Trefis Helps You Understand How a Company's Products Impact Its Stock Price
COMPANY OF THE DAY : DEUTSCHE BANK
Deutsche Bank and other European banks are faced with the Greek dilemma as an EU summit winds up today with no major announcements on the way forward with Greece.
Greece's increasingly likely exit from the Euro would undermine the currency's credibility and leave the door open for other weaker nation's to exit while the union can ill-afford to continue writing checks to prop up an insolvent government that cannot collect taxes from its citizens.
See Complete Analysis for Deutsche Bank
Greece's increasingly likely exit from the Euro would undermine the currency's credibility and leave the door open for other weaker nation's to exit while the union can ill-afford to continue writing checks to prop up an insolvent government that cannot collect taxes from its citizens.
See Complete Analysis for Deutsche Bank
Related Companies:
Bank of America
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Citigroup
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Goldman Sachs
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UBS
FORECAST OF THE DAY : DELL'S NOTEBOOK & NETBOOK MARKET SHARE
Dell's earnings after the bell yesterday showed weakness across its business lines in particular in the consumer business as notebooks sales fell by 15%.
This has sparked concerns on the strength of the PC industry, which is weighing on sentiment for Microsoft, HP and others.
Read more...
This has sparked concerns on the strength of the PC industry, which is weighing on sentiment for Microsoft, HP and others.
Read more...
RECENT ACTIVITY ON TREFIS
AT&T Looks To Reduce Subsidy Pressures While Boosting Revenues Through Shared Data Plans
AT&T (NYSE:T) is looking to reduce the subsidies it offers on smartphones according to a report in Reuters. Further the report says that the company, like Verizon (NYSE:VZ), will be offering shared data plans soon. Both the carriers, along with Sprint (NYSE:S), have been facing the brunt of the huge subsidies that they provide subscribers at the time they purchase smartphones in return for signing a two-year contract. While initially the ploy worked as subsidies drove up the demand for smartphones as well as data services, the incremental value add has decreased over time as the wireless market became saturated and spectrum limited. Rolling back the subsidies gradually will help the carriers manage costs better while boosting revenues through shared data plans.
Pharma Updates: Pfizer Recalls Advil & Merck's Propecia Causes Furor
Pfizer (NYSE:PFE) recently recalled 65,000 bottles of Advil Liqui-Gels as they had strong odor due to over-processing of an ingredient in the medicine. Separately, Merck (NYSE:MRK) is facing widespread furor over Propecia, a hair growth drug. Propecia and its generic Finasteride have been found to cause virility side effects. Pfizer (NYSE:PFE) is the largest drug maker in the U.S. and operates in four segments – pharmaceuticals, animal health, consumer healthcare and nutrition, whereas Merck (NYSE:MRK) has operations in pharmaceutical, animal health, consumer care and alliance segments.
MGM Resorts Plans To Launch A Social Gaming Website
Casino veteran MGM Resorts International (NYSE:MGM) is working on launching a social gaming website in order to grab share of the growing social gaming market. According to Lazard Capital, the social gaming industry will be worth $9 billion by 2015. With the increasing prevalence of social media, people are spending more time on social networking websites to stay connected. Approximately 41% of the U.S. Internet users access social networking sites to play games. The new game will have a Las Vegas casino theme and will be on similar lines of Zynga’s (NASDAQ:ZNGA) popular online game FarmVille. This move could help MGM establish a relationship with this niche customer segment. While it will be launched as a free gaming website, MGM’s chairman James Murren asserted a possibility of monetizing it at a later stage when online casino applications gain legal status.
JNJ Updates: Positives For Xarelto & Simponi
Johnson & Johnson ‘s (NYSE:JNJ) drug Simponi has shown improved results for inflammatory-bowel disease ulcerative colitis, according to a new clinical trial. This is an additional indication for Simponi over its already approved uses for rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis. Separately, JNJ’s Xarelto, a blood thinning drug, is found to reduce the risk of cardiovascular events including heart attacks. These are positives for JNJ as the drugs find applications for new indications which will help expand their respective patient bases. JNJ is a big pharma company which operates primarily through three segments – consumer, pharmaceuticals, and diagnostics. We maintain a $72 price estimate for JNJ, which is nearly 15% above the market price largely based on our long-term outlook for the stock.
