company's accounting for leased properties.
--Qualcomm ( QCOM ) is up near 6%, after the company reported fourth quarter results that beat expectations on the back of strong smartphone sales.
--Cablevision Systems Corp ( CVC ) is lower after the cable group reported third quarter earnings that fell short of expectations.
Commodities are mixed as December gold contracts are up $41, or 3.04%, to $1,378 an ounce while December crude contacts are up 1.89%, or $1.60, at $86.29 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is up 1.5% to $37.29 and the United States Natural Gas fund ( UNG ) is down 1.81% to $5.42.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is down 2.4% to $134.73. Market Vectors Gold Miners ( GDX ) is down 3.79% to $59.40. iShares Silver Trust ( SLV ) is down 3.55% to $25.11.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. In the latest earnings news: --Onyx Pharmaceuticals Inc ( ONXX ) is higher in morning trade after its third quarter results jumped on the back of license deal worth $59 million. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations. --Whole Foods Market Inc ( WFMI ) is higher as the organic supermarket group reported strong earnings results for the fourth quarter and raised its full-year outlook.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. --Sunrise Senior Living ( SRZ ) are higher as the company reported that it swung to a profit in its third quarter, helped by buyout fees related to its settlement with HCP ( HCP ), Reuters reported. --Shares of independent oil and gas exploration company Apache Corp ( APA ) are higher despite reporting third quarter earnings that missed Wall Street expectations.
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In company news, Dell Inc. ( DELL ) said its plans to focus M&A activity on expanding IT services in specific markets as the company looks to diversify beyond its core PC business, Reuters reported, citing a senior executive with the company. (+) M (+4.3%) gains after Oct. sales. (-) KSS (-2.4%) gains after dip in sales, backing EPS guidance.
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39426b58-db21-4fdf-b3cf-03fc84af334a
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726975.0
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2010-11-03 00:00:00 UTC
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Apple's iPad commands Q3 tablet sales
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DELL
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https://www.nasdaq.com/articles/apples-ipad-commands-q3-tablet-sales-2010-11-03
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nan
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nan
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The iPad - the overwhelming champion of the tablet market in the third quarter - enjoyed the market dominance its chief executive officer predicted last month.
Apple ( AAPL ) commanded 95 percent of tablet sales in July, August and September, according to a Strategy Analytics report and Forbes.com . Of the 4.4 tablets sold in the third quarter, 4.19 million were iPads. During the second quarter, 3.5 million tablets sold.
Both Hewlett-Packard ( HPQ ) and Research in Motion ( RIMM ) are devising and manufacturing competitors to Apple's iPad, but those machines have yet to see the market.
The chief executives of Research in Motion and Apple verbally sparred late last month over the iPad's dominance and Research in Motion's PlayBook. Steve Jobs of Apple said during a conference call that the status of his company's machine as customers' heavy favorite was unshakable. In response, Jim Balsillie of Research in Motion admonished Jobs for imposing on customers' thought processes.
Sales of Dell ( DELL ) and Motorola ( MOT ) tablets, which run on the Android manufactured by Google ( GOOG ), accounted for 2.3 percent of sales during the third quarter, which plunged from 2.9 percent in the second quarter.
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.
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Sales of Dell ( DELL ) and Motorola ( MOT ) tablets, which run on the Android manufactured by Google ( GOOG ), accounted for 2.3 percent of sales during the third quarter, which plunged from 2.9 percent in the second quarter. Apple ( AAPL ) commanded 95 percent of tablet sales in July, August and September, according to a Strategy Analytics report and Forbes.com . Both Hewlett-Packard ( HPQ ) and Research in Motion ( RIMM ) are devising and manufacturing competitors to Apple's iPad, but those machines have yet to see the market.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Sales of Dell ( DELL ) and Motorola ( MOT ) tablets, which run on the Android manufactured by Google ( GOOG ), accounted for 2.3 percent of sales during the third quarter, which plunged from 2.9 percent in the second quarter. During the second quarter, 3.5 million tablets sold.
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Sales of Dell ( DELL ) and Motorola ( MOT ) tablets, which run on the Android manufactured by Google ( GOOG ), accounted for 2.3 percent of sales during the third quarter, which plunged from 2.9 percent in the second quarter. The iPad - the overwhelming champion of the tablet market in the third quarter - enjoyed the market dominance its chief executive officer predicted last month. The chief executives of Research in Motion and Apple verbally sparred late last month over the iPad's dominance and Research in Motion's PlayBook.
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Sales of Dell ( DELL ) and Motorola ( MOT ) tablets, which run on the Android manufactured by Google ( GOOG ), accounted for 2.3 percent of sales during the third quarter, which plunged from 2.9 percent in the second quarter. The iPad - the overwhelming champion of the tablet market in the third quarter - enjoyed the market dominance its chief executive officer predicted last month. The chief executives of Research in Motion and Apple verbally sparred late last month over the iPad's dominance and Research in Motion's PlayBook.
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9e90cf39-fbb4-4ad7-9460-d0ccad110dfe
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726976.0
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2010-11-02 00:00:00 UTC
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Mid-Day Update: Major Indexes Moderately Higher as Americans Head to the Polls; M&A Still Active
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DELL
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https://www.nasdaq.com/articles/mid-day-update-major-indexes-moderately-higher-americans-head-polls-ma-still-active-2010
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nan
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nan
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Here's where markets stand at mid-day:
-NYSE up 63.58 (+0.85%) to 7,571.48
-DJIA up 61 (+0.43%) to 11,186.07
-S&P 500 up 7.57 (0.64%) to 1,192.03
-Nasdaq up 19.84 (+0.79%) to 2,524.54
GLOBAL SENTIMENT
Hang Seng up 0.08%
Nikkei up 0.06%
FTSE up 1.12%
MID-DAY NYSE INDEX WATCH
NYSE Energy up 1.29% at 11,429.24
NYSE Financial up 0.58% at 4,756.77
NYSE Health Care up 0.65% at 6,473.41
NYSE Arca Tech 100 up 0.78% at 1,025.35
UPSIDE MOVERS
(+) BP (+1.5%) profits decline but beat expectations.
(+) MA (+3.0%) beat with results.
(+) ARTG (+45.4%) sold to Oracle ( ORCL ).
(+) ICGN (+0.8%) secures grant money.
(+) RDN (+14.6%) reports smaller-than-expected Q3 loss.
(+) NVMI (+3.6%) expects sales to meet or exceed guidance.
(+) RGN (+5.5%) jumps on positive study results.
(+) MPEL (+3.7%) swings to profit, beats with sales.
(+) ARO (+0.1%) downgraded.
DOWNSIDE MOVERS
(-) PFE (-1.8%) gives up early gain in EPS beat, mixed guidance.
(-) WFR (-5.0%) continues evening decline that followed earnings miss, withdrawn guidance.
(-) ESLR (-10.8%) continues evening slide after narrower loss misses Street view.
(-) CLX (-4.1%) misses with Q3 and guides for FY EPS to miss.
(-) SGEN (-8.2%) downgraded.
(-) MVIS (-16%) reports wider-than-expected loss.
(-) TEVA (-1.6%) beats with results.
(-) RIMM (-0.2%) initiated with favorable analyst coverage.
MARKET DIRECTION
Stocks are logging gains in mid-day trading as Americans head to the polls in an election expected to result in Republican power-shift in Congress of at least one legislative chamber. Also, investors are eying the U.S. Federal Reserve, which began a two-day meeting today, and is expected to announce monthly asset purchases of around $100 billion over the next six months to spur the sluggish recovery.
Merger and acquisition activity also continued today, buoying stocks.
In the latest round of M&A news, Oracle Corp. ( ORCL ) is higher after announcing that it has agreed to buy Art Technology Group Inc. ( ARTG ) for $1 billion in cash. The $6-per-share purchase price is a 46% premium over Art Technology's closing price on Monday. Shares have soared by a near equal 45%, up $1.86 at $5.96 in morning trading. The deal needs shareholder and regulatory approval, and Oracle expects to close early next year.
Meanwhile, in bid to increase its stake in motion-sensing technology, Microsoft ( MSFT ) acquired Canesta, a company that designs microchips that enable computers to see images in three dimensions, Reuters reported. The purchase of the privately-held Canesta comes as the software giant is looking to launch its Kinect motion-controller next month in an effort to spark sales of its XBox video-game console, the report says.
BHP Billiton ( BHP ) shares are just higher on market buzz that its bid for Potash ( POT ) was rejected, according to a Reuters report. BHP was not available for comment, the report said. No decision was made by Canadian officials about whether the $39 billion bid for Potash should go forward, but news reports indicated that bearuacrats in that country were advising that it should proceed.
Dell Inc ( DELL ) is higher on news the computer maker is expected to announce the purchase of a cloud computer company later today. CEO Michael Dell also reportedly said at a Hong Kong event that the company will bolster its tablet computer line to compete head-on with rivals such as Apple ( AAPL ).
Ronald Kruszewski, Stifel Financial Corp. ( SF ) chief executive, said that the midterm elections could assist financial markets and the U.S. economy if spending gets reigned it, Reuters reports. Such assistance is particularly important for Stifel, the report said, noting it is a midd-market investment bank that underwrites stock offerings and manages money for individual investors.
In the latest earnings news:
--Pfizer ( PFE ) is down in regular-session trading. The drug giant reported Q3 adjusted EPS of $0.54 compared to $0.51 a year earlier and topping the Thomson Reuters mean analyst estimate for $0.51. Revenue of $16.2 billion is up 39% from $11.6 billion a year earlier. The Street expected $16.68 billion. The company is increasing its 2010 adjusted diluted EPS guidance to a range of $2.17 to $2.22 from a range of $2.10 to $2.20. The Street is at $2.22.
--BP ( BP ) is higher after reporting a 67% drop in third-quarter net profit due to another $7.7 billion of charges from the Gulf of Mexico oil spill. Adjusted underlying profit, however, beat consensus forecasts, MarketWatch reported.
--Medco Health Solutions ( MHS ) is up 9% after the company reported positive third quarter earnings and adjusted its full-year earnings guidance. Medco reported Q3 adjusted EPS of $0.91 compared to $0.75 a year earlier and topping the Street view for $0.88. Revenue reached $16.32 billion from $14.79 billion.
--Kellogg ( K ) is lower after a slowdown in cereal sales in the third quarter hurt the company's bottom line. Kellogg has struggled after 28 million boxes of Froot Loops, Apple Jacks, Honey Smacks, and Corn Pops were recalled in June. The four brands are seen to make up about 16% of the company's total cereal sales.
--Shares of NYSE Euronext ( NYX ) are lower in regular-session trading as the exchange said that its third-quarter profit dropped 12% as a global slowdown in trading hit. According to a Reuters report, NYSE Euronext management said that trading during the quarter was unusually quiet, a trend that is unlikely to continue into the next year.
Commodities are higher. December gold contracts are up $2, or 0.12%, to $1,352 an ounce while December crude contacts are up 0.99%, or $0.81, at $83.76 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is up 1.03% to $36.18 and the United States Natural Gas fund ( UNG ) is up 1.45% to $5.60.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.18% to $132.16. Market Vectors Gold Miners ( GDX ) is up 0.54% to $57.55. iShares Silver Trust ( SLV ) is up 0.50% to $24.20.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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CEO Michael Dell also reportedly said at a Hong Kong event that the company will bolster its tablet computer line to compete head-on with rivals such as Apple ( AAPL ). Dell Inc ( DELL ) is higher on news the computer maker is expected to announce the purchase of a cloud computer company later today. Stocks are logging gains in mid-day trading as Americans head to the polls in an election expected to result in Republican power-shift in Congress of at least one legislative chamber.
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Dell Inc ( DELL ) is higher on news the computer maker is expected to announce the purchase of a cloud computer company later today. CEO Michael Dell also reportedly said at a Hong Kong event that the company will bolster its tablet computer line to compete head-on with rivals such as Apple ( AAPL ). The drug giant reported Q3 adjusted EPS of $0.54 compared to $0.51 a year earlier and topping the Thomson Reuters mean analyst estimate for $0.51.
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Dell Inc ( DELL ) is higher on news the computer maker is expected to announce the purchase of a cloud computer company later today. CEO Michael Dell also reportedly said at a Hong Kong event that the company will bolster its tablet computer line to compete head-on with rivals such as Apple ( AAPL ). --BP ( BP ) is higher after reporting a 67% drop in third-quarter net profit due to another $7.7 billion of charges from the Gulf of Mexico oil spill.
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Dell Inc ( DELL ) is higher on news the computer maker is expected to announce the purchase of a cloud computer company later today. CEO Michael Dell also reportedly said at a Hong Kong event that the company will bolster its tablet computer line to compete head-on with rivals such as Apple ( AAPL ). (-) ESLR (-10.8%) continues evening slide after narrower loss misses Street view.
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cc9c04cd-6b8b-4f34-9dcb-f40ed8bef4eb
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726977.0
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2010-10-30 00:00:00 UTC
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Can Microsoft's Windows Phone 7 threaten Apple and RIM?
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DELL
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https://www.nasdaq.com/articles/can-microsofts-windows-phone-7-threaten-apple-and-rim-2010-10-30
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nan
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nan
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Microsoft ( MSFT ) is launching its new Windows Phone 7 operating system on nine mobile phones. The company is partnering with AT&T ( T ) and T-Mobile and is banking on phones from Dell ( DELL ), HTC, LG and Samsung. Microsoft's goal is to push back on the dominance of the smartphone market by Nokia's ( NOK ) Symbian, RIM's ( RIMM ) OS, Apple's (AAPL) iOS and Google's (GOOG) Android.
We believe that the OS's compatibility with the XBox Live, tight integration with Office 2010 and AT&T's U-verse home TV services are some of the attractive features that could threaten market share of competitors such as Apple and Research in Motion in the consumer as well as the enterprise smartphone segment.
Can Windows Phone 7 threaten Apple in the consumer segment?
According to Gartner , Microsoft's share of the smartphone operating system market has nearly halved, falling to 5% in the second quarter of 2010 from 9.3% a year ago. Microsoft failed to catch up with its peers, primarily Apple's iPhone, RIM's BlackBerry and Google's Android in terms of mobile software innovation.
In another article , we talked about how Microsoft's Windows Phone 7 won't have any major impact on Microsoft's stock as the segment contributes little to the overall value of the firm. However, Windows Phone 7 has some attractive features for consumers, which could slow down the growth of Apple iOS, BlackBerry OS and the Android OS.
Microsoft Windows Phone 7 provides integration capabilities with XBox Live that will potentially make smartphones using Windows Phone 7 attractive to gamers. XBox Live is an online gaming service that charges users a fee to play multi-player gaming, and has nearly 10 million paying subscribers.
Another attractive feature is the integration of AT&T's U-Verse home TV service which would allow customers to sign up for an entertainment plan to access cable shows found on its TV service. The mobile service will cost $9.99 a month for non U-Verse customers, and will be free for high-end U-Verse subscribers. We estimate that there are around 3 million U-Verse TV subscribers.
We believe that the Apple iOS, used in the iPhone and iPad, will continue to gain market share. According to our estimates, the Apple iPhone will gain market share from around 2% in 2009 to about 11% in the global mobile phones market over our forecast period.
