Archive for December 30th, 2007Filed under: Web services, web 2.0  WooMe
30
12
2007
 
Fujitsu announces exit from plasma display marketPosted by: in Companies Competitive StrategyFiled under: Products and services, Television, Competitive strategy, Sony Corp ADR (SNE)
Much is being affected by the near total domination of liquid crystal display technology within a tightening, yet deepening image display sector. Take further evidence of change by considering Brian White’s post about the exit from rear projection TV by Sony Corp. (NYSE: SNE). The LCD field is currently saturated and for it’s improvement it needs to thin out. Strides are still being made in regard to making LCD displays thinner and engineers are working on reducing power consumption. Little can be done however, to improve LCD profitability with so many companies cranking out cheap displays. What’s needed now is for some of the remaining display manufacturers to aggressively address some considerable quality issues. Gary Sattler does not knowingly hold financial interest in the companies he blogs about. Filed under: Earnings reports, Deals, Competitive strategy, Intel (INTC), Advanced Micro Dev (AMD) Advanced Micro Devices (NYSE: AMD) comes to the end of year at a 52-week low of $7.62. Very few stocks have done as badly over the last couple of years. In February 2006, the shares traded above $42. When the company was doing well, it was taking market share in the server and Personal computer industries by producing superior chips than more massive rival Intel (NASDAQ: INTC). In some of these segments, the company had about 25% of the market and said it could get to 40%. Intel fought back. It pushed its R&D to produce superior products and cut what it charged for chips, which injured AMD’s gross margins and drove the company to a loss. AMD made matters worse by purchasing graphics chip company ATI. That loaded AMD’s balance sheet with debt, just as its operating income fell apart. AMD could do a few things to improve its position. The chip company says it will have an operating profit by the end of next year. But, it keeps releasing its products late, and they’re often underpowered. The firm’s new Barcelona chip has been a disappointment. AMD might be superior off giving conservative release dates and product information and then doing better than forecasts. Another part of AMD that troubles Wall Street is its debt, which is over $5 billion. As painful as it might be, AMD should sell ATI. The company’s operations brought in $252 million of AMD’s $1.62 billion in revenue last quarter. And, the unit had negative operating income. The last thing AMD needs to do it let CEO Hector Ruiz go. He has been the architect of the current disaster and investors are unlikely to think he has the ability to have a hand in fixing it. After all, the company has lost well over three-quarters of its market value. Douglas A. McIntyre is an editor at 247wallst.com. Filed under: Earnings reports, Competitive strategy, Apple Inc (AAPL), Starbucks (SBUX), McDonald’s (MCD) Shares in Starbucks (NASDAQ: SBUX) are as hard to comprehend as those of almost any other massive public company in the U.S. In the fiscal year ending September 30, revenue for the company was up over 20% to just shy of $9.4 billion. Operating income rose 18% to $1.054 billion, according to the Starbucks 10-K. But, the price of the company’ stock dropped from just over $40 in November 2006 to the current price of $20.13. Starbucks can’t fix its Wall Street problems all at once, but it could look at the things investors don’t like about the company and begin to address them. First, investors believe that McDonald’s (NYSE: MCD) will take a great deal of the Starbucks premium coffee business. The fast-food chain states its earnings are being helped by its push into high-end coffee. Starbucks already knows whether it is being hurt by McDonald’s. It certainly keeps enough detail on each of its local outlets. Perhaps it could share that data with investors. The other huge knock on the coffee company is that it is opening stores too fast in the U.S. It ends up competing against itself in some markets. The facts about this should not be hard to come by. Starbucks certainly selects locations based on not taking business from its other outlets. If those decisions are working, perhaps the company could pass that along. The last significant question about the firm is whether its move into breakfast foods, music, and a partnership with Apple (NASDAQ: AAPL) are doing anything for the bottom line. Starbucks might do better with Wall Street if it would just give out a tiny information. Douglas A. McIntyre is an editor at 247wallst.com.
