Filed under: Other issues, Competitive strategy, Money and Finance Today, Bargain stocks, Presidential elections, Intuitive Surgical Inc (ISRG), Obama Picks, StemCells Inc. (STEM)

It was only two weeks ago I posted about one of the stocks I own and follow closely Chasing Value: Intuitive Surgical Earnings — what now?, a company that I think about an “Obama pick”. My frequent readers know that the company is one of my older investments and one that has paid off handsomely. Even though Intuitive Surgical Inc. (NASDAQ: ISRG) may still be a profitable investment at it’s current level, at this point, it is well covered.

Searching for something less known, and certainly more controversial, I’ve the ideal Obama stock pick to add to your watchlist, StemCell Inc. (NASDA: STEM) which closed yesterday at $1.90. per share. It isn’t profitable, spends heavily on Research and Development and is highly speculative. So was ISRG when I got in very early.

The company profile states that STEM “discovers cell-based therapies to treat diseases of the central nervous system (CNS), such as cerebral palsy and Alzheimer’s disease, as well as spinal cord injury. It is researching stem cell and progenitor cell (cells that have developed from stem cells) therapies to repair neural tissue damaged by disease and injury, and has discovered markers for CNS stem cells and a way to reproduce them for transplant.”

Continue reading Obama Pick: StemCells Inc.

Obama Pick: StemCells Inc. originally appeared on BloggingStocks on Wed, 05 Nov 2008 15:15:00 EST. Please see our terms for use of feeds.

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Filed under: Deals, Rants and raves, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Can you remember back ten months ago to January 31, when the Yahoo! (NASDAQ: YHOO) board (think Jerry Yang) rejected a $30per share offer from Microsoft Inc. (NASDAQ: MSFT). This buyout offer of $44.6 billion was made by the software giant to combine forces with Yahoo!, against the supposedly next evil empire, Google Inc. (NASDAQ: GOOG).

That was so long ago when the DJIA was thousands of points higher and the current presidents administration was in full recession denial mode. A lot has happened since then.

Yesterday Yahoo! closed at $12.25 per share, about 60% less than the offer, while MSFT closed at $23.08, down about 20%. This is important because it means that if Yahoo! accepted an all stock offer, shareholders would be way ahead of the game and be collecting dividends.

Continue reading Yahoo rejects $30 to buy itself for $12?

Yahoo rejects $30 to buy itself for $12? originally appeared on BloggingStocks on Thu, 30 Oct 2008 13:44:00 EST. Please see our terms for use of feeds.

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Filed under: Before the bell, International markets, Earnings reports, Good news, Competitive strategy, Exxon Mobil (XOM), Oil

Another record breaking quarter for the world’s largest oil company, as Exxon Mobil (NYSE: XOM) put up some large numbers once again for its third quarter, surpassing its previous quarterly records.

For its third quarter, the company earned an astonishing $14.83 billion. Net income jumped by 58% in the quarter, and worked out to an earnings per share of $2.86 for the July through September period, a time when oil and gasoline prices were both running at record high levels.

Analysts had been anticipating to see the company show earnings of $2.38 per share in the quarter.

So just how impressive is this new record profit amount? Pretty impressive when you take into account the previous record, which of course Exxon also held, was “only” $11.68 billion, set in the second quarter of this year. That is a pretty nice jump.

Shares of the company’s stock are trading up 1.3% immediately following the announcement in premarket trading.

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.

Exxon Mobil (XOM) does it again! originally appeared on BloggingStocks on Thu, 30 Oct 2008 08:48:00 EST. Please see our terms for use of feeds.

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Filed under: Competitive strategy, Time Warner (TWX), Marketing and advertising, Employees, Gannett Co (GCI)

Gannett (NASDAQ: GCI) stated it would cut nearly 10% of its staff. This is hardly a surprise. Newspaper ad revenue has been running down over 15% this year and that trend is expected to continue. At some papers, classified ads — mostly real estate, employment, and autos — are off well above 30%. The web has eroded readership. Most of these people will not ever return as newspaper subscribers. Gannett and all its peers trade at multi-year lows.

The advertising sales problem is beginning to spread to magazines. Between the web and the recession, the magazine business is getting pinched and pinched hard. Ad pages at many business magazines and newsweeklies are down 15% to 20% this year. In some cases, the drop is closer to 30%. As a reaction, the largest magazine publisher in the U.S., Time, Inc., a unit of Time Warner (NYSE: TWX) will cut as many as 600 people. According to The New York Times, “No magazines are scheduled to close, but some are likely to be severely cut back.”

Magazines will have to do something that newspapers have not be able to. They need to move their content to the internet in a way that’ll pull large numbers of readers so that advertising volumes are big enough to make up for the erosion of print dollars. Since there are a massive number of content sites on the web, there’s plenty of competition.

The print magazine business is dying and dying faster than many analysts thought it would. Its only life boat is the internet. A life boat only holds so many people.

Douglas A. McIntyre is an editor at 247wallst.com.