However, there could be a downside of 5% to Apple's stock if its market share increases slowly to reach 10% by 2016, instead of the 11% that we currently forecast.
Can Windows Phone 7 threaten RIM in the enterprise segment?
Microsoft already has a big presence in enterprises with its dominance in the PC OS and productivity software market. It can leverage its large enterprise customer base to grow its presence in the enterprise mobile phone market. Windows Phone 7 offers tight integration capabilities with Office 2010, including products such as SharePoint, OneNote, PowerPoint and Outlook e-mail and calendar.
RIM is the market leader in the enterprise mobile phones market with a share of around 66% as of August 2010. However, given the threat posed by Microsoft with its new operating system, Microsoft could take away some of RIM's share in the mobile phone's enterprise segment.
RIM's share of the global mobile phone market should reach 3.7% this year, up from 2.7% in 2009. We expect this growth to continue in coming years, reaching 8% by the end of Trefis forecast period.
However, there could be a downside of 10% to our price estimate for RIM if its market share only reaches 7% by 2016, instead of the 8% that we currently forecast.
You can see the complete $361 Trefis Price estimate for Apple's stock here.
You can see the complete $72 Trefis Price estimate for RIM's stock here .
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.
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The company is partnering with AT&T ( T ) and T-Mobile and is banking on phones from Dell ( DELL ), HTC, LG and Samsung. Microsoft's goal is to push back on the dominance of the smartphone market by Nokia's ( NOK ) Symbian, RIM's ( RIMM ) OS, Apple's (AAPL) iOS and Google's (GOOG) Android. We believe that the OS's compatibility with the XBox Live, tight integration with Office 2010 and AT&T's U-verse home TV services are some of the attractive features that could threaten market share of competitors such as Apple and Research in Motion in the consumer as well as the enterprise smartphone segment.
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The company is partnering with AT&T ( T ) and T-Mobile and is banking on phones from Dell ( DELL ), HTC, LG and Samsung. We believe that the OS's compatibility with the XBox Live, tight integration with Office 2010 and AT&T's U-verse home TV services are some of the attractive features that could threaten market share of competitors such as Apple and Research in Motion in the consumer as well as the enterprise smartphone segment. Microsoft failed to catch up with its peers, primarily Apple's iPhone, RIM's BlackBerry and Google's Android in terms of mobile software innovation.
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The company is partnering with AT&T ( T ) and T-Mobile and is banking on phones from Dell ( DELL ), HTC, LG and Samsung. We believe that the OS's compatibility with the XBox Live, tight integration with Office 2010 and AT&T's U-verse home TV services are some of the attractive features that could threaten market share of competitors such as Apple and Research in Motion in the consumer as well as the enterprise smartphone segment. According to our estimates, the Apple iPhone will gain market share from around 2% in 2009 to about 11% in the global mobile phones market over our forecast period.
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The company is partnering with AT&T ( T ) and T-Mobile and is banking on phones from Dell ( DELL ), HTC, LG and Samsung. We believe that the OS's compatibility with the XBox Live, tight integration with Office 2010 and AT&T's U-verse home TV services are some of the attractive features that could threaten market share of competitors such as Apple and Research in Motion in the consumer as well as the enterprise smartphone segment. Microsoft Windows Phone 7 provides integration capabilities with XBox Live that will potentially make smartphones using Windows Phone 7 attractive to gamers.
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094e813b-131a-4539-986e-2dd8a69e3ebb
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726978.0
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2010-10-27 00:00:00 UTC
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Forget Apple and RIMM: Buy This Smartphone Stock Instead
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DELL
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https://www.nasdaq.com/articles/forget-apple-and-rimm-buy-smartphone-stock-instead-2010-10-27
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nan
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nan
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It's time to write the obituary for traditional cell phones. Apple (Nasdaq: AAPL) has changed the game with its iPhone, and there are now a raft of other smartphones on the market as well.
My favorite play on this theme is Synaptics (Nasdaq: SYNA) , which was a pioneer in touch-screen technology. The company is not without its detractors (as I'll detail in a moment), but it is a proven play on the touch-screen revolution.
Until recently, Synaptics was a clear-cut growth story. Sales rose from $185 million in fiscal (June) 2006, to $267 million in fiscal 2007, to $473 million by fiscal 2009. But the global slowdown, coupled with increasing competition, led to a sharp slowdown in sales growth this past year to just +9%. The market for touch-screen technology should rebound nicely in 2011 as new devices hit the market, but Synaptics is now dealing with a host of new competitors, including Atmel (Nasdaq: ATML) and Cypress Semi ( CY ) . So the company has had to deal with a smaller slice of a much larger pie. That means sales are only expected to rise +10% to +15% this year and next.
Yet investors may be underestimating the changing nature of computing. Notebook sales are slumping because consumers have already started (or will soon be) buying tablet computers to replace them. The key difference between notebooks and these tablets: touch-screens. Who needs a keyboard when you can simply tap on what you want?
Apple may have kick-started the tablet computer industry, but a much broader onslaught is about to arrive. The likes of Hewlett-Packard ( HPQ ) , Dell (Nasdaq: DELL) , Samsung, Research In Motion (Nasdaq: RIMM) and others are all rolling out tablet computers. And as they're much larger than smartphones, touch-screen makers like Synaptics can charge a lot more for touch-sensitive glass.
Yet the company's detractors question whether Synaptics can replicate its success in the tablet market. The company has not formally announced any major design wins, but you need to know how the tech industry works to see why that hasn't happened yet. Tech vendors unveil technologies that must go through a six to 12-month testing phase with clients. Synaptics unveiled its new ClearPad tablet touch screen in late July, and it is simply too soon for customers to announce that Synaptics' technology will be used. But if history is any guide, Synaptics' heavy R&D means that the ClearPad has features that many rivals lack, such as precise inputting, the ability to read the movements of 10 fingers, and very fast response time. As design wins eventually roll in, the company's languishing stock, which is off -20% since early August, should rebound nicely.
Solidcash flow
Whether the company grows at a +10% clip or a +25% clip, you can be sure that cash flow will be prodigious. Free cash flow has risen every single year since fiscal 2007 and now exceeds $100 million annually. That has pushed the company's cash balance up to more than $7 a share, which has enabled it to announce ever larger stock buybacks.
Action to Take --> Synaptics' shares are a good growth story, trading at around 10 times projected fiscal 2012 profits. As the company is increasingly seen as a play on tablet computers, that multiple should expand. An expansion in the price-to-earnings (P/E) ratio up to 15 implies +50% upside, which could be reached once new tablet computer design wins are announced.
-- David Sterman
David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and a Managing Editor at TheStreet.com. Read More...
P.S. -- For the past few weeks we've been telling you about some of the hottest investment opportunities for 2011. From tiny nuclear power plants that can be buried in your lawn, to revolutionary pain killers made from cobra venom, we're convinced the companies behind these products will soar in the coming year. To get briefed on these opportunities, and several others that we think could return many times your money, please read this memo.
Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The likes of Hewlett-Packard ( HPQ ) , Dell (Nasdaq: DELL) , Samsung, Research In Motion (Nasdaq: RIMM) and others are all rolling out tablet computers. But if history is any guide, Synaptics' heavy R&D means that the ClearPad has features that many rivals lack, such as precise inputting, the ability to read the movements of 10 fingers, and very fast response time. Action to Take --> Synaptics' shares are a good growth story, trading at around 10 times projected fiscal 2012 profits.
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The likes of Hewlett-Packard ( HPQ ) , Dell (Nasdaq: DELL) , Samsung, Research In Motion (Nasdaq: RIMM) and others are all rolling out tablet computers. An expansion in the price-to-earnings (P/E) ratio up to 15 implies +50% upside, which could be reached once new tablet computer design wins are announced. -- David Sterman David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks.
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The likes of Hewlett-Packard ( HPQ ) , Dell (Nasdaq: DELL) , Samsung, Research In Motion (Nasdaq: RIMM) and others are all rolling out tablet computers. The market for touch-screen technology should rebound nicely in 2011 as new devices hit the market, but Synaptics is now dealing with a host of new competitors, including Atmel (Nasdaq: ATML) and Cypress Semi ( CY ) . Synaptics unveiled its new ClearPad tablet touch screen in late July, and it is simply too soon for customers to announce that Synaptics' technology will be used.
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The likes of Hewlett-Packard ( HPQ ) , Dell (Nasdaq: DELL) , Samsung, Research In Motion (Nasdaq: RIMM) and others are all rolling out tablet computers. Synaptics unveiled its new ClearPad tablet touch screen in late July, and it is simply too soon for customers to announce that Synaptics' technology will be used. As the company is increasingly seen as a play on tablet computers, that multiple should expand.
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6d40a66f-e749-4d37-b6e4-31fd19b475df
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726979.0
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2010-10-26 00:00:00 UTC
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4 Stocks That Could Plummet in the Weeks Ahead
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DELL
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https://www.nasdaq.com/articles/4-stocks-could-plummet-weeks-ahead-2010-10-26
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nan
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nan
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After a furious two-month rally that has pushed the major indices to yearly highs, it seems to be an appropriate time to look at stocks that have been receiving perhaps too much investor affection. When the market takes a breather, these are often the first stocks to be dumped by momentum investors.
So, I ran a screen for stocks that have risen at least +40% in the last three months and sport projected 2011 price-to-earnings (P/E) multiples above 40. There are surely some high-growth names here, but there are also low-growth stocks that, at least at first glance, don't merit such a strong move.
The logical rebounders
Some of these stocks are here simply because they were likely too undervalued earlier in the summer. Back in July, I suggested that Amazon.com (Nasdaq: AMZN) , trading at $120, was due for a rally and predicted that "as investors start to once again embrace the company's robust long-term outlook, shares should eventually power past the $150 mark seen earlier this spring." With shares now at $170, it's hard to find any appeal in this stock, as it now trades for 47 times next year's profits.
In a similar vein, health care information vendor athenahealth (Nasdaq: ATHN) also looked like the victim of too much pessimism early this summer. [ Read my take here ]
Now with a much loftier P/E multiple, which is nearly twice next year's sales growth forecast, it looks like too much optimism is the name of the game.
When the market gets carried away
I am among thousands of very happy Netflix (Nasdaq: NFLX) customers. The video delivery and streaming service continues to attract new subscribers at a stunning pace, and that's pushed its stock into the stratosphere, trading at more than 40 times projected 2011 profits. But I've seen this picture before. In 1999, Walmart ( WMT ) sported a very rich multiple, as investors assumed that strong growth would continue forever. But growth started to decelerate and shares slowly lost that P/E premium. A decade later, shares of Walmart have gone nowhere, and still-rising sales were met with an ever-shrinking P/E. I fear a similar fate will befall Netflix.
But Netflix is also a company that cannot afford to stumble. One so-so quarter, and this stock is toast, as expectations are so high. If you own shares of Netflix, it may be time to part with a stock that has been a real winner for you.
Travelzoo's (Nasdaq: TZOO) growth spurt
This online travel site has surely posted impressive recent results. Profits for the September quarter were double the consensus forecast, as the company saw a +17% jump in revenue. Results were depressed in 2009, but demand for travel is clearly on the mend. Yet investors are clearly getting carried away, assuming that this company can grow at a very fast pace in the next few years. After all, the online travel market is largely mature, with formidable competition coming from the likes of Priceline.com (Nasdaq: PCLN) and Expedia (Nasdaq: EXPE) .
Travelzoo's sales are likely to rise around +20% this year and +10% next year -- logical assumptions in light of the +10% annualized growth posted in 2007, 2008 and 2009. So why do shares trade at 40 times next year's projected profits? Because investors are still reacting to recent strong results, and momentum investors smell a winning continuing trade.
I'd hate to be around when the momentum investors take profits. We may already be there. Shares surged strongly last week and on Monday, but are starting to drift back Tuesday.
Room to run?
Not all of these strong gainers look ripe for profit-taking. For example, micro-cap Cleveland BioLabs (Nasdaq: CBLI) , which has doubled in the last three months, could rise much higher if it sees strong demand for its anti-radiation treatment. The U.S. government may eventually look to stockpile the company's drug in order to treat to the effects of a potential nuclear attack, such as with a dirty bomb. As with any small biotech, this stock remains speculative, and investors should do lots of homework before jumping in.
In a similar vein, Depomed (Nasdaq: DEPO) is another promising biotech play that could easily trend much higher -- if all goes according to plan. The company's oral drug delivery platform has brought interest from a number of major large drug companies that aim to license the technology. Depomed already uses that technology in its drugs that treat diabetes and urinary tract infection, and is also testing other drugs that have large potential market sizes. The company's potential licensees are hoping to secure FDA approval in the next few quarters. Yet I repeat, this remains speculative, and investors should do lots of homework before jumping in.
Action to Take --> A strong run for a stock is not always a reason to sell. Back in the 1990s, Cisco Systems (Nasdaq: CSCO) , Dell (Nasdaq: DELL) and Walmart routinely occupied the annual best-performing lists, year after year after year. But it's hard to find any stocks in this group that are on the cusp of a robust long-term rise in sales, with the possible exception of the biotechs noted above.
With the market posting a furious recent rally, a reversal may be the next move. And if that happens, these richly-priced stocks may be especially vulnerable.
David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and a Managing Editor at TheStreet.com. Read More...
Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Back in the 1990s, Cisco Systems (Nasdaq: CSCO) , Dell (Nasdaq: DELL) and Walmart routinely occupied the annual best-performing lists, year after year after year. Back in July, I suggested that Amazon.com (Nasdaq: AMZN) , trading at $120, was due for a rally and predicted that "as investors start to once again embrace the company's robust long-term outlook, shares should eventually power past the $150 mark seen earlier this spring." The video delivery and streaming service continues to attract new subscribers at a stunning pace, and that's pushed its stock into the stratosphere, trading at more than 40 times projected 2011 profits.
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Back in the 1990s, Cisco Systems (Nasdaq: CSCO) , Dell (Nasdaq: DELL) and Walmart routinely occupied the annual best-performing lists, year after year after year. Travelzoo's (Nasdaq: TZOO) growth spurt This online travel site has surely posted impressive recent results. As with any small biotech, this stock remains speculative, and investors should do lots of homework before jumping in.
|
Back in the 1990s, Cisco Systems (Nasdaq: CSCO) , Dell (Nasdaq: DELL) and Walmart routinely occupied the annual best-performing lists, year after year after year. Back in July, I suggested that Amazon.com (Nasdaq: AMZN) , trading at $120, was due for a rally and predicted that "as investors start to once again embrace the company's robust long-term outlook, shares should eventually power past the $150 mark seen earlier this spring." With shares now at $170, it's hard to find any appeal in this stock, as it now trades for 47 times next year's profits.
|
Back in the 1990s, Cisco Systems (Nasdaq: CSCO) , Dell (Nasdaq: DELL) and Walmart routinely occupied the annual best-performing lists, year after year after year. Travelzoo's sales are likely to rise around +20% this year and +10% next year -- logical assumptions in light of the +10% annualized growth posted in 2007, 2008 and 2009. So why do shares trade at 40 times next year's projected profits?
