Owner: Fiscal Times URL:www.fiscaltimes.com Join Date: Thu, 26 Apr 2007 14:21:12 -0500 Rating:0 Site Description: A financial blog discussion stocks, investing, mutual funds and news from the business world. Site statistics:Click here
Apple charges ahead 2007-04-26 00:18:57 Apple reports quarterly profits jumping 88%. For anyone who has ever walked into a gym, a college campus, or a shopping mall, this is no surprise. Shares of Apple are now upwards of 100 dollars. For those value hawks in the audience, you may be wondering how to profit off of Apple’s product line without paying for the expected growth priced into the stock. I propose selling puts. I have the May 2007s at 85 and 90 in mind. At the close of market today, the 85s are going for 50 cents, and the 90s for 1.45$. The only problem is that you have to have 8500 or 9000 dollars per contract ready in reserve just in case the price falls to that point and you are forced to provide the shares to the buyer of the puts. My rationale: unless the SEC indicts Jobs in the next 3 weeks, I can’t see the stock touching 90. If you choose to go with the May 90s, you can expect a premium of 145 dollars. Assuming nothing goes wrong, the contract expires in late May and you walk away with the premium. Read more:Apple
, ahead
Boeing’s Flying High 2007-04-25 19:11:32 There’s no turbulence in sight for Boeing
as it continues to capitalize on problems at rival Airbus. With earnings of $877 million or $1.13 a share, up 27 percent for the quarter, Boeing beat street expectations and gave Airbus another slap in the face.
Not only did Virgin just announce orders of up to 43 Dreamliners to replace its Airbus fleet, but US Airways cancelled its $3.7 billion order to Airbus and replaced it with one to Boeing. Times have been so great for Boeing that they have backlogs of a record $262 billion, up 23% from a year ago.
Goldman Sachs speculates long-term growth for the Aerospace & Defense industry, and analysts from BoA and Prudential both affirm their “outperform” ratings on the stock. With this much good news, Boeing’s bound to soar.
Read more:Flying
, Flying High
Dell raises bar for PC manufacturers 2007-04-25 04:52:27 Dell announced that it will offer solid state hard drives in its Latitude D420 ultra-mobile and D620 ATG semi-rugged models. What we are witnessing is an effective raising of the bar for all PC manufacturers. Solid state drives are bigger and more reliable versions of the flash memory one can find in a digital camera or mp3 player. Though the size of Dell’s offerings are only 32 Gigabytes, they make up for it in other ways.
Engineering tests show that the SSD has an operating shock tolerance of up to 1,300 Gs, which is twice the rating of mechanical drives. In fact, during extreme impact testing the surrounding notebook hardware breaks before the drive2. In addition, the drives are predicted to reduce the probability of failure by three-and-one-half times compared to standard mechanical drives3. This will help reduce costs associated with hard drive failures, which analyst firm Gartner reports is one of two top sources of system malfunctions in notebooks and accounts for up to 45
International Gaming Technology: Get In At The Bottom 2007-04-24 14:53:54 Looking at InternationalGamingTechnology
’s chart you’d wonder why I think IGT is at the bottom - this stock has had a nice run over the last 2 years and has pulled back slightly from recent highs of $48 but is certainly not dirt cheap. The key to this story is to look at the gaming industry’s current upgrade cycle trends as well as a huge development coming to the gaming markets in the near future: server-based games.
To address the first point, the past few years the gaming industry has experienced a steady wave of slot machine upgrades which has been a pleasant surprise for company’s such as IGT. However the good times have come to an end and currently the cycle has turned downwards and seems to be reaching a trough at the bottom. Wall Street is forecasting slot makers’ earnings growth to suffer due to the limited opportunities for gaming companies to replace old machines as they have been over the last few years (although new machine sal Read more:Bottom
Update On OVTI: Catchin’ a Bid 2007-04-23 21:42:11 Quick update on the previous post (last week) regarding OVTI. OVTI has caught a bid today and is trading sharply higher on relatively strong volume up 4.63% (for the day) at the time of this posting and up 8.1% since we recommended it last Wednesday. I realized that I argued it was undervalued last week but did not give a target price which would be a “fair” valuation for OVTI. If you buy into my “operations” + “liquidation” = market value argument then I think you’ll find awarding a IOV/CFO multiple (see post last week) of 8 to this stock is conservative but still leads to a valuation of ~ $18.50 which I think is a good target to think about when following this stock (although I could see it going well through this target if operations show signs of acceleration). It’s not crystal clear why the stock is trading higher today but I would speculate that somebody has information which leads them to believe this stock is a takeout c Read more:Update
The drug effect: Merck’s high may be short lived 2007-04-23 12:28:08 Merck has seen some tumultuous times over the past year but even though it finally looks like it may be out of the doghouse with Friday’s dropping of a Vioxx litigation, recent buzz about the upgrade in Merck from SELL to NEUTRAL and in Merrill Lynch’s case from SELL to BUY, should all be taken lightly.