The magazine business follows newspapers into troubled waters originally appeared on BloggingStocks on Wed, 29 Oct 2008 10:45:00 EST. Please see our terms for use of feeds.

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Filed under: Competitive strategy, Microsoft (MSFT)

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

When Microsoft Corp. (NASDAQ: MSFT) released its Windows Vista operating system product nearly two years ago, the market was initially excited. That excitement turned to boring indifference as customers, both business and consumer, realized that this was just another update to Windows. Nothing revolutionary, or even evolutionary (in many minds). The problem was this: Windows Vista was a massive change under the hood, but where its users interact with it, it seems like a boring reinvention of an operating system from half a decade ago.

But Microsoft doesn’t just make operating systems. It’s into the office productivity business (Microsoft Office, anyone), it’s huge into the mobile business (Windows Mobile), and it’s tried desperately to compete with Google Inc. (NASDAQ: GOOG) in the web search advertising business (which has largely failed). So, the company, which continues to make a ton of cash each quarter by selling Windows on all those global Personal computers that are sold, has no debt and a ton of cash under the mattress. It’s still a boring company with a business model that’s being made rapidly outdated by the internet and web-based competitors. Should it take its cash, return it to shareholders, and close up shop? Though this was recommended of Apple Inc. (NASDAQ: AAPL) some time back, that company roared back (maybe you’ve heard). Can Microsoft?

Continue reading Makeover needed: Microsoft

Makeover needed: Microsoft originally appeared on BloggingStocks on Mon, 27 Oct 2008 14:10:00 EST. Please see our terms for use of feeds.

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Filed under: Analyst reports, Products and services, Competitive strategy, Apple Inc (AAPL)

In business school, MBA students play a marketing strategy game where they launch imaginary electronics products, using phantom research & development dollars and marketing expenditures to position the products as high-end or low-end, to market to certain audiences, and then to change the price point to attract the maximum sales possible. It’s a delicate game meant to accentuate how consumers value products; and how some will not buy a product if it’s too inexpensive; the low price devalues the item. It’s a quest for the perfect price.

Smartphones have been on that quest, with Apple Inc. (NASDAQ: AAPL) in the lead. No company seems to more attentively strategize its price points than Apple, and the iPhone has a storied history, first launched for $599 and $499 for the 8GB and 4GB models, respectively, followed swiftly by a $200 price cut for both products. Now the new 8GB iPhone 3G is $199 if you purchase it with an AT&T phone plan (and $299 for the 16GB version).

In a research note yesterday, analyst Charlie Wolf of Needham Research said he’d done the analysis and Apple could safely sell the 8GB version for $99, a price point that, with the subsidy from AT&T, would protect its margins at 42.3% (I need to see the numbers on this), and certainly convince holdouts like me (the refurb Blackberry I use was free with the contract subsidy) that the iPhone is the thing. At this price, surely the game would be a landslide in Apple’s favor. The iPhone is more beautiful, more useful, and has more geeky cred than the Blackberry; at $99, I concur that the market would be won and to the iPhone conqueror would be the spoils.

iPhone at $99: Would that be the smartphone market conqueror? originally appeared on BloggingStocks on Tue, 28 Oct 2008 18:29:00 EST. Please see our terms for use of feeds.

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Filed under: Bad news, Products and services, Competitive strategy, McDonald’s (MCD)

When McDonald’s (NYSE: MCD) went into coffee, the fast-food giant went whole-hog (or bean?). The chain planned to add separate coffee bars to every one of its about 14,000 U.S. stores, and got to about 3,000 when the credit crunch hit and Bank of America pulled back on the availability of funds for its franchisees. This would be a relatively minor setback if it weren’t for a problem:

McDonald’s customers don’t really like coffee.

In a Wall Street Journal article today, which examines whether the coffee rollout came at a bad time, I was struck by a couple of “tweaks” McDonald’s has made to its coffee strategy. One, changing the title of the employee who prepares the coffee drinks to “beverage specialist” from “barista” betrays a generality that would indicate a widening of the strategy (if not baldly changing the strategy away from coffee to other drinks). The other is that McDonald’s is testing drinks made without coffee (think blended cream beverages at Starbucks). “The strategy is to appeal to customers who like the idea of coffee drinks but not the actual taste. Chocolate “gives people permission to introduce themselves to these drinks,” states Darci Forrest, a McDonald’s senior director of marketing.”

Continue reading McDonald’s coffee drinks not getting customers buzzed?

McDonald’s coffee drinks not getting customers buzzed? originally appeared on BloggingStocks on Mon, 27 Oct 2008 08:28:00 EST. Please see our terms for use of feeds.

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Filed under: International markets, Consumer experience, Competitive strategy, Diageo plc (DEO), Chasing Value, DJIA, Stocks to Purchase, Recession

Investors who want to follow “my pal Warren” back into the market are searching for the ideal angles with the least risk. I’ve been doing the same and recently posted Fog clearing — maybe. Clear skies — no! GE, JNJ, MRK, PG, RTN, WFC, highlighting blue-chip dividend payers.