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b88f3082-fa00-4cab-bdec-52df7b3d470e
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726980.0
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2010-10-20 00:00:00 UTC
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Microsoft: The Big Short
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DELL
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https://www.nasdaq.com/articles/microsoft-big-short-2010-10-20
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nan
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nan
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Akram's Razor submits:
"An idea that is not dangerous is unworthy of being called an idea at all"- Oscar Wilde
I believe the trade of trades, well actually it's more like an investment, (if you have a 6 to 15 month horizon) will be to take the other side of the Google ( GOOG ) Trade I just did. When I first contemplated buying Google calls five weeks ago the thing that jumped out at me was the visual representation of its position in the world of publicly traded technology companies. Forget the fact that there was a "cloud" mania going on, and that in my mind Google was the definition of "cloud"; its position in theglobal marketcap rankings made no sense. Going into earnings, which was after a solid rally of 8% over 4-5 weeks (I have used these numbers as I don't remember what they were the first day I looked at it and opened the position), the company had a market cap of 171 billion. That put them a full 103bln behind Apple ( AAPL ), 50 billion behind Microsoft ( MSFT ), and 6 billion behind [[IBM]]. This was shocking, and that was before I had even taken a close look at the last three quarterly reports and what the sell-side was expecting and obsessing about with respect to Google.
See, I was familiar with the China issue as I have traded Baidu.com ( BIDU ) pretty consistently over the past couple of years. I also understood the sell-side obsession with the spending concerns. In fact, I had actually been burned on that in July in both Amazon ( AMZN ) and Netflix ( NFLX ) when a miss due to a jump in expenses was shrugged off and then steadily and eventually aggressively bought. I'd been short. The market psyche had shifted to growth, and this meant that companies that were experiencing margin pressure because of excessive investment or hiring were now attractive. The logic was simple. One or two quarters of disappointing bottom lines were to be disregarded, and replaced with rapid multiple expansion.
What I didn't realize was that such a meaningful disparity had developed. Then I looked at the options and discovered they were cheap. When I noticed that Google was scheduled to report on the 14th with options expiration on the 16th of October, I got a little excited. I also knew they had a Google TV "Apple style" launch event on the 12th as well as industry market share data being released the week before (hype never hurts). Put this all together and throw in that the 520 Oct calls were at 4.5 dollars, and you have the making of a trade.
But this had more to do with Microsoft than Google. See, I had printed up Microsoft's 10ks a few months ago as I was exploring how I could maximize my exposure to a massive downwards rerating of their business. What I had picked up after perusing their 10-k was that Microsoft generates 28% of revenues from the Windows operating system division. But what really caught my eye was that operating profits for the Windows OS division account for 51% of total operating income. And in this division OEM sales are about 80%. This means that the biz with the original equipment guys, like Dell ( DELL ) or HP ( HPQ ), is virtually everything to this company. When you consider that these players have been watching pc margins collapse while the Microsoft 'monopoly' retained pricing power, you start to appreciate exactly where things are heading.
But let's be honest this is not news to most, but for some reason it doesn't really factor into many discussions on the stock. Those conversations usually center around the dividend yield, cash hoard and rock solid balance sheet, and the metrics that reflect the historical money minting machine of soon to be long ago.
But times they are a changing.
Apple the new Super Integrator -
Apple has slowly but surely perfected 'the closed model.' Steve Jobs calls it integration and the ultimate user experience; I call it super integration because there is nothing like it out there. They control everything themselves, and odds are that model (as long as Jobs is alive) is not changing anytime soon. Apple will continue to sell IOS devices that are miles ahead of the Wintel devices. I used to say compete, but the reality is they are killing them. Listening to Jobs on the conference call Monday (see transcript here ) should have told you all you needed to know about the future of Windows. He barely mentioned Microsoft. He spent all his time going after Android and Research In Motion ( RIMM ). In the hyper competitive world of Steve Jobs, Windows is irrelevant.
Research in Motion - The other integrator
Research In Motion comes in a step below Apple. They also are running an integrated model, but just not as sharp as Apple. They have a huge and quickly growing installed base of users, but they seem to have hit a bump in the road. Their OS has been criticzed and they have lagged Apple in applications. Users have also had a hard time with their attempts at touch interfaces. They are moving beyond simple Smartphones and into tablets with the launch of their new device 'the RIMM Playbook'.
Google - The Disruptive Monetizer
I think when you talk about Apple and RIMM most investors recognize what those companies are doing to Microsoft already. Some readers might even be confused by my argument as both are Smartphone companies and thus not a true threat to the PC space that Windows dominates. Isn't that the point of the new Windows Mobile? Aren't you missing the whole picture? Not exactly.
Enter Android. At the total other end of the business model spectrum you have Google which is running a pure monetization model. They are giving away software, namely, the OS and the browser, with the intention of monetizing the platform themselves. They have done this in mobile and it has taken off, and now they are moving to tablets (Android) and notebooks (running Chrome OS). Interesting right? Well, Steve Jobs doesn't think so. According to him this open model isn't truly open, and it will run into problems. First, before I even go there, let's acknowledge the fact that by attacking Android Jobs is validating the threat. See what Jobs is missing is the relationship with the OEMs that Android offers, that is to say, the least hard to pass up.
Here is where you can start to appreciate my argument. Apple and RIMM and the likes have succeeded because MSFT has failed to provide anything to their OEMs that could significantly boost their business. But the OEMs have been stuck on this model with no alternatives, and Microsoft has had an incentive to milk the 70% plus op margins that comes with it. Now, that is about to suddenly and most likely very rapidly change. Android and Chrome OS are a genuine option for any OEM looking to compete with RIMM and Apple. If Google is going to provide a free new platform, the OEMs will embrace it. They also have a huge incentive to work on shifting this platform over to their full suite of devices. Let the crazy monetizer figure out how to make money of search and display while we save on margins and provide a fresh new product to consumers. As long as the consumer is willing to embrace this shift, it is a no brainer. Recent market share data and the explosion of HTC would suggest that they are.
And that's not all….
HP has picked up on this shift and is now following suit by launching a line of devices using Palm's Web Os in an effort to replicate the Apple and RIMM models. They realize they have distribution and scale and that an integrated OS at this juncture makes perfect sense. And what about the Meego devices from Intel ( INTC ) slated for 2011…or a Mozilla based netbook?
So who's the big loser?
Well ask yourself this:
Can you imagine what happens to your pricing power when you go from being a software licenser with virtually no competition for twenty years to one with two to three integrated competitors as well as an additional competitor that has perfected back end monetization and could wipe out the licensing OS model all together?
I can.
Microsoft is in serious trouble. Sometime in the very immediate future the operational metrics will fall off a cliff.
I think this is a no brainer when you look at how strong their market share position still is. (Yes, I am taking the 'a lot to lose' approach here over the 'look at how strong they still are' approach.)
Despite falling behind the pack and letting Apple steadily gain share for years, they still pretty much dominate the OS space.
But that's why this is such a great trade from a risk/reward standpoint. If you think we have hit an inflection point, this is where you want to get short.
Are there risks?
Of course there are. Windows Phone 7 looks brilliant. But then again, it has to be brilliant, and even then we will still see a significant decline in the stock. Why? Competition. Microsoft mobile, no matter how good it is, will be a choice amongst several successful platforms. That equals less market share no matter what, and much weaker pricing. This is because pure web-enabled is taking share in the total device space and changing the economics of the OS. Consider what happens in the traditional WINTEL space when an OEM holds discussions in a world with multiple OS options competitive devices.
I can just picture the conversations between the Microsoft account manager and the OEM counterpart....
OEM: Umm, we are going to need to make some changes
MSFT Employee: sure
OEM: big changes
MSFT Employee: well, we can only go so far
OEM: you really have no choice...Google is giving it away and it's great and only getting better...and there are three other vendors selling hardware integrated with OS' now that dominate the market.
Ouch.
So where could I go wrong?
A person in this trade/investment has tremendous conviction that the Windows division is going to experience rapid margin erosion, and that this will be the equivalent of an earthquake for the shares.
That's a bold prediction and one I have tremendous conviction in, but others may disagree.
But that aside, I am aware of certain risks to my thesis.
1) Facebook Integration - I do see a bigger risk if they can monetize a healthy relationship with Facebook fast. But all that does is soften the blow.
2) Microsoft Buys RIMM - I have suggested this before, and so have many others. It is now a NO BRAINER. These are two companies that desperately need each other and would be much more competitive together. Microsoft would get an installed user base that is very hooked to their devices and could use RIMM to start building on a socially based mobile OS approach. Such an approach has a very good chance of succeeding while going it alone may result in Windows Mobile 7 going down as another great technology that just came along at the wrong time.
What to buy?
I like a combination of 2/6/15/30 month puts depending on your target return and risk profile. I expect the stock to decline at least 20% over 15 months. That's still a 175 billion company. You make 49% on your investment over 15 months or a 39% annualized return if you go the "conservative route".
There is of course a risk that all equities rise in this environment, and that this issue causes some headwinds for this trade. I for one am not bothering with this as I personally think MSFT will experience a much more drastic decline, but I do realize it is a concern for some. If that is the case hedge by pairing this position with some long calls on Google and the likes or the broader indices. You could also buy gold...short the DXY...or just don't do the trade.
Note: The value guys love this stock. It lights up every single valuation metric, and on a rear view mirror basis looks UNBELIEVABLY cheap. That is a trap (maybe one of the greatest ones in history), and why this is going to be such a great trade.
By the Way -
Some will say this thesis makes sense but the timing is too soon. I disagree. All you need is a whisper of weakness in the Windows division over the coming year. You will get it. In fact, I think sentiment has turned on this name already. The mobile launch has supported the stock. That effect will wear off. And the street now has one or two skeptics who will probably remain bearish till MSFT does "something big".
Oh, one more thing -
Anecdotally, I thought I would add that I have three PCs at home. I don't use them anymore. I surf and read on the iPad. That's after six months and a great deal of Anti-Apple based resistance on my part. Give me Flash/HTML access, some storage, a solid browser, and I could care less what the OS is now. Touch interface, super battery life, and display are huge leaps forward. That is what I think it took to convert me. So, Windows' market share in my life has fallen off a cliff. I only use Windows based devices because that's what is typically loaded on devices that I need to access the net that are not a smart phone. Change that, and I could care less what it is running on as long as it turns on instantly, lasts for 12 hours, is conveniently portable, and ultimately visually pleasant.
Disclosure: Holding puts on MSFT.
See also Digging Into Rare Earth Investments: Behind the Sudden Surge in Popularity on seekingalpha.com
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.
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This means that the biz with the original equipment guys, like Dell ( DELL ) or HP ( HPQ ), is virtually everything to this company. When I first contemplated buying Google calls five weeks ago the thing that jumped out at me was the visual representation of its position in the world of publicly traded technology companies. In fact, I had actually been burned on that in July in both Amazon ( AMZN ) and Netflix ( NFLX ) when a miss due to a jump in expenses was shrugged off and then steadily and eventually aggressively bought.
|
This means that the biz with the original equipment guys, like Dell ( DELL ) or HP ( HPQ ), is virtually everything to this company. Steve Jobs calls it integration and the ultimate user experience; I call it super integration because there is nothing like it out there. Consider what happens in the traditional WINTEL space when an OEM holds discussions in a world with multiple OS options competitive devices.
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This means that the biz with the original equipment guys, like Dell ( DELL ) or HP ( HPQ ), is virtually everything to this company. Akram's Razor submits: "An idea that is not dangerous is unworthy of being called an idea at all"- Oscar Wilde I believe the trade of trades, well actually it's more like an investment, (if you have a 6 to 15 month horizon) will be to take the other side of the Google ( GOOG ) Trade I just did. I can just picture the conversations between the Microsoft account manager and the OEM counterpart.... OEM: Umm, we are going to need to make some changes MSFT Employee: sure OEM: big changes MSFT Employee: well, we can only go so far OEM: you really have no choice...Google is giving it away and it's great and only getting better...and there are three other vendors selling hardware integrated with OS' now that dominate the market.
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This means that the biz with the original equipment guys, like Dell ( DELL ) or HP ( HPQ ), is virtually everything to this company. But this had more to do with Microsoft than Google. Android and Chrome OS are a genuine option for any OEM looking to compete with RIMM and Apple.
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184d45eb-9c60-49c2-bf65-7d6a382f7435
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726981.0
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2010-10-11 00:00:00 UTC
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U.S. Indexes Trade Modestly Higher, Extending Friday's Gains; Deals Top Market News
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DELL
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https://www.nasdaq.com/articles/us-indexes-trade-modestly-higher-extending-fridays-gains-deals-top-market-news-2010-10-11
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nan
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nan
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Stocks are modestly higher in mid-day trading in a relatively quiet day due to the Columbus Day holiday closing Federal offices and bond trading. With no economic data due for the day, investors are left to take stock of the Dow's Friday closing above 11,000.
Investors will be looking to the Federal Reserve Open Market Committee meeting minutes which will be released at 2pm EST Tuesday. There is a growing sense among Fed observers that the central bank will announce additional monetary stimulus following relatively disappointing employment numbers released last week.
Deal news topped investor interest to begin the week.
Gymboree ( GYMB ) is trading sharply higher on news the company will be bought for $65.40 per share in cash by Bain Capital. The deal is valued at $1.8 billion. Under the deal, Gymboree shareholders will get $65.40 in cash for each share held. The makes the price a premium of 23.5 percent to the stock's Friday closing price.
Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement. According to the detail, Dollar Tree will acquire 85 Dollar Giant stores including substantially all assets, inventory, leasehold rights and intellectual property for approximately $52 million (CAD) in cash, the statement said.
DineEquity Inc ( DIN ) is on the rise after it said it will sell 36 company-owned Applebee's Neighborhood Grill & Bar restaurants to Mid River Restaurants LLC for about $26 million after tax. The restaurant group which also operates IHOP expects the deal to close by the fourth quarter. The restaurants sold are based in Virginia, Missouri, and Illinois.
In other Monday news, Microsoft Corp., ( MSFT ) unveiled nine phone handsets that will run the Windows Phone 7 and will be available during the holiday season in Europe, North American and the Asia-Pacific region, according to a statement from the company. The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. The software on the phone arranges activities into tiles that update with new information, Bloomberg reported.
Meanwhile, Google ( GOOG ) shares are higher following news the Internet search company has been experimenting with a car that drives itself. The company said its automated cars use video cameras, radar sensors and a laser range finder to "see" other traffic, according to the blog. "This is all made possible by Google's data centers, which can process the enormous amounts of information gathered by our cars when mapping their terrain," the company said.
Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers. The drug, combine with the company's Sandostatin drug, did not stop neuroendocrine tumors from growing, the report said.
Shares of Jazz Pharmaceuticals, Inc. ( JAZZ ) are higher despite an announcement that the U.S. Food and Drug Administration (FDA) has sent the company a complete response letter ( CRL ) regarding the company's New Drug Application (NDA) for JZP-6 (sodium oxybate) for the treatment of fibromyalgia.