“Merck & Co. (MRK) said late Friday a Texas court overseeing the Texas Vioxx litigations has rejected a plaintiff’s claim that she was not properly informed of the drug’s alleged risks. According to the company, the claim, which came in the case Ledbetter v. Merck, was rejected by the court because the Vioxx label contained a Food and Drug Administration-approved warning label.”
The truth is there are still over 10,000 lawsuits in the pipeline and this ruling may be isolated.
Even Merck’s strong performance this past week with Q1 earnings up 12% and net income up $0.09 a share to $1.7 billion from $1.52 billion in Q1 last year, will only p Read more:effect
, Merck
, lived
Fast Processing: AMD is a Sell and Intel is Doing Well 2007-04-23 02:46:54 Sunnyvale, California chipmaker, Advanced Micro Devices, Inc. (AMD
) isn’t looking too mighty against industry goliath, Intel
(INTC) these days. Especially after a reported $611 million loss on revenues totaling $1.23 billion.
The loss includes charges related to the ATI acquisition in the amount of $113 million, but is mainly a result of the increasing competition with Intel in the microprocessor market. The company said that its Q1 margins were 31%, down from 40% in Q4 2006 and down from 59% in Q1 2006. “The decrease from the prior quarter was largely due to significantly lower microprocessor unit shipments, lower microprocessor average selling prices (ASPs), and the inclusion of the former ATI operations, which generally have lower-margin products, for the entire quarter, AMD said.
So what exactly does this mean for AMD? Well, it means that if you’re unlucky enough to own some, you should probably heed the analyst “sell” ratings. AMD is also perhaps putt Read more:Processing
Microsoft gets further away from reality every day 2007-04-22 04:11:54 It seems that every
bit of news from Microsoft
makes me more glad that I didn’t make the mistake of buying the company based on its cash holdings and past returns on equity. Recently, Microsoft declared that the Iphone would fail because of Apple’s ban on third party applications.
“However, it’s a closed device that you cannot install applications on, and there’s no support for Office documents. If you’re an enterprise and want to roll out line of business applications, it’s just not an option. Even using it as a heavy messaging device will be a challenge,” the executive added.
It gets getter. Take a look at this little gem.
Sorenson believes user familiarity with the Windows Mobile interface — and the ease with which companies can buy and develop applications for the platform — will sustain its increasing popularity and help keep the iPhone out of the lucrative corporate market.
First, why is Microsoft talking about its compe Read more:reality
RIMM and AAPL plan world conquest. 2007-04-21 22:37:24 Engadget Mobile is reporting that RIM plans to release the Blackberry 8830 with ITunes support and support for MicroSD cards. What we are seeing is Apple taking a swing at the enterprise customer who doesn’t want to carry around an extra phone or mp3 player. This will win on the convenience factor alone. Plenty of research, anecdotal and academic, shows that the more steps a customer has to go through in order to extract value from a product, the less likely they will use or purchase it. A great anecdotal case: I recently replaced my standalone voice recorder with an ipod add-on. I used to carry around the Sony ICDP 320. The device got the job done in terms of capturing voice for class notes or ideas, but it never really gripped me in terms of usability. First off, it recorded audio in on of Sony’s proprietary formats. In order to get audio off of the device, I had to use Sony’s software and then convert it to .wav format. From there, I had to convert it again to mp3
Listen to the Employees Before You Buy Up The Employer: Better Means Bigger 2007-04-20 14:11:26 The “Best Big Companies to Work For” list is comprised of those that are cross-listed in the Fortune 1000 list and the Best 100 Companies to Work For, a tally that rings up 37 coinciding companies. Of the 37, a majority 23 of them are in the Fortune 500, topped by Valero Energy which has a Fortune rank of 16 and a Best Companies rank of 22. Valero employs upwards to 18,000 people and has a mean pay of roughly $87,000. Furthermore, the company has never laid off an employee – a remarkable feat in an energy industry which has had its fair share of ups and down. Also, they run a safe business according to the government: “refineries can be dangerous places; of the 23 refineries designated by OSHA as having the best safety programs, 11 are Valero units. [Fortune]”
The Best Company to Work For according to the list is none other than the ubiquitous Google. With a Fortune rank of 241 and only 6500 employees, Google is a force to reckon with. They receive a rep Read more:Listen
, Employer
, Means
Sprint/Nextel: Dropped Balls, Dropped Calls, but Not Short on Promise 2007-04-30 15:11:01 As a lifelong Sprint
(NYSE: S) subscriber, I’ve always felt like I was on the short end of the stick. Their customer service is far from acceptable, signal comes and goes and coverage is limited to rooftops and buildings with paper walls. However, the light at the end of the tunnel could be bright. Due to Sprint’s Sprint Employee Referral Offer (SERO), a Blackberry can be had for $150 and $30/month plan (which includes nights starting at 7pm, 500 anytime and the kicker — unlimited data). If you’re not a Research in Motion (RIMM) Blackberry fan, you can get the Motorola Q for $100 as well. The data plan is part of the Power Vision that comes with the plan which basically gives unlimited web, email and IM.