Buying VIX Calls as a Portfolio Hedge
Submitted by Investing Daily as part of our contributors program . Buying VIX Calls as a Portfolio Hedge By: Jim Fink Because VIX calls are based on VIX futures instead of the more volatile “spot” VIX, in the past I suggested that it would be easier to hedge a portfolio against a “black swan” stock market decline using S&P 500 puts–either the cash-settled SPX index puts or the equity-settled SPY ETF puts. Well, I stand corrected. In preparing for a conference down in beautiful Palm Beach, Florida, I read two academic studies–one published in 2009 and another published in 2012 –that found VIX calls to be a much more effective portfolio hedge than S&P 500 puts. The reason is that most institutional investors (including mutual funds, hedge funds and pension funds) are benchmarked against the S&P 500 and have historically hedged their portfolios almost exclusively by purchasing S&P 500 puts. This institutional buying pressure has bid up their prices dramatically and made S&P 500 puts very expensive hedges for the rest of us. The more expensive a hedge, the less effective it is. By contrast, VIX calls have only been around since February 2006 and have yet to be widely adopted by “big money” institutions. Consequently, the prices of VIX calls have not been bid up by institutions and remain reasonable.
Facebook's Relationship Status With Nasdaq: It's Complicated
After months of speculation, the highly anticipated initial public offering of social network giant, Facebook, turned out to be a disaster for Nasdaq OMX Group (NASDAQ:NDAQ) as glitches in the software used by the exchange to establish a price caused confusion amongst investors and led to panicked selling. The exchange had to resort to manual intervention to deal with overwhelming updates and cancellations as the stock did not perform as well as expected, falling below the initial price within two days. Nasdaq’s main competitor is NYSE Euronext (NYSE:NYX).
Nvidia Graphics Chips In The New MacBook Pro Would Be A Huge Win
With rumors of Apple’s new MacBook Pro featuring Nvidia’s (NASDAQ:NVDA) GPU making the rounds, Nvidia might just have scored a point against its ongoing competition with AMD (NYSE:AMD). Though neither Apple nor Nvidia have directly confirmed the news, the new MacBook Pro is reportedly set for introduction with Nvidia’s graphic chips at next months Worldwide Developers conference. The introduction of AMD’s Rodeon chips has threatened the existing dominance of Nvidia in the discrete GPU market, which contribute around 15% to the Trefis price estimate. A switch over to Nvidia’s graphics by Apple, could do well to retain its dominant market share and the attractive valuation that it currently enjoys in the market.
Micron's Elpida Acquisition Could Help Consolidate The DRAM Market
After much speculation, Micron Technology (NASDAQ:MU) confirmed early this month that it is engaged in discussions with Elpida Memory to acquire its business. With $2.4 billion in cash, Micron is in a solid position to bid for the company. Its acquisition of Texas Instruments (NYSE:TXN) DRAM business in 1999 and Toshiba’s DRAM business in 2001, alleviated DRAM oversupply conditions and secured Micron’s sustainable core technological competence. Its acquisition of Elpida could further consolidate the DRAM market, in turn bringing stability in prices and increasing its market share. With a 36% contribution to our price estimate, a rise in the company’s DRAM market share could have a significant positive impact on its valuation.
Microsoft Passes Apple In China As Nokia Cheers
It looks like Microsoft (NASDAQ:MSFT) has made good on what seemed like a lofty claim made just two months back that it plans to overtake iPhone’s market share in China. According to the company’s COO for the Greater China region, Microsoft’s Windows Phone has already reached a 7% market share in the country trumping Apple (NASDAQ:AAPL) iPhone’s 6%. While it was never a tall order for Microsoft to achieve that target considering that iPhone’s market share wasn’t too high in the first place, the fact that the company has reached this milestone in such a short period of time shows that China will play a key role in shaping Windows Phone’s as well as its key partner Nokia’s (NYSE:NOK) fortunes in the coming quarters. Our price estimate for Nokia’s stock is $5, about 75% ahead of market price.
Falling Foreclosure Rates A Good Sign For Mortgage Banking
In yet another sign of an improving housing environment across the country, a recent report by RealtyTrac shows that foreclosure activity declined by nearly 5% for the month of April over March. In fact, the report indicates that foreclosure activity, as captured by the number of properties on which a foreclosure filing was reported for the month, was at the lowest level since July 2007. The housing market has seen quite some improvement since the beginning of the year – good news for the country’s biggest mortgage players, namely Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), U.S. Bancorp (NYSE:USB), Bank of America (NYSE:BAC) and Citigroup (NYSE:C).
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