ATP Oil & Gas Corp. ( ATPG ) said one of its deepwater wells in the Gulf of Mexico has begun producing at better-than-expected levels, reported Reuters. ATP said that its Mississippi Canyon 941 no. 3 well had made a production rate of over 7,000 barrels of oil a day, reported Reuters. In August, ATP had posted a worse-than-expected Q2 loss and said there would be project delays because of the drilling moratorium put in place by the federal; government following the BP Plc ( BP ) oil spill earlier in the year.
The New York Times Co. ( NYT ) has made a strong advance following a report ahead of Q3 earnings that print advertising declines have been shrinking while digital revenue is posting double-digit growth after falling during the recession.
Commodities are mixed as December gold contracts rose $4, or 0.28%, to $1,349 an ounce while November crude contacts are down 0.32%, or $0.23, at $82.43 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is down $0.22, or 0.61% to $35.93 and the United States Natural Gas fund ( UNG ) is down 0.70% to $5.79.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.11% to $131.81. Market Vectors Gold Miners ( GDX ) is down 0.72% to $56.87. iShares Silver Trust ( SLV ) is down 0.09% to $22.71.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. There is a growing sense among Fed observers that the central bank will announce additional monetary stimulus following relatively disappointing employment numbers released last week. Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. The makes the price a premium of 23.5 percent to the stock's Friday closing price. Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. Stocks are modestly higher in mid-day trading in a relatively quiet day due to the Columbus Day holiday closing Federal offices and bond trading. Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. The deal is valued at $1.8 billion. 3 well had made a production rate of over 7,000 barrels of oil a day, reported Reuters.
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6e2250b8-d0b5-4ab7-9659-5f90918dbf81
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726982.0
|
2010-10-11 00:00:00 UTC
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Mid-Day Update: Stocks Modestly Higher as Investors Look Ahead to Tomorrow's Fed Minutes
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DELL
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https://www.nasdaq.com/articles/mid-day-update-stocks-modestly-higher-investors-look-ahead-tomorrows-fed-minutes-2010-10
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nan
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nan
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Here's where markets stand at mid-day:
-NYSE up 6.92 (+0.09%) to 7,485.34
-DJIA up 12.48 (+0.11%) to 11,018.96
-S&P 500 up 1.83 (+0.16%) to 1,166.98
-Nasdaq up 7.91 (+0.33%) to 2,409.82
GLOBAL SENTIMENT
Hang Seng up 1.15%
Nikkei down 0.99%
FTSE up 0.26%
MID-DAY NYSE INDEX WATCH
NYSE Energy up 0.20% at 11,198.04
NYSE Financial down 0.04% at 4,796.06
NYSE Health Care up 0.14% at 6,452.04
NYSE Arca Tech 100 up 0.26% at 972.85
UPSIDE MOVERS
(+) NOK (+0.8%) rolls out new smartphone.
(+) HRBN (+18.2%) gets $24 per share offer to go private.
(+) LDK (+16.8%) boosts revenue view.
(+) IMGN (+5.2%) reports encouraging clinical data for Lorvotuzumab Mertansine, raises cash guidance.
(+) POT (+0.9%) reportedly working on breakup plan to ward off BHP Billiton
bid.
(+) SOLF (+5.4%) inks new contract.
(+) EXEL (+2.8%) inks deal with Bristol-Myers ( BMY ).
(+) RVSN (+5.9%) inks deal with Microsoft ( MSFT ).
(+) BRCM (+3.2%) upgraded.
(+) JAZZ (+4.9%) says FDA declines fibromyalgia drug.
DOWNSIDE MOVERS
(-) ALXA (-55.5%) tumbles as FDA says Adusuve not ready for approval.
(-) VQ (-14.6%) cuts production.
(-) CKSW (-4.7%) guides for revenue miss.
MARKET DIRECTION
Stocks are modestly higher in mid-day trading in a relatively quiet day due to the Columbus Day holiday closing Federal offices and bond trading. With no economic data due for the day, investors are left to take stock of the Dow's Friday closing above 11,000.
Investors will be looking to the Federal Reserve Open Market Committee meeting minutes which will be released at 2pm EST Tuesday. There is a growing sense among Fed observers that the central bank will announce additional monetary stimulus following relatively disappointing employment numbers released last week.
Deal news topped investor interest to begin the week.
Gymboree ( GYMB ) is trading sharply higher on news the company will be bought for $65.40 per share in cash by Bain Capital. The deal is valued at $1.8 billion. Under the deal, Gymboree shareholders will get $65.40 in cash for each share held. The makes the price a premium of 23.5 percent to the stock's Friday closing price.
Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement. According to the detail, Dollar Tree will acquire 85 Dollar Giant stores including substantially all assets, inventory, leasehold rights and intellectual property for approximately $52 million (CAD) in cash, the statement said.
DineEquity Inc ( DIN ) is on the rise after it said it will sell 36 company-owned Applebee's Neighborhood Grill & Bar restaurants to Mid River Restaurants LLC for about $26 million after tax. The restaurant group which also operates IHOP expects the deal to close by the fourth quarter. The restaurants sold are based in Virginia, Missouri, and Illinois.
In other Monday news, Microsoft Corp., ( MSFT ) unveiled nine phone handsets that will run the Windows Phone 7 and will be available during the holiday season in Europe, North American and the Asia-Pacific region, according to a statement from the company. The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. The software on the phone arranges activities into tiles that update with new information, Bloomberg reported.
Meanwhile, Google ( GOOG ) shares are higher following news the Internet search company has been experimenting with a car that drives itself. The company said its automated cars use video cameras, radar sensors and a laser range finder to "see" other traffic, according to the blog. "This is all made possible by Google's data centers, which can process the enormous amounts of information gathered by our cars when mapping their terrain," the company said.
Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers. The drug, combine with the company's Sandostatin drug, did not stop neuroendocrine tumors from growing, the report said.
Shares of Jazz Pharmaceuticals, Inc. ( JAZZ ) are higher despite an announcement that the U.S. Food and Drug Administration (FDA) has sent the company a complete response letter ( CRL ) regarding the company's New Drug Application (NDA) for JZP-6 (sodium oxybate) for the treatment of fibromyalgia.
ATP Oil & Gas Corp. ( ATPG ) said one of its deepwater wells in the Gulf of Mexico has begun producing at better-than-expected levels, reported Reuters. ATP said that its Mississippi Canyon 941 no. 3 well had made a production rate of over 7,000 barrels of oil a day, reported Reuters. In August, ATP had posted a worse-than-expected Q2 loss and said there would be project delays because of the drilling moratorium put in place by the federal; government following the BP Plc ( BP ) oil spill earlier in the year.
The New York Times Co. ( NYT ) has made a strong advance following a report ahead of Q3 earnings that print advertising declines have been shrinking while digital revenue is posting double-digit growth after falling during the recession.
Commodities are mixed as December gold contracts rose $4, or 0.28%, to $1,349 an ounce while November crude contacts are down 0.32%, or $0.23, at $82.43 a barrel.
In energy ETFs, the United States Oil Fund ( USO ) is down $0.22, or 0.61% to $35.93 and the United States Natural Gas fund ( UNG ) is down 0.70% to $5.79.
In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.11% to $131.81. Market Vectors Gold Miners ( GDX ) is down 0.72% to $56.87. iShares Silver Trust ( SLV ) is down 0.09% to $22.71.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. There is a growing sense among Fed observers that the central bank will announce additional monetary stimulus following relatively disappointing employment numbers released last week. Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. (+) JAZZ (+4.9%) says FDA declines fibromyalgia drug. The makes the price a premium of 23.5 percent to the stock's Friday closing price.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement. Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers.
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The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. (+) LDK (+16.8%) boosts revenue view. (+) RVSN (+5.9%) inks deal with Microsoft ( MSFT ).
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9be9f472-70a1-4300-b602-5fa1807244bf
|
726983.0
|
2010-10-06 00:00:00 UTC
|
What's behind Unisys call action
|
DELL
|
https://www.nasdaq.com/articles/whats-behind-unisys-call-action-2010-10-06
|
nan
|
nan
|
Unisys is consolidating after a run to the upside, and one trader is positioning for more gains.
optionMONSTER's Heat Seeker tracking system detected the purchase of 2,000 January 35 calls for $1 and the sale of an equal number of January 25 calls for $4.85. Volume was below open interest in the lower strikes, suggesting that a long position in the calls was rolled to the higher strike.
The move allowed the investor to recover $3.85 of principal while maintaining exposure to the IT service provider. It lost more than half its value between late April and early July.
UIS then started fighting upward and gapped higher on July 27 after per-share profit was more than double analysts' forecasts. The stock climbed 3.12 percent to $28.46 yesterday, capping a 12 percent move in the last month. It's now pausing around the $28-$28.50 area that was support earlier in the year and has since provided resistance (orange line on chart).
Value investors may consider the company attractive because it trades for about 4 times last year's earnings and has an enterprise value of less than 3 times EBITDA. In addition, short interest accounted for more than 9 percent of the float as of Sept. 15, which could potentially fuel the shares higher on any squeeze.
UIS has additional been paying down debt and increasing its focus on data centers. That could merit further attention because it may let the company ride some of the positive sentiment that has been developing in the cloud-computing sector after the recent bidding war between Hewlett-Packard and Dell for 3Par.
Overall option volume in the stock was 12 times greater than average yesterday, with calls outnumbering puts by more than 50 to 1.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
That could merit further attention because it may let the company ride some of the positive sentiment that has been developing in the cloud-computing sector after the recent bidding war between Hewlett-Packard and Dell for 3Par. UIS then started fighting upward and gapped higher on July 27 after per-share profit was more than double analysts' forecasts. In addition, short interest accounted for more than 9 percent of the float as of Sept. 15, which could potentially fuel the shares higher on any squeeze.
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That could merit further attention because it may let the company ride some of the positive sentiment that has been developing in the cloud-computing sector after the recent bidding war between Hewlett-Packard and Dell for 3Par. The stock climbed 3.12 percent to $28.46 yesterday, capping a 12 percent move in the last month. (Chart courtesy of tradeMONSTER) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
That could merit further attention because it may let the company ride some of the positive sentiment that has been developing in the cloud-computing sector after the recent bidding war between Hewlett-Packard and Dell for 3Par. Volume was below open interest in the lower strikes, suggesting that a long position in the calls was rolled to the higher strike. UIS then started fighting upward and gapped higher on July 27 after per-share profit was more than double analysts' forecasts.
|
That could merit further attention because it may let the company ride some of the positive sentiment that has been developing in the cloud-computing sector after the recent bidding war between Hewlett-Packard and Dell for 3Par. Unisys is consolidating after a run to the upside, and one trader is positioning for more gains. optionMONSTER's Heat Seeker tracking system detected the purchase of 2,000 January 35 calls for $1 and the sale of an equal number of January 25 calls for $4.85.
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18064f7e-ab45-4d9c-9b9d-ddc793ca3ee4
|
726984.0
|
2010-10-06 00:00:00 UTC
|
Why Aren't You Rich?
|
DELL
|
https://www.nasdaq.com/articles/why-arent-you-rich-2010-10-06
|
nan
|
nan
|
Why Aren't You Rich?
Maybe you already are. Good for you. Most investors aren't. They're still waiting for the big pay off. The problem is that most of them don't understand that there are several ways to be rich. Here are three ways to get yours.
For most people it takes a long time to gather enough wealth to feel comfortable, a great way to define rich. It takes years of saving, investing, and sacrificing for future rewards. It's not easily done, but if done correctly, it will pay off.
Done correctly means: conservative investing, always taking the more solid investment over speculative ones. It means dividends as well as capital gains. It means diversity over many industries with holdings of only the strongest companies. It means owning stocks that have ever increasing earnings, no matter what the economy does. It means being patient, riding out the shocks that life brings, knowing that eventually there is a natural human instinct that wants a better life. That means improving one's home or car or wardrobe or boat or any other thing that makes an individual happy. When that spending occurs, businesses thrive, profits go up, stocks increase in value. Human nature is a powerful force.
So that's the prescription for people who want to be rich after several decades of investing. But it's not the only way to be rich. The next way is much more typical of young people who have more money than most or older people who have more money than most. Their secret is this: they took a large gamble and won.
By that I mean they focused on one investment and didn't waver. For Warrnet Buffett, one of his first and largest investments was Geico Insurance. He bought millions of shares and very little else. He didn't diversify his holdings. He simply did his homework, saw what a great bargain the stock was, how well managed the company was, and bought all the shares he could afford. He did the same thing with Washington Post. If you look at his portfolio of stocks now, it isn't all that large. With the billions he invests you would expect many hundreds of different stocks. But that isn't his way. He believes in finding great stocks (and there are few of those) and buying as much as he can, then being patient.
Or look at Donald Trump (well, don't look at him because that hair is a little too much). He's another example of extreme wealth provided by an intense focus. In his case it was real estate. Initially only New York real estate. Of course, he had a great start from his inheritance, but he built on it, leveraged it, and became more knowledgable about Manhattan than any other investor. He's not successful because he's lucky. He's been successful because he's focused, took a gamble and won. More examples: Bill Gates (MSFT), Larry Ellison (ORCL), T. Boone Pickens (oil and natural gas), the Walton family (father Sam focused on retailing), Larry Page (Goog), Sheldon Adelson (gaming), Michael Dell (Dell). Forbes lists 400 of them each year. Every one has been focused on a specialized investment.
Many investors have taken lots of gambles, and they're still poor. That's because they didn't do their homework well enough, or they weren't patient enough, or in the case of real estate, didn't add enough value to a property to warrant a higher price. For stock investors, that first mistake (not doing enough investigating) is the most common.
They hear a hot tip from a tv or radio head screaming about the newest, greatest, best ever company and immediately buy it, never look it up or analyze it. They simply buy something and hope. That's not the way to get rich. It's the way to get poor. Doing due diligence is required. It's what you don't know that will kill you in investing. If you don't understand your investments, you can't make the right decisions as to when to buy or when to sell.
That's two ways of being rich: the slow and the fast ways. The third way is maybe the best. It has to do with being grateful for what you have, every day, feeling the riches that we all share in the United States. It's a feeling you can have, no matter how much money you have or how much money you owe.
It doesn't mean you don't strive to have a better life, as you define it. In fact, getting rich doesn't mean you want things. It may mean you want more money to give to others, maybe one of the best feelings there is. It may mean you can help your relatives or best friend. Or it may mean you can finally buy a new car, or a good used one.
Whatever your goals, being rich makes it easier to attain them. And if you keep your goals well within your income level, you'll always feel rich. But if you want to short cut the process, hit the jackpot early, you have to take risks and be ready to reap the rewards or suffer the catastrophes. Or you can take it nice and slow, be grateful for what you have, and work hard for your goals. Then you can feel very, very rich indeed. Every day.
- Ted Allrich
October 5, 2010
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.
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More examples: Bill Gates (MSFT), Larry Ellison (ORCL), T. Boone Pickens (oil and natural gas), the Walton family (father Sam focused on retailing), Larry Page (Goog), Sheldon Adelson (gaming), Michael Dell (Dell). For most people it takes a long time to gather enough wealth to feel comfortable, a great way to define rich. They hear a hot tip from a tv or radio head screaming about the newest, greatest, best ever company and immediately buy it, never look it up or analyze it.