The procedure is pretty simple:
1) Go to http://sprint.com/sero
2) Type in ’savings@sprint.com’ in the employee referral section and put in your ZIP code
3) Select a phone and a plan
4) Checkout
Although Sprint is nowhere near its $70/share days in Read more:Dropped
, Balls
, Short
THIS IS VENEZUELA! 2007-05-04 02:05:15 I think I’ve seen this movie before.
“This is madness,” said a Venezuelan banker, who asked not to be further identified for fear of reprisals against his company.
Chavez is threatening to nationalize even more industries throughout Venezuela. Though this has never been a good idea for any country that has ever existed, I believe we can still profit from the situation . It’s fairly safe for investors to expect a Venezuelan brain drain and generally mismanagement of the economy due to a steadily decreasing respect for property rights. It is impossible to guess when we’ll start to see a large scale economic deterioration, but it would not be a bad move to start looking at companies that do profitable business in Venezuela. Selling long term puts on these companies at current prices would be a sensible move since it is doubtful that investors will receive close to anything near fair value for any assets seized by the state. Since Venezuela is already in the p
The 50 Most Innovative Companies and What They Mean to Your Portfolio 2007-05-07 11:58:31 BusinessWeek’s report on the “50 Most InnovativeCompanies
” was released recently and for the third straight year in a row, the report is headed by Apple Computer (AAPL) — showing that thinking differently pays off in the end. Also, Google retains its comfy spot at number 2. Rounding off the top 10 are:
1. Apple Computer
2. Google
3. Toyota Motor
4. General Electric
5. Microsoft
6. Proctor and Gamble
7. 3M
8. Disney
9. IBM
10. Sony
One of the biggest jumps this year was Boeing, which had a 2006 rank of 70 and a 2007 rank of 21. Disney went from 43 to 8. Phillips went from 67 to 38. Costco went from 84 to 40. Amgen went from 87 to 45. McDonald’s went from 100 to 48. LG Electronics went from 85 to 49.Likewise, AT&T, CitiGroup, Verizon, Nintendo, Volkswagon, Best Buy, Merck and News Corp., went from being unranked to 35, 36, 37, 39, 41, 43, 46 and 47 respectively.
Some notable drops:
Research in Motion (RIM) went from 24 to 34. IDEO went from 15 to Read more:Portfolio
Apple Updates the MacBook 2007-05-16 08:03:07 Apple has announced across the board upgrades on the MacBook
line, giving the low-end MacBook a 2.0 GHz Intel Core 2 Duo processor and the higher level white and black MacBook a 2.16 GHz Intel Core...
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Read more:Apple
, Apple Updates
The New RAZR2: Will Motorola Relive It's Glory and Edge Out the iPhone? 2007-05-16 07:50:48 Apple’s iPhone
is certainly the biggest buzz phone, but it’s also going to be a big phone. Motorola
might keep its thunder for many consumers due to lucrative signing deals with many...
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Read more:Relive
Adventures with Linux: Doom for Microsoft, Part 1 2007-05-17 04:34:31 With all the hype surrounding Dell’s choice of Ubuntu Linux
as a pre-installed alternative to Windows, I decided to give Ubuntu a try. After five days of installing Ubuntu, XP, and Vista on a...
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Read more:Adventures
, Microsoft
Under the Radar 2007-05-25 13:25:30 With the various buyouts announced in the steel industry over the past year, one would assume that consolidation will continue. Valuations of some members in the industry are relatively low and cash...
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Read more:Radar
The End of Palm 2007-05-30 19:38:15 It is safe to say that Palm has begun the rapid stage of its decline today. Instead of streamlining the form factor of the Treo years ago, upgrading the OS, or creating innovative applications, Palm...
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Quick iPhone Review Roundup and Commentary 2007-06-28 19:39:57 I know that there are tons of iPhone
reviews out there, but the two best are probably still from David Pogue of NY Times and Walt Mossberg of Wall Street Journal.
David Pogue’s iPhone review...
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Read more:Quick
Guitar Center Buyout: Bain Drops $1.9 Billion 2007-06-28 18:05:04 Bain just bought up GuitarCenter
for $1.9 billion (although WSJ says that Guitar Center valued the acquisition at $2.1 billion). With 210 stores, that averages out to $10 million/store. If the...
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, Drops
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