30
12
2007
Late night hosts are about to prove just how funny they really arePosted by: in Companies Competitive StrategyFiled under: Products and services, Consumer experience, Competitive strategy, Marketing and advertising, CBS Corp ‘B’ (CBS) With the writers still on strike, late night hosts are gearing up to putting on shows without help from any writers [subscription required]. For the past two months, while Hollywood writers have been on strike, late night TV viewers have been served up re-runs of their favorite speak shows, but that is about to change. It has definitely been a strange time for our late night shows to be on hiatus. With the now heating up presidential race offering up loads of good material, you know that the late night hosts have just been dying to get back into the action. But, don’t anticipate to be seeing the same sort of shows you are used to seeing when they return to the air next week. The shows should prove to be very different than business as usual. The exception to this rule might be the two late night shows on CBS (NYSE: CBS). David Letterman’s production company, Worldwide Pants Inc., is currently in talks with the Writers Guild of America and hopes that its “Late Show with David Letterman” and “Late Late Show with Craig Ferguson” will be able to reach a deal to grant its writers to be able to contribute to its shows. One of the aspects of late night that we have come to love and anticipate is the interviews with major movie actors regarding their new releases. While this typically represents at least one guest each night, it could be lacking from the shows when they return in the next few weeks. Most major actors have vowed that they will support the writers and avoid the speak shows. The negotiations between Worldwide Pants Inc. and the guild could be the only thing that leads to actors being able to come out and promote their upcoming releases. One thing is for sure, as the shows begin to slowly come back on, we’ll all be getting our fill of commentary on the current presidential candidates, and who can complain about that? Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.
30
12
2007
Wal-Mart (WMT) closes video download servicePosted by: in Companies Competitive StrategyFiled under: Consumer experience, Internet, Competitive strategy, Hewlett-Packard (HPQ), Wal-Mart (WMT), Netflix, Inc. (NFLX), Apollo Investment (AINV), Videos, Technology
Wal-Mart probably figured out that having a lot of customers online does not translate into successfully offering them new services. Most on the internet research numbers show walmart.com as one of the top two or three e-commerce sites. But Wal-Mart customers are often not affluent and might not be best targets for a video download operation. There’s also the question of competition. Apple (NASDAQ: AAPL) has its iTunes service, which is growing. Netflix (NASDAQ: NFLX) has another, similar operation, and there are a dozen others. People may buy clothes and household goods from a retail website, but that does not mean that the customers can be moved to digital downloads. “Would you like a movie with that shirt?” does not necessarily work. Douglas A. McIntyre is an editor at 247wallst.com.
30
12
2007
Chasing Value: Intuitive Surgical on the 2008 watch listPosted by: in Companies Competitive StrategyFiled under: Competitive strategy, Top Picks 2007, Chasing Value, Stocks to Buy, Intuitive Surgical Inc (ISRG), Technology, Best Stocks for 2008 My eight stock picks for 2008 will not include one of my favorites, Intuitive Surgical, Inc. (NASDAQ: ISRG) because of current appreciation in the stock price. Since I am basing my picks on the December 28 close, in two days, it just looks too pricey. The company isn’t only the leader in producing patented robotic surgical systems; it is the only game in town. Intuitive Surgical was a strong candidate at $280 to $290, about 20% off it’s high, but not at Wednesday’s closing price of $335.24. It has a trailing P/E of 109 and a forward P/E of 77 if you believe projections, and I do since ISRG is constantly beating them. However, this stock has a 52-week low of $86.20 and a high of $359.59. That’s very high and a 400% bounce has to leave even Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) enthusiasts astonished. I have written favorably about ISRG in the past 22 months, so perhaps some of my readers have shared in the gains. It is one of the few stocks I’ve mentioned that does not pay a dividend, but it has beat all estimates each year since I purchased it, and is apt to do so again (albeit with fits and starts). It has hardly penetrated its potential market, and already it has grown into a $12 billion company. At this point, I would definitely put ISRG on my watch list, and perhaps like many volatile stocks, there would be an opportunity to own it at a lower price. Disclosure: I own shares of ISRG in several portfolios. Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.