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More examples: Bill Gates (MSFT), Larry Ellison (ORCL), T. Boone Pickens (oil and natural gas), the Walton family (father Sam focused on retailing), Larry Page (Goog), Sheldon Adelson (gaming), Michael Dell (Dell). For most people it takes a long time to gather enough wealth to feel comfortable, a great way to define rich. - Ted Allrich October 5, 2010 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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More examples: Bill Gates (MSFT), Larry Ellison (ORCL), T. Boone Pickens (oil and natural gas), the Walton family (father Sam focused on retailing), Larry Page (Goog), Sheldon Adelson (gaming), Michael Dell (Dell). Why Aren't You Rich? That's because they didn't do their homework well enough, or they weren't patient enough, or in the case of real estate, didn't add enough value to a property to warrant a higher price.
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More examples: Bill Gates (MSFT), Larry Ellison (ORCL), T. Boone Pickens (oil and natural gas), the Walton family (father Sam focused on retailing), Larry Page (Goog), Sheldon Adelson (gaming), Michael Dell (Dell). Why Aren't You Rich? It's what you don't know that will kill you in investing.
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d3f77c76-ce96-4e77-be62-911453246a8f
|
726985.0
|
2010-10-06 00:00:00 UTC
|
Apple's iPad a runaway sales success
|
DELL
|
https://www.nasdaq.com/articles/apples-ipad-runaway-sales-success-2010-10-06
|
nan
|
nan
|
Apple 's ( AAPL ) iPad tablet is the hottest-selling electronic device ever, a new report from Bernstein Research shows.
Three million of the tablets were sold in the 80 days after it was released; every quarter, Apple sells roughly 4.5 million iPads. The device is on track to have $9 billion in total sales next year, making it the fourth-largest electronics category all on its own.
"By any account," Bernstein retail analyst Colin McGranahan said in a note , "the iPad is a runaway success of unprecedented proportions."
Still, the iPad is slated to get new competition in the coming months. Dell ( DELL ) already offers a Google Android-powered mini-tablet called the Streak. It's now available in 5-inch form factor - and a 7-inch model will be released soon. Samsung is planning to release a tablet called the Galaxy Tab sometime during the fourth quarter; it, too, will run Android.
And Research in Motion ( RIMM ) is coming to the party with a BlackBerry OS-powered tablet called the PlayBook.
Whether any of those devices will be as popular as the iPad remains to be seen. For now, it's clear that Apple's product has the tablet market locked up.
By Steve Monfort
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.
|
Dell ( DELL ) already offers a Google Android-powered mini-tablet called the Streak. Apple 's ( AAPL ) iPad tablet is the hottest-selling electronic device ever, a new report from Bernstein Research shows. "By any account," Bernstein retail analyst Colin McGranahan said in a note , "the iPad is a runaway success of unprecedented proportions."
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Dell ( DELL ) already offers a Google Android-powered mini-tablet called the Streak. Three million of the tablets were sold in the 80 days after it was released; every quarter, Apple sells roughly 4.5 million iPads. By Steve Monfort The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Dell ( DELL ) already offers a Google Android-powered mini-tablet called the Streak. Apple 's ( AAPL ) iPad tablet is the hottest-selling electronic device ever, a new report from Bernstein Research shows. Three million of the tablets were sold in the 80 days after it was released; every quarter, Apple sells roughly 4.5 million iPads.
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Dell ( DELL ) already offers a Google Android-powered mini-tablet called the Streak. Apple 's ( AAPL ) iPad tablet is the hottest-selling electronic device ever, a new report from Bernstein Research shows. Three million of the tablets were sold in the 80 days after it was released; every quarter, Apple sells roughly 4.5 million iPads.
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5bb76f33-2898-494f-a95e-a4ce4acaa108
|
726986.0
|
2010-09-30 00:00:00 UTC
|
Puts surge as Dell hits resistance
|
DELL
|
https://www.nasdaq.com/articles/puts-surge-dell-hits-resistance-2010-09-30
|
nan
|
nan
|
Dell has climbed to a potential resitance level, and the bears are jumping in.
optionMONSTER's Depth Charge tracking system detected the purchase of about 40,000 November 12 puts for $0.34 and the sale of about 20,000 November 14 calls for $0.30. Volume was above open interest in both strikes.
DELL dropped 0.92 percent of its value to $12.98 in morning trading, following a 9 percent rally over the preceding month. That was a pretty big gain in a short time for the slow-moving PC maker, which could cause some investors to expect a pullback.
The option trade was broken into several pieces but appears to be the work of a single investor, likely a shareholder looking to hedge a long position in the stock.
Selling the upside calls generated income they used to buy the downside protection. It will cap their gains at $14 if the shares climb that high, while protecting them on a move below $12.
The trade occurred after DELL attempted to break above its 100-day moving average (red line on chart) for the first time since mid-May. Sellers hammered the stock at that
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The trade occurred after DELL attempted to break above its 100-day moving average (red line on chart) for the first time since mid-May. Dell has climbed to a potential resitance level, and the bears are jumping in. DELL dropped 0.92 percent of its value to $12.98 in morning trading, following a 9 percent rally over the preceding month.
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Dell has climbed to a potential resitance level, and the bears are jumping in. DELL dropped 0.92 percent of its value to $12.98 in morning trading, following a 9 percent rally over the preceding month. The trade occurred after DELL attempted to break above its 100-day moving average (red line on chart) for the first time since mid-May.
|
DELL dropped 0.92 percent of its value to $12.98 in morning trading, following a 9 percent rally over the preceding month. The trade occurred after DELL attempted to break above its 100-day moving average (red line on chart) for the first time since mid-May. Dell has climbed to a potential resitance level, and the bears are jumping in.
|
Dell has climbed to a potential resitance level, and the bears are jumping in. DELL dropped 0.92 percent of its value to $12.98 in morning trading, following a 9 percent rally over the preceding month. The trade occurred after DELL attempted to break above its 100-day moving average (red line on chart) for the first time since mid-May.
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b2def532-f049-4bc8-ba51-f41be9cf4010
|
726987.0
|
2010-09-30 00:00:00 UTC
|
Trader bets Radware will stay hot
|
DELL
|
https://www.nasdaq.com/articles/trader-bets-radware-will-stay-hot-2010-09-30
|
nan
|
nan
|
Radware has been red-hot along with other cloud-computing stocks, prompting one large trader to position for further upside.
optionMONSTER's Heat Seeker tracking system detected the purchase of more than 6,000 November 40 calls for about $1.20 and the sale of a matching number of November 25 puts for $0.60. The trade resulted in a cost of about $0.60, and volume was more than 4 times open interest in both strikes.
RDWR rose 8.11 percent to $34.79 yesterday and is up 38 percent in the last month. The maker of products that help companies use data centers has been climbing since the market bottomed in March 2009, and it has been fire since mid-September when it surged to a 10-year high amid takeover speculation.
The buzz followed the bidding war between Hewlett-Packard and Dell over 3Par, which led investors to look for other companies that could also be purchased.
Yesterday's option trade came amid a sudden afternoon rally in RDWR shares. The strategy is a low-cost and relatively low-risk way to leverage a big move. It will double the investor's money for every $0.60 that the shares trade over $40.60 on expiration.
It will lose money if RDWR falls below $25, and expire worthless if it closes between that level and $40.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
The buzz followed the bidding war between Hewlett-Packard and Dell over 3Par, which led investors to look for other companies that could also be purchased. Radware has been red-hot along with other cloud-computing stocks, prompting one large trader to position for further upside. The maker of products that help companies use data centers has been climbing since the market bottomed in March 2009, and it has been fire since mid-September when it surged to a 10-year high amid takeover speculation.
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The buzz followed the bidding war between Hewlett-Packard and Dell over 3Par, which led investors to look for other companies that could also be purchased. Yesterday's option trade came amid a sudden afternoon rally in RDWR shares. (Chart courtesy of tradeMONSTER) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The buzz followed the bidding war between Hewlett-Packard and Dell over 3Par, which led investors to look for other companies that could also be purchased. The maker of products that help companies use data centers has been climbing since the market bottomed in March 2009, and it has been fire since mid-September when it surged to a 10-year high amid takeover speculation. Yesterday's option trade came amid a sudden afternoon rally in RDWR shares.
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The buzz followed the bidding war between Hewlett-Packard and Dell over 3Par, which led investors to look for other companies that could also be purchased. Radware has been red-hot along with other cloud-computing stocks, prompting one large trader to position for further upside. Yesterday's option trade came amid a sudden afternoon rally in RDWR shares.
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636da19d-af12-40c8-a05c-c01109beb79e
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726988.0
|
2010-09-29 00:00:00 UTC
|
Tablet market poised to heat up
|
DELL
|
https://www.nasdaq.com/articles/tablet-market-poised-heat-2010-09-29
|
nan
|
nan
|
The market for tablet computers is about to get a lot bigger.
Dell's ( DELL ) long-awaited Streak tablet, which has a 7-inch screen and is equipped with Google's ( GOOG ) Android operating system, is slated for release in the near future. Tech site CNET quotes the Wall Street Journal as saying that the Streak will launch in a few weeks; the Journal was tipped off by the president of Dell's Greater China division, Amit Midha, who said in an interview that the Streak's release was forthcoming.
Midha also indicated that 10-inch, 3-inch and 4-inch Streak models would become available in the next six months.
But Dell isn't the only device manufacturer gunning for success in the tablet space. Research in Motion ( RIMM ) unveiled this week a new tablet it calls the PlayBook; the device will be both thinner and lighter than Apple 's ( AAPL ) extremely popular iPad. And Samsung has a tablet in the offing: Its Android-equipped Galaxy Tab will be available in time for the holiday season.
As many as 50 million tablets could be sold next year, Gleacher & Co. analyst Brian Marshall said this week to Bloomberg.
By Steve Monfort
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.
|
Tech site CNET quotes the Wall Street Journal as saying that the Streak will launch in a few weeks; the Journal was tipped off by the president of Dell's Greater China division, Amit Midha, who said in an interview that the Streak's release was forthcoming. Dell's ( DELL ) long-awaited Streak tablet, which has a 7-inch screen and is equipped with Google's ( GOOG ) Android operating system, is slated for release in the near future. But Dell isn't the only device manufacturer gunning for success in the tablet space.
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Dell's ( DELL ) long-awaited Streak tablet, which has a 7-inch screen and is equipped with Google's ( GOOG ) Android operating system, is slated for release in the near future. Tech site CNET quotes the Wall Street Journal as saying that the Streak will launch in a few weeks; the Journal was tipped off by the president of Dell's Greater China division, Amit Midha, who said in an interview that the Streak's release was forthcoming. But Dell isn't the only device manufacturer gunning for success in the tablet space.
|
Dell's ( DELL ) long-awaited Streak tablet, which has a 7-inch screen and is equipped with Google's ( GOOG ) Android operating system, is slated for release in the near future. Tech site CNET quotes the Wall Street Journal as saying that the Streak will launch in a few weeks; the Journal was tipped off by the president of Dell's Greater China division, Amit Midha, who said in an interview that the Streak's release was forthcoming. But Dell isn't the only device manufacturer gunning for success in the tablet space.
|
Tech site CNET quotes the Wall Street Journal as saying that the Streak will launch in a few weeks; the Journal was tipped off by the president of Dell's Greater China division, Amit Midha, who said in an interview that the Streak's release was forthcoming. But Dell isn't the only device manufacturer gunning for success in the tablet space. Dell's ( DELL ) long-awaited Streak tablet, which has a 7-inch screen and is equipped with Google's ( GOOG ) Android operating system, is slated for release in the near future.
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2b4723df-a56a-4905-875e-d00a9a91d575
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726989.0
|
2010-09-28 00:00:00 UTC
|
Bear anticipates Riverbed drying up
|
DELL
|
https://www.nasdaq.com/articles/bear-anticipates-riverbed-drying-2010-09-28
|
nan
|
nan
|
Riverbed Technologies has been rallying hard since the summer amid takeover speculation, but now one trader is positioning for a reversal lower.
optionMONSTER's Depth Charge tracking program detected the purchase of 6,371 January 45 puts for $5.10. At the same time, similar-sized blocks were sold in the January 39 puts for $2.55 and the January 36 puts for $1.75.
The strategy, known as a bearish "Christmas tree," allowed the investor to own the January 45 puts for about $0.80, giving him or her significant leverage on a push to the downside. The position will earn a maximum profit of 650 percent if RVBD closes between $36 and $39 on expiration. The gains will erode below that range and turn to losses if the stock falls though $30.
The Christmas tree resembles a ratio spread because more options are sold than are purchased. It's different because two strikes are sold, rather than one.
RVBD climbed 4.95 percent to $46.45 in afternoon trading and is up 55 percent in the last three months. The provider of networking devices has been rallying on strong earnings and as investors speculate that it may be acquired in the wake of Hewlett-Packard's and Dell's bidding war over 3Par.
The next earnings release is scheduled for after the bell on Oct. 21.
Overall option volume in RVBD is 8 times greater than average today, with puts accounting for 89 percent of the activity.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
The provider of networking devices has been rallying on strong earnings and as investors speculate that it may be acquired in the wake of Hewlett-Packard's and Dell's bidding war over 3Par. Riverbed Technologies has been rallying hard since the summer amid takeover speculation, but now one trader is positioning for a reversal lower. The strategy, known as a bearish "Christmas tree," allowed the investor to own the January 45 puts for about $0.80, giving him or her significant leverage on a push to the downside.
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The provider of networking devices has been rallying on strong earnings and as investors speculate that it may be acquired in the wake of Hewlett-Packard's and Dell's bidding war over 3Par. At the same time, similar-sized blocks were sold in the January 39 puts for $2.55 and the January 36 puts for $1.75. (Chart courtesy of tradeMONSTER) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The provider of networking devices has been rallying on strong earnings and as investors speculate that it may be acquired in the wake of Hewlett-Packard's and Dell's bidding war over 3Par. At the same time, similar-sized blocks were sold in the January 39 puts for $2.55 and the January 36 puts for $1.75. The strategy, known as a bearish "Christmas tree," allowed the investor to own the January 45 puts for about $0.80, giving him or her significant leverage on a push to the downside.
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The provider of networking devices has been rallying on strong earnings and as investors speculate that it may be acquired in the wake of Hewlett-Packard's and Dell's bidding war over 3Par. Riverbed Technologies has been rallying hard since the summer amid takeover speculation, but now one trader is positioning for a reversal lower. At the same time, similar-sized blocks were sold in the January 39 puts for $2.55 and the January 36 puts for $1.75.
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73e479ff-8200-4cbe-a979-40b0e0288c92
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726990.0
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2010-09-17 00:00:00 UTC
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This Sector's Mountain of Cash Could Soon Line Your Pocket
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DELL
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https://www.nasdaq.com/articles/sectors-mountain-cash-could-soon-line-your-pocket-2010-09-17
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nan
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nan
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Texas Instruments ( TXN ) just got with the program. The company announced Friday morning that it will increase its existing stock buyback program by $7.5 billion and modestly boost its dividend .