Last Thursday morning I had a coffee with William O’Sullivan, owner of O’Briens Pub in Santa Monica, Calif., and started quizzing him about how the recession might affect his business. He said it would probably improve. He expected some depressed and unemployed people to find refuge in his bar.

I used the occasion to bring up one of my watch-list stocks, Diageo (NYSE: DEO), the largest distiller of spirits in the world. It is the leader in the world by volume, by net sales, and by operating profit. The company produces eight of the world’s top 20 spirits brands. Some of these include include Guinness, Harp, Johnnie Walker, Tanqueray, and Smirnoff. O’Sullivan believes that Diageo has a drink for everyone at price points that his customers will not balk at.

The first time I wrote about DEO was 20 months ago (see Cramer states buy Diageo, I state WAIT) when it was around $85 per share. Since that time it has reached a 52-week high of $93.12. However, I could never bring myself to invest at those levels. Well, Friday it closed at $56.86, up $0.55, on a day the DJIA closed down 312.30 to 8378.95, when almost nothing was in postive territory.

Continue reading Chasing Value: Diageo (DEO) — Drink up?

Chasing Value: Diageo (DEO) — Drink up? originally appeared on BloggingStocks on Mon, 27 Oct 2008 13:51:00 EST. Please see our terms for use of feeds.

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Filed under: Management, Competitive strategy, Halliburton (HAL)

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

Remember Dick Cheney? He hasn’t emerged from his spider hole since shooting his buddy in the face at a quail hunt. But last time I was in Washington, I was walking along the street near George Washington University Hospital and suddenly all the automobiles disappeared and an armada of police vehicles and black suburbans whizzed by. I was later told that it was Cheney getting his stent checked up.

Prior to his stint in the administration of the 43rd president, It turns out that Cheney’s heart beat for Halliburton (NYSE: HAL). In 2004, for example, taxpayers provided Halliburton’s KBR subsidiary with $7 billion to provide services in Iraq while it took hundreds of millions of dollars in improper charges. With its 2% profit over costs, the more taxpayer money Halliburton spent, the higher its profits. Fortunately, Halliburton spun off that pesky KBR subsidiary in April 2007.

But it has other problems. The SEC is investigating Halliburton for paying bribes in Nigeria; its KBR subsidiary did a lousy job replacing bolts on an undersea pipeline that will cost Halliburton up to $220 million; the SEC investigated Halliburton for bogus contract revenue accounting; it settled asbestos litigation; a competitor of Hallburton accuses it of antitrust violations; and it received a $108 million judgment for dumping perilous waste.

Continue reading Makeover needed: Halliburton

Makeover needed: Halliburton originally appeared on BloggingStocks on Fri, 24 Oct 2008 14:10:00 EST. Please see our terms for use of feeds.

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Filed under: Competitive strategy, Mattel, Inc (MAT), Hasbro Inc (HAS)

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

Founded in 1945 in a garage workshop in southern California, Mattel Inc. (NYSE: MAT) is now the world’s biggest toy maker, with a market cap of about $5.2 billion. Number two Hasbro Inc. (NYSE: HAS) has a market cap of about $4.2 billion. Mattel produces from everything Barbie and American Girl, to Hot Wheels, Fisher Price toys, Scrabble, and the Magic 8 Ball, as well as tie-ins with Pixar, the Dark Knight, Harry Potter, and Nickelodeon. However, in 2002 Mattel shut its last factory in the United Says, and since then most of its products have been produced in China.

That decision came back to bite Mattel when, beginning in the summer of 2007, it was forced to issue a series of recalls of Chinese-made toys that contained lead paint. The company is still reeling from that PR disaster, which for some reason included an apology from Mattel to the Chinese people. The situation prompted BloggingStocks contributor Tom Barlow a year ago to suggest (tongue in cheek) that Mattel merge with Waste Management Inc. (NYSE: WMI) so that toxic toys could go directly where they belonged, bypassing the middleman (i.e., the children). That would be one way to make over the company, I guess.

As Christmas of 2007 approached, it looked like the worst might be behind Mattel. The year-end numbers were respectable, and some investors were beginning to eye Mattel again. But first quarter 2008 results were disappointing, and by mid year, expectations were very low. The share price has continued to slide since the recalls, reaching a multi-year low recently. While there was a copyright infringement lawsuit settled in Mattel’s favor (though they didn’t get as much out of it as they wanted), and they are no doubt hoping for the Dark Knight and other tie-in merchandise to help boost what otherwise looks like it could be dismal holiday season for retailers, the newest thing Mattel has to contend with is claims by some parents that one of its dolls secretly promotes Islam, which Mattel denies.

Continue reading Makeover needed: Mattel

Makeover needed: Mattel originally appeared on BloggingStocks on Sat, 25 Oct 2008 09:10:00 EST. Please see our terms for use of feeds.

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