30
12
2007
Ideal Buy sees ‘bait and switch’ tactics rise once againPosted by: in Companies Competitive StrategyFiled under: Rumors, Competitive strategy, Best Buy (BBY)
Although Best Buy saw a lawsuit earlier in the year from the Connecticut attorney general, it appears that the same problem is happening again — in Connecticut. Something is fishy if Best Buy employees are using a “secret” website that looks like the retailer’s official public website that in fact does not have the same pricing information as the Best Purchase public website. What’s the purpose of such a scenario? To eak out a few extra bucks from that contingent of customers who browse on the web only to end up at a store for the actual purchase? Who knows. Connecticut attorney general stated “we thought Ideal Purchase had addressed this … that’s what they said to us. Apparently that’s not the case.” This may re-ignite the flame under Ideal Buy’s behind to ensure employees don’t reference some internal-only website for current consumer pricing information, but only use www.bestbuy.com as a reference. Is that so difficult? Apparently, it is. Filed under: Forecasts, Competitive strategy, Apple Inc (AAPL), Stocks to Buy, Ideal Stocks for 2008 Seems so easy, but let me explain why. Apple’s story is actually stronger today at $200 than when it was at $100. Why? Apple is experiencing large momentum in all business segments AND it’s still early in all its product cycles. This is the astounding part and I must repeat — IT IS STILL EARLY IN ALL PRODUCT CYCLES. The December 31 quarter, ending in four short days, will be another blow-out quarter. The estimates call for $9.3 billion in revenue with earnings per share of $1.50 or so. Apple is going to beat these numbers and once again forward estimates are going to go up. Right now I’ve September 30, 2008 fiscal year estimates at revenues of $31 billion and earnings per share at $5.25; fiscal year 2009, revenues at $38.5 billion and earnings at $6.35 per share. Numbers are conservative and going higher and here’s why. The iPod will be blow away estimates again, and this is the most mature product set in the Apple portfolio. Installed base after the December quarter will be over 120 million total units sold. It is on its fifth iteration and the penetrable market is only at about 7-8%. The iPhone is JUST beginning and remember this is a global story. iPhone numbers by year end will exceed 20 million units sold. Analysts estimates run right now between 12-14 million units sold by year end 2008. Remember, Apple also gets a piece of the carrier contract with each iPhone sold — in the US, it’s AT&T (NYSE: T). Europe and Asia are just getting started and of course there is still China and South America yet to announce. iPhone is a revolution, not just a product. On June 28, 2007, Apple was not in the cell phone industry. On June 29, 2007, Apple became a feared major player. The new Mac with the new Leopard operating system is taking the PC world by storm. In the September quarter, Apple sold 2.116 million units, nearly 400,000 more than anyone anticipated. That is also just starting. The Mac is taking market share and will continue to do so all through 2008 and beyond. Apple’s operating margins have been running at about 17% and most Street analysts have them settling at 15% or so. Wrong. Apple has the component gig down pat: they’re sharks on component pricing and the operating margins will actually hang around 18-20%, which for a hardware maker is totally stunning. Dell (NASDAQ: DELL) would kill for 6-7% operating margins. The Apple retail stores, 197 strong, average over $4400 of revenues per selling square foot, the highest of any American retailer. That was the 2006 sales per square foot number and that was before the iPhone or the new Mac. I think those numbers are going higher. So let’s cut to the chase and set the new price target for Apple. I believe the September 2009 earnings number, now at $6.35 per share, will actually be over $7. At a 45 PE multiple, fully justified by operating margins, market dominance and early product life cycles, this puts the price target at $300 by year end 2008. [Disclosure: At publication time, Georges Yared owns Apple stock.] Georges Yared is the CIO of Yared Investment Research and the author of Stop Losing Money Today
30
12
2007
Shorts bet cable’s problems aren’t over: CMCSA, CHTRPosted by: in Companies Competitive StrategyFiled under: Industry, Consumer experience, Competitive strategy, Short stories, Comcast Cl’A’ (CMCSA), Verizon Communications (VZ), Technology Cable stocks have fallen sharply and most trade near 52-week lows, but that is not keeping short sellers from continuing to believe that they could go lower. The short interest in Comcast (NASDAQ: CMCSA) and Charter (NASDAQ: CHTR) went up on December 14 compared to November 30 according to data from Nasdaq. The slide in cable shares began around mid-year, when comments from Comcast indicated that the new TV-over-fiber products from telecom companies like Verizon (NYSE: VZ) were starting to take cable customers. Up until recently, cable was able to market voice, TV,and broadband as one package into the home. The telephone companies could not match that. But fiber installations have changed the picture, and competition is fierce. Cable companies are starting to see slowing growth in their subscriber bases. That could push them to drop rates, and it is forcing them into capital expenditures to improve the speed of their own networks. Both moves put pressure on earnings. The huge bet against cable might be premature. It will still take years before telecom companies can get fiber to all of their customers, and there is no guarantee that these consumers will switch from cable. Also. cable continues to take a massive number of voice customers from the telephone companies with inexpensive VoIP products. Cable might not be dead yet. Douglas A. McIntyre is an editor at 247wallst.com. |
Powered by WordPress, Mandigo theme by tom.
Entries (RSS)
and Comments (RSS).
Indicating reduced profitability in the video display market, 
Wal-Mart
Earlier this year, 