Suddenly, using hefty cash balances to buy back stock or boost dividends is all the rage in the sector, and the chip giant wants in on the action. I took a look at this trend last week and since it shows no signs of abating, it's time to look at all the cash-rich tech companies to see how a stock buyback or a dividend move would impact their stock. [See: Why the Cheap Debt Frenzy is Great for Stocks ]
I ran a screen to find the largest tech stocks that have at least $1 billion in net cash. I then also looked at their cash flow levels, and by combining cash and cash flow, looked to see how much they represented as a percentage of a company's market value . (Did you know that nearly half of Yahoo!'s (Nasdaq: YHOO) market value is accounted for in cash and cash flow?)
By using this as a yardstick, companies could theoretically reduce their share count by that percentage. For example, eBay (Nasdaq: EBAY) could afford to buy back 31% of its stock, and then simply let the cash balance rebound as future cash flow pours in.
Lastly, I was curious about potential dividend yields. In the past, tech companies usually loathed dividends because they were a sign that management no longer had compelling uses for the company's cash, which meant that growth opportunities were lacking. By now, we all know that the days of high-growth have ended (except for Apple (Nasdaq: AAPL) , Google (Nasdaq: GOOG) and a few others).
A few companies offer paltry dividends with meager yields (except for Intel's more impressive 3.4% payout), but all of these companies could offer fairly hefty dividends simply based on cash flow and leave their hefty cash balances intact. Symantec (Nasdaq: SYMC) , Dell (Nasdaq: DELL) and Hewlett-Packard ( HPQ ) could offer dividend yields in excess of 8%. More likely, these companies would seek to have lower payout ratios, so I looked at what kind of dividends could be offered up if these companies paid out 60% of their annual cash flow in dividends. For most of these companies, that would translate into a dividend yield in the 4% to 5% range. Not bad, but not overly impressive either.
With coming tax changes that hike the capital gains rate on dividends, companies may look to go the buyback route instead. [Read: What Could Happen to Your Favorite Income Spots ]
Looking at the column "cash flow as % of market cap," these companies could look to use all of their cash flow to buy back stock, leave the cash balance intact, and in the cases of Dell, HP and several others, could reduce the share count by more than 10% annually. That's just what HP is doing with its recently-announced $10 billion buyback. Microsoft (Nasdaq: MSFT) is rumored to have similar plans afoot.
What are the implications of a 10% annual share buyback? Well, at a minimum, it boosts earnings per share ( EPS ) by a commensurate amount. So a company that is only growing profits by +5% would see per share profits grow by +15%.
Action to Take --> Although firms like Dell and Yahoo have ample financial firepower relative to their market value, I'm especially intrigued by Symantec, which is now the largest standalone software security vendor, now that Intel has agreed to acquire McAfee ( MFE ) . The company also possesses a hefty data storage division, thanks to a 2005 acquisition of Veritas.
Symantec's shares now trade for half the value that they traded when that deal was announced, because the company has never been able to derive major synergies from the two divisions. But on a standalone basis, each of these businesses would hold real value to a suitor, and Symantec should look to shed one and focus on the other. Analysts seem to focus on a potential full buyout of the company. Jefferies thinks shares would fetch $19 or $20 if that happens, while UBS recently boosted its rating on Symantec to "buy" with a price target of $20 under the assumption that Symantec is "in play." But I think a sale of one part of the business if more likely.
Even without any moves, Symantec is still quite undervalued, trading at 10 times next year's profits, and management should seize on that. It could buy back nearly 15% of its stock every year simply out of cash flow. Sales growth is expected to be flat in the current fiscal year , but based on very recent trends, are expected to rise more than +5% next year. That should fuel slightly higher bottom-line growth, and when coupled with a large buyback, could again make Symantec a real EPS growth story.
David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and a Managing Editor at TheStreet.com. Read More...
Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
StreetAuthority
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Action to Take --> Although firms like Dell and Yahoo have ample financial firepower relative to their market value, I'm especially intrigued by Symantec, which is now the largest standalone software security vendor, now that Intel has agreed to acquire McAfee ( MFE ) . Symantec (Nasdaq: SYMC) , Dell (Nasdaq: DELL) and Hewlett-Packard ( HPQ ) could offer dividend yields in excess of 8%. [Read: What Could Happen to Your Favorite Income Spots ] Looking at the column "cash flow as % of market cap," these companies could look to use all of their cash flow to buy back stock, leave the cash balance intact, and in the cases of Dell, HP and several others, could reduce the share count by more than 10% annually.
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[Read: What Could Happen to Your Favorite Income Spots ] Looking at the column "cash flow as % of market cap," these companies could look to use all of their cash flow to buy back stock, leave the cash balance intact, and in the cases of Dell, HP and several others, could reduce the share count by more than 10% annually. Symantec (Nasdaq: SYMC) , Dell (Nasdaq: DELL) and Hewlett-Packard ( HPQ ) could offer dividend yields in excess of 8%. Action to Take --> Although firms like Dell and Yahoo have ample financial firepower relative to their market value, I'm especially intrigued by Symantec, which is now the largest standalone software security vendor, now that Intel has agreed to acquire McAfee ( MFE ) .
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[Read: What Could Happen to Your Favorite Income Spots ] Looking at the column "cash flow as % of market cap," these companies could look to use all of their cash flow to buy back stock, leave the cash balance intact, and in the cases of Dell, HP and several others, could reduce the share count by more than 10% annually. Symantec (Nasdaq: SYMC) , Dell (Nasdaq: DELL) and Hewlett-Packard ( HPQ ) could offer dividend yields in excess of 8%. Action to Take --> Although firms like Dell and Yahoo have ample financial firepower relative to their market value, I'm especially intrigued by Symantec, which is now the largest standalone software security vendor, now that Intel has agreed to acquire McAfee ( MFE ) .
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[Read: What Could Happen to Your Favorite Income Spots ] Looking at the column "cash flow as % of market cap," these companies could look to use all of their cash flow to buy back stock, leave the cash balance intact, and in the cases of Dell, HP and several others, could reduce the share count by more than 10% annually. Symantec (Nasdaq: SYMC) , Dell (Nasdaq: DELL) and Hewlett-Packard ( HPQ ) could offer dividend yields in excess of 8%. Action to Take --> Although firms like Dell and Yahoo have ample financial firepower relative to their market value, I'm especially intrigued by Symantec, which is now the largest standalone software security vendor, now that Intel has agreed to acquire McAfee ( MFE ) .
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2c65fd21-ddcc-47f6-a414-ab37fdb98127
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726991.0
|
2010-09-15 00:00:00 UTC
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Cisco Systems, Inc.'s Dividend News Provides a (Short-Lived) Boost to the Tech Sector
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DELL
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https://www.nasdaq.com/articles/cisco-systems-incs-dividend-news-provides-short-lived-boost-tech-sector-2010-09-15
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nan
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nan
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Tech stocks were hot on Tuesday, with Cisco Systems, Inc. ( CSCO ) leading the pack. The blue chip announced yesterday that it would be issuing a dividend between 1% and 2% in 2011, resulting in a nice boost for the entire sector -- tech peers Dell Inc. ( DELL ) and Microsoft Corporation ( MSFT ) included. Unsurprisingly, option players had tech stocks on their radar yesterday; however, puts were traders' preferred choice on Tuesday.
First up, Cisco Systems, Inc. ( CSCO ) , whose dividend news was met with mixed reactions. While dividend payouts are typically a good thing, analysts have already begun to criticize CSCO's decision. Opponents of the dividend believe that it is essentially CSCO's acknowledgment that the company couldn't find other, more profitable, ways to invest the money.
As a result of this ambivalence, CSCO gave back the gains it saw following the announcement, ending the day a penny poorer. CSCO is currently pinned beneath resistance from its 20-week trendline, located around $22.50, and above support from its 10-week moving average, which is located around $20.50. In fact, CSCO has been trading within this two-point range for over a month.
Put players targeted CSCO on Tuesday, with roughly 86,000 contracts traded -- double the tech stock's expected single-session put volume. Traders ignored soon-to-expire September options in favor of longer-term contracts, as evidenced by the 15,789 contracts traded on the January 2011 22.50 put. Open interest swelled by 14,040 contracts overnight, confirming that fresh positions were added at this in-the-money strike.
Meanwhile, for the front-month series, peak call open interest of 57,028 contracts can be found at the September 22 strike, and peak put open interest of 38,473 contracts is at the September 21 strike. As expiration nears, an unwinding of this massive out-of-the-money call open interest could push the shares lower.
Sector peer Dell Inc. ( DELL ) also quickly surrendered its gains on Tuesday, with the shares continuing to battle their 10-day and 20-day moving averages. This short-term duo has kept DELL in check since late July. In fact, in the past 40 sessions, DELL has underperformed the broader S&P 500 Index (SPX) by over 10%, on a relative-strength basis.
Option players have grown quite bearish toward this struggling tech stock, with DELL racking up a 10-day International Securities Exchange (ISE) and Chicago Board Options Exchange ( CBOE ) put/call volume ratio of 2.00, which ranks above 100% of all other readings taken during the past year. Meanwhile, DELL's Schaeffer's put/call open interest ratio (SOIR) of 1.06 ranks just nine percentage points shy of an annual bearish peak.
This pessimism was palpable on Tuesday, with one trader initiating a spread aimed to capitalize on a downtrending -- and highly volatile -- stock. Early yesterday morning, 4,100 October 12 puts, marked "spread," traded at the bid price, while 8,200 October 11 puts, also designated "spread," changed hands at the ask price. By implementing this back spread with puts at a 2:1 ratio of purchased puts to sold puts, the trader is able to partially offset the cost of the play, and also completely "cover" the sold contracts. Essentially, this trader is hoping that DELL will completely tank over the next month, putting the long puts deep in the money.
In light of DELL's recent technical -- and fundamental -- troubles, the heavy pessimism levied toward the stock is justifiable. With the shares docked beneath several layers of trendline support, it seems unlikely that DELL is poised for a rebound anytime soon.
Finally, Microsoft Corporation ( MSFT ) was also a favorite target among put players on Tuesday, with some 76,000 of these bearish bets crossing the tape -- nearly double the equity's expected single-session put volume.
However, unlike its peers, MSFT's heavy put activity was not necessarily bearish. The September 25 put saw volume of over 15,000 contracts traded -- the bulk of which changed hands at the bid price, revealing they were likely sold. Open interest increased by over 4,500 contracts overnight, confirming that fresh positions were added here. By selling to open the September 25 put, traders are counting on MSFT to remain at, or above, the $25 level until the end of the week.
Technically speaking, it's a gamble whether MSFT will end the week above $25. On one hand, the shares have spent the past few days docked above the support of their 20-day trendline, which is located just beneath the $25 level.
Meanwhile, peak call open interest of nearly 130,000 contracts can be found at the September 27 strike -- which is currently some two points out of the money. As expiration nears, an unwinding of this heavy call open interest could send the shares plummeting lower -- and have Tuesday's short put players kicking themselves.
In conclusion , while CSCO's dividend news provided a temporary lift to the tech sector, it seems that these gains were quickly lost -- leaving many of these stocks in uncertain technical predicaments.
Click here for the new summer issue of SENTIMENT magazine
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Meanwhile, DELL's Schaeffer's put/call open interest ratio (SOIR) of 1.06 ranks just nine percentage points shy of an annual bearish peak. The blue chip announced yesterday that it would be issuing a dividend between 1% and 2% in 2011, resulting in a nice boost for the entire sector -- tech peers Dell Inc. ( DELL ) and Microsoft Corporation ( MSFT ) included. Sector peer Dell Inc. ( DELL ) also quickly surrendered its gains on Tuesday, with the shares continuing to battle their 10-day and 20-day moving averages.
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The blue chip announced yesterday that it would be issuing a dividend between 1% and 2% in 2011, resulting in a nice boost for the entire sector -- tech peers Dell Inc. ( DELL ) and Microsoft Corporation ( MSFT ) included. Sector peer Dell Inc. ( DELL ) also quickly surrendered its gains on Tuesday, with the shares continuing to battle their 10-day and 20-day moving averages. This short-term duo has kept DELL in check since late July.
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The blue chip announced yesterday that it would be issuing a dividend between 1% and 2% in 2011, resulting in a nice boost for the entire sector -- tech peers Dell Inc. ( DELL ) and Microsoft Corporation ( MSFT ) included. Sector peer Dell Inc. ( DELL ) also quickly surrendered its gains on Tuesday, with the shares continuing to battle their 10-day and 20-day moving averages. This short-term duo has kept DELL in check since late July.
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The blue chip announced yesterday that it would be issuing a dividend between 1% and 2% in 2011, resulting in a nice boost for the entire sector -- tech peers Dell Inc. ( DELL ) and Microsoft Corporation ( MSFT ) included. Sector peer Dell Inc. ( DELL ) also quickly surrendered its gains on Tuesday, with the shares continuing to battle their 10-day and 20-day moving averages. This short-term duo has kept DELL in check since late July.
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8337373d-73f2-44e3-836b-9d99376d728b
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726992.0
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2010-09-14 00:00:00 UTC
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Can Apple Sell 28 Million iPads Next Year?
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DELL
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https://www.nasdaq.com/articles/can-apple-sell-28-million-ipads-next-year-2010-09-14
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nan
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nan
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Apple ( AAPL ) could sell 28 million iPads next year, according to a recent estimate by UBS Investment Research that was cited in the AppleInsider blog.
The UBS rationale is that the iPad is capturing demand for low-end notebook PC sales. However, the tablet market is poised to become more crowded as Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba all develop tablet devices, which could slow iPad unit sales growth. ( See our previous article on this topic .)
In comparison to UBS estimates, we currently estimate that Apple will sell about 15 million iPads in 2011. If UBS were right, there could be a 5% upside to our current $337 stock price estimate for Apple.
iPad forecast
We estimate that iPad constitutes around 8% of the $337 Trefis price estimate for Apple's stock. We expect Apple to sell about 10 million iPads in 2010 and 15 million in 2011. You can drag the trend-line in the chart below to create your own iPad sales forecast and see how it impacts Apple's estimated share value.
Tablets can't yet replace PCs
As mentioned above, we expect rival tablets to dampen iPad sales in coming years. Another constraint is that the iPad's features are still not compelling enough to cannibalize sales of more powerful PCs. The iPad is designed mostly for the consumption of content like websites, video and apps. For the foreseeable future, serious content creators will still need PCs.
In another article, we explained why the iPad is not impacting the sales of Apple's Mac line of PCs.
You can see the complete $337 Trefis Price estimate for Apple's stock here.
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.
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However, the tablet market is poised to become more crowded as Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba all develop tablet devices, which could slow iPad unit sales growth. Apple ( AAPL ) could sell 28 million iPads next year, according to a recent estimate by UBS Investment Research that was cited in the AppleInsider blog. You can drag the trend-line in the chart below to create your own iPad sales forecast and see how it impacts Apple's estimated share value.
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However, the tablet market is poised to become more crowded as Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba all develop tablet devices, which could slow iPad unit sales growth. In comparison to UBS estimates, we currently estimate that Apple will sell about 15 million iPads in 2011. iPad forecast We estimate that iPad constitutes around 8% of the $337 Trefis price estimate for Apple's stock.
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However, the tablet market is poised to become more crowded as Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba all develop tablet devices, which could slow iPad unit sales growth. Apple ( AAPL ) could sell 28 million iPads next year, according to a recent estimate by UBS Investment Research that was cited in the AppleInsider blog. In comparison to UBS estimates, we currently estimate that Apple will sell about 15 million iPads in 2011.
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However, the tablet market is poised to become more crowded as Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba all develop tablet devices, which could slow iPad unit sales growth. In comparison to UBS estimates, we currently estimate that Apple will sell about 15 million iPads in 2011. Tablets can't yet replace PCs As mentioned above, we expect rival tablets to dampen iPad sales in coming years.
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310fb86d-db62-423d-ade6-8f98e82bbecc
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726993.0
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2010-09-13 00:00:00 UTC
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Hewlett-Packard to Buy Security Company ArcSight for $1.5 Billion (HPQ)
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DELL
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https://www.nasdaq.com/articles/hewlett-packard-buy-security-company-arcsight-15-billion-hpq-2010-09-13
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nan
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nan
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PC and printer maker Hewlett-Packard Company ( HPQ ) on Monday announced that it has agreed to buy computer security company ArcSight, Inc ( ARST ) for $1.5 billion.
The $43.50 per-share asking price represents a 24% premium over ArcSight's Friday closing price of $35.10. The deal is expected to close by the end of this year.
H-P noted the acquisition will allow it "improve security" and "reduce risk … at a lower cost for customers."
Earlier this month, H-P agreed to buy storage specialist 3Par for $2.4 billion following a heated bidding war with rival PC maker Dell Inc. ( DELL ).
Hewlett-Packard shares rose 21 cents, or +0.6%, in premarket trading Monday.
The Bottom Line
We had removed shares of HPQ from our recommended list back on Oct.1, 2009, when the stock was trading at $47.21. The company has a .84% dividend yield, based on Friday's closing stock price of $38.28. The stock has technical support in the $35 price area. If the shares can firm up, we see overhead resistance around the $44-$46 price levels. We would remain on the sidelines for now.
Hewlett-Packard Company ( HPQ ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Created by Dividend.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Earlier this month, H-P agreed to buy storage specialist 3Par for $2.4 billion following a heated bidding war with rival PC maker Dell Inc. ( DELL ). H-P noted the acquisition will allow it "improve security" and "reduce risk … at a lower cost for customers." The Bottom Line We had removed shares of HPQ from our recommended list back on Oct.1, 2009, when the stock was trading at $47.21.
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Earlier this month, H-P agreed to buy storage specialist 3Par for $2.4 billion following a heated bidding war with rival PC maker Dell Inc. ( DELL ). PC and printer maker Hewlett-Packard Company ( HPQ ) on Monday announced that it has agreed to buy computer security company ArcSight, Inc ( ARST ) for $1.5 billion. The $43.50 per-share asking price represents a 24% premium over ArcSight's Friday closing price of $35.10.
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Earlier this month, H-P agreed to buy storage specialist 3Par for $2.4 billion following a heated bidding war with rival PC maker Dell Inc. ( DELL ). PC and printer maker Hewlett-Packard Company ( HPQ ) on Monday announced that it has agreed to buy computer security company ArcSight, Inc ( ARST ) for $1.5 billion. The $43.50 per-share asking price represents a 24% premium over ArcSight's Friday closing price of $35.10.
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Earlier this month, H-P agreed to buy storage specialist 3Par for $2.4 billion following a heated bidding war with rival PC maker Dell Inc. ( DELL ). PC and printer maker Hewlett-Packard Company ( HPQ ) on Monday announced that it has agreed to buy computer security company ArcSight, Inc ( ARST ) for $1.5 billion. The $43.50 per-share asking price represents a 24% premium over ArcSight's Friday closing price of $35.10.
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fd6713f1-6f98-4ba8-94e0-11f46a77184c
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726994.0
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2010-09-13 00:00:00 UTC
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Cash buildup 'outrageous,' S&P says
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DELL
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https://www.nasdaq.com/articles/cash-buildup-outrageous-sp-says-2010-09-13
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nan
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nan
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There's been plenty of talk about all the cash floating around out there, but Standard & Poor's equity folks put out some numbers over the weekend showing how big this trend really is.
At the end of the second quarter, cash represented a record 12 percent of the market cap of all the non-financials in the entire S&P 500. That's up from 10 percent at the end of last year and less than 6 percent three years ago. The measure excludes financial stocks, which must hold cash as reserves on their loan portfolio.
Companies now have enough cash on hand to pay their annual dividends a full 5 times, or to carry out 4.4 years worth of stock buybacks. A decade ago, both of these ratios were under 2 times, according to S&P senior index analyst Howard Silverblatt.
"It's been outrageous the last couple of years," he said in an interview this morning. "It's a further sign that companies are very frustrated and they can't do anything because they're nervous. They don't know where consumption is going and they don't know where taxes are going."
In another measure of the liquidity buildup, 49 percent of non-financial stocks in the S&P 500 increased their cash holdings by at least 20 percent in the last year.
Silverblatt said all that dry powder could cause management teams to overpay for acquisitions when they decide to buy other companies.
For instance, the final price Hewlett-Packard agreed to pay for 3Par was almost twice the original offer from Dell. Both HPQ and DELL saw their cash reserves rise more than 25 percent during their last fiscal years.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For instance, the final price Hewlett-Packard agreed to pay for 3Par was almost twice the original offer from Dell. Both HPQ and DELL saw their cash reserves rise more than 25 percent during their last fiscal years. There's been plenty of talk about all the cash floating around out there, but Standard & Poor's equity folks put out some numbers over the weekend showing how big this trend really is.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. For instance, the final price Hewlett-Packard agreed to pay for 3Par was almost twice the original offer from Dell. Both HPQ and DELL saw their cash reserves rise more than 25 percent during their last fiscal years.
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For instance, the final price Hewlett-Packard agreed to pay for 3Par was almost twice the original offer from Dell. Both HPQ and DELL saw their cash reserves rise more than 25 percent during their last fiscal years. That's up from 10 percent at the end of last year and less than 6 percent three years ago.
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Both HPQ and DELL saw their cash reserves rise more than 25 percent during their last fiscal years. For instance, the final price Hewlett-Packard agreed to pay for 3Par was almost twice the original offer from Dell. That's up from 10 percent at the end of last year and less than 6 percent three years ago.
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a1a82fc7-8e79-4407-96ac-5da7fc79ed18
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726995.0
|
2010-09-10 00:00:00 UTC
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Rival Tablets Could Knock 3% Off Apple Stock
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DELL
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https://www.nasdaq.com/articles/rival-tablets-could-knock-3-apple-stock-2010-09-10
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nan
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nan
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Every hardware manufacturer in the world seems to be rushing a tablet PC to market. Will this competition hurt Apple ( AAPL ), which has enjoyed a near-monopoly in the tablet market since the successful launch of the iPad last April?
Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba are all gunning for a piece of Apple's tablet action. Because most of these devices will not hit the market before next year, we don't expect them to impact iPad sales over the short term.
However, there could be a downside of 3% to our $337 stock price estimate for Apple if iPad sales grow more slowly than expected due to increased competition during our six-year forecast period. Our analysis follows below.
iPad sales forecast
We estimate that iPad constitutes around 8% of the $337 Trefis price estimate for Apple's stock . We expect Apple to sell 10 million iPads this year, and we expect annual sales to reach 29 million units by the end of the Trefis forecast period. You can drag the trend-line in the chart below to create your own iPad sales forecast and see how it impacts Apple's estimated share value.
However, if the competition catches up with iPad, it could hurt its sales in the longer term. Market research firm iSuppli estimates that iPad will have a 74% share of the tablet market in 2010, declining to 70% in 2011 and 62% in 2012 as more competitors enter the market.
There could be a downside of 3% to the $337 Trefis price estimate for Apple's stock if iPad sales only reach, let's say, 18 million units by 2016, instead of the 29 million that we currently forecast.
Flash vs. HTML5
Dell recently launched its Streak, a hybrid smartphone and tablet that runs on AT&T's network in the U.S. Toshiba, Samsung and LG are expected to launch tablet PCs over the next few months. Unlike the iPad, all four tablets will support Adobe Flash, a multimedia platform that adds animation and interactivity to web pages.
Betting that Flash was a declining technology, Apple chose instead to support HTML5, the next version of the standard programming language for describing the content and appearance of web pages. Today, however, 75% of all online videos still use Flash. In another article we argued that Flash will remain the preferred online video platform in the near future, which could be a competitive disadvantage for the iPad.
(Update: On September 9 Apple announced that it was relaxing its Flash ban to some extent, according to a Wall Street Journal article. Although iPhone and iPad users still won't be able to view Flash-based web pages, Apple will now allow developers to write mobile apps using Flash and then use a software tool to translate them into programming languages that Apple approves.)
Enterprise tablets
Apple is now trying to introduce the iPad in the corporate enterprise market, where RIM and Cisco are both well-established players. In another article, we argued that although RIM's BlackPad tablet may not succeed in the consumer market, it could do better in the BlackBerry-dominated enterprise smartphone market.
Similar logic applies to Cisco. In another article, we argued that Cisco's upcoming Cius tablet could find favor among business customers based on the company's successful IP phone launch for the enterprise market.
You can see the complete $337 Trefis Price estimate for Apple's stock here.
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.
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Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba are all gunning for a piece of Apple's tablet action. Flash vs. HTML5 Dell recently launched its Streak, a hybrid smartphone and tablet that runs on AT&T's network in the U.S. Toshiba, Samsung and LG are expected to launch tablet PCs over the next few months. However, there could be a downside of 3% to our $337 stock price estimate for Apple if iPad sales grow more slowly than expected due to increased competition during our six-year forecast period.
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Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba are all gunning for a piece of Apple's tablet action. Flash vs. HTML5 Dell recently launched its Streak, a hybrid smartphone and tablet that runs on AT&T's network in the U.S. Toshiba, Samsung and LG are expected to launch tablet PCs over the next few months. iPad sales forecast We estimate that iPad constitutes around 8% of the $337 Trefis price estimate for Apple's stock .
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Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba are all gunning for a piece of Apple's tablet action. Flash vs. HTML5 Dell recently launched its Streak, a hybrid smartphone and tablet that runs on AT&T's network in the U.S. Toshiba, Samsung and LG are expected to launch tablet PCs over the next few months. iPad sales forecast We estimate that iPad constitutes around 8% of the $337 Trefis price estimate for Apple's stock .
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Cisco ( CSCO ), Dell ( DELL ), LG, Research in Motion ( RIMM ), Samsung, and Toshiba are all gunning for a piece of Apple's tablet action. Flash vs. HTML5 Dell recently launched its Streak, a hybrid smartphone and tablet that runs on AT&T's network in the U.S. Toshiba, Samsung and LG are expected to launch tablet PCs over the next few months. However, there could be a downside of 3% to our $337 stock price estimate for Apple if iPad sales grow more slowly than expected due to increased competition during our six-year forecast period.
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362c5764-864f-4df3-9941-d252195a54d1
|
726996.0
|
2010-09-10 00:00:00 UTC
|
What's behind put action in Dell
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DELL
|
https://www.nasdaq.com/articles/whats-behind-put-action-dell-2010-09-10
|
nan
|
nan
|
Dell is flagging after a brief rally attempt, and one trader is positioning for the PC maker to retest recent lows.
optionMONSTER's Depth Charge monitoring system detected the purchase of 4,100 October 12 puts for $0.55 and the sale of 8,200 October 11 puts for $0.21. The trade, known as a bearish ratio spread, resulted in a net cost of $0.13 per contract owned.
DELL is down 3.23 percent to $11.98 in morning trading. It had climbed 7 percent in the first five days of the month--a relatively big move for the lumbering computer maker. Before that, it was trading at a 15-month low below $12.
The company's last earnings report on Aug. 19 was better than expected, though management warned that consumer demand has been lackluster and margins missed forecasts. The company also recently lost a bidding war with Hewlett-Packard for data-storage stock 3Par.
Today's ratio spread on DELL will earn a maximum profit of 669 percent if the stock closes at $11 on expiration. Because of the larger short position in the downside puts, the gains will erode below that level and turn to losses under $10.
Ratio spreads are often used by shareholders looking to protect gains and who are willing to be assigned more shares at the lower strike price.
Puts account for 83 percent of the activity in DELL so far today, reflecting the bearish sentiment.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Dell is flagging after a brief rally attempt, and one trader is positioning for the PC maker to retest recent lows. Today's ratio spread on DELL will earn a maximum profit of 669 percent if the stock closes at $11 on expiration. DELL is down 3.23 percent to $11.98 in morning trading.
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Today's ratio spread on DELL will earn a maximum profit of 669 percent if the stock closes at $11 on expiration. Dell is flagging after a brief rally attempt, and one trader is positioning for the PC maker to retest recent lows. DELL is down 3.23 percent to $11.98 in morning trading.
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Today's ratio spread on DELL will earn a maximum profit of 669 percent if the stock closes at $11 on expiration. Puts account for 83 percent of the activity in DELL so far today, reflecting the bearish sentiment. Dell is flagging after a brief rally attempt, and one trader is positioning for the PC maker to retest recent lows.
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Today's ratio spread on DELL will earn a maximum profit of 669 percent if the stock closes at $11 on expiration. Dell is flagging after a brief rally attempt, and one trader is positioning for the PC maker to retest recent lows. DELL is down 3.23 percent to $11.98 in morning trading.
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d260e1e2-31ea-47b7-ade0-e9a63195db10
|
726997.0
|
2010-09-08 00:00:00 UTC
|
Tablet PCs Could Yield 11% Upside for AT&T Stock
|
DELL
|
https://www.nasdaq.com/articles/tablet-pcs-could-yield-11-upside-att-stock-2010-09-08
|
nan
|
nan
|
As tablet PC usage rises, U.S. telecom giant AT&T ( T ) could see a sharp rise in its revenues from wireless data customers. AT&T competes mainly with Verizon ( VZ ) and Sprint Nextel ( S ) in the U.S. wireless market.
We see a potential upside of nearly 11 % to our $37.91 stock price estimate for AT&T if the company's average revenue per user (ARPU) of mobile data reaches $40 a month by the end of our forecast period, rather than the $28 a month that we currently forecast. Our analysis follows below.
Tablets everywhere
In a recent interview with Bloomberg News, AT&T Mobility CEO Ralph de la Vega noted that AT&T is looking to capitalize on the tablet revolution that began with the launch of Apple's iPad earlier this year. ""There's going to be a huge number of tablets, different sizes, different functions," de la Vega said.
Cisco ( CSCO ) plans to unveil a tablet for enterprise customers in early 2011. Dell ( DELL ) has already released its Streak tablet. Hewlett-Packard ( HPQ ), LG, Motorola ( MOT ), Samsung and others have tablets in the works as well. It seems plausible that these devices will drive a surge in wireless data usage as networks get faster and devices grow more powerful.
Impact on AT&T
We currently estimate that AT&T's ARPU from data will grow from an estimated $14.50 per user per month in 2009 to just over $28 by the end of our forecast period.
However, the advent of tablet PCs running on speedy 4G networks should encourage users to consume more data on cellular networks like that of AT&T. In this scenario, we think AT&T's data ARPU could reach $40 by the end of our forecast period, yielding an 11% upside to our stock price estimate.
You can see the complete $37.91 Trefis price estimate for AT&T's stock here.
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.
|
Dell ( DELL ) has already released its Streak tablet. Tablets everywhere In a recent interview with Bloomberg News, AT&T Mobility CEO Ralph de la Vega noted that AT&T is looking to capitalize on the tablet revolution that began with the launch of Apple's iPad earlier this year. ""There's going to be a huge number of tablets, different sizes, different functions," de la Vega said.
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Dell ( DELL ) has already released its Streak tablet. We see a potential upside of nearly 11 % to our $37.91 stock price estimate for AT&T if the company's average revenue per user (ARPU) of mobile data reaches $40 a month by the end of our forecast period, rather than the $28 a month that we currently forecast. In this scenario, we think AT&T's data ARPU could reach $40 by the end of our forecast period, yielding an 11% upside to our stock price estimate.
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Dell ( DELL ) has already released its Streak tablet. We see a potential upside of nearly 11 % to our $37.91 stock price estimate for AT&T if the company's average revenue per user (ARPU) of mobile data reaches $40 a month by the end of our forecast period, rather than the $28 a month that we currently forecast. Tablets everywhere In a recent interview with Bloomberg News, AT&T Mobility CEO Ralph de la Vega noted that AT&T is looking to capitalize on the tablet revolution that began with the launch of Apple's iPad earlier this year.
|
Dell ( DELL ) has already released its Streak tablet. AT&T competes mainly with Verizon ( VZ ) and Sprint Nextel ( S ) in the U.S. wireless market. We see a potential upside of nearly 11 % to our $37.91 stock price estimate for AT&T if the company's average revenue per user (ARPU) of mobile data reaches $40 a month by the end of our forecast period, rather than the $28 a month that we currently forecast.
|
3babdf42-c576-4a1c-9a71-0f89ac28af31
|
726998.0
|
2010-09-07 00:00:00 UTC
|
Is Dell a Value Trap?
|
DELL
|
https://www.nasdaq.com/articles/dell-value-trap-2010-09-07
|
nan
|
nan
|
Dell ( DELL ) is the definition of a fallen angel. This former tech darling has fallen to earth after years of flying high. It is also a company that bedevils me. Is it ridiculously undervalued or a value trap that will ultimately burn shareholders?
At year-end 2009, Dell had approximately $11 billion in cash and $4 billion of debt. Add in $2 billion or so in annual free cash flow and there is something to get excited about. This is especially true considering the company's $25 billion market value. Not surprisingly some of my favorite value firms are among the largest owners of Dell shares, including Southeastern (Longleaf), Brandes, and Harris Associates (Oakmark).
Earlier this year, I too was seduced into owning Dell. It didn't last long. A talk with investor relations woke me up. In discussing uses of cash, we covered buybacks, special/regular dividends, acquisitions and more. It became very obvious that acquisitions were to be the focus. In closing, the investor relations rep said my opinions were similar to those of Mason Hawkins. I took that as a huge compliment, but it wasn't meant to be. Dell clearly has no intention of listening to either of us.
This is a company that doesn't speak our language, to say nothing of their "new math".
I've seen companies fritter away billions and have nothing to show for it thanks to this attitude, so my Dell shares quickly found new homes. Given the continued decline in Dell shares, I should be grateful, but I keep revisiting this company and its odd capital decisions.
Given Dell's track record on share repurchases, one can understand if the company swore off buybacks. Shares have declined from nearly 3 billion shares to below 2 billion in the past 15 years and the stock has fallen nearly the entire time. In fact, since the shares peaked in 2000, shares outstanding have dropped from 2.6 billion to 1.9 billion. Hindsight tells us that they should have been more patient. Ironically, the cheaper the shares have gotten the less attractive they've become to Dell management as a use of excess cash. Buy low? No thank you.
As for dividends? Just like real men don't ask directions, real tech companies don't pay dividends. This is especially so for "growth" companies. And that is how Dell sees itself, even if the world no longer does. And paying dividends sends the wrong message. And here I thought dividend payments were about using capital wisely?!?
Instead Dell has decided to hold the cash and use it to "invest in the business". For the uninitiated, that's code for acquisitions. In this, Dell looks like a desperate company. Margin compression in Dell's core business helps explain why this may be the case. Of more concern, everywhere Dell wants to be there seems to be a superior company occupying the space.
Whether large integrated firms like [[IBM]] and HP ( HPQ ) or specialized firms like storage giant [[EMC]], Dell seems caught in the mushy middle strategically. This 2009 headline speaks volumes: Dell to Buy Perot in Catch-Up Deal.
Perhaps in response to Hewlett Packard's purchase of EDS, Dell bought Perot Systems a year ago for $3.9 billion, a 68% premium to Perot's public market price and 30x its earnings.
Shareholders should be relieved in a way. The Perot deal was r elatively cheap compared to the attempted purchase of 3Par. Whether it's the $18 a share bid in August or the final one at $32 (or $2.4 billion), it is a hefty bid for a company that is barely profitable. The financial press must have been feeling nostalgic about the Internet Bubble because they were again able to use the price-to-sales multiple to explain the deal instead of price-to-earnings. In fact, HP "won" the day with a bid valuing 3Par ( PAR ) at 8 times sales. Congratulations!
I've been told many times that as a value investor, I just don't understand growth, that I am incapable of understanding the world of possibilities that opens up because of such strategic acquisitions. I admit that I hate the word "synergy" and have no imagination! I will only say that growth is a variable to be valued not an end. Growth at any price does not benefit shareholders.
If this was a make or buy decision, both companies are admitting something by the price they were willing to pay for PAR. By ignoring other uses for cash, Dell is admitting still more.
A value trap is a company that may be undervalued, but where intrinsic value is falling. Margin of safety is eroded and there is no guarantee of upside. Some companies do this by losing money and burning up asset value. Others do it through poor capital allocation decisions.
If the competitive environment and value were static, Dell would be a buy. But these are dynamic forces. Dell's reaction to their competitive positioning is eating away at intrinsic value. Dividends and aggressive share repurchases (at current prices) would be vastly superior to acquisitions at ridiculous prices.
Luckily for Dell, 3Par found a "greater fool" in HP, but don't think that another deal isn't around the corner. Lexmark ( LXK ) perhaps? Either way, this flailing around isn't pretty to watch.
If Dell keeps throwing its cash away, their IR department can relax. That phone won't be ringing as often.
Disclosure: In addition to numerous Dell computers, author owns LXK .
See also The Great Australian Housing Bubble on seekingalpha.com
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.
|
Not surprisingly some of my favorite value firms are among the largest owners of Dell shares, including Southeastern (Longleaf), Brandes, and Harris Associates (Oakmark). I've seen companies fritter away billions and have nothing to show for it thanks to this attitude, so my Dell shares quickly found new homes. Dell ( DELL ) is the definition of a fallen angel.
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Dell ( DELL ) is the definition of a fallen angel. At year-end 2009, Dell had approximately $11 billion in cash and $4 billion of debt. Not surprisingly some of my favorite value firms are among the largest owners of Dell shares, including Southeastern (Longleaf), Brandes, and Harris Associates (Oakmark).
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I've seen companies fritter away billions and have nothing to show for it thanks to this attitude, so my Dell shares quickly found new homes. Given the continued decline in Dell shares, I should be grateful, but I keep revisiting this company and its odd capital decisions. Dell ( DELL ) is the definition of a fallen angel.
|
By ignoring other uses for cash, Dell is admitting still more. Dell ( DELL ) is the definition of a fallen angel. At year-end 2009, Dell had approximately $11 billion in cash and $4 billion of debt.
|
8a8d0fe1-22fe-4bab-a90a-1b69c5217b62
|
726999.0
|
2010-09-05 00:00:00 UTC
|
HP`s 3PAR Acquisition Makes Strategic & Financial Sense
|
DELL
|
https://www.nasdaq.com/articles/hps-3par-acquisition-makes-strategic-financial-sense-2010-09-05
|
nan
|
nan
|
By Dian L. Chu, Economic Forecasts & Opinions
The 3PAR saga finally came to a close on Sep. 2 with Dell Inc. (DELL) beaten by Hewlett-Packard Co. (HPQ) in an 18-day bidding war. The final price tag of 3PAR is at $33 a share, or $2.35 billion, almost twice Dell’s initial offer at $18 a share last month.
So, does this acquisition make sense for HP?
Building from Scratch?
There is considerable cost to build technology from scratch. By the time you factor in the cost of hiring the people with the requisite skill set, build a cohesive R&D program, patent obstacles, and the most important factor of all—time, it is well worth it to acquire the technology at any price below $40 a share.
Time is Money
In evaluating the 3PAR acquisition one must factor in the cost of being able to sell products, consulting expertise, bundled product solutions to customers ASAP versus building the technology in house, dragging out another acquisition, or failing to make a decisive bid which closes the deal.
And most important of all their time and resources resulted in a deal, unlike all the wasted time and money associated with a failed acquisition like the Exelon attempted acquisition of NRG, which dragged on for over 6 months, and they ended up still raising the original bid, only to be turned down as asset prices increased in value in the Utilities sector.
Sales Synergies
In evaluating the worth of 3PAR to HP, HP recognizes that with the increased sales channels which HP can provide through their already existing partnerships, that 3PAR will be able to generate extraordinary growth well beyond the 52% current growth of 3PAR revenues.
Expect this number to be well over 100%, and exponentially growing over the next 3 years. How do you put a price on a deal difference maker, HP will now bundle this technology into their total product solution when bidding upon new contracts, and this new technology will enable HP to outcompete other bids, and bring in new business revenue because they can now offer companies a one stop solution to their enterprise needs.
Zero – Sum Gain
There is a certain value gained from blocking a direct competitor from getting a technology that they wanted which they feel could help them better compete against your firm. Sure, Dell can go buy some other storage company, but it still will not be cheap since all the prices for these companies have increased as the market has revalued the entire sector due to market forces.
Furthermore, this is the storage firm that Dell wanted--3PAR--was their first choice. And there is a reason they tried so hard to continue the fight even though they were up against a larger balance sheet.
In short, 3PAR created value for Dell as an acquisition, and they modeled some of the same sales and portfolio synergies that HP did, which raised the value of 3PAR far above the originally undervalued market price.
High End Data Storage Technology - A Mispriced Sector
The bottom line is the market mispriced the entire sector, as the technological landscape was changing, the strategic importance of storage was also dynamically changing, and the market was slow to realize this fact.
The burgeoning growth in cloud computing puts a premium on strategically focused flexible storage technology, and market prices were behind the curve in this sector, similarly to how the changing growth dynamics of the emerging market economies such as China and India, put a premium on raw materials and commodities.
Deflationary Environment
It is always smart to buy firms in a deflationary market. The acquiring firm gets real value from their purchase by buying when asset prices, especially for equities are dirt cheap right now. Compare this to buying at the top of the tech boom where asset prices for technology companies were sky high in terms of price to earnings multiples, and this leads to boards overvaluing the takeout price even further.
So, the cost of an acquisition at any price given the low multiple base is quite attractive in a deflationary environment. For example, when the Bond Bubble bursts, and all this capital comes flooding into equities, and equities multiples expand, it is quite possible that 3PAR would be trading at $20 a share as opposed to $10 a share, so the initial starting point would be much higher in an inflationary market environment.
Inflationary Cycle Ahead
It is quite apparent that the next cycle is going to be exemplified by an abundance of inflation in all asset prices, but especially so in equities and in high demand areas like technology, energy, food, and raw materials. In short, the value of the US Dollar is going to depreciate, and any assets are going to appreciate in value.
So a firm that spends 2 Billion today in a deflationary environment, will not be able to get the same value for that 2 Billion in two years in the midst of an inflationary environment. The last thing a firm should be doing is holding onto cash in a deflationary environment. Instead a firm should be buying all the assets they can before the next cycle of inflation occurs. A firm gets more bang for their buck today, all prices are only going up in the future.
Market Share Gains
The 3PAR acquisition enables HP to take full aim at both IBM and EMC and now puts them on much better footing to compete in the lucrative High End External Data Storage Market. HP currently ranks the third in that segment with 11% market share, behind EMC with 25% market share, and IBM with 14%.
Expect HP to start taking market share from IBM, EMC and NetApp in the 4th quarter of this year, and be fully established as the number two player, and breathing down the neck of EMC by the 4th quarter of 2011. This is the type of growth in taking market share in important high margin categories from competitors that is often underappreciated in evaluating the effective cost of the acquisition that is strategic in nature.
On Final Analysis
The recent acquisition of 3PAR on behalf of HP makes both strategic and financial sense upon analyzing the underlying economic and philosophic factors that are relevant in this case. The real value is that the acquired technology is already marketable and in demand, and you have to expect to pay a premium for acquiring said technology.
Your biggest fear as an acquirer should be an acquisition with no other suitors. Yes, you might get a lower price, but ask yourself why you’re the only bidder? Is the company that you are acquiring strategically relevant to your competitors? Well, in the case of 3PAR we already know the answer to that question.
Disclosure: No Positions
Dian L. Chu, Sep. 5, 2010
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.
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In short, 3PAR created value for Dell as an acquisition, and they modeled some of the same sales and portfolio synergies that HP did, which raised the value of 3PAR far above the originally undervalued market price. By Dian L. Chu, Economic Forecasts & Opinions The 3PAR saga finally came to a close on Sep. 2 with Dell Inc. (DELL) beaten by Hewlett-Packard Co. (HPQ) in an 18-day bidding war. The final price tag of 3PAR is at $33 a share, or $2.35 billion, almost twice Dell’s initial offer at $18 a share last month.
|
By Dian L. Chu, Economic Forecasts & Opinions The 3PAR saga finally came to a close on Sep. 2 with Dell Inc. (DELL) beaten by Hewlett-Packard Co. (HPQ) in an 18-day bidding war. The final price tag of 3PAR is at $33 a share, or $2.35 billion, almost twice Dell’s initial offer at $18 a share last month. Sure, Dell can go buy some other storage company, but it still will not be cheap since all the prices for these companies have increased as the market has revalued the entire sector due to market forces.
|
By Dian L. Chu, Economic Forecasts & Opinions The 3PAR saga finally came to a close on Sep. 2 with Dell Inc. (DELL) beaten by Hewlett-Packard Co. (HPQ) in an 18-day bidding war. The final price tag of 3PAR is at $33 a share, or $2.35 billion, almost twice Dell’s initial offer at $18 a share last month. Sure, Dell can go buy some other storage company, but it still will not be cheap since all the prices for these companies have increased as the market has revalued the entire sector due to market forces.
|
By Dian L. Chu, Economic Forecasts & Opinions The 3PAR saga finally came to a close on Sep. 2 with Dell Inc. (DELL) beaten by Hewlett-Packard Co. (HPQ) in an 18-day bidding war. The final price tag of 3PAR is at $33 a share, or $2.35 billion, almost twice Dell’s initial offer at $18 a share last month. Sure, Dell can go buy some other storage company, but it still will not be cheap since all the prices for these companies have increased as the market has revalued the entire sector due to market forces.
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5afc8fd3-077e-48ae-881a-0af1668ce441
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